Publication

January 13, 2014Client Alert

The Seventh Circuit Breaks from the Pack; Prohibits Employers from Challenging the EEOC’s Pre-Lawsuit Conciliation Efforts

When the United States Equal Employment Opportunity Commission (EEOC) makes a finding of reasonable cause after its investigation of a discrimination charge, Title VII of the Civil Rights Act instructs the EEOC to “…endeavor to eliminate any such unlawful employment practice by informal methods of conference, conciliation and persuasion.” The statute also provides that the EEOC may proceed to filing a lawsuit against the employer only if it “…has been unable to secure from the Respondent a conciliation agreement acceptable to the Commission.” In EEOC v. Mach Mining LLC, No. 13-2456, the Seventh Circuit Court of Appeals (which covers Illinois, Indiana and Wisconsin) recently held that employers may not challenge the EEOC’s pre-lawsuit conciliation efforts as an affirmative defense to the lawsuit. By its decision, the Seventh Circuit broke away from the majority of Federal Courts of Appeal. The EEOC called the ruling in Mach Mining a “landmark” victory in its press release.

 

As part of its recent initiatives, the EEOC has been very aggressive in filing lawsuits and in the past few years has suffered setbacks with many courts critical of the Agency’s pre-lawsuit investigatory and conciliation efforts. The defense tactic of raising the failure of the EEOC to engage in good faith conciliation efforts as an Affirmative Defense has been widely used by employers’ attorneys in discrimination lawsuits brought by the EEOC. In many cases the EEOC might fail to even attempt face-to-face negotiation, refuse to provide information requested by the employer to assist in conciliation, or simply make a “take it or leave it proposal” before rushing to the courthouse to file a lawsuit.

 

The essence of the Court’s decision is that conciliation is an informal process in which the EEOC is to “try” to obtain a settlement acceptable to it. The Court also found that Title VII gives the EEOC “sole discretion” to determine whether a conciliation proposal is acceptable and further noted that Title VII is silent as to the standards by which the adequacy of the Agency’s conciliation efforts can be measured. Finally the Court found that permitting the employer to raise inadequate conciliation efforts as a defense to a discrimination claim would undermine the enforcement goals of Title VII. According to the Court, employers could drag out discrimination litigation by turning “what was meant to be an informal investigation into the subject of endless disputes over whether the EEOC did enough before going to court.” At least in Illinois, Wisconsin and Indiana, the EEOC’s methods, the negotiation process and whether the EEOC has acted in good faith in attempting to resolve a charge before filing a lawsuit no longer matters.

 

Although it is not yet known whether Mach Mining will petition the United States Supreme Court to resolve the split between the Seventh Circuit and the majority of other Courts of Appeal, it is likely this issue will someday be decided by the Supreme Court.

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