The Supreme Court Reviews EEOC’S Investigatory Subpoena Power

Nicholas Fortuna, February 24, 2017

The Supreme Court oral arguments in McLane v. Equal Employment Opportunity Commission (EEOC) on February 21, 2017 presented the justices with the chance to determine the role of federal district courts in monitoring EEOC subpoenas. The concern of the Court was how district courts should rein in agency investigations so they don’t turn into fishing expeditions.

The case started when McLane, a supplier of consumer products to convenience stores, required one of its employees, Damiana Ochoa, to pass a physical strength test before returning to work after maternity leave. Ochoa failed the test and McLane fired her. Ochoa filed an EEOC charge alleging sex discrimination.

The EEOC began an investigation and sought names, genders, social security numbers, contact information for each test-taker nationwide and the results of the tests. Further, the EEOC wanted the reason each test-taker had to take the tests. The EEOC issued a subpoena for this information and McLane objected. The dispute went to the United States District Court for the District of Arizona.

District courts apply a burden-shifting analysis in reviewing agency subpoenas. The courts look to whether Congress has granted the agency statutory authority to investigate and issue subpoenas. Then the agency must show that it followed the procedural requirements, and the evidence sought was relevant and material to the investigation. The employer (the subpoenaed party) then has an opportunity to show that the subpoena is overbroad or unduly burdensome.

The district court in McLane applied this test and found that the information sought by the EEOC was not relevant to Ochoa’s sex discrimination charge. The Court stated that the EEOC was “trolling for possible complainants.” The EEOC appealed to the Ninth Circuit Court of Appeals.

The Court of Appeals performed a de novo review of the district court’s decision, which is a wholesale appellate review of the lower court’s ruling from scratch on a question of law. The Ninth Circuit reversed the district court’s decision finding that the information sought was within the EEOC’s authority to obtain.

On appeal to the Supreme Court, McLane argued that The Ninth Circuit should not have performed a de novo review, but a more limited review of whether the lower court abused its discretion in concluding that the EEOC did not have the authority to conduct such a broad investigation.

In support of the Ninth Circuit’s decision, it was argued that whether a party must comply with a subpoena is a question of law subject to de novo review by the Court of Appeals because the test governing the enforcement of agency subpoenas is rooted in the fourth amendment and subpoenas are essentially constructive searches. Therefore, a decision on whether to enforce compliance with the subpoena is a reasonableness determination under the fourth amendment and is subject to a de novo review.

Notwithstanding that McLane turns on technical legal principles of review of agency action, it will have a practical impact for employers. The Supreme Court will set the standard for judicial oversight of the agency and when to curtail investigations. A decision is expected by June of this year.