United States: I'll Defer To You: Supreme Court Rules Appellate Courts Should Apply Abuse Of Discretion Standard When Reviewing EEOC Subpoena Efforts

Authored by: Gary Siniscalo, Mark Thompson, and Michael Disotell

Recently, in McLane Co., Inc. v. EEOC, case number 15-1248  , the United States Supreme Court clarified the standard for when an appellate court reviews a trial court's order to enforce or quash a subpoena from the EEOC. Vacating a Ninth Circuit decision applying a de novo standard of review, the Court ruled that appellate courts should review based on the abuse of discretion standard.

Damiana Ochoa was terminated by her employer McLane Co., a supply-chain services company, for failing strength tests after returning to work from maternity leave.  Ochoa, filed a claim against the company for gender discrimination under Title VII.  During its investigation of Ochoa's charge, the EEOC expanded its investigation beyond Ochoa seeking information regarding McLane's nationwide compliance with the anti-discrimination laws. The agency issued a subpoena for various "pedigree" information," such as names, Social Security numbers, and phone numbers, for thousands of applicants and employees who had taken a strength test for the company.  McLane refused to provide the information requested by the subpoena and the EEOC moved to enforce it.  The district court quashed the subpoena, reasoning the information was not relevant because "an individual's name, or even an interview he or she could provide if contacted, simply could not shed light on whether the [evaluation] represents a tool of . . . discrimination." However, the Ninth Circuit – applying a de novo standard of review – overturned the district court's ruling after deciding the information was indeed relevant to the EEOC's sex bias investigation.  In reviewing the court's decision de novo, the Ninth Circuit broke from the approach in every other circuit court, which all applied the abuse of discretion standard.

Interestingly, both McLane and the EEOC agreed before the Supreme Court that the Ninth Circuit applied the wrong standard. However, the EEOC maintained that the Ninth Circuit would have reached the same conclusion even if it reviewed the district court's ruling under the abuse of discretion framework.  Writing for the Court, Justice Sonia Sotomayor stated the Ninth Circuit should have applied the more deferential abuse of discretion standard to review the lower court's decision.  The Court noted there was a well-established practice of appellate courts reviewing district court decisions to enforce or quash EEOC subpoenas for abuse of discretion, and it recognized the practice dated back to the time when the National Labor Relations Act (which predates Title VII) first became effective. The Court then vacated the Ninth Circuit's decision and ordered it to reach a decision applying the correct standard.  Justice Ruth Bader Ginsburg penned a short partial dissent in which she agreed with the Court's central holding as to the standard of review, but even under that standard the Ninth Circuit's finding that the EEOC's subpoena was enforceable should have been upheld.

For employers, this decision provides clarity that the district court decisions upholding or quashing EEOC subpoenas will be upheld unless there is an abuse of discretion. In addition, the more deferential standard may make it less likely that district court decisions regarding the enforcement of an EEOC subpoena will be appealed.  From a doctrinal perspective, the fact that Ginsburg failed to get any other member of the Court to join her dissent seems to indicate the other Justices essentially agreed with the trial court's decision that the subpoena sought information not relevant to its claim.  And perhaps most importantly, it may suggest that such sweeping subpoenas issued by the EEOC will not be readily enforced by courts in the future.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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