Use it or Lose it! Supreme Court Holds Employers Risk Waiving Failure to Exhaust Administrative Remedies Defense When Not Timely Pled

June 13, 2019

Most employers know that, generally, an employee must file a complaint with the Equal Employment Opportunity Commission (“EEOC”) or relevant state or local agency (Department of Fair Employment and Housing or “DFEH” in California, for example) before filing a lawsuit alleging discrimination in state or federal courts.

However, on June 3, 2019, in Fort Bend County, Texas v. Davis, U.S., No. 18-525 (June 3, 2019), the U.S. Supreme Court ruled unanimously that the requirement to first file an agency discrimination charge is not a jurisdictional prerequisite to bringing a lawsuit in court under Title VII.  Rather, it is a “non-jurisdictional mandatory claim-processing” rule that is a precondition for relief.  Accordingly, if an employer waits too long to bring the defense that the plaintiff did not exhaust his or her administrative remedies, the employer could waive that defense altogether.

By way of background, Title VII of the Civil Rights Act of 1964 creates a multi-step process that plaintiffs alleging employment discrimination (or other actions prohibited by Title VII) must follow before they may file suit.  That process requires employees to begin by filing a charge with the EEOC or a corresponding state agency.  The EEOC then investigates the claims and attempts to resolve them informally if it finds merit to them.  If informal resolution fails, the EEOC may pursue the claims in court.  Alternatively, if the EEOC’s investigation does not yield reasonable cause for the agency to proceed, or if the Plaintiff requests immediate case closure, the plaintiff may file suit on his or her own.  Failure to complete this process before filing a lawsuit under Title VII is a ground for the court to dismiss a case.

In Fort Bend County v. Davis, an employee of Fort Bend County, Texas, filed an EEOC charge alleging sexual harassment and retaliation against her employer.  She then attempted to supplement the charge by handwriting “religion” on the EEOC intake questionnaire, but did not amend the formal EEOC charge.  After Davis received a right-to-sue letter from the EEOC, she filed suit, alleging religion-based discrimination and retaliation for reporting sexual harassment.

The case progressed through years of litigation and appeals.  The district court originally granted summary judgment for the County.  The Court of Appeals for the Fifth Circuit affirmed as to the retaliation claim and reversed as to the religious discrimination claim.  The County then moved to dismiss the employee’s complaint.  The County argued for the first time that the plaintiff failed to exhaust her administrative remedies on her religious discrimination claim by not including the claim in her formal EEOC charge.  The district court agreed and dismissed the case, holding that administrative exhaustion is a jurisdictional bar to suit.  The Fifth Circuit reversed, finding that the charge-filing requirement is not jurisdictional and that the County waived this defense after waiting too long to raise it.

The County appealed to the U.S. Supreme Court, arguing that because Title VII’s exhaustion requirement was jurisdictional, federal courts lack authority to even hear Title VII claims which have not been first filed with the EEOC or respective state agency.  But the U.S. Supreme Court unanimously rejected that argument, concluding instead that the exhaustion requirement was a “claim-processing” rule that could be waived under exceptional circumstances.  The Court then held that because the County significantly delayed raising the issue, the County waived any objection to the employee’s failure to exhaust administrative remedies.  However, the Supreme Court did not indicate a bright-line deadline by which the defense must be raised.  And so the saying goes, “Don’t wait too long; you might miss your chance.”

Takeaways for Employers:

    • The Supreme Court did not remove the requirement that plaintiffs first file an EEOC charge before filing a lawsuit under Title VII.
    • Employers should perform an initial investigation at the commencement of a discrimination suit into whether a plaintiff alleging discrimination claims adequately exhausted his or her administrative remedies and, if not, must raise the failure to exhaust defense in a timely manner by seeking early dismissal of those Title VII claims.
For further information, contact one of our employment attorneys.

Hope Case
(650) 494-4098

Merrili Escue
(858) 381-5458

Nancy Kawano
(858) 381-4890