Dentons Digest
On June 11, 2024, in United States Equal Employment Opportunity Commission (“EEOC”) v. Cambridge Transportation, Inc., 0:23-mc-00101 (D. Minn), Magistrate Judge Dulce Foster recommended that Defendant Cambridge Transportation, Inc. be held in civil contempt and be ordered to pay civil contempt sanctions to the EEOC, in the amount of $100.00 per day with additional potential penalties for each day that the company failed to comply with the EEOC’s subpoena. On July 7, 2024, the District Judge, Nancy E. Brasel, accepted the Magistrate Judge’s recommendation, serving as an important reminder for employers of the importance of complying with government agency subpoenas.
Case Background
The EEOC was investigating unlawful employment practices alleged in a Charge of Discrimination filed against Cambridge Transportation, Inc. (“Cambridge”), a medical transportation company in Minnesota. 0:23-mc-00101 (D. Minn), Dkt. 30 (Magistrate Judge Report and Recommendation).During its investigation, on March 2, 2023, the EEOC issued and served upon Cambridge a subpoena duces tecum, requesting certain employment information. Cambridge failed to respond by the initial response deadline and did not return the EEOC’s calls until May 18, 2023. Cambridge subsequently missed the EEOC’s extended deadline to comply with the subpoena and only partially complied with the subpoena at the end of May 2023. By October 2023, Cambridge still had not fully complied with the subpoena, despite the EEOC’s repeated extensions, attempts to communicate with Cambridge, and offers to limit the subpoena. The EEOC then initiated an enforcement action in federal court, seeking an order to show cause why the subpoena should not be enforced.
On February 27, 2024, the Court ordered Cambridge to comply with the EEOC’s subpoena on or before May 14, 2024. Id. at 1. Per the Court’s Order, Cambridge’s failure to timely comply would subject it to being held in civil contempt and charged daily fines. Cambridge did not provide any new records to the EEOC by the May 14th deadline; the EEOC filed a Status Report with the Court that same day, requesting the Court impose a civil fine of $800 per day, for each day that Cambridge remained non-compliant. Id. at 2. The Court thereafter issued an Order to Show Cause why Cambridge should not be held in contempt and assessed sanctions for failure to comply with the Court’s February 27 Order. Id. at 3. Cambridge did not appear for the show cause hearing or otherwise attempt to communicate with the Court. Id. It also did not appear that Cambridge had made any effort to secure legal counsel and otherwise made no effort to explain itself to the Court. Id.
The Magistrate Judge’s Recommendation and District Court’s Ruling
On June 10, 2024, in response to the EEOC’s request for an order imposing a daily civil fine against Cambridge, the Magistrate Judge reviewed the case history and agreed with the EEOC that such an imposition was appropriate. Id. at 4. The Magistrate Judge found that “Cambridge’s continued noncompliance with the subpoena and the Court’s February 27 Order warrants a finding of civil contempt and the imposition of monetary sanctions. The Court does not make this recommendation lightly, but Cambridge’s intransigent refusal to cooperate leaves few other options.” Id.
The Magistrate Judge rejected the EEOC’s proposed rate of $800 per day, and rather recommended a daily fine of $100 per day for each day that Cambridge remains noncompliant with the subpoena. Id. The Magistrate Judge further noted that “[a]dditional daily sanctions and penalties may be warranted in the future if Cambridge’s failure to comply with the subpoena continues.” Id. The District Judge reviewed the Magistrate Judge’s Report and Recommendation and, finding no clear error, accepted it. 0:23-mc-00101 (D. Minn), Dkt. 33 (District Judge Order).
Implications for Employers
EEOC v. Cambridge Transportation, Inc., highlights for employers the importance of taking EEOC Charges, and specifically EEOC-issued subpoenas, seriously. The EEOC has the authority to issue subpoenas and failure to comply can subject the recipient to enforcement actions, contempt, and civil penalties. An employer in receipt of a Charge should retain all related records, work to cooperate with the EEOC, and consult with an employment lawyer to evaluate the matter and compliance obligations.
