Breaking ranks with every other federal appellate court to address the issue, the Federal Court of Appeals for the Seventh Circuit has ruled that an employer cannot defend a lawsuit brought by the EEOC by contending that the EEOC failed to engage in reasonable conciliation prior to filing suit. See EEOC v. Mach Mining, Inc. In so holding, the court created a split with six other circuits that have recognized such a defense. The Seventh Circuit covers Illinois, Wisconsin and Indiana.
In EEOC v. Mach Mining, Inc., the EEOC filed a complaint in the federal district court for the Southern District of Illinois alleging that the employer failed to hire female applicants because of their sex, in violation of Title VII of the Civil Rights Act. Mach Mining raised an affirmative defense that the EEOC had failed to undertake reasonable efforts to negotiate a pre-lawsuit resolution. The basis for this defense comes directly from a provision in Title VII itself, which provides in relevant part that:
“If the Commission determines after such investigation that there is reasonable cause to believe that the charge is true, the Commission shall endeavor to eliminate any such alleged unlawful employment practice by informal methods of conference, conciliation, and persuasion”
42 U.S.C. § 2000e-5(b). The statute further provides that the EEOC may sue only after it “has been unable to secure from the respondent a conciliation agreement acceptable to the Commission.” 42 U.S. C. § 2000e-5(f)(1).
After two years of extensive discovery on whether the EEOC had engaged in sufficient conciliation efforts, the EEOC moved for summary judgment in the district court on this issue. The EEOC took the position that the sufficiency of the EEOC’s conciliation efforts were not subject to judicial review, and could not form the basis of an employer’s defense to an EEOC filed lawsuit. The district court rejected the EEOC’s position, but also took the unusual step of certifying this issue for immediate interlocutory appeal.
The Seventh Circuit accepted the appeal and reversed the decision of the district court, holding that the text and framework of Title VII did not support the ability of employers to raise a “failure to conciliate” defense. In making this determination, the court pointed to the applicable statutory language, which invites the EEOC to “endeavor to eliminate” discrimination “by informal methods.” The court found that such discretionary language signals an intent to leave the methods and timing up to the agency to determine: “It would be difficult for Congress to have packed more deference to agency decision-making into so few lines of text.” The panel also noted that allowing such a defense would conflict with the statutory command that “[N]othing said or done during and as a part of such informal endeavors may be made public by the Commission, its officers or employees, or used as evidence in a subsequent proceeding without the written consent of the persons concerned.” 42 U.S.C. § 2000e-5(b).
The court also observed that Title VII did not contain any “meaningful standard” by which a court could determine whether the EEOC’s conciliation efforts were sufficient, and noted that the other courts which had recognized the defense have applied inconsistent standards in evaluating the defense. Finally, the court expressed concern that claimants with potentially meritorious claims on whose behalf EEOC sued could be deprived of potential relief solely because a court determined after the fact that the EEOC had not done enough to negotiate a resolution before filing suit.
As noted, the Seventh Circuit’s ruling conflicts with the other federal district and appellate courts that have criticized the EEOC for engaging in “shoot first, ask questions later” litigation tactics that result in cases of questionable merit being filed in federal court, and have recognized that the EEOC’s pre-suit investigation and conciliation efforts are a legitimate subject of judicial inquiry. See e.g. EEOC v. CRST Van Expedited, Inc. 679 F.3d 657, 676-77 (8th Cir. 2012).
By creating a circuit split, this ruling substantially increases the likelihood that the United States Supreme Court will weigh in on this issue. In the meantime, employers with employees in Illinois, Wisconsin and Indiana who are sued by the EEOC in Illinois, Wisconsin or Indiana may no longer rely on the EEOC’s failure to conciliate as a potential defense.