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Equal Employment Opportunity Commission v. Southeast Food Services Co., LLC

United States District Court, E.D. Tennessee

June 23, 2017

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Petitioner,
v.
SOUTHEAST FOOD SERVICES COMPANY, LLC D/B/A WENDY'S, Respondent.

          MEMORANDUM OPINION

          THOMAS A. VARLAN, CHIEF UNITED STATES DISTRICT JUDGE

         This matter is before the Court on the Equal Employment Opportunity Commission's (“EEOC”) Objections to Magistrate Judge's Memorandum and Opinion Issued March 27, 2017 [Doc. 14]. The EEOC filed these objections to United States Magistrate Judge H. Bruce Guyton's Memorandum and Order (“M&O”) [Doc. 10] denying its Application for an Order To Show Cause Why an Administrative Subpoena Should Not Be Enforced [Doc. 1]. Respondent filed a response to the objections [Doc. 16]. For the reasons contained herein, the Court will overrule the EEOC's objections and accept the decision of Magistrate Judge Guyton.

         I. Background[1]

         The EEOC is currently investigating a charge of employment discrimination filed by Christine Cordero against respondent under Title VII of the Civil Rights Act of 1964. In the course of its investigation, the EEOC issued a subpoena seeking information and documents regarding employment data. Respondent has refused to provide the requested information. For purposes of the current matter, the following facts are not in dispute.

         On September 25, 2014, Ms. Cordero was hired by respondent as a crew member to work at one of its fast-food locations. Approximately two weeks later, on October 11, 2014, respondent offered to promote Ms. Cordero to crew leader. In connection with the promotion, Ms. Cordero was asked to sign a general release, waiving all claims that she may have had against respondent up to the date of the release's execution. For the past twenty years, respondent has required employees to sign this release of all claims as a condition of promotion. At the time Ms. Cordero was asked to sign the release, she did not have any claims. She declined to sign the release, however, because she felt that respondent was discriminating against her by asking her to sign the waiver. Consequently, respondent did not promote Ms. Cordero, admittedly because of her refusal to sign the release. Respondent gave her the twenty-five-cent pay raise, as well as the same training, however, that accompanied the promotion.

         Ms. Cordero continued to work for respondent, but she filed a charge of discrimination with the EEOC on December 5, 2014. In this charge, Ms. Cordero alleges that respondent retaliated against her by failing to promote her due to her refusal to sign the release. Ms. Cordero voluntarily resigned from her position on April 20, 2015.

         Having learned that respondent required its employees to sign a release of claims as a condition of promotion, the EEOC sent respondent a pre-subpoena letter on June 9, 2015, notifying respondent of its intent to expand its investigation. In addition, the letter requested various information about all former and current employees who worked for respondent from December 4, 2012, to present. On February 18, 2016, after not receiving the information requested, [2] the EEOC issued a subpoena that sought the same information identified in its pre-subpoena letter. Specifically, the subpoena seeks the identity and contact information of all: (1) current and former employees since December 4, 2012, (2) current and former employees who signed a release of claims since December 4, 2012, and (3) current and former employees who were promoted since December 4, 2012.[3] It also seeks information related to the employees' dates of hire, promotion, advances, and termination, reasons for termination, and current and former job titles. Moreover, the subpoena requests copies of all releases respondent required its employees to sign in order to receive a promotion and copies of various documents relating to information about the system or software components of respondent's Human Resource Information System.[4]

         Respondent continued to object to the subpoenaed information, prompting the EEOC to file the instant application with the Court on November 18, 2016. Respondent filed a response in opposition on February 22, 2017.

         In the M&O, Judge Guyton denied the EEOC's application, finding that the EEOC has not met its burden in demonstrating that the information sought is relevant to Ms. Cordero's charge [Doc. 10 pp. 5-10]. The EEOC objects to the M&O on substantive and procedural grounds. The Court will address the EEOC's procedural objections first, and it will then proceed to the EEOC's substantive arguments.

         II. Standard of Review

         As a preliminary point, the EEOC argues that Judge Guyton had jurisdiction only to conduct the show-cause hearing and to submit to the undersigned his proposed findings of fact and recommendations, rather than issuing the M&O [Doc. 14 p. 6]. According to the EEOC, because the application to enforce the administrative subpoena is typically treated as a dispositive matter, Judge Guyton did not possess authority to deny the EEOC's application and improperly disposed of this action [Id.]. Thus, the EEOC argues that this Court should treat the M&O as a recommendation, rather than a final order, and conduct a de novo review [Id.]. Respondent contends in opposition that this argument by the EEOC is of no consequence [Doc. 16 p. 5]. It submits that this procedural issue has no substantive bearing on the weight of Judge Guyton's decision [Id.].

         The standard of review for a magistrate judge's ruling on a non-dispositive pretrial matter is the “clearly erroneous or contrary to law” standard. See 28 U.S.C. § 636(b)(1)(A); Fed.R.Civ.P. 72(a). In certain situations, however, where the decision will finalize the district court proceeding, district courts have treated the motion as dispositive, making the ruling subject to de novo review. Luppino v. Mercedes-Benz Fin. Servs. USA, LLC, No. 13-50212, 2013 WL 1844075, at *3 (E.D. Mich. Apr. 11, 2013); see also Jackson v. Gogel, No. 15-35-DLB-JGW, 2015 WL 3452546, at *2 (E.D. Ky. May 29, 2015); EEOC v. Nestle Prepared Foods, No. 11-358, 2012 WL 1888130, at *4-5 (E.D. Ky. May 23, 2012); Ross v. Pioneer Life Ins. Co., No. 07-MC-18, 2007 WL 4150957, at *4 (N.D. Okla. 2007). In this case, considering that the Court's ruling on this motion will terminate the proceeding in this district, the Court finds that it is appropriate to treat Magistrate Judge Guyton's M&O [Doc. 10] as a report and recommendation. The Court notes, however, that while it has elected to apply a more demanding standard of review, it would have reached the same result under the more deferential “clearly erroneous or contrary to law” standard.

         A court must conduct a de novo review of those portions of a magistrate judge's report and recommendation to which a party objects unless the objections are frivolous, conclusive, or general. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b)(3); Smith v. Detroit Fed'n of Teachers, Local 231, 829 F.2d 1370, 1373 (6th Cir. 1987); Mira v. Marshall, 806 F.2d 636, 637 (6th Cir. 1986). “[A]bsent compelling reasons, ” parties may not “raise at the district court stage new arguments or issues that were not presented to the magistrate.” Murr v. United States, 200 F.3d 895, 902 n.1 (6th Cir. 2000) (citing United States v. Waters, 158 F.3d 933, 936 (6th Cir. 1998)); see also Marshall v. Chater, 75 F.3d 1421, 1426-27 (10th Cir. 1996) (“[I]ssues raised for the first time in the objections to magistrate judge's report and recommendation are deemed waived.”). The Court “may accept, reject, or modify, in whole or in part, the findings or recommendations” made by the magistrate judge. 28 U.S.C. § 636(b)(1).

         III. The EEOC's Substantive Objections

         In the M&O, Judge Guyton ruled that the EEOC has not demonstrated the relevance of the subpoenaed information to Ms. Cordero's claims [Doc. 10 p. 10]. “Give[n] the Commission's lack of explanation as to how the information would resolve the instant charge or is necessary to determine whether [r]espondent has discriminated against Ms. Cordero, ” wrote Judge Guyton, “granting the Application would surely render the relevancy requirement ‘a nullity'” [Id.]. Thus, Judge ...


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