The EEOC posts a huge win in the Seventh Circuit, with the court holding that the agency's alleged failure to reasonably conciliate a claim with an employer does not pose an affirmative defense to a claim filed by the EEOC in court. In so holding, the circuit creates a split with six other circuits that have heretofore permitted employers to argue such a defense. "While we respect the views of our colleagues in these circuits," the panel holds, "we also recognize our duty to decide our cases independently and to disagree when we must."
The EEOC filed a complaint in the Southern District of Illinois, alleging failure-to-hire because of sex, in violation of Title VII. The employer, Mach Mining, answered with an affirmative defense that the EEOC's case should be dismissed because the EEOC did not make a sincere and reasonable effort to negotiate a pre-filing resolution under 42 U.S.C. § 2000e-5(b). The provision at issue states that:
"If the Commission determines after such investigation that there is reasonable cause to believe that the charge is true, the Commission shall endeavor to eliminate any such alleged unlawful employment practice by informal methods of conference, conciliation, and persuasion."
The EEOC may sue only after it "has been unable to secure from the respondent a conciliation agreement acceptable to the Commission." 42 U.S. C. § 2000e-5(f)(1).
After two years of "extensive discovery" over this defense alone, the EEOC sought summary judgment to knock this defense out of the answer. But the district court, citing the decisions of six other circuits, held that the defense was valid. The court then certified the legal issue of the validity of the defense for the Seventh Circuit to decide on interlocutory appeal.
The Seventh Circuit reverses (in an opinion signed by Judge Hamilton), holding that neither the text nor enforcement framework of Title VII supported such a defense:
"The text of Title VII contains no express provision for an affirmative defense based on an alleged defect in the EEOC's conciliation efforts. In 'the context of a statute as precise, complex, and exhaustive as Title VII,' [University of Texas Southwestern Med. Ctr. v. Nassar, 133 S. Ct. 2517, 2530 (2013)], this silence itself is compelling. We do not rely only on that silence, however. We are also persuaded by the express statutory language making clear that conciliation is an informal process entrusted solely to the EEOC's expert judgment and that the process is to remain confidential."
The panel notes that the statutory language invites the EEOC to "endeavor to eliminate" discrimination "by informal methods." Such discretionary language signals an intent to leave the methods and timing up to the agency to determine: "It would be difficult for Congress to have packed more deference to agency decision-making into so few lines of text." The panel also notes that allowing such a defense would conflict with the statutory command that "Nothing said or done during and as a part of such informal endeavors may be made public by the Commission, its officers or employees, or used as evidence in a subsequent proceeding without the written consent of the persons concerned." 42 U.S.C. § 2000e-5(b).
Apart from conflicting with the language of Title VII, the panel reasons that a "failure-to-conciliate" defense would "lack of a meaningful standard to apply." Courts would be required to place themselves in the shoes of EEOC counsel to decide how hard (or not) to press for resolution. Congress conferred such discretion on the agency, not for courts to apply retrospectively.
"A court reviewing whether the agency negotiated in good faith would almost inevitably find itself engaged in a prohibited inquiry into the substantive reasonableness of particular offers-not to mention using confidential and inadmissible materials as evidence-unless its review were [sic] so cursory as to be meaningless."
The panel compares the Title VII language to actions "committed to agency discretion by law," under the Administrative Procedure Act, which are exempt from the APA's general presumption of judicial review
The panel also observes that allowing an affirmative defense would have the perverse consequence of defeating conciliation, turning that phase of dispute-resolution into litigation by other means:
"If an employer engaged in conciliation knows it can avoid liability down the road, even if it has engaged in unlawful discrimination, by arguing that the EEOC did not negotiate properly-whatever that might mean-the employer's incentive to reach an agreement can be outweighed by the incentive to stockpile exhibits for the coming court battle. Similar reasoning explains why Title VII makes negotiations confidential in the first place."
Finally, the panel determines that it cannot follow the decisions of its sister circuits, which are even among themselves inconsistent about proof might be required. "[O]ther courts have struggled to provide meaningful guidance on how to judge the process." (Noting that it was creating a circuit split, the panel states that the draft opinion was circulated to the full court, and no judge requested rehearing of the issue.) The panel also expresses disapproval of the idea that the claimants, who are blameless by-standers in the process, should surrender their claims because a court finds after the fact that the EEOC could have taken more steps to conciliate.
It would seem certain that the employer will seek review in the U.S. Supreme Court, and there's a reasonable chance that the justices might agree to consider the legal issue now that there's a split. Still, the Seventh Circuit has written a very persuasive argument in support of agency discretion that ought to carry the day for the EEOC.