Hunton Employment & Labor Perspectives

In EEOC v. McLane Co., Inc., the Ninth Circuit recently held that the EEOC has broad subpoena powers to obtain nationwide private personnel information, including social security numbers (“SSNs”), in connection with its investigation of a sex discrimination charge.

Damiana Ochoa, a former employee of a McLane subsidiary in Arizona, filed a charge with the EEOC alleging sex discrimination (based on pregnancy), claiming that when she tried to return to work after taking maternity leave, the company informed her that she could not return to work until she passed a physical capability strength test. Ochoa alleged that the company requires all new employees and all employees returning from medical leave to take the test and acknowledged that she failed this test three times. Based on her failure to pass the test, the company terminated Ochoa’s employment.

The EEOC broadened its investigation beyond Ochoa’s claims to all company facilities nationwide. The company provided certain information to the EEOC about the test and the individuals who had been required to take it, but refused to comply with an administrative subpoena that asked for “pedigree information” (such as each test taker’s name, SSN, last known address and phone number), and for the test takers who were ultimately terminated, the reasons for termination. In lieu of providing SSNs, the company provided an “employee ID number” created solely for purposes of responding to the EEOC’s investigation. In response, the EEOC filed a subpoena enforcement action. The district court sided with the company and did not require the company to turn over the pedigree information and the reason for termination information.

In a unanimous ruling, a three-judge panel of the Ninth Circuit reversed the district court’s ruling and held that the company had to provide all of the pedigree information requested by the EEOC. The Court reasoned that the EEOC has broad investigatory powers which are not constrained by strict relevancy requirements. Citing EEOC v. Shell Oil Co., 466 U.S. 54, 68-69 (1984), the Court found that the relevance standard that applies in this context “encompasses ‘virtually any material that might cast light on the allegations against the employer’” and, accordingly, the company should produce the pedigree information because it is relevant to the EEOC’s investigation, particularly since the EEOC should be able to contact and speak to other employees and applicants to learn more about their experiences.

As to SSNs, although the company argued that it is trying to protect its employee’s privacy interests, the Court found that such information is protected from public disclosure by 42 U.S.C. § 2000e-8(e). As for the reason for termination information, the Court remanded the issue back to the district court to consider the company’s undue burden arguments.

The Ninth Circuit’s ruling demonstrates yet again how much leeway certain courts are willing to provide the EEOC with respect to its broad investigatory powers, including the production of highly confidential personnel information such as SSNs. Here, the Court’s stated reasons for why the pedigree information is relevant – so that the EEOC could contact other test takers – does not support the production of SSNs, and it raises data privacy concerns. While Judge Smith’s concurrence highlighted data privacy concerns and the government’s dismal performance in protecting such information, his concurrence notes that “we, as a court, are not in a position in this case to weigh the concerns present in any particular data gathering and storage protocol.” The Court’s refusal to weigh these concerns raises several questions: Who is protecting the interests of third party employees with respect to their SSNs and other confidential personnel information that could be used to steal their identities? When will courts acknowledge that the employer’s refusal to produce this type of highly confidential personnel information is out of concern for its employees and not because it wants to hinder the EEOC’s investigation? How many federal data breaches are necessary before someone takes notice of the broad access to information granted to the EEOC by the courts?

While these concerns remain unresolved for now, what remains likely going forward is that the EEOC will continue to aggressively seek direct contact information and other personnel information for employees, particularly in systemic discrimination cases.