Failure-to-conciliate Affirmative Defense Not Available in EEOC Title VII Cases: Seventh Circuit

Practical Law Legal Update 9-553-2046 (Approx. 5 pages)

Failure-to-conciliate Affirmative Defense Not Available in EEOC Title VII Cases: Seventh Circuit

by Practical Law Labor & Employment

Background

In Mach Mining, the EEOC determined that there was reasonable cause to believe that Mach Mining had discriminated against a class of female job applicants at one of its mines. After the EEOC notified the company that it intended to begin informal conciliation, the parties discussed resolution but failed to reach an agreement. Nearly one year later, the EEOC informed the company that it had determined the conciliation process to be unsuccessful and the agency filed suit in district court two weeks later. The company denied the claim of unlawful discrimination and raised several affirmative defenses, including a failure-to-conciliate defense alleging that the EEOC failed to negotiate in good faith. The EEOC moved for summary judgment on the failure-to-conciliate defense arguing that its conciliatory efforts are not subject to judicial review. The district court, following other circuits' holdings, denied summary judgment and held that courts are permitted to evaluate whether the EEOC made a sincere and reasonable effort to conciliate. The district court then certified for interlocutory appeal whether and to what extent courts may review conciliation efforts based on an affirmative defense for failure-to-conciliate.

Outcome

In deciding whether a failure-to-conciliate affirmative defense is available, the Seventh Circuit evaluated:

The text of Title VII.
Whether a workable standard for such a defense is available.
Whether the defense might fit into the broader statutory scheme of Title VII.
Relevant case law from the Seventh Circuit.
Relevant case law from other circuits.

In granting summary judgment to the EEOC on the issue of the company's affirmative defense, the Seventh Circuit held that alleged failures of the EEOC to conciliate do not support finding a failure-to-conciliate affirmative defense for employers charged with employment discrimination claims brought by the EEOC. In reaching this holding, the Seventh Circuit found:

The text of Title VII provides no statutory support for the court to allow an affirmative defense for failure-to-conciliate, given:
- the lack of an express affirmative defense in the text of Title VII;
- the strong deference given to the EEOC in making informal efforts to reach a conciliation agreement it finds "acceptable" before it may sue; and
- the direct conflict between the implied affirmative defense and the statute's strict requirement that the conciliation process stay confidential.
No statutory standard for courts to apply to review the EEOC's conciliation efforts.
An implied affirmative defense does not fit well within the broader statutory scheme of Title VII, because:
- it would allow employers to refute the purpose of the conciliation process as a means to settle and instead attempt to use it to escape liability;
- there is no indication that Congress intended to create an affirmative defense or an employer's right to conciliation along with its directive to conciliate;
- the EEOC has powerful incentives to conciliate that have proven effective; and
- the EEOC's practices are subject to oversight from the Attorney General, Congress and the Senate, making judicial review less critical.
Earlier Seventh Circuit case law has rejected similar attempts by employers to focus on the EEOC's pre-suit processes rather than on their own employment practices.
Although other circuits have adopted an implied affirmative defense to give effect to Congress's intent that the EEOC resolve Title VII claims through voluntary settlement, permitting judicial review of the EEOC's conciliatory efforts:
- conflicts with the statute's confidentiality provision, whether applying the test used by the Fourth, Sixth and Tenth Circuits (whether the EEOC's efforts meet a minimal level of good faith) or the test used by the Second, Fifth and Eleventh Circuits (whether the EEOC outlined for the employer its reason why it believes Title VII was violated, gave the employer a chance to comply voluntarily and responded reasonably);
- conflicts with the deference given to the EEOC to accept or reject any offer to compromise; and
- would not result in dismissal of the EEOC's action on the merits because a failure to conciliate is merely a procedural wrong and would not warrant such a drastic remedy.

Practical Implications

Employers should note that the Seventh Circuit has deviated from the Second, Fourth, Fifth, Sixth, Tenth and Eleventh circuits, and requires only that the EEOC plead on the face of its complaint that it has complied with all procedures required under Title VII and the relevant documents are facially sufficient to satisfy review of the conciliation process.

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