MARTIN REIDINGER, District Judge.
The Equal Employment Opportunity Commission (EEOC) initiated this action in August 2009 against the Defendant Propak Logistics, Inc. (Propak) pursuant to
Propak moved to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief may be granted. [Doc. 4]. This Court denied the motion without prejudice, holding that even after Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), an employment discrimination plaintiff is not required to plead specific facts but may rely on notice pleading requirements. [Doc. 16]. The Court found that the allegations of the Complaint sufficiently identified the nature of the discrimination, the grounds on which the discrimination was based and the time period involved. [Id.]
Propak's motion contained an alternative basis for dismissal, the defense of laches. In considering this alternative ground, the Court noted that both parties had submitted matters outside the pleadings for consideration. [Doc. 16]. Because those matters were relevant to the issue of laches, the Court denied the motion to dismiss without prejudice, citing Federal Rule of Civil Procedure 12(d). [Id.] The parties were provided an additional period of time within which: (1) to agree that discovery should proceed prior to resolution of the issue of laches; (2) for Propak to elect to have the motion considered on the current pleadings as a motion for summary judgment; or (3) to submit additional briefing and evidence. [Id. at 17].
The parties responded, notifying the Court that they had been unable to agree on the necessity for discovery. [Doc. 17; Doc. 18]. The parties were provided an additional opportunity to explain their positions regarding the need for discovery. [Doc. 19]. The EEOC responded that it needed discovery to show that Propak had not been prejudiced by the delay between the filing of Quintois' Charge in 2003 and the initiation of this action in 2009. [Doc. 20 at 2]. The EEOC further pointed out that the administrative record, which it submitted in camera to the Court with a copy provided to Propak, "does not address Defendant's alleged prejudice resulting from any delay." [Id. at 3].
Propak opposed discovery, noting that the "EEOC admits that the Court's record provides sufficient factual support for Defendant's motion for summary judgment on the first prong of the laches defense, i.e. delay." [Doc. 22 at 2]. It argued that the administrative record mooted any need for discovery on the issue of prejudice. Propak did, however, elect to supplement the record with additional briefing and evidence. [Doc. 18].
In considering the parties' responses, the Court specifically noted that "the EEOC has addressed only the issue of prejudice, conceding the delay but claiming that it needs discovery in order to show that the Defendant has not been prejudiced by the delay." [Doc. 23 at 6]. The Court therefore provided the parties
Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, 519 (4th Cir. 2003), cert. denied 541 U.S. 1042, 124 S.Ct. 2171, 158 L.Ed.2d 732 (2004) (emphasis in original).
A genuine issue of fact exists if a reasonable jury considering the evidence could return a verdict for the nonmoving party. Shaw v. Stroud, 13 F.3d 791, 798 (4th Cir.1994), cert. denied 513 U.S. 814, 115 S.Ct. 68, 130 L.Ed.2d 24 (1994) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986)). "Regardless of whether he may ultimately be responsible for proof and persuasion, the party seeking summary judgment bears an initial burden of demonstrating the absence of a genuine issue of material fact." Bouchat, 346 F.3d at 522 (citing Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986)). If this showing is made, the burden then shifts to the non-moving party who must convince the Court that a triable issue does exist. Id.
Id. (internal quotations and citations omitted).
Nonetheless, in considering the facts for the purposes of a summary judgment motion, the Court will view the pleadings and material presented in the light most favorable to the nonmoving party. Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).
On January 2, 2003, Quintois filed a Charge of Discrimination against Propak with the EEOC. [Doc. 4-2]. In that
[Id., at 2]. Quintois also stated in the Charge that he believed he was discharged in retaliation for making complaints about those hiring practices. [Id.]. In March 2004, Quintois filed an Amended Charge which did not significantly differ from the original. [Doc. 38]. Quintois had been employed by Propak for an approximately two month period between October 2002 and December 2002. [Doc. 27-1 at 11].
During the EEOC's investigation of the Charge, Quintois retained an attorney to represent him.
The Chronology filed by the EEOC shows that although the Charge was filed on January 2, 2003, the EEOC did not interview Quintois until August 6, 2003, six months later.
Propak requested there be no on-site investigation by the EEOC due to concerns that it would interfere with Propak's business relationship with Wal-Mart. [Id. at 2-3; Doc. 7-5 at 2]. That request, however,
The Chronology contains a notation that the Charge was designated as a class case in September 2004. [Doc. 21-2 at 3]. The Administrative Record, however, does not contain evidence that any notification of that designation was provided to Propak.
The only other investigation taken by the EEOC in 2004 was the requesting of additional documentation from Propak and the scheduling of interviews of site managers which did not occur until 2005. [Doc. 21-2]. Some of the delay in scheduling those interviews was caused by requests for extensions from Propak. [Id.].
In March 2005, settlement was discussed between the EEOC and Propak. [Id.]. On May 26, 2005, Propak's attorney requested copies of the statistical data concerning "entry of applicant flow and the development of relevant labor market analysis" which had been collected by the EEOC. [Id.; Doc. 7-5 at 3]. Counsel was instructed to make the request in writing. [Doc. 21-2 at 4]. In June 2005, Propak's attorney did so on two occasions. [Id.]. In July 2005, a calculation of lost wages; that is, back pay, was submitted to the EEOC investigator but apparently not disclosed to Propak.
In May and June 2006, four potential class members were interviewed. [Id.]. Quintois was interviewed on September 6, 2006. [Id. at 5]. Nothing further occurred in 2006. [Id.]. Although Whitlock, the EEOC Enforcement Manager, has provided an affidavit in which he states that between July 2006 and February 2007, the EEOC continued to perform statistical analysis and to review "over ten thousand (10,000) documents produced by" Propak, the Chronology does not reflect that conduct. [Id. at 4-5; Doc. 7-5 at 3].
In June 2007, over four and one-half years after the Charge was filed, the EEOC asked to interview Propak's managers again. [Doc. 21-1 at 5]. Citing the delay between the first interviews and the second request, Propak refused to make them available.
In January 2008, the Legal Unit of the EEOC recommended that the subpoenas be withdrawn. [Id.]. That was done on January 18, 2008 and on February 7, 2008, the EEOC granted Quintois' fourth request that the agency issue a Right to Sue letter. [Id.].
On March 19, 2008, Quintois filed suit against Propak in this Court. Quintois v. Propak Logistics, Inc., Civil Case No. 1:08cv98. That suit was dismissed with prejudice on July 24, 2008. Id. at Doc. 15.
On September 29, 2008, the EEOC issued a Determination letter in which it stated the following:
[Doc. 7-7 at 1]. The EEOC invited Propak to engage in informal conciliation. [Id.]. Propak claims this was the first "sufficient notification" that the charge had been designated as a class case. [Doc. 31 at 7 n. 11].
Propak responded on October 10, 2008 that effective participation in conciliation could not be accomplished "because of the extreme delay in the Commission's issuance of its determination." [Doc. 29-4].
[Doc. 29-4 at 1]. Propak also noted that the conciliation procedures which the EEOC had recommended; such as hiring in the North and South Carolina facilities, posting notices in such facilities and training the managers thereof, could not be accomplished because Propak had closed all of its facilities in those two states. [Id. at 1, 3].
On October 14, 2008, the EEOC issued a Notice of Conciliation Failure in which it notified Propak that it considered any further conciliation efforts futile. [Doc. 7-8]. The Notice advised that the matter had been referred to the EEOC's litigation unit. [Id.]. The Complaint in this action was filed on August 12, 2009 alleging discriminatory employment practices at Propak from October 2002 through June 2004. [Doc. 1].
Leah Hamilton is the Human Resources manager for Propak. [Doc. 4-3; Doc. 29-6]. Hamilton stated that the site managers
Donna Davis (Davis) is the Vice-President of Human Resources for Propak. [Doc. 29-5]. On October 6, 2011, more than eight years after the Charge was filed, she was deposed by an attorney employed by the EEOC. [Id.]. Davis testified that when Propak was notified that an EEOC Charge had been filed, all records related to the Charge had been gathered. [Id. at 7]. Davis testified that she no longer had those records which apparently no longer existed and she could not testify as to the date when they were last known to exist. [Id.]. Davis did note that when an EEOC Charge is resolved, such records were no longer kept. [Id.]. When Quintois dismissed his action against Propak, the charge was considered resolved. [Id.].
Davis also testified that the Shelby facility had closed in May 2008 and in 2010, Propak placed all personnel files in electronic (computer) format. [Id. at 8]. They did not do so, however, for facilities which had been closed. [Id.]. It was Davis' understanding that according to company policy, Propak did not retain personnel records longer than three years after the employee was no longer employed. [Id. at 9]. Moreover, Propak had no knowledge of the location of past employees who had worked in the Shelby facility in 2002 through 2004. [Id.].
[Id. at 10]. Davis testified that it was unreasonable for the EEOC to expect Propak to find former employees seven years after the purported facts. [Id.]. Davis also pointed out that even if such employees could be found, it was unreasonable to expect them to recall hiring procedures used by Propak between 2002 and 2004. [Id.].
The Court notes that the Administrative Record as well as the Chronology contain repeated references to the production of documents to the EEOC, including employment records. [Doc. 21-2]. Those documents have not been placed in the public record of this action due to confidential information contained therein.
There is no statute of limitations for civil actions brought by the EEOC. Occidental Life Insurance Co. v. EEOC, 432 U.S. 355, 97 S.Ct. 2447, 53 L.Ed.2d 402 (1977). If a defendant is prejudiced, however, by the EEOC's unreasonable delay in
Id. (internal quotation and citation omitted).
There is no rule, however, defining an "unreasonable" amount of time for conducting an EEOC investigation. EEOC v. Worthington, Moore & Jacobs, Inc., 582 F.Supp.2d 731, 735 (D.Md.2008). As for proof of prejudice, it may include unavailability of witnesses, change in personnel, and the loss of pertinent records. Id.
Although the length of the delay and the reasons therefore are questions of fact, whether the delay is unreasonable is a question of law for the Court. EEOC v. Great Atlantic & Pacific Tea Co., 735 F.2d 69, 81 (3rd Cir.), cert. dismissed 469 U.S. 925, 105 S.Ct. 307, 83 L.Ed.2d 241 (1984). Likewise, while the historical circumstances leading to a claim of prejudice are questions of fact, whether those circumstances rise to the level of prejudice sufficient to invoke the equitable doctrine of laches is a question of law. Id.; Smith v. Caterpillar, Inc., 338 F.3d 730, 733 (7th Cir.2003) (the laches defense is appropriate for summary judgment where the facts necessary to resolution are found to be not genuinely disputed).
The discretion of this Court to apply the laches defense must include a consideration that the EEOC in this Title VII case is "vindicating both the public interest in eliminating employment discrimination and the private interests of those class members it represents." Id. The Court will therefore "take into account whether there is a less drastic form of equitable relief than a complete dismissal of the action[.]" Id.
As previously noted, the EEOC concedes, as it must on this record, an almost seven year delay between the filing of Quintois' Charge and the initiation of this litigation. Its position, however, is that this is not an unreasonable amount of time. "In the EEOC's view, the mere passage of time does not indicate undue delay. Instead, it maintains, the [more than] six-year period between the charge and this lawsuit reflects the commission's active investigation of the charge[.]" EEOC v. PBM Graphics, Inc., 877 F.Supp.2d 334, 364-65, 2012 WL 2513512 **23 (M.D.N.C.2012). "Although no court has found a particular period of delay to be unreasonable per se, there is no question that the ... [more than] six years between the filing of the charge and the commencement of this lawsuit is lengthy." Id.
The EEOC's excuse is that it "continuously investigated" the charge against Propak. However, even "fairly consistent" activity by the EEOC during a lengthy investigation is not sufficient to avoid laches "if the nature and quality of [the EEOC's investigative] activity are such as to not justify the delay[.]" PBM Graphics, 877 F.Supp.2d at 365, 2012 WL 2513512 **23 (quoting EEOC v. Peterson, Howell & Heather, Inc., 702 F.Supp. 1213, 1221-22 (D.Md.1989)) (other citations omitted). Here, there were significant periods when the EEOC took little or no action toward completing the investigation. EEOC v. Louisiana Power & Light Co., 1989 WL 35915 **4 (E.D.La.1989) (unreasonable
Although the EEOC designated the Charge as a class case in September 2004, the first interview of a potential class member did not occur until May 2006. [Doc. 21-2]. While the EEOC had a calculation of lost wages prepared by an expert, the record does not disclose that Propak was provided with this information.
Massey-Ferguson, 622 F.2d at 277 (finding five years three months unreasonable and collecting cases holding delays ranging from four to five years unreasonable); EEOC v. Autozone, Inc., 258 F.Supp.2d 822 (W.D.Tenn.2003) (five year four month delay unreasonable).
The EEOC attributes some of the delay to Propak's requests for extensions, describing the same as "recalcitrant behavior during the course of the investigation."
"Certainly, delay will not be excused merely because the EEOC activity is continuous, if the nature and quality of that activity do not justify the delay." U.S. EEOC v. Lockheed Martin Global Telecommunications, Inc., 514 F.Supp.2d 797, 802 (D.Md.2007); Louisiana Power & Light Co., 1989 WL 35915 (administrative paper shuffling constitutes unreasonable delay). Based upon the undisputed facts in the record, the Court concludes as a matter of law that the delay in this case was unreasonable and therefore the first prong of the laches defense has been established.
Lockheed Martin, 514 F.Supp.2d at 803-04 (internal quotations and citations omitted).
Propak points to the unavailability of key witnesses, in particular Ponder and Gay, the only two site managers at the Shelby facility during the time at issue. Ponder left Propak's employment in 2005 and Gay left in 2006. Those two individuals had the hiring responsibility for non-managerial positions and their testimony would be vital in Propak's defense. Propak had no knowledge of their current addresses and locating them would be difficult, if not impossible. Smith, 338 F.3d at 733. Indeed, even the EEOC was unable to locate Ponder and another former employee in November 2007. [Doc. 39; Doc. 40].
In addition to these two key witnesses, the locations of other former employees at the Shelby facility between 2002 and 2004 were also unknown. The Administrative Record discloses that the EEOC had difficulty identifying purported class members despite the 10,000 pages of documents produced by Propak.
Propak also cites Davis' testimony that previous employees, including Ponder and Gay, will have faded memories of the time period at issue, 2002 through 2004. Smith, 338 F.3d at 733-34, 735 n. 2; Peterson, Howell & Heather, 702 F.Supp. at 1223. The Court agrees.
Smith, 338 F.3d at 735 n. 2. Based on the undisputed facts as to this issue, the Court concludes as a matter of law that Propak has been prejudiced in this regard.
Another instance of prejudice argued by Propak stems from the unavailability of personnel records. Davis testified that the personnel records for Quintois were immediately gathered upon receipt of his Charge. Neither the original nor the amended Charge, however, contained any notification that the EEOC intended to pursue this as a class case. [Doc. 38]. Although the Chronology contains a notation that the case was so designated in September 2004, it does not contain any notation that Propak was actually notified of that designation. [Doc. 21-2]. It was not until the Determination letter which Propak received in September 2008 that it was disclosed that the EEOC had expanded its investigation into a class case, [Doc. 7-7], and the EEOC had been unable to point to anything in the record that would tend to show the contrary.
Regardless, Davis testified that it was Propak's custom not to retain an employee's records longer than three years after they left employment. Thus, the personnel records for employees at the Shelby facility during the two year period of 2002 through 2004 would have been destroyed by 2007 as part of routine record maintenance. Smith, 338 F.3d at 735. That destruction would have occurred before receipt of the Determination letter.
Davis also testified that the Shelby facility closed no later than May 2008 at which time all remaining employees were terminated. In 2010, Propak converted all of its personnel records into digital form except the records for facilities which had been closed. As a result, those records were also lost as part of routine record maintenance.
Citing 29 C.F.R. § 1602.14, the EEOC claims that Propak was obligated by regulation to gather and retain the records of all its employees until Quintois' Charge was resolved.
It is possible that some of those personnel records were among the 10,000 documents produced by Propak to the EEOC, even though they did not appear in the record. Nonetheless, as noted above, Propak would still face an undue hardship in attempting to locate those former employees in order to mount a defense. EEOC v. Liberty Loan Corp., 584 F.2d 853, 858 (8th Cir.1978).
The facility at which the EEOC claims the discrimination occurred is defunct and no longer in existence. Even if the EEOC's litigation were successful, no injunctive relief could be imposed on a facility which is no longer in business. Training and education of the employees and management at such a facility could not be imposed as they are also non-existant. Propak has only one business location in Arkansas and none of the allegations in this action relate to that business. "It would be grossly unfair to require [Propak] to spend large amounts of time and money in attempting to locate former employees and records in order to defend an essentially moot lawsuit which was unreasonably delayed by EEOC." Liberty Loan Corp., 584 F.2d at 858.
The last ground raised by Propak in support of its laches defense is the possibility of potential liability for back pay to a class of individuals. While the EEOC delayed in its investigation, the potential liability for back pay increased each day of that delay. Smith, 338 F.3d at 735; Dresser, 668 F.2d at 1204 n. 3. While this factor "does not necessarily result in material prejudice because back pay is an equitable remedy within the discretion of the court," that possibility "does not eliminate the availability of the laches defense." Smith, 338 F.3d at 735.
Peterson, Howell & Heather, Inc., 702 F.Supp. at 1224.
EEOC v. Bell Helicopter, 426 F.Supp. 785, 793 (N.D.Tex.1976), abrogated on other grounds by Occidental Life, 432 U.S. 355, 97 S.Ct. 2447.
The parties have been provided with a period of discovery during which the issue of laches was explored. Viewing the facts related to laches in the light most favorable to the EEOC, Propak has still established a "valid defense of laches by proving it ha[s] suffered material prejudice as a result of [the EEOC's] unreasonably lengthy delay[.]" Smith, 338 F.3d at 735. In concluding that the EEOC's claims against Propak are barred by laches, the Court has considered that the EEOC in this Title VII case is "vindicating both the public interest in eliminating employment discrimination and the private interests of those class members it represents." Id. at 733. The Court has therefore considered whether "a less drastic form of equitable relief" is appropriate. Id. The fact remains,
