EEOC Permitted to Subpoena Documents Showing Workers Forbidden From Discussing Pay

The United States District Court for the Western District of New York in EEOC v. Sterling Jewelers Inc., W.D.N.Y., No. 1:11-mc-00028, 2011 WL 5282622, recently enforced a subpoena issued by the Equal Employment Opportunity Commission (EEOC) to Sterling Jewelers Inc. (doing business as Jared the Galleria of Jewelry) requesting information on the company’s policies barring employees from discussing their pay, as well as information on employees disciplined under such policies.

Diane Thielker, a former employee of Sterling, filed a charge of discrimination with the EEOC alleging that she was discriminated against in pay and promotions because of her age and gender. The EEOC sued Sterling on behalf of Ms. Thielker, alleging that Sterling engaged in unfair employment practices nationwide by maintaining a system for making promotions and compensation decisions that is excessively subjective and has a disparate impact on female sales employees.

As part of the investigation into her charge, Ms. Thielker provided the EEOC with a copy of a counseling report issued to her by Sterling. This counseling report stated in part as follows:

Any discussion regarding payroll need only to be made between said employee and mgr. Having inappropriate discussions only contribute to and fosters ill will amongst team members as well as being a direct violation of Sterlings [sic] code of conduct. 
The report also included Ms. Thielker’s comments that she believed that she was being discriminated against based upon her gender due to the fact that the company paid male employees more than it paid female employees.

A few months after receiving a copy of the report, the EEOC served a subpoena upon Sterling requesting information on (1) the code of conduct referred to in the counseling report and any other policies prohibiting employees from discussing pay; (2) all disciplinary notices, reports, or warnings reflecting enforcement of Sterling’s policy prohibiting discussions of pay; and (3) information related to the individuals disciplined under such policy.

In upholding the EEOC’s right to enforcement of the subpoena, the court held that the nationwide scope of the information requested was relevant to the EEOC’s pattern or practice claims against Sterling, and legitimately arose from statements on the counseling report indicating that Sterling had a company-wide policy prohibiting discussions about pay. Significantly, the court further concluded that, even without the counseling report referencing such a policy, information regarding Sterling’s nationwide policies prohibiting discussions of pay is relevant to Thielker’s individual charge.

Contact: Emily Ciecka Wilcheck

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