The investigatory authority of the EEOC is broad and, as many employers are painfully aware, includes the right to examine “any evidence of any person being investigated or proceeded against that relates to unlawful employment practices covered by [Title VII of the Civil Rights Act of 1964] . . . and is relevant to the charge under investigation.” (42 U.S.C. 2000e-8(a).) Over the years, with courts having liberally construed the term “relevant” in this context, the EEOC has been afforded access “to virtually any material that might cast light on the allegations against the employer.” (EEOC v. Shell Oil Co. (1984) 466 U.S. 54, 68-69; see also EEOC v. Federal Exp. Corp. (9th Cir. 2008) 558 F.3d 842, 854.)
In Equal Employment Opportunity Commission v. Royal Caribbean Cruises, Ltd. (11th Cir. 2014) 771 F.3d 757, a decision issued late last year, the 11th Circuit Court of Appeals placed some reasonable limitations on this sweeping grant of investigatory authority, and in doing so – though the decision is not binding on the Ninth Circuit – offered some potential options to California employers faced with broad requests for information from the EEOC.
In June 2010, Jose Morabito, an Argentinean national who was employed by Royal Caribbean Cruises (“Royal Caribbean”) on one of its cruise ships, filed a discrimination charge with the EEOC alleging that the company had violated the Americans with Disabilities Act when it refused to renew his employment contract after he was diagnosed with HIV and Kaposi Sarcoma. In response, Royal Caribbean contended that the ADA was inapplicable given Morabito’s status as a foreign national employed on a ship flying the flag of the Bahamas and further that Royal Caribbean, because its ships are registered under the laws of the Bahamas, was required to follow medical standards set forth by the Bahamas Maritime Authority (BMA) – standards that allegedly disqualified Morabito from duty at sea.
The EEOC, in turn, requested from the company a list of all employees discharged by the company since 2010 pursuant to the BMA medical standards. Royal Caribbean objected to the request, asserting that the ADA did not cover foreign nationals employed on foreign-flagged ships and that the information sought was not relevant to Morabito’s charge.
The EEOC ultimately issued an administrative subpoena requesting a list of all employees who were discharged, whose contracts were not renewed, or who were not hired from 2009 to present, due to a medical reason, in addition to a wealth of identifying information and documents relating to any such persons and the circumstances of their discharge or non-employment.
Royal Caribbean partially complied with the subpoena, providing records for employees or applicants who were U.S. citizens. The EEOC sought to compel enforcement of the requests relating to records of non-U.S. citizens.
A magistrate judge recommended that the petition to enforce be denied on the grounds that the information sought was not relevant to Morabito’s charge and that compliance with the disputed portions of the subpoena would be unduly burdensome. The District Court affirmed and adopted the magistrate judge’s report and recommendation and the EEOC appealed.
THE COURT OF APPEALS’ DECISION
The Court of Appeals affirmed the District Court’s denial of the EEOC’s application to enforce the administrative subpoena.
As to the issue of relevance, the Court explained that it was clear from the record that the disputed portions of the EEOC’s subpoena were not aimed at fleshing out Morabito’s claim but were instead targeted at discovering “members of a potential class of employees or applicants who had suffered from a pattern or practice of discrimination.” The Court of Appeals rejected the EEOC’s arguments that the information in question was relevant to the allegations against Royal Caribbean, explaining that it was not immediately clear how companywide data of the sort sought by the EEOC – regarding employees and applicants with any medical condition, including conditions not similar to Morabito’s or covered by the BMA’s medical standards – would shed light on Morabito’s individual charge. The Court noted that this was especially so given that Royal Caribbean had admitted that it terminated Morabito because of his medical condition – an action it claimed was compelled by the BMA standards. While the Court noted that in some cases statistical data of the sort in question might be needed to assess whether an employer’s facially neutral explanation for an adverse employment action was actually a pretext for discrimination, the case in question was not that sort of case.
The Court further noted that the EEOC had devoted much of its efforts in the matter to the argument that it was entitled to expand its investigation to uncover other potential violations and victims of disability discrimination. The Court, while acknowledging that the EEOC’s mandate includes the goals of eradicating discrimination and protecting undiscovered victims, explained that the relevancy standard did not have as broad a meaning as suggested by the EEOC. Rather, according to the Court, “[t]he relevance that is necessary to support a subpoena for the investigation of an individual charge is relevance to the contested issues that must be decided to resolve that charge, not relevance to issues that may be contested when and if future charges are brought by others.” (See also 42 U.S.C. § 2000e-8(a).) The Court explained that Royal Caribbean’s admission that it refused to renew Morabito’s contract because of his medical condition settled that issue and thus made it irrelevant whether the company had refused to renew other employees’ contracts for the same reason.
The Court further held that even if the information in question bore some tenuous relevance to Morabito’s charge, it found no error in the District Court’s holding that requiring Royal Caribbean to compile and provide the information sought by the subpoena would be unduly burdensome on Royal Caribbean. Among other things, the Court noted that Royal Caribbean, to gather the information sought, would need to divert five to seven employees from their usual tasks for 40 hours a week for two months.
It is not unusual for employers dealing with an EEOC charge filed by an individual to receive broad requests from the EEOC seeking information about non-complaining employees and/or applicants. While the Royal Caribbean case is certainly not binding on the Ninth Circuit, the analysis suggests that employers receiving wide-ranging requests for information in connection with individual charges of discrimination may have grounds to argue that the information sought is irrelevant or only tangentially relevant – particularly in cases where no pattern or practice of unlawful activity is alleged and/or where there is no dispute that the adverse action was taken because of a protected status (but for legitimate reasons nevertheless).
The Court’s holding on the unduly burdensome argument made by Royal Caribbean is in all likelihood less helpful to California employers. While the Ninth Circuit has yet to define what constitutes an unduly burdensome request in the context of an EEOC subpoena enforcement action, several district courts within the Ninth Circuit have concluded that compliance with a subpoena is excused as being unduly burdensome if the employer can show that compliance “threatens to unduly disrupt or seriously hinder normal operations of a business” or “if the cost of gathering the information would be unduly burdensome in the light of the company’s normal operating costs.” (The Court in Royal Caribbean rejected such a “rigid rule,” i.e. that a party seeking to avoid enforcement of an EEOC subpoena must show that compliance would interfere with its normal business operations, explaining that courts may consider a number of hardship and benefit factors in conducting such an analysis.) Thus, California employers will likely continue to have a difficult time proving that an EEOC subpoena (otherwise relevant) is unduly burdensome, unless they can make a solid showing satisfying one of the two prongs stated above.