In June 2008, the D.C. Circuit Court of Appeals found that an EEOC policy allowing the disclosure of confidential information without first giving notice to the party providing the confidential information was “arbitrary and capricious”. Venetian Casino Resort, L.L.C. v. EEOC.
When the Venetian opened in Las Vegas in 1999 it hired approximately 4,440 new employees out of 44,000 applicants. Numerous unsuccessful applicants filed complaints with the EEOC alleging age discrimination under the Age Discrimination in Employment Act (“ADEA”). In response to the EEOC Charges of Discrimination, the Venetian submitted documents that the Venetian deemed, and identified as confidential. The EEOC later issued a subpoena for more documents, which the Venetian petitioned the EEOC to revoke. The EEOC denied the Venetian’s petition.
As a result of the EEOC’s denial, the Venetian brought a lawsuit against the EEOC seeking an injunction. The Venetian argued that a provision in the EEOC’s 1992 ADEA Compliance Manual that permits the disclosure of an employer’s confidential information to potential ADEA plaintiffs without first notifying the employer that its information will be disclosed violated the Administrative Procedure Act (“APA”), the Freedom of Information Act (“FOIA”) and the Trade Secrets Act (“TSA”). The Venetian contended that the disclosure policy could not be reconciled with the EEOC’s own FOIA regulations, which require the EEOC to notify a submitter of confidential information before disclosure to a third party pursuant to a FOIA request when the submitter previously, in good faith, designated the records as confidential. The Venetian was mainly concerned that its competitors and labor unions would obtain confidential information relating to its hiring practices, and this disclosure would economically harm the hotel.
In 2006, the trial court found for the EEOC, holding that a disclosure policy allowing the release of documents the employer identified as confidential without notice to the employer was not unlawful. The D.C. Circuit Court of Appeals reversed and remanded the case to the trial court to enter an injunction prohibiting the EEOC from disclosing the Venetian’s confidential information. The Court of Appeals held that the EEOC’s policy was “arbitrary and capricious” because it was contrary to the EEOC’s own FOIA policies. The Court of Appeals was clear to point out that the disclosure policy was not necessarily contrary to law, but the EEOC needed to provide a more definitive explanation to reconcile the ADEA Compliance manual and the EEOC’s regulations governing FOIA requests.
This case is a reminder that employers should not submit information to the EEOC or state agencies assuming that the information will automatically be treated as confidential. When submitting confidential information, the information should be labeled as confidential and a request should be included that notice be given before the information is disclosed. However, employers should be aware that this may not be enough to guarantee that the EEOC will provide notice before disclosing the information.