EEOC v. Kronos Inc ( 2010 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 09-3219
_____________
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,
Appellant
v.
KRONOS INCORPORATED
On Appeal from the United States District Court
for the Western District of Pennsylvania
Case No. 2:09-mc-00079-AJS
District Judge: Honorable Arthur J. Schwab
________________
Argued February 26, 2010
Before: CHAGARES, STAPLETON, and LOURIE * , Circuit
Judges.
(Filed: September 7, 2010)
_________________
Corbett Anderson, Esq. (Argued)
Equal Employment Opportunity Commission
131 M Street, N.E.
Washington, DC 20507
*
Honorable Alan D. Lourie, United States Circuit Judge for
the Federal Circuit, sitting by designation.
Lisa H. Hernandez, Esq.
Equal Employment Opportunity Commission
1001 Liberty Avenue
Pittsburgh, PA 15219
Counsel for Appellant
Robert L. Ashe, Jr., Esq. (Argued)
Ashe, Rafuse & Hill
1355 Peachtree Street
Suite 500
Atlanta, GA 30309
Terrance H. Murphy, Esq.
Buchanan Ingersoll & Rooney
301 Grant Street
One Oxford Centre, 20th Floor
Pittsburgh, PA 15219
Counsel for Appellee
Rae T. Vann
Norris, Tysse, Lampley
& Lakis, LLP
1501 M Street, N.W. Ste. 400
Washington, DC 2005
Counsel for Amici Curiae
________________
OPINION
________________
CHAGARES, Circuit Judge.
On March 18, 2009, the Equal Employment Opportunity
Commission (the “EEOC” or the “Commission”) filed a Subpoena
Enforcement Application in the United States District Court for the
Western District of Pennsylvania, seeking enforcement of a third-
party administrative subpoena it issued to Kronos Incorporated
(“Kronos”) pertaining to the EEOC’s investigation into a charge of
discrimination against Kroger Food Stores (“Kroger”). On June 1,
2009, the District Court issued an order narrowing the scope of the
2
subpoena and directing the parties to negotiate a confidentiality
order. On July 22, 2009, the District Court denied the EEOC’s
motion to adopt its proposed confidentiality order, granted
Kronos’s motion for adoption of its order, and entered Kronos’s
proposed order as the court’s own, with slight modifications. The
EEOC appeals from both of these orders. For the reasons stated
below, we will affirm in part and reverse in part the District
Court’s order of June 1, 2009 modifying the scope of the subpoena.
We will vacate the District Court’s July 22, 2009 confidentiality
order and remand for further proceedings.
I.
Vicky Sandy, who is hearing and speech impaired, filed a
charge of discrimination with the EEOC against Kroger on or about
June 30, 2007. According to her charge, Sandy applied for work
as a cashier, bagger, and stocker in May 2007 at a Kroger in
Clarksburg, West Virginia. She alleged that Kroger did not hire
her because of her disability, in violation of the Americans with
Disabilities Act of 1990, 42 U.S.C. § 12101 et seq. (“ADA”).
Sandy alleged that “[i]n May, 2007, a management official (name
unknown) told me that I would not be a good fit for any openings
because of the way that I speak. After denying me employment,
they continued to advertise for openings.” Joint Appendix (“JA”)
23.
Kroger utilizes a Customer Service Assessment, created by
Kronos (the “Assessment” or “Kronos Assessment”), in its hiring
process.1 The Assessment purports to “measure[] the human traits
that underlie strong service orientation and interpersonal skills,
such as: Controlling impatience; Showing respect; Listening
1
The Assessment consists of fifty statements, to which the
applicant must answer “strongly disagree,” “disagree,” “agree,” or
“strongly agree.” It includes statements such as the following:
“You have confidence in yourself”; “You are always cheerful”;
“You try to sense what others are thinking and feeling”; “You say
whatever is on your mind”; and “It is easy for you to feel what
others are feeling.” JA 27.
3
attentively; Working well on a team; [and] Being sensitive to
others’ feelings.” JA 25. According to Kronos, applicants who
perform well on the assessment are more likely to “[a]ct cheerful,
polite, and friendly . . . [l]isten carefully . . . and . . . [c]ommunicate
well with customers.” JA 26. Sandy’s score on the Assessment
was 40%. JA 33.
According to Kroger’s position statement in response to
Sandy’s charge, the store manager, Bob Bowers, interviewed Sandy
for the open positions. Kroger alleged that during the interview,
“Bowers had difficulty in understanding [Sandy’s] verbal responses
to questions” and found her responses to be “garbled and at times
inaudible and unintelligible.” JA 39. Kroger also noted that
Bowers discussed with Sandy her low score on the Kronos
Assessment and her lack of job experience.
Kroger provided the EEOC with a copy of Sandy’s
employment application summary. The portion summarizing the
results of the Kronos Assessment provides, inter alia, that Sandy
“is less likely to . . . listen carefully, understand and remember.”
JA 33. The summary contains an “Interview Guide” that lists
suggested follow-up questions. Sandy’s follow-up questions
include, “Describe the hardest time you’ve had understanding what
someone was talking about.” Sandy’s application summary also
suggests observations the interviewer should make, such as “How
does the applicant speak during the interview[?] Listen for:
C o r r e c t l a n g u a g e , c l e a r e n u n c i a ti o n , a p p r o p r i a t e
volume/tone/expression/smile/eye contact.” JA 33.
After Kroger admitted in its position statement that it relied
at least in part on the Assessment in its hiring decision, the EEOC
sent Kroger a request for information (“RFI”), dated January 16,
2008, seeking several categories of documents related to the
Assessment and its use. Included was a request for copies of “any
and all validity studies” and information pertaining to applications
for the position of “Cashier Bagger” going back to January 1, 2007.
JA 42. The RFI asked that Kroger provide the information on or
before February 12, 2008 – the date of the EEOC investigator’s
planned site-visit.
4
Kroger responded to the RFI on February 14, 2008, but
failed to provide all of the information requested, including validity
studies. The EEOC contends that it was not sure at that point
whether Kroger had access to Kronos’s validity studies. JA 103
n.5.
On March 11, 2008, the EEOC issued a third-party
administrative subpoena to Kronos. The subpoena sought validity
studies related to the Kronos tests Kroger purchased, instruction
manuals for the assessment tests Kroger used, documents related
to Kroger, “and any validation efforts made regarding any or all
jobs” at Kroger, any documents related to potential adverse impact
on people with disabilities, and job analyses related to “any and all
positions” at Kroger. JA 48-49.
The EEOC later notified Kroger that it was expanding the
scope of its ADA investigation:
Based upon its authority, the [EEOC] hereby serves
notice that the above referenced charge has been
expanded to include the issue of disability with
respect to the use of assessment test in hiring (class)
during the period August 1, 2006 to the present and
for all facilities in the United States and its
territories.
JA 54.
According to the EEOC, around this time it discovered an
article, co-written by a Kronos employee, which indicated that
minority applicants performed worse than non-minority applicants
on the Kronos Assessment administered by a large, geographically
diverse retailer. Further, the EEOC maintains that its charge
database contained complaints against Kroger alleging failure to
hire based on disability and race.
Based on these circumstances, the EEOC sent Kroger a
letter informing it that the EEOC was expanding its investigation
once again, this time to include race:
5
Based upon its authority, the [EEOC] hereby serves
notice that the above referenced charge has been
expanded to include the basis of disability and race
(black) with respect to the issues of the use of
assessment tests . . . in hiring (class) for the period
beginning from the date that such test(s) were
implemented by [Kroger] through the present and for
all facilities in the United States and its territories.
JA 56. The EEOC rescinded its original subpoena to Kronos and
issued a new subpoena directing that Kronos:
1. Produce any and all documents and data
constituting or related to validation studies or
validation evidence pertaining to Unicru [a Kronos
subsidiary] and/or Kronos assessment tests
purchased by The Kroger Company, including but
not limited to such studies or evidence as they relate
to the use of the tests as personnel selection or
screening instruments.
2. Produce the user’s manual and instructions for the
use of the Assessment Tests used by The Kroger
Company[.]
3. Produce any and all documents and data, including
but not limited to correspondence, notes, and data
files, relating to the Kroger Company; its use of the
Assessment Tests; results, ratings, or scores of
individual test-takers; and any validation efforts
made thereto.
4. Produce any and all documents discussing,
analyzing or measuring potential adverse impact on
individuals with disabilities and/or an individuals
[sic] race.
5. Produce any and all documents related to any and
all job analyses created or drafted by any person or
entity relating to any and all positions at The Kroger
6
Company.
6. Furnish a catalogue which includes each and every
assessment offered by Unicru/Kronos. Additionally
provide descriptions of each assessment.2
JA 51-52.
Kronos filed a Petition to Revoke the Subpoena with the
EEOC, objecting that the subpoena “requests information that is:
(1) not relevant to any allegation made in [Sandy’s] Charge, and (2)
constitutes [sic] commercially valuable and trade secret property of
Kronos, which the EEOC seeks without adequate protection.” JA
59. The EEOC denied the Petition to Revoke on January 7, 2009
and ordered Kronos to comply with the subpoena. The EEOC
determined that the information the subpoena requested was
directly relevant to its properly expanded investigation and “well
within the [EEOC]’s investigative authority.” JA 108. It further
concluded that Title VII of the Civil Rights Act of 1964 (“Title
VII”), the ADA, and the EEOC’s regulations regarding
confidentiality of information obtained during an investigation
provided sufficient protection against disclosure without a
confidentiality agreement.
When Kronos failed to comply with the subpoena, the
EEOC filed a Subpoena Enforcement Action, which the District
Court granted in part and denied in part. The District Court
characterized the subpoena’s scope as “breathtaking – potentially
including most of Kronos’ business documents, covering its entire
client base, with no time, geographic, or job description
limitations.” JA 5 (footnotes omitted). The District Court
determined that materials unrelated to Sandy’s discrimination
charge were not relevant to the investigation. The District Court
modified the subpoena to include only Kronos’s work for Kroger
limited to the time period of January 1, 2006 to May 31, 2007, the
state of West Virginia, and the job positions of bagger, stocker,
2
The EEOC no longer seeks enforcement of Paragraph 6 of
the subpoena. EEOC Br. at 16 n.5.
7
and/or cashier/checker. Specifically, the District Court ordered
Kronos to comply with the following provisions:
1. Produce any user’s manual and instructions for
the use of the Assessment Tests provided to the
Kroger Company.
2. Produce any and all documents and data,
including but not limited to correspondence, notes,
and data files, relating to The Kroger Company; The
Kroger Company’s use of the Assessment Tests;
results, ratings, or scores of individual test-takers at
The Kroger Company; and any validation efforts
performed specific[ally] for and only for The Kroger
Company.
3. Produce any and all documents discussing,
analyzing or measuring potential adverse impact on
individuals with disabilities, relating specifically to
and only to the Kroger Company.
4. Produce any and all documents related to any and
all job analyses created or drafted by Kronos relating
to the bagger, stocker, and/or cashier/checker
positions at The Kroger Company.
5. Furnish any catalogue provided to The Kroger
Company.
6. Items 1 through 5 are limited to the time period of
January 1, 2006 through May 31, 2007, in the state
of West Virginia, for the positions of bagger,
stocker, and/or cashier/checker.
JA 5-6.
The District Court also ordered the parties to enter into “any
appropriate confidentiality order to protect any trade
secret/confidential information of Kronos and the personal
information of persons taking the Assessment Tests.” JA 6. The
8
parties negotiated and agreed to certain provisions of a
confidentiality order, but failed to arrive at an agreement regarding
other terms Kronos requested, including: 1) a limitation confining
the use of confidential material to the investigation of Sandy’s
allegations against Kroger and any subsequent charge she may file;
2) a restriction that during the investigation, confidential material
may be disclosed only to EEOC employees with a “need to know”
and any other person mutually agreed upon by Kronos and the
EEOC; and 3) a requirement that the EEOC return confidential
material within ten business days after concluding the Sandy
investigation, and destroy any documents, including EEOC notes
or memoranda, that reflect or refer to the confidential material
within ten business days after a notice of right to sue.
Both parties submitted proposed confidentiality orders to the
District Court. On July 22, 2009, the court denied the EEOC’s
motion to adopt its proposed confidentiality order and granted
Kronos’s motion for entry of its proposed confidentiality order.
The court added an additional term to the Kronos order: “Said
confidential material shall not be entered into a centralized
database.” JA 9.
The EEOC appeals both decisions of the District Court.
II.
The District Court exercised jurisdiction under 29 U.S.C. §
161(2) and 28 U.S.C. §§ 1331 and 1345. This Court has
jurisdiction pursuant to 28 U.S.C. § 1291. We review a district
court’s decision to enforce an administrative subpoena for abuse of
discretion. Chao v. Cmty. Trust Co., 474 F.3d 75, 79 (3d Cir.
2007). We also employ an abuse of discretion standard when
reviewing the grant of a confidentiality order. Pansy v. Borough of
Stroudsburg, 23 F.3d 772, 783 (3d Cir. 1994). “Abuse of
discretion occurs when ‘the district court’s decision rests upon a
clearly erroneous finding of fact, an errant conclusion of law or an
improper application of law to fact.’” Chao, 474 F.3d at 79(quoting NLRB v. Frazier, 966 F.2d 812, 815 (3d Cir. 1992)).
9
III.
A.
The ADA prohibits, inter alia, use of employment tests that
“screen out or tend to screen out an individual with a disability or
a class of individuals with disabilities unless the . . . test . . . , as
used by the [employer], is shown to be job-related for the position
in question and is consistent with business necessity.” 42 U.S.C.
§ 12112(b)(6); see also 42 U.S.C. § 12112(b)(7) (defining
“discriminate” to include “failing to select and administer tests
concerning employment in the most effective manner to ensure
that, when such test is administered to a job applicant or employee
who has a disability that impairs sensory, manual, or speaking
skills, such test results accurately reflect the skills, aptitude, or
whatever other factor of such applicant or employee that such test
purports to measure, rather than reflecting the impaired sensory,
manual, or speaking skills of such employee or applicant . . . .”).
“Both disparate treatment and disparate impact claims are
cognizable under the ADA.” Raytheon Co. v. Hernandez, 540 U.S.
44, 53 (2003).
The EEOC is empowered to investigate charges of
discrimination to determine whether there is reasonable cause to
believe that an employer has engaged in an unlawful employment
practice.3 See 42 U.S.C. §§ 2000e-5(b), 12117(a) (expanding the
EEOC’s power to investigate and address discrimination on the
basis of disability). In connection with its investigation, the EEOC
may issue administrative subpoenas. See id. § 2000e-9; 29 U.S.C.
§ 161(1). However, the EEOC’s statutory investigative authority
is not plenary; the EEOC is entitled to access only evidence
3
In addition to investigating charges of discrimination filed
by or on behalf of an individual, the EEOC has the authority to file
and investigate a commissioner’s charge alleging unlawful
employment practices, pursuant to 42 U.S.C. §§ 2000e-5(b) and
2000e-6(e).
10
“relevant to the charge under investigation.” 42 U.S.C. §§ 2000e-
8(a).4
The relevance requirement is not particularly onerous.
Courts have given broad construction to the term “relevant” and
have traditionally allowed the EEOC access to any material that
“might cast light on the allegations against the employer.” EEOC
v. Shell Oil Co., 466 U.S. 54, 68-69 (1984); see also EEOC v.
Dillon Cos., Inc., 310 F.3d 1271, 1274 (10th Cir. 2002) (“The
Supreme Court has explained that the ‘relevancy’ limitation on the
EEOC’s investigative authority is ‘not especially constraining.’”
(quoting Shell Oil, 466 U.S. at 68)); EEOC v. Ford Motor Credit
Co., 26 F.3d 44, 47 (6th Cir. 1994) (noting that “Congress intended
[the EEOC] to have broad access to information relevant to
inquiries it is mandated to conduct”); EEOC v. Franklin &
Marshall Coll., 775 F.2d 110, 116 (3d Cir. 1985) (“The concept of
relevancy is construed broadly when a charge is in the investigatory
stage.”). Nonetheless, the EEOC’s power of investigation is
anchored to the charge of discrimination, and courts must be
careful not to construe the charge and relevance requirements so
broadly as to confer “unconstrained investigative authority” upon
the EEOC. Shell Oil, 466 U.S. at 64-65; see also EEOC v. United
Air Lines, Inc., 287 F.3d 643, 653 (7th Cir. 2002). The relevance
requirement “is designed to cabin the EEOC’s authority and
prevent fishing expeditions.” United Air Lines, 287 F.3d at 653(quotation marks omitted). The EEOC bears the burden of
demonstrating relevance. See EEOC v. S. Farm Bureau Cas. Ins.
Co., 271 F.3d 209, 211 (5th Cir. 2001).
4
To obtain enforcement of an administrative subpoena, an
agency must demonstrate that 1) its investigation has a legitimate
purpose, 2) the inquiry is relevant to that purpose, 3) the agency
does not already possess the information requested, 4) the agency
has complied with relevant administrative requirements, and 5) the
demand is not “‘unreasonably broad or burdensome.’” Univ. of
Med. & Dentistry of N.J. v. Corrigan, 347 F.3d 57, 64 (3d Cir.
2003) (quoting FDIC v. Wentz, 55 F.3d 905, 908 (3d Cir. 1995)).
It is the second requirement, that the inquiry be relevant to a
legitimate purpose, that is at issue here.
11
Once the EEOC begins an investigation, it is not required to
ignore facts that support additional claims of discrimination if it
uncovers such evidence during the course of a reasonable
investigation of the charge. See, e.g., Gen. Tel. Co. of the N.W.,
Inc. v. EEOC, 446 U.S. 318, 331 (1980) (“Any violations that the
EEOC ascertains in the course of a reasonable investigation of the
charging party’s complaint are actionable.”); EEOC v. Cambridge
Tile Mfg. Co., 590 F.2d 205, 206 (6th Cir. 1979) (per curiam)
(enforcing EEOC subpoena seeking information related to sex
discrimination in job classification after EEOC uncovered evidence
of such discrimination during investigation of allegations of sex
and race discrimination in termination); EEOC v. Gen. Elec. Co.,
532 F.2d 359, 364-65 (4th Cir. 1976) (“[T]he original charge is
sufficient to support action by the EEOC . . . for any discrimination
stated in the charge itself or developed in the course of a reasonable
investigation of that charge . . . .”). Rather, the EEOC has the
power to investigate a “a broader picture of discrimination which
unfolds in the course of a reasonable investigation of a specific
charge.” Cambridge Tile, 590 F.2d at 206.
B.
The EEOC argues on appeal that, by narrowing the
subpoena’s scope rather than enforcing it as written, the District
Court abused its discretion. The EEOC contends that the
information it sought in the subpoena is relevant because it might
cast light on Sandy’s allegations against Kroger, and thus meets the
liberal standard of relevance the Supreme Court espoused in Shell
Oil. In particular, the EEOC argues that the scope of Kroger’s use
of the Kronos Assessment – “nationwide (not just ‘the state of
West Virginia’), for all retail jobs (not just for ‘baggers, stockers,
and/or cashiers/checkers’), from whatever date Kroger began using
the test to the present (not just from ‘January 1, 2006 through May
31, 2007’” – is relevant as to whether Kroger discriminated against
Sandy individually and/or as a member of a class of individuals
with disabilities adversely impacted by the Kronos Assessment test.
EEOC Br. at 19. The EEOC also asserts that Kronos Assessment
instructions and manuals are relevant (regardless of whether
Kronos actually provided them to Kroger), as are materials related
12
to validation studies and potential adverse impact based on
disability, even if such materials are not specific to Kroger’s use of
the test. We agree. The District Court applied too restrictive a
standard of relevance in limiting the information related to
geography, time, and job position. Further, the District Court erred
in limiting the EEOC’s access to user’s manuals and instructions,
validation information, and materials pertaining to potential
adverse impact on individuals with disabilities.
Sandy’s charge alleges failure to hire based on her disability.
Kroger admitted to relying at least in part on the Kronos
Assessment in evaluating Sandy.5 In order for the EEOC to
determine whether Kroger’s failure to hire Sandy was
discriminatory, it is entirely appropriate for the EEOC to
investigate Kroger’s use of the Assessment. The EEOC is entitled
to information that “may provide a useful context” for evaluating
employment practices under investigation, in particular when such
information constitutes comparison data. EEOC v. Univ. of
Pittsburgh, 643 F.2d 983, 985-86 (3d Cir. 1981) (holding EEOC
request for faculty employment records of four related schools was
relevant to charge of sex discrimination in the School of Nursing,
especially because the School of Nursing faculty was almost
entirely female); see also EEOC v. Associated Dry Goods Corp.,
449 U.S. 590, 604 (1981) (“Statistics and other information about
an employer’s general practices may certainly be relevant to
individual charges of discrimination . . . .”); Franklin & Marshall
Coll., 775 F.2d at 116-17 (holding materials related to other tenure
candidates in a “similar time frame” were “relevant and not
overbroad” in EEOC’s investigation of charge alleging
discriminatory denial of tenure because they might provide useful
5
According to Kroger, “Bowers also discussed with
Charging Party the low score on the Customer Service Assessment
she had completed as part of the application process. Bowers noted
from the Customer Service Assessment that Charging Party
potentially might be less inclined to deliver great customer service
. . . . Bowers ended the interview by informing Charging Party that
he was concerned about her qualifications, including her low
Customer Service Assessment . . . .” JA 38-39.
13
comparison data and help determine whether there was a “pattern
of discrimination”). In this case, information pertaining to
Kroger’s actual use of the Kronos Assessment may provide “useful
context” and important comparative data for the EEOC’s
investigation into Sandy’s charge of discrimination.
The District Court’s decision to narrow the subpoena to
include only bagger, stocker, and/or cashier/checker positions was
an abuse of its discretion. Kroger purportedly uses the Kronos
Assessment in hiring for every retail position. JA 104. Under the
Shell Oil relevance standard, there is no reason to confine the
subpoena to Kroger’s use of the Assessment for bagger, stocker,
and/or cashier/checker positions. Information related to other job
descriptions may shed light on whether the Assessment has an
adverse impact on persons with disabilities. Such data, at the very
least, provides comparative information on the Assessment, which
is “absolutely essential to a determination of discrimination.”
EEOC v. Roadway Express, Inc., 261 F.3d 634, 642 (6th Cir. 2001)
(quotation marks omitted) (holding that the EEOC was entitled to
information related to job positions other than those at issue in the
charge because such information met the Shell Oil standard of
relevance).
For the same reason, the District Court misapplied the
relevance standard when it limited the EEOC’s access to Kroger’s
information related only to the state of West Virginia. Kroger uses
the Kronos Assessment in hiring nationwide. JA 104. An
employer’s nationwide use of a practice under investigation
supports a subpoena for nationwide data on that practice. EEOC
v. United Parcel Serv. Inc., 587 F.3d 136, 139 (2d Cir. 2009) (per
curiam) (enforcing EEOC subpoena seeking information on how
employer applied appearance guidelines nationwide in EEOC
investigation of two complaints of religious discrimination). Here,
nationwide materials could provide important comparison data, as
well as a “useful context” for evaluating whether Kroger’s use of
the Assessment violates the ADA. See Univ. of Pittsburgh, 643
F.2d at 985-86.
The District Court also too narrowly circumscribed the
subpoena when it instituted the temporal limitation of January 1,
14
2006 through May 31, 2007. Although the relevance requirement
does impose temporal limits on the scope of the EEOC’s inquiry,
the duration of Kroger’s use of the Kronos test falls within the
scope of information that might cast light on the practice under
investigation. Evidence related to the employment practice under
investigation prior to and after Sandy’s charge provides valuable
context that may assist the EEOC in determining whether
discrimination occurred. Roadway Express, 261 F.3d at 642(enforcing EEOC subpoena for information both before the alleged
discrimination took place and after the charge of discrimination).
Kronos argues that the EEOC is not entitled to the
information it seeks because Sandy’s charge is completely devoid
of any allegations of nationwide discrimination and discrimination
in job positions other than those for which she applied. Kronos’s
argument fails to recognize that the EEOC’s investigatory power
is broader than the four corners of the charge; it encompasses not
only the factual allegations contained in the charge, but also any
information that is relevant to the charge. Thus, the EEOC need
not cabin its investigation to a literal reading of the allegations in
the charge. As we have acknowledged, “[t]he concept of relevancy
is construed broadly when a charge is in the investigatory stage.”
Franklin & Marshall Coll., 775 F.2d at 116; see also Univ. of
Pittsburgh, 643 F.2d at 986 (“The investigatory powers of the
EEOC should be interpreted broadly.”). The EEOC does not seek
“information or materials related to assessment tests Kroger has
never purchased and has never used.” EEOC Reply Br. at 12. The
requested materials are not so broad as to render the relevance
requirement a “nullity.” See Shell Oil, 466 U.S. at 69 (noting that
courts must not interpret the standard of relevance so broadly that
it becomes a “nullity”). We decline Kronos’s invitation to cabin
the EEOC’s investigation such that it is unable to access materials
that meet the Shell Oil relevance standard – that is, materials that
might cast light on Sandy’s charge of discrimination.
The District Court’s decision denying the EEOC access to
particular materials unless they relate only to Kroger was an
improper use of its discretion. The District Court limited
production of “documents discussing, analyzing, or measuring
potential adverse impact on individuals with disabilities” to those
15
“relating specifically to and only to The Kroger Company.” JA 6.
The court also modified the subpoena to limit production of
validation study information to validation efforts “performed
specific[ally] for and only for Kroger.” JA 5-6. Such information,
regardless of whether it was “performed specifically for” or
“relat[es] specifically to and only to” Kroger, certainly might shed
light on the charge of discrimination. If Kronos has information
relating to whether its Assessment has an adverse impact on
disabled people, that information is clearly relevant to whether
Kroger violated the ADA by using the Assessment. Additionally,
information pertaining to the validity of the test, even if it was not
“performed specific[ally] for and only for Kroger,” could assist the
EEOC in evaluating whether Kroger’s use of the test constituted an
unlawful employment action. Modifying the subpoena to exclude
these materials was a misapplication of the broad relevance
standard that accompanies the EEOC’s subpoena authority.
Kronos argues that Sandy alleged disparate treatment in her
charge but failed to allege disparate impact, and thus the EEOC is
not entitled to investigate whether Kroger’s use of the Assessment
has an adverse impact on people with disabilities. We disagree.
Sandy’s charge does not contain a legal theory, nor was she
required to assert one. See 29 C.F.R. § 1601.12(a)-(b) (requiring,
inter alia, a “clear and concise statement of the facts” related to the
alleged unlawful employment practices and noting that a charge
that “describe[s] generally the action complained of” is sufficient).
We have recognized that the individuals who draft charges are
often “not well vested in the art of legal description” and as a
result, “the scope of the original charge should be liberally
construed.” Hicks v. ABT Assocs., Inc., 572 F.2d 960, 965 (3d
Cir. 1978); see also Sanchez v. Standard Brands, Inc., 431 F.2d
455, 462-63 & n.4 (5th Cir. 1970) (noting that a layperson filling
out a charge of discrimination might have difficulty articulating
legal basis for alleged discrimination); EEOC v. E.I. DuPont de
Nemours & Co., 373 F. Supp. 1321, 1335 (D. Del. 1974)
(explaining that the “precise language of the charge . . . provides
less guidance for subsequent proceedings than the general
character of the grievances to which the charge alludes” and that
the charge is often drawn by a layperson who “perceives only
dimly the nature and cause of the discrimination”), aff’d on other
16
grounds, 516 F.2d 1297 (3d Cir. 1975). It is entirely possible that
Sandy was not fully aware of the extent to which Kroger relied on
the test in evaluating her application, and thus did not perceive the
potential impact the test had on Kroger’s decision not to hire her.
In any event, it is up to the EEOC, not Sandy, to investigate
whether and under what legal theories discrimination might have
occurred.
Finally, the District Court abused its discretion in limiting
Kronos’s production of the user’s manual and instructions for the
Assessment to those materials only actually provided to Kroger.
We agree with the EEOC that regardless of whether Kronos
actually provided Kroger with user’s manuals and instructions, the
materials may aid the EEOC in understanding the Assessment’s
potential for disparate impact on the disabled.
For the foregoing reasons, we will reverse the District
Court’s judgment insofar as it limited the scope of the EEOC’s
subpoena in terms of geography, time, and job description. We
will also reverse to the extent that the District Court’s order limits
the EEOC’s access to validation efforts conducted solely on behalf
of Kroger, documents relating to potential adverse impact on
disabled individuals to those relating specifically and only to
Kroger, and user’s manuals and instructions for the Assessment
that were actually provided to Kroger.
C.
We now turn to the EEOC’s request for “documents
discussing, analyzing or measuring potential adverse impact . . .
[on the basis of] race.” JA 52. The EEOC argues that it is entitled
to this information as part of a properly expanded investigation of
Sandy’s charge and that the District Court abused its discretion in
modifying its subpoena to exclude such materials. We disagree.6
6
We understand the EEOC’s argument in support of its
request for information related to potential adverse impact based on
race to be premised on a reasonable expansion of its investigation
of the Sandy charge. However, to the extent that the EEOC asserts
17
According to the EEOC, it expanded the investigation to
include potential race discrimination because it discovered a
scholarly article, co-written by a Kronos employee, suggesting that
minority applicants performed worse than non-minorities on the
Kronos Assessment. The EEOC also contends that it discovered
in its database charges against Kroger alleging race discrimination
in hiring. According to the EEOC, this constitutes evidence that
the Assessment might be a potential “root source of
discrimination” against people with disabilities and African
Americans, and is thus a legitimate basis for it to expand its
investigation into discrimination based on race. See Gen. Elec.
Co., 532 F.2d at 366 n.9 (“‘The Commission need not confine
itself to the particular symptom of discrimination identified by a
charge if a reasonable investigation of that charge uncovers a root
source of discrimination responsible for that and other violations
of Title VII.’” (quoting DuPont de Nemours & Co., 373 F. Supp.
at 1335)). For support, the EEOC cites to General Electric Co.,
532 F.2d at 364-66, in which the Court of Appeals for the Fourth
Circuit held that the original charge of race discrimination
supported EEOC action (including a lawsuit) to address sex
discrimination that the EEOC uncovered while investigating the
race discrimination charge.
Kronos responds that the District Court did not abuse its
discretion in limiting the subpoena to exclude information related
to adverse impact based on race. Kronos cites to EEOC v.
Southern Farm Bureau Casualty Insurance Co., 271 F.3d 209 (5th
Cir. 2001), in support of its argument. In Southern Farm, an
employee filed a charge with the EEOC alleging that Southern
Farm had discriminated against him based on race. During the
EEOC’s investigation, Southern Farm provided the EEOC with a
list of employees by name, position, and race. Based on this list,
that the information related to race is relevant to Sandy’s charge
under the Shell Oil standard, we decline to hold that the EEOC’s
request for materials concerning whether the Kronos Assessment
has an adverse racial impact is relevant to, or might shed light on,
Sandy’s charge that Kroger discriminated against her based on
disability.
18
the EEOC suspected potential sex discrimination, and issued a
subpoena requesting certain information related to possible
unlawful employment practices based on sex. Id. at 211.
The Court of Appeals for the Fifth Circuit affirmed the
district court’s refusal to enforce the EEOC subpoena for
information relating to potential sex discrimination. In affirming
the district court’s decision, the Southern Farm court noted that
when the EEOC discovered what it considered to be evidence of
sex discrimination, it could have exercised its authority under 42
U.S.C. §§ 2000e-5(b) and 2000e-6(e) to file a commissioner’s
charge alleging sex discrimination. At that point, the EEOC would
have been free to request information relevant to Southern Farm’s
employment of women. Id.
While the EEOC is not required to ignore facts it uncovers
in the course of a reasonable investigation of the charging party’s
complaint, that standard does not justify the expansion of the
investigation undertaken here. The charging party is a disabled
white female who has complained of disability discrimination. We
are unprepared to hold that a reasonable investigation of that
charge can be extended to include an investigation of race
discrimination.
We conclude that the inquiry into potential race
discrimination is not a reasonable expansion of Sandy’s charge.
Instead, the EEOC’s subpoena for materials related to race
constitutes an impermissible “fishing expedition.” See United Air
Lines, 287 F.3d at 653. The EEOC’s attempt to rely on an article
in the public domain and purported charges of race discrimination
in its database that are not a part of this record do not convince us
otherwise. We acknowledge that the EEOC’s investigatory
powers are expansive; however, the EEOC is still not permitted to
“wander[] into wholly unrelated areas.” See Cambridge Tile, 590
F.2d at 206. In this case, the EEOC’s inquiry into discrimination
based on race is wholly unrelated to Sandy’s charge and does not
19
fall within the ambit of a reasonable expansion.7
For these reasons, we will affirm the District Court’s
judgment to the extent that it declines to enforce the portion of the
EEOC’s subpoena requesting information related to potential
discrimination based on race.
IV.
Courts have “inherent equitable power” to grant orders of
confidentiality upon a showing of good cause. Pansy, 23 F.3d at
785-86. The party seeking confidentiality establishes good cause
by showing that “‘disclosure will work a clearly defined and
serious injury to the party seeking closure. The injury must be
shown with specificity.’” Id. at 786 (quoting Publicker Indus., Inc.
v. Cohen, 733 F.2d 1059, 1071 (3d Cir. 1984)). “‘Broad
allegations of harm, unsubstantiated by specific examples or
articulated reasoning,’ do not support a good cause showing.” Id.(quoting Cipollone v. Liggett Group, Inc., 785 F.2d 1108, 1121 (3d
Cir. 1986)). The burden of justifying confidentiality remains at all
times on the party seeking the order. Pearson v. Miller, 211 F.3d
57, 72 (3d Cir. 2000).
In Pansy, we held that courts deciding whether a party has
established good cause should balance public interests against
private interests. Pansy, 23 F.3d at 787. We recognized several
factors that courts may consider as part of this “good cause
balancing test”:
1) whether disclosure will violate any privacy
interests;
2) whether the information is being sought for a
7
Because we conclude that the EEOC has not reasonably
expanded its investigation to include race, we decline to address
Kronos’s argument that the EEOC lacks the authority to expand its
discrimination investigation based on one anti-discrimination
statute (the ADA) to include charges arising under a different
statute (Title VII).
20
legitimate purpose or an improper purpose;
3) whether disclosure of the information will cause
a party embarrassment;
4) whether confidentiality is being sought over
information important to public health and safety;
5) whether the sharing of information among
litigants will promote fairness and efficiency;
6) whether a party benefitting from the order of
confidentiality is a public entity or official; and
7) whether the case involves issues important to the public.
Glenmade Trust Co. v. Thompson, 56 F.3d 476, 483 (3d Cir. 1995)
(citing Pansy, 23 F.3d at 787-91). Under the good cause balancing
test, there is a strong presumption against entering an order of
confidentiality whose scope would prevent disclosure of
information that would otherwise be accessible under a relevant
freedom of information law. Pansy, 23 F.3d at 791. When a
district court fails to conduct a good cause balancing test before
issuing an order of confidentiality, that court has failed to exercise
properly its discretion. Id. at 792.
In this case, the District Court entered a wide-reaching
confidentiality order which defines “Confidential Material” as:
any documents or information in any form produced
by Kronos pursuant to [the subpoena] or any
information or documents that refer to or reflect
information obtained from the documents or refer to
or reflect information provided by Kronos pursuant
to the Subpoena, including copies, notes or
memoranda made by the EEOC during the
Commission’s investigation into the allegations
made by Vicky Sandy and any subsequent or
amended charge she may file.
21
JA 8. The order limits the use of Confidential Material solely for
the purpose of Sandy’s charge. It permits disclosure only to EEOC
employees with a “need to know” and other individuals Kronos and
the EEOC agree upon in writing. The District Court prohibited the
EEOC from entering Confidential Material into a centralized
database. The order prohibits the EEOC from disclosing the
documents Kronos produces, and the information contained
therein, to the charging party or her agents. The order also
provides that:
All Confidential Material, including copies thereof,
will be returned by EEOC to Kronos within ten (10)
business days after the investigation into [Sandy’s
charge] is concluded by EEOC. Any information or
documents that reflect or refer to Confidential
Material, including any notes or memoranda made
by EEOC shall be destroyed by EEOC within ten
(10) business days after a notice of right to sue is
issued by EEOC, and such destruction shall be so
certified to Kronos.
JA 9.
The EEOC appeals entry of the confidentiality order.8 The
EEOC argues that sufficient statutory and regulatory protection
exists to safeguard confidential material without the confidentiality
order and that the order’s definition of Confidential Material is
overbroad. In addition, the EEOC urges that the order is contrary
to the EEOC’s disclosure obligations under the Freedom of
Information Act, 5 U.S.C. §§ 551-559, and its limitations on the
8
We note that the EEOC does not challenge the portion of
the order prohibiting it from disclosing subpoenaed material to
Sandy or her agents during the investigation. EEOC Br. at 41 n.11.
Further, the EEOC has represented that it “would honor the portion
of the confidentiality order stating that the EEOC would disclose
materials covered by the subpoena to individuals outside the
Commission (including but not limited to expert witnesses) when
mutually agreed upon in writing.” Id.22
EEOC’s use of the subpoenaed material impermissibly interferes
with the EEOC’s law enforcement function.
The District Court did not articulate its reasoning for
granting the order and its rationale for exercising its broad
discretion to fashion the order by imposing the specific terms it
chose to include. See Pansy, 23 F.3d at 791 (“Courts have
discretion to fashion such orders according to the needs and
circumstances of each case.”). Without any indication that the
District Court conducted the required good cause balancing test
before entering this order, we must conclude that the entry of the
order does not reflect the proper exercise of discretion. See id. at
792; cf. EEOC v. Nat’l Children’s Ctr., Inc., 98 F.3d 1406, 1410
(D.C. Cir. 1996) (remanding when the district court’s failure to
articulate its reasoning for sealing portions of the record rendered
the court’s decision unreviewable). Accordingly, we will vacate
the order and remand to the District Court to conduct a good cause
balancing test.
On remand, the District Court should be mindful of the
statutory scheme governing disposal of government records. The
Federal Records Disposal Act (“FRDA”) prohibits destruction of
government records except according to its requirements. 44
U.S.C. § 3314 (“[R]ecords of the United States Government may
not be alienated or destroyed except under this chapter.”). The
FRDA defines “records” as “documentary materials . . . made or
received by an agency of the United States Government under
Federal law or in connection with the transaction of public business
and preserved or appropriate for preservation . . . as evidence of the
organization, function, policies, decisions, procedures, operations,
or other activities of the Government.” 44 U.S.C. § 3301. Courts
must exercise caution when issuing confidentiality orders so as not
to demand that the EEOC destroy government documents,
including notes and memoranda, in conflict with the EEOC’s duty
to obey the requirements of the FRDA.
Based on the aforementioned reasons, we will vacate the
District Court’s confidentiality order and remand to permit the
District Court to conduct a good cause balancing test.
23
V.
For the reasons stated above, we will reverse in part and
affirm in part the District Court’s judgment of June 1, 2009
narrowing the scope of the subpoena. We will vacate and remand
the District Court’s July 22, 2009 confidentiality order.
24