Equal Employment Opportunity Commission v. MacH Mining, LLC ( 2013 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 13-2456
EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION,
Plaintiff-Appellant,
v.
MACH MINING, LLC,
Defendant-Appellee.
Appeal from the United States District Court for the
Southern District of Illinois.
No. 3:11-cv-879 — J. Phil Gilbert, Judge.
ARGUED OCTOBER 29, 2013 — DECIDED DECEMBER 20, 2013
Before WOOD, Chief Judge, and KANNE and HAMILTON,
Circuit Judges.
HAMILTON, Circuit Judge. Title VII of the Civil Rights Act of
1964 directs the Equal Employment Opportunity Commission
to try to negotiate an end to an employer’s unlawful employ-
ment practices before suing for a judicial remedy. 42 U.S.C.
§ 2000e-5(b). Defendant Mach Mining, LLC, the target of an
EEOC lawsuit for sex discrimination in hiring, sees in this
2 No. 13-2456
statutory instruction an implied affirmative defense in its
discrimination case. Mach Mining seeks dismissal of the
EEOC’s suit on the ground that the agency failed to engage in
good-faith conciliation before filing suit. The EEOC moved for
summary judgment on this “failure-to-conciliate” defense,
arguing that courts should look no further than the face of the
complaint to review the sufficiency of the conciliation process
itself. The district court denied that motion but certified for
interlocutory appeal the question whether an alleged failure to
conciliate is subject to judicial review in the form of an implied
affirmative defense to the EEOC’s suit.
We reverse the district court’s denial of summary judgment
on the affirmative defense. The language of the statute, the lack
of a meaningful standard for courts to apply, and the overall
statutory scheme convince us that an alleged failure to concili-
ate is not an affirmative defense to the merits of a discrimina-
tion suit. Finding in Title VII an implied failure-to-conciliate
defense adds to that statute an unwarranted mechanism by
which employers can avoid liability for unlawful discrimina-
tion. They can do so through protracted and ultimately
pointless litigation over whether the EEOC tried hard enough
to settle. An implied failure-to-conciliate defense also runs
flatly contrary to the broad statutory prohibition on using what
was said and done during the conciliation process “as evidence
in a subsequent proceeding.” 42 U.S.C. § 2000e-5(b). We
therefore disagree with our colleagues in other circuits and
hold that the statutory directive to the EEOC to negotiate first
and sue later does not implicitly create a defense for employers
who have allegedly violated Title VII.
No. 13-2456 3
Factual and Procedural Background
The EEOC received a charge of discrimination in early 2008
from a woman who claimed Mach Mining had denied a
number of her applications for coal mining jobs because of her
gender. After investigating the charge, the agency determined
there was reasonable cause to believe Mach Mining had
discriminated against a class of female job applicants at its
mine near Johnston City, Illinois. In late 2010, the EEOC
notified the company of its intention to begin informal concilia-
tion. The parties discussed possible resolution but did not
reach an agreement. In September 2011, the EEOC told Mach
Mining that it had determined the conciliation process had
been unsuccessful and that further efforts would be futile. The
EEOC filed its complaint in the district court two weeks later.
There is no challenge here to the facial sufficiency of these
documents. See EEOC v. Shell Oil Co., 466 U.S. 54, 81 (1984).
Mach Mining’s answer denied unlawful discrimination and
asserted several affirmative defenses. The only defense
relevant to this appeal is the allegation that the suit should be
dismissed because the EEOC failed to conciliate in good faith.
The parties have spent nearly two years sparring over whether
this is a sufficient ground for dismissing the discrimination
case. The defense has been the subject of extensive discovery
requests by Mach Mining seeking information about the
EEOC’s investigation and conciliation efforts. The defense has
also slowed discovery on the merits of the underlying discrimi-
natory hiring claim. Mach Mining has asserted failure to
conciliate as a basis for objecting to a number of the EEOC’s
discovery requests. The EEOC moved for summary judgment
solely on the issue of whether, as a matter of law, an alleged
4 No. 13-2456
failure to conciliate is an affirmative defense to its suit for
unlawful discrimination.
In denying the EEOC’s motion, the district court held that
courts should evaluate conciliation to the extent needed to
“determine whether the EEOC made a sincere and reasonable
effort to negotiate.” EEOC v. Mach Mining, LLC, 2013 WL
319337, at *5 (S.D. Ill. Jan. 28, 2013) (internal quotations
omitted). Because the EEOC had not argued that its efforts
were either sincere or reasonable, only that they were not
reviewable as a defense to unlawful discrimination, the district
court had no occasion to demonstrate what its proposed
standard might mean in practice. The district court followed
decisions of other circuits holding (and sometimes simply
assuming) that judicial review of conciliation is appropriate in
the form of an affirmative defense. See EEOC v. CRST Van
Expedited, Inc., 679 F.3d 657 (8th Cir. 2012); EEOC v. Asplundh
Tree Expert Co., 340 F.3d 1256 (11th Cir. 2003); EEOC v.
Johnson & Higgins, Inc., 91 F.3d 1529 (2d Cir. 1996); EEOC v.
Keco Indus., Inc., 748 F.2d 1097 (6th Cir. 1984); EEOC v. Klingler
Elec. Corp., 636 F.2d 104 (5th Cir. 1981); EEOC v. Radiator
Specialty Co., 610 F.2d 178 (4th Cir. 1979); EEOC v. Zia Co.,
582 F.2d 527 (10th Cir. 1978).
The district court recognized at the same time that the
EEOC’s position had merit and raised arguments not consid-
ered by other circuits. It thus certified for interlocutory appeal
under 28 U.S.C. § 1292(b) whether and to what extent concilia-
tion is judicially reviewable through an implied affirmative
defense. We accepted the appeal because it presents a control-
ling question of law as to which there is substantial ground for
difference of opinion, because the resolution may advance the
No. 13-2456 5
ultimate termination of the case, and because of the importance
of the issue.
Analysis
In evaluating whether Mach Mining has a legally viable
affirmative defense for failure to conciliate, we consider (1) the
statutory language, (2) whether there is a workable standard
for such a defense, (3) whether the defense might fit into the
broader statutory scheme, and (4) our relevant case law. We
then review (5) the decisions of other courts recognizing the
affirmative defense that we reject here.
I. Statutory Language
We begin our analysis, of course, with the text of the
statute, mindful of the Supreme Court’s recent admonition that
“Congress’ special care in drawing so precise a statutory
scheme” as Title VII “makes it incorrect to infer that Congress
meant anything other than what the text does say.” University
of Texas Southwestern Med. Ctr. v. Nassar, 133 S. Ct. 2517, 2530
(2013). The text of Title VII contains no express provision for an
affirmative defense based on an alleged defect in the EEOC’s
conciliation efforts. In “the context of a statute as precise,
complex, and exhaustive as Title VII,” id., this silence itself is
compelling. We do not rely only on that silence, however. We
are also persuaded by the express statutory language making
clear that conciliation is an informal process entrusted solely to
the EEOC’s expert judgment and that the process is to remain
confidential.
The EEOC’s enforcement procedures under Title VII are
spelled out in section 706 of the Civil Rights Act of 1964 as
6 No. 13-2456
amended. 42 U.S.C. § 2000e-5. The process begins when the
agency receives a charge of discrimination from an aggrieved
employee or a Commission member. It then must notify the
employer and investigate whether reasonable cause exists to
support the allegations.
A finding of cause triggers the conciliation process: “If the
Commission determines after such investigation that there is
reasonable cause to believe that the charge is true, the Commis-
sion shall endeavor to eliminate any such alleged unlawful
employment practice by informal methods of conference,
conciliation, and persuasion.” § 2000e-5(b). The EEOC may sue
only after it “has been unable to secure from the respondent a
conciliation agreement acceptable to the Commission.”
§ 2000e-5(f)(1). Title VII allows the entire process to move fairly
quickly, at least in some cases. The only time limit on the
EEOC’s ability to sue is that it not do so within the first 30 days
after receiving the original charge. See § 2000e-5(f)(1); Occiden-
tal Life Ins. Co. v. EEOC, 432 U.S. 355, 360 (1977).
The words are significant: “endeavor to eliminate” discrimi-
natory practices “by informal methods of conference, concilia-
tion, and persuasion.” § 2000e-5(b). If it is “unable to secure
from the respondent a conciliation agreement acceptable to the
Commission,” the agency may then sue. § 2000e-5(f)(1). What
we have then is an instruction to the EEOC to try, by whatever
methods of persuasion it chooses short of litigation, to secure
an agreement that the agency in its sole discretion finds
acceptable. It would be difficult for Congress to have packed
more deference to agency decision-making into so few lines of
text.
No. 13-2456 7
The only other statutory terms in Title VII addressing the
conciliation process make all details of the conciliation process
strictly confidential. Violators are even subject to criminal
prosecution: “Nothing said or done during and as a part of
such informal endeavors may be made public by the Commis-
sion, its officers or employees, or used as evidence in a subse-
quent proceeding without the written consent of the persons
concerned. Any person who makes public information in
violation of this subsection shall be fined not more than $1,000
or imprisoned for not more than one year, or both.”
§ 2000e-5(b).
An implied affirmative defense for failure to conciliate
conflicts directly with the confidentiality provision. See
generally United States v. Misc. Firearms, 376 F.3d 709, 712 (7th
Cir. 2004) (courts should avoid interpretations that “render
other provisions of the statute inconsistent, meaningless, or
superfluous”).1
1
The parties dispute whether the criminal provision applies equally to the
EEOC and to employers, as well as whether it would penalize using
information as evidence if it is filed under seal (and thus arguably not
“made public”). Case law on these questions is scattered and inconsistent.
Compare EEOC v. LifeCare Mgmt. Servs., LLC, No. 02:08-CV-1358, 2009 WL
772834 (W.D. Pa. Mar. 17, 2009) (district judge recused after viewing
conciliation documents that were filed under seal and became subject of
dispute; court relied on confidentiality provision but did not consider how
it might apply to the entire failure-to-conciliate defense), with EEOC v. First
Midwest Bank, NA, 14 F. Supp. 2d 1028 (N.D. Ill. 1998) (recounting at length
the procedural and substantive details of parties’ conciliation efforts,
without any mention of confidentiality). But we need not explore all
subtleties of the criminal provision here. Also, the EEOC has produced
(continued...)
8 No. 13-2456
The statute’s explicit prohibition against using the contents
of conciliation as evidence in a later proceeding is broad.
Unlike Federal Rule of Evidence 408(b) regarding evidence of
settlement negotiations, Title VII contains no exception
allowing such information to be admitted for a collateral
purpose, such as to satisfy a court that the EEOC’s efforts to
conciliate were sufficient. Implying a failure-to-conciliate
defense in Title VII would thus require courts to evaluate
conciliation without evidence to weigh, at least without the
consent of both parties. An alternative but no more persuasive
solution to the problem would be first to imply this affirmative
defense and then to construct an implied set of exceptions to
the sweeping statutory requirement of confidentiality. The
better reading is to avoid the conflict, stick to the text, and
reject both the non-statutory affirmative defense and the non-
statutory exceptions to confidentiality.
II. No Standard for Review
The second major problem with an implied failure-to-
conciliate defense is the lack of a meaningful standard to
apply. Title VII says nothing about the informal methods the
EEOC is required to use—must it involve all three of confer-
ence, conciliation, and persuasion?—or how hard the agency
should “endeavor” to pursue them. The statute gives no
1
(...continued)
evidence related to conciliation efforts before courts that have recognized
the failure-to-conciliate defense. These actions appear to have been efforts
to comply with conflicting and, we believe, mistaken interpretations of the
law. The EEOC has not waived its right to argue that the failure-to-
conciliate defense is mistaken at its foundation.
No. 13-2456 9
description of what a negotiated settlement should look like
beyond eliminating the discriminatory conduct. And the
statute gives the agency complete discretion to accept or reject
an employer’s offer for any reason. Such an open-ended
provision looks nothing like a judicially reviewable prerequi-
site to suit.
Nor can Mach Mining explain just how many offers,
counteroffers, conferences, or phone calls should be necessary
to satisfy judicial review, despite repeated invitations to
provide the court with a workable standard. In its brief, the
company says review would sometimes require the EEOC to
respond to employers’ requests for more information, but
sometimes not. Sometimes the agency would have to show
how it calculated monetary damages, but sometimes not.
Sometimes it would have to identify all individual complain-
ants, identify potential new hires, or agree to face-to-face
meetings, but sometimes not. The defendant’s uncertainty is
consistent with the cases that have recognized this affirmative
defense, but we are not tempted to send district courts down
such a dimly lighted path.2
2
Courts applying a failure-to-conciliate defense have varied widely in what
evidence they consider and what actions they require of the EEOC. Must
the EEOC identify all claimants during conciliation? Compare EEOC v.
Swissport Fueling, Inc., 916 F. Supp. 2d 1005, 1037–38 (D. Ariz. 2013) (yes),
with EEOC v. Scolari Warehouse Mkts., Inc., 488 F. Supp. 2d 1117, 1129 n.14
(D. Nev. 2007) (no). Must the EEOC provide during conciliation the basis
for its damages demand? Compare EEOC v. Bloomberg LP, 751 F. Supp. 2d
628, 641–42 (S.D.N.Y. 2010) (yes, agency must provide more than “basic
information”), with EEOC v. Hibbing Taconite Co., 266 F.R.D. 260, 274 (D.
(continued...)
10 No. 13-2456
In the absence of any statutory guide, some courts that have
approved the implied affirmative defense for failure to
conciliate have imposed a requirement of good faith. E.g., Keco
Indus., 748 F.2d at 1102; Zia Co., 582 F.2d at 533. Mach Mining
argues that the National Labor Relations Act offers a template
for how courts should analyze good faith in this context, and
some courts have indeed relied on the NLRA for guidance in
evaluating Title VII conciliation. E.g., Zia Co., 582 F.2d at 533.
Unlike Title VII, however, the NLRA contains an explicit
statutory command to employers and unions to negotiate in
good faith, 29 U.S.C. § 158(d), so courts have done their best to
enforce that explicit command. We have warned about the
problems of applying such a standard to a process like concilia-
tion under Title VII: “We know from cases under the National
Labor Relations Act, which requires unions and employers to
bargain in good faith, how difficult it is to enforce such a duty,
2
(...continued)
Minn. 2009) (no), and EEOC v. Riverview Animal Clinic, PC, 761 F. Supp. 2d
1296, 1302 (N.D. Ala. 2010) (agency can “negotiate in good faith even if it
does not have an accurate final computation of actual damages”). Is the
substantive reasonableness of the EEOC’s settlement position relevant?
Compare EEOC v. Agro Distribution, LLC, 555 F.3d 462, 468 (5th Cir. 2009)
(finding failure to conciliate based in part on substance of agency’s
“insupportable” settlement demand), with EEOC v. High Speed Enter., Inc.,
No. CV-08-01789, 2010 WL 8367452, at *5 (D. Ariz. Sept. 30, 2010) (disclaim-
ing any reliance on value of agency’s settlement offer). May the EEOC raise
its damages demand significantly? Compare EEOC v. PBM Graphics Inc.,
877 F. Supp. 2d 334, 363 (M.D.N.C. 2012) (agency’s sudden quintupling of
monetary demands was not failure to conciliate), with EEOC v. First
Midwest Bank, NA, 14 F. Supp. 2d 1028, 1032 (N.D. Ill. 1998) (agency’s
sudden quadrupling of monetary demands showed failure to conciliate).
No. 13-2456 11
because it jostles uneasily with the right of each party to a labor
negotiation to refuse an offer by the other even if a neutral
observer would think it a fair, even a generous, offer.” Doe v.
Oberweis Dairy, 456 F.3d 704, 711 (7th Cir. 2006) (internal
citations omitted); see also Nassar, 133 S. Ct. at 2530 (Title VII’s
“detailed statutory scheme” should not be read in light of
“capacious language” of other statutes).
The parties here agree that, like a party to a labor negotia-
tion, the EEOC is free to refuse an offer that might appear fair
or even generous to a neutral observer. Courts that have
recognized an implied affirmative defense for failure to
conciliate draw a distinction between review of the conciliation
process, which they permit, and review of the substance of the
EEOC’s position, which is supposedly prohibited. See, e.g.,
EEOC v. Hibbing Taconite Co., 266 F.R.D. 260, 273 (D. Minn.
2009) (“While the substance and details of any settlement
offers, or discussions, are not discoverable, the actions and
efforts, that are undertaken by the EEOC to conciliate the
matter … are subject to the Court’s review.”).
But the distinction between process and substance in this
context is unlikely to survive the adversarial crucible of
litigation. A court reviewing whether the agency negotiated in
good faith would almost inevitably find itself engaged in a
prohibited inquiry into the substantive reasonableness of
particular offers—not to mention using confidential and
inadmissible materials as evidence—unless its review were so
cursory as to be meaningless. Was it unreasonable for the
EEOC to refuse one more meeting, one more request for
information, or one more extension of time to respond, or to
raise its settlement demand? So unreasonable as to permit an
12 No. 13-2456
inference of bad faith? These questions cannot be answered
without a close look at the substance of the parties’ positions,
yet all agree that Title VII leaves the choice to settle or not
entirely to the EEOC’s unreviewable discretion.
While Mach Mining did not plead its conciliation defense
under the Administrative Procedure Act, its argument relies
heavily on the statute’s “basic presumption of judicial review”
that is so central to American law in general and the APA in
particular. See Abbott Labs. v. Gardner, 387 U.S. 136, 140 (1967),
abrogated in part on other grounds, Califano v. Sanders, 430 U.S.
99 (1977). The APA thus casts a helpful light because the lack
of a workable standard for courts to apply makes conciliation
look very much like an action “committed to agency discretion
by law,” which the APA excepts from its general presumption
of judicial review. See 5 U.S.C § 701(a); cf. § 704 (only actions
“made reviewable by statute and final agency action for which
there is no other adequate remedy in a court are subject to
judicial review”). Under this exception, court involvement “is
not to be had if the statute is drawn so that a court would have
no meaningful standard against which to judge the agency’s
exercise of discretion.” Webster v. Doe, 486 U.S. 592, 600 (1988),
quoting Heckler v. Chaney, 470 U.S. 821, 830 (1985).
Under the APA, this exception is generally narrow. It
applies only “if a careful analysis of the statutory language,
statutory structure, legislative history, and the nature of the
agency action requires it.” Home Builders Ass'n of Greater
Chicago v. U.S. Army Corps of Engineers, 335 F.3d 607, 615 (7th
Cir. 2003). Nevertheless, the exception is not so narrow as to
disappear entirely into the rule, and we have applied it where
the statutory text and structure as well as the nature of the
No. 13-2456 13
agency decision so demand. See Anaya-Aguilar v. Holder,
683 F.3d 369, 373 (7th Cir. 2012); Singh v. Moyer, 867 F.2d 1035,
1038–39 (7th Cir. 1989); Board of Trade of City of Chicago v.
Commodity Futures Trading Comm'n, 605 F.2d 1016, 1025 (7th
Cir. 1979). We need not do so directly here because, again,
Mach Mining has not explicitly grounded its defense in the
APA. But our reasoning is consistent with the APA exception
because the statutory directive to attempt conciliation is so
similar to those open-ended grants of authority that courts
have found committed to agency discretion by law and thus
not subject to judicial review under the APA.
To be sure, the presumption favoring judicial review is not
limited to the APA. It extends to cases such as this one, in
which the agency action is not being challenged under the
APA. In Bowen v. Michigan Academy of Family Physicians,
476 U.S. 667 (1986), the Supreme Court considered a non-APA
challenge to regulations setting out how to calculate Medicare
Part B benefits. Noting the “strong presumption” in favor of
review, id. at 670, the Court held the regulations were judicially
reviewable. It distinguished an earlier case that said individual
benefit computations were unreviewable because the challenge
in Bowen was to a general agency rulemaking and thus
presented less danger of flooding courts with burdensome
litigation in contravention of the statutory scheme. Id. at
675–76.
Similarly, in Traynor v. Turnage, 485 U.S. 535 (1988), the
Court applied the presumption of judicial review to petition-
ers’ challenge to a Veterans’ Administration regulation that
allegedly violated the Rehabilitation Act of 1973. Traynor
explained that the challenge to the particular regulation’s
14 No. 13-2456
lawfulness would not drag courts into complex, fact-specific
determinations or open the door to “expensive and time-
consuming litigation” over individual claims. Id. at 544–45. The
broader challenge to the regulation was thus not barred by an
earlier case finding that Congress had expressly precluded
review of individual veteran benefits awards.
While upholding judicial review in each case, both Bowen
and Traynor acknowledged that the general “presumption
favoring judicial review of administrative action is just that—a
presumption.” Block v. Community Nutrition Inst., 467 U.S. 340,
349 (1984), cited in Bowen, 476 U.S. at 673, and Traynor, 485 U.S.
at 542. It may be overcome “whenever the congressional intent
to preclude judicial review is fairly discernible in the statutory
scheme.” Block, 467 U.S. at 351 (internal quotations omitted);
see also Morris v. Gressette, 432 U.S. 491, 504–05 (1977).
Unlike the pure questions of law the Supreme Court found
reviewable in Traynor and Bowen, case-by-case adjudication of
the sufficiency of the EEOC’s conciliation efforts would require
that courts be given some metric by which to analyze the
parties’ conduct. Congress’s failure to provide even the
outlines of such a standard tends to show that it did not intend
for judicial review of conciliation through an implied affirma-
tive defense. This conclusion becomes compelling when
considered alongside the language of the statute, including the
prohibition on evidence from the conciliation process. Judicial
review under the implied affirmative defense would have to
proceed without a workable legal standard and even without
evidence.
No. 13-2456 15
III. Review Undermines Conciliation
An implied affirmative defense for failure to conciliate also
does not fit well with the broader statutory scheme of Title VII.
Offering the implied defense invites employers to use the
conciliation process to undermine enforcement of Title VII
rather than to take the conciliation process seriously as an
opportunity to resolve a dispute. The Supreme Court has
recognized “Congress’s intent that voluntary compliance be
the preferred means of achieving the objectives of Title VII.”
Ricci v. DeStefano, 557 U.S. 557, 581 (2009) (internal quotations
omitted). In 1972 Congress gave the EEOC the new power to
bring suit in order to spur more voluntary compliance.
EEOC v. Kimberly-Clark Corp., 511 F.2d 1352, 1357 (6th Cir.
1975). Congress’s purpose is not served well by litigating the
parties’ informal endeavors at “conference, conciliation, and
persuasion.” Simply put, the conciliation defense tempts
employers to turn what was meant to be an informal negotia-
tion into the subject of endless disputes over whether the
EEOC did enough before going to court. Such disputes impose
significant costs on both sides, as well as on the court, and to
what end?
All the employer should legitimately hope to gain is some
unspecified quantum of additional efforts at conciliation by the
EEOC. The result of such a defense, as we have said in a
closely related context, is to “protract and complicate Title VII
litigation, and with little or no offsetting benefit.” Oberweis
Dairy, 456 F.3d at 710 (reversing summary judgment for
employer; complaining party’s failure to cooperate did not
provide employer with affirmative defense); see also EEOC v.
Chicago Miniature Lamp Works, 526 F. Supp. 974, 975–76 (N.D.
16 No. 13-2456
Ill. 1981) (discussing at length “undesirability of turning every
properly-filed EEOC action into a two-fold action” by litigating
first the EEOC’s probable cause finding and then the actual
merits).
Of course, we doubt that many employers will go to the
trouble of putting on a failure-to-conciliate defense purely out
of a desire to see their adversary across the negotiating table
again. What most hope to win is dismissal of the case, or at
least its delay. See, e.g., Asplundh Tree, 340 F.3d at 1261; EEOC
v. Bloomberg LP, — F. Supp. 2d —, —, 2013 WL 4799150, at
*10–11 (S.D.N.Y. Sept. 9, 2013) (dismissing case while acknowl-
edging that meritorious discrimination claims “now will never
see the inside of a courtroom”).
If an employer engaged in conciliation knows it can avoid
liability down the road, even if it has engaged in unlawful
discrimination, by arguing that the EEOC did not negotiate
properly—whatever that might mean—the employer’s
incentive to reach an agreement can be outweighed by the
incentive to stockpile exhibits for the coming court battle.
Similar reasoning explains why Title VII makes negotiations
confidential in the first place. See Branch v. Phillips Petroleum
Co., 638 F.2d 873, 881 (5th Cir. 1981) (“the prospect of disclo-
sure or possible admission into evidence of proposals made
during conciliation efforts would tend to inhibit the kind of
free and open communication necessary to achieve unlitigated
compliance with the requirements of Title VII”).
An employer cannot be sure in advance that its defense will
carry the day, of course. But the cost to the employer of
pursuing that defense rather than settling before suit is filed is
No. 13-2456 17
likely to be relatively low—a civil complaint from the EEOC,
perhaps accompanied by a negative press release—because the
employer remains free to settle after the EEOC files suit. The
potential gains of escaping liability altogether will, in some
cases, more than make up for the risks of not engaging in
serious attempts at conciliation. And the stronger the EEOC’s
case on the merits, the stronger the incentive to use a failure-to-
conciliate defense. We see no persuasive reason to find that a
statute meant to encourage voluntary compliance on the part
of employers implied a defense that would create such
contrary incentives for them. See generally EEOC v. Shell Oil
Co., 466 U.S. 54, 81 (1984) (rejecting employer’s effort to litigate
adequacy of EEOC’s disclosure of facts supporting subpoena
where such disputes would slow and undermine EEOC’s
enforcement efforts).
Mach Mining and the amici supporting it argue strenuously
that judges must police the EEOC, lest it either abandon
conciliation altogether or misuse it by advancing unrealistic
and even extortionate settlement demands. Neither scenario is
plausible. We are not persuaded by Mach Mining’s argument
that EEOC field offices are so eager to win publicity or to curry
favor with Washington by filing more lawsuits that they will
needlessly rush to court.
First, in the context of deciding whether to imply private
rights of action, the Supreme Court has repeatedly made clear
that not every statutory directive is the subject of a private
right of action. See generally Sosa v. Alvarez-Machain, 542 U.S.
692, 727 (2004) (“this Court has recently and repeatedly said
that a decision to create a private right of action is one better
left to legislative judgment in the great majority of cases”);
18 No. 13-2456
Alexander v. Sandoval, 532 U.S. 275, 286–87 (2001) (without
congressional “intent to create not just a private right but also
a private remedy … a cause of action does not exist and courts
may not create one, no matter how desirable that might be as
a policy matter, or how compatible with the statute”).
The Court’s reluctance to imply private rights of action
would seem to apply with similar force to implied affirmative
defenses, especially as defenses for violations of federal law
where Congress provided expressly for the enforcement action
itself. Using the standards for implied rights of action, there is
no indication that Title VII’s directive to conciliate was for the
special benefit of employers or that they have a right to
conciliation. Congress was focused on effective enforcement of
the anti-discrimination standards of Title VII, not creating new
rights for employers. See Alexander, 532 U.S. at 289 (“Statutes
that focus on the person regulated rather than the individuals
protected create ‘no implication of an intent to confer rights on
a particular class of persons.’”), quoting California v. Sierra
Club, 451 U.S. 287, 294 (1981).
Second, the agency has its own powerful incentives to
conciliate, and the available data show that it does so. The
EEOC currently processes and investigates nearly 100,000
charges of discrimination a year, but it ultimately files suit in
only a few hundred cases. In fiscal year 2012, the agency
attempted conciliation in 4207 cases, was unsuccessful in 2616,
yet filed suit on the merits in just 122. All Statutes: FY 1997
T h r o u g h F Y 2 0 1 2 ,
http://www.eeoc.gov/eeoc/statistics/enforcement/all.cfm;
EEOC Litigation Statistics, FY 1997 Through FY 2012,
http://www.eeoc.gov/eeoc/statistics/enforcement/litigation.cfm
No. 13-2456 19
(both sites last visited Dec. 20, 2013). That so few unsuccessful
efforts at conciliation end up in court shows how constrained
the agency is by practical limits of budget and personnel.
The agency’s practices and priorities are also checked in
this regard by the two other branches of government, making
it less urgent for the judiciary to add its supervision, at least
without a statutory command to do so. Although structured as
an independent agency, the EEOC shares its enforcement
authority with the Attorney General, see 42 U.S.C. § 2000e-5(f),
and it is attuned to the policy priorities of the executive. See
Neal Devins, Political Will and the Unitary Executive: What Makes
an Independent Agency Independent?, 15 Cardozo L. Rev. 273,
297–98 (1993). As it can with other agencies, Congress can exert
its influence on the EEOC through oversight hearings, adjust-
ments to appropriations, and statutory amendments. In
addition, the commissioners who head the agency are ap-
pointed by the President with the advice and consent of the
Senate. In short, even without the judiciary trying to monitor
the EEOC’s efforts at conciliation, those efforts are subject to
meaningful scrutiny.
IV. Applicable Seventh Circuit Case Law
We turn next to our own decisions that provide some
guidance on this question of an implied defense. We have not
had occasion before this case to examine this particular
question about an implied defense for failure to conciliate. But
our rejection of the defense is consistent with our earlier cases
rejecting similar attempts by employers to change the focus
from their employment practices to the agency’s pre-suit
processes.
20 No. 13-2456
For example, in EEOC v. Elgin Teachers Association, 27 F.3d
292 (7th Cir. 1994), the EEOC sued a local teachers union for
damages related to a collective bargaining agreement that the
agency believed was discriminatory. Rejecting the union’s
claim that the EEOC “lacked the right” to sue, we noted that
although “the EEOC must pursue conciliation, it failed to get
all of what it wanted in bargaining.” Id. at 294 (internal
citations omitted). While we doubted whether the teachers
union was the best target for suit, we made clear that the
decision to go to court was “a matter for the conscience of the
person who authorized the suit, rather than for the judiciary.”
Id. The same reasoning applies to judicial review of conciliation
efforts.
More recently, in Doe v. Oberweis Dairy, 456 F.3d 704 (7th
Cir. 2006), we held that the defendant employer was not
entitled to summary judgment on the ground that the com-
plainant, a former employee, had failed to cooperate with the
EEOC before suit was filed. Although the EEOC requires
complainants to cooperate with its investigations, we refused
to read into Title VII a rule that good-faith cooperation was a
prerequisite to individual suit or that failure to cooperate
would be an affirmative defense. Nothing in the statutory text
expressed any such requirement, and imposing it would
needlessly complicate Title VII cases: “To allow employers to
inject such an issue by way of defense in every Title VII case
would cast a pall over litigation under that statute.” Id. at 711.
The same reasoning applies to a failure-to-conciliate defense.
EEOC v. Caterpillar, Inc., 409 F.3d 831 (7th Cir. 2005), is even
more closely on point. In Caterpillar, the defendant employer
had moved for partial summary judgment on the theory that
No. 13-2456 21
the EEOC’s complaint went beyond the scope of the investiga-
tion required by 42 U.S.C. § 2000e-5(b). We affirmed denial of
summary judgment. Distinguishing cases with contrary dicta,
we held that the “existence of probable cause to sue is gener-
ally and in this instance not judicially reviewable.” 409 F.3d at
833. Nothing in the language of Title VII or our past case law
invites courts to review the agency’s finding of probable or
reasonable cause, and the same is true of its approach to
conciliation.
Mach Mining offers two grounds for distinguishing
Caterpillar. It first argues that any error as to whether probable
cause exists will be corrected at trial while, absent court
review, insufficient conciliation will remain forever
unremedied. We are not persuaded. A trial will check defects
in the conciliation process to the same extent it will a lack of
probable cause. All an employer loses from deficient concilia-
tion effort is the chance to comply with the discrimination laws
without need for a trial, and we must keep in mind that the
EEOC has complete discretion to decide whether to settle.
If the EEOC’s demands are so high that they offer no real
chance at bargaining, a trial on the merits should bring them
back to earth. If the employer feels it lacked the time or
information necessary to settle before suit is filed, litigation
will provide both. The employer can still settle, and district
courts have many tools available to encourage reasonable
settlements. We see no reason the EEOC would be likely to
prefer spending its limited litigation budget rather than accept
success in the form of a reasonable settlement. Moreover, the
parties can settle quickly and without court approval because
EEOC suits are not considered representative actions subject to
22 No. 13-2456
the requirements of Rule 23. See EEOC v. Waffle House, Inc., 534
U.S. 279, 288 (2002); cf. Fed. R. Civ. P. 23(e). It is true that the
employer may have to bear the burden of trial, but that is
equally true in the probable cause context. Mach Mining
asserts also that the existence of probable cause is particularly
the subject of agency expertise in a way that a failure to
conciliate is not. This claim, offered without further support or
explanation, is no more persuasive.
Perhaps the closest our cases come to supporting a failure-
to-conciliate defense is EEOC v. Massey-Ferguson, Inc., 622 F.2d
271, 277 (7th Cir. 1980), where our discussion of a laches
defense shows that some evidence from the conciliation
process was offered and considered. We rejected the em-
ployer’s attempt to require the EEOC to raise back-pay claims
in conciliation as a condition of seeking back-pay in the
lawsuit. Nevertheless, our discussion seems to have assumed
some degree of judicial review might be available, and the
evidence from the conciliation process was deemed relevant to
a defense of laches. The parties did not make an issue of the
conciliation process in Massey-Ferguson, however. Nor did they
raise the issue of confidentiality or confront the issues of
statutory text we address here. The opinion therefore adds
little to Mach Mining’s case here, while Caterpillar, Oberweis
Dairy, and Elgin Teachers Association show our consistent
skepticism toward employers’ efforts to change the focus from
their own conduct to the agency’s pre-suit actions.
V. Other Circuits
Our decision makes us the first circuit to reject explicitly the
implied affirmative defense of failure to conciliate. Because the
No. 13-2456 23
courts of appeals already stand divided over the level of
scrutiny to apply in reviewing conciliation, our holding may
complicate an existing circuit split more than it creates one, but
we have proceeded as if we are creating a circuit split.3
As explained in more detail below, the Second, Fifth, and
Eleventh Circuits evaluate conciliation under a searching three-
part inquiry. EEOC v. Asplundh Tree Expert Co., 340 F.3d 1256,
1259 (11th Cir. 2003); EEOC v. Johnson & Higgins, Inc., 91 F.3d
1529, 1534 (2d Cir. 1996); EEOC v. Klingler Elec. Corp., 636 F.2d
104, 107 (5th Cir. 1981). The Fourth, Sixth, and Tenth Circuits
require instead that the EEOC’s efforts meet a minimal level of
good faith. EEOC v. Keco Indus., Inc., 748 F.2d 1097, 1102 (6th
Cir. 1984); EEOC v. Radiator Specialty Co., 610 F.2d 178, 183 (4th
Cir. 1979); EEOC v. Zia Co., 582 F.2d 527, 533 (10th Cir. 1978).
While we respect the views of our colleagues in these circuits,
we also recognize our duty to decide our cases independently
and to disagree when we must. See, e.g., Atchison, Topeka &
Santa Fe Ry. Co. v. Pena, 44 F.3d 437, 443 (7th Cir. 1994), aff'd sub
nom. Bhd. of Locomotive Engineers v. Atchison, Topeka & Santa Fe
R.R. Co., 516 U.S. 152 (1996); Grandberry v. Keever, 735 F.3d 616,
618 (7th Cir. 2013).
To the extent other courts have explained why judicial
review of conciliation is appropriate in the form of an implied
affirmative defense to claims of unlawful discrimination, we
3
We have circulated this opinion among all judges of this court in regular
active service pursuant to Circuit Rule 40(e). No judge favored a rehearing
en banc on the question of rejecting the implied affirmative defense for
failure to conciliate.
24 No. 13-2456
are not persuaded to join them.4 Few courts recognizing this
implied defense have addressed the issue directly; those that
have recognized it have pointed generally to a need to give
effect to Congress’s intention that the EEOC address discrimi-
nation through voluntary settlement. See, e.g., EEOC v. Bass Pro
Outdoor World, LLC, No. 4:11-CV-3425, 2013 WL 5515345, at *4
(S.D. Tex. Oct. 2, 2013); Bloomberg LP, — F. Supp. 2d at —, 2013
WL 4799150, at *7. As we have explained, though, apart from
the problems this poses under the statutory text, including the
confidentiality requirement, we are also skeptical that court
oversight is necessary or that it encourages compliance rather
than strategic evasion on the part of employers.
Given Title VII’s deliberate silence concerning the details of
conciliation, it is not surprising that other courts have strug-
gled to provide meaningful guidance on how to judge the
process. The approach adopted in the Fourth, Sixth, and Tenth
Circuits proposes to inquire into the good faith of the EEOC’s
efforts. As we have explained, we see no reason to import a
judicially reviewable requirement of good faith into the
4
Nor are we persuaded by the arguments of Mach Mining’s amici that
Congress has implicitly “acquiesced” to these courts’ long-standing
interpretations. Amicus Br. of Retail Litig. Ctr., Inc., U.S. Chamber of
Commerce, and Nat’l Fed. of Indep. Bus. at 18, citing Block v. Community
Nutrition Inst., 467 U.S. 340, 349 (1984). Block discussed congressional
inaction on the way to holding that courts could not review the challenged
agency action, and in any event, the Supreme Court has since expressed
considerable skepticism about this argument by acquiescence, regardless of
which direction it runs. See Alexander v. Sandoval, 532 U.S. 275, 292–93
(2001); Central Bank of Denver, NA v. First Interstate Bank of Denver, NA,
511 U.S. 164, 187 (1994).
No. 13-2456 25
informal and confidential process of conciliation when the
statute does not require it.
The Second, Fifth, and Eleventh Circuits employ an even
more searching three-part test first announced in Marshall v.
Sun Oil Co. (Delaware), 605 F.2d 1331, 1335 (5th Cir. 1979). This
test asks whether the EEOC: (1) outlined to the employer its
cause for believing Title VII has been violated, (2) gave the
employer a chance to comply voluntarily, and (3) responded
“in a reasonable and flexible manner to the reasonable atti-
tudes of the employer.” Asplundh Tree, 340 F.3d at 1259.
This inquiry—especially the open-ended third
step—appears to be no clearer in practice than on paper. It
invites ad hoc assessments of whether the EEOC played fairly
and took reasonable substantive positions. See note 2, above,
collecting cases. Under either test, court review will conflict
directly with the statute’s confidentiality provision, as well as
with its grant of discretion to the agency to accept or reject any
particular offer to compromise.
Finally, a word on remedies. Even if there were a sound
basis for disregarding the confidentiality provision in Title VII
and subjecting the EEOC’s conciliation efforts to any form of
judicial review, and even where the EEOC’s conciliation effort
has fallen short of judicial expectations, we see no sound basis
for dismissing a case on the merits. Dismissal certainly is not
required by the language of the statute, which says nothing to
authorize judicial review in the first place and effectively
prohibits it by making the relevant evidence inadmissible. See
42 U.S.C. § 2000e-5(b).
26 No. 13-2456
As a practical matter, there is little reason to expect the
potential for dismissal to promote conciliation. The employer
in a dismissed case has little incentive to resume talks, of
course. The next employer the EEOC investigates will have
seen the benefit of using the conciliation process as a strategic
defense rather than a chance to settle. Dismissal also provides
little additional deterrence against EEOC misconduct beyond
what a stay or a referral to mediation could provide, and the
significant social costs of allowing employment discrimination
to go unaddressed in these situations are likely to outweigh
any marginal gain in deterrence. Cf. Hudson v. Michigan, 547
U.S. 586, 594–96 (2006) (holding that violation of “knock-and-
announce” rule under Fourth Amendment did not require
suppression of evidence where deterrence benefits would be
outweighed by substantial social costs).
Because all parties acknowledge that the statute grants the
EEOC discretion to reject any particular settlement offer, Mach
Mining must argue that its failure to conciliate defense is a
claim solely about process and not substance. This distinction
seems too fine a thread on which to hang judicial review. Cases
applying both the tests for failure to conciliate slide easily from
review of the form of conciliation toward more substantive
scrutiny. Even setting aside this problem, the Supreme Court
has made clear that, as a general rule, the remedy for a defi-
ciency in a process is more process, not letting one party off the
hook entirely. See, e.g., Hamdi v. Rumsfeld, 542 U.S. 507, 533
(2004) (citizens classified as “enemy combatants”were entitled
to notice and hearing before neutral arbiter, but not to release
from detention); Vitek v. Jones, 445 U.S. 480, 495–97 (1980)
(prisoner was entitled to procedural safeguards before transfer
No. 13-2456 27
to mental hospital, but not to immunity from transfer);
Fuentes v. Shevin, 407 U.S. 67, 96–97 (1972) (alleged debtors
were entitled to hearing before prejudgment seizure of their
property, but not to forgiveness of their debts).
The essence of an affirmative defense is that it assumes the
plaintiff can prove its factual allegations. An affirmative
defense raises additional facts or legal arguments that defeat
liability nonetheless. See 2 Moore’s Federal Practice 8.08[1] (3d
ed. 2013); see also 5 Wright & Miller, Federal Practice and
Procedure § 1271, at 585 (3d ed. 2004); Sloan Valve Co. v. Zurn
Industries, Inc., 712 F. Supp. 2d 743, 756 (N.D. Ill. 2010);
Menchaca v. American Medical Response of Illinois, Inc., 6 F. Supp.
2d 971, 972 (N.D. Ill. 1998). The wrong claimed by defendant
here is purely one of insufficient process. A procedural
remedy, such as a short stay to allow the parties to pursue
conciliation further, would be tailored to the alleged wrong.
Dismissal on the merits, however, would excuse the em-
ployer’s (assumed) unlawful discrimination. That would be too
final and drastic a remedy for any procedural deficiency in
conciliation.
We need not say more about remedies because we hold that
alleged failures by the EEOC in the conciliation process simply
do not support an affirmative defense for employers charged
with employment discrimination. If the EEOC has pled on the
face of its complaint that it has complied with all procedures
required under Title VII and the relevant documents are
facially sufficient, see EEOC v. Shell Oil Co., 466 U.S. 54, 81
(1984), our review of those procedures is satisfied. The EEOC
is entitled to summary judgment on defendant Mach Mining’s
affirmative defense. The decision of the district court is
28 No. 13-2456
REVERSED and the case is REMANDED for further proceed-
ings on the merits.