Venetian Casino Resort LLC v. EEOC, No. 06-5361 (D.C. Cir. June 27, 2008); Niswander v. Cincinnati Ins. Co., No. 07-3738 (6th Cir. June 24, 2008)

| Jun 26, 2008 | Daily Developments in EEO Law |

I am refreshed by two weeks in Newfoundland, and ready to return to my beat.  This past week, we have two cases addressing the confidentiality of employer documents:  a retaliation action in the Sixth Circuit, where the asserted protected activity was a class member turning over client information to a class action attorney engaged in civil discovery; and the D.C. Circuit decision ordering entry of an injunction against the EEOC to prevent the release of data to charging parties.

Niswander v. Cinncinnati Ins. Co., No. 07-3738 (6th Cir. June 24, 2008):  Lawyers often ask clients in litigation to provide anything in their files arguably related to a discovery request for production of documents.  An incautious lawyer, though, may put the employee at jeopardy by overproducing — such as (we shall see in this case) turning over customer files that the employee kept in her home office.  Because the disclosure of documents to the lawyer may be deemed a violation of the company’s confidentiality policies, and may be grounds for termination all by itself, the lawyer has to take care in what documents are turned over to the employer.  Because as this case reveals, not everything that a client turns over will be protected by the anti-retaliation sections of Title VII and the Equal Pay Act.

The plaintiff in this case had opted-in to an Equal Pay Act collective action (the Rochlin case), and believed she had suffered retaliation as a result. I set forth the history at some length below, because of their stomach-churning familiarity to lawyers who regularly litigate employment cases:

“Niswander communicated with the lawyers in the Rochlin lawsuit throughout the period of time in which the alleged retaliation took place. At some undisclosed point in time, Niswander discussed with the Rochlin lawyers her belief that Baldwin was retaliating against her. She testified in her deposition that she was told by the attorneys that they ‘were hoping to bring a retaliation claim in the future.’

“In late September of 2005, Niswander received two letters from Amy DeBrota, one of the lawyers in the Rochlin lawsuit. The letters informed Niswander that CIC had ‘ask[ed] [the plaintiffs] to provide addition al discovery response and documents.’ In the first letter, Niswander was directed to provide, among other information, ‘[a]ny documents that relate in any way to the allegations we have made in the Complaint or Amended Complaints or any documents that you have that show that you were treated less favorably (in any way) than a male employee at CIC.’ The letter concludes by stating that the plaintiffs ‘must cooperate in discovery or face adverse consequences from the Court, such as preventing us from presenting helpful evidence at trial, or even dismissing some claims altogether.’

“DeBrota’s second letter was primarily intended to provide Niswander with her deposition schedule for the lawsuit, but it also referred to the ongoing discovery requests. Specifically, that letter stated: ‘[I]if you have any documents related to your employment at CIC which you have not already sent in, please send them to me immediately.’ (Formatting in original.) The letter continued: ‘I also need you to look around your house and office for any documents you think might be even remotely helpful to our case and send them in right away. If we do not produce the documents to CIC and cooperate in discovery, we will not be able to use the documents at all.’

Niswander, allegedly in response to these letters, gathered up documents from her home office and sent them to DeBrota. She admitted in her deposition that she had ‘no documents to support an equal pay [claim].’ Instead, she sent documents that she believed were relevant to CIC’s alleged acts of retaliation against her. Some of the documents that Niswander sent were copies of e-mails back and forth with her supervisors related to her job performance. Other documents, however, were claim-file documents that allegedly would jog her memory regarding instances of retaliation, but that did not in and of themselves contain evidence of retaliation. In sending the documents to her lawyers, some of which included information about CIC’s policyholders, Niswander ‘thought everything was confidential’ and that ‘anything [she] produced was all between the two attorneys, being Cincinnati Insurance[‘s attorney] and mine.'”

Here, the Sixth Circuit in an opinion signed by Judge Gilman held that the employee’s disclosure to the lawyer of the confidential client documents — admitted by the employee to be unrelated to the substance of the case — was neither opposition to discriminatory practices, nor participation in an EEO proceeding, and thus was not “protected activity” for purposes of the anti-retaliation sections of Title VII or the Equal Pay Act. 

First, the plaintiff fell outside of the participation clause, because the documents that she turned over to the class action lawyer by the employee’s own admission did not concern the pending class Equal Pay Act claim:

“This is not a case of an employee mistakenly or inadvertently delivering confidential information out of a belief that the documents provided direct proof of discrimination. Instead, Niswander delivered numerous documents, some of which were copies of e-mails from her supervisors related to her job performance, but some of which were claim-file documents that included confidential personal information of insured individuals. Those claim-file documents were delivered in order to help trigger Niswander’s memory of instances of alleged retaliation.

“There is no dispute that she had those documents in her possession as a result of her employment duties, but the fact that she innocently acquired them is not sufficient to overcome her intentional and unnecessary dissemination of documents that were irrelevant to her EPA claim. Our analysis would be different if the documents that Niswander had given to her lawyers, and that they in turn produced to CIC, had reasonably supported her claim of gender-based pay discrimination-or if she reasonably believed that they did. But on the basis of the facts before us, her delivery of the documents to her attorneys in the Rochlin lawsuit does not qualify as participation in that lawsuit.”

Second, the Sixth Circuit held that where the asserted opposition activity is exposing an employer’s confidential documents in civil discovery, it was necessary to impose a balancing of interests between the employee’s right to pursue a complaint of discrimination and the employer’s interest not to have its confidential information exposed to outsiders:

“[We believe that the following factors are relevant in determining whether Niswander’s delivery of the confidential documents in question was reasonable: (1) how the documents were obtained, (2) to whom the documents were produced, (3) the content of the documents, both in terms of the need to keep the information confidential and its relevance to the employee’s claim of unlawful conduct, (4) why the documents were produced, including whether the production was in direct response to a discovery request, (5) the scope of the employer’s privacy policy, and (6) the ability of the employee to preserve the evidence in a manner that does not violate the employer’s privacy policy.”

Applying this test, the court found as a matter of law that Niswander’s turning over of the documents to the lawyer was not protected opposition activity:

“The only factors that arguably weigh in Niswander’s favor are factors one and two, but even those do not weigh heavily in her favor. Although she had access to the documents through her employment, Niswander did not innocently acquire the documents in the same manner as the plaintiff in Kempcke [v. Monsanto Co., 132 F.3d 442 (8th Cir. 1998)], who came across evidence of potential age discrimination in a company computer that had been issued to him. See Kempcke, 132 F.3d at 445. Rather than innocently stumbling upon evidence of illegal employment practices, Niswander specifically searched through the CIC documents that she had at her home office for the purpose of uncovering evidence of retaliation. Such behavior cannot be classified as truly innocent acquisition. “

The adoption of the balancing test led to two separate concurring opinions.  The first, from Judge McKeague, suggested that the majority opinion ought to have stopped with the first five factors:  “one could read the majority opinion to permit an employee to breach her employer’s privacy policy even when there are nonbreaching alternatives within her reach if a particular tribunal believes that one or more of the other factors weigh heavily enough in her favor.”  The second opinion, again by Judge Gilman, responded to Judge McKeague and stated that he was unwilling to foreclose the “possibility that an employee’s dissemination of confidential documents might be reasonable under the totality of the circumstances despite having a nonbreaching alternative available, as for example in a case where an employee reasonably believes that she is being subjected to discrimination and takes confidential documents to an attorney for advice and counsel.”

Venetian Casino Resort LLC v. EEOC, No. 06-5361 (D.C. Cir. June 27, 2008): This case, on its second trip to the D.C. Circuit, concerns the EEOC’s policy under Section 83 of its compliance Manual (adopted under the Privacy Act) that allows it to share information obtained from respondents with ADEA and Equal Pay Act charging parties, without prior notice to the employer. The casino — challenging a subpoena filed by the agency for documents in considered to be confidential — brought an action for injunctive relief, claiming that the Compliance Manual policy contradicted a regulation that the EEOC adopted under the Freedom of Information Act (FOIA) that requires the agency to notify the employer before it disclosed confidential documents to a third party. The district court originally dismissed the case as unripe, but the D.C. Circuit reversed (409 F.3d 359 (D.C. Cir. 2005)).

On remand, the district court granted summary judgment to the agency on the ground that Section 83 was neither arbitrary nor capricious. But the D.C. Circuit again reversed, this time ordering entry of an injunction in favor of the casino. Although there was a lack in clarity about what version of the policy was presently in force at the agency (the Commission had versions from 1987 and 1992), the court held that in any event “the record leaves no doubt the Commission has a policy of disclosing confidential information without notice to the submitter.”

The Court then evaluated whether the policy violates the Administrative Procedure Act (APA) because it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Thought the panel rejects the argument that Section 83 violates the federal Trade Secrets Act, it finds support for an injunction under the FOIA and the agency’s implementing regulation, 29 C.F.R. § 1610.19(b)(3). “[We cannot but agree with Venetian that the policy is arbitrary and capricious. To maintain two irreconcilable policies, one of which — the Compliance Manual section relating to the Privacy Act — apparently enables the agency or, for that matter, any person asking for information, to circumvent the other, viz., the regulation implementing the FOIA and requiring pre-release notification, is arbitrary and capricious agency action.”

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