Procedural Slip-Up Sinks Mammoth EEOC Lawsuit

The Equal Employment Opportunity Commission (EEOC) failed to prove systemic, nationwide claims of discriminatory pay and promotion policies because it didn’t really conduct a nationwide investigation of the claims, even though it told a court it had, according to Gerald Maatman Jr., an attorney in Seyfarth Shaw’s Chicago and New York City offices.
The case involved the pay and promotion claims of 44,000 women employed by Sterling Jewelers, the largest specialty retail jeweler in the nation, with more than 1,300 stores, including Kay Jewelers and Jared the Galleria of Jewelry.
Sterling allegedly paid its female employees less than men and promoted them at lower rates, the agency maintained. Its theory was similar to the one in Wal-Mart Stores v. Dukes, a case in which the EEOC challenged decentralized decision-making, arguing that individual managers, when left to their own devices, discriminate, explained Maatman, who represented Sterling in the case.
No Nationwide Investigation
In the Sterling case, the EEOC insisted it had conducted a nationwide investigation, but it investigated only one store in New York and two in Florida.
The agency relied on a statistical analysis of Sterling’s pay and promotion data, presented for settlement purposes only, but this wasn’t enough to constitute a nationwide investigation, the U.S. District Court for the Western District of New York noted in its Jan. 2, 2014, decision. The court upheld its decision in a March 10, 2014, two-page order.
Quoting EEOC v. CRST Van Expedited, 679 F.3d 657 (8th Cir. 2012) in its January opinion, the district court noted that “the EEOC may not use discovery in the resulting lawsuit as a fishing expedition to uncover more violations.”
Five EEOC investigators originally looked into the charges, but the charges were transferred to the EEOC’s Buffalo office and assigned to one investigator, David Ging, in 2007, and a lawsuit was filed in September 2008.
Seven years after being assigned to explore the charges, Ging had “very little memory of what actions he undertook in this investigation.” There also wasn’t any evidence that the four other investigators conducted any sort of nationwide investigation.
No Employer Gamesmanship
The agency asserted that Sterling was resorting to “gamesmanship, diverting the court’s attention from the merits of EEOC’s allegations and Sterling’s defenses.”
But the court noted that the EEOC “ignores the fact that the absence of a nationwide pre-suit investigation is a defense to the EEOC’s nationwide pattern-or-practice claim.”
Maatman said the case was the largest EEOC lawsuit in the country.
This case is EEOC v. Sterling Jewelers, 08-CV-00706-A (W.D.N.Y. 2014).
Allen Smith, J.D., is the manager of workplace law content for SHRM. Follow him @SHRMlegaleditor. 
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