Associated Dry Goods Corp. v. EQUAL EMP., ETC.

• Decision Date: 18 July 1978
• Docket Number: Civ. A. No. (1) CA 75-0297-R,(2) CA 76-0510-R.
• Citation: 454 F. Supp. 387
• Parties: ASSOCIATED DRY GOODS CORPORATION, Plaintiff, v. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION et al., Defendants. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. JOSEPH HORNE COMPANY, Defendant.
• Court: U.S. District Court — Eastern District of Virginia

454 F. Supp. 387

ASSOCIATED DRY GOODS CORPORATION, Plaintiff, v. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION et al., Defendants.

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. JOSEPH HORNE COMPANY, Defendant.

Civ. A. Nos. (1) CA 75-0297-R, (2) CA 76-0510-R.

United States District Court, E. D. Virginia, Richmond Division.

July 18, 1978.

Lonnie Crawford, Equal Employment Opportunity Commission, Pittsburgh, Pa., Hill B. Wellford, Jr., Richmond, Va., for plaintiff.

Hill B. Wellford, Jr., Richmond, Va., David A. Schneider, Asst. U. S. Atty., Richmond, Va., for defendants.

MEMORANDUM

MERHIGE, District Judge.

Associated Dry Goods Corporation ("Associated"), plaintiff herein, brings this action to challenge certain practices of defendant Equal Employment Opportunity Commission ("EEOC") relating to disclosure of EEOC investigative files to charging parties. Consolidated with Associated's action is an application by the EEOC to enforce an EEOC administrative subpoena duces tecum against one of Associated's subsidiaries, the Joseph Horne Company ("Horne's"). Jurisdiction is premised upon the Administrative Procedure Act, 5 U.S.C. §§ 551 et seq.; on Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq.; and on 28 U.S.C. § 1331.

The facts, briefly stated, are as follows: From November 1971, through June 1973, several employees and former employees of Horne's filed race and sex discrimination charges against Horne's with the EEOC. The EEOC began investigating the charges by serving interrogatories on Horne's in February and April of 1974. Horne's refused to answer the interrogatories without assurances from the EEOC that the answers would not be disclosed to the charging parties, their attorneys, or others. The EEOC could not offer such assurance. Rather, the Commission explained that its policy was to disclose to charging parties both their own case files (including data submitted by the employer in response to Commission interrogatories) and "related case files" — files involving the same employer which were compiled during the investigation of similar charges filed by other individuals. The only conditions attached to such disclosures were that the charging party use the information "in connection with contemplated or pending litigation," and that he or she agree in writing not to make the information public except in the normal course of a civil action or other proceeding instituted under Title VII. The Commission admitted, however, that it had "no way of preventing charging parties from transmitting information" to others.

Lacking the assurance it sought, Horne's continued to withhold the information which the EEOC had requested in its interrogatories. On October 18, 1974, the Commission issued a subpoena for the information. On October 23, 1974, Horne's petitioned for revocation of the subpoena, and on May 9, 1975, its petition was denied.

Horne's did not comply with the subpoena. Instead, on June 27, 1975, Associated (Horne's parent company) filed the instant action, challenging the Commission's disclosure policies and seeking declaratory and injunctive relief. The EEOC moved to dismiss the suit. On June 25, 1976, this Court denied in part and sustained in part the Commission's motion to dismiss. Associated Dry Goods Corp. v. EEOC, 419 F.Supp. 814 (E.D.Va.1976). By order of July 8, 1976, the Court instructed the parties to brief the sole remaining issue: whether § 706(b) of Title VII, as civilly invoked, prohibited the EEOC from disclosing investigative materials to charging parties.¹ That issue has now been fully briefed. Additionally, the parties have addressed the closely related issue of whether § 709(e) of Title VII prohibits the EEOC from disclosing investigative materials to charging parties. These issues are now ripe for disposition.

For the reasons which follow, judgment on the merits will be entered in favor of Associated as to the disclosure issues. At the same time, the EEOC's application for enforcement of its investigative subpoena will be granted, subject to the conditions implicit in the Court's holding on disclosure.

I.

Plaintiff specifically challenges the procedural regulations found at 29 C.F.R. §§ 1601.20² and 1610.17(d),³ and the EEOC's "special disclosure rules" contained in § 83 of the EEOC Compliance Manual.⁴ Under these rules and regulations, the EEOC may furnish materials from its investigative files to employees contemplating private Title VII litigation against employers under investigation by the Commission. It is the plaintiff's contention that this practice contravenes the statutory non-disclosure provisions found at §§ 706(b) and 709(e) of Title VII.

Section 709(e) of Title VII, 42 U.S.C. § 2000e-8(e), provides, in pertinent part:

It shall be unlawful for any officer or employee of the Commission to make public in any manner whatever any information obtained by the Commission pursuant to its investigative authority . . prior to the institution of any proceeding under this subchapter involving such information. Emphasis added.

The crucial phrase with respect to the case at bar is "make public". The EEOC argues that charging parties are not members of the "public" for purposes of § 709(e). Thus, the EEOC takes the position that § 709(e) does not bar it from disclosing to charging parties information obtained pursuant to the Commission's statutory investigative powers.

The Court rejects the EEOC's contentions in this regard. The Court's reasoning is aptly expressed by the United States Court of Appeals for the District of Columbia Circuit in the case of Sears, Roebuck and Co. v. EEOC, 189 U.S.App.D.C. ___, 581 F.2d 941, 16 E.P.D. ¶ 8348 (1978). Facing nearly the identical issue posed in the instant case, the District of Columbia Circuit stated:

An examination of the overall statutory scheme persuades us that Title VII was never meant to permit dissemination of EEOC investigative data to anyone not within the government.

. . . It would do violence to the scheme of negotiation and settlement if the Commission were permitted to encourage numerous private litigants by distributing information from EEOC files before the administrative procedures of Title VII had run their course.

16 E.P.D. ¶ 8348, at 5835.

The District of Columbia Circuit also noted in Sears that the EEOC had no effective means of controlling the manner in which charging parties used information which they obtained from the Commission's files:

Although the Commission extracted promises from the requesting parties with respect to some of the information it proposed to distribute in the instant case, such promises obviously are not enforceable against those receiving information. . . . As there is nothing to prevent charging parties from redistributing what they receive from the EEOC to whomever they please, distribution of investigative file data to charging parties would be tantamount to distribution to the public at large.

16 E.P.D. § 8348 at 5836.

Finally, the Sears opinion distinguished H. Kessler & Co. v. EEOC, 472 F.2d 1147 (5th Cir.) (en banc), cert. denied., 412 U.S. 939, 93 S.Ct. 2774, 37 L.Ed.2d 398 (1973), formerly the leading case interpreting § 709(e). That case held that an individual charging party could be given access to his own EEOC investigative file. The District of Columbia Circuit expressly declined to extend the Kessler holding to a situation involving numerous requests by parties bringing related charges, as opposed to the single request by the initial charging party involved in Kessler. Moreover, the Sears opinion implied that Kessler itself might no longer be viable in light of the 1972 amendments to Title VII, none of which were considered in that case. For the same reasons, the Court is of the view that Kessler is inapplicable to the case at bar.

In summary, the Court of Appeals for the District of Columbia Circuit held in Sears that § 709(e) of Title VII prohibited the EEOC from disclosing its investigative files to anyone outside the government, including charging parties.

The District of Columbia Circuit reached a parallel conclusion in reference to § 706(b) of Title VII, 42 U.S.C. § 2000e-5(b). That section provides, in relevant part:

Nothing said or done during and as a part of . . . informal endeavors at conciliation, may be made public by the Commission, its officers or employees, or used as evidence in a subsequent proceeding without the written consent of the persons concerned. Emphasis added.

Observing that § 706(b) uses essentially the same "make public" language found in § 709(e), and finding no reason to construe the two provisions differently, the Court of Appeals held that § 706(b) prohibited the EEOC from disclosing to parties outside the government any information gleaned from settlement or conciliation negotiations.

This Court finds the reasoning of the District of Columbia Circuit in its Sears decision to be persuasive. Moreover, by facilitating and encouraging the conciliation process, the Sears interpretation of §§ 706(b) and 709(e) is in complete harmony with the Fourth Judicial Circuit's recognition that the EEOC's statutory duty to attempt conciliation "is among its most essential functions." Patterson v. American Tobacco Co., 535 F.2d 257, 272 (4th Cir. 1976). Consequently, this Court adopts the view stated in Sears and will enter judgment on the merits in favor of the plaintiff regarding the validity of the EEOC rules and regulations at issue here.⁵

II.

It remains to be considered whether the EEOC's application for enforcement of its subpoena duces tecum should be granted. While the plaintiff has advanced extensive arguments against enforcement, the Court is of the view that the application should be granted.

The EEOC applied for the enforcement of its administrative subpoena duces tecum against Horne's on May 24, 1976, in the United States District Court in Pittsburgh, Pennsylvania. On September 28, 1976, that court...