Monday, December 10, 2012

Maybe Systemic Disparate Treatment Isn't Dead Yet?

New ImageWal-Mart was obviously a major blow to the systemic disparate treatment theory, radically curtailing efforts to use that approach in private class actions. There's also more than a hint that in the majority opinion that the substantive theory is questionable, despite its pedigree in Teamsters and Hazelwood.  But to test that out, it seems clear that the only available forum is a government suit, most likely by the EEOC. The possibility of that happening was increased earlier this month when the Sixth Circuit decided Serrano v. EEOC.

The case started life as an class action filed by the woman who had originally filed a charge with the agency. While class certification was denied, the EEOC intervened and, although Ms. Serrano settled her claim, sought relief for a class of female employees.

The agency's efforts didn't fare well at the district court, which not only dismissed all the claims but granted attorneys' fees and costs to the employer. The basis of the dismissal was that the EEOC could not bring a pattern and practice claim on the basis of an individual charge under section 706 of the statute but only on the basis of a pattern or practice suit under section 707 (although the court also found that the agency had failed to properly plead the pattern or practice claim).

The circuit court panel held that a pattern or practice violation could be prosecuted on the basis of a 706 charge. I won't explore the reasoning because the result is more important, but it does seem that the whole issue could have been avoided by the Commission filing its own 707 claims (either in the Serrano litigation or in a separate action that could then be consolidated). That would have avoided the statutory authorization question and, if adequately supported, satisfied the pleading requirements that bothered the dissenting judge. Admittedly, however, a 707-only suit might have more limited remedies.

But what is surprising about the opinion is the failure of the EEOC to be explicit in its pleading about asserting a Teamsters case.  To find the pleading sufficient, the majority looked to Swierkiewicz, whose authority is at least questionable, concluding that the EEOC complaint "although not a model of good lawyering," sufficed. Although the dissent agreed with the majority that Teamsters did not have to be explicitly invoked, but she found not "even a shred of an allegation suggesting a pattern-or-practice claim." 

This is all more than a little disturbing. Now that the EEOC has pretty much a monopoly on pursuing systemic disparate treatment claims, it is more important than ever that it be that model of good lawyering. While the Commission escaped a fee award (and the court stressed that such an award would probably have been inappropriate even had the defendant prevailed), it can scarcely be confident that it will meet so generous a reading of its pleadings the next time around.


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I do not find it surprising at all that the EEOC's complaint failed to be explicit about asserting a Teamsters case. That is consistent with the EEOC's practice in systemic disparate treatment cases. EEOC complaints are also often vague about whether they are proceeding under 706, 707, or both. There are some advantages to each section. As you note, the remedies are better under 706. But the EEOC has argued, and some courts have agreed (incorrectly in my view), that there are no temporal limitations on the scope of the class under 707. Last but not least, there is the conciliation issue that I have commented about previously. The conciliation requirement clearly applies to 706 claims, and the EEOC would presumably like to avoid another CRST. So by blurring the lines between 706 and 707, the EEOC hopes to get the best remedies, no limitations period on the class, and avoid a strict application of the conciliation requirement.

Posted by: Jason Bent | Dec 10, 2012 11:43:48 AM

There is the conciliation problem that I have mentioned about formerly. The conciliation need clearly relates to 706 statements, and the EEOC would presumably like to prevent another CRST.

Posted by: School Admission Mumbai | Dec 14, 2012 10:18:35 PM

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