Labor & Employment Law Daily Wrap Up, PROCEDURE—2d Cir.: EEOC retains statutory investigative authority after right-to-sue letter, charging party’s suit, (Aug 26, 2025)

By Jason Albright, J.D.

The charging party alleged that dancers were “pressured... to have sex with high-paying and recurring customers in the champagne rooms.”

The EEOC retains the authority to investigate a charge even after it issues a right-to-sue letter to the charging party and the charging party files a lawsuit, the Second Circuit held in a case in which a dancer alleged widespread sexual harassment and a hostile work environment at two adult entertainment clubs in Manhattan. In addition, the pedigree information the EEOC sought from the clubs is relevant to the underlying charge, and complying with the subpoenas would not be unduly burdensome in the case, the appeals court found (EEOC v. AAM Holding Corp., No. 24-1672-cv (2d Cir. Aug. 25, 2025)).

FlashDancers Midtown and Downtown. The charging party, according to the court, is a former dancer at FlashDancers Midtown and FlashDancers Downtown, two adult entertainment clubs operated by AAM Holding Corp. and the other named respondents in Manhattan. She worked “interchangeably at both locations” from September 2019 to July 2021.

Class charge. In March 2022 she filed a class charge with the EEOC, alleging widespread sexual harassment and a hostile work environment at both clubs, which she alleged was “perpetuated through the policies and practices” of the clubs. Among other things, she alleged that she and approximately 40 other women dancers were forced to “change clothes in an open back room, without proper doors... which was monitored by video.” The dancers were allegedly “pressured... to have sex with high-paying and recurring customers in the champagne rooms” on the understanding that refusing to do so would result in adverse employment action. She also alleged that they were pressured by managers or “hostesses” to perform other sexual acts.

EEOC’s initial request for information. After notifying the clubs about her charge, the EEOC formally requested information, including the clubs’ policies regarding relationships between customers and employees, any records of sexual harassment complaints, and pedigree information for their employees, including each employee’s name, age, sex, race, position, dates of employment, and contact information.

Deficiency letter. When the clubs objected to the request, the EEOC issued a deficiency letter reasserting its request. The clubs again objected, asserting that the requested information was both irrelevant and unduly burdensome to produce.

Subpoenas. The EEOC eventually issued two subpoenas demanding employee pedigree information from both clubs. Reiterating their view that the pedigree information was irrelevant and also too burdensome to produce, the clubs asked the EEOC to revoke the subpoenas. The EEOC denied the request and later petitioned a federal district court to enforce the subpoenas.

Enforced. The district court granted the EEOC’s petition and issued an order enforcing the subpoenas. Among other things, because the dancer’s charge alleged widespread sexual harassment, the district court determined that “the employee information would help [the EEOC] illuminate the work conditions experienced by the class of female employees.” The district court also concluded that the clubs had failed to establish why complying with the subpoenas would be difficult or disruptive to their normal business operations.

Stays denied. The clubs filed a notice of appeal and moved in the district court to stay the enforcement order. The district court denied the stay, citing their failure to show either a likelihood of success on the merits or irreparable harm. The clubs then filed a motion in the Second Circuit to stay the enforcement order, which was also denied.

Right-to-sue letter and filing of putative class action. However, in July 2024, while the clubs’ appeal before the Second Circuit was pending, the EEOC issued the dancer a right-to-sue letter. She then filed a putative class action complaint in the district court in September 2024.

Clubs’ arguments on appeal. In view of these developments, the clubs argued before the Second Circuit that the EEOC was divested of its investigative authority, including its authority to issue administrative subpoenas, as soon as the dancer received her right-to-sue letter and sued. They also argued, as they did before the district court, that the underlying subpoenas’ demand for pedigree information for all club employees, not just information about the dancer, was overbroad and unduly burdensome.

EEOC’s authority to investigate charge. The appeals court first rejected the clubs’ argument that the EEOC’s authority to investigate a charge ceases as soon as it issues a right-to-sue letter to the charging party and that party files suit. Although the Fifth Circuit so held in EEOC v. Hearst Corp., 103 F.3d 462 (5th Cir. 1997), “Neither the text nor the structure of Title VII draws the strict dividing line that Hearst described or otherwise signals that a charging party’s right to sue and its subsequent suit circumscribe the EEOC’s authority to continue investigating the charge,” concluded the Second Circuit.

First, Title VII broadly provides that the EEOC “shall at all reasonable times have access to... evidence... that relates to unlawful employment practices... and is relevant to the charge under investigation.” 42 U.S.C. § 2000e—8(a) (emphasis added). And second, after Title VII vests the EEOC with the authority to investigate upon the filing of a charge, it does not then place any strict temporal limit on that authority.

Finally, “[t]he EEOC’s broad public interest and role in combating employment discrimination supports our view that its authority to investigate a charge extends beyond the issuance of a right-to-sue letter,” observed the Second Circuit. “A central component of the EEOC’s role is to pursue the public’s interest in enforcing employment discrimination laws even where that interest is distinct from, and may exceed, the private interest of the aggrieved charging party.”

The appeals court thus held that the EEOC retains its authority to investigate, including by issuing and enforcing administrative subpoenas, after it issues a right-to-sue letter, and the charging party has filed a civil lawsuit.

Not overbroad or unduly burdensome. Finally, the Second Circuit agreed with the district court below that the subpoenas at issue were not overbroad or unduly burdensome.

The EEOC sought pedigree information relevant to the dancer’s class charge of widespread sexual harassment at both clubs. She had alleged “an appalling hostile work environment and quid pro quo sexual harassment” that was “perpetuated through the policies and practices” of the clubs. And she further alleged that the hostile work environment “affected all women who have worked at the strip clubs.” Her complaint of a pattern or practice of sexual harassment was explicitly filed “on behalf of a class of all other similarly-situated female employees who have worked” at the clubs, and in light of these broad allegations of a widespread pattern or practice of sexual harassment, the district court “sensibly concluded that employees who worked at the clubs at or around the time [she] worked there are reasonably likely to have information about the alleged discriminatory practices.”

“Evidence also may be relevant to the extent it is likely to be helpful in uncovering other relevant evidence,” observed the appeals court. Pedigree information about workers at the clubs from January 2019 through November 2023, including contextual identifying information about race, was thus “relevant to the charge insofar as it permits the EEOC to identify particular employees who may have relevant information notwithstanding incomplete descriptions provided by other witnesses.”

The appeals court was unpersuaded by the clubs’ argument that, for “small businesses, with limited personnel” and without “all of the requested information stored electronically in a database,” complying will be overly burdensome. Although an office manager for both clubs asserted that complying with the subpoenas would take approximately 300 hours of work, it was “nearly impossible to assess whether 300 hours is an undue burden” in the absence of “context establishing a baseline for the Respondents’ regular business operations and normal operating costs,” which the clubs failed to provide.

The case is No. 24-1672-cv.

Judge: Lohier, R.

Attorneys: Julie Loraine Gantz for the EEOC. Jeffrey A. Kimmel (Akerman) for AAM Holding Corp. and 59 Murray Street Enterprises, Inc.

Companies: AAM Holding Corp.; 59 Murray Street Enterprises, Inc.

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