Court Opinion

ID: 3149766
Source: CourtListenerOpinion
Date Created: 2015-10-27 17:01:05.790865+00
Date Added: 2024-06-11T09:33:14.060561
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

U.S. EQUAL EMPLOYMENT                     No. 13-15126
OPPORTUNITY COMMISSION,
               Plaintiff-Appellant,         D.C. No.
                                         2:12-cv-02469-
                 v.                           GMS

MCLANE COMPANY, INC.,
            Defendant-Appellee.             OPINION

      Appeal from the United States District Court
               for the District of Arizona
       G. Murray Snow, District Judge, Presiding

                Argued and Submitted
      March 12, 2015—San Francisco, California

                Filed October 27, 2015

    Before: J. Clifford Wallace, Milan D. Smith, Jr.,
         and Paul J. Watford. Circuit Judges.

              Opinion by Judge Watford;
            Concurrence by Judge M. Smith
2                     EEOC V. MCLANE CO.

                           SUMMARY*

                        Subpoena / EEOC

    The panel reversed in part and vacated in part the district
court’s order that granted in part and denied in part the Equal
Employment Opportunity Commission’s request for
enforcement of an administrative subpoena issued as part of
an EEOC investigation of a sex discrimination claim.

    The panel held that the district court erred in refusing to
compel production of pedigree information (name, social
security number, last known address, and telephone number)
of other applicants and employees who took a qualifying test
because the information was relevant to the EEOC’s
investigation. The panel vacated the district court’s order
denying enforcement of the subpoena’s request for the
reasons for termination of other employees, and remanded so
that the district court could rule on whether requiring the
employer to produce that information would in fact be unduly
burdensome.

    Judge M. Smith concurred in the majority opinion but
wrote separately to discuss the employer’s suggestion that it
was justified in withholding its employees’ Social Security
numbers to protect their privacy interests. Judge M. Smith
noted that the EEOC’s insistence on obtaining Social Security
numbers that could be used to steal an employee’s identity
will endanger the very employees it sought to protect.

  *
    This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
                   EEOC V. MCLANE CO.                         3

                         COUNSEL

James Tucker (argued), Attorney, P. David Lopez, General
Counsel, Lorraine C. Davis, Acting Associate General
Counsel, Daniel T. Vail, Acting Assistant General Counsel,
U.S. Equal Employment Opportunity Commission,
Washington, D.C., for Plaintiff-Appellant.

Ronald E. Manthey (argued) and Ellen L. Perlioni, Morgan,
Lewis & Bockius LLP, Dallas, Texas; Joshua R. Woodard
and Ashley T. Kasarjian, Snell & Wilmer L.L.P., Phoenix,
Arizona, for Defendant-Appellee.

                          OPINION

WATFORD, Circuit Judge:

     This is a subpoena enforcement action brought by the
Equal Employment Opportunity Commission (EEOC) against
McLane Company. The EEOC is investigating a charge of
sex discrimination filed against McLane by one of its former
employees, who was fired when she failed to pass a strength
test after returning from maternity leave. The subpoena seeks
information about the company’s use of the test and the
individuals who have been required to take it. The main issue
before us is whether the district court correctly held that some
of the information sought by the subpoena is not relevant to
the EEOC’s investigation. The court refused to enforce that
portion of the subpoena, and the EEOC has appealed.
4                   EEOC V. MCLANE CO.

                                I

    In January 2008, Damiana Ochoa, a former employee of
a McLane subsidiary in Arizona, filed a charge with the
EEOC alleging sex discrimination (based on pregnancy) in
violation of Title VII of the Civil Rights Act of 1964. Ochoa
alleged that when she tried to return to work after taking
maternity leave, McLane informed her that she could not
resume her position as a cigarette selector—a position she
had held for eight years—unless she passed a physical
capability strength test. Ochoa alleged that the company
requires all new employees and all employees returning to
work following a medical leave to take the test. Ochoa took
the test three times but failed to receive a passing score on
each occasion. Based on her failure to pass the test, McLane
terminated her employment.

    The EEOC notified McLane of Ochoa’s charge and began
an investigation. During the early stages of the investigation,
McLane disclosed that it uses the strength test at its facilities
nationwide for all positions that are classified as physically
demanding. All new applicants for such positions and
employees returning to such positions from a leave longer
than 30 days are required to pass the test as a condition of
employment.

    McLane voluntarily provided general information about
the test and the individuals who had been required to take it
at the Arizona subsidiary where Ochoa worked. That
information included each test taker’s gender, job class,
reason for taking the test, and score received (pass or fail).
However, McLane refused to disclose what the parties have
referred to as “pedigree information” for each test taker
(name, social security number, last known address, and
                    EEOC V. MCLANE CO.                         5

telephone number). Instead of identifying the test takers by
name and social security number, McLane identified them
only by an “employee ID number” created solely for purposes
of responding to the EEOC’s investigation. McLane also
refused to disclose, for those employees who had taken the
test and were later terminated, when and why their
employment was terminated.

    The EEOC eventually expanded the scope of its
investigation to include all McLane facilities nationwide
within the grocery division (the division in which Ochoa
worked), since all of those facilities used the same test for the
same purposes. The EEOC sought the same information
described above for each of the test takers at McLane’s
facilities nationwide. McLane ultimately provided most of
that information, but it again refused to provide either
pedigree information or, for those test takers who were
ultimately terminated, the reasons for termination.

    The EEOC then issued an administrative subpoena
demanding production of the withheld information. McLane
petitioned the EEOC to revoke or modify the subpoena, but
the agency denied the petition. Upon McLane’s continued
refusal to provide the disputed information, the EEOC filed
this subpoena enforcement action.

    The district court granted in part and denied in part the
EEOC’s request for enforcement. The court required
McLane to disclose the following information: the gender of
each test taker, the date the test was given, the score the test
taker received, the position for which the test was taken, the
passing score for the position in question, and any adverse
employment action imposed within 90 days of an employee’s
taking the test. (McLane had already provided some, but not
6                      EEOC V. MCLANE CO.

all, of that information.) The court refused to enforce the
subpoena to the extent it required McLane to divulge two
categories of information: (1) the pedigree information for
each test taker; and (2) for those employees who were
terminated after taking the test, the reasons for termination.
With respect to the pedigree information, the court concluded
that the EEOC did not need such information to determine
whether McLane had used the test to discriminate on the basis
of sex. Thus, in the court’s view, the information was not
relevant at this stage of the EEOC’s investigation. With
respect to the reasons for termination, the court did not
explain why it refused to require production of that
information. However, in a parallel subpoena enforcement
action the EEOC brought against McLane under the Age
Discrimination in Employment Act (ADEA), the court had
earlier ruled that providing information about whether an
adverse employment action was directly triggered by taking
the test (as the EEOC had requested) would be unduly
burdensome. EEOC v. McLane Co., 2012 WL 1132758, at *6
(D. Ariz. Apr. 4, 2012).1

                                    II

    Title VII grants the EEOC broad power, within specified
limits, to investigate potential violations of the statute. The
agency’s investigative authority is triggered by the filing of
a charge alleging that an employer has engaged in

    1
   The EEOC has dismissed the appeal it filed in the ADEA action. And
although Ochoa’s charge alleged discrimination on the basis of disability
under the Americans with Disabilities Act (in addition to alleging
discrimination on the basis of sex), the EEOC is no longer attempting to
enforce the subpoena based on the allegations of disability discrimination.
We therefore focus our analysis on the Title VII charge alone.
                   EEOC V. MCLANE CO.                        7

employment practices made unlawful by the statute. A
charge may be filed either by an EEOC Commissioner or, as
in this case, by “a person claiming to be aggrieved.”
42 U.S.C. § 2000e–5(b). The charge is not a formal pleading
governed by the legal standards applicable to the filing of a
complaint. EEOC v. Shell Oil Co., 466 U.S. 54, 68 (1984).
Its purpose is simply to “place the EEOC on notice that
someone (either a party claiming to be aggrieved or a
Commissioner) believes that an employer has violated the
title.” Id. A charge is valid if it contains “[a] clear and
concise statement of the facts, including pertinent dates,
constituting the alleged unlawful employment practices,”
although even a written statement “sufficiently precise to
identify the parties, and to describe generally the action or
practices complained of” will do. 29 C.F.R. § 1601.12(a)(3),
(b).

    Once the EEOC receives a charge, the statute states that
the agency “shall make an investigation thereof.” 42 U.S.C.
§ 2000e–5(b). The EEOC’s investigative authority is limited,
at least initially, to the unlawful employment practices
specified in the charge. Shell Oil, 466 U.S. at 64. (If new
facts come to light during an investigation, the EEOC may
expand its scope beyond the practices specified in the original
charge. See EEOC v. General Elec. Co., 532 F.2d 359,
364–66 (9th Cir. 1976).) Unlike some federal agencies,
which have “plenary authority to demand to see records
relevant to matters within their jurisdiction,” the EEOC’s
authority under Title VII is more constrained. Shell Oil,
466 U.S. at 64. The agency has the right to obtain evidence
only if it relates to employment practices made unlawful
8                      EEOC V. MCLANE CO.

under Title VII and “is relevant to the charge under
investigation.” 42 U.S.C. § 2000e–8(a).2

    When an employer refuses to comply with the EEOC’s
requests for information, as occurred here, the EEOC may
issue an administrative subpoena and bring an enforcement
action to compel compliance. 42 U.S.C. § 2000e–9
(incorporating the provisions of 29 U.S.C. § 161). The scope
of judicial review in such actions is narrow. A court
determines only “(1) whether Congress has granted the
authority to investigate; (2) whether procedural requirements
have been followed; and (3) whether the evidence is relevant
and material to the investigation.” EEOC v. Children’s Hosp.
Med. Ctr., 719 F.2d 1426, 1428 (9th Cir. 1983) (en banc),
overruled on other grounds as recognized in Prudential Ins.
Co. v. Lai, 42 F.3d 1299, 1303 (9th Cir. 1994). If those
conditions are met, the court must enforce the subpoena
unless the objecting party shows that the subpoena is
overbroad or that compliance would be unduly burdensome.
Id. We review the district court’s resolution of these issues
de novo. EEOC v. Federal Express Corp., 558 F.3d 842, 846
(9th Cir. 2009).3

    2
    Section 2000e–8(a) provides: “In connection with any investigation
of a charge filed under section 2000e–5 of this title, the Commission or its
designated representative shall at all reasonable times have access to, for
the purposes of examination, and the right to copy any evidence of any
person being investigated or proceeded against that relates to unlawful
employment practices covered by this subchapter and is relevant to the
charge under investigation.”
    3
    Why we review questions of relevance and undue burden de novo is
unclear. In a similar but related context—issuance of a protective order
restricting the scope of an administrative subpoena—we have said that
review is for abuse of discretion. See McLaughlin v. Service Employees
Union, AFL-CIO, Local 280, 880 F.2d 170, 174 (9th Cir. 1989). Other
                      EEOC V. MCLANE CO.                                9

                                   III

    With that background in mind, we turn to the specifics of
the dispute before us. McLane does not contest that the
EEOC has followed the proper procedural requirements. Nor
can it seriously contest that the subpoena relates to a matter
within the EEOC’s investigative authority, since Ochoa’s
charge alleges discrimination in employment on the basis of
sex. See 42 U.S.C. § 2000e–2(a)(1). (Title VII defines
discrimination on the basis of pregnancy as a form of sex
discrimination. 42 U.S.C. § 2000e(k).) With respect to the
test-taker pedigree information, McLane contests whether
that information is “relevant to the charge under
investigation.” 42 U.S.C. § 2000e–8(a). With respect to the
reasons for termination, McLane contends that producing
such information would be unduly burdensome.

                                   A

    We begin with the district court’s refusal to compel
production of the pedigree information, which the court held
is not relevant at this stage of the EEOC’s investigation.

   The relevancy limitation imposed by § 2000e–8(a) “is not
especially constraining.” Shell Oil, 466 U.S. at 68. The
question is not whether the evidence sought would tend to

circuits also appear to review issues related to enforcement of
administrative subpoenas for abuse of discretion. See, e.g., EEOC v.
Kronos Inc., 620 F.3d 287, 295 (3d Cir. 2010); EEOC v. United Air Lines,
Inc., 287 F.3d 643, 649, 654 n.6 (7th Cir. 2002). Nonetheless, the de novo
standard of review is now firmly entrenched in our case law. See, e.g.,
United States v. Golden Valley Electric Ass’n, 689 F.3d 1108, 1111 (9th
Cir. 2012); NLRB v. North Bay Plumbing, Inc., 102 F.3d 1005, 1007 (9th
Cir. 1996).
10                 EEOC V. MCLANE CO.

prove a charge of unlawful discrimination.            At the
investigative stage, the EEOC is trying to determine only
whether “reasonable cause” exists “to believe that the charge
is true.” 42 U.S.C. § 2000e–5(b). So the relevance standard
in this context sweeps more broadly than it would at trial. It
encompasses “virtually any material that might cast light on
the allegations against the employer.” Shell Oil, 466 U.S. at
68–69.

    Under this standard, we think the pedigree information is
relevant to the EEOC’s investigation. Ochoa’s charge alleges
that McLane’s use of the strength test discriminates on the
basis of sex. To decide whether there is any truth to that
allegation, the EEOC can of course speak to Ochoa about her
experience with taking the test. But the EEOC also wants to
contact other McLane employees and applicants for
employment who have taken the test to learn more about their
experiences. Speaking with those individuals might cast light
on the allegations against McLane—whether positively or
negatively. To take but one example, the EEOC might learn
through such conversations that other female employees have
been subjected to adverse employment actions after failing
the test when similarly situated male employees have not. Or
it might learn the opposite. Either way, the EEOC will be
better able to assess whether use of the test has resulted in a
“pattern or practice” of disparate treatment. To pursue that
path, however, the EEOC first needs to learn the test takers’
identities and contact information, which is enough to render
the pedigree information relevant to the EEOC’s
investigation. The district court erred by refusing to enforce
the subpoena’s request for production of that information.

   McLane raises a series of arguments resisting this
conclusion, but all of them lack merit. First, McLane asserts
                   EEOC V. MCLANE CO.                        11

that Ochoa’s charge alleges only a disparate impact claim,
not a pattern-or-practice disparate treatment claim. That
assertion is wrong. Ochoa’s charge does not allege
discrimination based on any particular legal theory, and it did
not need to do so. See EEOC v. Kronos Inc., 620 F.3d 287,
300 (3d Cir. 2010). A charge is valid if it is sufficiently
precise “to describe generally the action or practices
complained of.” 29 C.F.R. § 1601.12(b). Ochoa’s charge did
that by describing McLane’s practice of precluding
employees who have taken maternity leave from returning to
work unless they pass a strength test, which she could not do
despite three attempts. Ochoa’s charge is framed in terms
general enough to support either a disparate impact or a
disparate treatment theory. See Kronos, 620 F.3d at 300. As
the Third Circuit put it in Kronos, “it is up to the EEOC, not
[Ochoa], to investigate whether and under what legal theories
discrimination might have occurred.” Id.

    Second, McLane contends that, given all of the other
information it has produced, the EEOC cannot show that
production of the pedigree information is “necessary” to
complete its investigation. But the governing standard is not
“necessity”; it is relevance. If the EEOC establishes that the
evidence it seeks is relevant to the charge under investigation,
we have no warrant to decide whether the EEOC could
conduct the investigation just as well without it. The EEOC
does not have to show a “particularized necessity of access,
beyond a showing of mere relevance,” to obtain evidence.
University of Pennsylvania v. EEOC, 493 U.S. 182, 188
(1990). Congress has not left it to employers accused of
discrimination to decide what evidence may be necessary for
the EEOC to complete its investigation. Id. at 193.
12                 EEOC V. MCLANE CO.

     For similar reasons, the district court erred when it held
that pedigree information is irrelevant “at this stage” of the
investigation. The court reasoned that the evidence McLane
has already produced “will enable the E.E.O.C. to determine
whether the [strength test] systematically discriminates on the
basis of gender.” The court suggested that if the EEOC’s
analysis of that evidence reveals systemic discrimination, the
pedigree information might become relevant and obtaining
that information might then be “necessary.” The EEOC
argues that the district court improperly required it to
substantiate the allegation of systemic discrimination before
it could obtain access to relevant evidence. We doubt that is
what the district court meant, as the Supreme Court has made
plain that courts may not condition enforcement of EEOC
administrative subpoenas on a threshold evidentiary showing
that the allegations under investigation have merit. Shell Oil,
466 U.S. at 71–72 & n.26. Rather, the district court appeared
to conclude that the EEOC did not really need pedigree
information to make a preliminary determination as to
whether use of the strength test has resulted in systemic
discrimination. As we have explained, however, that line of
reasoning is invalid: The EEOC’s need for the evidence—or
lack thereof—simply does not factor into the relevance
determination. Because the pedigree information meets the
broad standard for relevance, the EEOC is entitled to obtain
that information now. (McLane does not contend that
production of the information poses any kind of undue
burden.)

    Finally, McLane contends that the pedigree information
is not relevant because Ochoa’s charge alleges only a
“neutrally applied” strength test, which by definition cannot
give rise to disparate treatment, systemic or otherwise.
McLane’s argument misconstrues the charge. Ochoa alleges
                    EEOC V. MCLANE CO.                         13

that McLane requires all employees returning from medical
leave to take the strength test before they can return to work,
but she does not allege that the test is neutrally applied. (She
alleges just the opposite—that the test was discriminatorily
applied as to her.) Even though McLane requires everyone to
take the test, the test could still be applied in a discriminatory
manner—if, for example, the company were to routinely
excuse the failure of male employees to pass the test but grant
no such exemptions to similarly situated female employees.
The very purpose of the EEOC’s investigation is to determine
whether the test is being neutrally applied; the EEOC does
not have to take McLane’s word for it on that score. See
Merritt v. Old Dominion Freight Line, Inc., 601 F.3d 289,
296–99 (4th Cir. 2010).

    One additional note is in order regarding the EEOC’s
request for social security numbers. The EEOC seeks that
information so that it can accurately identify individual test
takers in the data sets it has received from McLane. As
explained above, other employees’ experiences might cast
light on the allegations against McLane, whether by
substantiating them or showing them to be unfounded.
Information that helps the EEOC determine whom to contact
to learn more about McLane’s use of the test is therefore
relevant to the investigation. McLane contends that the
employee ID numbers should suffice for these purposes, but
that is not McLane’s call to make. Furthermore, McLane
does not assert any undue burden associated with producing
this information, nor could it, for the original data sets
contain employee social security numbers. If anything,
McLane has imposed an extra burden on itself by removing
that information from the data sets before producing them to
the EEOC.
14                 EEOC V. MCLANE CO.

     McLane suggests in a footnote that it is simply attempting
to protect its employees’ privacy interests by withholding
their social security numbers, but the Supreme Court has
already rejected an analogous argument. See University of
Pennsylvania, 493 U.S. at 192–93. Congress has struck the
balance between granting the EEOC access to relevant
evidence and protecting confidentiality interests by imposing
strict limitations on the public disclosure of information
produced during the course of an EEOC investigation. Id.;
see 42 U.S.C. § 2000e–8(e). McLane’s dissatisfaction with
that balance does not entitle it to withhold information
relevant to a charge of discrimination.

                              B

    That leaves the second category of information in dispute:
the reasons for termination. The district court provided no
explanation for refusing to require production of this
information.      It is clearly relevant to the EEOC’s
investigation; McLane does not argue otherwise. McLane
nonetheless attempts to defend the district court’s ruling on
the ground that producing this information would pose an
undue burden. McLane prevailed on this argument in the
parallel subpoena enforcement action in the ADEA case, but
the EEOC’s request there was more onerous than the one at
issue here. In the ADEA action, the EEOC sought
information for employees whose dismissal was triggered by
failure to pass the test, but McLane represented that its human
resources database did not capture such “triggering”
information and that it was not otherwise readily available.
McLane Co., 2012 WL 1132758, at *6. Here, the EEOC is
not seeking such “triggering” information; it requests instead
McLane’s reasons for terminating employees who had
previously taken the test, regardless of any linkage between
                   EEOC V. MCLANE CO.                       15

the two. Because the issue raised in this action is not the
same as the issue raised in the ADEA action, the EEOC is not
precluded from litigating the undue burden issue here. See
Hydranautics v. FilmTec Corp., 204 F.3d 880, 885 (9th Cir.
2000).

   We do not think it would be prudent for us to address the
undue burden issue in the first instance. We therefore vacate
the district court’s order denying enforcement of the
subpoena’s request for the reasons for termination, and
remand so that the district court can rule on whether requiring
McLane to produce that information would in fact be unduly
burdensome.

  REVERSED in part, VACATED in part, and
REMANDED.

M. SMITH, Circuit Judge, concurring:

    I concur in the majority opinion. I write separately to
discuss McLane’s suggestion that it was justified in
withholding its employees’ Social Security Numbers to
protect their privacy interests. The majority opinion rejects
that argument, following University of Pennsylvania v.
EEOC, 493 U.S. 182 (1990). It bears noting, however, that
University of Pennsylvania predates the rash of “data breach”
incidents that plague a world interconnected by computers.

   Of particular relevance is the United States government’s
dismal performance in protecting even its own employees’
sensitive data. See, e.g., Office of Personnel Management
Cybersecurity Resource Center, Cybersecurity Incidents,
16                 EEOC V. MCLANE CO.

“What Happened,” https://www.opm.gov/cybersecurity/
cybersecurity-incidents/#WhatHappened (detailing the
discovery in June, 2015 of the theft from the Office of
Personnel Management of 21.5 million Social Security
Numbers, an undisclosed number of interview records, 5.6
million fingerprints, and an undisclosed number of usernames
and passwords).

    Thus, it may be that the EEOC’s insistence here on
obtaining Social Security Numbers and other information that
could be used to steal an employee’s identity will endanger
the very employees it seeks to protect. While we, as a court,
are not in a position in this case to weigh the concerns present
in any particular data gathering and storage protocol, the
EEOC would be well advised to consider these issues in the
collection of data in this case.