In a positive development for employers throughout the land, the United States Supreme Court will consider a dispute over the Equal Employment Opportunity Commission's duty to try and settle charges of job discrimination before filing lawsuits against employers. The issue has riled business groups as the Obama administration has aggressively stepped up enforcement of the nation's anti-discrimination laws.
The justices agreed to hear an appeal from an Illinois mining company that was sued by the EEOC for failing to hire qualified female job applicants. The government alleges the employer has never hired any female miners since it began operations in 2006 despite getting applications from many qualified women. The employer argues the lawsuit should be thrown out because the EEOC didn't try hard enough to negotiate a settlement before going to court. The Obama administration claims it is up to the EEOC — not the courts — to decide whether terms of a settlement are acceptable.
A federal judge agreed to review whether the EEOC's attempt to settle the case was "sincere and reasonable," but the government objected. The 7th U.S. Circuit Court of Appeals reversed, saying a company could not raise ineffective settlement effort as a defense. Federal law does require the EEOC to try to stop illegal employment practices by "informal methods of conference, conciliation and persuasion." But it also allows the Commission to file a lawsuit if it has been unable to reach a conciliation agreement "acceptable to the Commission."
Appeals courts have long been split as to how deeply to probe the EEOC's settlement efforts. Some require a minimal level of "good faith" while other courts perform a more thorough analysis. The 7th Circuit was the first appeals court to rule that employers cannot try to dismiss EEOC lawsuits by claiming conciliation efforts were lacking. The court said that would undermine the agency's law enforcement goals and tempt employers into dragging out settlement talks.
The case has drawn interest from the business community. The U.S. Chamber of Commerce and other groups have filed a brief in the case arguing that the EEOC's recent enforcement strategy has been "sue first and negotiate later." The Obama administration had also urged the court to take up the case and resolve the split among appeals courts over what role settlement talks should have when litigation begins.
We will keep an eye out for the Court’s decision as it will take up the case when its new term begins this fall. In the interim, we would advise our clients to continue to move to dismiss the case in jurisdictions allowing such a motion and raise the issue in affirmative defenses to EEOC discrimination complaints in jurisdictions that do not.