EEOC v. Bass Pro Outdoor World, LLC

By Dale Conder Jr.

In 2011, the EEOC sued Bass Pro claiming that the retailer’s hiring practices discriminated on the basis of race and national origin. The Government also claimed that Bass Pro retaliated against employees who complained about the discrimination. According to the EEOC there were 50,000 victims of the alleged discrimination. The EEOC came up with this figure in an odd way. Because 50,000 African Americans and Hispanics unsuccessfully applied to Bass Pro over a ten-year period, the Government concluded that there must be 50,000 victims of discrimination. EEOC v. Bass Pro Outdoor World, LLC, — F.3d —, 2017 WL 1540853 at *1 (5th Cir.) (Jolly, Judge dissenting from the denial of en banc review). (The denial of en banc review was the result of a 7-7 tie in the Fifth Circuit’s voting.)

EEOC’s conciliation efforts

Under Title VII, the EEOC must engage in conciliation of the dispute. 42 U.S.C. § 2000e-5(b). Here, the EEOC notified “Bass Pro that it had reasonable cause to believe that Bass Pro had engaged in discriminatory practices.” EEOC v. Bass Pro Outdoor World, LLC, 826 F.3d 791, 805 (5th Cir. 2016). The parties then engaged in an eleven-month-long process that involved face-to-face negotiations and negotiations by letter. Id. But the EEOC never identified any of the alleged 50,000 victims until after the mediation. Id. at 804 n. 74. And the EEOC only identified victims when pressed by the district court. EEOC v. Bass Pro Outdoor World, LLC, — F.3d —, 2017 WL 1540853 at *2 (Jolly, Judge dissenting from the denial of en banc review). Bass Pro argued that the EEOC had to identify the individuals and try to resolve the individual claims for the conciliation process to be effective. Id. The Fifth Circuit rejected this argument and held that the EEOC’s conciliation efforts satisfied its duty. Id. at 805. The court concluded that Bass Pro was on notice as to the claims against it. Id. And because § 706 permits pattern-and-practice claims, the EEOC’s failure to negotiate on behalf of individual victims was not a problem. Id. It was the Fifth Circuit’s holding on the pattern-and-practice claim that prompted the en banc vote.

The Fifth Circuit’s initial opinion was decided by a three-judge panel. Bass Pro filed a motion for the case to be reheard en banc, i.e., by the full Fifth Circuit. Because the vote on the en banc petition was evenly divided, the Fifth Circuit denied the motion for a rehearing. But six of the seven who favored rehearing filed a statement dissenting from the denial. The dissenters were only concerned about the holding that allowed the EEOC to pursue a “pattern-or-practice case under both or either § 706 or § 707 . . . to claim individualized punitive and compensatory damages for each of the 50,000 persons.” EEOC v. Bass Pro Outdoor World, LLC, — F.3d —, 2017 WL 1540853 at *1 (Jolly, Judge dissenting from the denial of en banc review).

Can the EEOC go both ways?

In the movie The Wizard of Oz, Dorothy asks the Scarecrow for directions to the Emerald City. The brainless Scarecrow, after pointing first one way and then the other, says “of course, some folks do go both ways.” The Wizard of Oz, Metro-Goldwyn Mayer 1939. And it’s allowing the EEOC to go both ways that concerned the six judges in their dissenting statement.

Sections 706 and 707

As the dissenters noted in their statement, “the notion that § 706 and § 707 are dichotomous with respect to suits brought by the EEOC is hardly a novel proposition.” EEOC v. Bass Pro Outdoor World, LLC, — F.3d —, 2017 WL 1540853 at *4 n. 9 (Jolly, Judge dissenting from the denial of en banc review). Under § 706, individuals can seek compensatory and punitive damages caused by defendants’ discriminatory conduct; the EEOC can bring this action as the representative of the alleged victims. But the statute’s language does not mention allowing a plaintiff to pursue a pattern-and-practice claim. On the other hand, § 707 explicitly authorizes such a claim. The Fifth Circuit’s holding allows the pattern-and-practice claims to be brought under § 706 too.

This creates problems for employers

Although the EEOC claimed there were 50,000 victims, it was never able to identify more than 200 individuals, and this was after three years! The Constitution’s Seventh Amendment gives every litigant the right to a jury trial. U.S. Const. Amend. VII. Will this subject Bass Pro to between 200 and 50,000 jury trials?

The Fifth Circuit’s answer is that a jury will be empaneled to decide the pattern-and-practice case. Then a second jury would be empaneled to decide the punitive-damages issue. EEOC v. Bass Pro Outdoor World, LLC, — F.3d —, 2017 WL 1540853 at *13-14 (Higginbotham, Judge responding to the dissent from the denial of en banc review). This is likely to increase the costs of these cases for employers. The Fifth Circuit’s response that the decision presents the parties with years of unmanageable litigation is “that the parties would settle their claims.” EEOC v. Bass Pro Outdoor World, LLC, 826 F.3d 791 at 801.

This opinion gives the EEOC leverage in pursuing cases. The EEOC will now pick and choose from the § 706-§ 707 cafeteria. The EEOC will exercise this power to force employers to settle.

Subsequent developments

Apparently not satisfied with its 50,000 victims, the EEOC asked the district court to add as plaintiffs those individuals who applied for employment after the EEOC issued its letter of determination. The district court denied this motion. The district court held that the EEOC could not have known about these applicants before it issued its letter of determination because they had not applied for jobs. Therefore, the EEOC could not have conciliated these claims.

But after six years, Bass Pro and the EEOC reached a settlement agreement. According to reports, Bass Pro will pay $10.5 million to settle the case. The money will be used, in part, to compensate victims of the discrimination. In addition, Bass Pro will establish an office of diversity and inclusion. The director of this office will make sure that Bass Pro complies with the terms of the settlement agreement. The Fifth Circuit’s settlement rationale seems to have worked.

Finally, this case reveals a significant divide on the Fifth Circuit. The dissenting statement was sharp and to the point. This prompted Judge Higginbotham, the author of the panel opinion, to respond to the dissenting statement. But this was not the end: Judge Edith Jones then issued her statement joined by two other judges that took Judge Higginbotham to task for defending the panel’s opinion. Very unusal!

Dale Conder Jr., Attorney
Rainey, Kizer, Bell & Reviere PLC