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Employers Can’t Arbitrate Any Issues Related to PAGA Claim
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States, Business Groups and House Push Back on DOL Overtime Rules
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A Middle Name—or Lack Thereof—Triggers FCRA Liability
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NLRB: Employee Misclassification Can Be NLRA Violation
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Court Orders Employer to Comply With EEOC Subpoenas
Employers Can’t Arbitrate Any Issues Related to PAGA Claim
Why it matters
The California Supreme Court’s decision in Iskanian v. CLS Transportation Los Angeles forecloses an employer’s ability to require a worker to arbitrate a threshold issue of standing to bring a Private Attorneys General Act (PAGA) claim, a state appellate panel recently ruled. Sergio Perez and another former U-Haul employee sued the company and included a PAGA claim. The employer sought to compel arbitration pursuant to a provision in an employment agreement signed by the plaintiffs, arguing that whether or not they were “aggrieved employees” and therefore had standing to bring suit under PAGA was a threshold issue that should be determined in arbitration. The panel disagreed. “[W]e do not believe an employer may force an employee to split a PAGA claim into ‘individual’ and ‘representative’ components, with each being litigated in a different forum,” the court wrote, affirming denial of U-Haul’s motion to compel arbitration. “We think it clear that a private agreement requiring an employee to litigate his or her PAGA claim in multiple forums that have been selected based solely on the employer’s own preferences interferes with ‘the state’s interests in enforcing the Labor Code,’ and is therefore against public policy.” The court effectively shut the door on any form of arbitration related to a PAGA employment claim.
Detailed discussion
Sergio Perez and Erick Veliz both worked as customer service representatives for U-Haul Company. As a condition of their employment, both signed a mandatory arbitration agreement that stated: “I agree that it is my obligation to … submit to final and binding arbitration any and all claims and disputes … that are related in any way to my employment. … [B]y agreeing to use arbitration to resolve my dispute, both U-Haul and I agree to … forego any right to bring claims as a representative or as a member of a class or in a private attorney general capacity.”
Perez and Veliz filed class action complaints against U-Haul in 2012 alleging violations of various California Labor Code provisions, including unpaid overtime, failure to provide meal breaks, failure to pay minimum wages and failure to pay wages in a timely manner. After the California Supreme Court decided Iskanian v. CLS Transportation Los Angeles, the plaintiffs filed amended complaints with a cause of action under PAGA.
In Iskanian, the state’s highest court upheld the general enforceability of class waivers in mandatory employment arbitration agreements but carved out an exception for employees to bring representative actions under PAGA, holding that “an arbitration agreement requiring an employee as a condition of employment to give up the right to bring representative PAGA actions in any forum is contrary to public policy”.
When the cases were consolidated, U-Haul moved to compel arbitration. Specifically, the company argued that the arbitration agreement obligated Perez and Veliz to individually arbitrate the predicate issue of whether they had standing to assert a PAGA claim. Iskanian did not hold that part of a PAGA claim or that predicate issues could not be arbitrated, the employer told the court. Instead, Iskanian stands for the proposition that only “aggrieved employees” be allowed to bring representative PAGA claims.
The plaintiffs countered that the California Supreme Court made clear that claims brought pursuant to PAGA are not arbitrable in any manner whatsoever and that to permit arbitration of whether or not an employee had suffered an underlying violation of the Labor Code in order to establish standing as an aggrieved employee would render Iskanian meaningless. The court agreed, affirming denial of the motion to compel arbitration.
Whether or not the plaintiffs have standing to pursue a PAGA claim was actually not an issue that fell within the scope of the arbitration agreement, the panel said. Although the broad language of the agreement covers “any and all claims and disputes … in any way related to … employment,” an additional clause excludes “claims as a representative … or in a private attorney general capacity.”
“Given that the parties did not agree to arbitrate representative claims, and that a PAGA action is by definition a form of representative claim, we conclude that PAGA claims are categorically excluded from the arbitration agreement,” the court wrote. “Moreover, the agreement contains no language suggesting that despite this exclusion of representative claims, the parties did agree to arbitrate whether the complaining party had standing to initiate a representative claim in court. We fail to see how an agreement that excludes representative claims can nonetheless be reasonably interpreted to require plaintiffs to arbitrate their standing to bring a representative claim.”
Even if the agreement did require plaintiffs to arbitrate whether they have standing to bring a PAGA claim, the provision was unenforceable under California law, the panel held.
“In Iskanian, the Supreme Court explained that ‘every PAGA action, whether seeking penalties for Labor Code violations as to only one aggrieved employee—the plaintiff bringing the action—or as to other employees as well, it is a representative action on behalf of the state,’” the court said. “The Court also held that requiring an employee to bring a PAGA claim in his or her ‘individual’ capacity, rather than in a ‘representative’ capacity, would undermine the purposes of the statute. Given these conclusions, we do not believe an employer may force an employee to split a PAGA claim into ‘individual’ and ‘representative’ components, with each being litigated in a different forum.”
The reasoning of the California Supreme Court’s decision also indicates that an employer is not permitted to impose arbitration provisions that impede an aggrieved employee’s ability to bring a PAGA claim.
“In this case, U-Haul is, in effect, attempting to impose its preferred forum for different aspects of the PAGA claim by requiring plaintiffs to individually arbitrate whether a Labor Code violation was committed against them, while simultaneously preserving its right to a judicial forum for the ‘representative’ issues,” the panel said. “We think it clear that a private agreement requiring an employee to litigate his or her PAGA claim in multiple forums that have been selected based solely on the employer’s own preferences interferes with ‘the state’s interests in enforcing the Labor Code,’ and is therefore against public policy.”
The Federal Arbitration Act did not require a different outcome, the court added, as Iskanian held that PAGA claims “lie outside the FAA’s coverage.”
To read the decision in Perez v. U-Haul Co., click here.
States, Business Groups and House Push Back on DOL Overtime Rules
Why it matters
Opponents of the Department of Labor’s (DOL) new overtime rules set to take effect on Dec. 1 have come out swinging. A coalition of 21 states filed a lawsuit in Texas asserting that the rules contradict both congressional intent and the statutory text of the exemption while a separate complaint brought by more than 50 business groups contends that the rule was promulgated in contravention of the Administrative Procedures Act. The controversial final rule raised the floor below which overtime must be paid pursuant to the “white collar” exemption from $455 to $913 per week. The states argued that the significant changes rendered by the rule essentially doubled the current amount “and rendered virtually irrelevant any inquiry into whether an employee is actually working in an executive, administrative, or professional capacity,” while the business groups called the rules “arbitrary, capricious, and contrary to the procedures required by law.” Both suits seek a declaratory judgment that the rules are unlawful as well as an injunction preventing their implementation or enforcement. Not to be outdone, the House of Representatives passed a bill that would provide an additional six months for employers to achieve compliance. While the measure has moved to the Senate, President Barack Obama already indicated he would veto the bill.
Detailed discussion
In May, the DOL published final regulations setting a new salary threshold for the executive, administrative and professional employee exemptions under the Fair Labor Standards Act (FLSA)—known as the “white collar” exemption—at $913 per week, or $47,476 per year.
Set to take effect on Dec. 1, the new threshold more than doubled the current minimum salary level of $455 per week or $23,660 per year. For the first time, employers will be able to use nondiscretionary bonuses and incentive payments to satisfy up to ten percent of the standard salary level, as long as those payments are made on a quarterly or more frequent basis. In addition, the new rules created an automatic adjustment to occur every three years, tracking the 40th percentile of the lowest wage Census Region.
With less than three months before the new rules kick in, opponents filed suit to challenge them. Led by the Attorneys General of Nevada and Texas, a group of 21 states requested that a federal court judge halt enforcement of the regulations and declare them unconstitutional, arguing that the rules violate the Tenth Amendment and contravene congressional intent with regard to the FLSA.
Instead of conducting an inquiry into the duties that employees actually perform to determine their eligibility for the exemption, the DOL simply doubled the current salary threshold “and rendered virtually irrelevant any inquiry into whether an employee is actually working in an executive, administrative, or professional capacity,” the states argued.
The new overtime rule will increase the employment costs of the plaintiff states “significantly,” according to the complaint, forcing them to reduce or eliminate some essential government services and functions, as well as reclassify some salaried white collar workers as hourly employees to reduce their hours and avoid payment of overtime. Iowa, for example, estimated that the new rule will add approximately $19.1 million of additional costs in just the first year while Arizona anticipated a $10 million budgetary impact.
“[E]nforcing FLSA and the new overtime rule against the States infringes upon state sovereignty and federalism by dictating the wages that States must pay to those whom they employ in order to carry out their governmental functions, what hours those persons will work, and what compensation will be provided where these employees may be called upon to work overtime,” the AGs argued. “Left unchecked, DOL’s salary basis test and compensation levels will wreck State budgets.”
In addition, the states questioned whether the final rule truly furthers the intent of the FLSA. “One would think—as the statute indicates—that actually performing white collar duties (i.e. being ‘employed in a [white collar] capacity’) would be the best indicator of white collar exempt status,” the AGs argued. “Instead, DOL relegates the type of work actually performed to a secondary consideration while dangerously using the ‘salary basis test,’ unencumbered by limiting principles, as the exclusive test for determining overtime eligibility for EAP employees.”
Following suit, more than 55 business groups—including the U.S. Chamber of Commerce, the National Retail Federation and the National Association of Manufacturers—relied upon the Administrative Procedures Act (APA) to challenge the rules on behalf of private employers, asserting they exceed the authority of the DOL and are “arbitrary, capricious, contrary to procedures required by law, and otherwise contrary to law.”
“The costs of compliance will force many smaller employers and non-profits operating on fixed budgets to cut critical programming, staffing, and services to the public,” the groups told the court. Further, “the failure of DOL to provide any phase-in period for the radical increase in the minimum salary level required for exemption under the Rule, and the inclusion of an unprecedented escalator provision, exacerbates the significant impact on businesses, both large and small, that will be harmful to the economy as a whole.”
The groups took particular issue with the indexing set to occur every three years, calling it an “unprecedented” change that “not only departs from the terms of the FLSA, it does so without additional notice and comment required by the APA,” after more than 77 years of statutory history without such automatic increases.
Both suits requested a declaratory judgment that the new rules and regulations are unlawful and should be enjoined from having any legal effect.
Lawmakers also got in on the action, passing a bill that would provide an additional six months for employers to prepare for the changes. H.R. 6094, the Regulatory Relief for Small Businesses, Schools, and Nonprofits Act, would delay the Dec. 1, 2016 effective date until June 1, 2017.
The measure passed by a vote of 246 to 177 but appears unlikely to move much farther through the legislative pipeline. In a Statement of Administration Policy, the White House made it clear that President Barack Obama “strongly opposes” the bill and would veto it if it landed on his desk. “While this bill seeks to delay implementation, the real goal is clear—delay and then deny overtime pay to workers,” according to the statement. “With a strong economy and labor market, now is a good time for employers to provide these essential protections for workers, who cannot afford to wait.”
To read the complaint in State of Nevada v. U.S. Department of Labor, click here.
To read the complaint in Plano Chamber of Commerce v. U.S. Department of Labor, click here.
To read H.R. 6094, click here.
A Middle Name—or Lack Thereof—Triggers FCRA Liability
Why it matters
According to the Sixth Circuit Court of Appeals, the failure to include an applicant’s middle name as part of a background check could be a negligent—but not willful—violation of the Fair Credit Reporting Act (FCRA). David Alan Smith had worked as a delivery driver for ten years when his employer was purchased by another company. The new company did not automatically hire the workers but conditioned their employment on a criminal background check. Smith provided his authorization to LexisNexis Screening Solutions to run a background check and provided his full name and other identifying information to the employer. While a credit check was returned for the proper individual, the report also returned criminal convictions for a David Oscar Smith. The company refused to hire David Alan Smith until the error was corrected and he sued LexisNexis. A jury sided with Smith and awarded him $375,000 in damages. On appeal to the Sixth Circuit, the federal appellate panel acknowledged the case was “a close call” but said a reasonable jury could have found negligence on the part of LexisNexis, upholding the $75,000 compensatory award. Lacking sufficient evidence of willfulness, however, the court threw out the punitive damage award.
Detailed discussion
David Alan Smith worked as a delivery driver for Tasson Distributing. When the company was purchased in 2012, former Tasson employees were instructed to apply for new positions with Great Lakes Wine and Spirits, conditioned upon satisfactory completion of a credit check and a criminal history check. To authorize the checks, Smith provided Great Lakes with his first, middle and last name; Social Security number; driver’s license number; date of birth; sex; street address; and phone number.
Great Lakes contracted with LexisNexis Screening Solutions to complete the checks. To conduct its search, Lexis requested a first name, last name and date of birth for criminal checks. While the Lexis form included fields for middle name and Social Security number, it did not require this information.
A search of criminal records that matched Smith’s first and last name and date of birth returned a conviction for uttering a forged instrument for David Smith born on March 12, 1965. However, the conviction was for David Oscar Smith. Because Lexis did not require a middle name from Great Lakes, it could not exclude the “Oscar” result from its search, and the criminal records did not contain a Social Security number for further verification.
Lexis included the criminal records in the report it provided to Great Lakes and the employer rejected Smith’s application for employment. When Smith received a copy of the report, he contacted Lexis to correct the inaccurate search results. Approximately six weeks later, Lexis removed the disputed criminal history and Great Lakes hired Smith as a delivery driver.
Smith then sued Lexis for violating the FCRA. A jury sided with Smith and awarded him $75,000 in compensatory damages for his weeks of lost wages and emotional distress, plus $300,000 in punitive damages. The trial judge reduced the punitives award and both parties appealed.
Lexis argued that no evidence was presented from which a reasonable jury could conclude that it either negligently or willfully violated the FCRA. The Sixth Circuit Court of Appeals both agreed and disagreed. “Although it is a close call, the evidence in the record was sufficient to support the jury’s finding of negligence,” the three-judge panel wrote.
The defendant argued that it met the statutory requirement to “follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates,” as it used birthdates and Social Security numbers to confirm the accuracy of its information. In Smith’s case, the birthdate matched and the records did not contain a Social Security number, Lexis said, noting the company has a 0.2 percent dispute rate for its roughly 10 million criminal background reports per year.
However, given that “David Smith” is an exceedingly common first-and-last name combination (with more than 125,000 individuals with the moniker in the United States), the “jury could conclude that a reasonably prudent CRA, when presented with such a common name, would have required additional identifying information—like a middle name—to heighten the accuracy of its reports,” the court said. “The fact that requiring a middle name is an inarguably reasonable procedure (considering Lexis already had a field for middle names on the form that Great Lakes filled out) is what tips the scales against Lexis.”
Additional support for the jury’s determination was found in the fact the credit report listed Smith as “David A. Smith,” providing a cross-reference that Lexis failed to take advantage of, the panel said.
Despite the reasonable conclusion of negligence, “that is a far cry from being willful,” the panel wrote, which entails “an unjustifiably high risk of harm that is either known or so obvious that it should be known.” The jury’s willful finding “fails to acknowledge Lexis’s efforts to combat inaccuracies: requiring an individual’s first name, last name, and birthdate, and also—when provided—using a middle name and Social Security number. These procedures have kept Lexis’s dispute rate at just 0.2 percent, which is remarkably low.”
Smith presented no evidence of similar complaints lodged against Lexis and a single inaccuracy, without more, does not constitute a willful violation of the FCRA, the panel said. “Although this inaccuracy might have resulted from Lexis’s carelessness, it did not result from Lexis’s disregarding a high risk of harm of which it should have known,” the panel concluded. “The district court thus should have granted judgment as a matter of law with respect to the willfulness claim.”
Without a finding of willfulness, the court struck the entire punitives award and affirmed the $75,000 jury award for compensatory damages.
To read the opinion in Smith v. LexisNexis Screening Solutions, click here.
NLRB: Employee Misclassification Can Be NLRA Violation
Why it matters
The National Labor Relations Board’s (NLRB) Division of Advice published an Advice Memorandum binding on regional offices that permitted an action based on an employer’s alleged misclassification of an employee as an independent contractor. Written in December 2015 but previously unpublished, the Memorandum recognizes that the Board has never found misclassification a per se violation of the National Labor Relations Act (NLRA). However, “there are several lines of Board decisions that support such a finding,” according to the Memorandum. In the case of the Pacific 9 Transportation, Inc., the employer continued to categorize its workers as independent contractors despite an earlier ruling from a regional office that its drivers were employees and conveyed to workers that unionization would be futile, actions the NLRB said worked as “a preemptive strike,” chilling workers from exercising their rights under the Act. The Division of Advice therefore recommended that the regional office issue a complaint based on a Section 8(a)(1) violation for the sole reason that the employer misclassified its workers as independent contractors. While the Memorandum only authorizes a complaint and is not a finding of liability, it serves as a warning to employers that the Board considers misclassification a potential per se violation of the NLRA.
Detailed discussion
Pacific 9 Transportation operates a drayage company servicing the ports of Los Angeles and Long Beach. A fleet of approximately 160 trucks and 180 drivers transport containers to and from the ports, rail locations and customer warehouses.
Each driver was required to execute an agreement stating they are an independent contractor. Other provisions state that drivers must acquire and maintain insurance for their trucks, will be compensated by the load (not the hour), are not required to rent or purchase trucks from the employer and may accept or decline shipments at their choosing.
According to the NLRB, however, day-to-day operations were much different, with Pacific exercising “extensive control” over drivers’ schedules, 90 percent of workers renting their vehicles from the company, insurance held by Pacific on all its vehicles and memos routinely issued to drivers about various expectations.
A union began an organizing campaign among the drivers, part of which was to file individual wage and hour claims with the state Labor Commissioner alleging misclassification as independent contractors. The union also filed a charge with the NLRB. After an investigation, the region determined the drivers were statutory employees and that the company violated Section 8(a)(1), notifying Pacific of its intent to file a complaint.
Instead, the company entered into an informal settlement. A few weeks later, however, Pacific distributed a memorandum to its drivers stating that the company only worked with independent contractors, did not have any employee drivers, and the charge the union filed with the NLRB was “completely false and without fact.”
When the region requested Pacific retract the memo, the company refused and the region revoked the settlement agreement. It then turned to the Board’s Division of Advice, asking whether the misclassification of employees as independent contractors by itself violates Section 8(a)(1) of the NLRA.
In a newly published Advice Memorandum, Associate General Counsel Barry J. Kearney answered in the affirmative: “We conclude that the Region should issue a Section 8(a)(1) complaint alleging that the Employer’s misclassification of its employees as independent contractors interfered with and restrained employees in the exercise of their Section 7 rights.”
Pacific’s drivers are statutory employees and not independent contractors, the Board said, as the company “exerts extensive control over its drivers on a day-to-day basis,” effectively supervises the performance of work through standards in a handbook and establishes and controls the drivers’ rates of compensation, and the work performed by the drivers is “literally the entirety” of Pacific’s business.
“Section 8(a)(1) makes it unlawful for an employer ‘to interfere with, restrain, or coerce employees in the exercise of’ employees’ Section 7 rights,” the memo stated. “Although the Board has never held that an employer’s misclassification of statutory employees as independent contractors in itself violates Section 8(a)(1), there are several lines of Board decisions that support such a finding.”
The Board has found Section 8 violations when an employer’s actions “operate to chill or curtail” future Section 7 activity of statutory employees, where employers make a statement to employees that engaging in Section 7 activity would be futile, and are based on a misstatement of law that insinuates adverse consequences for workers engaging in Section 7 activity.
“In the instant case, [Pacific’s] misclassification of its statutory employees as independent contractors operates as a restraint on and interference with its drivers’ exercise of their Section 7 rights,” Kearney wrote. Pacific’s “conduct—treating the drivers as employees on a daily basis while continuing to insist that they are independent contractors—is without any legitimate business purpose other than to deny the drivers the protections that inure to them as statutory employees, and operates to chill its drivers’ exercise of their Section 7 rights. [Pacific’s] misclassification suppresses future Section 7 activity by imparting to its employees that they do not possess Section 7 rights in the first place. [Pacific’s] misclassification works as a preemptive strike, to chill its employees from exercising their rights under the Act during a period of critical importance to its employees—the Union’s organizing campaign.”
Pacific also conveyed the message in its memo that unionization would be futile and its continued insistence that drivers are independent contractors “is akin to a misstatement of law that reasonably insinuates adverse consequences for employees’ continued Section 7 activity,” the Board added. “Because independent contractors may lawfully be terminated for engaging in Section 7 activity, [Pacific’s] continued insistence to its employees during a union organizing campaign that they are independent contractors is tantamount to [Pacific] telling its employees that they engage in Section 7 activity at the risk of losing their jobs.”
Accordingly, the Advice Memorandum recommended the region office should issue a Section 8(a)(1) complaint alleging Pacific’s misclassification of its drivers as independent contractors violated the NLRA.
As a remedy, the region should seek an order requiring Pacific “cease and desist from interfering with, restraining, or otherwise coercing its employees in the exercise of their Section 7 rights by communicating to drivers that they are independent contractors and not employees within the meaning of the Act.” In addition, the order should mandate Pacific take affirmative action to rescind agreements with drivers that classify them as independent contractors and post appropriate notice.
To read the Advice Memorandum in Pacific 9 Transportation, Inc., click here.
Court Orders Employer to Comply With EEOC Subpoenas
Why it matters
Providing a valuable lesson for employers, a federal court judge in Illinois ordered Groupon to comply with two subpoenas from the Equal Employment Opportunity Commission (EEOC) as part of its investigation into an employee complaint. An African-American applicant told the agency that he was rejected from a position with the company because of his race, triggering an investigation and a request from the EEOC for information about Groupon’s applicants and employees over a two-year period. Groupon objected, but the court wrote that the data was relevant because the agency was investigating a possible pattern or practice of discrimination claim. Neither was the request unduly burdensome, the court said, not persuaded by Groupon’s contention that producing the information would be expensive, time consuming and technologically challenging.
Detailed discussion
Adrian Stratton applied for the position of Vice President of Merchandising with Groupon in January 2014. When he was not hired, Stratton filed a charge of discrimination with the EEOC, accusing the employer of discriminating against him based on his race in violation of Title VII.
The EEOC sent Groupon notice of the charge and launched an investigation. Groupon denied the allegations but, in February 2015, the agency asked to conduct on-site interviews of the individual who reviewed Stratton’s application and other related employees. Groupon complied and the EEOC conducted the interviews.
In March 2015, the EEOC followed up with a request for additional information. Groupon objected, arguing that it was overbroad but providing some information it deemed directly related to the position for which Stratton applied. In May, the agency requested access to Groupon’s Chicago headquarters to conduct an on-site investigation. Groupon refused.
The agency then issued two administrative subpoenas, asking the employer for a host of additional information, including a database of all employees (with details on race, date of application, source of application, position, date of separation, address and, if applicable, the name and race of the individual who referred the employee), a similar database of all applicants, a database of the same characteristics for the 192 applicants for the position to which Stratton applied and access to the premises, software and technology related to Groupon’s hiring and recruiting processes.
Groupon balked. The company argued the subpoenas were overbroad and not relevant. In response, the EEOC modified the subpoenas to narrow the time period to Jan, 1, 2014 to the present and limit the geographic scope to the Chicago headquarters. The employer provided some materials but not all the information requested and the agency filed an application to enforce the subpoenas with an Illinois federal court.
Noting that she was not considering the merits of the underlying charge of discrimination, U.S. District Court Judge Sara L. Ellis sided with the EEOC, finding the subpoenas were not overly broad, did not request irrelevant information and did not place an undue burden on Groupon.
“The Subpoenas seek information about other Groupon employees and applicants for employment at Groupon’s Chicago headquarters as well as information about Groupon’s recruiting and hiring practices at the Chicago headquarters,” the court wrote, and the agency argued the information could illustrate discriminatory patterns of conduct to support an inference that race was the motivation behind the failure to hire Stratton.
“EEOC may request evidence about a company’s employment practices beyond those specifically contained in the Charge during the course of an investigation,” the judge said. “Evidence regarding whether Groupon discriminates in recruiting and hiring based on race at its Chicago headquarters will advance EEOC’s investigation into whether Groupon discriminated against Stratton based on his race.”
The information sought by the agency is relevant, the judge added, because racial discrimination is by definition class discrimination, and information concerning whether an employer discriminated against other members of the same class may cast light on whether an individual person suffered discrimination. Further, the temporal proximity of the requested information to Stratton’s application “is sufficiently close that the relevance of the information is not substantially diminished,” meaning the subpoenas were not overbroad.
As for creating an undue burden, Judge Ellis said Groupon failed to demonstrate that the EEOC’s subpoenas were more trouble than they were worth.
The information requested was voluminous, the court acknowledged, and the employer estimated production could take four months and necessitate the hiring of three to five temporary employees, plus another five to ten hours per week from a current Groupon employee. On top of that, the company has used “at least” three different methods to track applicant data since 2008 and two systems to track hiring information, with data from the old systems no longer stored in a usable format, meaning converting the data posed a “significant” amount of effort.
However, measuring the likelihood that the evidence would cast light on whether Stratton suffered discrimination against the resources available to Groupon, the court said the burden placed on the employer did not appear unconscionable, particularly as racial discrimination “continues to be a matter of grave public concern.”
“The Court finds that the subpoenas are relevant to the underlying charge and not overly broad,” Judge Ellis wrote. “Additionally, the Court finds that Groupon fails to demonstrate that compliance with the subpoenas would be unduly burdensome. Therefore, the Court grants the application and enforces the subpoenas.”
To read the opinion and order in EEOC v. Groupon, Inc., click here.