Co-authored by Gerald L. Maatman, Jr., Jennifer A. Riley, and Brandon L. Spurlock
In a series of nationwide pattern or practice cases the EEOC has litigated since adoption of its systemic litigation program in April of 2006, the Commission has maintained that it is generally unencumbered by the 300-day statute of limitations in Section 706 of Title VII that applies to private litigants (which frames any Title VII lawsuit as limited to events occurring within 300 days preceding the filing on an EEOC charge with the EEOC). Typically, the EEOC argues that it can sue an employer back to the start of the allegedly illegal pattern or practice (e.g., a discriminatory practice of denying promotions to female employees) irrespective of the date when a charging party filed his or her EEOC administrative charge. This raises the stakes for employers in this type of litigation, since the EEOC’s theory expands the parameters of the case and sweeps in large numbers of claimants for whom the Commission seeks damages.
The EEOC has a mixed track record of success in convincing the courts to adopt its view of the statute of limitations issue. A recent decision in EEOC v. Freeman, No. 09-CV-2573, 2011 WL 337339 (D. Md. Jan. 31, 2011) [ruling link], rejects the Commission’s views, and gives employers a new statute of limitations argument in pattern or practice litigation brought by the EEOC.
In EEOC v. Freeman, an African-American woman filed a charge of discrimination with the EEOC in January of 2008 claiming that Freeman discriminated against her on the basis of her race when it rejected her employment application based on her credit history. Sometime after it began investigating the charge, the EEOC expanded its investigation to include Freeman’s use of criminal history information for all applicants. The EEOC eventually brought suit against Freeman alleging an on-going, nationwide pattern or practice of discrimination against Black, Hispanic, and male job applicants based on the use of criminal background checks.
Freeman’s initial responsive pleading raised a statute of limitations defense by arguing that the EEOC could not seek to recover on claims based on unlawful employment decisions that occurred more than 300 days before the filing of the original charge. The Court’s decision on that motion – EEOC v. Freeman, No. 09-CV-2573, 2010 WL 1728847 (D. Md. Apr. 26, 2010) [ruling link] – soundly rejected the EEOC’s theory.
After limited discovery, Freeman then brought a motion for partial summary judgment contending that, for claims that were not part of the original charge, the 300 days should run – not from the date of the original charge – but from the date that the EEOC notified the company that it was expanding its investigation to encompass new claims. The Court agreed, holding that the “relevant date” for purposes of the 300-day time bar is the “date of notice” of the new charges. Freeman, 2011 WL 337339, at *4. The Court rejected the EEOC’s argument that the “plain language of Title VII” compels a different result, concluding that the EEOC’s right to expand its investigation without a new charge is a right carved out by case law “and not addressed in the statutory language.” Id. The Court also rejected the EEOC’s argument that Freeman should be required to demonstrate “substantial prejudice” from the delay in notification, finding that “it is plain” that Freeman would be prejudiced by the addition of ten claims resulting from an expanded investigation of which it was not made aware for eight months. Id. at *5. Finally, the Court rejected the EEOC’s arguments that: (i) the original charge provided sufficient notice, (ii) Freeman “understood” that its use of criminal information was at issue, and (iii) Freeman had “independent notice” via the EEOC’s published guidance documents. Id. at *5-7. In particular, the Court noted that Freeman’s provision of information to the EEOC regarding all aspects of its background check policy did not establish Freeman’s knowledge that its use of criminal history information was under challenge or investigation. Id. at *6.
Whereas the implications of the Court’s decision in EEOC v. Freeman are not yet clear, it gives employers defending pattern or practice claims new ammunition against the EEOC, particularly where the Commission delays in disclosing the parameters of an expanded investigation encompassing new claims or theories.