Equal Employment Opportunity Commission v. Southeast Food Services Company, LLC

Filing 10

MEMORANDUM AND OPINION denying 1 Motion. Signed by Magistrate Judge H Bruce Guyton on 3/27/17. (JBR)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT KNOXVILLE

EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION,
Petitioner,
v.
SOUTHEAST FOOD SERVICES
COMPANY, LLC D/B/A WENDY’S,
Respondent.

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No. 3:16-MC-46-TAV-HBG

MEMORANDUM AND OPINION
This case is before the undersigned pursuant to 28 U.S.C. § 636, the Rules of this Court,
and Standing Order 13-02.
Now before the Court is an Application for an Order to Show Cause Why an Administrative
Subpoena Should Not Be Enforced (“the Application”) [Doc. 1], filed by the Equal Employment
Opportunity Commission (“the Commission”) on November 18, 2016. The parties appeared
before the Court on February 28, 2017, for a hearing. Attorneys Mark Chen and Steven Lipsey
appeared on behalf of the Commission. Attorney Chadwick Hatmaker appeared on behalf of
Respondent. The Court has considered all the filings and the oral arguments presented at the
hearing. For the reasons more fully explained below, the Court will DENY the Application.
I.

BACKGROUND
The Commission is currently investigating a charge of employment discrimination filed by

Christine Cordero against Respondent under Title VII of the Civil Rights Act of 1964. In the
course of its investigation, the Commission issued a subpoena seeking information and documents

regarding employment data. Respondent has refused to provide the requested information. For
purposes of the Application, the following facts are not in dispute.
On September 25, 2014, Ms. Cordero was hired by Respondent as a crew member to work
at one of its fast-food locations. Approximately two weeks later on October 11, 2014, Respondent
offered to promote Ms. Cordero to crew leader. In connection with the promotion, Ms. Cordero
was asked to sign a general release, waiving all claims she may have against Respondent up to the
date of the release’s execution. For the past 20 years, it has been Respondent’s promotion policy
to require employees to sign a release of all claims as a condition of promotion. The release does
not affect any future claims an employee may have. At the time Ms. Cordero was asked to sign
the release, she did not have any claims. Nonetheless, she declined to sign the release because she
felt that Respondent was discriminating against her merely by asking her to sign a waiver.
Consequently, Ms. Cordero was not promoted due to her refusal to sign the release.
Ms. Cordero continued to work for Respondent but filed a charge of discrimination with
the Commission on December 5, 2014. The charge alleges that Respondent retaliated against Ms.
Cordero by failing to promote her due to Ms. Cordero’s refusal to sign the release. Although Ms.
Cordero was not promoted, Respondent still gave her the 25-cent pay raise, as well as the same
training, that accompanied the promotion. Ms. Cordero voluntarily resigned from her job on April
20, 2015.
Having learned that Respondent required its employees to sign a release of claims as a
condition of promotion, the Commission sent Respondent a pre-subpoena letter on June 9, 2015,
notifying Respondent of its intent to expand its investigation. In addition, the letter requested
various information about all former and current employees who worked for Respondent from
December 4, 2012 to present.

On February 18, 2016, after not receiving the information

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requested, 1 the Commission issued a subpoena which sought the same information identified in its
pre-subpoena letter. Specifically, the subpoena seeks the identity and contact information of all
(1) current and former employees since December 4, 2012, (2) current and former employees who
signed a release of claims since December 4, 2012, and (3) current and former employees who
were promoted since December 4, 2012. 2 The foregoing requests also seek information related to
the employees’ dates of hire, promotion, advances, and termination, reasons for termination, and
current and former job titles. Moreover, the subpoena requests copies of all releases Respondent
had required its employees to sign in order to receive a promotion and copies of various documents
relating to information about the system or software components of Respondent’s Human
Resource Information System. 3
Respondent continued to object to the subpoenaed information, prompting the Commission
to file the instant Application with the Court on November 18, 2016. Respondent filed a response
in opposition on February 22, 2017. 4

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Respondent did respond to the Commission’s pre-subpoena letter and also made efforts
to resolve the matter by limiting the scope of the information requested and proposing to
discontinue its use of a general release as a condition of promotion. However, the parties could
not reach an agreement, prompting the Commission to file its subpoena.
2

Originally, the subpoena also requested the identity and contact information of all current
and former employees since December 4, 2012, who had refused to sign a release. The
Commission eliminated this request after learning that Ms. Cordero was the only employee who
had ever refused to sign a release of claims. [Doc. 2 at 5 n.1].
3

Respondent explains in its brief that it does not have a Human Resource Information
System that is capable of collecting the requested information, and would instead be required to
review each individual employee file to retrieve the information requested. [Doc. 5 at 14].
4

The Court notes that the Application was not served upon Respondent. The Court
admonishes the Commission for its failure to properly serve Respondent, which has caused delay
in adjudicating this matter.
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II.

THE COMMISSION’S INVESTIGATIVE POWER
The Commission is empowered to investigate charges of discrimination and enforce Title

VII of the Civil Rights Act. 42 U.S.C.§ 2000e-5(a)-(b). Administrative subpoenas may be used
to assist investigative efforts in uncovering acts of discrimination. See id. § 2000e-9 (incorporating
the provisions of 29 U.S.C. § 161, which allows the issuance of subpoenas to parties under
investigation). Specifically, the Commission has authority to serve subpoenas to gain “access to .
. . any evidence of any person being investigated or proceeded against that relates to unlawful
employment practices . . . and is relevant to the charge under investigation.” Id. § 2000e-8(a).
While “courts have generously construed the term ‘relevant’ and have afforded the Commission
access to virtually any material that might cast light” on the allegations against the employer,” the
Commission’s investigative authority should not be construed so broadly as to render the relevancy
requirement “a nullity.” E.E.O.C. v. Shell Oil Co., 466 U.S. 54, 68-69 (1984). “The EEOC has
the burden to demonstrate the relevancy of the information sought in the subpoena.” E.E.O.C. v.
Dillon Cos., 3310 F.3d 1271, 1274 (10th Cir. 2005).
III.

ANALYSIS
In this case, the Commission argues that “[i]t is undeniable that the requested information

‘might cast light’ on the allegations against the employer.” [Doc. 2 at 8]. Because Respondent
admitted it did not promote Ms. Cordero due to her refusal to sign a release of all claims and that
it has required all employees to sign a similar release prior to being promoted, the Commission
asserts that it “requires the contact information for Respondent’s employees to mail questionnaires
in order to determine if those employees gave up any claim in order to receive promotions.” [Id.].
Respondent contends that the sole issue with regard to the instant charge is whether
Respondent’s uniform policy regarding a signed release as a condition of promotion is sufficient

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to sustain Ms. Cordero’s Title VII retaliation claim, and that the information sought for the
questionnaires is neither relevant nor necessary to the Commission’s investigation.
Relevancy is demonstrated when the Commission shows that it has a “realistic expectation
rather than an idle hope that the information requested will advance its investigation.” E.E.O.C.
v. Konica Minola Bus. Sols. USA, Inc., 639 F.3d 366, 369 (7th Cir. 2011) (quotations omitted). It
is not immediately clear to the Court how the information sought by the subpoena will advance
the Commission’s investigation.

The Commission is investigating an individual charge of

discrimination: that Respondent denied Ms. Cordero a promotion after she refused to sign the
release. There are no other additional charges of retaliatory discrimination and no other charging
party besides Ms. Cordero. Moreover, there is no dispute that Respondent asked Ms. Cordero to
sign the release, that Respondent’s longstanding policy has been to require employees to sign a
release as a condition of promotion, and that Ms. Cordero was not promoted because she declined
to sign the release. Therefore, whether other “employees gave up any claim in order to receive
promotions” is irrelevant to resolving Ms. Cordero’s charge.
Moreover, the Commission’s decision to expand its investigation after it learned of
Respondent’s promotion policy does not provide any further justification for the subpoenaed
information. The Commission’s decision to expand its investigation does not statutorily expand
its investigative power. The Commission’s subpoena power remains limited to information that
is “relevant to the charge under investigation.” 42 U.S.C. § 2000e-8(a) (emphasis added). The
letter does not change the nature of the instant charge and as conceded by the Commission, no
other charge or charging party is involved in this matter.
The Commission maintains that because Respondent potentially engaged in an unlawful
employment practice that may have affected other employees, the Commission has a duty to

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investigate whether other employees knowingly waived potential or actual Title VII claims and
whether any adverse employment action was taken by Respondent toward any other employee
based on a refusal to sign the release. [Doc. 7 at 3]. The Tenth Circuit Court of Appeals recently
rejected a similar argument, finding that “a single discriminatory act does not, by itself, warrant a
broader pattern-or-practice investigation.” E.E.O.C. v. TriCore Reference Labs., 849 F.3d 929
(10th Cir. 2017) (rejecting the notion that an employer’s alleged individual act of discrimination
entitled the Commission to evidence that “could be part of a pattern or practice of discrimination”)
(citing E.E.O.C. v. Burlington N. Santa Fe R.R., 669 F.3d 1154, 1157-58 (10th Cir. 2012) ( holding
that while “[a]ny act of discrimination could be part of a pattern or practice of discrimination . . .
not every charge of discrimination warrants a pattern or practice investigation.”)).
During the February 28 hearing, the Commission insisted that sending the questionnaires
to other employees is the only way to verify Respondent’s contention that no other employees
aside from Ms. Cordero refused to sign the release. That may be, but it is unclear how another
employee’s refusal to sign a release “might cast light” on the instant charge, particularly where
there is no dispute that for the past 20 years, all employees have been required to sign a general
release of all claims as a condition of promotion. In fact, the Commission eliminated from the
subpoena a request for information on all current and former employees who had refused to sign
a release since Respondent had advised that Ms. Cordero was the only employee who had ever
refused. [Doc. 2 at 5 n.1].
Additionally, the Commission submits that the questionnaires will determine whether any
employees “gave up” a claim or whether any employees did not seek promotions because they
knew Respondent required a signed waiver. [Doc. 2 at 8]. The impact of Respondent’s promotion
policy on other employees, however, does nothing to cast light on whether unlawful discrimination

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occurred to Ms. Cordero. In reaching this conclusion, the Court observes that the charge does not
allege that Ms. Cordero was treated differently compared to other employees who were offered
promotions or that Respondent’s promotion policy was applied in a disparate manner. It is
undisputed that all employees who have been offered a promotion were asked to sign a release and
that Ms. Cordero was not promoted because of her refusal to sign the release. Therefore, the
unlawfulness of Respondent’s employment practice is not dependent on how many other
employees signed a release.
Concessions made by the Commission during the February 28 hearing are even more
telling that the information it seeks is not relevant to the charge under investigation. Specifically,
the Commission admitted for the first time that it was “looking at a possible class action.” 5 The
Commission was unable to say whether Respondent’s promotion policy was legal or illegal but
asserted that it must look at the entire picture, which requires contacting other employees.
Moreover, in its reply brief, the Commission submitted that Respondent’s admission that it has
implemented its promotion policy for the past 20 years was “grounds for a finding of probable
cause that Respondent has engaged in an unlawful employment practice under Title VII.” [Doc.
7 at 2]. While it remains unclear to the Court how questionnaires sent to other employees is
necessary for determining the lawfulness of a policy practice that is not in dispute, it is readily
apparent to the Court that the information would assist the Commission in identifying other
potential claimants.

If the Commission desires to conduct a broader “pattern-or-practice”

investigation, it is empowered to file a Commissioner’s charge. See 42 U.S.C. § 2000e–5(b) (a

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Citing the Supreme Court’s decision in Univ. of Pa. v. E.E.O.C., 493 U.S. 182, 194
(1990), the Commission submits that it does not need to present a “specific reason for disclosure
of the requested information.” [Doc. 2 at 8]. The correct standard, however, is that the
Commission does not need to “demonstrate a specific reason for disclosure, beyond a showing of
relevance.” Univ. of Pa., 493 U.S. at 194 (emphasis added).
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discrimination charge may be filed “by or on behalf of a person claiming to be aggrieved, or by a
member of the Commission”). The Commission, however, may not use Ms. Cordero’s charge as
a backdoor means to obtain information that is more appropriately available through other
channels. See E.E.O.C. v. Royal Caribbean Cruises, Ltd., 771 F.3d 757, 762 (11th Cir. 2014) (“the
EEOC may not enforce a subpoena in the investigation of an individual charge merely as an
expedient bypass of the mechanisms required to file a Commissioner’s charge.”).
The Commission advances its position by relying on case law in which discovery of pattern
and practice evidence was permitted because said evidence provided context or comparative
information on whether discrimination had taken place. But this is not the type of case in which
“evidence that an employer discriminated in one situation or employment position is relevant to a
determination of whether the employer discriminated in other circumstances.” E.E.O.C. v.
Roadway Exp., Inc., 261 F.3d 634, 638 (6th Cir. 2001) (citation omitted) (finding that the
subpoenaed information, which went beyond the specific hiring and promoting practices alleged
in the charge, were relevant where a Commissioner’s charge alleged that the employer had engaged
in a number of discriminatory policies and practices based on race and gender).
This matter is more analogous to Royal Caribbean Cruises, Ltd., wherein the Eleventh
Circuit Court of Appeals upheld the district court’s finding that the subpoenaed information
regarding other employees was not relevant to the charge under investigation. Specifically, the
charging party in that case filed a charge of discrimination against Royal Caribbean when it failed
to renew his employment contract after he was diagnosed with a medical condition. 771 F.3d at
759. In relevant part, Royal Caribbean contended that the employee was disqualified for duty
based upon the medical standards set forth by the Bahamas Maritime Authority. Id. In response,
the Commission subpoenaed company wide application, hiring, and termination data with regard

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to employees who were discharged or whose contracts were not renewed due to a medical reason.
Id. The Court found that the information sought was “aimed at discovering members of a potential
class of employees or applicants who suffered a pattern or practice of discrimination, rather than
fleshing out Mr. Morabito’s charge.” Id. at 759-61. In making this finding, the Court observed
that data regarding other employees and applicants would not cast light on the charge, particularly
where Royal Caribbean admitted that Mr. Morabito was terminated because of his medical
condition. Id. at 61.
In rejecting the Commission’s argument that the subpoenaed information was relevant
because it is the same type of discrimination alleged by the charging party, the Court reasoned that
while “[i]t might be that this information is related to Mr. Morabito’s individual charge, [] the
standard by which the EEOC’s subpoena power is governed is ‘relevant to the charge under
investigation.’” Id. at 761 (quoting 42 U.S.C. § 2000e–8(a)) (emphasis in original). The Court
continued,
The relevance that is necessary to support a subpoena for the
investigation of an individual charge is relevance to the contested
issues that must be decided to resolve that charge, not relevance to
issues that may be contested when and if future charges are brought
by others. Because RCCL has admitted that the reason that it
refused to renew Mr. Morabito’s contract is his medical condition,
whether it refused to renew other employee’s contracts for the same
reason is irrelevant to his charge. That issue is settled. Although
eradicating unlawful discrimination and protecting other as-yet
undiscovered victims are laudatory goals and within the
Commission’s broad mandate, the EEOC must still make the
necessary showing of relevancy in attempting to enforce its
subpoena.
Id.
Similarly, Respondent in the present matter has admitted that it did not promote Ms.
Cordero because of her refusal to sign the release. Respondent has further admitted that it has

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required all employees for the past 20 years to sign a release of claims as a condition of promotion.
Therefore, whether other employees refused to sign the release or did not seek a promotion because
they knew they would be required to sign a waiver of any claims is likewise irrelevant to Ms.
Cordero’s charge. The overbreadth of the subpoena is further demonstrated by the Commission’s
request for the contact information, as well as the hiring and termination data, of all employees.
Simply put, “this does not appear to be a case where statistical data is needed to determine whether
an employer’s facially neutral explanation for the adverse employment decision is pretext for
discrimination.” See id. at 761.
Accordingly, the Court finds that the Commission has not met its burden in demonstrating
that the information subpoenaed is relevant to Ms. Cordero’s charge. Give the Commission’s lack
of explanation as to how the information would resolve the instant charge or is necessary to
determine whether Respondent has discriminated against Ms. Cordero, granting the Application
would surely render the relevancy requirement “a nullity.” As such, the Court need not address
Respondent’s contention that the information sought is unduly burdensome.
IV.

CONCLUSION
For the reasons explained herein, the Commission’s Application for an Order to Show

Cause Why an Administrative Subpoena Should Not Be Enforced [Doc. 1] is DENIED.
IT IS SO ORDERED.
ENTER:

United States Magistrate Judge

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