[author: Leonard V. Feigel]

The EEOC claims that it can sue an employer and then use discovery to identify, investigate, and seek relief for individuals that it never heard of before it filed the lawsuit, which has been commonly referred to as the EEOC’s sue first, ask questions later litigation strategy. Accordingly, an employer may find itself defending a class action against the EEOC when it was under the impression that the alleged claims were limited to a few identified individuals. This strategy has been controversial and, to the delight of employers, has been rejected by several courts, most recently by the Eighth Circuit Court or Appeals in EEOC v. CRST Van Expedited Inc., holding that such a strategy does not satisfy the agency’s mandatory pre-suit requirements. Before filing suit, the EEOC must receive a charge alleging unlawful discrimination or retaliation, it must conduct an investigation, issue a reasonable cause determination, and then engage in conciliation with the employer (informal settlement discussions). In sum, the EEOC cannot comply with its pre-suit requirements if it seeks relief for individuals it only learned of during litigation because the agency could not have investigated their claims, issued a determination, and attempted to conciliate their claims.

Despite the judicial trend to the contrary, a federal judge in the Northern District of Illinois ruled last week that the EEOC does have authority to sue first and ask questions later (EEOC v. United Road Towing). The judge denied the employer’s motion for summary judgment on the claims brought on behalf of 17 individuals that had not been identified before the suit was filed. The judge held that courts may not review an EEOC’s administrative investigation to determine whether it supports the claims asserted in the lawsuit. The judge further held that EEOC conciliation efforts were sufficient for the 17 individuals because the EEOC notified the employer that the agency would pursue a class action (although the agency never identified the 17 individuals) when it demanded $2 million dollars as a settlement. The judge stated United Road Towing could have asked for the names of the alleged unidentified class members and issued a counter-offer to the EEOC demand rather than walk away from the conciliation negotiations. The judge’s ruling makes no reference to the other cases, including the CRST Van Expedited case, which appear to take contrasting positions.

The EEOC is touting the United Road Towing decision as support for its sue first, ask questions later litigation strategy. As such, it is safe to say that the EEOC will not be backing down from its controversial strategy in the near future.

What employers should take away from the United Road Towing decision is that the legal landscape regarding the EEOC’s strategy is not clear. Therefore, employers must be diligent when dealing with the EEOC; otherwise, you may find yourself blindsided by EEOC class action litigation. Furthermore, an employer’s actions during the agency’s investigative and conciliation stage can strengthen and/or hurt an employer’s defenses to claims by the EEOC on behalf of previously unidentified individuals.

Foley Labor & Employment attorneys will continue to monitor and report on developments on this topic, as the EEOC has an appeal pending before the 6th Circuit, and oral argument was held April 20, 2012 in EEOC v. Cintas.