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U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
Washington, D.C. 20507
Selected EEOC Developments
“Preservation of Access to the Legal System” Priority
under the Strategic Enforcement Plan
ABA Section of Labor and Employment Law
Annual CLE Conference
November 2014
Los Angeles, California
Strategic Enforcement Plan Priority
The U.S. Equal Employment Opportunity Commission adopted its current
Strategic Enforcement Plan (SEP) on December 17, 2012. The SEP lists
“Preserving Access to the Legal System” as a top enforcement priority. According to
the SEP:
The EEOC will . . . target policies and practices that discourage or
prohibit individuals from exercising their rights under employment
discrimination statutes, or which impede the EEOC’s investigative or
enforcement efforts. These policies or practices include retaliatory
actions, overly broad waivers, settlement provisions that prohibit filing
charges with the EEOC or providing information to assist in the
investigation or prosecution of claims of unlawful discrimination, and
failure to retain records required by EEOC regulations.
See U.S. EEOC Strategic Enforcement Plan for Fiscal Years 2013 – 2016, at Section
III.B.V., available at http://www.eeoc.gov/eeoc/plan/sep.cfm.
This document describes some recent developments implicating this SEP
priority.
Enforcement Actions Involving Waivers/Releases/Severance Agreements
•
EEOC v. Doherty Enterprises, Inc. (S.D. Fla. No. 14-cv-81184) (filed Sept. 18,
2014; suit pending). The EEOC sued Doherty Enterprises, Inc. alleging that its
use of a mandatory arbitration agreement violated Section 707 of Title VII of the
Civil Rights Act of 1964. The Commission contends that since at least May
2013, Doherty has conditioned applicants’ and/or employees’ employment on
signing a mandatory, unenforceable Arbitration Agreement that interferes with
its applicants’ and/or employees’ right to: (1) file charges with the Commission
and Fair Employment Practices Agencies (“FEPAs”); and (2) communicate with
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and participate in the proceedings conducted by the EEOC and FEPAs. The
EEOC asserts that Doherty, through its regular and repeated use of this
Arbitration Agreement, has intended to deny the full exercise of the Title VII
right to file a charge. The Arbitration Agreement on its face prohibits chargefiling, demonstrating Doherty’s intent to prevent applicants and employees from
exercising that right. According to the EEOC, this violates section 707 of Title
VII, which prohibits employer conduct that constitutes a pattern or practice of
resistance to the rights protected by Title VII. Section 707 permits the agency to
seek immediate relief without the same pre-suit administrative process that is
required under Section 706 of Title VII (e.g., it does not require that the agency’s
suit arise from a discrimination charge). The Commission does not seek
monetary relief for victims, but rather to stop Doherty from using this allegedly
illegal agreement and to grant 300 days for applicants or employees subjected to
the agreement to file a charge with the EEOC or a FEPA.
•
EEOC v. CollegeAmerica (D. Colo. No. 14-cv-01232) (filed Apr. 30, 2014; suit
pending). The EEOC filed suit against CollegeAmerica, a private college based
in Salt Lake City, alleging that it violated the Age Discrimination in
Employment Act of 1967 by including unlawful provisions in a separation
agreement with one of its former campus directors and then retaliating against
her by suing her after learning she filed a discrimination charge. According to
the EEOC’s lawsuit, Debbi D. Potts, the campus director of CollegeAmerica’s
Cheyenne, Wyo., campus, resigned in July 2012 and signed a separation
agreement in September 2012 that conditioned the receipt of separation
benefits on, among other things, her promise not to file any complaint or
grievance with any government agency or to disparage CollegeAmerica. The
Commission contends that these provisions would prevent Potts from reporting
any alleged employment discrimination to the EEOC or filing a discrimination
charge. Seven days after CollegeAmerica learned that Potts filed a charge
against CollegeAmerica charging age discrimination and retaliation, the EEOC
claims, the school sued Potts in Colorado state court for allegedly violating the
severance agreement signed in September 2012. The EEOC asserts that the
state court lawsuit was filed in retaliation for Potts filing her charge. The
EEOC also claims that provisions which similarly chill employees’ rights to file
charges and cooperate with the EEOC exist in CollegeAmerica’ s form
separation and release agreements, routinely used with its employees. The
Commission seeks to recover Potts’s attorney’s fees and costs incurred in
defending the state court lawsuit. The EEOC also seeks injunctive relief,
including invalidating Potts’s separation agreement; reforming
CollegeAmerica’s form separation and release agreements to comply with the
ADEA; anti-discrimination training; and policies and programs to stop any
future violations of the ADEA.
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•
EEOC v. CVS Pharmacy Inc. (N.D. Ill. No. 14-cv-0863) (filed Feb. 7, 2014; suit
pending). The Commission filed suit against CVS, the nation’s largest
integrated provider of prescriptions and health-related services, alleging that
CVS violated Section 707 of Title VII of the Civil Rights Act of 1964. According
to the EEOC, CVS conditioned the receipt of severance benefits for certain
employees on an overly broad severance agreement set forth in five pages of
small print. The Commission contends that the agreement interfered with
employees’ right to file discrimination charges and/or communicate and
cooperate with the EEOC. The Commission alleges that the use of this
Agreement violates Section 707 of Title VII, which prohibits employer conduct
that constitutes a pattern or practice of resistance to the rights protected by
Title VII. Section 707 permits the agency to seek immediate relief without the
same pre-suit administrative process that is required under Section 706 of Title
VII (e.g., it does not require that the agency’s suit arise from a discrimination
charge). The Commission does not seek monetary relief for victims, but rather
to stop CVS from using this allegedly illegal severance agreement and tolling of
the charge-filing limitations period for those subjected to the release. On
September 18, 2014, the district court granted CVS’s motion to dismiss.
•
EEOC & Whitelow v. Cognis (C.D. Ill. No. 10-cv-2182) (filed Aug. 18, 2010;
resolved Jan. 28, 2013). The Commission sued Germany-based Cognis arguing
that it retaliated against a longtime employee, Steven Whitlow in violation of
Title VII. As a condition of his continued employment, Cognis required Whitlow
to sign a “last-chance agreement” (LCA) that prohibited Whitlow from filing a
charge of employment discrimination with the EEOC – even based on conduct
that had yet to occur. According to the EEOC, Cognis essentially conditioned
Whitlow’s employment on Whitlow’s agreement to give up his right to make any
federal complaint of employment discrimination. When Whitlow refused to be
bound by that agreement, the company fired him, the EEOC said. The EEOC’s
lawsuit also alleged that Cognis retaliated against a class of employees who
signed similar last-chance agreements because Cognis forced those employees to
make a choice between termination and signing LCAs that stripped employees of
their right to file charges and seek relief for future discriminatory conduct -- or
at least deterred them from doing so. On May 23, 2012, the district court
granted EEOC’s motion for summary judgment with regard to Whitlow,
concluding that “no jury could reasonably conclude that Cognis did not
unlawfully retaliate against Whitlow when it fired him, and that Cognis’s
argument to the contrary “defies simple logic.” The court also held that a jury
could reasonably conclude that “Cognis feared protected activity from poorly
performing employees if they were terminated and therefore offered LCAs which
required the poorly performing employees to give up their civil rights as their
sole alternative to termination.” The court noted that the language of the
agreements supported this inference “because fear of such protected activity
seems to be one of the only reasons for placing the retaliatory provision” in the
last chance agreements. Accordingly, the court concluded a jury should decide
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whether Cognis engaged in unlawful “anticipatory retaliation” against
the class. See EEOC v. Cognis Corp., 2012 WL 1893725 (C.D. Ill. May 23, 2012).
The parties later settled the matter via a consent decree.
•
EEOC v. Allstate Ins. Co. (3d Cir. 14-2700; appeal pending). Opening brief as
Appellant filed Aug. 12, 2014. For decades most of Allstate’s insurance agents
were employees who enjoyed generous employment benefits. In 1990 Allstate
decided it wanted its agents to be independent contractors. The company
encouraged its employee agents to become independent contractors, but few of
them did so voluntarily. In November 1999 Allstate announced its Preparing for
the Future Group Reorganization Program (“Program”). Allstate said it would
fire all its employee agents in June 2000. The employee agents had four options,
the first three of which required them to release all their claims against Allstate.
An agent could: (1) sign a release and become an exclusive agent (an
independent contractor); (2) sign a release, become an exclusive agent briefly,
and sell his book of business (client list); (3) sign a release and receive enhanced
severance benefits (a full year’s salary); or (4) sign no release and receive only
“base severance benefits” (13 weeks’ salary). The EEOC sued Allstate in 2001
claiming that the Program was retaliatory. The district court granted Allstate
summary judgment in 2007, the U.S. Court of Appeals for the Third Circuit
reversed in 2009, and the district court again granted Allstate summary
judgment in March 2014. The EEOC has now appealed that ruling, arguing
(inter alia) that Allstate’s release requirement is retaliatory per se because it
frustrates the primary purpose of the anti-retaliation provisions, which is to
ensure “unfettered access” to the anti-discrimination statutes’ remedial
mechanisms. According to the Commission, if it were lawful for an employer to
require its employees to release their claims in order to keep their jobs,
employers could require their employees to release their claims every month or
before issuing every paycheck and thereby immunize themselves from liability
under the anti-discrimination statutes.
Appellate Briefs Addressing Retaliation Issues
•
Grant v. United Cerebral Palsy of NYC, Inc. (2d Cir. 14-1223; resolved Sept. 16,
2014). Amicus curiae brief filed July 16, 2014. In this Title VII action, plaintiff
Sherry Grant alleged in relevant part that she had been subjected to retaliation
for complaining to her employer about her supervisor’s hostile treatment of
herself and other women in the workplace, and for subsequently filing a charge
of discrimination. The district court granted summary judgment to the
defendant, ruling that Grant’s charge filing was not protected activity because
the conduct about which she had complained in her charge could not objectively
be viewed as unlawful sex discrimination, and she therefore lacked the required
good faith, reasonable belief that the complained-of conduct was unlawful under
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the statute. On appeal, the Commission argued as amicus that individuals who
file a charge of discrimination under Title VII are protected from retaliation for
that filing under the participation clause of title VII’s retaliation provision,
regardless of whether the charge filer has a good faith, reasonable belief that the
charge has merit. Such a requirement is present for protection from retaliation
under the statute’s opposition clause, but not its participation clause. Courts
have long recognized the broad and largely unfettered protection afforded by
Title VII’s participation clause. While the U.S. Court of Appeals for the Second
Circuit has discussed the good faith, reasonable belief requirement in the
context of participation clause claims, it has never directly addressed the
question of whether this requirement should be applied to participation clause
claims, and a number of the court’s decisions suggest that the court would not
extend this requirement to participation clause claims. In September 2014, the
parties stipulated to withdrawal of the appeal without prejudice as to
reinstatement.
•
Boyer-Liberto v. Fontainbleau Corp. (4th Cir. 13-1473; appeal pending). Amicus
curiae brief filed July 8, 2014 in support of appellant’s petition for rehearing en
banc. The U.S. Court of Appeals for the Fourth Circuit, in Jordan v. Alternative
Resources Corp., 458 F.3d 332 (4th Cir. 2006), held that Title VII does not
protect an employee who opposed harassment in the workplace from retaliation
unless the employee had an objectively reasonable belief at the time that the
harassment had created, or was creating, an actionable hostile work
environment. In its amicus brief in Boyer-Liberto, the Commission argued the
Fourth Circuit sitting en banc should reconsider Jordan. The EEOC argued that
Title VII’s anti-retaliation provision should be construed to protect employees
who complain about racially offensive conduct that would result in an actionable
hostile work environment if repeated often enough. According to the
Commission, the Fourth Circuit’s current rule leaves employees experiencing
harassment in a catch-22 – forced to choose between enduring the harassment in
silence and complaining about it with no protection against retaliation. The
EEOC argued that the Jordan rule is inconsistent with the employee’s duty to
avoid damages by reporting the harassment before it becomes actionable, and
with the interpretation of Title VII that the Supreme Court has repeatedly
affirmed: that the primary purpose of Title VII is to prevent harm and avoid
violations, and that the best way to avoid hostile environments is for employees
experiencing harassment to report it to their employers before it becomes severe
or pervasive.
•
Huri v. Office of the Chief Judge of the Circuit Court of Cook County et al. (7th
Cir. 12-02217; appeal pending). Amicus curiae brief filed May 7. 2014. The
district court dismissed plaintiff Huri’s Title VII claim of retaliation for failure to
state a claim, stating that Huri failed to allege that she had suffered harassment
significant enough to cause a change in her employment status or discourage
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other employees from complaining about Title VII violations. On appeal, the
Commission argued that Huri alleged sufficient facts to withstand dismissal.
The EEOC contended that the district court’s heightened pleading standard for
Huri’s claim of retaliation conflicts with Burlington Northern & Santa Fe
Railway Co. v. White, 548 U.S. 53 (2006). The on-going mistreatment that Huri
alleges resulted from her complaints about her hostile work environment
satisfies Burlington Northern’s “materially adverse” standard because such
treatment might well dissuade a reasonable employee from making or
supporting a claim of discrimination. According to the Commission, to the
extent there is law from the U.S. Court of Appeals for the Seventh Circuit that
suggests retaliation in the form of harassment must satisfy a higher standard,
the plaintiff in that case failed to argue the proper standard under Burlington
Northern.
•
DeMasters v. Carilion Clinic et al. (4th Cir. 13-2278; appeal pending). Amicus
curiae brief filed February 25, 2014. In this Title VII suit, the plaintiff, an
employee assistance counselor, alleged he was fired in retaliation for urging an
employee to use the employer’s established mechanisms to complain about
sexual harassment and for opposing the employer’s failure to eradicate the
hostile work environment growing out of that complaint. The district court
dismissed DeMasters’s complaint on the ground that DeMasters did not engage
in protected activity under the opposition clause because DeMasters was just
doing his job when he relayed to HR the underlying complaint and under the
participation clause, because DeMasters’s activity was not related to an EEOC
filing or a Title VII action. On appeal the Commission argued as amicus that
DeMasters’s acts assisting the employee in complaining about sexual
harassment and his criticisms that Carilion failed to prevent ongoing retaliatory
harassment constituted protected opposition. When DeMasters conveyed the
sexual harassment complaint to HR, he reasonably believed the egregious
conduct described was unlawful under Title VII. Further, the Commission
argued that the district court erred when it applied a judicially-created
“manager rule” exception when determining opposition coverage. That rule,
which requires employees to “step outside” their normal job role has no
application here, first because DeMasters’s conduct was viewed by his employer
as adverse to the company’s interests, and second because the manager rule,
developed in FLSA cases, cannot be squared with the logic or policy rationale
animating recent Supreme Court Title VII retaliation cases. The Commission
further argued that proceedings under Title VII include employers’ internal
investigations and DeMasters’s efforts to help instigate an investigation are
properly viewed as protected participation conduct, as well. Oral argument is
calendared for October 2014.
•
Greathouse v. JHS Security (2d Cir. 12-4521; appeal pending); Neviaser v. Mazel
Tec, Inc. (2d Cir. 12-3948; resolved March 25, 2013). Amicus curiae letter
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brief/amicus curiae brief filed in conjunction with U.S. Department of Labor
March 7, 2013 and January 15, 2013, respectively. The issue was whether, in
light of the Supreme Court’s decision in Kasten v. Saint-Gobain Performance
Plastics Corp., 131 S. Ct. 1325 (2011), internal complaints are protected under
the FLSA/EPA anti-retaliation provision. (The Commission argued they
are.) Oral argument was held in Greathouse in June 2013; Neviaser voluntarily
settled pre-decision.
NOTE: Similar joint briefs were filed in Minor v. Bostwick Laboratories (4th
Cir. 10-1258) and Jafari v. Old Dominion Transit Mgmt. (4th Cir. 09-1004). On
January 27, 2012, the U.S. Court of Appeals for the Fourth Circuit issued two
favorable decisions agreeing with the Commission’s position that internal
company complaints are covered. See Minor v. Bostwick Labs., Inc., 669 F.3d
428 (4th Cir. 2012); Jafari v. Old Dominion Transit Mgmt. Co., 462 Fed. Appx.
385 (4th Cir. Jan. 27, 2012).
•
•
•
EEOC & Posten v. Jiudicy (11th Cir. 12-12777; resolved Feb. 5, 2014). Opening
brief as Appellant filed July 20, 2012; reply brief as Appellant filed October 22,
2012. The issues included whether the decision by the U.S. Court of Appeals for
the Eleventh Circuit, in EEOC v. Total System Services, Inc., 221 F.3d 1171
(11th Cir. 2000), is still good law. That case held that an employer is not liable
for firing an employee for engaging in protected activity if the employer
concludes that the employee is lying, even when the employer is mistaken, so
long as that mistake was an “honest” one. After briefing and oral argument, the
parties settled the matter via consent decree.
McKinley v. Skyline Chili, Inc. (6th Cir. 12-4064). Amicus curiae brief filed
December 21, 2012. In an unpublished decision issued August 21, 2013, the
Sixth Circuit agreed with the Commission’s view that the plaintiff’s “comment
that she was being treated differently than her younger and/or male coworkers” could qualify as protected activity under the anti-retaliation
provisions of Title VII and the ADEA. See McKinley v. Skyline Chili, Inc., 534
Fed. Appx. 461 (6th Cir. Aug. 21, 2013).
Richter v. Advance Auto Parts, Inc. (8th Cir. 11-2570). Amicus curiae brief
filed September 5, 2012 in support of appellant’s petition for rehearing en
banc. The Commission argued that the panel majority erred in holding that a
plaintiff like Richter, who allegedly was subjected to retaliation for filing a Title
VII charge, is barred from challenging that retaliation in court unless she first
filed a new or amended charge mentioning the retaliation. The EEOC explained
that the panel’s ruling overturned long-standing circuit precedent, conflicts with
case law from most other circuits, was not compelled by the Supreme Court’s
decision in National Railroad Passenger Corp. v. Morgan, 536 U.S. 101
(2002), and would undermine enforcement of federal anti-discrimination
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law. The Court denied the rehearing petition (over the dissent of three judges),
and the Supreme Court subsequently denied the plaintiff’s cert.
petition. See Richter v. Advance Auto Parts, Inc., 686 F.3d 847 (8th Cir), reh’g
en banc denied Oct. 10, 2012.
•
Bertsch v. Overstock.com (10th Cir. 11-4128). Amicus curiae brief filed January
3, 2012. The Commission argued the district court erred in concluding as a
matter of law that a performance improvement plan or written warning could
not constitute an adverse, retaliatory action. The EEOC also argued that the
district court erred in ruling that a threat to reassign the plaintiff to a
warehouse was not adverse, since a reasonable employee would be dissuaded
from complaining if she knew that she would face a threat of removal to a
warehouse site, where such removal would have isolated her from the rest of her
co-workers and would have been commonly perceived as “punishment.” In a
published opinion, the U.S. Court of Appeals for the Tenth Circuit adopted the
EEOC’s argument and reversed the district court’s grant of summary judgment
on the plaintiff’s retaliation claim. See Bertsch v. Overstock.com, 684 F.3d 1023
(10th Cir. 2012).
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