Opinion ID: 1043390
Heading Depth: 4
Heading Rank: 1

Heading: Charge and Statement of Position

Text: In May, 2005, Sherri Scott filed a charge of discrimination against Peoplemark with the EEOC. Scott alleged that after she applied at the Peoplemark office in Grand Rapids, Michigan, Peoplemark’s interviewer told her she would not be hired because she had a felony conviction. Scott alleged that Peoplemark rejected her application because of her race and felony conviction. No. 11-2582 E.E.O.C. v. Peoplemark Page 19 From 2005 to 2007 the EEOC investigated the charge. At the outset of the investigation, Peoplemark provided the EEOC with a written statement of position conceding that it uniformly rejects felon candidates. Peoplemark confirmed that its interviewer told Scott that she could not continue in the application process because she had prior convictions. Peoplemark also informed the EEOC that it handled similarly all candidates with convictions. Peoplemark argued that its client’s refusal to hire felons for “security, safety, and other legitimate business reasons” provided the company with an appropriate business justification for rejecting felon candidates.
Throughout the EEOC’s investigation, Judd Osten (Osten), Vice President and Chief Counsel for Peoplemark, continued to assert that Peoplemark did not hire felons. Osten sent letters to the EEOC on October 31, 2005 as well as June 12 and December 1, 2006, expressly stating that Peoplemark rejects all felon applicants. In his first letter, Osten provided information specific to the Grand Rapids office. He stated that the office uses a bifurcated application process to screen out felon applicants. It did so, he stated, because Peoplemark’s client-employers refuse to employ felons. The first step in the process involves an information sheet, on which an applicant indicates only his or her name and whether he or she has an existing or pending felony charge or conviction. After the applicant fills out the information sheet, a staff member searches the public record to confirm the accuracy of the applicant’s disclosures. Applicants without a felony conviction proceed to the second step – filling out an employment application. In his second letter, Osten stated that Peoplemark, Inc., never hires felons. Osten did not state explicitly whether he was referring to all Peoplemark offices: It is the practice of Respondent not to accept applications for placement in temporary assignments of individuals with felony conviction records No. 11-2582 E.E.O.C. v. Peoplemark Page 20 because they pose too great a risk to Respondent and its clients . . . Respondent’s clients are generally aware that it does criminal background checks on all of its candidates for temporary placement, but [Respondent] has made no independent inquiry of its clients as to which, if any, would accept personnel with a felony conviction record. It has received no request from any client for the assignment of an employee with a felony conviction record. The following [four] clients have orally advised Respondent that they do not wish to have anyone with a felony conviction assigned to their accounts: Pridgeon & Clay; Zondervan; Team Industries; and Adac Automotive. In his third and final letter during the investigation, Osten stated explicitly that Peoplemark had a company-wide practice of rejecting felon candidates: Peoplemark will “stipulate that the practice of screening out applicants with felony conviction records, which is at the core of this matter, is used in all of our offices throughout the country.”2 Based on Scott’s charge, Osten’s statements, and 18,000 cover sheets3 covering one year of applicants in the Grand Rapids office, the EEOC attempted to conciliate the dispute.4 The EEOC was ultimately unable to conciliate the matter. It issued a cause letter of determination on September 10, 2007. 2 Contrary to Peoplemark’s repeated assertions that Osten made this statement only during the investigation phsase of this case, Osten asserted the same belief in his December 2009, deposition. At that time, long after this suit had been pending, he again stated, that Peoplemark maintained a “generally wellknown” practice of not hiring felons. 3 The cover sheets covered only a one year period and indicated only the name of an applicant and whether he or she disclosed a felony conviction. Based on Peoplemark’s representation that it hired no felons during this period, the EEOC assumed that, at a minimum, those applicants who had disclosed a conviction were not placed in temporary positions. From there the EEOC used statistical formulas to estimate the percentage of those individuals who were black. It used this methodology to attempt to conciliate the case. 4 Unlike other federal agencies, the EEOC does not use its investigations to gather the maximum amount of possible information to prosecute cases within the agency administrative hearing process. The EEOC aims only to gather enough information to move the parties toward an informal agreement settling charges of discrimination. See discussion infra. The EEOC alleges that during the conciliation it used a formulaic approach to propose an amount of backpay for a group of hundreds of African Americans. It calculated the proposed settlement amount based on the average wage and duration of a temporary assignment. According to the EEOC, it never claimed to have identified particular individual victims or amounts owed to them during the investigation. No. 11-2582 E.E.O.C. v. Peoplemark Page 21 B. Filing Suit and Initial Case Management Order Deadlines On September 29, 2008, the EEOC filed suit in the United States District Court for the Western District of Michigan on behalf of Scott and similarly situated African Americans. The EEOC alleged: Since at least May 2005, Defendant Employer has engaged in unlawful employment practices at all of its facilities in violation of Section 703 (a) of Title VII, 42 U.S.C. § 2000e-2(a). The Defendant's unlawful employment practices include maintaining a policy which prohibits the hiring of any person with a criminal record. Such policy has had and continues to have a disparate impact on African American applicants. The effect of the practices complained of in paragraph 7, above, has been to deprive Scott and similarly situated African Americans of equal employment opportunities and otherwise adversely affect their status as applicants for employment. On January 9, 2009, a Magistrate Judge held a case management conference. The parties set deadlines: 1) identify experts: 6/30/2009 2) produce expert reports: 8/31/2009 3) close of discovery: 12/31/2009 4) bench trial: 7/16/20105 C. Discovery Disputes and Electronic Document Production Had discovery proceeded without incident and attended delays, the original deadlines would have given the EEOC seven and a half months to gather information and produce its expert reports. Unfortunately, discovery was not uneventful. Two discovery disputes consumed approximately five of the seven and a half months the EEOC expected to have for gathering factual information and preparing its expert reports. Various discovery related 5 At the Rule 16 conference the EEOC asked the court to postpone experts until the parties completed fact discovery. The court rejected the EEOC’s request and shortened the discovery period the EEOC proposed from fifteen to twelve months. See discussion, infra. No. 11-2582 E.E.O.C. v. Peoplemark Page 22 motions, conferences, and hearings occupied the parties from February to early August, 2009. 1. Discovery Dispute #1: Peoplemark’s Demand for a Complete Class List The first discovery dispute arose because the EEOC could not provide Peoplemark with a complete class list at the outset of discovery. On February 4, 2009, Peoplemark filed a single interrogatory asking for a class list, including contact information, of all black candidates that had been denied placement because of their felony convictions. The EEOC responded that it previously provided Peoplemark with the name and contact information of Sherri Scott and it was too early to identify the rest of the class. At the time of Peoplemark’s interrogatory, the only company records the EEOC possessed were the 18,000 initial information sheets applicants had completed in the Grand Rapids office during a one year period. The sheets contained only the applicants’ names and whether they disclosed a felony conviction. The sheets did not contain the race of applicants, or any other personal identification information from which the EEOC could identify race with any reasonable degree of accuracy. The sheets also did not indicate whether Peoplemark had actually placed any of the applicants who had noted a felony conviction on the information sheets. a. Peoplemark’s Motion to Compel and the EEOC’s Response Unsatisfied with the EEOC’s answer to its interrogatory, Peoplemark filed a motion to compel. The Magistrate Judge granted the motion and sanctioned the EEOC for failing to produce a class list in response to Peoplemark's interrogatory. The judge ordered the EEOC to produce a class list by May 1, 2009. In response to the motion to compel and the Magistrate Judge’s order, the EEOC explained that it was impossible to produce a complete or accurate class list without all of Peoplemark’s application records for the relevant time period. The EEOC had no record of which applicants Peoplemark had placed, nor did it have the applicants’ No. 11-2582 E.E.O.C. v. Peoplemark Page 23 personal identification information - it could not identify accurately the race of applicants without their personal information. In a word, the Magistrate Judge had, early on in the case, placed the EEOC in a classic Catch-22 situation – from which the EEOC was never able to extricate itself.6 To resolve the discovery dispute, the EEOC provided its best guess as to a list of 286 persons with individual claims for relief. On providing the list of potential victims, the EEOC reiterated its position, stated previously in its answer to Peoplemark’s interrogatory, that this was only a potential list of some possible victims, not a class list. The EEOC stated, inter alia: Although the investigation uncovered a number of applicants with criminal records believed to be African American, the Commission has not yet determined the magnitude of the class and is in the process of gathering additional information from Defendant in discovery so that it may identify the definitive class for purposes of this litigation. On March 5, 2009, the EEOC timely served its Answer to Peoplemark's first Interrogatory: INTERROGATORY NO. 1: Identify by name and address each and every individual whom you maintain has been discriminated against by the alleged employment policy/practice which is the subject of this lawsuit. ANSWER: Plaintiff previously identified Sherri Scott, 718 Broadway, Apt. 2G, Niles, MI 49120. To the extent this interrogatory seeks the identities of individuals other than Ms. Scott, this request is pre-mature because discovery has recently commenced and is on-going. Plaintiff will develop the class of victims during discovery and supplement this response at a later time. [I]n an effort to resolve this discovery dispute, the EEOC is willing to provide you with information regarding applicants believed to be African American and who had disclosed criminal convictions on their application with Peoplemark. Based on Defendant's representation that no individual with a felony conviction was hired, 6 In my view, the Magistrate Judge’s order constituted plain error. It ordered the EEOC to identify class membership without a basis for being able to do so. The information Peoplemark had provided was barren of the basic data – race of applicants, whether they had felony records, and whether they had, despite a felony record, been placed – that the EEOC needed to comply with the interrogatory. The Magistrate Judge compounded the error and abused his discretion when he imposed sanctions. No. 11-2582 E.E.O.C. v. Peoplemark Page 24 we believe that these individuals may form part of the class in the instant case. However, please be advised that the EEOC makes no representation that this list is all inclusive as it is based upon the limited scope of information Peoplemark provided during the administrative investigation. Consequently, we anticipate that individuals may be removed from and added to the list as discovery progresses. Until substantial discovery is completed, the magnitude of the class cannot be determined. Peoplemark argues that because it produced a large volume of employment applications and other documents, during what it describes as an extensive administrative investigation, the Commission should have established the class during its investigation . . . Defendant is incorrect in its argument for several reasons. First, the administrative investigation was not as over broad as Defendant attempts to suggest. In fact, the Commission made several compromises regarding the scope of its documentary information requested by limiting the time frame to March 2004 through November 20067, and seeking only the first page of each employment application instead of all documents related to the application process. Second, there was nothing in the documents Peoplemark produced which revealed the race of applicants. Consequently, and as a required part of its investigation, the Commission took further investigative measures to identify applicants by race to the extent possible. In light of Peoplemark's no-felony-conviction policy, all applicants with felony convictions identified during the investigation as African American were treated as the putative group of victims harmed by Peoplemark's policy. Accordingly, the Commission attempted to conciliate this matter based on this putative group of victims who it believed were harmed by Defendant's policy. Regardless, now that the parties are in litigation, the Commission is required to define the class with more precision and has served Peoplemark with written discovery requests (which include requests for all previously incomplete application materials and all applicant information to the present) in an effort to obtain information needed to determine the scope and identities of the class. (Emphasis added). 7 Ultimately, emails between Peoplemark and the EEOC show that the EEOC only received one year of information sheets. No. 11-2582 E.E.O.C. v. Peoplemark Page 25