Equal Emp't Opportunity Comm'n v. Crothall Servs. Grp., Inc.

• Decision Date: 28 June 2016
• Docket Number: CIVIL ACTION No. 15-3812
• Parties: EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. CROTHALL SERVICES GROUP, INC. Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. CROTHALL SERVICES GROUP, INC. Defendant.

CIVIL ACTION No. 15-3812

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

June 28, 2016

Anita B. Brody, J.

MEMORANDUM

Plaintiff Equal Employment Opportunity Commission ("EEOC") brings this lawsuit against Defendant Crothall Services Group, Inc. ("Crothall") for alleged violations of § 709(c) of Title VII and an EEOC recordkeeping regulation, 29 C.F.R. § 1607.4(A). The parties have filed cross-motions for judgment on the pleadings addressing certain threshold legal issues. See ECF Nos. 13, 14.¹ For the reasons stated below, I will deny both motions without prejudice to raise the sufficiency of Crothall's records after the close of discovery.

I. BACKGROUND

The EEOC brings suit against Crothall, a Pennsylvania corporation with more than 100 employees, for purportedly violating recordkeeping requirements imposed by Title VII and the EEOC's regulations. A brief overview of the relevant statutory and regulatory landscape follows.

A. Title VII and the EEOC's Regulations

Title VII prohibits employment discrimination against any individual on the basis of race, color, religion, sex, or national origin. 42 U.S.C. § 2000e-2(a). Title VII gives the EEOC limited authority to promulgate regulations that implement the statute. Two provisions of the statute are particularly relevant for this dispute. First, under § 709(c) of Title VII²:

Every employer, employment agency, and labor organization subject to this subchapter shall (1) make and keep such records relevant to the determinations of whether unlawful employment practices have been or are being committed, (2) preserve such records for such periods, and (3) make such reports therefrom as the Commission shall prescribe by regulation or order, after public hearing, as reasonable, necessary, or appropriate for the enforcement of this subchapter or the regulations or orders thereunder.

42 U.S.C. § 2000e-8(c). Section 709(c) further authorizes the EEOC to seek an injunction from a federal district court to compel compliance with the statute's provisions. See 42 U.S.C. § 2000e-8(c) ("If any person required to comply with the provisions of this subsection fails or refuses to do so, the United States district court for the district in which such person is found, resides, or transacts business, shall, upon application of the Commission . . . have jurisdiction to issue to such person an order requiring him to comply."). Second, § 713(a) of Title VII gives the EEOC"the authority from time to time to issue, amend, or rescind suitable procedural regulations to carry out the provisions of this subchapter." 42 U.S.C. § 2000e-12(a).

While the EEOC has not adopted any "generally applicable" recordkeeping regulations under Title VII, the agency "reserves the right to impose recordkeeping requirements upon individual employers or groups of employers. . . whenever, in its judgment, such records . . . are . . . required to accomplish the purposes of [T]itle VII." 29 C.F.R. § 1602.12. The EEOC has issued regulations dealing with recordkeeping in specific contexts. As relevant here, in 1978, after notice and comment³, the EEOC promulgated the Uniform Guidelines on Employee Selection Procedures ("UGESP"). Issued pursuant to §§ 709(c) and 713(a) of Title VII, the UGESP relates specifically to selection procedures, which are defined as "measure[s], combination[s] of measures, or procedure[s] used as a basis for any employment decision." 29 C.F.R. § 1607.16(Q). Although much of the UGESP addresses methods to determine whether a selection procedure has a disparate impact and standards to demonstrate that a selection procedure is related to a legitimate business purpose, one section of the UGESP, 29 C.F.R. § 1607.4(A), deals with recordkeeping. This recordkeeping provision states:

Each user should maintain and have available for inspection records or other information which will disclose the impact which its tests and other selection procedures have upon employment opportunities of persons by identifiable race, sex, or ethnic group as set forth in paragraph B of this section, in order to determine compliance with these guidelines. Where there are large numbers of applicants and procedures are administeredfrequently, such information may be retained on a sample basis, provided that the sample is appropriate in terms of the applicant population and adequate in size.

29 C.F.R. § 1607.4(A).

B. The EEOC's Lawsuit Against Crothall

Crothall bases employment decisions for certain positions on criminal background checks and assessments of applicants' criminal histories (collectively, "criminal history assessments"). On July 9, 2015, the EEOC brought suit against Crothall, claiming that the company's use of criminal history assessments constitutes a selection procedure, and that the company failed to maintain records relating to selection procedures that are required by § 709(c) and 29 C.F.R. § 1607.4(A).⁴ Crothall concedes that its criminal history assessments are selection procedures, but challenges the EEOC's standing to sue and the EEOC's claim that Crothall is required to maintain records under § 709(c) and 29 C.F.R. § 1607.4(A). On October 19, 2015, I ordered the parties to file dispositive motions addressing these threshold legal issues. On November 20, 2015, the parties filed their cross-motions.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 12(c) provides that "[a]fter the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings." Fed. R. Civ. P. 12(c). There is "no material difference in the applicable legal standards" for a motion for judgment on the pleadings under Rule 12(c) and a motion to dismiss under Rule 12(b)(6).Spruill v. Gillis, 372 F.3d 218, 223 n.2 (3d Cir. 2004). As with a Rule 12(b)(6) motion, a court must treat all well-pled allegations in the complaint as true and draw all inferences in favor of the non-moving party. See Sheridan v. NGK Metals Corp., 609 F.3d 239, 259 n.25 (3d Cir. 2010). Where, as here, cross-motions have been filed, a court must "determine whether either of the parties deserves judgment as a matter of law on facts that are not disputed." Mercury Sys., Inc. v. Shareholder Representative Servs., LLC, 820 F.3d 46, 51 (1st Cir. 2016) (internal quotation marks omitted).

III. DISCUSSION

At the Rule 16 scheduling conference, the parties requested that certain threshold legal issues be resolved prior to discovery. Pursuant to the parties' submissions, in my October 19, 2015 Order I directed them to address:

• Whether EEOC is authorized to bring this action to enforce recordkeeping regulations;

• Whether a user of a selection procedure is required to make, keep, and make available for inspection records pursuant to the recordkeeping regulations; and,

• Whether Defendant Crothall Services Group's use of criminal history assessments constitutes the use of a selection procedure as defined by the recordkeeping regulations

Order, ECF No. 9. Addressing the parties' arguments in their briefs, I will determine (1) whether the EEOC has standing to bring this action; and (2) whether Crothall is required to make, keep, and make available for inspection records under § 709(c) and 29 C.F.R. § 1607.4(A).⁵ As discussed below, I conclude that the EEOC has standing and that § 709(c) and 29 C.F.R. § 1607.4(A) impose mandatory recordkeeping requirements on Crothall.

A. The EEOC has Standing to Bring this Lawsuit

Crothall argues that the EEOC lacks standing to bring this action because it has not identified any individual who has suffered or will suffer an injury in fact based on Crothall's alleged recordkeeping violations. It is well established, however, that a federal government agency has standing to sue based on an alleged violation of a federal statute. The EEOC need not identify a specific individual who has been injured by Crothall's alleged recordkeeping violation in order to demonstrate standing because "[a] violation of [a] statute inherently constitutes an injury to the United States." Stauffer v. Brooks Bros., Inc., 619 F.3d 1321, 1325 (Fed. Cir. 2010); see also Vt. Agency of Natural Res. v. United States ex rel. Stevens, 529 U.S. 765, 771 (2000) (stating that the government suffers an "injury to its sovereignty arising from violation of its laws"). Moreover, § 709(c) explicitly authorizes the EEOC to seek an injunction from a federal district court to compel compliance with the statute's provisions. See 42 U.S.C. § 2000e-8(c) ("If any person required to comply with the provisions of this subsection fails or refuses to do so, the United States district court for the district in which such person is found, resides, or transacts business, shall, upon application of the Commission . . . have jurisdiction to issue to such person an order requiring him to comply.").

Crothall also claims that the EEOC does not have standing because no statutory violation occurred in this case. The merits of the EEOC's claim that a statutory violation occurred are not germane to the standing inquiry. The Supreme Court has held that "standing in no way depends on the merits of the plaintiff's contention that the particular conduct is illegal." Warth v. Seldin, 422 U.S. 490, 500 (1975). A court must determine standing before it can adjudicate the merits of a plaintiff's claims. See Whitmore v. Arkansas, 495 U.S. 149, 154 (1990) ("[B]efore a federal court can consider the merits of a legal claim, the person seeking to invoke the jurisdiction of thecourt must establish the requisite standing to sue."). In ruling on standing at this stage of the litigation, a court "must accept as true all material allegations of the complaint, and must construe the complaint in favor of the complaining party." Warth, 422 U.S. at 501. Regardless of whether the EEOC can ultimately establish a statutory violation, the EEOC's complaint sufficiently alleges that...