Employers in Indiana, Illinois, and Wisconsin are likely to see their legal fees increase as a result of a Seventh Circuit decision that allows the U.S. Equal Employment Opportunity Commission to file suit immediately instead of first trying to negotiate a settlement with the employer.
Typically, the EEOC attempts to negotiate, or “conciliate” a settlement with employers accused of discrimination before filing a lawsuit in court. During the conciliation process, an EEOC investigator negotiates in a good-faith effort with the employer and employee, exchanging offers and counter-offers, to settle the case. The process is intended to cut down on the time and money normally spent in litigation.
Most Circuit Courts have held that employers can raise an affirmative defense against the EEOC for not conciliating in good faith, avoiding liability for unlawful discrimination in the process.
The Seventh Circuit has done away with this affirmative defense. In EEOC v. Mach Mining, LLC, 738 F.3d 171 (7th Cir. 2013), the Seventh Circuit removed the need for the EEOC to conciliate in good-faith. The court held that Title VII of the Civil Rights Act of 1964, a federal anti-discrimination statute, does not contain an affirmative defense for employers to use against the EEOC during litigation. As a result, the EEOC does not have to concern itself with good-faith conciliation. It can go to the negotiation table with take-it-or-leave-it settlement offers, and employers have no recourse.
The ramifications of the Mach Mining decision are slowly being realized. As of now, the Seventh Circuit’s decision is in startling contrast to a majority of the circuit courts. In fact, the Second, Fourth, Fifth, Sixth, Eight, Tenth, and Eleventh Circuits have all concluded that employers can raise an affirmative defense against the EEOC for not conciliating in good-faith.
In light of the clear circuit split, Mach Mining is well positioned for Supreme Court review. Mach Mining has filed its petition for a writ of certiorari, which the EEOC just recently backed. The EEOC is asking the Supreme Court to affirm the Seventh Circuit’s holding, which would create binding precedent upon all lower courts and eliminate the need for good-faith conciliation across the country.