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Bad faith required for spoliation instruction, holds Tenth Circuit

There is a general requirement that parties not destroy evidence; bolstering that, there is a specific requirement in EEOC regulation 29 CFR 1602.14 that employers preserve personnel records for 1 year and that the parties in an EEOC charge preserve evidence until final disposition of the charge.

In this case, the EEOC and plaintiffs argued that an Excel file contained information that was allowed to be destroyed as the file was routinely updated. Additionally notes of a meeting were at-issue. The employer’s witnesses testified that they did not know how the records had been lost and, further, that, even if they hadn’t been destroyed, they had never contained evidence relevant to the case at-issue. The EEOC argued it should, nonetheless, be entitled to a presumption that the records would have been helpful to its case, and further that the jury should be so instructed. Such an instruction is called a “spoliation” instruction.

The Tenth Circuit reviewed its precedents and held that, first, a litigant must show the destroying party did so in bad faith. Merely allowing records to be destroyed is not sufficient to warrant a spoliation instruction. The EEOC responded that, unlike general litigants, it should, even despite the lack of bad faith, be entitled to a spoliation instruction because, whatever the employer’s intent had been, it had allowed the records to be destroyed in violation of that regulation. The Tenth Circuit rejected the argument that a spoliation instruction should be a remedy for such a violation absent bad faith, noting that was especially true where, as here, the EEOC and plaintiffs failed to produce any evidence countering the employer’s evidence that, if the records had been preserved, there was nothing helpful to the EEOC and plaintiffs in them.

Source: EEOC v. JetStream Ground Services, Inc., case no. 17-1003 (10th Cir. 12/28/17).

EEOC is about to shift to majority of Republican-appointees

As previously reported, the NLRB recently shifted to a majority of Republican-appointees. Next, with President Trump’s appointments of Janet Dhillon (to be Chair) and Daniel Gade, it will be the EEOC’s turn. Their confirmation (expected by the end of October) will create the first Republican-majority at the EEOC in a decade.

President Trump is expected to nominate a new EEOC General Counsel soon, as well.

These changes will likely have significant impact on issues including LGBTQ protections and equal pay, as well as the EEOC’s recent practice of issuing, without undertaking the requirements for rulemaking, guidances and other non-regulatory publications.

Office of Management and Budgets (OMB) rejects EEOC’s revised EEO-1 Form

The OMB rejected the EEOC’s new EEO-1 form, which would have become effective March 31, 2018. The OMB reviews agency forms like this pursuant to the Paperwork Reduction Act and determined that the EEOC’s new EEO-1 had been unlawfully developed by the EEOC had underestimated the burden on employers it its published estimate. The PRA was enacted into law in 1980 and since then has required agencies to estimate the paperwork burden any new bureaucratic action would require. Here the OMB determined that the EEOC’s previously published estimate was simply, and significantly, too low. Specifically the new EEO-1 form would have required employers who are subject to EEO-1 reporting (typically employers of 100 or more) to report wage and hours worked for all employees by race, ethnicity and sex, all within 12 specified pay bands. The OMB determined that the public had not been properly apprised by the EEOC of the burdens such a requirement would entail.
The OMB’s ruling comes after much controversy over the new EEO-1 form. Commentators criticized the EEOC’s approach not only as being overly burdensome but also as overly simplistic. Commentators noted it would have created the impression that workers within the same pay bands should be paid the same amounts (irrespective of their gender, race, etc.) despite the fact that they may work in very different positions within those bands. Likewise it has been noted that the EEOC’s approach overly simplified compensation practices by not properly allowing for articulation of base wages versus bonuses, commissions, overtime and non-wage benefits that form part of a compensation package.
Although a part of the White House, the OMB is often seen as a non-partisan watch dog.
The OMB’s ruling leaves the EEOC’s proposed EEO-1 for 2018 dead in the water. The OMB has invited the EEOC to continue the OMB’s examination of the proposed EEO-1 form if it believes the form defensible. The OMB has also noted the EEOC’s prior EEO-1 would be acceptable for use. The EEOC has announced it is considering its options. Employers must wait for the EEOC’s decision to determine what form to use in the future.
Source: OMB Memoradum re EEO-1 Form, Review and Stay (8/29/17)

Tenth Circuit confirms employees may “double file” EEOC charges

An employee filed an EEOC charge in 2009 for sexual harassment, but did not sue when he received his administrative right to sue. Instead, he continued to work, then filed another charge in 2011. When he sued for sexual harassment after the second charge, the employer challenged his claim as timely. The trial court held that he could not include in his claim any events preceding 300 days (the applicable statute of limitations) prior to the 2011 charge, in other words, all of the 2009 charge’s allegations (and potentially a period thereafter into 2010). The Tenth Circuit reversed. The Tenth Circuit said that, under the Supreme Court’s 2001 decision, Nat’l R.R. Passenger Corp. v. Morgan, any events constituting the “the same actionable hostile work environment practice” are admissible in the lawsuit, irrespective of whether they occurred before the 2011 charge’s time period. In other words, a plaintiff is allowed to “double file” EEOC charges for the same conduct.

In so ruling, the court noted its 2005 precedent in Duncan v. City and County of Denver, outlining the relevant factors to determine if events do or do not constitute part of “the same actionable hostile work environment practice” under Morgan: They must be “related by type, frequency, and perpetrator” without any “intervening action by the employer” that might break the relationship.

The case is Hansen v. SkyWest Airlines, 844 F.3d 914 (10th Cir. 2016).

 

Tenth Circuit refuses to enforce EEOC subpoena

The Tenth Circuit refused to enforce an EEOC subpoena denied where the EEOC’s subpoena requested information regarding the employer’s treatment of other employees. The request exceeded the scope of the purely individual-oriented charge, no EEOC charge had been filed and the employer had not put its treatment of other employees at-issue in its position statement.

The case was EEOC v. TriCore Reference Laboratories, — F.3d — (10th Cir. 2/27/17).

Supreme Court holds that trial court analysis of EEOC subpoena’s enforceability is entitled to discretion, not de novo review.

In a decision that probably surprised no one except the often-reversed and reversed-in-this-case Ninth Circuit, the Supreme Court held that a trial court, not an appellate court, is in the best position to review the particulars of a subpoena.

Interestingly, the decision, which can be seen as reinforcing the EEOC’s ability to issue subpoenas – or at least reducing judicial scrutiny over EEOC subpoenas – was technically a loss for the EEOC. The EEOC had issued a subpoena for contact information for employees who’d taken a certain test, nationwide. The company objected, and the trial court agreed with the company, holding the EEOC’s nationwide request was overly broad. The EEOC then appealed to the Ninth Circuit, which ruled it could review the trial court’s ruling de novo (from scratch) without having to give the trial court any deference. The Supreme Court disagreed and sent the case back to the Ninth Circuit. Now, the EEOC will decide if it still wants the information, and if so, it will have the heavy burden of proving not only that  it is entitled to the information but that the trial court was so wrong when it decided otherwise that it abused its discretion.

While the EEOC lost the Supreme Court case, companies should be mindful of the overarching lesson: The EEOC has broad subpoena power, and a trial court may now be the only judicial body with substantial authority to hear a challenge to an EEOC subpoena.

For an example of how EEOC subpoenas are analyzed for enforceability, see this posting.

The case was McLane Co., Inc. v. EEOC, — S.Ct. — (4/3/17/).