A federal appeals court has rejected efforts by FedEx Corp. to shield information about its personnel records from the U.S. Equal Employment Opportunity Commission.
In a unanimous decision, the 9th U.S. Circuit Court of Appeals said the federal agency is entitled to the materials as part of its investigation of whether the company discriminates against blacks and Latinos. The judges said the EEOC subpoena seeks information that is relevant and is not overly broad.
This is the second time the company has lost its legal battle to withhold the documents. A federal court judge in Tucson issued a similar ruling nearly two years ago.
The case has gained the attention of the national business community, to the point that an attorney representing the U.S. Chamber of Commerce and the Equal Employment Advisory Council filed legal papers on behalf of FedEx.
"This is a huge decision," said Sally Shanley, the regional trial attorney for EEOC.
She said her agency has gotten "a lot of resistance" to these kinds of requests. Shanley said the appellate court ruling should make clear to companies that they cannot balk.
Calls to the company's lawyer in Tennessee were not returned.
Central to the issue is a complaint filed four years ago by Tyrone Merritt, a FedEx employee in Phoenix. Merritt, a handler, said he failed the Basic Skills Test that is required to be promoted to some other positions, including customer service agent and courier.
According to Merritt, the test has a "statistically significant adverse impact" on blacks and Latinos, though the claim does not explain why that appears to be the case. He also charged that white employees were promoted over him for other positions such as dispatcher.
In an effort to investigate the case, EEOC issued a subpoena demanding that FedEx provide what amounts to a list of all the types of personnel information and documents it has in its computers. Shanley said that would provide her agency with a road map to decide specifically what it needed.
FedEx objected for a variety of reasons. One was purely technical: The company pointed out that Merritt decided to pursue his own civil lawsuit. That, the attorneys argued, stripped EEOC of any power to investigate further.
But 9th Circuit Judge Wallace Tashima, writing for the court, said Merritt had alleged a pattern or practice of discrimination by the company against others. The judge said that gives the EEOC the power to investigate further.
Beyond that, FedEx argued that the subpoena sought information that was irrelevant, and that it was overly broad.
Tashima noted that the subpoena asks only that FedEx identify any computerized files it has or maintains.
It is true, he said, that everything in those files might not be relevant to the investigation. But Tashima said the information EEOC wants will help it better craft further subpoenas for the material it does decide is relevant.
Similarly, Tashima said the fact that EEOC is investigating allegations of systemwide discrimination, seeking system-wide information about hiring and personnel practices is not overly broad.
In fact, he commended the agency for how it is handling the matter.
"Because the charge allegations are so broad, the EEOC has demonstrated restraint by requesting identification of the computerized files and not the files themselves," Tashima wrote. "The information sought by the EEOC will afford it the opportunity to make sure that it doesn't request vastly more information than it needs."
Shanley said the EEOC is continuing its investigation even after FedEx settled a separate employment suit filed on behalf of 20,000 current and former employees in Arizona and 13 other states who alleged the company paid its minority workers less than whites. In that case, attorney James Finberg said he was able to get the company to settle out of court for $53.5 million.
Finberg said, as part of the deal, the company is not using the Basic Skills Test - at least not in the affected states. Shanley said the question of discrimination in FedEx nationwide is still left open.