Rare Opinion Letter Clarifies Limitations on EEOC’s Authority to Bring Title VII “Pattern and Practice” Lawsuits

On September 3, 2020, the U.S. Equal Employment Opportunity Commission (EEOC) issued a rare opinion letter confirming its legal interpretation of the EEOC’s ability to sue businesses under Section 707(a) of Title VII of the Civil Rights Act. While most people are familiar with the fact that individual employees may sue under Title VII, Section 707(a) allows the EEOC itself to sue an employer to remedy workplace violations. Typically, such suits challenge workplace policies that the EEOC believes constitute patterns or practices of violating employee rights. The letter, which the EEOC sent to an undisclosed recipient after approving it in a non-public meeting, contains the EEOC’s detailed analysis of the interplay between different sections of Title VII and Section 707.

The letter includes two key takeaways for employers. The first is that, in order for the EEOC to bring pattern or practice lawsuits against employers under Section 707, the EEOC must first participate in the same pre-suit process as it does under Section 706, which covers discrimination claims the EEOC may pursue on behalf of individuals. Section 706 requires, among other things, the filing of a charge of discrimination and the EEOC’s participation in the informal conciliation process before filing a lawsuit when it has reasonable cause to believe unlawful employment actions occurred.

The second key takeaway is the EEOC’s affirmative statement that EEOC pattern and practice lawsuits under Section 707 must involve behavior that constitutes unlawful retaliation or discrimination under Sections 703 and 704 of Title VII, respectively. In linking its authority under Section 707 to Sections 703 and 704, the EEOC stated that the language in Section 707 referring to an employer’s “pattern or practice of resistance” does not give the EEOC “an independent basis for a lawsuit” that is distinct from other sections under Title VII. This interpretation is consistent with the Seventh Circuit’s rationale in a 2015 case involving a Section 707 claim. In that case, the Seventh Circuit rejected the EEOC’s position that Section 707 gives the agency broad authority to bring pattern and practice lawsuits against employers without first participating in pre-suit conciliation or alleging that the challenged employment practices were discriminatory. The underlying case pertained to form severance agreements that the EEOC claimed included provisions that deterred terminated employees from bringing claims of prohibited discrimination or retaliation to the EEOC’s attention.

The EEOC acknowledged that in a few cases it previously argued that it could bring Section 707 pattern and practice lawsuits, even when the employment actions at issue did not allegedly constitute unlawful retaliation or discrimination under the other sections of Title VII. However, the EEOC “now believes the better view” of Section 707 is that pattern or practice claims must be connected with Sections 703, 704, and 706 of Title VII.

Employers should note that formal EEOC opinion letters like this one provide employers with a defense when they act in conformity with and in reliance on the matters addressed in a given opinion letter. Before taking any action in reliance on an EEOC opinion letter, however, employers should consult with trusted employment counsel.