Equal Employment Opportunity Commission v. Bessemer Group Inc. , 105 F. App'x 411 ( 2004 )

Opinions of the United
2004 Decisions States Court of Appeals
for the Third Circuit
7-29-2004
EEOC v. Bessemer Grp
Precedential or Non-Precedential: Non-Precedential
Docket No. 03-4049
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"EEOC v. Bessemer Grp" (2004). 2004 Decisions. Paper 450.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 03-4049
___________
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
v.
BESSEMER GROUP INC.;
BESSEMER TRUST CO.,
Appellants
___________
On Appeal from the United States District Court
for the District of New Jersey
District Court Judge: The Honorable Katharine S. Hayden
(D.C. Civil No. 03-cv-04006)
___________
Submitted Under Third Circuit L.A.R. 34.1(a)
May 6, 2004
Before: SLOVITER, FUENTES, Circuit Judges, and POLLAK,* District Judge.
(Opinion Filed: July 29, 2004)
________________________
OPINION OF THE COURT
________________________
*
The Honorable Louis H. Pollak, U.S. District Judge for the Eastern District of
Pennsylvania, sitting by designation.
FUENTES, Circuit Judge:
This is a subpoena enforcement action under the Age Discrimination in
Employment Act of 1967 (ADEA). Petitioners, The Bessemer Group, Inc. and Bessemer
Trust Company (collectively “Bessemer”) were served with a subpoena to produce
documents relevant to an investigation being conducted by the Equal Employment
Opportunity Commission (“EEOC”). After Bessemer failed to comply, the EEOC
initiated an action to enforce the subpoena in the District Court for the District of New
Jersey. The matter was referred to a Magistrate Judge, who ordered the subpoena to be
enforced. Subsequently, the District Court affirmed the Magistrate Judge’s order and
Bessemer now appeals from that decision. Because we find that the subpoena was issued
in the course of an investigation pursuant to a legitimate purpose, we will affirm.
I. Facts
This case arises out of an employment discrimination claim filed against Bessemer
by a former employee, Florina Gualberto, in which she alleged that Bessemer
discriminates on the basis of age in the severance packages offered to terminated
employees in violation of the ADEA. Bessemer denies that it engages in any such
practice.
Because the nature of the severance package is relevant in part to the current
appeal, we briefly summarize it here. Gualberto was terminated four months before she
turned 65, the age at which she would have retired and received retiree pension benefits
from Bessemer. In an affidavit submitted to the EEOC, Gualberto stated that Bessemer
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has a regular policy of offering severance benefits to employees upon termination. App.
at 45. Gualberto also stated, however, that when an employee facing retirement is
terminated, as she was, the amount of severance benefits is offset by the amount of retiree
pension benefits to which the employee is entitled. This was the severance package
Bessemer offered Gualberto upon her termination. She alleges this practice is
discriminatory because younger employees who are terminated receive full severance
benefits without any offset, and still receive retiree pension benefits when they reach the
age of 65. Bessemer, on the other hand, asserts that the described offset practice is
expressly permitted by the ADEA and therefore no discrimination occurs.
Upon receipt of Gualberto’s complaint, the EEOC commenced an investigation
into Bessemer’s practices concerning severance benefits. On May 7, 2003 an EEOC
investigator sent Bessemer a Request for Information, seeking information about other
former employees and their severance packages. In response, Bessemer produced
Gualberto’s personnel file but refused to produce any other documents, claiming they
were confidential. Subsequently, the EEOC issued an administrative subpoena on July 7,
2003, ordering production of the requested documents by July 21, 2003.
Bessemer refused to comply with the administrative subpoena, at which point the
EEOC initiated an action to have the subpoena enforced in the District Court for the
District of New Jersey. The District Judge referred the matter to a Magistrate Judge, who
issued an order enforcing the subpoena on September 12, 2003.1
1
The Magistrate Judge also issued two subsequent orders which are not relevant to the
current appeal.
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Bessemer appealed the Magistrate Judge’s order to the District Court. After
reviewing the Magistrate Judge’s determination, the District Court affirmed the order
enforcing the subpoena, finding that the EEOC had the authority to subpoena the
documents pursuant to its investigation of unlawful employment practices. Bessemer
now appeals the district court’s affirmance of the Magistrate Judge’s order.
II. Jurisdiction and Standard of Review
We have jurisdiction to review the order of the district court pursuant to 28 U.S.C.
§ 1291. Orders enforcing administrative subpoenas are considered “final” for purposes of
this section because there is no ongoing judicial proceeding that would be delayed by an
appeal. Univ. of Med. & Dentistry v. Corrigan, 347 F.3d 57, 63 (3d Cir. 2003).
There is disagreement between the parties as to which standard of review we
should employ in our analysis. The EEOC argues that the appropriate standard is abuse
of discretion, which is generally applied to review a district court’s order enforcing an
administrative subpoena.2 N.L.R.B. v. Frazier, 966 F.2d 812, 815 (3d Cir. 1992).
Bessemer argues, however, that we should review the District Court’s order de novo
because the district court improperly reviewed the Magistrate Judge’s order. We find it
unnecessary to resolve this dispute because, even if we accept Bessemer’s proposal and
review the record de novo, we would nevertheless affirm the District Court’s order to
enforce the subpoena.
III. Discussion
2
District courts review a magistrate judge’s order de novo. See N.L.R.B., 966 F.2d at
815.
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An administrative subpoena should be enforced if the agency can show “that the
investigation will be conducted pursuant to a legitimate purpose, that the inquiry is
relevant, that the information demanded is not already within the agency’s possession,
and that the administrative steps required by the statute have been followed.” Univ. of
Med. & Dentistry, 347 F.3d at 64 (quoting F.D.I.C. v. Wentz, 55 F.3d 905, 908 (3d Cir.
1995)). Furthermore, the request for information may not be overbroad or burdensome.
Id.
Bessemer does not dispute that the subpoena itself is procedurally valid, that the
information sought by the EEOC is generally relevant to investigating the charge of age
discrimination, or that the EEOC does not already possess the requested information.
Rather, Bessemer argues that the subpoena should be quashed because there is no
legitimate purpose behind the EEOC’s investigation. Specifically, Bessemer asserts that
the practice of offsetting severance pay by the amount of pension benefits is expressly
permitted by the ADEA, and thus the absence of a statutory violation renders the purpose
of the investigation illegitimate. We disagree.
Bessemer’s contention that its offset practice does not violate the ADEA is
premised on section 623(l)(2)(A)(ii) of the Act, which states “[i]t shall not be a violation .
. . of this section solely because following a contingent event unrelated to age the value of
any additional pension benefits that are made available solely as a result of the contingent
event unrelated to age . . . are deducted from severance pay made available as a result of
the contingent event unrelated to age.” 29 U.S.C. § 623(l)(2)(A)(ii) (2000). Bessemer
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argues that this section specifically permits severance offset, and thus the EEOC has no
legitimate purpose because it cannot ultimately prevail against Bessemer on the merits.
To bolster its argument, Bessemer attempts to analogize this case to other
subpoena enforcement proceedings in which subpoenas were not enforced because courts
found that the EEOC ultimately could not prevail in the underlying case as a matter of
law. See E.E.O.C. v. Ocean City Police Department, 820 F.2d 1378 (4th Cir. 1987) (en
banc) (quashing subpoena relating to Title VII charge because the charge was untimely),
vacated on other grounds, 486 U.S. 1019 (1988); E.E.OC. v. Group Health Plan, 212 F.
Supp. 2d 1094 (E.D. Mo. 2002) (quashing subpoena because the charge against the
employer did not involve practices covered by the Americans with Disabilities Act).
Bessemer urges us to consider McCambridge v. Bethlehem Steel Corp., 873 F.
Supp. 919 (E.D. Pa. 1994), in which the district court ruled on a summary judgment
motion that an employer’s policy of reducing employees’ severance allowances based on
their eligibility for retiree health benefits did not violate the ADEA as a matter of law, in
order to find similarly that the practice at issue in this case does not violate the ADEA.
First, we observe that retiree health benefits are addressed separately from retiree
pension benefits in 29 U.S.C. § 623(l)(2)(A)(i). Second, we believe it is inappropriate to
extend any analysis from McCambridge at this stage of the proceedings with the limited
record before us. The EEOC responds that § 623(l)(2)(A)(ii) does not broadly permit
severance pay to be offset by pension benefits, but rather, it narrowly permits offsets in
very specific instances. In its brief, the EEOC states that “at this stage we know virtually
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nothing about Bessemer’s severance practices . . . and therefore we are not able to make
any assessment about the company’s compliance with the ADEA.” Resp. Brief at 15.
For example, the EEOC points out that when it first attempted to solicit information
regarding these practices, Bessemer maintained that it does not even have a formal
severance pay program. Distinguishing the cases cited by Bessemer in support of its
proposition, the EEOC points out that in this case there is no way to determine at this
point that any charge brought by the EEOC would ultimately fail as a matter of law.
We agree with the EEOC that more information is necessary before a dispositive
legal determination can be made. At this point, it is not clear whether Bessemer is in
compliance with the ADEA. As the Supreme Court stated in Oklahoma Press Publishing
Co. v. Walling, “[t]he very purpose of the [administrative] subpoena and of the order . . .
is to discover and procure evidence, not to prove a pending charge or complaint, but upon
which to make one if . . . the facts thus discovered should justify doing so.” 327 U.S. 186,
201 (1946).
Traditionally, administrative agencies are granted broad investigatory powers to
enforce the laws within their purview. See U.S. v. Powell, 379 U.S. 48, 57 (1964); U.S. v.
Morton Salt Co., 338 U.S. 632, 642 (1950). Unlike the judiciary, an agency is not bound
by the case or controversy requirement, and “can investigate merely on suspicion that the
law is being violated, or even just because it wants assurance that it is not.” Morton, 338
U.S. at 642-43. The District Court correctly enforced the subpoena to allow the EEOC to
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investigate whether Bessemer’s severance pay program violates the ADEA. We therefore
affirm the District Court’s enforcement of the subpoena.
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