EEOC’s Investigative Authority Continues After Case Otherwise Resolved

By Michael J. Lorenger October 12, 2017

Employers have long known that the U.S. Equal Employment Opportunity Commission (EEOC) has broad authority to obtain information, interview witnesses and subpoena documents once it begins investigating a charge of discrimination. What most employers may not know, however, is that the EEOC's investigative authority does not end when it issues a right-to-sue letter to the complaining employee, or even when the employee's claim has been settled or dismissed. That, at least, is the conclusion of the 7th U.S. Circuit Court of Appeals, which last month enforced an EEOC subpoena long after the complaining employees had received right-to-sue letters, filed suit and lost their claims in federal court.

[SHRM members-only toolkit: Managing Equal Employment Opportunity]

The case arose in the fall of 2011 when two former employees of the Union Pacific Railroad Co. filed charges of discrimination alleging that they had been denied the opportunity to sit for promotional tests on the basis of their race. In response to the employer's position statement disputing the allegations, the EEOC issued a subpoena demanding additional information.

While the EEOC and the company argued over the scope of the subpoena, the agency issued right-to-sue letters to both employees, who promptly filed legal actions in federal court. Despite its issuance of these letters and the employees' pending claims, the EEOC did not consider its investigation complete, and in May 2013 the agency filed its own action against Union Pacific, seeking to enforce its subpoena.

That case was tentatively resolved, but the EEOC issued a second subpoena a year later when it contended that Union Pacific had failed to provide required information. Meanwhile, after nearly two years of litigation, the employees' federal court action was dismissed by the district court when it concluded that they lacked sufficient evidence to move the case forward.

Following this dismissal, Union Pacific moved to revoke the EEOC subpoena, arguing that the agency's investigative authority had expired in light of its issuance of the right-to-sue letters and the district court's dismissal of the employees' private claims. The district court rejected the company's arguments, and the appellate court agreed.

The 7th Circuit held that while a valid charge of discrimination is necessary before the EEOC can begin an investigation, its investigative authority does not end when the legal proceedings related to the charge are terminated. Noting that the EEOC has been given a "broad role in promoting the public interest by preventing employment discrimination under Title VII [of the Civil Rights Act of 1964]," the appellate court concluded that "neither the issuance of a right-to-sue letter nor the entry of judgment in a lawsuit brought by the individuals who originally filed the charges" bars the EEOC from continuing its own investigation.

In reaching this conclusion, the appellate court noted that prior decisions of the U.S. Supreme Court and the 7th Circuit had made it clear that the EEOC is not stripped of its investigative authority when, for example, complaining employees are required to submit their claims to arbitration or when they voluntarily withdraw their charges, perhaps as the result of a private settlement. Similarly, the issuance of right-to-sue letters and even a court's dismissal of the resulting litigation does not divest the EEOC of its "broad obligation to the public interest."

The 7th Circuit's decision mirrors a similar decision handed down by the 9th Circuit in 2009, but it runs contrary to a 1997 5th Circuit decision. This brewing circuit split may well cause the Supreme Court to take up the issue in the coming years.

EEOC v. Union Pacific, 7th Cir., No. 15-cv-3452 (Aug. 15, 2017).

Professional Pointer: This case should be a reminder to executives and human resources professionals that a company cannot necessarily end an EEOC investigation by prevailing in court or even by settling with the employee or former employee. If the EEOC suspects that the employer has engaged in systemic discriminatory practices beyond those alleged to have affected the complaining employee, it has broad authority to continue its investigation.

Michael J. Lorenger is an attorney with Lorenger & Carnell PLC, the Worklaw® Network member firm in Alexandria, Va.


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