E.E.O.C. v. Astra U.S.A., Inc.

• Decision Date: 01 August 1996
• Docket Number: No. 96-1751,96-1751
• Citation: 94 F.3d 738
• Parties: 71 Fair Empl.Prac.Cas. (BNA) 1267, 68 Empl. Prac. Dec. P 44,220, 65 USLW 2182 EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, Appellee, v. ASTRA USA, INC., Defendant, Appellant. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 738

94 F.3d 738

71 Fair Empl.Prac.Cas. (BNA) 1267,

68 Empl. Prac. Dec. P 44,220, 65 USLW 2182

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, Appellee, v. ASTRA USA, INC., Defendant, Appellant.

No. 96-1751.

United States Court of Appeals, First Circuit.

Heard Aug. 1, 1996.

Decided Sept. 6, 1996.

Richard L. Alfred, Boston, MA, with whom John A.D. Gilmore, Joshua M. Davis, and Hill & Barlow were on brief, for appellant.

Arthur G. Telegen, William B. Koffel, Foley, Hoag & Elliot LLP, John H. Mason, Robert B. Gordon, Ropes & Gray, John F. Welsh, Testa, Hurwitz & Thibeault LLP, Wilfred J. Benoit, and Goodwin, Procter & Hoar LLP, Boston, MA, on brief for Boston Area Management Attorneys Group, amicus curiae.

Paul D. Ramshaw, with whom C. Gregory Stewart, General Counsel, Gwendolyn Young Reams, Associate General Counsel, Vincent J. Blackwood, Assistant General Counsel, and Gail S. Coleman, Washington, DC, were on brief, for appellee.

Michael Roitman, Shapiro Grace Haber & Urmy, Boston, MA, Richard T. Seymour, Teresa A. Ferrante, Helen Norton, Washington, DC, and Ozell Hudson, Jr., Boston, MA, on brief for Lawyers Committee for Civil Rights Under Law, Women's Legal Defense Fund, Massachusetts Black Lawyers Association, and Lawyers Committee for Civil Rights Under Law of the Boston Bar Association, amici curiae.

Before SELYA and CYR, Circuit Judges, and TAURO, ^* District Judge.

SELYA, Circuit Judge.

In this case of first impression, defendant-appellant Astra USA, Inc. ("Astra" or "the company") challenges a preliminary injunction restraining it from entering into or enforcing settlement agreements containing provisions that prohibit settling employees both from filing charges of sexual harassment with the Equal Employment Opportunity Commission ("EEOC" or "the Commission") and from assisting the Commission in its investigation of any such charges. ¹ For the reasons that follow, we affirm the preliminary injunction in part and vacate it in part.

I. BACKGROUND

The EEOC is currently investigating three sexual harassment charges filed against Astra. At least two of these charges allege class-wide improprieties. The controversy before us arose when the Commission found its investigation hampered by certain settlement agreements entered into between Astra and sundry employees who theretofore had pursued sexual harassment claims. The problem first surfaced when an EEOC investigator, Brenda Choresi Carter, spoke with a former Astra employee on May 7, 1996. According to Carter, the employee stated that she possessed relevant information but was unable to disclose it "due to a confidential settlement agreement that she had entered into with Astra." Although this conversation supplies the EEOC's most concrete proof that Astra's settlement agreements are hindering its probe, the Commission also points to other evidence hinting that the agreements may be stifling potential sources. One employee who expressed reluctance about speaking with an EEOC investigator refused to say whether she had entered into a settlement agreement. Then, too, when the EEOC contacted ninety employees and requested information, only twenty-six replied. Although the Commission finds this widespread unresponsiveness to be sinister, its cause is unproven.

This is the extent of the hard evidence as to the impact of the settlement agreements on the EEOC's investigation. In all events, the Commission has not unleashed its subpoena power, see 42 U.S.C. § 2000e-9 (1994) (incorporating by reference 29 U.S.C. § 161), to compel any recalcitrant employee to furnish relevant information.

The record reveals that Astra has entered into at least eleven settlement agreements--the exact number remains uncertain--with employees who claimed to have been subjected to, or to have witnessed, sexual harassment. The details of these agreements vary, but they all contain versions of four provisions that are relevant to the disposition of this appeal. First, the settling employee agrees not to file a charge with the EEOC. Second, the settling employee agrees not to assist others who file charges with the EEOC. ² Third, the settling employee releases all employment-related claims against Astra and those in privity with Astra (including Astra's management). Fourth, the settling employee assents to a confidentiality regime under which she is barred from discussing the incident(s) that gave rise to her claim and from disclosing the terms of her settlement agreement.

After the EEOC learned of Astra's artful draftsmanship, it asked the company to rescind those portions of the settlement agreements that prohibited individuals from filing charges with the Commission ("non-filing provisions") and from aiding the Commission's investigations ("non-assistance provisions"). Astra defended both the non-filing and the non-assistance provisions but added that it "do[es] not interpret any settlement agreement as preventing any ... employee from communicating with the EEOC concerning any of its investigations." Astra's concession on the right of settling employees to communicate with the Commission remains somewhat tenebrous: at oral argument, the company's counsel suggested that employees must await a subpoena before sharing information with the EEOC. At any rate, Astra steadfastly maintains that employees who have signed settlement agreements may not volunteer any information to the Commission that is beyond the scope of an ongoing investigation.

Dissatisfied with Astra's response, the EEOC filed suit seeking injunctive relief pursuant to section 706(f)(2) of Title VII, 42 U.S.C. § 2000e-5(f)(2). Without convening an evidentiary hearing, the district court granted the request for a preliminary injunction and enjoined Astra for the time being "from entering into or enforcing provisions of any Settlement Agreements which prohibit current or former employees from filing charges with the EEOC and/or assisting the Commission in its investigation of any charges." EEOC v. Astra U.S.A., Inc., 929 F.Supp. 512, 521 (D.Mass.1996). The court also directed Astra to "provide a copy of this injunction to all current and former employees who have signed Settlement Agreements to assure them of notification of their rights set forth herein." Id. Astra appealed and requested interim relief. We stayed the operation of the injunction (subject to certain conditions not relevant here) and expedited appellate proceedings.

II. ANALYSIS

We first delineate certain legal standards (a task that, in this instance, requires us to resolve a threshold question). We then evaluate the injunction as it affects the non-assistance and non-filing provisions, respectively.

A. The Applicable Preliminary Injunction Standard.

In the typical case, a party seeking preliminary injunctive relief must prove: (1) a substantial likelihood of success on the merits; (2) a significant risk of irreparable harm if the injunction is withheld; (3) a favorable balance of hardships; and (4) a fit (or, at least, a lack of friction) between the injunction and the public interest. See Narragansett Indian Tribe v. Guilbert, 934 F.2d 4, 5 (1st Cir.1991). Here, however, the EEOC asserts that Congress, by enacting section 706(f)(2) of Title VII, specifically authorized the agency to seek injunctive relief in the public interest. ³ Based on this circumstance, the EEOC argues that it need not satisfy the traditional test for preliminary injunctive relief but, instead, must only meet the built-in criterion that section 706(f)(2) itself establishes. On this approach an injunction is appropriate as long as the Commission, after conducting a preliminary investigation of a pending charge of discrimination, (1) determines that prompt judicial intervention is essential to carry out the purposes of Title VII, and (2) makes out a prima facie case that the defendant has committed (or is likely to commit) serious violations of Title VII which, if not enjoined, will frustrate the Act's purposes. In practice, the difference between the two approaches may be more apparent than real. The EEOC, however, sees two key distinctions: under its approach the public interest prong becomes a foregone conclusion (for the Commission is itself the standard-bearer for the public interest), and, in addition, a somewhat lessened showing of irreparable harm may be adequate to justify preliminary injunctive relief.

The circuits are in some disarray regarding whether the EEOC must meet the traditional four-part test for injunctive relief. See, e.g., Baker v. Buckeye Cellulose Corp., 856 F.2d 167, 169 (11th Cir.1988) (holding that an allegation of a Title VII violation establishes a rebuttable presumption of irreparable injury); EEOC v. Pacific Press Pub. Ass'n, 535 F.2d 1182, 1187 (9th Cir.1976) (suggesting that "the usual requirement of irreparable injury is relaxed" when the EEOC seeks injunctive relief pendente lite ); cf. EEOC v. Cosmair, Inc., 821 F.2d 1085, 1090 (5th Cir.1987) (holding, in an ADEA case, that "[w]hen an injunction is expressly authorized by statute and the statutory conditions are satisfied, the movant need not establish specific irreparable injury to obtain a preliminary injunction").

Amidst these subtly shaded solutions, the Sixth Circuit struck a blow for clarity and flatly rejected the EEOC's interpretation of section 706(f)(2). See EEOC v. Anchor Hocking Corp., 666 F.2d 1037, 1040-41 (6th Cir.1981). We think that this is the right result. There is nothing in the language of section 706(f)(2) that can fairly be read to limit a district court's discretion in issuing preliminary injunctions. In authorizing the EEOC to "bring an action for appropriate temporary or preliminary relief," the statute does not purport to wrest the final decision on whether relief is warranted from the courts. See id. at 1041 & n. 4 (comparing § 706(f)(2) with other federal statutes which by their language restrict the district courts' discretion in issuing...