Take Care When Providing Proprietary or Confidential Information to the EEOC

July 10, 2008

How many times does your company submit information to the EEOC in defending against a charge of discrimination? Most businesses with any significant number of employees do so all the time, and even small businesses have to do so occasionally. When you submit information with your position statement, your primary worry probably is whether the information will cause the EEOC to dismiss the charge with a finding of “no probable cause.” But what if the information you submit can help your competitors learn about your hiring practices and employment policies? What if it can help competitors learn other important things about your business? What if it can help employees or their lawyers in bringing claims against you?

For decades the EEOC has taken the position that it can disclose any information submitted by a company without first notifying that company and giving it an opportunity to object. But a recent decision of a federal Court of Appeals gives careful employers an opportunity to protect confidential information submitted to the EEOC.

In Venetian Casino Resort, L.L.C. v. EEOC, decided June 27, 2008, the D.C. Circuit Court of Appeals found that the EEOC did not have adequate safeguards to assure that employer trade secrets would not be disclosed without prior notification. The court recognized that EEOC employees “cannot be expected to anticipate the competitive implications of disclosing an employer’s confidential information. Moreover, . . . the Commission points to no reason to think that they have an incentive to take the precaution of notifying the submitter before disclosing its information.”

The Court of Appeals ordered that the Commission be enjoined from disclosing the Venetian’s confidential information without first giving the Venetian notice under the Freedom of Information Act (“FOIA”). The court went on to say, however, that the injunction could be dissolved if the Commission better explains how changes to its disclosure policy are likely to satisfy its various legal obligations.

The decision highlights several important points. First, employers should not submit information assuming that it will be treated by the EEOC as confidential. Second, if sensitive information is submitted to the EEOC, just labeling it “confidential” may not be enough to assure that the EEOC will provide notice before disclosing the information to anyone who asks for it. The Court of Appeals specifically stated that “. . . disclosure of information does not violate the [Trade Secrets Act] merely because that information was labeled ‘confidential’ by the submitter.”

At a minimum, confidential information submitted to the EEOC should include prominent notice that it is confidential, an explanation of how disclosure would cause “substantial harm to your company’s competitive position,” and a request that notice be given before the information is disclosed in response to a FOIA request.

For more information please contact the Frost Brown Todd Labor and Employment Department.

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