Labor & Employment Developments Blog

Oh, I was so surprised and shocked, and I wondered too
if by chance you heard it for yourself

            Donna Summer - On The Radio

A recent decision from a United States District Court in Maryland may be of interest to employers involved in litigation with the EEOC, or those that may someday be involved in litigation with the EEOC.  In EEOC v. McCormick & Schmick's Seafood Rests., Inc., the Court considered the employer’s objections to a radio announcement run by the EEOC soliciting claimants for class litigation.  The radio announcement stated:

In connection with the class race discrimination lawsuit, the U.S. EEOC is looking for black individuals who applied for employment at or used to work for McCormick and Schmick's or M&S Grill at the Inner Harbor.  If you applied to work, or worked at either restaurant, please call the EEOC at 410-209-2208.  Again, 410-209-2208.

Not surprisingly, McCormick & Schmick’s objected to this and tried to persuade the Court to put a stop to it.  They made three arguments.  First, that the radio spot violates the Rule of Professional Responsibility that prohibits the making of “an extrajudicial statement that the lawyer knows or reasonably should know will be disseminated by means of public communication and will have a substantial likelihood of materially prejudicing an adjudicative proceeding in the matter.”  Second, that the announcements will pollute the jury pool and threaten to injure McCormick & Schmick’s business.  Third, that the announcement is misleading because it implied that there is a Federal Rule 23 class action lawsuit, which was not the case. 

The Court rejected all of the arguments.  Although the action was not brought pursuant to Rule 23, it was a class claim.  As to the other arguments, the Court noted that the announcement did nothing more than relay public record, i.e. the pendency of a lawsuit.  Moreover, the Rules of Professional Conduct specifically allow “a request for assistance in obtaining evidence and information necessary thereto.”  Thus, there was no violation. 

If one accepts the Court’s reasoning, there is nothing wrong with the EEOC running radio announcements, although the practice does point to a broader issue.  Judging by the case number, the EEOC case against McCormick & Schmick’s has been pending for upwards of three years.  One might ask why the EEOC is trolling the airwaves for claimants this far into their case.  The answer might be found in another recent case that is unlikely to make it onto the EEOC Website’s “Newsroom” section.  In EEOC v. Peoplemark, Inc., a Michigan District Court sanctioned the EEOC, requiring the agency to pay an employer a total of a little over $750,000 for pursuing frivolous litigation.  The Workplace Class Action Blog has a nice summary of the case, which notes the “EEOC’s ‘Shoot-First, Aim Later’ Tactics”:

In EEOC v. Peoplemark, Inc., the EEOC alleged that the staffing company’s policy of not hiring individuals with a criminal record had a disparate impact on African-Americans.  Notably, the EEOC has repeatedly signaled that it intends to attack these blanket criminal background policies as disproportionally and discriminatorily affecting minorities.  Indeed, the Court in Peoplemark, Inc. noted that an EEOC Commissioner had even highlighted this case in a public meeting in 2008, noting that the Commission had unanimously approved the case against Peoplemark.

The problem with the EEOC’s theory was its assertion that Peoplemark’s had a blanket no-hire policy was simply not true.  In fact, of the 286 individuals the EEOC purported to represent in this case, only 22% actually had been hired and placed by Peoplemark.  Significantly, the Court found that even after the EEOC knew that was the case, it proceeded with the litigation anyway.

Among the administrative prerequisites of an EEOC-initiated enforcement actions are efforts at informal settlement and conciliation prior to formal court action.  Also, the EEOC may not sue on a complaint broader in scope than the results of its investigation as contained in its reasonable-cause determination.  It is generally not a good argument for employers to attack the sufficiency of EEOC investigations or conciliation efforts.  However, one might question why, if the EEOC has effectively investigated and attempted to conciliate a charge, it needs to be advertising for potential claimants on the radio three years into the court case. 

I freely acknowledge that I have no inside information about any of the litigation mentioned in this post.  However, reading these two cases together paints a troubling picture for employers faced with EEOC enforcement actions.  In the interest of fairness, I invite the EEOC to e-mail me a response to this post and I will post it.  My questions for the EEOC are: 1) why is it necessary to advertise for claimants on the radio three years after completing an investigation that provided probable cause for the case; and 2) how can the EEOC have made efforts at informal settlement and conciliation for individuals who were not identified until almost three after its case was filed.  I look forward to a response.