No

No. 15-1690

IN THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

EQUAL EMPLOYMENT OPPORTUNITY

COMMISSION,

Applicant-Appellee,

AEROTEK, INC.,

Respondent-Appellant.

On Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division

Hon. Milton I. Shadur, Judge

Appellee Equal Employment Opportunity Commission’s

Opposition to Aerotek’s Motion to Stay Enforcement
of the District Court Order During Pendency of Appeal

The Equal Employment Opportunity Commission brought this directed investigation of age discrimination against Aerotek, a staffing company. In the course of its investigation, the Commission issued a subpoena seeking information from the 62 Aerotek offices at which hundreds of discriminatory requests were made by Aerotek clients. In response, Aerotek provided the Commission with a reworked version of its database, camouflaging its clients’ names. The district court ruled that the Commission is entitled to the information it seeks and Aerotek appealed. The district court ultimately denied Aerotek’s request for a stay pending appeal, and the company has renewed its request in this Court. The Commission respectfully urges this Court not to stay the district court’s order.

Background

This is an ongoing investigation into Aerotek’s practices of recruiting, hiring or placing individuals for employment both at its own facilities and/or at the facilities owned or operated by Aerotek’s clients. The Commission is investigating whether Aerotek or its clients have used age-based criteria in violation of the Age Discrimination in Employment Act of 1967 (“ADEA”). To shed light on this issue, the EEOC issued an administrative subpoena seeking, among other things, the names of Aerotek’s clients: i.e., the employers who seek employees through referrals from Aerotek. The subpoena does not seek the identity of Aerotek’s clients at all of the company’s 226 offices. Rather, it seeks this information only from the 62 Aerotek offices where the EEOC has already uncovered hundreds of referral requests that appear to discriminate on the basis of age. R.7[1], Exh. 1, ¶¶ 7, 13; Exh. 1-G, p. 3. The district court granted the application, ordered Aerotek to produce all information requested by the subpoena no later than March 30, 2015, and denied Aerotek’s motion to alter or amend the judgment. S.A.14[2], 25. Aerotek filed a notice of appeal, R.21, and asked the district court to stay its order pending appeal. R.25. The district court granted the motion for a partial stay during the pendency of this Court’s Rule 33 prehearing conference. R.31; 7th Cir. R. 33. The court ruled that Aerotek “made the same failure” in its stay request as it had made when arguing the merits in the February and March hearings: “Aerotek never made clear just how it was potentially harmed,” and the company’s argument that individuals will be “bothered” if EEOC contacts them is insufficient. Aerotek Mot., Exh. D [3] 2-4.

On June 11, after the mediation failed, the district court vacated the partial stay and denied Aerotek’s further request for a stay, noting that Aerotek can request an emergency stay from this Court. R.33; Aerotek Mot., Exh. A, 57. On June 15, 2015, the same day it filed its opening brief in this appeal, Aerotek gave the EEOC a subset of client names it deemed relevant. Aerotek has not fully complied with the court’s order enforcing the subpoena. On July 17, the EEOC filed its response brief with this Court. On July 20, Aerotek filed this motion for a stay of the district court’s March order.

Argument

The District Court Properly Denied a Stay of the Commission’s Enforcement Action Pending Appeal and This Court Should Deny a Stay for the Same Reasons.

“A stay is not a matter of right . . . . It is instead an exercise of judicial discretion, and [t]he propriety of its issue is dependent upon the circumstances of the particular case.” Nken v. Holder, 556 U.S. 418, 433 (2009) (citation omitted). In reviewing a district court’s denial of a stay pending appeal, this Court reviews the district court’s factual findings for clear error, its balancing of the factors for abuse of discretion, and its legal conclusions de novo. Hinrichs v. Bosma, 440 F.3d 393, 396 (7th Cir. 2006). The “factors regulating the issuance of a stay are generally the same” in the rules of procedure governing both district courts and courts of appeals. Hilton v. Braunskill, 481 U.S. 770, 776 (1987) (citing Fed. Rule Civ. Proc. 62(c); Fed. Rule App. Proc. 8(a)); see also In re A & F Enters., Inc. II, 742 F.3d 763, 766 (7th Cir. 2014) (same). The party seeking the stay “must show that it has a significant probability of success on the merits; that it will face irreparable harm absent a stay; and that a stay will not injure the opposing party and will be in the public interest.” Hinrichs 440 F.3d at 396 (citing Hilton, 481 U.S. at 776). The movant must make a threshold showing of some likelihood of success on the merits and irreparable harm. If the movant fails to make these threshold showings, “the stay should be denied without further analysis.” Matter of Forty-Eight Insulations, Inc., 115 F.3d 1294, 1300 (7th Cir. 1997) (citing Green River Bottling Co. v. Green River Corp., 997 F.2d 359, 361 (7th Cir. 1993)).

A. Aerotek Has Failed to Demonstrate that It Is Likely to Succeed on the Merits.

The district court held that the EEOC’s authority to ferret out ADEA violations through reasonable investigations permits it to seek, and requires Aerotek to produce, client names from the 62 Aerotek offices at which possible ADEA violations were identified. The court rejected Aerotek’s argument that the Commission has all the information it needs. The court held that Aerotek’s argument that the EEOC is required to submit a request to Aerotek for the identity of specific clients, client by client, is “nonresponsive in real world terms to the subpoena,” “inverts” the subpoena process and “misses the whole point of what [the EEOC] is . . . seeking to do.” S.A. 8-9.

Aerotek does not maintain that the district court abused its discretion in balancing the factors. The company ignores this standard of review, and focuses instead on the EEOC’s burden on the merits in the underlying subpoena enforcement action, which is not relevant to this motion. Aerotek argues that the client identities the Commission seeks are not relevant. Aerotek Mot. at 5. In contending that the identities are not relevant, the company relies entirely on cases addressing subpoenas issued under Title VII and the ADA.[4] But this Court has held that the rules governing ADEA subpoenas differ from those governing Title VII and ADA subpoenas. EEOC v. Sidley Austin Brown & Wood, 315 F.3d 696, 701 (7th Cir. 2002).

Under Title VII and the ADA, the information the Commission seeks must be relevant to the charge on which the investigation is based. See id; Aerotek Mot. at 5. Under the ADEA, however, the Commission’s investigative authority “is not cabined by any reference to charges.” Sidley Austin, 315 F.3d at 701. A Commission ADEA subpoena should be enforced if the district court determines “that the investigation is authorized by Congress, is for a purpose Congress can order, and the documents sought are relevant to the inquiry.” EEOC v. Peat, Marwich, Mitchell & Co., 775 F.2d 928, 930 (8th Cir. 1985); Sidley Austin, 315 F.3d at 700–01 (“[I]t is sufficient if the inquiry is within the authority of the agency, the demand is not too indefinite and the information sought is reasonably relevant.”) (quoting Morton Salt, 338 U.S. at 652).

Aerotek has thus failed to show it is likely to succeed on the merits, because it has failed to cite and apply the correct standard. Moreover, Aerotek’s restrictive definition of the term “relevance”—the company maintains that a client’s name is relevant only if the EEOC has already uncovered evidence that that client discriminated—is incompatible with established precedent from this Court and other courts of appeals. EEOC br. at 15. Rather than cabining the investigation to the potential ADEA violations already uncovered, the discovery of these potential violations fully justifies an expansion of the investigation. As the district court observed, the potential violations already uncovered “serve[] as a predicate as the potential springboard for finding out if this is a larger problem or not.” S.A. 11. This ruling is consistent with precedent from this Court even in Title VII cases. See generally EEOC v. A.E. Staley, 711 F.2d 780, 783 (7th Cir. 1983) (“The EEOC need not demonstrate probable cause before it is entitled to information.”) (citing EEOC v. Bay Shipbuilding Corp., 668 F.2d 304, 312–13 (7th Cir. 1981)). See also EEOC v. Kronos, 620 F.3d 287 (3rd Cir. 2010) (“[T]he EEOC has the power to investigate a ‘broader picture of discrimination which unfolds in the course of a reasonable investigation . . . .’”) (ADA) (quoting EEOC v. Cambridge Tile Mfg. Co., 590 F.2d 205, 206 (5^th Cir. 1979) (per curiam) (Title VII)). “In many instances, the purpose of the EEOC investigation is to determine whether probable cause does in fact exist.” A.E. Staley, 711 F.2d at 783. Aerotek’s arguments fail to demonstrate that the district court erred when it failed to adopt Aerotek’s unduly narrow view of what is relevant in an ADEA subpoena enforcement action. Aerotek’s position essentially requires the EEOC to gain the company’s permission to obtain the name of each individual client. Aerotek’s desire to stand as the gatekeeper blocking the EEOC’s access to relevant information is not workable, not reasonable and not what Congress intended. EEOC br. at 19.

B. Aerotek Fails to Demonstrate That, Absent a Stay, the Company Will Suffer Irreparable Harm.

The district court did not abuse its discretion when it held that Aerotek failed to demonstrate that it would suffer irreparable harm if its request for a stay was denied. The district court explained its ruling as follows:

[T]he problem that I have had with [Aerotek’s request for a stay] is that Aerotek really never made clear just how it was potentially harmed. There is a constant recital this is going to do us terrible injury. But . . . one of the reasons I entered the order that I did was that you never really came to the fore and said, “Well, here is how we are going to be hurt.”

Aerotek Mot., Exh. A.3. If Aerotek had set forth a credible argument for injury, the court “would have given serious consideration to that.” Id. Aerotek’s only allegation of harm in the district court was that it did not want its clients “to be bothered” by “the Government” asking them questions about Aerotek’s “business relationship” with them. Id. at 5. Aerotek has not repeated this argument on appeal. The company does not argue that it will suffer irreparable harm if the EEOC contacts its clients. The company has therefore waived this aspect of its irreparable harm argument.

On appeal, Aerotek re-crafts its “irreparable injury” argument, asserting that it will be harmed if the stay is denied because if the stay is denied, the appeal would be moot. But denying Aerotek’s motion for an emergency stay would not moot this appeal.

If Aerotek complies with the subpoena and gives the EEOC its clients’ names, the delivery of that information does not moot the appeal. “A question in a case is moot if it is impossible for the court to grant any effectual relief whatever to the party that prevails on it.” Reich v. Nat’l Eng. & Contracting Co., 13 F.3d 93, 97 (4th Cir. 1993) (quoting Church of Scientology v. United States, 506 U.S. 9, 12 (1992)). If this Court ultimately determines that the district court abused its discretion when it ordered enforcement of this provision in the subpoena, this Court can order the EEOC to return the information to Aerotek and bar the Commission from using it. As the Supreme Court stated in Church of Scientology, which involved an IRS summons to obtain certain audio tapes,

While a court may not be able to return the parties to the status quo ante—there is nothing a court can do to withdraw all knowledge or information that IRS agents may have acquired by examination of the tapes—a court can fashion some form of meaningful relief . . . . [E.g.,] this case is not moot because if the summons were improperly issued or enforced a court could order the IRS’ copies of the tapes be either returned or destroyed.

Church of Scientology, 506 U.S. at 12, 15 (emphasis in original). See also In re Grand Jury Investigation, 445 F.3d 266, 270–73 (3d Cir. 2006) (holding that the appeal of an order compelling an attorney’s testimony and production of the attorney’s notes was not moot, even though the attorney had already testified and produced the notes). This Court could order the EEOC to return or destroy the key used to decode the clients’ names and bar the EEOC from using the information it obtained by using the key. For these reasons, denying Aerotek a stay of the district court’s order would not moot this appeal. Accordingly, Aerotek has not established irreparable harm.

C. The District Court Properly Exercised Its Discretion to Deny a Stay of the Commission’s Enforcement Action Because the Denial Serves an Important Public Purpose.

The district court’s order enforcing the Commission’s subpoena should not be stayed pending appeal because the agency’s investigation serves an important public purpose. The EEOC has the duty to enforce the ADEA even if no charge has been filed. EEOC v. Johnson & Higgins, Inc., 91 F.3d 1529, 1537 (2d Cir. 1996) (“[T]he ADEA gives the EEOC authority to investigate and enforce independent of individual employee charges.”) (quoting EEOC v. Am. & Efird Mills, Inc., 964 F.2d 300, 304 (4th Cir. 1992)). Commission actions enforcing the ADEA serve the public interest by punishing and deterring discrimination on the basis of age. Id. (holding that even though no current or former employee claimed injury, the EEOC could litigate an ADEA claim against the employer because of “the strong public interest in eradicating age discrimination . . . and the EEOC's broad statutory power to enforce the ADEA”).

The stay pending appeal should be denied to prevent any further delay in the Commission’s investigation. The district court expressed its frustration with Aerotek’s actions, which had the effect of protracting the process. In its April 2015 hearing, when it temporarily granted the stay while the parties were in Circuit Rule 33 mediation, the district court stated that it “was troubled by [seeking appellate review] as further delay” in a matter that has already been delayed many months. Aerotek Mot., Exh. A at 3.

Conclusion

The Commission needs to obtain the names of Aerotek’s clients to assure itself that the ADEA is not being violated at the sixty-two named offices. Aerotek has shown neither a likelihood of success on the merits nor irreparable harm. Its motion for a stay should accordingly be denied.

[1] “R. __” refers to the entries in the district court’s docket sheet.

[2] “S.A. __” refers to page cites in Aerotek’s short appendix appended to its opening brief.

[3] “Aerotek Mot. ___” refers to page cites in Aerotek’s Motion To Stay Enforcement of District Court’s Oder During Pendency of Appeal.

[4] All of the cases Aerotek cites on pages 5 and 6 of its motion are Title VII or ADA cases, except for U.S. v. Harrington, 338 F.2d 520 (2d Cir. 1968), which involves an IRS summons. None of the cases addresses an ADEA subpoena or a FLSA or FTCA subpoena.