Justices will hear arguments Tuesday in a case that considers whether employers can defend themselves in discrimination lawsuits by asserting that government lawyers did not try hard enough to settle claims before going to court.
Companies are complaining increasingly about the Equal Employment Opportunity Commission’s “systemic litigation” program, which turns individual complaints of bias into high-stakes class-action cases on behalf of dozens or even hundreds of workers. The enforcement strategy has netted over $100 million in judgments and settlements from more than 50 companies since 2011.
EEOC general counsel P. David Lopez has said the bigger cases send a stronger message to all employers about complying with the law. But employer groups deride the strategy as “sue first and negotiate later.”
The case before the high court involves an Illinois mining company sued by the EEOC in 2011 for failing to hire any female workers despite receiving applications from many qualified women. Mach Mining says the suit should be thrown out because the commission did not try in good faith to reach a settlement before taking the company to court.
A federal judge agreed to look into whether the EEOC’s attempt to settle the case was “sincere and reasonable.” But the 7th U.S. Circuit Court of Appeals in Chicago reversed that, saying the court has no business peering into the EEOC’s private settlement talks.
Federal law does require the EEOC to attempt to halt unlawful employment practices by “informal methods of conference, conciliation and persuasion.” But the EEOC may choose to sue if it is unable to reach a settlement that is “acceptable to the commission.”
Lower courts have struggled to determine exactly what that means. Some courts have required a minimal showing of “good faith,” while other courts probe more deeply.But the 7th Circuit is the first to reject an inquiry altogether.
Lawyers for Mach Mining argue that judicial review of the conciliation process is needed to find out whether the EEOC complied with basic steps such as giving an employer enough information about the charges or providing sufficienttime to respond to settlement offers.
The Justice Department argues that allowing employers to question the government’s settlement efforts at all undermines law enforcement and only encourages companies to drag out settlement talks.
Business groups, including the U.S. Chamber of Commerce, say the EEOC is shortchanging the settlement process in favor of litigation to pursue a policy agenda. Systemic cases now make up nearly 25 percent of the EEOC’s litigation docket, up sharply from less than 5 percent before Obama took office, according to the agency and lawyers familiar with the caseload.
A brief filed on behalf of more than a dozen women’s rights organizations, including the National Organization for Women, argues that letting a judge review informal and confidential settlement discussions will burden courts and make it easier for companies to avoid liability.
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