How broad is the EEOC's administrative subpoena authority? That agency urged the courts to allow it to seek information from companies and third party testing firms that goes far beyond the bounds of an individual complaint. The EEOC wants to search for systemic discrimination by employers or the third parties they hire to do personality tests or other tests prior to employment. However, the courts are not all so expansive.
The defendant in this case, Kronos, won before a federal judge. The EEOC appealed to the Third Circuit. The NAM and others filed an amicus brief arguing that the EEOC’s tactics in this case exceed its statutory authority. Pursuing unbridled fishing expeditions in search of a big system case diverts valuable resources from investigating actual, live charges. The statute granting the EEOC investigatory powers is limited to investigations relating to the specific charge that an individual files.
Also on appeal was a district court order protecting the confidentiality of personality test information disclosed to the lawyers during discovery. We argued that validated employment tests are important hiring tools whose integrity could be compromised by even a minor breach of confidentiality.
On Sept. 7, 2010, the Third Circuit reversed in part, allowing the EEOC authority to expand an investigation of a single complaint into a broader investigation involving hiring practices in general and other job positions. It allowed a broadening of the time period to be examined and allowed the EEOC to look at the effect of the company's use of an employment assessment in hiring nationwide. According to the Third Circuit, the EEOC's power to investigate "encompasses not only the factual allegations contained in the charge, but also any information that is relevant to the charge." The court also ruled that while the EEOC may expand its investigation to include various legal theories of disability discrimination, it may not expand its investigation to seek out racial discrimination that is wholly unrelated to the original charge. Only "reasonable" expansion of the investigation is allowed.
The court sent the confidentiality issue back to the trial court for further explanation.