Equal Employment Opportunity Comm'n v. Kronos Inc..

• Decision Date: 07 September 2010
• Docket Number: No. 09-3219.,09-3219.
• Citation: 620 F.3d 287
• Parties: EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Appellant v. KRONOS INCORPORATED.
• Court: U.S. Court of Appeals — Third Circuit

620 F.3d 287

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Appellant

v.KRONOS INCORPORATED.

No. 09-3219.

United States Court of Appeals,Third Circuit.

Argued Feb. 26, 2010.

Filed: Sept. 7, 2010.

COPYRIGHT MATERIAL OMITTED.

COPYRIGHT MATERIAL OMITTED.

Corbett Anderson, Esq. (Argued), Equal Employment Opportunity Commission, Washington, DC, Lisa H. Hernandez, Esq., Equal Employment Opportunity Commission, Pittsburgh, PA, for Appellant.

Robert L. Ashe, Jr., Esq. (Argued), Ashe, Rafuse & Hill, Atlanta, GA, Terrance H. Murphy, Esq., Buchanan Ingersoll & Rooney, Pittsburgh, PA, for Appellee.

Rae T. Vann, Norris, Tysse, Lampley & Lakis, LLP, Washington, DC, for Amici Curiae.

Before CHAGARES, STAPLETON, and LOURIE ^* , Circuit Judges.

OPINION

CHAGARES, Circuit Judge.

On March 18, 2009, the Equal Employment Opportunity Commission (the “EEOC” or the “Commission”) filed a Subpoena Enforcement Application in the United States District Court for the Western District of Pennsylvania, seeking enforcement of a third-party administrative subpoena it issued to Kronos Incorporated (“Kronos”) pertaining to the EEOC's investigation into a charge of discrimination against Kroger Food Stores (“Kroger”). On June 1, 2009, the District Court issued an order narrowing the scope of the subpoena and directing the parties to negotiate a confidentiality order. On July 22, 2009, the District Court denied the EEOC's motion to adopt its proposed confidentiality order, granted Kronos's motion for adoption of its order, and entered Kronos's proposed order as the court's own, with slight modifications. The EEOC appeals from both of these orders. For the reasons stated below, we will affirm in part and reverse in part the District Court's order of June 1, 2009 modifying the scope of the subpoena. We will vacate the District Court's July 22, 2009 confidentiality order and remand for further proceedings.

I.

Vicky Sandy, who is hearing and speech impaired, filed a charge of discrimination with the EEOC against Kroger on or about June 30, 2007. According to her charge, Sandy applied for work as a cashier, bagger, and stocker in May 2007 at a Kroger in Clarksburg, West Virginia. She alleged that Kroger did not hire her because of her disability, in violation of the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq. (“ADA”). Sandy alleged that “[i]n May, 2007, a management official (name unknown) told me that I would not be a good fit for any openings because of the way that I speak. After denying me employment, they continued to advertise for openings.” Joint Appendix (“JA”) 23.

Kroger utilizes a Customer Service Assessment, created by Kronos (the “Assessment” or “Kronos Assessment”), in its hiring process. ¹ The Assessment purports to “measure[ ] the human traits that underlie strong service orientation and interpersonal skills, such as: Controlling impatience; Showing respect; Listening attentively; Working well on a team; [and] Being sensitive to others' feelings.” JA 25. According to Kronos, applicants who perform well on the assessment are more likely to “[a]ct cheerful, polite, and friendly ... [l]isten carefully ... and ... [c]ommunicate well with customers.” JA 26. Sandy's score on the Assessment was 40%. JA 33.

According to Kroger's position statement in response to Sandy's charge, the store manager, Bob Bowers, interviewed Sandy for the open positions. Kroger alleged that during the interview, “Bowers had difficulty in understanding [Sandy's] verbal responses to questions” and found her responses to be “garbled and at times inaudible and unintelligible.” JA 39. Kroger also noted that Bowers discussed with Sandy her low score on the Kronos Assessment and her lack of job experience.

Kroger provided the EEOC with a copy of Sandy's employment application summary. The portion summarizing the results of the Kronos Assessment provides, inter alia, that Sandy “is less likely to ... listen carefully, understand and remember.” JA 33. The summary contains an “Interview Guide” that lists suggested follow-up questions. Sandy's follow-up questions include, “Describe the hardest time you've had understanding what someone was talking about.” Sandy's application summary also suggests observations the interviewer should make, such as “How does the applicant speak during the interview[?] Listen for: Correct language, clear enunciation, appropriate volume/tone/expression/smile/eye contact.” JA 33.

After Kroger admitted in its position statement that it relied at least in part on the Assessment in its hiring decision, the EEOC sent Kroger a request for information (“RFI”), dated January 16, 2008, seeking several categories of documents related to the Assessment and its use. Included was a request for copies of “any and all validity studies” and information pertaining to applications for the position of “Cashier Bagger” going back to January 1, 2007. JA 42. The RFI asked that Kroger provide the information on or before February 12, 2008-the date of the EEOC investigator's planned site-visit.

Kroger responded to the RFI on February 14, 2008, but failed to provide all of the information requested, including validity studies. The EEOC contends that it was not sure at that point whether Kroger had access to Kronos's validity studies. JA 103 n. 5.

On March 11, 2008, the EEOC issued a third-party administrative subpoena to Kronos. The subpoena sought validity studies related to the Kronos tests Kroger purchased, instruction manuals for the assessment tests Kroger used, documents related to Kroger, “and any validation efforts made regarding any or all jobs” at Kroger, any documents related to potential adverse impact on people with disabilities, and job analyses related to “any and all positions” at Kroger. JA 48-49.

The EEOC later notified Kroger that it was expanding the scope of its ADA investigation:

Based upon its authority, the [EEOC] hereby serves notice that the above referenced charge has been expanded to include the issue of disability with respect to the use of assessment test in hiring (class) during the period August 1, 2006 to the present and for all facilities in the United States and its territories.

JA 54.

According to the EEOC, around this time it discovered an article, co-written by a Kronos employee, which indicated that minority applicants performed worse than non-minority applicants on the Kronos Assessment administered by a large, geographically diverse retailer. Further, the EEOC maintains that its charge database contained complaints against Kroger alleging failure to hire based on disability and race.

Based on these circumstances, the EEOC sent Kroger a letter informing it that the EEOC was expanding its investigation once again, this time to include race:

Based upon its authority, the [EEOC] hereby serves notice that the above referenced charge has been expanded to include the basis of disability and race (black) with respect to the issues of the use of assessment tests ... in hiring (class) for the period beginning from the date that such test(s) were implemented by [Kroger] through the present and for all facilities in the United States and its territories.

JA 56. The EEOC rescinded its original subpoena to Kronos and issued a new subpoena directing that Kronos:

1. Produce any and all documents and data constituting or related to validation studies or validation evidence pertaining to Unicru [a Kronos subsidiary] and/or Kronos assessment tests purchased by The Kroger Company, including but not limited to such studies or evidence as they relate to the use of the tests as personnel selection or screening instruments.

2. Produce the user's manual and instructions for the use of the Assessment Tests used by The Kroger Company[.]

3. Produce any and all documents and data, including but not limited to correspondence, notes, and data files, relating to the Kroger Company; its use of the Assessment Tests; results, ratings, or scores of individual test-takers; and any validation efforts made thereto.

4. Produce any and all documents discussing, analyzing or measuring potential adverse impact on individuals with disabilities and/or an individuals [sic] race.

5. Produce any and all documents related to any and all job analyses created or drafted by any person or entity relating to any and all positions at The Kroger Company.

6. Furnish a catalogue which includes each and every assessment offered by Unicru/Kronos. Additionally provide descriptions of each assessment. ²

JA 51-52.

Kronos filed a Petition to Revoke the Subpoena with the EEOC, objecting that the subpoena “requests information that is: (1) not relevant to any allegation made in [Sandy's] Charge, and (2) constitutes [sic] commercially valuable and trade secret property of Kronos, which the EEOC seeks without adequate protection.” JA 59. The EEOC denied the Petition to Revoke on January 7, 2009 and ordered Kronos to comply with the subpoena. The EEOC determined that the information the subpoena requested was directly relevant to its properly expanded investigation and “well within the [EEOC]'s investigative authority.” JA 108. It further concluded that Title VII of the Civil Rights Act of 1964 (“Title VII”), the ADA, and the EEOC's regulations regarding confidentiality of information obtained during an investigation provided sufficient protection against disclosure without a confidentiality agreement.

When Kronos failed to comply with the subpoena, the EEOC filed a Subpoena Enforcement Action, which the District Court granted in part and denied in part. The District Court characterized the subpoena's scope as “breathtaking-potentially including most of Kronos' business documents, covering its entire client base, with no time, geographic, or job description limitations.” JA 5 (footnotes omitted). The District Court determined that materials unrelated to Sandy's discrimination charge were not relevant to the investigation. The District Court modified the...