McDonnell Douglas Corp. v. USEEOC

• Decision Date: 16 April 1996
• Docket Number: No. 4:95CV431 CDP.,4:95CV431 CDP.
• Citation: 922 F. Supp. 235
• Parties: McDONNELL DOUGLAS CORPORATION, Plaintiff, v. UNITED STATES EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Defendant.
• Court: U.S. District Court — Eastern District of Missouri

922 F. Supp. 235

McDONNELL DOUGLAS CORPORATION, Plaintiff, v. UNITED STATES EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Defendant.

No. 4:95CV431 CDP.

United States District Court, E.D. Missouri, Eastern Division.

April 16, 1996.

COPYRIGHT MATERIAL OMITTED

Michael P. Burke, Dennis C. Donnelly, Partner, Bryan Cave, St. Louis, MO, for plaintiff.

Eric T. Tolen, Asst. U.S. Attorney, St. Louis, MO, Daniel T. Riordan, E.E.O.C., Office of General Council, Washington, DC, for defendant.

MEMORANDUM AND ORDER

PERRY, District Judge.

This reverse FOIA case presents the question whether FOIA's exemption 4 applies to otherwise privileged documents that were submitted to the EEOC pursuant to an administrative subpoena. The Court agrees with the plaintiff/submitter here that the documents are commercial or financial information that is confidential and privileged under exemption 4, and that the EEOC should be enjoined from producing them pursuant to a FOIA request made by a private litigant.

This case is before the Court on the parties' cross-motions for summary judgment. Plaintiff McDonnell Douglas Corporation (MDC) asks the Court to enjoin the United States Equal Employment Opportunity Commission (EEOC) from releasing to a third party documents MDC produced to the EEOC during a discrimination investigation. Plaintiff brings this action pursuant to the Freedom of Information Act, 5 U.S.C. § 552, the Trade Secrets Act, 18 U.S.C. § 1905, and the judicial review provisions of the Administrative Procedure Act, 5 U.S.C. §§ 701-706.

MDC had delivered the "adverse impact analyses" at issue here to the EEOC as part of the EEOC's investigation of possible pattern and practice discrimination arising out of two large-scale reductions in force at McDonnell Douglas. When a FOIA request for the documents was filed by an attorney for an individual discrimination plaintiff, the EEOC initially determined that the adverse impact analyses were exempt from disclosure pursuant to FOIA exemption 4. However, after an internal agency appeal, the EEOC reversed its decision and advised MDC that it would disclose the adverse impact analyses to the FOIA requestor.

In response, MDC filed the present action. The parties consented to a temporary restraining order enjoining temporarily the disclosure of the subject documents, and agreed to the filing of cross-motions for summary judgment to resolve all issues in the case.

I. Facts

1. In July 1990, MDC engaged in a large scale reduction of its work force. As a result of this RIF, approximately 5,000 employees were terminated in St. Louis. In January 1991, MDC implemented a second reduction in force affecting approximately another 5,000 employees in the St. Louis area.

2. The McDonnell Douglas Missile Systems Company ("MDMSC") prepared adverse impact analyses, at the request of its attorneys, for the purpose of obtaining legal advice about the legal ramifications of these reductions in force. The adverse impact analyses are a comprehensive analysis of the work force segregated by product division and job groups. In each product division, the analysis examines the employees being laid off compared to those retained, according to gender, race, and age groups. Mathematical formulas were used in the analysis to determine the statistical impact on the various groups under the discrimination laws. The adverse impact analyses were captioned "Privileged Legal Communication" and were disseminated only to those individuals who had a need to know the content of a document because of their jobs.

3. The RIFs in 1990 and 1991 triggered the filing of a number of discrimination charges against MDC. As a result of these discrimination charges, the St. Louis district office of the EEOC decided to investigate the discrimination charges collectively in order to determine whether MDC had engaged in a pattern and practice of age discrimination. During the EEOC's pattern and practice investigation, approximately 150 individual discrimination charges were pending.

4. On June 21, 1991, the Commission issued subpoenas to MDC to produce documents pertaining to the charges. MDC provided the EEOC with thousands of corporate documents and computer tapes, and objected to producing other documents. By letter dated September 18, 1991, the EEOC stated to MDC, "The Commission recognizes that some documents may be protected by the attorney-client privilege and that MDC and its components have not waived this privilege." It went on to suggest a procedure for the submission of privileged documents to the agency. Eventually MDC and the EEOC reached an accommodation whereby, on March 12, 1992, MDC provided the EEOC with three boxes of documents.¹ The documents provided to the EEOC were marked "Privileged Legal Communication" and contained the following legend:

This document contains McDonnell Douglas trade secrets or confidential and proprietary commercial, technical, and other business information furnished in confidence and exempt from public disclosure under the Freedom of Information Act. Unauthorized disclosure outside the recipient organization of the United States Government is prohibited by 18 U.S.C. § 1905.

The documents produced included the adverse impact analyses at issue here.

5. In producing the documents to the EEOC, David Heath, an assistant general counsel for MDC, produced the documents to the EEOC with the following transmittal letter:

This note will confirm my delivery today of three boxes containing documents set aside by MDC under the view they were legally privileged as attorney advice memoranda or attorney work product. Upon further review, we have decided to disclose these materials. Given our recent dispute regarding redacted documents, we have chosen not to obliterate legends on these documents denominating them as legally privileged. The fact that such legends remain should not be construed as a waiver of MDC's right to claim and maintain legal privileges in appropriate instances involving other documents.

Heath has provided an affidavit stating that he believed that the disclosure to the EEOC of these documents constituted no more than a limited waiver of the attorney-client privilege, therefore protecting such documents from disclosure to other parties.²

6. The EEOC concluded that there was insufficient evidence that employees between the ages of 40 and 54 had been terminated as part of a pattern and practice of age discrimination. However, the EEOC did find that a substantial number of employees who were 55 and older had been selected for termination because of their age. During the fall of 1992, the EEOC commenced conciliation efforts to secure relief for those former employees who had been terminated and were 55 and over. The negotiations resulted in a compromise in the form of a consent decree, which United States District Judge Carol E. Jackson entered on August 12, 1993.

7. On March 18, 1993, Samuel H. Liberman, an attorney representing Teresita Glatz in an individual employment discrimination action, filed a FOIA request with the EEOC. Specifically, Mr. Liberman requested:

The production of all documents, tapes or other materials produced to EEOC by McDonnell Douglas or any of its divisions, affiliates, or subsidiaries with regard to the EEOC's investigation of a pattern or practice of discrimination with regard to lay offs during the period between January 1, 1990 and the present date ... and any other information produced by McDonnell Douglas indicating the existence of a possible pattern or practice of discrimination, including but not limited to all documents considered and/or used in EEOC's considerations, analysis and actions leading up to and carrying out the proposed consent decree or other activities relating to Cause No. 4:93CV00526 CEJ in the United States District Court for the Eastern District of Missouri.

8. By letter dated June 8, 1994, the regional attorney for the EEOC's St. Louis district office informed McDonnell Douglas that a FOIA request for copies of "reduction in force systems, adverse impact analyses" for the MDMSC had been received and requested MDC's comments on the applicability of exemption 4 to these documents. The letter stated the agency's conclusion that exemption 4 protected trade secrets and confidential commercial and financial information, and cited the case of National Parks & Conservation Ass'n v. Morton, 498 F.2d 765 (D.C.Cir.1974) for its definition of "confidential." The regional attorney requested that MDC provide answers to the following questions for the purposes of assisting her in making a preliminary determination on disclosing the documents:

i. Whether the requested information contains trade secrets or "confidential" information;

ii. If it contains trade secrets or confidential information, the identity of the precise information, by page, and line;

iii. If it contains trade secrets, an explanation of why each identified portion is considered to be a trade secret; and

iv. If it contains confidential information, an explanation of why disclosure of each identified portion is likely to cause substantial harm to your competitive position.

McDonnell Douglas responded to the regional attorney's request, by letter dated June 24, 1994, arguing that the adverse impact analyses should not be released because they were entitled to protection under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-5, 29 C.F.R. § 1610.17(b)-(c), FOIA exemptions 4 and 6, the Trade Secrets Act, 18 U.S.C. § 1905, the attorney-client privilege, attorney work product, and the self-critical analysis privilege. Among numerous other arguments, MDC asserted that the documents were covered by exemption 4 on the basis of the attorney-client privilege and as confidential commercial information under the test of confidentiality contained in Critical Mass Energy Project v. Nuclear Regulatory Commission, 975 F.2d 871 (D.C.Cir. 1992) (en banc), cert. denied, 507 U.S. 984,...