It's Unanimous! EEOC Conciliation is subject to Judicial Review

The Supreme Court last week rejected the EEOC’s longstanding position that pre-suit conciliation efforts are shielded from judicial review of any kind. Holding that “a court may review whether the EEOC satisfied its statutory obligation to attempt conciliation before filing [an employment discrimination] suit,” the unanimous opinion of Mach Mining, LLC v. EEOC makes clear that judicial review is the only way to ensure EEOC compliance with pre-suit obligations.

The opinion, written by Justice Elena Kagan, also establishes the general scope of any such review – and even suggests ways for the EEOC to prove compliance and for the employer to rebut. Even so, Mach Mining leaves many issues related to the EEOCs pre-suit obligations unresolved.

Overview

A female applied for a job as a coal miner with Mach Mining and was not hired. She filed a sex discrimination charge with the Equal Employment Opportunity Commission. The EEOC issued a “reasonable cause” determination on behalf of the woman who filed the original charge as well as a class of women who applied for mining jobs. After sending two letters, one advising the company of the EEOC’s reasonable cause determination and another declaring conciliation efforts unsuccessful, the EEOC filed suit in a federal court in Illinois.

The EEOC alleged in its complaint that it tried to conciliate before filing suit, but Mach Mining denied that the agency “conciliated in good faith.” The EEOC sought summary judgment on the issue, claiming that courts should not be allowed to review the agency’s conciliation efforts. The district court disagreed, and found that it was entitled to determine whether the EEOC made “a sincere and reasonable effort to negotiate.” The EEOC appealed to the U.S. Court of Appeals for the Seventh Circuit, which hears appeals from federal courts in Illinois, Indiana, and Wisconsin. The Seventh Circuit reversed, and found that there was no right of judicial review of the EEOC’s conciliation efforts. (The U.S. Courts of Appeals for the Fourth, Sixth, and Tenth circuits found in previous decisions that a very limited degree of judicial review was appropriate, while the Second, Fifth and Eleventh circuits permitted a more in-depth review.)

Mach Mining petitioned for the Seventh Circuit decision to be reviewed by the U.S. Supreme Court, and the Supreme Court unanimously reversed this week. However, the Court found that the appropriate remedy when the EEOC failed to conciliate was not dismissal of the lawsuit but an order requiring the EEOC to conciliate before moving forward.

“Strong presumption” in favor of judicial review

The Supreme Court first discusses the “strong presumption” in favor of judicial review of administrative actions that may be rebutted only if the agency demonstrates Congress’ intent for an agency to “police its own conduct.” The Court’s opinion does not include a discussion of the legislative history related to the 1972 amendment to Title VII, which granted the EEOC authority to litigate. The Court did, however, find that the EEOC failed to demonstrate a Congressional intent exempting its conciliation efforts from all judicial review.

(The legislative history (scroll down to pdf page 37) shows that Congress considered exempting the EEOC’s conciliation efforts from judicial review but removed the exempting language from the final version passed in 1972. This is a strong indication that Congress did not intend to exempt the EEOC’s conciliation process from review by the courts.)

The Court said that the EEOC must disclose to the employer the alleged unlawful employment practice at issue and provide the employer with an opportunity to discuss it, all in an effort to achieve voluntary compliance with the law. Without the option of judicial review, the Court notes, violations of these requirements by the EEOC would have no consequence.

Narrow scope of review

That said, the Court clarifies that judicial review of the EEOC’s conciliation efforts should be narrow in scope, rejecting the arguments in this regard by the EEOC and Mach Mining. The conciliation process must “afford the employer a chance to discuss and rectify a specified discriminatory practice – but goes no further.” The court should “respect[] the expansive discretion that Title VII gives to the EEOC over the conciliation process, while still ensuring that the [EEOC] follows the law.” The purpose of judicial review is to “determine that the EEOC actually, and not just purportedly, tried to conciliate a discrimination charge.”

In short, the Court makes clear that the EEOC need only “endeavor” to conciliate a claim, without a set amount of time or resources, without requiring specific steps or measures, and with the discretion to sue whenever “unable to secure” terms “acceptable” to the EEOC.

Going forward

The Court’s decision suggests what the EEOC should and should not do in proving that it complied with its duty to conciliate. The “bookend” letters at issue in the Mach Mining case are not sufficient. According to the Court, the EEOC may prove compliance by submitting an affidavit saying that it met its obligations by attempting in good faith to conciliate but that conciliation efforts failed.

If the EEOC’s affidavit is rebutted with “credible evidence” from the employer, the trial court must then “conduct the factfinding necessary to decide that limited dispute.” What these phrases mean will no doubt result in another split among the circuits.

The opinion does, however, resolve the split in the circuits with regard to the appropriate remedy if the EEOC fails to satisfy its conciliation obligation. Previously, some courts were “staying” (suspending) the case while the EEOC fulfilled its obligations. Other courts dismissed the lawsuit altogether. As already noted above, the Supreme Court ruled that “the appropriate remedy is to order the EEOC to undertake the mandated efforts to obtain voluntary compliance” rather than dismissal.

What we don’t know

The Mach Mining opinion leaves many issues unresolved. For example, the opinion does not address the EEOC’s statutory and separate pre-suit obligation to investigate the merits of a charge or the appropriate remedy if the EEOC fails to do so. Likewise, the Court does not address whether the EEOC’s obligations are different depending upon whether it seeks prospective relief (to prevent future discrimination) or retrospective relief (like monetary damages for backpay) on behalf of claimants. Finally, the Court does not discuss what discovery is permitted of the EEOC’s conciliation (or investigative) efforts, an issue on which the circuits do not agree.

Those questions aside, the Supreme Court Mach Mining decision is an important victory for employers.

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