Most of the discrimination statutes require a mandatory administrative process as a prerequisite to filing a lawsuit.  The employee must file a charge of discrimination with the EEOC or TWC within a specified number of days, and then the agency is supposed to investigate the charge.  If the agency does not pursue the charge, it issues a right to sue letter.  At that point, the employee can file a lawsuit.

The charge process is supposed to be a simple and not a roadblock.  However, employers are constantly pressing the courts to make the charge process more technically demanding, so that they can obtain dismissals of lawsuits without being forced to litigate the merits of the case.  Occasionally, a court takes the bait.  This is what happened in EEOC v. Simbaki, Ltd., No. 13-20387 (5th Cir. Sept. 17, 2014).

The facts of the case presented a common problem for EEOC charges: Who exactly is the employer?  This might seem to be a simple matter, but many employers operate under trade names or through interlocking companies.  It is not uncommon for an employee to believe that he works for ABC Company, when he really works for ABC Holdings or for XYZ Company d/b/a ABC Company.  The EEOC intake personnel are not well equipped to resolve these sorts of subtle corporate law distinctions.

The employees in Simbaki were two women who had been crudely sexually harassed at the Berryhill Baja Grill & Cantina on Montrose in Houston.  But who exactly was the employer?  This is a restaurant chain, with some corporate locations and some franchise locations.   The corporate locations were run by Berryhill Hot Tamales Corporation (“Berryhill Corporate”).  The franchise locations were run by individual franchisees.  Apparently, the Montrose location was a franchise owned by Simbaki, Ltd., the principal of which was Phillip Wattel (“Berryhill Montrose”).

The EEOC charges were imprecise as to the exact identity of the employer.  They listed the employer as “Berryhill Baja Grill” with an address on Montrose, and referred to Wattel as the owner.  Nonetheless, the EEOC notified Berryhill Corporate of the charges.  Berryhill Corporate responded by pointing out that the Montrose location was owned by a franchisee.

The EEOC sued Berryhill Montrose.  The individual plaintiffs intervened and sued Berryhill Corporate, apparently on some sort of joint employer theory.  Berryhill Corporate argued that the plaintiffs had failed to exhaust their administrative remedies because they did not name Berryhill Corporate in the charge of discrimination.  The district court took the bait and dismissed the claim against Berryhill Corporate.

The Fifth Circuit reversed.  The court agreed that the plaintiffs had technically failed to name Berryhill Corporate as a party.  However, the court noted that there are judicially recognized exceptions that are applicable when an employer is not properly named.  The Fifth Circuit stated that it follows both the Glus test from the Third Circuit and the Eggleston test from the Seventh Circuit.  The Court described the Glus test as follows:

In Glus v. G.C. Murphy Co., 562 F.2d 880 (3d Cir. 1978), the court set out a four-part test to determine whether there was sufficient identity-of-interest between the named and the unnamed party so that the unnamed party could be sued in court despite not being named in the charge:

1) whether the role of the unnamed party could through reasonable effort by the complainant be ascertained at the time of the filing of the EEOC complaint;

2) whether, under the circumstances, the interests of a named are so similar as the unnamed party’s that for the purpose of obtaining voluntary conciliation and compliance it would be unnecessary to include the unnamed party in the EEOC proceedings;

3) whether its absence from the EEOC proceedings resulted in actual prejudice to the interests of the unnamed party;

4) whether the unnamed party has in some way represented to the complainant that its relationship with the complainant is to be through the named party.

 The Fifth Circuit described the Eggleston test as follows:

The Seventh Circuit, while accepting the Third Circuit’s Glus test, has also recognized that certain parties with actual notice of the EEOC proceedings may also be sued.  The Seventh Circuit justifies the actual notice exception on the grounds that the named-party requirement is meant to “give[] the employer some warning of the conduct about which the employee is aggrieved and afford[] the EEOC and the employer an opportunity to attempt conciliation without resort to the courts.”   As such, if “an unnamed party has been provided with adequate notice of the charge, under circumstances where the party has been given the opportunity to participate in conciliation proceedings aimed at voluntary compliance,” the purpose of the named-party requirement has been accomplished, and “the charge is sufficient to confer jurisdiction over that party.” (citations omitted).

After describing those tests, the Fifth Circuit announced its own rule, which includes both of the tests:

[W]e examine whether a party can meet either (1) the Third Circuit’s Glus test for whether there is an identity-of-interest or (2) the Seventh Circuit’s Eggleston test for whether there was actual notice of the charge and an opportunity to participate in conciliation.

The Fifth Circuit did not proceed to apply that rule, however.  Instead, it addressed the district court’s holding that only pro se litigants would invoke the Glus and Eggleston tests.  Because the plaintiffs had been represented by counsel, the district court held that they could not invoke those tests.

The Fifth Circuit rejected that argument:


First, allowing represented parties to invoke the exceptions as well is more consistent with the way this court treats pro se litigants. Despite our general willingness to construe pro se filings liberally, we still require pro se parties to fundamentally “abide by the rules that govern the federal courts.”  Pro se litigants must properly plead sufficient facts that, when liberally construed, state a plausible claim to relief, serve defendants, obey discovery orders, present summary judgment evidence, file a notice of appeal, and brief arguments on appeal.  Fashioning a wholly separate set of exhaustion requirements for pro se parties—rather than simply construing pro se charges more liberally—would therefore be incongruous with our general requirement that pro se parties follow the rules of federal court.

Second, this result is more consistent with our “well recognized” practice of liberally construing Title VII’s requirements in light of the statute’s remedial purpose.  As our sister circuits have explained, the entire point of the judicially-recognized exceptions to the named-party requirement is to permit suits to go forward where, despite the plaintiff’s failure to name the defendant in the charges, the purposes of the named-party requirement have nonetheless been met.   We do not perceive a reason why the presence of plaintiff’s counsel is necessarily determinative of that inquiry such that a categorical rule against represented parties invoking the exceptions is appropriate.  Whether a party is represented by counsel, for example, tells us very little about whether the underlying purposes of Title VII’s named-party requirement—which largely concerns whether the allegedly discriminating party has received sufficient notice either through actual notice (Eggleston) or a proxy (Glus)—have been met.

Accordingly, the Fifth Circuit remanded the case to the district court for further proceedings.

The lesson from this case for employers is that trying to avoid the need to respond to an EEOC charge on a technicality will usually be futile.  The lesson from the case for employees is to be aware that the identity of the actual employer may not be obvious, and that there may be joint employer issues that are not immediately obvious.  It will often be prudent to name more than one corporate entity as an "employer" to ensure that the correct entity receives notice.

David C. Holmes is a Houston employment lawyer with The Law Offices of David C. Holmes