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Supreme Court subpoena ruling favors EEOC

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A federal appeals court should review a lower court’s decision to enforce or quash a U.S. Equal Employment Opportunity Commission subpoena on the basis of abuse of discretion, rather than the “more searching” de novo form of review, the U.S. Supreme Court said Monday in a 7-1 ruling.

An expert characterized the ruling as a victory for the EEOC.

The case before the U.S. Supreme Court involved the EEOC’s investigation of a sex discrimination charge filed against Temple, Texas-based McLane Co. Inc., a grocery and food service supply chain services company, by an employee who was fired when she failed to pass a physical strength test after returning from maternity leave, according to Monday’s ruling by the high court in McLane Co. Inc. v. U.S. Equal Employment Opportunity Commission.

Damiana Ochoa filed a charge with the EEOC in January 2008, alleging she was first required to pass the test before being permitted to return to work and was terminated after failing it three times. 

The EEOC launched an investigation of the charge and eventually expanded it to include all McLane facilities nationwide, according to the ruling.

McLane provided certain information to the EEOC about the test and the individuals who had been required to take it, but refused to comply with an administrative subpoena that asked for so-called “pedigree information,” including each test taker’s name, Social Security number, last known address and phone number.

The EEOC then filed a subpoena enforcement action. The U.S. District Court in Phoenix ruled McLane should disclose information including the gender of each test taker, but refused to order the company to divulge the pedigree information and the reasons employees were terminated after taking the test.

In a unanimous ruling, a three-judge panel of the 9th U.S. Circuit Court of Appeals in San Francisco held in October 2015 that McLane should provide all the information requested by the EEOC. “We think the pedigree information is relevant to the EEOC’s investigation,” said the appeals court ruling.

But in a footnote to that ruling, the panel questioned whether the de novo standard of review applied, said the Supreme Court ruling. Under “de novo” review, an appeals court does not give deference to the trial court’s ruling and considers the issue as if it were for the first time.

The footnote noted, however, that other appeals courts review enforcement of administrative subpoenas for abuse of discretion, a standard of review under which a ruling cannot be reversed unless it has been decided there has been a clear error in judgment.

The abuse-of-discretion review is the correct one, said the Supreme Court. “First, the longstanding practice of the Courts of Appeals in reviewing a district court’s decision to enforce or quash an administrative subpoena is to review that decision for abuse of discretion,” said the majority ruling. “That practice predates even Title VII itself.”

“Almost every Court of Appeals reviews such a decision for abuse of discretion,” and only the 9th Circuit “applies a more searching form of review,” said the ruling. 

“Other functional considerations also show that abuse-of-discretion review is approbative here,” said the ruling. “For one, District Courts have considerable experience in other contexts making decisions similar — though not identical ¬— to those they must make in this one,” said the ruling, which remanded the case back to the 9th Circuit for further proceedings.

In her dissent, Justice Ruth Bader Ginsburg said while she agreed that abuse of discretion is generally the proper review standard for District Court decisions reviewing agency subpoenas, “I would nevertheless affirm the Ninth Circuit’s judgment in this case.”

The case law in most of the circuits gives the EEOC “very wide latitude on the information it deems necessary to investigate EEOC charges,” said Gerald L. Maatman Jr., a partner with law firm Seyfarth Shaw L.L.P. in Chicago, and this ruling “makes it much harder for anyone who loses at the District Court level” to have that ruling reversed.

And while until now employers could use the different standards of review to negotiate with the EEOC and narrow its quest for data, employers’ options in this respect are “pretty limited” with this ruling, he said.