Last month, the Sixth Circuit affirmed enforcement of an EEOC
investigatory subpoena served on an affiliate company of the Charging Party’s alleged
employer. EEOC v.
Ferrellgas, LP, No. 23-1719 (6th Cir. 3/26/24). After addressing and rejecting a number of
technical objections to service of the subpoena and alleged waiver of objections,
the Court observed that the employer had not shown that the subpoena was unduly
burdensome by merely describing the amount of time and effort to comply. Proving undue burden is a comparative
exercise and the employer failed to also explain how limited (or not) its
resources were in light of the burden imposed.
The subpoena was also not overly
broad because the Charging Party’s allegations touched on similar issues and
the EEOC is given broad powers to investigate most employment-related
issues.
According to the Court’s opinion, the operating partnership,
holding company and affiliate corporation all had similar names. The Charge named the holding company as the
employer, but the EEOC served its Request for Information (RFI) on the
affiliate corporation. HR and outside
counsel responded to the RFI, provided some requested documents, objected to the
RFI’s scope (but not to the addressee) and
did not identify which of the entities employed either of them. The investigation continued for almost two
years. The EEOC then mailed a subpoena to
outside counsel, who provided some responsive documents and objected to the
scope of the subpoena, but did not challenge the addressee or manner of
service. The EEOC then sent another RFI
to HR, but the only response was an objection that it should have been sent
instead to outside counsel. The EEOC
then mailed a subpoena addressed to the corporate affiliate but sent to outside
counsel, which objected not to the corporate addressee, but to the fact that it
was overly broad, was unduly burdensome, was not sent by certified mail and was
not signed. The EEOC then sent the
identical, but signed, subpoena by certified mail. Without filing a formal objection with the EEOC,
outside counsel reiterated its objection to the scope of the subpoena. The EEOC then obtained enforcement of the subpoena
from federal court against the operating partnership (not the named employer or
corporate affiliate named in the subpoena) and this appeal ensued.
The Court rejected the respondents’ objection to manner of
service because it had already directed the EEOC several times to communicate
only with outside counsel. “To hold otherwise would reward duplicity and allow
potential defendants to easily avoid the Commission’s subpoenas. What is more,
it would ‘create a rule that would allow a lawyer with actual notice of a
subpoena to take no action, in hope that the [Commission] will not seek
enforcement, and to make objections only if enforcement proceedings ensue.’” In addition, “when ‘[a]ctual notice reached
counsel promptly and counsel responded on the merits,’ service not in strict
conformity with the . . . regulations does not preclude a district
court’s enforcement of a . . . subpoena.”
The Court agreed that the respondent raised a valid
objection that the EEOC had served it with a subpoena whose response date
pre-dated the service date (making compliance an impossibility) and identified
an entity other than the employer identified in the Charge or even the entity
named in the federal court enforcement action.
“[A]t a surface level, the Commission issued a subpoena with an invalid
response date and now seeks court enforcement of that subpoena against an
entity that was not, strictly speaking, the target of the subpoena itself. These technical oversights are blameworthy,
and the Commission should have rectified them well before this juncture.” Nonetheless, the Court refused to “exalt
form over substance” because the respondents had failed to raise any of these
objections to the EEOC. Moreover, one
purpose of the EEOC’s investigatory process involves identifying the correct
defendant employer. Finally, the EEOC’s
errors did not prevent the respondents from raising substantive objections to
the subpoena to the EEOC, federal court or appellate court.
Similarly, while the Court agreed that EEOC regulations only
gave the respondent 5 days to object to a subpoena, it refused to enforce that
deadline here because service of the subpoena was not technically correct. “It
is self-evident, [respondents] argues, that an employer’s obligation to exhaust
its administrative remedies under § 161(1) and 29 C.F.R. § 1601.16(b)(1), if it
exists at all, is contingent upon proper service of a subpoena that complies
with the statute and its implementing regulations. This argument carries
considerable logical force, and we find support for it in our caselaw.”
The Court rejected the employer’s argument that the subpoena
was overly broad in seeking information about its hiring practices when the Charge
was focused only on compensation and termination issues. Courts
do not strictly construe relevance against the EEOC “and have afforded the
Commission access to virtually any material that might cast light on the
allegations against the employer.” Moreover,
in this case, the Charging Party had also made allegations about discriminatory
statements made to her during her job interview and her initial job assignment,
making inquiries into those matters relevant. In addition,
The application and hiring
information that the Commission seeks could cast light on whether [respondents]
discriminated against other job applicants — in the same region and during the
same timeframe as [Charging Party’s] employment — based on sex or race. In
turn, that information might illuminate whether [it] discriminated against [her]
on those same bases but in other employment contexts — i.e., in her pay and
termination.
The Court also rejected the employer’s arguments that the subpoena
was unduly burdensome.
“[W]hether a subpoena is overly
burdensome turns on the nature of the materials sought and the difficulty the
employer will face in producing them.” .
. . Given its “fact-intensive” nature,
the burdensomeness inquiry is “generally not amenable to broad per se rules.” . . . . The employer bears the obligation to
show that compliance would impose an undue burden.
First, the respondent only provided an unsigned and undated declaration,
which is not valid evidence in any legal proceeding. In any event, the argument was unpersuasive
because it only described the amount of effort that would be required to respond
and did not also describe the respondent’s available resources. The respondent
“fails to explain why they
represent an undue burden. Assessing whether the burden of compliance is undue
is a comparative exercise; what is unduly burdensome to a small business
with a handful of employees may not be unduly burdensome to a Fortune 500
company. . . . While [its] figures provide an estimate of the burden it might
face, [it] offers up no baseline against which we can compare its estimates to
decide whether the burden it faces is undue. Merely pointing out that
compliance with the subpoena will divert employee attention from ordinary tasks
is insufficient — if that were enough, then nearly every EEOC subpoena would
fail. We are not blind to the fact that compliance with the Commission’s
subpoena will require significant time and effort, but without some metric of
how significant that time and effort is, we cannot find that an employer has
met its burden to show that compliance would be unduly burdensome.
NOTICE: This summary is designed merely to inform and alert
you of recent legal developments. It does not constitute legal advice and does
not apply to any particular situation because different facts could lead to
different results. Information here can change or be amended without notice.
Readers should not act upon this information without legal advice. If you have
any questions about anything you have read, you should consult with or retain
an employment attorney.
