Equal Employment Opportunity Commission Issues Rare Opinion Letter Curbing Its Enforcement Authority for “Pattern or Practice” Claims

September 11, 2020
On September 3, 2020, the Equal Employment Opportunity Commission (“EEOC”) issued an Opinion Letter regarding the EEOC’s interpretation and  enforcement of Section 707(a) of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-6, which authorizes the EEOC to bring a civil action when it has “reasonable cause to believe that any person or group of persons is engaged in a pattern or practice of resistance to the full enjoyment of any of the rights secured [under Title VII].”  The Opinion Letter announced that (i) Section 707(a) does not provide an independent basis for a lawsuit, and (ii) the EEOC is required to meet certain administrative prerequisites, including pre-suit conciliation, before filing suit under Section 707.  The Opinion Letter explained that, although the EEOC had taken differing positions in a “small number of cases” and that its prior arguments were “reasonable,” its newly announced interpretation reflects “the better reading of the statutory text” of Title VII.

First, the EEOC clarified that Section 707(a) does not provide an independent cause of action under Title VII.  In other words, lawsuits brought by the EEOC under Section 707(a) must be tethered to an alleged pattern or practice of conduct that violates Section 703, which prohibits discrimination on the basis of “race, color, religion, sex or national origin,”[1] or Section 704, which prohibits retaliation against an employee “because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter.”[2] 

The Opinion Letter narrows the EEOC’s prior interpretation of Section 707(a), under which the EEOC had previously filed lawsuits challenging practices that it believed facilitated unlawful “resistance” of Title VII rights but may not themselves have constituted discrimination or retaliation in violation of Sections 703 and 704, respectively.  For example, in EEOC v. Doherty Enterprises, Inc., the EEOC argued that an employer’s use of arbitration agreements to deter employees from filing charges of discrimination or cooperating with the EEOC constituted a “pattern and practice of resistance” in violation of Section 707(a).  The district court agreed with the EEOC, finding that “a resistance claim is not limited to cases involving an unlawful employment practice [i.e., discrimination and retaliation].”[3]  In EEOC v. CVS Pharmacy, Inc., the EEOC took a similar position and argued that Section 707(a) gives it “broad power to sue without . . . alleging that the employer engaged in discrimination” and claimed that a severance agreement limiting employees’ right to file charges with the EEOC violated Section 707(a).[4]  The Seventh Circuit, the only court of appeals to have considered the issue, rejected the EEOC’s position, finding that “Section 707(a) does not create a broad enforcement power for the EEOC to pursue non-discriminatory employment practices that it dislikes” and that it “simply allows the EEOC to pursue multiple violations of Title VII (i.e., unlawful employment practices involving discrimination or retaliation defined in Sections 703 and 704) in one consolidated proceeding.”[5]

In a reversal of the EEOC’s broader interpretation of Section 707(a), the Opinion Letter adopts the Seventh Circuit’s reasoning in CVS Pharmacy.  The Opinion Letter instructs that Section 707(a) does not give the EEOC “wide-ranging power to bring suit against undefined practices” but gives the EEOC “the important power of acting against acts of discrimination in violation of sections 703 or 704.”  The Opinion Letter also notes that Section 707(e) of Title VII confirms its interpretation of Section 707(a) because it limits the EEOC’s authority to act upon “a pattern or practice of discrimination.”[6]

Second, the Opinion Letter explains that Section 706’s pre-suit procedural requirements apply to Section 707, including that (i) a charge must precede an action and (ii) the EEOC must attempt to conciliate any claim before filing suit.  In reaching this determination, the EEOC again relied on Section 707(e), which provides that actions brought under Section 707 be “conducted in accordance with the procedures set forth in [Section 706].”[7] 

The Opinion Letter provides greater protections to employers by curbing the EEOC’s ability to challenge employment practices which do not constitute discrimination and retaliation under Sections 703 and 704 and bolstering procedural safeguards by requiring confidential pre-suit conciliation prior to the EEOC filing suit.  Indeed, even if a court were to reach a different interpretation of Section 707, an employer’s good faith reliance on the Opinion Letter is a defense from liability for so long as the policies announced in the Opinion Letter remain in effect.  It is important to note, however, that the five-member commission currently has two vacant seats, and policies may change with the composition of the commission or changes in the administration.
 
[1] See 42 U.S.C. § 2000e–2.
[2] See 42 U.S.C. § 2000e–3. 
[3] See EEOC v. Doherty Enters., Inc., 126 F. Supp. 3d 1305, 1311 (S.D. Fla. 2015).
[4] See EEOC v. CVS Pharmacy, Inc., 809 F.3d 335, 337 (7th Cir. 2015).
[5] See id. at 341.
[6] See Commission Opinion Letter: Section 707, U.S. Equal Employment Opportunity Commission, Sept. 3, 2020,  https://www.eeoc.gov/commission-opinion-letter-section-707?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term= (emphasis added); see also 42 U.S.C. § 2000e-6(e) (“Subsequent to March 24, 1972, the Commission shall have authority to investigate and act on a charge of a pattern or practice of discrimination, whether filed by or on behalf of a person claiming to be aggrieved or by a member of the Commission.”).
[7] See 42 U.S.C. § 2000e–6(e) (“All such actions shall be conducted in accordance with the procedures set forth in section 2000e-5 of this title.”).