The Seventh Circuit recently concluded that the EEOC’s investigative powers do not end when a lawsuit related to the originating charge ends.  EEOC v. Union Pacific, No. 15-cv-3452 (Aug. 15, 2017).

Background.  Two former railroad employees alleged race discrimination and retaliation in EEOC charges, asserting that they were not permitted to take an advancement test and were later discharged.  In 2012, the EEOC issued a right to sue letter to them.  The employees filed suit in the Northern District of Illinois, and the suit was dismissed in July 2014.  Despite having issued the right to sue letter and despite the dismissal of the private lawsuit, the EEOC continued its investigation into alleged race discrimination against other employees in the same work unit, and petitioned in September 2014 to enforce a subpoena when the Company had refused to produce documents (because it contended that the EEOC’s investigative authority terminated upon the resolution of the underlying charges and lawsuit).  The district court granted the EEOC’s petition to enforce, and an appeal followed.

Ruling.  The Seventh Circuit ruled that while the investigative authority is tied to charges filed with the Commission, that authority does not end when the proceedings related to the charges terminate.  The court based its holding on “the EEOC’s broad role in promoting the public interest by preventing employment discrimination under Title VII, including its independent authority to investigate charges of discrimination.”  Even though the EEOC had issued right to sue letters years earlier, and a district court granted the Company summary judgment in July 2014, the court found that the EEOC could continue to investigate potential discrimination at the Company through subpoenas which were issued in 2014 and became the subject of the underlying enforcement action.  Acknowledging the circuit split as to whether EEOC authority terminates after a right to sue letter is issued, the Seventh Circuit sided with the Ninth Circuit and disagreed with the Fifth Circuit on this issue.

Implications.  While this decision and the expanding circuit split may entice the U.S. Supreme Court to weigh in on the scope of the EEOC’s investigative authority, employers in Illinois, Indiana and Wisconsin should be mindful that (at least for now) the EEOC’s investigation of alleged discrimination may not end when proceedings related to an original charge terminate.

Posted in Discrimination, Harassment and Retaliation
Tags: discrimination, EEOC, retaliation
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Photo of Steven J. Pearlman Steven J. Pearlman

Steven J. Pearlman is a partner in the Labor & Employment Law Department, where he is Head of the Restrictive Covenants, Trade Secrets & Unfair Competition Group and Co-Head of the Whistleblowing & Retaliation Group.

Employment, Restrictive Covenant & Trade Secret, and Whistleblower…

Steven J. Pearlman is a partner in the Labor & Employment Law Department, where he is Head of the Restrictive Covenants, Trade Secrets & Unfair Competition Group and Co-Head of the Whistleblowing & Retaliation Group.

Employment, Restrictive Covenant & Trade Secret, and Whistleblower Practice. Steven’s national practice focuses on defending companies in federal and state courts and in arbitration fora against the full spectrum of employment-related claims, including claims of executives; restrictive covenant violations; employee raiding; theft of trade secrets; whistleblower retaliation under the Sarbanes-Oxley Act, the Dodd-Frank Act and similar state laws; and wage-and-hour violations, including class, collective and PAGA actions.

Steven has successfully handled trials in multiple jurisdictions; prevailed in seeking and defending against applications for temporary restraining orders and preliminary injunctions; defended one of the largest Illinois-only class actions in the history of the federal courts in Illinois (over 90k putative class members); and prevailed following his oral arguments before federal and state appellate courts. He brings his litigation experience (beginning in 1998) to bear in counseling clients to minimize risk and avoid or prepare for success in litigation.

Investigations. Reporting to boards of directors, their audit committees, CEOs and in-house counsel, Steven conducts sensitive investigations and has the unusual experience of testifying in federal court in connection with investigations. His investigations have involved complaints of sexual harassment involving C-suite officers; systemic violations of employment laws and company policies; and fraud, compliance failures and unethical conduct.

Thought Leadership and Accolades. Steven was named Lawyer of the Year for Chicago Labor & Employment Litigation in the 2023 edition of The Best Lawyers in America. He is a Fellow of the College of Labor and Employment Lawyers. Chambers has reported:

  • Steven is “one of the best in the country and has a lot of experience”;
  • Steven is as an “outstanding lawyer” who is “very sharp and very responsive,” a “strong advocate,” and an “expert in his field”;
  • He is thoughtful, attentive and demonstrates an acute understanding of matters top of mind for business-minded general counsel; and
  • “He is someone who can navigate the twists and turns of litigation without difficulty.”

Steven was 1 of 12 individuals selected by Compliance Week as a “Top Mind.” Earlier in his career, he was 1 of 5 U.S. lawyers selected by Law360 as a ”Rising Star Under 40” in the area of employment law and 1 of “40 Illinois Attorneys Under Forty to Watch” selected by Law Bulletin Publishing Company. Steven is a U.S. Library of Congress Burton Award Winner for “Distinguished Legal Writing.”

Steven was appointed to Law360’s Employment Editorial Advisory Board and selected as a Contributor to Forbes.com. He has appeared on Bloomberg News (television and radio) and Yahoo! Finance, and is often quoted in leading publications such as The Wall Street Journal. The U.S. Chamber of Commerce has engaged Steven to serve as lead counsel on amicus briefs to the U.S. Supreme Court and federal circuit courts of appeal.

In 2024, Steven received the Excellence in Pro Bono Service Award from the United States District Court for the Northern District of Illinois and the Chicago Chapter of the Federal Bar Association.

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