Keefe, Campbell & Associates, LLC

Editor’s comment: Human resources and benefits managers across the U.S. are smiling to hear a federal judge in Iowa ordered the Equal Employment Opportunity Commission to pay $4.56 million in attorney fees and expenses to a Cedar Rapids trucking business after dismissing the agency’s sexual harassment lawsuit. A team of attorneys successfully defended CRST Van Expedited in the lawsuit, which was filed in 2007.

The fee award against the EEOC by a federal judge is unusual and may be among the largest imposed by a federal court. They are appealing. The agency alleged CRST’s lead drivers or team drivers subjected approximately 270 female drivers to sexual harassment and a sexually hostile work environment and the company had failed to correct and protect them.

In a series of rulings, Chief Judge Linda Reade of the Northern District of Iowa dismissed the agency’s claims. She previously granted summary judgment on the claim CRST tolerated a “pattern and practice” of sexual harassment against female drivers. The EEOC presented the court with what was felt to be solely anecdotal evidence to show some members of CRST’s management may have occasionally violated CRST’s anti-sexual harassment policy by failing to respond appropriately to sexual harassment in the workplace.

The EEOC did not present the failings of CRST’s managers in any meaningful way to show CRST had a defined pattern or practice of tolerating sexual harassment in its workplace. This summary judgment ruling effectively left 200 or so EEOC claims with nothing in common.

Please don’t hesitate to reply with your thoughts and comments.

Editor’s comment: We have been asked the question so many times; we felt a full review was necessary. Trust us the issue cuts in a number of directions for risk managers, brokers, claims handlers and attorneys on both sides. This is another area, like release/resignations, where workers’ compensation claims practice will start to cut into employment law issues—WC claims handlers are not going to be able to take the “ostrich approach” and stick their heads in the sand and ignore the EPLI (or employment practices) ramifications of their decisions. If further training is needed, send a reply.

The Illinois standard—Mechanical Devices = MMI to get injured folks off TTD

First and foremost, the Illinois standard on getting workers off TTD and back to work comes from the ruling of our Appellate Court, Workers’ Compensation Division in the oddly named case of Mechanical Devices v. IWCC. In Mechanical Devices, the Court focused on maximum medical improvement or MMI as the basis to get someone back to work and off your dole. Like a lot of other stuff in Illinois workers’ compensation law and practice, the concept of using MMI as the basis for returning folks to work is not contained in the legislation or rules. There is no legislative history for the Act or Rules so the reviewing courts didn’t get it there. It was basically created by the courts and we will all have to struggle with defining it.

You may note some doctors, hospitals and other caregivers will affirmatively find a claimant to be MMI and some doctors simply won’t. The over-billers in the work comp medical field will almost never use the concept because they will keep providing care and “treatment” so long as folks keep coming back for whatever treatment protocol can be implemented. Whatever you do, you can’t force a doctor to provide an MMI finding—they either will or they won’t. Many doctors and similar caregivers are trained to put in their medical charts “return PRN” at the end of care—the term ‘PRN’ means return “per required need” or is a way of leaving it up to the patient to decide on whether they have a defined medical need.

Either way, MMI is a very liberal standard to use on when to get folks back to work. We don’t feel you should regularly use it; you just have to be aware that when push comes to shove, that is how the Commission and reviewing courts may analyze your actions and claims decisions. The reason we feel it is so liberal is the vast majority of workers will return to light or full work long before they are fully recovered and no longer need care. As you may note below, the federal government is affirmatively requiring U.S. employers to bring workers back to work prior to their reaching maximum medical improvement—they just aren’t providing guidance as to when and how you have to do so. We truly feel getting someone back to work definitively assists them in recovery and brings the medical course to close quicker.

What do you do when injured works want to come back to work faster and want light work accommodation—accommodate!

The second or “inverse” of the situation in which you are trying to “force” the worker to take light or full work by cutting off benefits is what do you do when the injured worker demands it? In the recent settlement in EEOC v. Sears, a class of workers from Sears all affirmatively requested light work or accommodation and were refused or simply put off by Sears. When it was all said and done, the workers didn’t get back to light or full work and were eventually terminated for being off work too long.

The workers seeking “accommodation” or light work all filed EEOC charges. They were later represented by the EEOC. The EEOC took the stance ADA mandates light work or job accommodation for injured workers in the WC setting. Rather than fight and possibly pay both sides attorney’s fees, Sears settled the dispute for over $6 million dollars.

This sets up the legal scenario mandating light work or job modification where possible to facilitate return to work “with reasonable accommodation” whenever and wherever possible.

The problem with unions in all this mess—are they above the law, specifically ADA?

We were recently asked by a client what to do when a union advised their injured members had to be healthy enough to return to “bargaining unit work” or they had to be kept on work comp benefits. The problem we have with the collective bargaining agreement model presented is defining what is “bargaining unit work” and whether such work may ever be modified.

There is no direction from the EEOC on the subject that we are aware of. The ADA says everyone, including the unions have to reasonably accommodate injured workers. We feel some unions try to get out of ADA by saying you, as the employer, aren’t technically “able” to reasonably accommodate injured workers to allow them to perform “bargaining unit work” with accommodation. We feel that position runs directly counter to the intent and purpose of ADA which defines needed job changes to be required when “reasonable accommodation” will allow an over-the-road truck driver or rough carpenter or journeyman electrician do essential job functions with some modifications.

So for example, if you have

• A truck driver who ‘has’ to lift 75lbs to do his/her “bargaining unit work” and
• You are confident your staff can modify the vehicle and job to allow him/her to return to work with essential job functions and the same pay at a 50lb limit;

We think you and his unions have to cooperate to allow him to work with modification under the ADA. Many unions say no, you can’t do that and “bargaining unit work” can’t be modified so as to accommodate an injured worker in any way. Therefore, we feel it is their position the worker has to be left on WC to the strong detriment of employers and to the wild benefit of the injured worker who may now receive thousands or possibly millions in WC benefits in IL. It is our opinion labor unions want that outcome and do everything they can to make it happen.

We feel that approach directly violates what ADA demands. We feel Sears got walloped by the EEOC for not being willing to change their job description for an auto mechanic to accommodate similarly injured workers—the cost to Sears was over $6M. We don’t know why that same legal theory wouldn’t apply to the unions and employers in all U.S. industries.

Some day, someone is going to get better direction on whether this approach complies with or violates ADA. However, due to the cost and uncertainty of such litigation, my vote is not to let your organization pay for the test case on the topic.

Can I cut them off TTD in reliance on my defense IME?—not so fast, not so fast!!!

Finally, you need to know about Grabs, et. als. v. Safeway, Inc. and Dominick’s Finer Foods, LLC. In their ruling, the Illinois Appellate Court addressed a certified question on an interlocutory appeal on this narrow issue of alleged retaliatory discharge. Plaintiffs filed a joint complaint alleging Defendant terminated them in retaliation for filing workers’ compensation claims. Defendant responded to assert Plaintiffs had been terminated for violating a neutral attendance policy when they missed three consecutive days of work subsequent to being advised to return to work pursuant the opinions given by Defendant’s IME. A battle over the IME and ability of the employer to rely on the IME to terminate the workers went back and forth.

The Appellate Court found it wasn’t per se retaliation to fire someone in reliance on an IME but the lawsuit was allowed to stand and was returned to the Circuit Court for hearing. The Appellate Court felt the employer had to first go to the Commission to get a ruling about the efficacy of the IME.

Therefore, our advice is not to fire a workers’ compensation claimant in reliance only on a defense ME. Put the reluctant worker on either leave of absence or inactive status—issue COBRA notices, etc.

All of this requires close coordination with defense counsel. We are happy to assist in close calls—just send an email or call one of the nice attorneys at their numbers below. We appreciate your thoughts and comments, please reply or post them on our award-winning blog. For details, read below.

Editor’s comment: Last week, we reported the $6.2 million levy on one of the world’s largest retailers by the Equal Employment Opportunity Commission. We feel the national and regional directors of the EEOC “held up the scalp” of the vanquished corporate human resources department for everyone to see. We feel other HR and general counsels’ departments of the hundreds of U.S. businesses across the country that employ autotermination policies need to undertake a very cautious review of their policies in light of this consent decree. Actually, this may affect any and all termination policies when it comes to dealing with folks on workers’ comp who want reasonable accommodation under ADA. While the record-high settlement doesn’t actually point to any specific provision of the ADA that was violated and isn’t a ruling from a federal or state court, it does signal the willingness of a federal bureaucracy to employ their unlimited legal budget to sue you and potentially force similar seven-figure settlements.

What is the concern of the EEOC? What started this mess? Well, we call autotermination policies a gender/sex/religion/race/sexual-orientation neutral way to terminate any employee. The simple rule is that if a given employee is off work continuously for either six months or a full year (or some other defined term) for any reason, your organization terminates them without recourse.

One thing that Sears may have done wrong comes from the pleadings. In filing a motion to dismiss, you may note the lead Plaintiff worked as an automotive service technician. He was injured when he fell while on the job in April 2001. Although the lead Plaintiff took leave to recover, his injuries arguably left him substantially impaired in his ability to perform physical tasks. According to the EEOC, within three months after his injury he sought placement in two less physically demanding positions for which he was qualified, but Sears refused to place hire him in either position. As a result, he remained on workers’ compensation leave because he was unable to return to his prior service technician job. Ultimately, his employment was terminated under Sears’ disability or worker’s compensation leave policy that inflexibly mandated the termination of employees on leave for more than one year.

In this factual scenario, it appears clear claimant sought the benefit of ADA—he was arguably a qualified individual with a disability and required reasonable accommodation. From these reports, it appears Sears refused to accommodate while he was off so as to allow him to return to work and get off TTD. It is unclear whether initial accommodation would have allowed him to return to full work at a later time. As a result of the refusal to accommodate, Plaintiff was then left to “dangle” and although he may have received TTD, in the process, he lost his job.

Assuming this scenario is accurate, we are very confident in advising all of our readers such a factual scenario is a clear red flag under this approach when the ADA is going to be enforced by the current administration of the EEOC. If you have an employee who is out on TTD and asks for reasonable accommodation to allow them to return to work consistent with ADA, you had better address the request in a meaningful fashion. If you leave them on TTD until your autotermination period passes and fire them, you are directly in the crosshairs over the gun barrels of the EEOC and don’t forget what happened to Sears.

But there are lots of other situations we all need to consider and we will be writing the EEOC for clarification and report any reply. We are wondering what to do with the panoply of situations in which workers are off work for extended periods and what to counsel you about the numerous factual situations that may arise. A fundamental question not answered by the consent decree is patent—can an employer ever terminate a worker who is on TTD? Does the work injury equal infinite or at least indefinite job security to the extent the injured worker could always later claim the need for reasonable accommodation to allow them to get back into your workforce?

We also ask the obvious questions:

• Do you always have to fire the replacement worker when you return the injured worker to his/her job with accommodation?
• In the alternative, is the injured worker on TTD entitled to priority in being rehired to allow for reasonable accommodation without having to fire someone?

Other pertinent questions that arise include what an HR department should do when and if:

1. The injured worker is off for the entire autotermination period and doesn’t request accommodation until after they have been terminated;
2. The injured worker who is fully recovered to MMI during the autotermination period and then aggravates the injury at a later time, again losing substantial time from work;
3. A union employer is more than willing to accommodate an employee who is ready to return to work before or after the autotermination period has run but the applicable union or their interpretation of their union rules won’t allow it;
4. An employee is off for multiple reasons, some of which are related to injury and some of which are wholly personal and unrelated to the work injury.

One “solution” to this problem is to maintain the status quo, sort of. First, autoterminate everyone consistent with your current policy that isn’t suffering from a claimed work injury. Second, for those with pending workers’ compensation claims, if they ask for accommodation to return to work prior to the running of the autotermination period, actively address the request and keep careful records of both the request and your decision(s) on reasonable accommodation. Third, for injured workers with pending workers’ compensation claims who don’t request accommodation during the autotermination period, when your autotermination period is over, don’t terminate; put them on “inactive” or leave of absence status, pending further action. If such injured workers later request reasonable accommodation due to their work injuries, consider the request, confer with your defense counsel and take whatever action necessary to avoid running afoul of the ADA. If they don’t seek reasonable accommodation, at some distant point, take them off the inactive or leave of absence status.

The other concept EEOC v. Sears, Roebuck will greatly encourage is the coincidental general release/resignation. We are already seeing many companies that will not enter into lump sum settlement agreements unless and until the injured worker coincidentally resigns at the time they depart your organization. To present, we feel such documents have not been exhaustively challenged in the courts by the EEOC or other similar state agencies and we hope they leave it alone and do not start raising challenges. If you need our sample coincidental release/resignation, send a reply.

We are certain this article and the consent decree will create intricate issues for all of us moving forward. As we outline, we are hoping the EEOC has some answers or guidelines on these issues and any further inquiries our readers would like to send along. Please forward your thoughts and comments and questions for the federal regulators.

Editor’s comment: If you have an auto-termination policy for extended absence in place, please read this article!  Please also note this settlement is just what it is; a settlement by the EEOC of a claim against a major U.S. retailer—it isn’t a ruling by a trial or appellate court. However, the settlement indicates the U.S. Government’s anti-business HR-busters are now probably going to be attacking auto-termination policies for anyone who uses them. If you have such a policy in place, we are happy to counsel you on how to best modify it. We caution the worst thing that can happen to an HR department is to be sued by the federal government with their unlimited legal budget.

You can also share the groans of all HR folks to see the settlement fund demanded from Sears is $6.2 million dollars. We consider that absolutely preposterous in light of this new and unprecedented interpretation of the Americans with Disabilities Act by the EEOC. Please also note what Sears was doing was fully sanctioned under Illinois law by the Illinois Supreme Court in their ruling in Hartlein v. Illinois Power.

Auto-termination policies based on extended absence have been in vogue in the HR arena for several decades. The idea is to terminate folks who are off work and out of your work force for months and years on a fully neutral basis—duration of absence only. The concept is that a worker who isn’t at your workplace for a long enough time has to be let go, regardless of the reason. The focus is on neutrality in terminating them.

The problems with a fully “neutral” termination policy are multifaceted. What do you do about a hero? What if you have a worker who risks his/her life and saves five co-workers in a fire and is badly burned? Can you still terminate them if they are off work for a lengthy period of time but later fully recover? The public relations impact of such a termination could be disastrous.

In light of the “hero” model, our focus on such programs is to recommend a management-labor panel review all such individuals and see what the best overall approach might be for your company. You shouldn’t impose a hard and fast line but should have an overall focus of keeping your business competitive while adjusting to the hopefully rare exception to the rule.

In EEOC v. Sears, Roebuck & Co., the consent decree focuses on the disparate impact auto-termination policies might have on workers’ compensation claimants. The U.S. Equal Employment Opportunity Commission obtained a record-setting consent decree resolving a class lawsuit against Sears under the Americans with Disabilities Act for $6.2 million and significant remedial relief. The suit alleged Sears maintained an inflexible workers’ compensation leave exhaustion policy and terminated employees instead of providing them with requested reasonable accommodations for their disabilities, arguably in violation of the ADA.

EEOC Chicago District Director John Rowe said the case arose from a charge of discrimination filed with the EEOC by a former Sears service technician, John Bava. According to Rowe, Bava was injured on the job, took workers’ compensation leave, and, although remaining disabled by the injuries, repeatedly attempted to return to work. Sears followed its policy and did not provide Bava with a reasonable accommodation which would have put him back to work and, instead, fired him when his leave expired. Pre-trial discovery in the lawsuit revealed numerous employees had taken workers’ compensation leave and were terminated by Sears without seriously considering reasonable accommodations to return them to work while they were on leave, or seriously considering whether a brief extension of their leave would make their return possible.

The EEOC outlined inflexible leave policies which ignore reasonable accommodations making it possible to get employees back on the job cannot survive under federal law. In addition to providing monetary relief, the three-year consent decree includes an injunction against violation of the ADA and retaliation. It requires Sears to amend its workers’ compensation leave policy, provide written reports to the EEOC detailing its workers’ compensation practices’ compliance with the ADA, train its employees regarding the ADA, and post a notice of the decree at all Sears’ locations.

We are confident the issues in this case focused on the monster cost of defending EEOC charges and the unbelievably high rates some defense firms charge. If you want more reasonably priced employment law counsel or seek a copy of the consent decree, send a reply.

Editor’s comment: Hard to imagine these facts made it to the Seventh Circuit for consideration. However, if you review the facts you will note claimant already filed a prior EEOC charge and internal discrimination complaints. The employer did a solid job of trying to insure all interviewers were “independent” or otherwise unaware of prior complaints.

Our advice in EPLI claims such as this is to have your defense case-in-chief ready when the EEOC or Illinois Department of Human Rights sends you the notices. All of our top clients do so. If you need assistance in developing a strong defense case-in-chief, send a reply.

In Stephens v. Erickson, (No. 08-1416, June 30, 2009), the Federal Appeals Court ruled the District Court did not err in granting the Defendant-employer’s motion for summary judgment in a Title VII discrimination action. Plaintiff-employee alleged Defendant failed to promote Plaintiff on four separate occasions in retaliation for having previously filed an EEOC charge and for making internal discrimination complaints.

The record before the Federal Appellate Court showed the interviewing process as to all four promotions was fair. The record also demonstrated interviewers who scored all applicants were unaware of existence of Plaintiff’s prior EEOC charge or internal complaints.

Moreover, Plaintiff failed to establish that an individual manager with Defendant who had knowledge about his prior discriminations complaints played any role in promotional decisions where record showed that said individual was mere “rubber stamp” for approving recommendations for promotions made by interviewers.

If you have thoughts and comments or need the case citation, please send a reply.

Editor’s comment: There is always a concern about the need for independent counsel in EPLI claims. This ruling should clear up many of the issues raised by risk and human resources managers about when you can get your insurer to pay for truly independent counsel for your organization.

In National Casualty Co. v. Forge Industrial Staffing Inc. (No. 08-3110 June 3, 2009), the Federal Court was faced with a claim by an insured—Forge Industrial Staffing for their attorney’s fees in defending themselves. Fearful that its insurer, National Casualty Corporation (“NCC”), would control its defense in a way that would preclude coverage, Forge declined to accept insurer-appointed counsel to defend it against claims brought before the Equal Opportunity Employment Commission (“EEOC”). The parties filed cross-claims for declaratory judgment seeking to resolve whether an actual conflict of interest existed requiring NCC to reimburse Forge for the costs of retaining independent counsel to defend against the EEOC charges.

NCC issued an insurance policy to Forge Industrial Staffing, a staffing company that places temporary, and occasionally permanent, employees. Among other things, the policy insured Forge against any legal damages stemming from intentional acts, including intentionally discriminating against any of its employees. Four of Forge’s former employees filed anti-discrimination charges with the EEOC. As a result of these charges, NCC agreed to defend Forge under the Employment Practices Liability Part of the insurance contract and assigned NCC’s own counsel to do so. At the same time, NCC reserved the right to later deny coverage based on any of the exclusions in the policy. Most notably, the policy did not provide coverage for “punitive damage awards” or for any claim arising out of Forge’s “willful failure . . . to comply with any law . . . or regulations relating to employment practices.”

Forge requested NCC provide independent counsel for Forge because a purported conflict of interest existed as a result of NCC’s reservation of rights. Specifically, Forge asserted that whether the policy would indemnify Forge for its alleged conduct depended on how the EEOC charges were defended with respect to the issues of punitive damages and Forge’s knowledge of the applicable anti-discrimination laws. When NCC refused to provide independent counsel, Forge hired its own counsel.

The lower court found conflict counsel was not required and Forge appealed. On appeal, Forge argued conflict counsel was required as the possibility punitive damages that were not covered could potentially dwarf any compensatory damages that were covered. Forge further argued mutually exclusive theories of liability existed and appointed counsel could steer the facts of the case to the non-covered theories. The Federal Court of Appeals Court agreed and confirmed the lower court ruling.

In coming to its decision, the Court of Appeals noted an insurer has a broad duty to defend its insured in any action where the allegations in the complaint are even potentially within the scope of the policy. If there is an actual conflict of interest between the insurer and insured, the insured has the right to obtain independent counsel at the insurer’s expense. An actual, not merely potential, conflict is required to trigger the insured’s right to conflict counsel. An actual conflict does not arise merely because the insurer has an interest in negating coverage as to every count of the underlying complaint. .

In order to determine if a conflict exists, the court “must compare the allegations of the underlying complaint against the insured to the terms of the insurance policy at issue.” . If, after comparing the complaint against the insured to the insurance policy, “it appears that factual issues will be resolved in the underlying suit that would allow insurer-retained counsel to ‘lay the groundwork’ for a later denial of coverage, then there is a conflict between the interests of the insurer and those of the insured.”.

With respect to the punitive damage issue, the Court of Appeals Appellate Court found the mere possibility that punitive damages might be sought in litigation did not create an actual conflict of interest. The court also noted that no evidence existed that any punitive damages would be so disproportionate that a conflict would exist. The Appellate Court further reasoned that no evidence existed that Forge and NCC’s interests were not aligned on this issue. In the event of the filing of the lawsuit, both punitive and compensatory damages would be tied to the same conduct, and thus, in defending Forge’s actions, NCC would be protecting Forge’s interests with respect to all damages.

Forge also argued conflict counsel must be appointed when the underlying complaint contains two mutually exclusive theories of liability, one which the policy covers and one which the policy excludes. The Court of Appeals found the policy provided Forge liability coverage for intentional acts, including intentional torts such as intentionally discriminating against one of its employees. The policy did not cover Forge if it “willfully failed” to adhere to anti-discrimination laws. The court acknowledged that if a jury was to find Forge both intentionally discriminated against its employees and did so in willful violation of anti-discrimination laws, Forge’s conduct would fall within the policy’s “willful” exception, and NCC would not have to indemnify Forge.

The Court of Appeals held conflict counsel was not required as by generally defending Forge against discrimination charges; the NCC-supplied defense would encompass both “intentional claims” and “willful claims.” Further, any attempt by the NCC-supplied defense to shift the facts and focus to the non-covered theories of liability would be transparent and be a violation of counsel’s ethical duty. Further, the facts regarding both theories would be necessarily fleshed out during discovery, whether there was conflict for assigned counsel representing Forge. Also, a contrary ruling would require the appointment of independent counsel any time a complaint could foresee ably be amended to assert a non-covered theory. As there were no direct allegations as to Forge’s “willful” conduct, conflict counsel was not required.

If you need the case citation, send a reply. We appreciate your thoughts and comments.

Editor’s comment: While the ability of the EEOC to investigate potential discrimination is important, the facts of this case lead the editor to believe the EEOC hasn’t figured out how to focus on potential instances of ongoing harmful discrimination rather than past policies of now non-existent companies which do not appear to have been harmfully discriminatory at first blush. It is hard to imagine which anyone really believes a policy of not hiring violent criminals is unacceptable discrimination—if your company makes it a policy to hire violent criminals, please reply as we have some vocational claims which may provide you with a steady stream of available employees.

In EEOC v. Watkins Motor Lines, Inc., No. 08-2483 (January 23, 2009) the Seventh Circuit on appeal from the United States District Court for the Northern District of Illinois, Eastern Division was presented with a question regarding whether the EEOC has subject matter jurisdiction to complete investigation including the power to ask the District Court to adjudicate subpoena enforcement actions even after the charging party asks to withdraw their charge.

By way of background, in June 2004 after experiencing three episodes of employee-on-employee murder or attempted murder, Watkins Motor Lines decided which it would no longer hire anyone who had been convicted of a violent crime. Three months later Watkins rejected Lyndon Jackson’s application because of his criminal record. He filed a complaint with the Equal Employment Opportunity Commission, which opened an investigation to determine whether the policy had a disparate impact on minority applicants—and, if so, whether it was “job related for the positions in question and consistent with business necessity”. Watkins did not cooperate in the investigation, and on April 8, 2005, the EEOC issued a subpoena seeking pertinent information which was ignored. Jackson and Watkins reached a settlement in January 2006 and Watkins insisted the settlement be contingent on the EEOC’s abandonment of its investigation. Jackson told the EEOC he was withdrawing his charge of discrimination however the EEOC’s regulations give it discretion whether to allow a charge to be withdrawn, and the EEOC decided to press ahead with an investigation which may cover persons in addition to Jackson. In September 2006 Watkins Motor Lines sold its operating assets to FedEx. Since Watkins remains potentially liable to Jackson and any similarly situated applicants, the proceeding was not moot. The district court did not act on the subpoena until March 2008, when it dismissed for lack of subject-matter jurisdiction the EEOC’s motion (filed in July 2007) to enforce the subpoena. The judge believed Jackson would be best served by the settlement, and since settlement was contingent on withdrawal of the charge the agency should have allowed him to withdraw it, reasoning the agency’s contrary decision was arbitrary so it was as if no charge had been filed—and, if no one makes a valid charge, the EEOC is not entitled to investigate.

The Seventh Circuit notes the judge appears to have believed the lack of a pending charge deprives the court of subject-matter jurisdiction, however two provisions of Title VII itself authorize district courts to adjudicate subpoena-enforcement actions filed by the EEOC and 28 U.S.C. §1345 creates subject-matter jurisdiction for any suit filed by the United States or one of its agencies. A district court’s belief the EEOC should not have investigated or sued does not detract from the fact it did ask the court to enforce its subpoena. A statute authorizes the court to adjudicate this request.

Watkins contends Jackson’s request to withdraw his charge should have been granted. Yet withdrawing a charge does not mean a valid charge was never filed. Watkins didn’t contend, and the district court did not find Jackson’s charge was invalid when filed. Once one has been filed, the EEOC rather than the employee determines how the investigation proceeds. The Seventh Circuit noted the suit affects legal rights of persons other than the initial plaintiff, and some other member of the class is entitled to intervene to carry on with the litigation. The Seventh Circuit further noted allowing settlement contingent on vacatur of all judicial decisions made so far, in order to relieve the parties of any preclusive or precedential effects which the decisions carry would almost be automatic if allowed. The problem with this type of decision would be allowing litigants to achieve their settlement by injuring other, unrepresented persons. The Seventh Circuit noted many a defendant would love to decapitate a class after the statute of limitations has run by paying off the sole representative plaintiff, and thus avoiding potential liability to all other class members. The Seventh Circuit noted the EEOC and the judiciary are not obliged to abet this strategy by preferring Jackson’s interests over those of other workers. Jackson and Watkins Motor Lines are free to resolve their own dispute but may not compromise the interests of other employees and applicants in the process. The EEOC’s regulation says “[a] charge filed by or on behalf of a person claiming to be aggrieved may be withdrawn only by the person claiming to be aggrieved and only with the consent of the Commission . . . where the withdrawal of the charge will not defeat the purposes of Title VII”. The agency is entitled to vindicate the interests of all employees and applicants.

Finally, the Seventh Circuit appears to hint Watkins should have asked to affirm the judgment on the ground the subpoena was needlessly burdensome or otherwise inappropriate and the Seventh Circuit further noted they (like the district judge) questioned whether the EEOC is acting prudently by devoting time of both its staff and Watkins to short-lived practices by an entity which is no longer an operating company, and whose rule may well be amply supported by “business necessity” given its history of workplace violence. But the Seventh Circuit confirmed the Executive Branch rather than the Judicial Branch is entitled to decide where investigative resources should be devoted and a charging party’s change of mind does not diminish the agency’s authority to investigate on its own behalf so the judgment of the district court was reversed, and the case was remanded with instructions to enforce the subpoena.

This case is a pretty straightforward example of the power of governmental agencies to conduct their investigations and how a single charge, however lacking in basis or evidence—even lacking cooperation of the charging party—can continue to create legal issues for a company. It is difficult for us to recommend a company consider not implementing rules or policies which may offend the “senses” of parties from whom you are attempting to protect you business or workforce at large. Instead, we suggest consideration of the common sense approach to litigation where you detail the lack of evidence, the valid purpose behind your policy and the valuable time and resources being wasted. Based upon the decision reviewed, it appears the courts still value their time even if our government agencies do not. This article was researched and written by Shawn R. Biery, J.D. If you have thoughts and comments or need the case citation, please send a reply to sbiery@keefe-law.com.