EEOC Update: The Commission Issues A Rare Opinion Letter Interpreting Requirements For Pattern Or Practice Claims

Seyfarth Synopsis:  On September 3, 2020, the EEOC issued an opinion letter (only its second of the year) regarding the Commission’s interpretation and enforcement of § 707(a) of Title VII, which authorizes the EEOC to sue employers engaged in a “pattern or practice” of discrimination. The opinion letter addresses two seemingly technical questions that may have a big impact on future litigation: (1) whether a pattern or practice claim under section 707(a) requires allegations of violations of section 703 or section 704 of Title VII; and (2) whether the EEOC must satisfy pre-suit requirements such as conciliation before it can bring a section 707 case.  In a lengthy discussion, the EEOC ultimately concludes that the answer to both questions is “yes.”  The opinion letter is important for employers because – in essence – the EEOC is actually taking a somewhat surprising position limiting its enforcement powers.

The Commission’s opinion letter is the latest in an ongoing series of efforts to clarify and standardize the EEOC’s processes and procedures, including those applying to conciliation efforts and pre-suit obligations, and offers some insight into a potential shift in philosophy at the Commission.

Section 707(a) Claims Require Allegations Of Sections 703 Or 704 Violations

The Commission’s letter first acknowledged that “[t]he Commission, like all agencies, is a ‘creature of statute’ that only has the authority that Congress has given it….Therefore, in performing its duties, the Commission must follow the statutory language that Congress has provided.” In accordance with these principles, the letter then examined whether section 707(a) of Title VII provides the EEOC a stand-alone claim to raise against employers or whether the EEOC must allege violations of sections 703 or 704, which are the provisions that prohibit discrimination in the workplace and retaliation for assisting or participating in the EEOC charge or enforcement proceedings, in order to bring a pattern or practice suit.

In analyzing the issue, the EEOC examined the holdings of the Seventh Circuit Court of Appeals in EEOC v. CVS, 809 F.3d 335 (7th Cir. 2015), and of the U.S. Supreme Court in International Brotherhood of Teamsters v. U.S., 431 U.S. 324 (1977) (in which the EEOC was challenging the employer’s alleged pattern or practice of race discrimination in its hiring and promotion decisions). The Seventh Circuit concluded in CVS that “Section 707(a) does not create a broad enforcement power for the EEOC to pursue non-discriminatory employment practices that it dislikes – it simply allows the EEOC to pursue multiple violations of Title VII (i.e., unlawful employment practices involving discrimination or retaliation defined in Sections 703 and 704) in one consolidated proceeding.” 809 F.3d at 341.

Similarly, the Supreme Court held in Teamsters that “[t]he plaintiff in a pattern-or-practice action is the Government, and its initial burden is to demonstrate that unlawful discrimination has been a regular procedure or policy followed by an employer or group of employers.” 431 U.S. at 336. In light of these holdings, and the statutory language that allows the Commission to act only on “a pattern or practice of discrimination,” 42 U.S.C. § 2000e-6(e) (emphasis added), the EEOC concluded in its opinion letter that any suit that pursuant to section 707(a) must be based on an alleged pattern or practice that violates either section 703 or section 704 of Title VII.

While the EEOC’s determination appears to be technical, the result of this opinion may have a significant impact on the EEOC’s approach to pattern or practice litigation. The Commission has previously alleged claims in pattern or practice suits relative to an employer’s “resistance” to Title VII rights, claims which were not specifically defined in the statute. However, this new approach limits the EEOC’s claims in pattern or practice suits to only concrete allegations of discrimination.

Section 707 Claims Are Subject To The Pre-Suit Requirements Of Section 706

The EEOC’s letter then addressed whether actions under section 707 are subject to the pre-suit requirements of section 706, which mandate that any suit brought by the Commission must first have a filed charge, a reasonable cause finding, and an attempt to conciliate the dispute.

Examining Title VII’s statutory language, the Commission first concluded that a charge must precede any action brought pursuant to section 707. Section 707(e) explicitly states that pattern or practice claims will follow a charge filed either “by or on behalf of a person claiming to be aggrieved or by a member of the Commission.”  Further, the Commission’s own regulations require that the EEOC file a civil action under Title VII only after a charge has been filed. 29 C.F.R. § 1601.27.

The EEOC also concluded in its letter that Title VII and its interpreting regulations also require the Commission to attempt to conciliate claims before filing suit under section 707. See 29 C.F.R. § 1601.24(a) (“Where the [EEOC] determines that there is reasonable cause to believe that an unlawful employment practice has occurred or is occurring, the [EEOC] shall endeavor to eliminate such practice by informal methods of conference, conciliation and persuasion.”). The Commission’s opinion letter conclusively states that there is no exception to this requirement for section 707 claims.

At the end of its opinion letter, the EEOC recognized that “it has previously asserted in a small number of cases that a section 707 claim need not be tied to allegations of violations of sections 703 or 704, nor comply with the procedural prerequisites of section 706,” but stated that it now believes that “the better view of section 707 is that a ‘pattern or practice of resistance’ claim must be tethered to a violation of section 703 or section 704….[and] any claim the Commission pursues under section 707 must follow the procedures of section 706.”

Implications For Employers

The EEOC’s opinion letter has clarified some oft-murky topics relative to the agency’s view on pattern or practice suits and, while the opinion letter only addresses Title VII claims specifically, could also provide guidance as to suits brought under the Americans with Disabilities Act (“ADA”), which tracks the requirements of Title VII, and the Age Discrimination in Employment Act (“ADEA”). In recent years, courts have developed a body of law surrounding pattern or practice suits brought by the EEOC, including those brought under the ADA and ADEA (we blogged about an example of such a case here). The Commission’s interpretation of the requirements relative to Title VII pattern and practice suits in its opinion letter could also help provide some much-needed guidance as to such claims brought under the ADA and ADEA. While requirements for ADA suits follow those for Title VII, courts have also reached similar conclusions to those in the opinion letter regarding ADEA pattern or practice suits.

Additionally, the EEOC’s letter could signal a shift in philosophy at the Commission. The letter begins by acknowledging that the EEOC “must follow the statutory language that Congress has provided.” This constructionist view is a departure from agency activity in the past, as the EEOC has previously liked to explore the boundaries of legal theories.  While too much should not be read into the letter, the opinion could signal a retrenchment by the EEOC on cutting edge litigation.  For example, this new view could impact the EEOC’s position on whether the ADEA allows a disparate impact theory for applicants (which is not expressly provided for by the statute).

In sum, this opinion letter is a must-read for employers, particularly those dealing with pattern or practice litigation with the EEOC, and is the latest in a series of ongoing efforts at the Commission to bring more transparency and consistency to the agency’s procedures.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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