In EEOC v. Mach Mining, LLC, No. 13-2455 (7th Cir. Dec. 20, 2013), the Seventh Circuit held that employers may not defend against an EEOC-filed lawsuit by claiming that the EEOC failed to comply with its statutory obligation to conciliate in good faith.
When the EEOC investigates a charge of unlawful discrimination and determines that there is cause to believe discrimination occurred, Title VII requires the EEOC to attempt to eliminate the unlawful employment practices "by informal methods of conference, conciliation, and persuasion" (i.e., to conciliate).
The EEOC investigated a job applicant's sexual discrimination charge that Mach Mining failed to consider her for coal mining jobs due to her gender, and found cause to believe that Mach Mining discriminated against a class of job applicants at one of its mines. The EEOC and Mach Mining engaged in unsuccessful conciliation, and the EEOC filed suit. Mach Mining asserted in its answer that the lawsuit should be dismissed because the EEOC failed to engage in good faith conciliation.
The EEOC moved for partial summary judgment on the issue of whether failure to conciliate was an affirmative defense to its lawsuit. The district court, following several other circuits' precedents, denied the EEOC's motion, holding that the EEOC's attempt at conciliation is subject to at least some level of judicial review. The district court then certified to the Seventh Circuit the question of whether and to what extent conciliation is judicially reviewable through an implied affirmative defense. The Seventh Circuit reversed the district court's decision, and held that the EEOC's conciliation efforts were not reviewable, on several grounds.
First, the Seventh Circuit evaluated Title VII's language, which it noted does not explicitly provide for a failure-to-conciliate defense. In contrast, however, Title VII does explicitly state that the EEOC is required to "endeavor to eliminate" discrimination "by informal methods of… conciliation," and if it is unable to secure a conciliation agreement "acceptable to the Commission," then it may sue. Based on this language, the court held that Congress "packed…deference" to the EEOC's decision-making into Title VII. The court also found that the only other Title VII provision addressing conciliation requires that all conciliation details be kept confidential and prohibits the use of conciliation contents as evidence in later proceedings. Thus, the court reasoned that the language of the statute prohibits judicial review of EEOC's conciliation efforts because the conciliation proceedings cannot be introduced in court, and no exception exists in the statute.
Second, the Seventh Circuit explained that there was no meaningful or workable standard of review for the district courts to apply when evaluating the EEOC's conciliation efforts. Title VII grants the EEOC discretion to choose its informal methods and efforts in furtherance of Title VII. Further, the statute does not provide a description of what a negotiated settlement must contain, again deferring to the EEOC as to whether to accept or reject an employer's offer. Congress's failure to provide a basic standard or "some metric by which to analyze the parties' conduct," "tends to show that it did not intend for judicial review of conciliation through an implied affirmative defense."
Third, the Seventh Circuit reasoned that a failure-to-conciliate defense "invites employers to use the conciliation process to undermine enforcement of Title VII rather than to take the conciliation process seriously as an opportunity to resolve a dispute." In the court's view, the defense served to protract and complicate Title VII litigation, which is contrary to Congress's intent for voluntary compliance to be the preferred means of achieving Title VII's objectives as recognized by the Supreme Court in Ricci v. DeStefano, 557 U.S. 557, 581 (2009).
Recognizing that it had not previously examined this particular issue, the Seventh Circuit held that rejection of the defense was consistent with its earlier cases rejecting employers' attempts to, in its view, "change the focus from their employment practices to the agency's pre-suit processes." See EEOC v. Caterpillar, Inc., 409 F.3d 831 (7th Cir. 2005) (declining to review the EEOC's determination of probable or reasonable cause to sue) and Doe v. Oberweis Dairy, 456 F.3d 704 (7th Cir. 2006) (refusing to read into Title VII a rule that good-faith cooperation was a prerequisite to individual suit or that failure to cooperate would be an affirmative defense).
The Seventh Circuit declined to adopt the Fourth, Sixth, and Tenth Circuits' test, which consists of an inquiry into the good faith of the EEOC's conciliation efforts. Likewise, it declined to adopt the Second, Fifth, and Eleventh Circuits' three-part test, which evaluates whether the EEOC (i) provided the employer with an outline of its cause for believing Title VII had been violated, (ii) gave the employer a chance to voluntarily comply, and (iii) responded in a reasonable and flexible manner to the employer's reasonable attitudes.
The Seventh Circuit held that, if the EEOC has pled on the face of its complaint that it has complied with all procedures required under Title VII—not just conciliation—and, if the relevant documents are facially sufficient, its review of those procedures will be satisfied.
The Mach Mining decision is a significant victory for the EEOC, and employers can expect the EEOC, as it typically does with favorable decisions, to push the decision's application to its outer limits. Unless and until the Supreme Court grants certiorari to resolve the circuit split and provide guidance on the defense, those employers in the Seventh Circuit should know they can no longer rely upon the affirmative defense of the EEOC's failure to conciliate in good faith, and other employers dealing with the EEOC should stay tuned.