U.S. Equal Employment Opportunity Commission v. Aaron Bros.
Docket: Case CV 07-5315 AHM (FMOx)
Court: District Court, C.D. California; May 22, 2009; Federal District Court
On September 24, 2007, the U.S. District Court for the Central District of California partially granted the EEOC's application for a subpoena to obtain employment data from Aaron Brothers Inc., following allegations of sex-based pay discrimination and retaliation filed by Jessica Fairley in January 2005. The Court limited the subpoena's scope to data from just two of Aaron Brothers' districts but allowed for potential future expansion based on the EEOC's findings. The Court expressed skepticism regarding Aaron Brothers' claims of the burden associated with producing the requested data, ultimately ordering the production of documents by December 24, 2007. The EEOC received all necessary data by late March 2008 and completed its analysis by November 2008, revealing a statistically significant correlation between gender and pay rates for managers and assistant managers. Subsequently, the EEOC sought additional nationwide data, which Aaron Brothers refused, arguing the findings were too vague. The EEOC highlighted that being a woman at Aaron Brothers correlated with a pay reduction of over 40 cents per hour and requested further information to support its discrimination claims, which was again denied by the Respondents.
The EEOC invoked work product, attorney-client, and governmental deliberative process privileges, as well as 42 U.S.C. 2000e-8(e), to withhold its statistical report. On January 30, 2009, the EEOC sought to modify a court order through a motion scheduled for a hearing on April 6, 2009. The motion requests detailed information from Aaron Brothers' stores, including management employee identities and histories, pay changes, store volume, and relevant policies since January 1, 2003. The court took the motion under submission on April 3, 2009.
Respondents argue the subpoena is overly broad and imposes an undue burden, but the court disagrees. It outlined that the inquiry's scope in EEOC subpoena enforcement is limited to three key questions: 1) the authority granted by Congress for investigation; 2) adherence to procedural requirements; and 3) the relevance and materiality of the evidence requested. The court noted that relevance is broadly interpreted, allowing the EEOC access to information that could illuminate allegations against employers.
The Ninth Circuit's standards dictate that administrative subpoenas should be enforced unless the evidence sought is clearly irrelevant or incompetent. The court emphasized that the EEOC's inquiries must not be mere 'fishing expeditions,' yet must have a realistic expectation of discovering pertinent information. The burden is on Respondents to demonstrate that the subpoena is excessively broad or burdensome, which the court found they failed to do. Furthermore, the EEOC provided declarations to support the need for a nationwide subpoena, including one from Marla Stern, a seasoned EEOC investigator, indicating a broader scope of investigation is justified based on her experience in handling discrimination cases.
The EEOC conducted a regression analysis to assess whether gender significantly affected the pay rates of management employees at Aaron Brothers, necessitating information from all nationwide stores to adequately investigate claims of class gender discrimination. The analysis utilized earnings data from February 1, 2004, and considered various factors, including gender, store location, job title, and seniority. Findings indicated that gender had a statistically significant relationship with pay rates, with women earning over 40 cents less per hour than men when controlling for these variables.
Respondents challenged the declarations supporting the EEOC's motion, arguing they were based on hearsay, lacked detail about the analysis process, and were not attested to by someone directly involved in the analysis. They also contended that prior work experience was not accounted for in salary determinations and criticized the withholding of full statistical analysis from them. However, the Court overruled these objections, determining that the evidence requested by the EEOC was relevant and material to the investigation into Ms. Fairley's claims of gender-based pay disparity. The Court found the declarations sufficient to establish a realistic expectation of discovering relevant evidence through a nationwide subpoena, confirming that national data was pertinent to the class-wide allegations of discrimination. Despite some concerns about the need for more comprehensive evidence and the qualifications of the declarant, the lower evidentiary standard applicable in this context warranted enforcement of the subpoena. The Court accepted that the EEOC need only demonstrate relevance and materiality, not prove discrimination at this stage.
The Supreme Court has prohibited a district court from evaluating whether an EEOC-issued subpoena is based on a 'well-founded' or 'verifiable' discrimination charge. The court's role is to ensure the charge's validity and the relevance of requested materials, without assessing the likelihood of the EEOC proving its claims, which would be considered reversible error. The court found the EEOC's declarations sufficient and did not need to determine if the EEOC was justified in withholding its analysis from the respondents. Respondents argued that the subpoena was overbroad and burdensome but failed to provide credible evidence regarding production costs or the size of their operations. Consequently, the court could not conclude that the subpoena was unduly burdensome.
Respondents contested the EEOC's request for resumes and employment applications, claiming it deviated from the original subpoena. However, the court ruled that the request was within the original scope, as the EEOC needed this information to assess the impact of prior work experience on salary differentials. Respondents did not substantiate their claims about the production costs of documents, and the EEOC offered to mitigate costs by processing the data electronically. As a result, the court found the subpoena to be appropriate and not overbroad. The motion to enforce the subpoena was granted, and the parties were ordered to file a compliance schedule by June 12, 2009. Confidentiality regarding the information obtained by the EEOC prior to any proceedings was reiterated.
