Equal Employment Opportunity Commission v. Kronos Inc.

694 F.3d 351, 26 Am. Disabilities Cas. (BNA) 1409, 2012 WL 4040258, 2012 U.S. App. LEXIS 19320, 96 Empl. Prac. Dec. (CCH) 44,610
CourtCourt of Appeals for the Third Circuit
DecidedSeptember 14, 2012
Docket11-2834
StatusPublished
Cited by21 cases

This text of 694 F.3d 351 (Equal Employment Opportunity Commission v. Kronos Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Equal Employment Opportunity Commission v. Kronos Inc., 694 F.3d 351, 26 Am. Disabilities Cas. (BNA) 1409, 2012 WL 4040258, 2012 U.S. App. LEXIS 19320, 96 Empl. Prac. Dec. (CCH) 44,610 (3d Cir. 2012).

Opinion

OPINION

CHAGARES, Circuit Judge.

This is our second encounter with this case, which again requires us to consider the enforcement of an administrative subpoena issued by the Equal Employment Opportunity Commission (“EEOC”) seeking to compel Kronos Incorporated (“Kronos”), a non-party to the underlying action, to disclose information about its employment tests. The EEOC issued the disputed subpoena as part of its investigation into an allegation that Kroger grocery store violated the Americans with Disabilities Act (“ADA”), 42 U.S.C. § 12101, et seq., by failing to hire a disabled applicant after she took an employment test created by Kronos. We previously held that the EEOC was entitled to Kronos’s data without the geographic, temporal, and topical *355 restrictions originally imposed by the District Court except insofar as the EEOC sought discovery regarding racial discrimination. We also remanded for the District Court to conduct a good cause balancing test to determine if a confidentiality order was warranted.

On remand, the District Court expanded the scope of its original order, but again placed certain limitations on the disclosure of information related to the Kronos tests. Regarding Kronos’s request for a confidentiality order, the court found there was good cause to enter a modified version of the order we previously reviewed. Finally, the District Court required Kronos and the EEOC to split evenly the costs of production.

Although the District Court’s thoughtful handling of this case reflects its efforts to comply with our mandate and to strike a balance between the burden on a non-party and the EEOC’s need for information, we must reverse and remand for the reasons that follow. We note, however, that we. agree with much of the District Court’s discussion regarding the need for a confidentiality order, and our remand on this issue is solely for the purpose of allowing the District Court to consider how the specific limitations it ordered are tied to Kronos’s justifiable fears regarding the disclosure of proprietary information. Similarly, we are reversing the District Court’s cost-sharing order not because we necessarily disagree with the result, but to allow the court to make an individualized determination of whether the costs of production under the newly expanded subpoena are outside the scope of what Kronos can reasonably expect to bear as the cost of doing business.

I.

The underlying facts of this case relate to a charge of discrimination Vicky Sandy filed with the EEOC on June 30, 2007. Sandy, who is hearing and speech impaired, applied to work as a cashier, bagger, and stocker at a Kroger grocery store in West Virginia. As part of the application process, Sandy took a Customer Service Assessment (the “Assessment”) created by Kronos and received a low score of 40%. Kroger admitted it relied, at least in part, on the Assessment when it decided not to hire Sandy.

A.

During the course of its investigation into Kroger’s hiring practices, on March 11, 2008, the EEOC issued a third-party administrative subpoena to Kronos. The subpoena initially sought documents solely related to Kroger, including any validity studies related to the Assessment. The EEOC later expanded the scope of the subpoena to include the nationwide use of Kronos’s assessment tests and the tests’ impact on both minority and disabled applicants (like the District Court, we refer to the modified subpoena as “Subpoena 2”). Specifically, Subpoena 2 directed Kronos to:

1. Produce any and all documents and data constituting or related to validation studies or validation evidence pertaining to Unicru [a Kronos subsidiary] and/or Kronos assessment tests purchased by The Kroger Company, including but not limited to such studies or evidence as they relate to the use of the tests as personnel selection or screening instruments.
2. Produce the user’s manual and instructions for the use of the Assessment Tests used by The Kroger Company[.]
3. Produce any and all documents and data, including but not limited to correspondence, notes, and data files, relating to the Kroger Company; its use of the *356 Assessment Tests; results, ratings, or scores of individual test-takers; and any validation efforts made thereto.
4. Produce any and all documents discussing, analyzing or measuring potential adverse impact on individuals with disabilities and/or an individual[’]s race.
5. Produce any and all documents related to any and all job analyses created or drafted by any person or entity relating to any and all positions at The Kroger Company.
6. Furnish a catalogue which includes each and every assessment offered by Unieru/Kronos. Additionally provide descriptions of each assessment.

EEOC v. Kronos Inc., 620 F.3d 287, 294 (3d Cir.2010) (“Kronos I”).

Kronos objected and filed a Petition to Revoke the Subpoena with the EEOC. Kronos claimed that the information sought by the EEOC included data that was irrelevant to Sandy’s charge and that much of the information sought by the EEOC constituted valuable trade secrets that would be at risk of further disclosure if revealed. The EEOC denied the petition and, after Kronos failed to provide the requested information, filed a motion to enforce the subpoena in district court.

The District Court granted the motion in part, but limited the scope of the subpoena to documents related to Kroger’s West Virginia operations and the positions of cashier, bagger, and stocker, from January 1, 2006 to May 31, 2007. The District Court also refused to allow discovery related to racial discrimination, since it was not a part of Sandy’s charge. In sum, the District Court ordered Kronos to do the following:

1.Produce any user’s manual and instructions for the use of the Assessment Tests provided to the Kroger Company.
2. Produce any and all documents and data, including but not limited to correspondence, notes, and data files, relating to The Kroger Company; The Kroger Company’s use of the Assessment Tests; results, ratings, or scores of individual test-takers at The Kroger Company; and any validation efforts performed specific[ally] for and only for The Kroger Company.
3. Produce any and all documents discussing, analyzing or measuring potential adverse impact on individuals with disabilities, relating specifically to and only to the Kroger Company.
4. Produce any and all documents related to any and all job analyses created or drafted by Kronos relating to the bagger, stocker, and/or cashier/checker positions at The Kroger Company.
5. Furnish any catalogue provided to The Kroger Company.
6.

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694 F.3d 351, 26 Am. Disabilities Cas. (BNA) 1409, 2012 WL 4040258, 2012 U.S. App. LEXIS 19320, 96 Empl. Prac. Dec. (CCH) 44,610, Counsel Stack Legal Research, https://law.counselstack.com/opinion/equal-employment-opportunity-commission-v-kronos-inc-ca3-2012.