EEOC gets what it wants in Dollar General background check suit discovery dispute

Granting the EEOC’s motion to compel pre-2008 background screening data and information regarding Dollar General’s business necessity for its criminal background screenings, a federal district court in Illinois found that since the EEOC was alleging a disparate impact on applicants beginning in 2004, pre-2008 data was not just relevant, it was necessary. Nor did it give credence to Dollar General’s argument that the EEOC had to first provide evidence of a disparate impact before the employer was required to provide information related to an affirmative defense it had consistently indicated it would assert. And the court wouldn’t bite at Dollar General’s claim that the EEOC had failed to engage in a good faith effort to resolve the discovery dispute, instead questioning Dollar General’s good faith (EEOC v Dolgencorp, LLC dba Dollar General, July 29, 2014, Wood, A).

Discovery dispute. EEOC challenged Dollar General’s hiring practices, alleging that, since at least 2004, the retailer’s practice of conducting criminal background checks on potential employees has had a disparate impact on African-American applicants. Dollar General objected to providing any information from prior to 2008 and also refused to provide information regarding Dollar General’s business necessity for performing criminal background checks on job applicants, claiming the EEOC first needed to provide evidence of disparate impact before it would have to provide such discovery on its affirmative defense. The parties squabbled, Dollar General requested a Local Rule 37.2 conference to further discuss the issues, and although they had a telephone conference, no agreement was reached.

Whose good faith? As is often the case, Dollar General’s first approach was to complain that the EEOC had failed to engage in a good faith effort to resolve the discovery dispute in violation of local rules. It said it had “tried to reach agreement” by offering to produce the post-2008 data, and it was “willing to negotiate further if the EEOC found a specific reason why the post-2008 data was insufficient ….” This time, however, the court wasn’t having it. Instead, the court said it did not see Dollar General’s offer as a good faith attempt: “In essence, Dollar General offered to produce the same post-2008 data that it had already agreed to provide in its initial responses to EEOC’s discovery requests.” Accordingly, the court would consider EEOC’s motion to compel.

Pre-2008. EEOC sought to compel Dollar General to produce conditional hire and background screen data for the period 2004 to 2008. There was no doubt that the pre-2008 data were relevant: The complaint alleged a disparate impact from Dollar General’s criminal background checks from 2004 to the present. More importantly, pre-2008 data were necessary for the EEOC to establish its affirmative case, because in disparate impact cases, a plaintiff “must offer statistical evidence of a kind and degree sufficient to show that the practice in question has caused the exclusion of applicants for jobs or promotions because of their membership in a protected group.” Dollar General’s argument that pre-2008 information was “unnecessary,” because the EEOC could use later data from which to extrapolate what it needed for the pre-2008 period, was simply not supported by the law, said the court.

Burden and expense. Although agreeing that Dollar General’s asserted costs to produce pre-2008 data — 160 man-hours and $16,000 — were significant, the court did not find them disproportionate under Rule 26(b)(2)(iii ) in light of the importance of the information to the resolution of the case. Pointing out that, as alleged in the EEOC’s complaint, Dollar General’s criminal background checks affected thousands of job seekers going back to 2004, the court remarked that “regardless of which party prevails, the case could serve the important purpose of clarifying the legality of an employment practice” that has affected many.

Business necessity. As for the EEOC’s request for information relating to Dollar General’s asserted business necessity for its criminal background checks, the employer claimed that at this stage of the litigation, the EEOC was not entitled to this information because the asserted business necessity is an affirmative defense. Finding this argument “untenable,” the court emphasized that discovery rules explicitly allow parties to obtain discovery that is “relevant to any party’s claim or defense.” Because Dollar General consistently indicated that it would assert a business necessity defense, the EEOC was entitled to discovery regarding that defense.

First show me the evidence. Dollar General also maintained that the EEOC must first provide evidence of disparate impact before it was entitled to discovery on business necessity issues, to which the EEOC countered that no plaintiff is required to prevail on a portion of its prima facie case before being permitted to obtain discovery related to its case in chief. And the court agreed, finding Dollar General’s approach “contrary to one of the most fundamental premises of discovery” — which places the burden on the objecting party to show why a particular discovery request was improper.” Thus, the court would not require the EEOC to assume the burden of proof at the discovery phase in order to take discovery regarding Dollar General’s affirmative defense.

Cost-shifting. Finally, the court was unwilling to shift the cost of Dollar General’s production to the EEOC, which would go against the general presumption that responding parties must bear the expense of complying with discovery requests. While cost-shifting for production of electronically stored information may be appropriate when the data is inaccessible, Dollar General did not argue that the requested information was inaccessible, and the court ordered that it bear its own cost of producing the discovery.
By Joy P. Waltemath, J.D.