Highlighting just how far the Equal Employment Opportunity Commission investigative powers can go, a staffing firm under agency investigation for purportedly handling clients’ job requisitions that are facially discriminatory has been ordered to comply with an EEOC subpoena seeking the names of all of the firm’s clients — 22,000 of them — at 62 of the firm’s offices. EEOC v. Aerotek, Inc., No. 1:15-cv-00275 (N.D. Ill.). The firm has asked the U.S. Court of Appeals for the Seventh Circuit to reconsider its decision to deny a stay of the district court’s order that it produce the data requested by the EEOC.

At a hearing on the matter earlier in the year, the EEOC indicated an interest in emails between the firm’s recruiters and its clients. The firm maintained the EEOC planned to contact or investigate its clients, which will affect its business relationships if clients come to fear they will be contacted or investigated by the EEOC merely for doing business with Aerotek, “even when the EEOC has found no indication of discriminatory conduct by either party.”

Background

The Age Discrimination in Employment Act authorizes the EEOC to conduct investigations on its own initiative without a charge of discrimination. In August 2013, the EEOC began investigating Aerotek’s recruitment, hiring, and placement of individuals at all facilities operated by Aerotek or its clients for the period beginning January 1, 2009. The firm voluntarily provided the EEOC with millions of rows of data and the substantive text of more than 600,000 client job requisitions. It redacted client and candidate name and address information from this, instead providing unique identifiers for client and candidate names. Aerotek informed the EEOC that its review “unearthed a few isolated incidents of employees acting in a manner inconsistent with the Company’s policies and practices with respect to client referrals, and requested the EEOC’s cooperation to look into those situations and devise appropriate remedies.”

According to the EEOC, however, the initial information produced by Aerotek revealed hundreds of discriminatory job requests. The agency has provided three examples of such alleged requests: (1) “a person in their 40s or 50s would not be a cultural fit;” (2) “looking for young energetic guys;” (3) “looking for a fresh college grad.”

In October 2014, the EEOC issued a subpoena to Aerotek focused on 62 of the firm’s 286 branches. Aerotek declined to provide further information. In January 2015, the EEOC proceeded to federal court seeking an order that Aerotek produce client names and individual candidate names previously withheld by Aerotek. The district court ordered Aerotek to produce the data requested by the EEOC. Aerotek then produced candidate name and contact information to the EEOC, but on March 31, 2015, appealed the district court’s order to the U.S. Court of Appeals for the Seventh Circuit.

After Aerotek filed its appeal, it sought an order from the district court to stay the order to produce 22,000 client names to the EEOC so that Aerotek’s appeal could be resolved first. The District Court initially granted Aerotek’s motion, but, in June 2015, vacated the order. The following month, in the midst of briefing the substantive issues of the appeal, Aerotek filed a motion with the Seventh Circuit requesting it stay enforcement of the District Court order pending appeal. A three-member panel of the Seventh Circuit denied Aerotek’s motion, without opinion. On August 6, Aerotek requested the Seventh Circuit to reconsider its order denying a stay.

Arguments against Providing Client Names

Aerotek argues on appeal that the EEOC must show that the information it seeks is relevant to the Commission’s investigation. The EEOC alleges only a small percentage of Aerotek clients completed discriminatory requisitions, and the other clients are not relevant to the EEOC’s investigation. Aerotek states it had identified to the EEOC the names of the clients associated with the three examples provided and the names of clients with requisitions containing similar terms and phrases. However, the EEOC has refused to provide it any further information in response to which Aerotek could provide additional client names.

Aerotek also points out that the District Court Judge did not make required factual determinations or cite to case legal authority for its determination and misapprehended or misinterpreted the positions of the parties.

Arguments Supporting of Obtaining Client Names

The EEOC asserts it operates more freely in age discrimination investigations than those under Title VII of the Civil Rights Act and the Americans with Disabilities Act because, under the ADEA, it is not required to show relevance of the information sought to the underlying charge of discrimination. According to the EEOC, Aerotek’s relevance argument is overly constrictive and boils down to Aerotek telling the EEOC how it should conduct an investigation, which “cannot substitute for legal authority.” The EEOC claims that providing the limited subset of client names associated with alleged discriminatory requisitions would prevent the EEOC from proceeding efficiently with its investigation. It states, “In essence, this would require the EEOC to prove discrimination as it goes.”

No date for oral argument has been set on Aerotek’s substantive appeal.

Aerotek’s Arguments for Staying District Court Order

In its original motion for a stay, and in its motion to reconsider the Seventh Circuit’s denial of a stay, Aerotek argues it has made a strong showing that: it will succeed on the merits of its appeal because the information sought by the EEOC is not reasonably relevant to its investigation; Aerotek will be irreparably injured in that it will be forced to produce client names and its substantive appeal will be rendered moot; the EEOC will not be injured by a stay because it will be able to continue with other aspects of its investigation; and the public interest is served by a stay because the public interest lies with preventing governmental overreach.

The EEOC disputes all of Aerotek’s arguments. With respect to mootness, the EEOC argues that even if Aerotek provides the client names to the EEOC now, Aerotek might receive meaningful relief from its substantive appeal. According to the EEOC, if Aerotek wins its appeal, the Seventh Circuit could order the EEOC to destroy the clients’ names and bar the EEOC from using information obtained from those names. For its part, Aerotek responds that the EEOC’s offer to “return or destroy” client names does nothing to keep the EEOC from using the information in the meantime; specifically, harming Aerotek’s business relationships with its clients.

Implications

Regardless of the ultimate outcome of the case, the EEOC’s dispute with Aerotek reminds employers that:

• The EEOC may pursue information from employers in large data sets. Here, if the EEOC’s account is correct, it found alleged disparate treatment evidence in a small percentage of Aerotek’s data. Such large data sets may assist the EEOC in isolating practices with a disparate impact against protected groups.

• The EEOC perceives fewer investigative constraints when conducting an ADEA investigation than under Title VII and the ADA. Keeping in mind that in addition to the ADEA, the EEOC also is authorized to conduct directed investigations under the Equal Pay Act.

• Meeting workforce needs through a staffing firm may be “off-line” from the normal hiring process, but it is not “off-line” from employment discrimination laws. Employers who use staffing firms are well-advised to bring company HR professionals into this process to the extent HR is not already involved.