Equal Emp't Opportunity Comm'n v. Bass Pro Outdoor World, L.L.C.

• Decision Date: 17 June 2016
• Docket Number: No. 15–20078,15–20078
• Parties: Equal Employment Opportunity Commission, Plaintiff–Appellee v. Bass Pro Outdoor World, L.L.C.; Tracker Marine Retail, L.L.C., Defendants–Appellants
• Court: U.S. Court of Appeals — Fifth Circuit

826 F.3d 791

Equal Employment Opportunity Commission, Plaintiff–Appellee

v.Bass Pro Outdoor World, L.L.C.; Tracker Marine Retail, L.L.C., Defendants–Appellants

No. 15–20078

United States Court of Appeals, Fifth Circuit.

June 17, 2016

James Mark Tucker, U.S. Equal Employment Opportunity Commission, Office of General Counsel/Appellate Services, Washington, DC, for Plaintiff–Appellee.

Michael Wayne Johnston, Attorney, Samuel M. Matchett, Esq., Jona Jene McCormick, Rebecca Cole Moore, Atlanta, GA, James Patrick Sullivan, Austin, TX, King & Spalding, L.L.P., for Defendant–Appellant.

Rae T. Vann, General Counsel, Norris, Tysse, Lampley & Lakis, L.L.P., Washington, DC, for Amicus Curiae Equal Employment Advisory Council.

Eric S. Dreiband, Jones Day, Washington, DC, for Amicus Curiae Retail Litigation Center, Incorporated and Chamber of Commerce of the United States of America.

Before HIGGINBOTHAM, SOUTHWICK, and HIGGINSON, Circuit Judges.

PATRICK E. HIGGINBOTHAM

, Circuit Judge:

The Equal Employment Opportunity Commission sued Bass Pro under Sections 706 and 707 of Title VII of the Civil Rights Act for damages and equitable relief, claiming that it engaged in a practice of racially discriminatory hiring.¹ Bass Pro moved for summary judgment, arguing that claims alleging a “pattern or practice” of discrimination can be brought only for equitable relief and only under Section 707 of the Civil Rights Act, adding that the EEOC did not satisfy administrative prerequisites to suit. The district court disagreed, allowing the litigation to proceed. Bass Pro filed this interlocutory appeal. We affirm.

I.

The EEOC is nestled within a statutory framework fundamental to this case. We begin and end with the statutory language erecting this structure. Congress enacted Title VII of the Civil Rights Act in 1964 to prohibit employers from intentionally “fail[ing] or refus[ing] to hire ... any individual ... because of ... race, color, religion, sex, or national origin[.]”² Section 705(a) of the Act “created a Commission to be known as the Equal Employment Opportunity Commission,” governed by bipartisan Commissioners “appointed by the President by and with the advice and consent of the Senate.”³ The EEOC's original powers of enforcement in Section 706 did not include the power to sue; it could “make an investigation of” charges of discrimination filed by individuals and use informal methods of “conference, conciliation, and persuasion” to bring employers into compliance with Title VII.⁴ If these efforts failed, the Act authorized private suits, not by the EEOC, but “by the person claiming to be aggrieved or ... by any person whom the charge alleges was aggrieved by the alleged unlawful employment practice.”⁵

At the same time, in a separate provision, Section 707, Congress authorized the Attorney General to file suit upon “reasonable cause to believe that any person or group of persons is engaged in a pattern or practice of resistance to the full enjoyment of any of the rights secured by [Title VII].”⁶ In enacting Section 707, Congress intended to “provide the government with a swift and effective weapon to vindicate the broad public interest in eliminating unlawful practices, at a level which may or may not address the grievances of particular individuals.”⁷ To expedite these suits, Congress did not provide private individuals with the “unconditional” right to intervene in suits brought pursuant to Section 707.⁸ Between 1964 and 1972, the Attorney General filed “numerous” pattern or practice suits pursuant to this authority.⁹

Over those eight years, “Congress became convinced ... that the ‘failure to grant the EEOC meaningful enforcement powers [had proved] to be a major flaw in the operation of Title VII.’ ”¹⁰ In 1972, Congress gave the EEOC the power to bring two kinds of suits against private employers alleged to have violated Title VII.¹¹ First, “[i]f ... the Commission [is] unable to secure from the respondent a conciliation agreement acceptable to the Commission [under Section 706] the Commission may bring a civil action against the respondent.”¹² An aggrieved individual cannot bring his own claim after the EEOC files one, but retains the right to intervene.¹³ Second, “[e]ffective two years after the date of enactment,” Congress transferred the Attorney General's power to bring pattern or practice suits under Section 707 to the EEOC.¹⁴

In 1991, Congress further amended Title VII to allow “the complaining party under Section 706 ...[to] recover compensatory and punitive damages.”¹⁵ Congress defined “[t]he term ‘complaining party’ ” as “the Equal Employment Opportunity Commission, the Attorney General, or a person who may bring an action or proceeding under title VII ....”¹⁶ The 1991 Amendments were intended “to strengthen existing protections and remedies available under federal civil rights laws to provide more effective deterrence and adequate compensation for victims of discrimination.”¹⁷ Congress recognized that 42 U.S.C. § 1981

had long provided these remedies to victims of intentional racial discrimination, but that Title VII did not provide them.¹⁸ Permitting compensatory and punitive damages under Title VII would close this “serious gap.”¹⁹ In cases where the “complaining party” sought such damages, Congress provided that “any party may demand a trial by jury”²⁰ in order “[t]o protect the rights of all persons under the Seventh Amendment.”²¹

Congress limited these expanded remedies to cases of intentional discrimination.²² In other words, proof that an employment practice had a “disparate impact” is not enough; plaintiffs seeking compensatory or punitive damages, including the EEOC, must prove that the employers intended to discriminate by engaging in a certain practice or act.²³ Further, punitive damages are not available unless the plaintiff can “demonstrate [ ] that the [employer] engaged in a discriminatory practice ... with malice or with reckless indifference to the federally protected rights of an aggrieved individual.”²⁴ In short, Congress explicitly authorized the EEOC to sue, and upon proof of intentional discrimination, to recover compensatory and sometimes punitive damages.

II.

Title VII suits are often tried to courts under the Teamsters

framework.²⁵

In International Brotherhood of Teamsters v. United States

, the Supreme Court determined that when “a class ... allege[s] a broad-based policy of employment discrimination,” the class may pursue its pattern or practice claims in a bifurcated proceeding.²⁶ In its first stage, plaintiffs must establish “that unlawful discrimination has been a regular procedure ... followed by an employer.”²⁷ “[S]ingle, insignificant, isolated acts of discrimination” are not enough to prove a pattern or practice; nor are “sporadic incident[s].”²⁸ Instead, plaintiffs must show that the “denial of rights” was “repeated, routine, or of a generalized nature,”²⁹ and that “discrimination was the company's standard operating procedure.”³⁰

If the plaintiff meets its initial burden of proving a pattern or practice, a subsequent remedial phase determines “the scope of individual relief.”³¹ During these proceedings, it is assumed “that any particular employment decision [made while] the discriminatory policy was in force[ ] was made in pursuit of that policy.”³² “The [plaintiff] need only show that [he] ... unsuccessfully applied for a job” to prove a prima facie case, and the burden then shifts to “the employer to demonstrate that the ... applicant was denied ... for lawful reasons.”³³

Although the Teamsters

pattern or practice method of proof is often used in class actions, the EEOC is not required to adhere to Rule 23 when bringing “an enforcement action ... in its own name.”³⁴ In General Telephone, the Supreme Court observed that the prerequisites to class certification under Rule 23—“numerosity, commonality, typicality, and adequacy of representation”³⁵ —would inhibit the EEOC's ability to “proceed in a unified action” bringing all available claims.³⁶ Congress intended to endow the EEOC with broad enforcement authority outside the confines of Rule 23 because “[w]hen the EEOC acts, albeit at the behest of and for the benefit of specific individuals, it acts also to vindicate the public interest in preventing employment discrimination.”³⁷

III.

This case began in February 2007, when the EEOC issued a Commissioner's Charge stating that there was “reason to think” Bass Pro “ha[d] since at least November 2005[ ] discriminated against African American applicants and employees on the basis of their race at ... retail stores and facilities nationwide.” In an amended charge, the EEOC expanded its allegations to include Hispanic applicants and employees, alleging that Bass Pro “fail[ed] to recruit and/or hire” racial minorities “for all positions in its retail stores.”³⁸ The EEOC's investigation commenced shortly thereafter.

In April 2010, the EEOC issued a Letter of Determination providing that it had “good cause” to believe that the allegations in the amended charge were true and began the conciliation process. During conciliation, the EEOC told Bass Pro that it had identified an estimated 100 individuals who were victims of discriminatory hiring, but it did not provide specific names. The parties exchanged several letters and met in person once, but made little headway. The EEOC finally declared conciliation unsuccessful in April 2011.

In September 2011, the EEOC filed this lawsuit under 42 U.S.C. § 2000e–5

(“Section 706”) and § 2000e–6 (“Section 707”), alleging a pattern or practice of discriminatory hiring against African American and Hispanic applicants. The EEOC intended to proceed under the Teamsters framework, and it did not identify aggrieved individuals. Bass Pro moved to dismiss, arguing, inter alia , that the EEOC may not bring a pattern or practice claim under Section 706, and that the EEOC may not use the Teamsters bifurcated framework to prove a Section 706 claim. The district court agreed...