Texas v. Equal Employment Opportunity Commission

827 F.3d 372, 2016 U.S. App. LEXIS 11735, 2016 WL 3524242
CourtCourt of Appeals for the Fifth Circuit
DecidedJune 27, 2016
Docket14-10949
StatusPublished
Cited by9 cases

This text of 827 F.3d 372 (Texas v. Equal Employment Opportunity Commission) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Texas v. Equal Employment Opportunity Commission, 827 F.3d 372, 2016 U.S. App. LEXIS 11735, 2016 WL 3524242 (5th Cir. 2016).

Opinions

E. GRADY JOLLY, Circuit Judge:

In this declaratory judgment action, the State of Texas appeals the district court’s order dismissing this action under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction. Texas’s complaint seeks a declaration that an Enforcement Guidance document from the Equal Employment Opportunity Commission (“EEOC”) regarding the hiring of persons with criminal backgrounds violates the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 701-06. The EEOC has instigated no legal proceedings against the State of Texas regarding the subject of felony hiring bans and Title VII.

This appeal requires the court to address only the threshold issues of justicia-bility and subject matter jurisdiction under both Article III and the APA. In dismissing Texas’s complaint, the district court held that Texas lacked Article III standing to bring this action because Texas could not show a substantial likelihood of harm, noting that although the EEOC had the statutory authority to investigate Title VII charges against Texas, it had no authority to bring an enforcement action against the State, that authority belonging only to the ■ Attorney General of the United States. The district court further asserted that Texas’s challenge to the EEOC’s Enforcement Guidance was unripe, and that, in any event, the court lacked subject matter jurisdiction over the APA claim because the EEOC’s Guidance did not constitute “final agency action” under 5 U.S.C. § 704.

Although the parties conflate the issues of standing, ripeness, and “final agency action” under the APA, Texas essentially argues that it has standing because it is an object of the challenged EEOC Guidance, and that the Guidance is a “final agency action” because it creates legal consequences for Texas and all other employers. Texas asserts that the Guidance implements a mandatory regulatory framework for employers and EEOC staff to follow, and that the Guidance purports to preempt Texas state law. In response, the EEOC argues that the Guidance is purely advisory, and thus does not create an actual [376]*376injury sufficient to confer standing. The EEOC further contends that, because it cannot bring an enforcement action against Texas directly, the Guidance is not a “final agency action” under the APA. In making this argument regarding “final agency action,” the EEOC relies heavily on several recent decisions from this circuit. The EEOC’s arguments regarding ripeness overlap with its arguments regarding a lack of finality, as the EEOC essentially contends that Texas’s challenge to the Guidance is unripe until Texas faces a more certain threat of enforcement.

After full briefing and argument, we REVERSE the district court’s judgment and REMAND this action for further proceedings not inconsistent with this opinion.

I.

Although this appeal presents only a jurisdictional issue, this action ultimately seeks to question whether a bar on hiring felons constitutes an unlawful employment practice under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. Title VII makes it unlawful for an employer:

(1) to fail or refuse to hire or discharge' any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin; or
(2) to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s race, color, religion, sex, or national origin.

42 U.S.C. § 2000e-2(a).

Texas employs hundreds of thousands of people across various state agencies. Many of these state agencies do not hire convicted felons, felons convicted of particular categories of felonies, or, in some cases, individuals convicted of particular misdemeanors. The sources of these bans stem from both Texas state statutes and longstanding employment policies adopted by the agencies. According to Texas, its agencies apply the hiring bars neutrally “to all job applicants, without regard to their races.” Where these exclusions exist, however, Texas applies them categorically and does not undertake an individualized assessment into the nature of the prospective employee’s conviction.

Although the EEOC enforces Title VII, its enforcement power is limited in a number of respects that are relevant to this appeal. First, the EEOC has only the limited regulatory authority “to issue, amend, or rescind suitable procedural regulations to carry out the provisions of this subchap-ter.” 42 U.S.C. § 2000e-12(a). In other words, the EEOC cannot promulgate binding. substantive interpretations of Title VII. Second, the EEOC lacks the authority to file an enforcement action against a state employer directly. See 42 U.S.C. § 2000e-5(f)(l). The EEOC does, however, have the power to investigate state employers for potential Title VII violations. The EEOC refers any case for which it finds reasonable cause to believe a Title VII violation occurred to the Attorney General of the United States, who then decides whether to bring enforcement action against the state. Id.

Notwithstanding its limitation to only formulating procedural rules, the EEOC holds and advances the view, as expressed through its policy statements, that categorical bans on the hiring of felons can constitute a violation of Title VII when they disproportionately affect blacks and Hispanics. In 2012, the EEOC issued the “Enforcement Guidance on the Consider[377]*377ation of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964” (the “Enforcement Guidance” or the “Guidance”), which is at issue in this suit. The Enforcement Guidance provides that

[w]ith respect to criminal records, there is Title VII disparate impact liability where the evidence shows that a covered employer’s criminal record screening policy or practice disproportionately screens out a Title VII-proteeted group and the employer does not demonstrate that the policy or practice is job related for the positions in question and consistent with business necessity.

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Bluebook (online)
827 F.3d 372, 2016 U.S. App. LEXIS 11735, 2016 WL 3524242, Counsel Stack Legal Research, https://law.counselstack.com/opinion/texas-v-equal-employment-opportunity-commission-ca5-2016.