The Case Law and Its Implications for Both Plaintiffs' and Defense Counsel
By Kimberly Lambert Love and Jason L. Callaway
In many types of employment claims, a plaintiff must first exhaust administrative remedies, typically by filing a charge of discrimination with the Equal Employment Opportunity Commission (EEOC). Until a few years ago, federal courts in the 10th Circuit treated the failure to exhaust administrative remedies as a jurisdictional basis for dismissal, meaning both that the court was required to dismiss when the basis for dismissal was shown and that the court could dismiss sua sponte at any time during the proceedings. Recently, however, the 10th Circuit has set in motion jurisprudential changes to the exhaustion of administrative remedies doctrine, reclassifying failure to exhaust in some circumstances from a jurisdictional failure to a “condition precedent” to bringing suit. This change in the law has resulted in practical and technical challenges for both plaintiff and defense counsel.
THE LEGAL BACKDROP AND IMPORTANT DECISIONS OUTLINING THE CHANGES
Prior to 2015, the 10th Circuit repeatedly stated that “exhaustion of administrative remedies is a jurisdictional prerequisite to suit.”1 As a result, the failure to exhaust argument was routinely made through a Rule 12(b)(1) motion to dismiss at the pleading stage.2 However, in Gad v. Kansas State University,3 the 10th Circuit put some wrinkles in this otherwise simple rule.
The plaintiff in Gad, a former professor at Kansas State University, filed a charge of discrimination with the EEOC alleging the university discriminated against her on the basis of religion, sex and national origin by failing to promote her.4 Although an EEOC investigator gave the plaintiff a copy of the charge to sign, the plaintiff did not sign or otherwise verify her charge.5 After the EEOC issued a right-to-sue notice, the plaintiff brought suit, and the university moved to dismiss for lack of subject-matter jurisdiction on the basis that the plaintiff had failed to verify her EEOC charge.6 Since verification is a statutory requirement for an EEOC charge,7 the question before the 10th Circuit was whether the plaintiff’s failure to verify the charge precluded the district court from having subject-matter jurisdiction.
Citing several recent Supreme Court decisions, including Arbaugh v. Y&H Corp8 and United States v. Kwai Fun Wong,9 the 10th Circuit found the failure of verification was not jurisdictional. In reaching its conclusion, the 10th Circuit distilled several key principles from these cases:
First, a Title VII statutory requirement’s classification as jurisdictional or non-jurisdictional turns in large part on whether it is located in Title VII’s jurisdictional subsection – 42 U.S.C. §2000e-5(f)(3) … Second, recognizing that non-lawyers are initiating Title VII processes, the courts should be careful in interpreting procedural rules to cause inadvertent forfeiture of rights. Third, verification should protect employers from the burden of responding to frivolous claims or later finding themselves in court over claims of which they had no notice. Finally, … a failure to verify as required by a federal rule will not render the document in question fatally defective.10
Applying these principles, the 10th Circuit recognized that the verification requirement did not appear in the jurisdictional subsection and that there is no “clear statement” that it should be treated as jurisdictional.11
Nevertheless, the 10th Circuit confirmed that the verification requirement is a “condition precedent” to bringing suit.12 Under the statutory framework of Title VII, the requirement to verify a charge is “a ‘duty [Title VII] imposes’ that ‘serves as a necessary precondition to filing a lawsuit’”; it is not merely an affirmative defense to be raised by an employer.13 In other words, the plaintiff must both meet the verification requirement and properly plead that the requirement has been met.14
By calling the exhaustion requirement a “condition precedent,” however, the 10th Circuit opened the prospect of equitable waiver, which is available for failure to meet a condition precedent but not available to satisfy a jurisdictional flaw. While the 10th Circuit did not address the contours of waiver in its opinion, it implied that no “rigid rule” regarding waiver would suffice.15 There could be times when an employer waives the requirement, such as by “fail[ing] to raise a known verification defect.”16 Equitable waiver could also apply to save a plaintiff’s cause of action in “extreme circumstances where negligent EEOC conduct would mislead a reasonable layperson into thinking he need not verify.”17
Various panels of the 10th Circuit have subsequently analyzed Gad and held, in unpublished opinions, that other types of failure to exhaust arguments are not jurisdictional but rather conditions precedent to suit. One panel found that a plaintiff’s failure to disclose a particular factual basis for a discrimination claim to the EEOC, where that factual basis would not easily be discovered by the EEOC’s investigation, meant that the plaintiff had not exhausted remedies for that factual basis, although the claim could proceed on the bases that had been disclosed to the EEOC.18 Another panel concluded that a plaintiff’s failure to cooperate with the EEOC by following the orders of an administrative judge resulted in the failure to exhaust remedies, precluding suit entirely.19 And most recently, a panel held that the failure to identify a particular claim, in that case retaliation, in a timely filed charge was a failure to exhaust that acted as a precondition to suit.20 Although no case has put it bluntly, these cases imply that the true “condition precedent to suit” is not a set of strict statutory requirements but is instead simply completing the administrative review process for each claim subsequently brought in federal court in a way that provides notice to the employer and the EEOC of the claim and its supporting facts.
Of course, these cases stating that certain exhaustion requirements are nonjurisdictional raise the question of what acts are jurisdictional bases for dismissal. As noted above, the jurisdictional grant for Title VII appears in 42 U.S.C. §2000e-5(f)(3). Under that provision, a Title VII claim is jurisdictionally appropriate in any of the following judicial districts: where the unlawful employment practice allegedly occurred; where relevant employment records are maintained; where the claimant would have worked but for the unlawful practice; or, if none of those apply, where the employer has its principal office. There are no other requirements included in the statute, meaning that the jurisdictional grounds for dismissing a Title VII claim appear to have been substantially limited to venue-type considerations. It is also worth noting that this analysis would apply equally to claims under any act that adopts the procedures established in Title VII, like the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act.21
IMPACT ON PARTIES, THEIR COUNSEL AND MOTION PRACTICE
The impact of this doctrinal shift in litigation varies depending on the party. For plaintiffs, there should be no changes at the administrative review stage, as counsel should already be ensuring that the proper claims are being submitted to the EEOC and supported by sufficient facts for each claim set out in the charge and supporting documentation. In cases where the client handled the administrative proceedings pro se, plaintiffs’ attorneys should be cautioned that, following Wickware and Arabalo, any claims made in court will be limited to those supported by facts presented to the EEOC. If facts supporting the claims asserted in a complaint do not appear in an EEOC charge, defendants may likely move to dismiss those claims as unexhausted. Moreover, under Fed. R. Civ. P. 9(c), counsel must plead the satisfaction of conditions precedent in the complaint, including exhaustion of remedies. While this has been characterized as a “loose” requirement at best that requires only a general statement,22 it remains a requirement. In Martin v. Mt. St. Mary’s Univ. Online23 for example, the plaintiff’s complaint was dismissed because the plaintiff failed to attach a right-to-sue letter to an amended complaint despite a court order to do so, demonstrating the seriousness of failing to meet the Rule 9 pleading standard. For plaintiffs’ counsel, the changes in how failure to exhaust is treated appears more a matter of dotting the i’s and crossing the t’s than any major change.
From a defense perspective, the Gad court’s discussion of equitable waiver illustrates that the employer should raise any failure to exhaust argument at the first available moment or run the risk that the argument is waived. In addition, a defendant will now likely raise failure to exhaust arguments in motions to dismiss brought under Rule 12(b)(6) or 12(c) instead of Rule 12(b)(1). While counsel may be concerned that a Rule 12(b)(6) motion will not allow presentation of evidence outside the complaint without converting the motion to one for summary judgment, at least one district court addressing that question has considered an EEOC charge as part of a Rule 12 motion on the ground that courts “may consider documents referred to in the complaint if the documents are central to the plaintiff’s claim, and the parties do not dispute the documents’ authenticity.”24 Moreover, even absent this precedent, a charge would likely be the type of document of which courts would be willing to take judicial notice.25 Although the substance of a motion to dismiss for failure to exhaust will not change, the 10th Circuit’s treatment of failure to exhaust as a condition precedent requires defense counsel to be more proactive in identifying those types of errors early in the case.
In sum, with its decision in Gad, the 10th Circuit made what would seem to be a merely technical change to the requirements for some types of employment lawsuits, but that change does have ramifications for counsel. Because exhausting administrative remedies remains a condition precedent to suit and because courts are strongly enforcing those requirements, plaintiffs and their counsel must be detail-oriented at the administrative review stage. Because exhaustion of remedies is no longer a jurisdictional precondition to suit, employers and defense counsel will need to be on guard against the possibility of waiver and be prepared to make any failure to exhaust argument early in the case.26
1. Jones v. UPS, Inc., 502 F.3d 1176, 1183 (10th Cir. 2007) (referring to the ADA); see also Shikles v. Sprint/United Mgmt. Co., 426 F.3d 1304, 1317 (10th Cir. 2005) (referring to Title VII).
2. See, e.g., Hung Thai Pham v. James, 630 F. App’x 735 (10th Cir. 2015).
3. Gad v. Kansas State University, 787 F.3d 1032 (10th Cir. 2015).
4. Gad, 787 F.3d at 1034.
6. Id. at 1035.
7. See 42 U.S.C. §2000e-5(b).
8. Arbaugh v. Y&H Corp, 546 U.S. 500 (2006).
9. United States v. Kwai Fun Wong, 135 S. Ct. 1625 (2015).
10. Gad, 787 F.3d at 1038.
11. Id. at 1038-39.
12. Id. at 1041.
13. Id. (quoting Mach Mining, LLC v. EEOC, 135 S. Ct. 1645, 1651 (2015)).
14. See id. at 1042.
15. Id. at 1042.
16. Id. at 1042-43.
17. Id. at 1042-43.
18. Arabalo v. City of Denver, 625 F. App’x 851 (10th Cir. 2015).
19. Hung Thai Pham v. James, 630 F. App’x 735 (10th Cir. 2015).
20. Wickware v. Johns Manville, 676 F. App’x 753 (10th Cir. 2017).
21. See 42 U.S.C. §§2000ff-6(a)(1), 12117(a).
22. See Kiernan v. Zurich Cos., 150 F.3d 1120, 1124 (9th Cir. 1998); see also Anderson v. United Tel. Co., Civil Action No. 86-2511-O, 1989 U.S. Dist. LEXIS 6046, at *7 (D. Kan. May 22, 1989) (describing the Rule 9(c) standard as “minimal and perhaps even perfunctory”).
23. Martin v. Mt. St. Mary’s Univ. Online, 620 F. App’x 661 (10th Cir. 2015).
24. Munoz v. Navistar Int’l Corp., No. 13-CV-357-JED-FHM, 2015 U.S. Dist. LEXIS 133271, at *7 n.2 (N.D. Okla. Sept. 30, 2015) (quoting Jacobsen v. Deseret Book Co., 287 F.3d 936, 941 (10th Cir. 2002)).
25. See Tal v. Hogan, 453 F.3d 1244, 1265 (10th Cir. 2006); see also Chaney v. Wal-Mart Stores Inc., No. CIV-15-592-R, 2015 U.S. Dist. LEXIS 148560, at *3 n.2 (W.D. Okla. Nov. 3, 2015) (taking judicial notice of an EEOC charge).
26. The authors would like to thank Chris Davis of Johnson & Jones PC and Miles McFadden of Titus Hillis Reynolds Love for their contributions to this article.
ABOUT THE AUTHORS
Kimberly Lambert Love is a partner with Titus Hillis Reynolds & Love. With more than 30 years of experience, Ms. Love practices in all areas of employment law. She is a past chairperson of the OBA Labor and Employment Law Section and regularly contributes to the Oklahoma Bar Journal.
Jason L. Callaway is an associate with Johnson & Jones PC. He attended the OU College of Law, where he served as managing editor of the Oklahoma Law Review and received the Order of the Coif. Following graduation, he clerked for District Judge Claire V. Eagan, Northern District of Oklahoma. His practice focuses primarily on general civil litigation, employment litigation and insurance defense.
Originally published in the Oklahoma Bar Journal -- OBJ 88 pg. 2231 (Nov. 18, 2017)