In a case called EEOC v. Sterling Jewelers, Inc., the Second Circuit Court of Appeals recently held that, as matter of first impression, while federal courts may review whether the EEOC conducted an investigation into a formal charge of discrimination against an employer, federal courts may not review the sufficiency of the investigation.

Title VII of the Civil Rights Act of 1964 (Title VII) prohibits employment discrimination based on race, color, national origin, and other protected classifications. The Equal Employment Opportunity Commission (EEOC)  interprets and enforces Title VII.  Before the EEOC can bring an enforcement action against an employer, among other things, it must investigate the charges of discrimination.  The term “investigation,” however, is not defined by Title VII.   There are no specific steps or actions that the EEOC is required to take in conducting its investigation.   In order to ensure compliance with Title VII, the federal courts have been vested with the power to review whether the EEOC has fulfilled its pre-suit administrative obligations, including whether it has conducted an investigation.

In Sterling, the EEOC brought an enforcement action against Sterling Jewelers based on 19 charges of nationwide sex-based discrimination in pay and promotion.  The district court granted summary judgment in favor of Sterling Jewelers finding that the EEOC had failed to prove that it had conducted a pre-suit investigation.  The EEOC appealed that determination resulting in this Second Circuit decision.

The court held that judicial review of an EEOC investigation is limited to the sole question of whether the EEOC conducted an investigation.  This means the courts may only review whether an investigation occurred, but not the sufficiency of the investigation.  In order to prove that it fulfilled its pre-suit investigative obligation, the EEOC must show that it took steps to determine whether there was reasonable cause to believe that the allegations in the charge against the employer are true.  The courts, however, do not get to decide what those steps should have been, only whether investigative steps were taken.  Accordingly, to show that it met its obligation to investigate, the EEOC can usually just present an affidavit which states that the EEOC investigated the charges and that provides a general outline of the steps it took to investigate.

The Court cited several reasons for this approach.  First, it noted that this limited review respects the expansive discretion that Title VII gives to the EEOC in investigating discrimination claims, while still ensuring that the EEOC follows the law.  Second, the court reasoned that “Title VII ultimately cares about substantive results.”  Thus, allowing courts to review the sufficiency of an EEOC investigation would effectively make every Title VII suit a two-step action: First, the parties would litigate the question of whether the EEOC had a reasonable basis for its initial finding, and only then would the parties proceed to litigate the merits of the action.  This type of extensive judicial review “would expend scarce resources and would delay and divert EEOC enforcement actions from furthering the purpose behind Title VII —eliminating discrimination in the workplace.”

Although this Second Circuit decision is not binding on California employers, it is a good reminder of the expansive discretion the EEOC is afforded in carrying out its investigation and enforcement obligations.