Penalizing the Employer for the EEOC’s Mistake?

By Fiona W. Ong - Shawe Rosenthal LLP

June 25, 2019

A recent case caused me significant concern on behalf of employers. As you may know, before an employee may file a federal discrimination lawsuit against their employer, they must first file a charge of discrimination with the Equal Employment Opportunity Commission. (And, on a related note, just recently, the U.S. Supreme Court held that this charge-filing requirement was a procedural one that could be waived by the employer). But what happens if the EEOC never notifies the employer of the charge?

This is what happened in Trujillo v. Rockledge Furniture, LLC. In his charge of age discrimination, the employee listed the name of the store where he worked – Ashley Furniture HomeStore – along with the address and telephone number for the store. Under the applicable regulations, the EEOC is then supposed to serve notice of the charge on “persons named in such charge as prospective defendants.” According to the court, the purpose of this to notify an employer that it has been charged with discrimination, and to enable the EEOC to investigate and “eliminate any unlawful practice through informal conciliation.”

Well, Ashley Furniture franchises its name to various entities, and unfortunately the wrong franchisee was identified through the EEOC’s automated system. (In our representation of employers, we have experienced a number of issues with the automated system. Apparently, here’s another. It’s not been the most effective system…). So this other franchisee appropriately responded to the EEOC’s notice of the charge that it had never employed the employee. The employee’s then-attorney clarified for the EEOC that the proper employer was Rockledge Furniture LLC, doing business as “Ashley Furniture HomeStore – Rockledge,” at the previously provided address and phone number. Shockingly, the EEOC still failed to notify the proper employer – instead, it closed the case and issued a right to sue letter to the employee!

Well, it was a surprise to Rockledge when it was then sued. It argued that the employee had failed to comply with the charge-filing requirement, properly naming it as the employer. The federal district court agreed and dismissed the case.

On appeal, however, the U.S. Court of Appeals for the Seventh Circuit essentially found that the employee had done what he was supposed to do. The mistake he made in leaving “Rockledge” off the end of “Ashley Furniture HomeStore” on his original charge was a minor one of the type that courts have overlooked in the past. Moreover, he had further provided the correct address and telephone number for the employer. The real mistake had been made by the EEOC, and, as the Seventh Circuit stated:

Penalizing the charging party for the EEOC’s mistake in processing that sufficient information would frustrate the purpose of the ADEA and its design allowing non‐lawyers to pursue claims before the EEOC. That’s why documents filed with the EEOC should be construed, to the extent consistent with
permissible rules of interpretation, to protect the employee’s rights and statutory remedies.

(Internal quotation omitted). Therefore, the Seventh Circuit overturned the dismissal of the lawsuit. It acknowledged Rockledge’s argument that the EEOC’s failure to provide notice deprived Rockledge of the opportunity to pursue informal resolution of the matter through conciliation, and ordered an admittedly “imperfect but best available remedy” to allow the parties to pursue conciliation through the EEOC, if they were so interested.

Well, I understand the court’s desire not to penalize the employee, who really seemed to have done what was expected of him. But the end result unfairly penalizes the employer. In this case, the employee was terminated in late 2015 or early 2016, filed his charge in May 2016, and then filed suit in July 2017. The case was initially dismissed, but now, almost two years later (and three and a half years after his termination), it will now proceed on the merits.

As employers know, the passage of time can seriously compromise the employer’s ability to successfully defend an employment claim. Witnesses leave the company, memories fade, documents go missing, systems change. Often employers in such situations are forced to settle meritless claims simply because of these logistical issues.

And there are no consequences to the EEOC for its mishandling of the matter. Wouldn’t it really be more fair to hold the EEOC accountable to the employee? Just a thought…