Filed: Sep. 09, 2015
Latest Update: Mar. 02, 2020
Summary: 14-1782 EEOC v. Sterling Jewelers, Inc. In the United States Court of Appeals For the Second Circuit _ AUGUST TERM, 2014 ARGUED: MAY 5, 2015 DECIDED: SEPTEMBER 9, 2015 No. 14-1782 EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellant, v. STERLING JEWELERS INC., Defendant-Appellee. _ Appeal from the United States District Court for the Western District of New York. No. 08 Civ. 706– Richard J. Arcara Judge. _ Before: WALKER, LYNCH, and LOHIER, Circuit Judges. _ This case arises from an Equa
Summary: 14-1782 EEOC v. Sterling Jewelers, Inc. In the United States Court of Appeals For the Second Circuit _ AUGUST TERM, 2014 ARGUED: MAY 5, 2015 DECIDED: SEPTEMBER 9, 2015 No. 14-1782 EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellant, v. STERLING JEWELERS INC., Defendant-Appellee. _ Appeal from the United States District Court for the Western District of New York. No. 08 Civ. 706– Richard J. Arcara Judge. _ Before: WALKER, LYNCH, and LOHIER, Circuit Judges. _ This case arises from an Equal..
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14‐1782
EEOC v. Sterling Jewelers, Inc.
In the
United States Court of Appeals
For the Second Circuit
________
AUGUST TERM, 2014
ARGUED: MAY 5, 2015
DECIDED: SEPTEMBER 9, 2015
No. 14‐1782
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,
Plaintiff‐Appellant,
v.
STERLING JEWELERS INC.,
Defendant‐Appellee.
________
Appeal from the United States District Court
for the Western District of New York.
No. 08 Civ. 706– Richard J. Arcara Judge.
________
Before: WALKER, LYNCH, and LOHIER, Circuit Judges.
________
This case arises from an Equal Employment Opportunity
Commission (“EEOC”) enforcement action under Title VII of the Civil
Rights Act of 1964, 42 U.S.C. § 2000e et seq. (“Title VII”), alleging that
2 No. 14‐1782
Defendant‐Appellee Sterling Jewelers Inc. (“Sterling”) engaged in a
nationwide practice of sex‐based pay and promotion discrimination. After
discovery, the magistrate judge (Jeremiah J. McCarthy, J.) issued a Report
and Recommendation finding that the EEOC failed to prove that it satisfied
its statutory obligation to conduct a pre‐suit investigation and
recommended summary judgment on that basis. On March 10, 2014, the
district court (Richard J. Arcara, J.) adopted the magistrate judge’s Report
and Recommendation, and granted summary judgment to Sterling.
On appeal, the EEOC argues that the district court erred in granting
summary judgment because the magistrate judge improperly reviewed the
sufficiency of the EEOC investigation rather than whether there was an
investigation. We agree. Under Title VII, courts may review whether the
EEOC conducted an investigation, but not the sufficiency of an
investigation. The EEOC conducted an investigation in this case.
Accordingly, we VACATE the district court’s summary judgment order and
REMAND the case for further proceedings.
________
BARBARA L. SLOAN, (P. David Lopez, Carolyn L. Wheeler,
Jennifer S. Goldstein, on the brief), Equal Employment
3 No. 14‐1782
Commission, Office of General Counsel, Washington,
D.C. for Plaintiff‐Appellant.
GERALD L. MAATMAN, JR., (Jeffrey S. Klein, Weil, Gotshal
& Manges, LLP, New York, N.Y., David Bennet Ross,
William F. Dugan, Daniel B. Klein, Lorie E. Almon,
Seyfarth Shaw LLP, New York, N.Y., on the brief), Seyfarth
Shaw LLP, New York, N.Y., for Defendant‐Appellee.
________
JOHN M. WALKER, JR., Circuit Judge:
This case arises from an Equal Employment Opportunity
Commission (“EEOC”) enforcement action under Title VII of the Civil
Rights Act of 1964, 42 U.S.C. § 2000e et seq. (“Title VII”), alleging that
Defendant‐Appellee Sterling Jewelers Inc. (“Sterling”) engaged in a
nationwide practice of sex‐based pay and promotion discrimination. After
discovery, the magistrate judge (Jeremiah J. McCarthy, J.) issued a Report
and Recommendation finding that the EEOC failed to prove that it satisfied
its statutory obligation to conduct a pre‐suit investigation and
recommended summary judgment on that basis. On March 10, 2014, the
district court (Richard J. Arcara, J.) adopted the magistrate judge’s Report
and Recommendation, and granted summary judgment to Sterling.
4 No. 14‐1782
On appeal, the EEOC argues that the district court erred in granting
summary judgment because the magistrate judge improperly reviewed the
sufficiency of the EEOC investigation rather than whether there was an
investigation. We agree. Under Title VII, courts may review whether the
EEOC conducted an investigation, but not the sufficiency of an
investigation. The EEOC conducted an investigation in this case.
Accordingly, we VACATE the district court’s summary judgment order and
REMAND the case for further proceedings.
BACKGROUND
Sterling is the largest fine jewelry company in the United States,
operating chains including Kay Jewelers and Jared–the Galleria of Jewelry.
Between 2005 and 2007, the EEOC received 19 individual charges of
discrimination from women employed by Sterling in stores located in nine
states: California, Colorado, Florida, Indiana, Massachusetts, Missouri,
Nevada, New York, and Texas (the “Charging Parties”). Sixteen of the
charges alleged that Sterling engaged in a “continuing policy or pattern and
practice” of sex discrimination. See, e.g., App’x 1390. Five investigators
initially investigated the charges, but the EEOC later transferred all 19
5 No. 14‐1782
charges to one investigator, David Ging. Around that time, the EEOC also
requested copies of Sterling’s company‐wide protocols, including policies
governing pay, promotion, and anti‐discrimination; job descriptions for
sales associates and management positions; and computerized personnel
files listing employees’ hiring dates, responsibilities, and pay and
promotion histories.
In 2006, Sterling and the Charging Parties entered mediation and
invited the EEOC to participate. Then‐EEOC Regional Attorney Elizabeth
Grossman, who participated on behalf of the EEOC, and the parties signed a
Mediation and Confidentiality Agreement (the “Agreement”), as well as
several addenda. Under the Agreement, the EEOC agreed to suspend its
investigation during the mediation, and the parties agreed to identify the
data relevant to the charges against Sterling and produce all of the
documents on which their respective experts would rely in preparing their
reports. App’x 3666‐68. Based on the data provided by Sterling, labor
economist Dr. Louis Lanier, hired by the Charging Parties, conducted a
statistical analysis of Sterling’s pay and promotion practices. This analysis
6 No. 14‐1782
led Dr. Lanier to find that Sterling paid female employees less and
promoted them at slower rates than similarly situated male employees.
Under a confidentiality provision in the Agreement, the EEOC agreed
that it would “not rely on, or introduce as evidence in any court, arbitration,
judicial, or other proceeding” information disclosed during the mediation.
App’x 3656. However, the parties subsequently signed addenda, stating
that the documents exchanged at the mediation could be given to
Investigator Ging and permitting certain documents, including Dr. Lanier’s
analysis, to be placed in the EEOC investigative file if the mediation was
unsuccessful.
In November 2007, the mediation failed. Thereupon, Ging sent letters
to the parties stating: “I understand that Ms. Grossman has [Sterling’s]
permission to provide me with its documents exchanged in conjunction
with that mediation . . . . [and] that Ms. Grossman has Charging Parties’ and
[Sterling’s] permission to provide me with Dr. Lanier’s tables and
explanatory notes . . . . ” App’x 959‐62. Ging also encouraged the parties to
provide any additional information they wanted the EEOC to consider
during its investigation. The Charging Parties sent Ging a letter
7 No. 14‐1782
summarizing the evidence of “company‐wide” discrimination as well as
supporting documents, including declarations from the Charging Parties; a
declaration from a male employee attesting to his belief that Sterling
discriminated against female employees with regard to pay and promotion;
and Dr. Lanier’s analysis. Sterling did not provide any additional
information.
On January 30, 2008, the EEOC issued a Letter of Determination
(“LOD”) finding that Sterling “subjected Charging Parties and a class of
female employees with retail sales responsibilities nationwide to a pattern
or practice of sex discrimination in regard to promotion and compensation.”
App’x 1000. The LOD further stated:
Statistical analysis of pay and promotion data provided by
[Sterling] reveals that [Sterling] promoted male employees at a
statistically significant, higher rate than similarly situated
female employees and that [Sterling] compensated male
employees at a statistically significant, higher rate than
similarly situated female employees. Witness testimony further
corroborates the allegations.
App’x 1000. Then, on September 23, 2008, the EEOC filed suit in the
Western District of New York alleging that Sterling engaged in sex‐based
pay and promotion discrimination in violation of Title VII.
8 No. 14‐1782
During discovery, approximately seven years after the close of the
investigation, the parties deposed two EEOC investigators: Ging and
Jennifer Carlo, the investigator assigned to the first of the 19 charges. Ging
stated that he “d[id]n’t really recall much about [the] investigation,” App’x
32, and both investigators invoked the deliberative privilege and declined to
answer several of the questions about the investigation.
Following discovery, Sterling moved for summary judgment on
grounds that the EEOC had not satisfied its statutory obligation to conduct
a pre‐suit investigation. The magistrate judge issued a Report and
Recommendation, in which he determined that there was “no evidence that
[the EEOC] investigated a nationwide class” and recommended that the
district court grant summary judgment. App’x 83. On March 10, 2014, the
district court adopted the Report and Recommendation, granted summary
judgment to Sterling, and dismissed the EEOC’s action with prejudice. The
EEOC timely appealed.
DISCUSSION
“We review an award of summary judgment de novo, construing the
evidence in the light most favorable to the nonmoving party and drawing
9 No. 14‐1782
all reasonable inferences in his favor.” McElwee v. Cnty. of Orange, 700 F.3d
635, 640 (2d Cir. 2012). Summary judgment is only appropriate where there
is “no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Id. (citing Fed. R. Civ. P. 56(a)).
I. Judicial Review of Title VII Enforcement Actions
Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., as
amended, prohibits employers from discriminating on the basis of race,
color, religion, sex, or national origin. Ricci v. DeStefano, 557 U.S. 557, 577
(2009). Before the EEOC may bring an enforcement action under Title VII, it
must discharge certain administrative obligations. The EEOC must: (1)
receive a formal charge of discrimination against the employer; (2) provide
notice of the charge to the employer; (3) investigate the charge; (4) make and
give notice of its determination that there was reasonable cause to believe
that a violation of Title VII occurred; and (5) make a good faith effort to
conciliate the charges. See 42 U.S.C. § 2000e–5(b); see also Mach Mining, LLC
v. EEOC, 135 S. Ct. 1645, 1649‐50 (2015). Title VII does not define
“investigation” or prescribe the steps that the EEOC must take in
10 No. 14‐1782
conducting an investigation. Newsome v. EEOC, 301 F.3d 227, 231 (5th Cir.
2002).
To ensure agency compliance with Title VII, Congress empowered
federal courts to review whether the EEOC has fulfilled its pre‐suit
administrative obligations. See Mach Mining, 135 S. Ct. at 1653 (holding that
courts may review whether the EEOC has satisfied its obligation to
conciliate). The proper scope of that review, however, is an issue of first
impression in this Circuit.
In the recently decided case of Mach Mining, the Supreme Court
provided guidance regarding the scope of judicial review of the EEOC’s
administrative obligations. Id. In the context of the EEOC’s obligation to
conciliate, the Court explained that judicial review is “narrow” and serves
to “enforce[] the statute’s requirements . . . that the EEOC afford the
employer a chance to discuss and rectify a specified discriminatory
practice―but goes no further.” Id. The Court further explained that a
sworn affidavit from the EEOC stating that it satisfied its conciliation
obligations but failed to reach an agreement “will usually suffice to show
that it has met the conciliation requirement.” Id. at 1656.
11 No. 14‐1782
Mach Mining did not address the EEOC’s obligation to investigate,
but we conclude that judicial review of an EEOC investigation is similarly
limited: The sole question for judicial review is whether the EEOC
conducted an investigation. As the district and magistrate judges in this
case recognized, courts may not review the sufficiency of an
investigation―only whether an investigation occurred. EEOC v. Keco Indus.,
Inc., 748 F.2d 1097, 1100 (6th Cir. 1984); see also EEOC v. CRST Van Expedited,
Inc., 679 F.3d 657, 674 (8th Cir. 2012) (“[T]he nature and extent of an EEOC
investigation into a discrimination claim is a matter within the discretion of
that agency.” (quoting Keco, 748 F.2d at 1100)); Newsome, 301 F.3d at 231
(same).
In order to prove that it has fulfilled its pre‐suit investigative
obligation, the EEOC must show that it took steps to determine whether
there was reasonable cause to believe that the allegations in the charge are
true. Cf. 42 U.S.C. § 2000e‐5(b) (noting that the purpose of an EEOC
investigation is to determine whether “there is reasonable cause to believe
that the charge is true”); EEOC v. Shell Oil Co., 466 U.S. 54, 71 (1984) (“[T]he
purpose of [an EEOC investigation] is to determine whether there is reason
12 No. 14‐1782
to believe those allegations are true.”). Here, the EEOC’s complaint against
Sterling alleged nationwide discrimination; accordingly, the agency must
show that it undertook to investigate whether there was a basis for alleging
such widespread discrimination. The EEOC need not, however, describe in
detail every step it took or the evidence it uncovered. As with the
conciliation process, an affidavit from the EEOC, stating that it performed
its investigative obligations and outlining the steps taken to investigate the
charges, will usually suffice. See Mach Mining, 135 S. Ct. at 1656
(concluding that a sworn affidavit from the EEOC stating that it attempted
to conciliate will usually establish that the EEOC has met its obligation to
conciliate).
There are several reasons for this approach. First, this “limited
review respects the expansive discretion that Title VII gives to the EEOC” in
investigating discrimination claims, “while still ensuring that the
Commission follows the law.” Id. at 1653. Second, it reflects the fact that
“Title VII ultimately cares about substantive results.” Id. at 1654. Allowing
courts to review the sufficiency of an EEOC investigation would “effectively
make every Title VII suit a two‐step action: First, the parties would litigate
13 No. 14‐1782
the question of whether EEOC had a reasonable basis for its initial finding,
and only then would the parties proceed to litigate the merits of the action.”
Keco, 748 F.2d at 1100 (internal quotation marks omitted). Extensive judicial
review of this sort would expend scarce resources and would delay and
divert EEOC enforcement actions from furthering the purpose behind Title
VII―eliminating discrimination in the workplace. See id; see also Ricci, 557
U.S. at 577.
II. Application
The EEOC argues that the magistrate judge, while purporting to
examine the existence of the EEOC’s investigation, actually considered its
sufficiency. We agree.
A. The EEOC Investigated the Claims Against Sterling
Testimony from EEOC investigators Ging and Carlo and the
investigative file show that the EEOC took multiple steps to investigate the
claims against Sterling.1 As the magistrate judge found, the EEOC received
19 charges, which were “investigated by five EEOC investigators.” App’x
The only statutory pre‐suit obligation at issue in this case is the investigation. The
1
parties agreed that the EEOC’s participation in the mediation would satisfy its obligation
to conciliate in the event that it brought an enforcement action, and there is no dispute
concerning the other pre‐suit requirements.
14 No. 14‐1782
74. After receiving a letter from a Charging Party that identified six
additional women alleging sex‐based discrimination, the EEOC transferred
all of the charges to one investigator. That investigator, Ging, testified that
he reviewed all of the individual investigative files and investigated “all of
the[ ] charges as class charges.”App’x 569.
Additionally, the 2,600‐page investigative file shows that the EEOC
requested and obtained numerous documents related to the charges,
including Sterling’s company‐wide policies governing pay, promotion, and
anti‐discrimination; witness statements; Sterling’s responses to individual
allegations; the Charging Parties’ personnel documents; company‐wide job
descriptions; EEO‐1 reports; and Dr. Lanier’s statistical analysis, which
found that Sterling paid and promoted women at statistically significant
lower rates than men. Notes from the investigative file also show that the
EEOC interviewed at least one Charging Party, Jacquelyn Boyle, in January
2006 and again in February 2006.
In contrast to the cases in which some of our sister circuits concluded
that the EEOC did not satisfy Title VII’s investigation requirement, it cannot
be said here that the EEOC failed to conduct any pre‐suit investigation at
15 No. 14‐1782
all. For example, in EEOC v. Pierce Packing Co., the Ninth Circuit held that
the EEOC did not conduct a pre‐suit investigation where it “obtain[ed] the
results of [a two‐week Department of Labor] investigation,” and “did not
conduct an independent investigation.” 669 F.2d 605, 606 (9th Cir. 1982).
Similarly, in CRST, the Eighth Circuit held that the EEOC did not fulfill its
investigative obligation because “the EEOC did not investigate the specific
allegations of any of the 67 allegedly aggrieved persons . . . until after the
Complaint was filed.” CRST, 679 F.3d at 675‐76. In both Pierce Packing and
CRST, the courts determined that the EEOC failed to take any steps to
investigate. That is plainly not the case here. Although Ging acknowledged
in discovery that he did not remember much about the investigation, that
testimony―given some seven years after the investigation concluded―is
not tantamount to an admission that he failed to conduct an investigation.2
Sterling identifies a laundry list of steps the EEOC failed to take in
investigating the claims against it. But “the nature and extent of an EEOC
investigation into a discrimination claim is a matter within the discretion of
The lengthy and costly depositions taken in this case might have been easily avoided
2
by an affidavit from an EEOC investigator outlining the steps taken to investigate the
claims. It is especially important for the court and the parties to understand the contours
of an EEOC investigation given that, as explained below, the EEOC investigation must be
pertinent to the allegations that it ultimately includes in the complaint.
16 No. 14‐1782
that agency.” Keco, 748 F.2d at 1100; see also CRST, 679 F.3d at 674; EEOC v.
Caterpillar, 409 F.3d 831, 832‐33 (7th Cir. 2005); Newsome, 301 F.3d at 231. For
a court to second guess the choices made by the EEOC in conducting an
investigation “is not to enforce the law Congress wrote, but to impose extra
procedural requirements. Such judicial review extends too far.” Mach
Mining, 135 S. Ct. at 1654‐55.
B. The EEOC Investigation Was Nationwide
Ging’s testimony coupled with the documents in the investigative file
suffice to demonstrate that the EEOC investigation was nationwide. The
investigative file contains 19 charges, 16 of which alleged company‐wide
class and/or pattern‐or‐practice discrimination, from nine states across the
country (California, Colorado, Florida, Indiana, Massachusetts, Missouri,
Nevada, New York, and Texas), and Ging testified that he investigated all of
those charges as “class charges.” App’x 569. Additionally, the EEOC
obtained Dr. Lanier’s statistical analysis, based on company‐wide
computerized data, which found that Sterling paid and promoted male
employees at statistically significant higher rates than similarly‐situated
17 No. 14‐1782
female employees nationwide.3 The EEOC also obtained Sterling’s policies
governing pay and promotion, which, Sterling concedes, have nationwide
application. This testimony together with these documents is sufficient to
establish that the investigation was nationwide.
In concluding that the investigation was not nationwide, the
magistrate judge found the word “class” to be ambiguous because it could
refer to a local, regional, or nationwide class. We are, however, at a loss to
think of a locality or region that would include California, New York, and
Texas, and the cases relied on by the magistrate judge are inapposite. The
magistrate judge cited EEOC v. Outback Steak House of Florida, Inc., for the
proposition that a “class can also mean a local or regional class instead of a
nationwide class”). But, as the district court in that case explained, “both the
charges and the investigation centered around [a] three‐state region
[Colorado, Montana, and Wyoming], [so] Defendants had every reason to
The magistrate judge concluded that the EEOC could not rely on Dr. Lanier’s
3
analysis in showing that the investigation was nationwide because Ging and Carlo
invoked the deliberative privilege in response to questions regarding whether Dr. Lanier’s
analysis was the analysis referred to in the LOD and whether the EEOC independently
verified the analysis. But nothing in Title VII suggests that the EEOC must identify the
documents referenced in the LOD or, as explained above, independently validate expert
analysis. Therefore, the fact that Ging and Carlo declined to answer these questions about
Dr. Lanier’s analysis creates no bar to the EEOC’s reliance on that analysis in establishing
the scope of its investigation.
18 No. 14‐1782
believe that the ‘class’ the EEOC was referring to in its determination was a
regional class.” 520 F.Supp.2d 1250, 1267 (D. Colo. 2007). Similarly, in EEOC
v. Jillian’s of Indianapolis, IN, Inc., the EEOC’s investigation was confined to a
single state. See 279 F. Supp. 2d 974, 980 (S.D. Ind. 2003) (“The nationwide
class named in the EEOC’s Amended Complaint is not reasonably
anticipated in its investigation into the four charges filed against Jillian’s
Indianapolis.” (emphasis in original)). Because of the limited geographic
scope of the investigations in Outback Steak House and Jillian’s, there was
reason to believe the employers did not have notice that the EEOC would
bring suit on behalf of a nationwide class. By contrast, here the EEOC
investigated charges alleging class‐wide discrimination from women in nine
states across the country. We therefore conclude that the class Ging referred
to was nationwide.
Sterling contends that the EEOC cannot rely on Dr. Lanier’s analysis
to satisfy its burden of proof because the parties and the EEOC agreed that
the materials would not “lose their mediation privilege.” Def. Br. at 55.
However, the Agreement stated that the EEOC could “not rely on, or
introduce as evidence” documents exchanged during mediation “in any
19 No. 14‐1782
court, arbitration, judicial, or other proceeding.” App’x 3656. We interpret
that Agreement in light of the Fourth Addendum, in which Sterling agreed
to have Dr. Lanier’s analysis given to Ging and put in the investigative file
in the event that the mediation failed.4 To be sure, there is some tension
between various parts of the Agreement and its addenda. We read the
whole of the documents, however, to mean that the EEOC was not
precluded from relying on the analysis in reaching its own internal
determination as to whether there was reasonable cause to believe Sterling
violated Title VII. Indeed, what other purpose could the parties have for
allowing the EEOC to include Dr. Lanier’s analysis in its investigative file if
the EEOC could not review the analysis as part of its investigation? Because
the EEOC was permitted to rely on Dr. Lanier’s analysis in making its
reasonable‐cause determination, the EEOC properly referenced that analysis
as part of the proof that its investigation was nationwide.
There is no dispute that Sterling consented to giving Dr. Lanier’s analysis to Ging.
4
Ging informed the parties at the close of mediation that he anticipated receiving the
mediation documents and that he had the parties’ permission to do so. At no time did
Sterling raise an objection.
20 No. 14‐1782
CONCLUSION
For the reasons stated above, we VACATE the district court’s order
granting summary judgment and REMAND the case for further
proceedings consistent with this opinion.
