Thursday, September 25, 2014

EEOC “Spam” Gets a Green Light


          Merriam-Webster Dictionary defines “spam” as an “unsolicited usually commercial e-mail sent to a large number of addresses” or “a canned meat product.”  Another definition may now be “an aggressive investigative tactic of the Equal Employment Opportunity Commission (“EEOC”) which has been given a green light by the courts.”

On September 24, 2014, a U.S. District Court Judge in Washington, DC announced he will dismiss a lawsuit over the Equal Employment Opportunity Commission (“EEOC”) sending a blast of more than 1300 e-mails to a company’s employees, requesting they supply information to the agency as part of an investigation into allegations of age discrimination.

In my October 2013 post, “You’ve Got (Mass) Mail . . . From the EEOC?”, I discussed the federal lawsuit filed by construction equipment maker Case New Holland (“CNH”) in which the company alleged the EEOC unconstitutionally solicited or “trolled” the company’s employees to become class members in a potential age discrimination class action.

Prior to the e-mail blitz, the company had cooperated with the EEOC’s investigative requests by producing ten of thousands of page of documents and hundreds of thousands of electronic documents.  The company heard nothing more from the agency for more than a year and a half, until the incident that caused the company to sue the EEOC.

At 8:00 a.m. on June 5, 2013, the EEOC conducted a mass e-mailing to the business e-mail addresses of 1330 CNH employees across the United States and Canada. Over 200 of the recipients were members of management. The e-mail stated the EEOC was conducting “a federal investigation” and making “an official inquiry” into allegations that CNH discriminated against job applicants and employees, and contained a link to an on-line series of questions regarding alleged discrimination. It also asked for the employee’s birth date, address and telephone number. The EEOC’s on-line survey instructed CNH employees to “Please complete and submit this electronic questionnaire as soon as possible.”

The e-mail had been sent without any advance notice to CNH and according to the lawsuit, the mass mailing disrupted CNH’s business operations at the start of the workday and communicated to employees they should cease their legitimate work duties and instead immediately respond to the agency’s questions. A significant concern was the company’s belief that the EEOC had deliberately cut the employer out of the investigatory process, and had solicited members of management, whose statements arguably could have bound the company.

CNH filed its lawsuit on August 1, 2013, alleging that the EEOC’s mass e-mailing: (1) was not authorized by any EEOC rule or regulation, (2) violated the federal Administrative Procedure Act, (3) constituted an unreasonable search and seizure in violation of the Fourth Amendment, (4) violated the takings clause of the Fifth Amendment, and (5) violated the EEOC’s own compliance manual, which requires that an employer be allowed to have a spokesman or attorney present during an interview of management employees, and that advance notice be given. The suit claims the EEOC engages in bullying tactics to force companies into monetary settlements of questionable claims.

However, in his ruling announcing his plans to dismiss CNH’s lawsuit, U.S. District Judge Reggie B. Walton stated that the company lacked standing to bring the suit because it was not able to establish how it was injured by the EEOC’s investigatory tactic, other than vague allegations of business disruptions.  Judge Walton announced he would issue a written opinion dismissing the case within the next two months.  At this time, the company has not announced if it plans to appeal the ruling.

Although the EEOC had never before utilized e-mail at this scale to try and identify alleged victims of discrimination, it had argued to the court that the tactic was clearly within the agency’s investigatory authority.

With the U.S. District Court giving the green light to the EEOC’s investigatory “spam”, at least for the time being, it appears highly likely that employers will be seeing much more of this tactic.  From the EEOC’s perspective, it is cheaper and quicker then actually sending investigators to a workplace, and has the added benefit of being able to target thousands of potential plaintiffs/class members with the click of a mouse.  Also, as noted in CNH's lawsuit, it has the effect of allowing the EEOC to cut the employer out of the investigative process.

Mark Fijman is a labor and employment attorney with Phelps Dunbar, LLP, which has offices in Louisiana, Mississippi, Florida, Texas, Alabama, North Carolina and London. To view his firm bio, click here. He can be reached at (601) 360-9716 and by e-mail at fijmanm@phelps.com

Wednesday, September 24, 2014

EEOC Targets Mandatory Arbitration Agreements in Lawsuit Against Restaurant Franchisee

 
 
          A Florida company that owns franchise restaurants, such as Applebee’s and Panera Bread, has been sued by the Equal Employment Opportunity Commission (“EEOC”) for making its employees sign mandatory arbitration agreements.  The lawsuit, filed September 18, 2014 in the U.S. District Court for the Southern District of Florida, is the latest instance of the EEOC targeting employer practices which the agency  views as limiting employees’ right to file charges of discrimination or bring lawsuits under Title VII and other employment discrimination statutes.
            According to the agency’s allegations in EEOC v. Doherty Enterprises, Inc. (Civil Action No. 9:14-cv-81184-KAM), the company “requires each prospective employee to sign a mandatory arbitration agreement as  a condition of employment.  The agreement  mandates that all employment-related claims -- which would otherwise allow  resort to the EEOC -- shall be submitted to and deter­mined exclusively by  binding arbitration.”  The EEOC alleges the arbitration agreements interfere with employees' rights to file discrimination charges and “violates Section 707 of Title VII of the Civil  Rights Act of 1964, which prohibits employer conduct that constitutes a pattern  or practice of resistance to the rights protected by Title VII.
            The lawsuit is not surprising since the EEOC made it clear in its 2013 – 2016 Strategic Enforcement Plan that “[t]he EEOC will target policies and practices that discourage or prohibit individuals from exercising their rights under employment discrimination statutes, or that impede the EEOC's investigative or enforcement efforts.”  However, while these type of “test” cases by the agency result in substantial legal costs for employers, the EEOC does not seem to have been getting much bang for its buck when it actually gets in front of a federal judge.
            As noted in my September 21, 2014 posting, “EEOC Experiences “Separation Anxiety”in Lawsuit Against CVS”, last week the EEOC suffered a big defeat in their controversial lawsuit against CVS Pharmacy, over the drug store chain’s use of separation agreements for departing employees.  In that lawsuit, the EEOC had taken the same approach as it has in this latest case, alleging the drug store chain’s use of very standardized separation agreements demonstrated a pattern and practice of CVS interfering with employees' Title VII in a way that “deters the filing of charges and interferes with employees' ability to communicate voluntarily with the EEOC.” 
            In comments about the agency’s lawsuit against Doherty Enterprises, EEOC Regional Counsel Robert E. Weisberg left little doubt that more lawsuits over arbitration agreements can be expected:
"Employee communication with the  EEOC is integral to the agency's mission of eradicating employment discrimination.  When an employer forces all complaints about  employment discrimination into confidential arbitration, it shields itself from  federal oversight of its employment practices.   This practice violates the law, and the EEOC will take action to deter further use of these types of overly broad arbitration agreements."
           
        As was the case of separation agreements in the CVS lawsuit, mediation agreements are commonly used by employers nationwide, and the EEOC’s litigation focus is troubling to the business community.  For employers who utilize arbitration agreements, it would be advisable to have them reviewed by legal counsel.
 Mark Fijman is a labor and employment attorney with Phelps Dunbar, LLC, which has offices in Louisiana, Mississippi, Florida, Texas, Alabama, North Carolina and London. To view his firm bio, click here. He can be reached at (601) 360-9716 and by e-mail at fijmanm@phelps.com



Sunday, September 21, 2014

EEOC Experiences “Separation Anxiety” in Lawsuit Against CVS



          The details are still yet to be known, but word out of Chicago is that the EEOC has suffered a big defeat in their controversial lawsuit against CVS Pharmacy, over the drug store chain’s use of separation agreements.  Employers commonly use separation or severance agreements when the employment relationship ends. In exchange for some type of payment, the employee agrees to a general release of any potential claims he or she might have against the employer, and possibly other provisions, such as confidentiality and non-disparagement clauses.
As reported in my August 8, 2014 post “Mad Men: The EEOC Advertises its Aggressive Agenda”, earlier this year, the EEOC filed a lawsuit against CVS, claiming the drug store chain’s use of its standard separation agreement demonstrated a pattern and practice of CVS interfering with employees' Title VII in a way that “deters the filing of charges and interferes with employees' ability to communicate voluntarily with the EEOC.” 
The EEOC’s lawsuit was troubling for many in the business community, because employers nationwide commonly use the language being attacked in the CVS agreements. In the event the EEOC were to prevail, it could have result in chaos for many businesses, casting into doubt the validity of such standard severance agreements, and potentially allowing former employees to revive previously barred claims.  
On September 18, 2014, U.S. District Court Judge John Darrah verbally granted CVS’s motion to dismiss based on the EEOC’s failure to state a claim, and an opinion is expected shortly that will give the Court’s basis for dismissing the EEOC’s lawsuit.  CVS has announced it is pleased with the decision and the EEOC is withholding comment until it sees the Judge’s written opinion.
It is not surprising that the EEOC filed the lawsuit.  In its Strategic Enforcement Plan for 2013-2016, the EEOC had announced its intent to target employer policies it claimed discouraged or prohibited individuals from exercising their legal rights, including overly broad waivers or settlement provisions that prohibited filing EEOC charges or providing information in EEOC or other legal proceedings.
In its rush to file a “test” case, the EEOC might have made the error of simply picking the wrong defendant to go after, or not bothering to actually read the agreements in question.  When it filed its motion to dismiss, CVS noted that its separation agreements expressly allowed for employees to participate with and cooperate in any investigation by a government agency, including the EEOC. Specifically, CVS’s agreements expressly note that none of the provisions are:
“[I]ntended to or shall interfere with employee’s right to participate in a proceeding with any appropriate federal, state or local government agency enforcing discrimination laws, nor shall this Agreement prohibit employee from cooperating with any such agency in its investigation,” provided of course that the employee waives her entitlement to monetary and other relief.

       The decision in the CVS case may not bode well for a similar lawsuit filed by the EEOC in the United States District Court of Colorado.  Some legal commentators have suggested that the EEOC may be trying to use this type litigation to impose new guidelines for such agreements, or perhaps as a prelude to more formalized regulation

Mark Fijman is a labor and employment attorney with Phelps Dunbar, LLC, which has offices in Louisiana, Mississippi, Florida, Texas, Alabama, North Carolina and London. To view his firm bio, click here. He can be reached at (601) 360-9716 and by e-mail at fijmanm@phelps.com