_________________________________________________________ No. 11-2834 _________________________________________________________ IN THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _________________________________________________________ EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Applicant-Appellant, v. KRONOS INCORPORATED, Respondent-Appellee. _________________________________________________________ On Appeal from the United States District Court for Western District of Pennsylvania _________________________________________________________ BRIEF OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS APPELLANT _________________________________________________________ P. DAVID LOPEZ General Counsel CAROLYN L. WHEELER Acting Associate General Counsel LORRAINE C. DAVIS Assistant General Counsel CORBETT L. ANDERSON Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 131 M Street, N.E., 5th Floor Washington, DC 20507 (202) 663-4579 corbett.anderson@eeoc.gov TABLE OF CONTENTS TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . iii STATEMENT OF JURISDICTION. . . . . . . . . . . . . . . . . . . . . . . . . . 1 STATEMENT OF THE ISSUES. . . . . . . . . . . . . . . . . . . . . . . . . . . 1 STATEMENT OF RELATED CASES. . . . . . . . . . . . . . . . . . . . . . . . 3 STATEMENT OF THE CASE. . . . . . . . . . . . . . . . . . . . . . . . . . . 4 A. Course of Proceedings in Kronos I. . . . . . . . . . . . . . . . . . 4 B. Course of Proceedings on Remand. . . . . . . . . . . . . . . . . . 9 C. District Court's Decisions on Remand. . . . . . . . . . . . . . . . 15 STANDARD OF REVIEW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 SUMMARY OF ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . 25 ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 A. The District Court failed to comply with the letter or spirit of this Court's decision in Kronos I when it limited the validation evidence Kronos must produce pursuant to the subpoena. . . . . . . . . . . .28 B. Good cause does not support a confidentiality order in this case because statutory, regulatory, policy, and stipulated protections make such an order unnecessary. . . . . . . . . . . . . . . . . . 33 C. The District Court abused its discretion in ordering the EEOC to pay half of Kronos's costs in complying with the subpoena. . . 50 CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 CERTIFICATES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57-58 TABLE OF AUTHORITIES Cases AT&T v. FCC, 582 F.3d 490 (3d Cir. 2009). . . . . . . . . . . . . . . . . . 44 Bankers Trust Co. v. Bethlehem Steel Corp., 761 F.2d 943 (3d Cir. 1985). . . . . . . . . . . . . . . . . . . . .28 Beazer East, Inc. v. Mead Corp., 412 F.3d 429 (3d Cir. 2005). . . . . . . . 52 Beazer East, Inc. v. Mead Corp., 525 F.3d 255 (3d Cir. 2008). . . . . . 53 Chrysler v. Brown, 441 U.S. 281 (1979). . . . . . . . . . . . . . . . . . 37 Chrysler v. Schleisinger, 611 F.2d 439 (3d Cir. 1979). . . . . . . . . . . .46 Degen v. United States., 517 U.S. 820 (1996). . . . . . . . . . . . . . . 34 EEOC v. Aon Consulting, 149 F. Supp. 2d 601 (S.D. Ind. 2001). . . . . . 38 EEOC v. Associated Dry Goods, 449 U.S. 590 (1981). . . . . . . . . 35-36, 50 EEOC v. C&P Tel., 813 F. Supp. 874 (D. D.C. 1993). . . . . . . . . . . .20, 39 EEOC v. Kronos, Inc., 620 F.3d 287 (3d Cir. 2010). . . . . . . . . . . .passim EEOC v. Maryland Cup Corp., 785 F.2d 471 (4th Cir. 1986). . . . . . 50, 51, 53 EEOC v. Shell Oil Co., 466 U.S. 54 (1984). . . . . . . . . . . . . . . 25, 29 EEOC v. Univ. of Pa., 850 F.2d 969 (3d Cir. 1988). . . . . . . . . . . . 34 Exxon Corp. v. FTC, 588 F.2d 895 (3d Cir. 1978). . . . . . . . . . . . . . .45 FCC v. Schreiber, 381 U.S. 279 (1965). . . . . . . . . . . . . . . . . .40, 45 FTC v. Texaco, 555 F.2d 862 (D.C. Cir. 1977). . . . . . . . . . . . 33-34, 48 Kilbarr Corp., v. Business Sys. Inc., 990 F.2d 83 (3d Cir. 1993). . . . . . 24 Lanning v. SEPTA, 183 F.3d 478 (3d Cir. 1999). . . . . . . . . . . . 32-33 Pansy v. Borough of Stroudsburg, 23 F.3d 772 (3d Cir. 1994). . . . . . . . . . . . . . . 8, 19, 34, 41 United States v. Friedman, 532 F.2d 928 (3d Cir. 1976). . . . . 23, 50, 51, 55 United States v. Olano, 507 U.S. 725 (1993). . . . . . . . . . . . . . . 51 United States v. Rockwell Int'l, 897 F.2d 1255 (3d Cir. 1990). . . . . . 49 Univ. of Med. & Dentistry of N.J. v. Corrigan, 347 F.3d 57 (3d Cir. 2003). . . . . . . . . . . . . . . . . . 33, 47 Univ. of Pa. v. EEOC, 493 U.S. 182 (1990). . . . . . . . . . . . . . . 40 Xiao Xing Ni v. Gonzales, 494 F.3d 260 (2d Cir. 2007). . . . . . . . . 39, 48 Statutes 18 U.S.C. § 1905. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 28 U.S.C. § 1291. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 28 U.S.C. § 1331. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 28 U.S.C. § 1337. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 28 U.S.C. § 1345. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 29 U.S.C. § 161(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 42 U.S.C. § 12112(b)(6). . . . . . . . . . . . . . . . . . . . . . . . . . 32 42 U.S.C. § 12117(a). . . . . . . . . . . . . . . . . . . . . . . . 1, 34, 47 42 U.S.C. § 2000e-12. . . . . . . . . . . . . . . . . . . . . . . . . . . 37 42 U.S.C. § 2000e-2(k)(1)(A)(i). . . . . . . . . . . . . . . . . . . . . 32 42 U.S.C. § 2000e-5(b). . . . . . . . . . . . . . . . . . . . . . . . 34, 47 42 U.S.C. § 2000e-8. . . . . . . . . . . . . . . . . . . . . . . . . . . 1 42 U.S.C. § 2000e-8(e). . . . . . . . . . . . . . . . . . . . . . . . . . . 34 42 U.S.C. § 2000e-9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 5 U.S.C. § 552. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 5 U.S.C. § 552a(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 35 5 U.S.C. § 552(b)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Other Authorities EEOC Compliance Manual Section 83. . . . . . . . . . . . . . . . . . . . . 36 EEOC FOIA Reference Guide § XI. . . . . . . . . . . . . . . . . . . . . 35, 36 Rules Fed. R. App. P. 32(a)(5). . . . . . . . . . . . . . . . . . . . . . . . . . 57 Fed. R. App. P. 32(a)(6). . . . . . . . . . . . . . . . . . . . . . . . 57 Fed. R. App. P. 32(a)(7)(B). . . . . . . . . . . . . . . . . . . . . . . . 57 Fed. R. App. P. 32(a)(7)(B)(iii). . . . . . . . . . . . . . . . . . . . . 57 Fed. R. Civ. P. 45(c). . . . . . . . . . . . . . . . . . . . . . . . . . . 54 L.A.R. 28.1(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 L.A.R. 31.1(c). . . . . . . . . . . . . . . . . . . . . . . . . . . 57, 58 LAR 28.3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Regulations 29 C.F.R. § 1601.22. . . . . . . . . . . . . . . . . . . . . . . . . . . 35-36 29 C.F.R. § 1610.19. . . . . . . . . . . . . . . . . . . . . . .37, 41, 43, 44 STATEMENT OF JURISDICTION This is an administrative subpoena enforcement case under Section 107 of Title I of the Americans with Disabilities Act, 42 U.S.C. § 12117(a) (incorporating Sections 709 and 710 of Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e-8(a) and 2000e-9). The district court had jurisdiction pursuant to 29 U.S.C. § 161(2) and 28 U.S.C. §§ 1331, 1337, and 1345. On remand from EEOC v. Kronos, Inc., 620 F.3d 287 (3d Cir. 2010) ("Kronos I"), the district court issued a final order on May 3, 2011, which the EEOC timely appealed on July 1, 2011. I-JA- Tab 1 at 1-2.<1> This Court has jurisdiction under 28 U.S.C. § 1291. STATEMENT OF THE ISSUES 1. On remand, by limiting Kronos's production of validity studies and evidence to that which Kronos "relied upon in creating or implementing the tests for Kroger" and "relating to disabilities, persons with disabilities, or adverse impact upon persons with disabilities," did the district court fail to comply with the letter and spirit of this Court's opinion and mandate in Kronos I? This issue was raised below in the Commission's memoranda regarding the parties' proposed orders on remand (Doc. 41 at 21-24; Doc. 48 at 2-6) and in its Brief in Support of Motion for Reconsideration or, in the Alternative, to Alter or Amend Judgment (Doc. 54 at 2-6). The district court ruled on this issue in its Memorandum Opinion (I-JA-Tab 2 at 28-34) and accompanying Order of Court (I-JA-Tab 3 at 43-44), and its Order on Motion for Reconsideration or, in the Alternative, to Alter or Amend Judgment (I- JA-Tab 4 at 48-49). 2. Did the district court abuse its discretion by determining that good cause supports a confidentiality order given that the statutory, regulatory, and stipulated protections that apply in this case make the order unnecessary? This issue was raised below in the Commission's memoranda regarding the parties' proposed orders on remand (Doc. 41 at 4-18; Doc. 48 at 6-7) and in its Brief in Support of Motion for Reconsideration or, in the Alternative, to Alter or Amend Judgment (Doc. 54 at 9-14). The district court ruled on this issue in its Memorandum Opinion (I-JA-Tab 2 at 35-37) and accompanying Order of Court (I-JA-Tab 3 at 44-45), and its Order on Motion for Reconsideration or, in the Alternative, to Alter or Amend Judgment (I- JA-Tab 4 at 48-49). 3. Did the district court abuse its discretion by concluding that Kronos did not waive any defense of undue burden or cost in Kronos I, and by concluding that the cost to Kronos of complying with the EEOC's subpoena exceeds that which Kronos may reasonably be expected to bear as a cost of doing business? This issue was raised below in EEOC's Response to Respondent's Motion for Status Conference (II-JA-Tab 9 at 108-20) and EEOC's Response to Respondent's Proposed Order Dated January 31, 2011 (Doc. 48 at 11-12). The district court ruled on this issue in its Memorandum Opinion (I-JA-Tab 2 at 38-41) and its Memorandum Order on Cost Shifting (I-JA-Tab 5 at 50-53). STATEMENT OF RELATED CASES This case was previously before this Court in Appeal No. 09-3219, resulting in a published decision, EEOC v. Kronos, Inc., 620 F.3d 287 (3d Cir. 2010) ("Kronos I"). The EEOC is unaware of any other case or proceeding that is directly related to this case. However, this Court has pending before it another EEOC subpoena case, EEOC v. UPMC, Appeal No. 11-2869, in which the relevance standard applicable in EEOC subpoena cases is at issue. See 3d Cir. L.A.R. 28.1(a)(2). STATEMENT OF THE CASE A. Course of Proceedings in Kronos I Vicky Sandy, who is hearing and speech impaired, filed a charge of discrimination alleging she was denied a job with Kroger in Clarksburg, West Virginia, as a bagger, cashier, or stocker, based on her disability in violation of the ADA. Kronos I, 620 F.3d at 292. Kroger responded that the store manager who interviewed Sandy had difficulty understanding her and that he discussed with Sandy her low score on a customer service assessment test. Id. at 293. Kroger's reliance on the customer service assessment test, and the impact it may have had on Sandy due to her hearing and speech impairments, led the EEOC to send to Kroger a request for information about the test and its use. Id. The EEOC subsequently learned that Kronos administers and scores the customer service assessment for Kroger nationwide and for all retail positions. The EEOC issued a third party subpoena to Kronos. Id. The EEOC also notified Kroger that it was expanding the scope of its ADA investigation to cover all facilities nationwide, from January 1, 2006, to the present. Id. Subsequently, the EEOC discovered an article co-written by a Kronos employee indicating that the Kronos customer service assessment may have had a disparate impact on minority test takers when given by an unnamed large retailer. Id. The EEOC thus informed Kroger it was expanding its investigation again to include race and was removing the date restriction. Id. at 294. The EEOC then rescinded its subpoena to Kronos and sought enforcement of a new subpoena reflecting the investigation's expanded scope. Id. The district court granted in part and denied in part the EEOC's Subpoena Enforcement Application, opining that the scope of the EEOC's subpoena was "breathtaking - potentially including most of Kronos's business documents, covering its entire client base, with no time, geographic, or job description limitations." Id. The district court significantly narrowed the temporal, geographic, and job parameters of the subpoena "to the time period of January 1, 2006 through May 31, 2007, in the state of West Virginia, for the positions of bagger, stocker, and/or cashier/checker." Id. at 295. The court also deleted the request for race data; narrowed the scope of validity and impact information to materials that specifically and only related to Kroger; and held that Kronos was required only to produce user's manuals and instructions actually provided to Kroger. Id. Over the EEOC's objections, the district court then entered a confidentiality order (1) restricting the use of confidential material solely to the Sandy charge or any subsequent charge filed by Sandy; (2) confining disclosure only to Commission employees with a "need to know"; (3) requiring that the EEOC return confidential material within ten business days after concluding the investigation, and destroy any documents, including EEOC notes or memoranda, that reflect or refer to the confidential material within ten business days after a notice of right to sue; and (4) prohibiting the EEOC from entering any confidential material into a centralized database. The district court defined "Confidential material" very broadly to cover essentially everything produced pursuant to the subpoena and everything referring to or reflecting information produced. Id. at 295, 302-03. The Commission appealed. On appeal, this Court agreed with the Commission that the district court applied too restrictive a standard of relevance in narrowing the EEOC's subpoena. Kronos I, 620 F.3d at 297. Specifically, the Court held that the district court's decision to narrow the EEOC's subpoena by job category, time, and geography was an abuse of discretion. Id.; see also id. at 298-99. This Court further agreed with the EEOC that "Kronos Assessment instructions and manuals are relevant (regardless of whether Kronos actually provided them to Kroger), as are materials related to validation studies and potential adverse impact based on disability, even if such materials are not specific to Kroger's use of the test." Id. at 297; see also id. at 299 ("Such information, regardless of whether it was 'performed specifically for' or 'relat[es] specifically to and only to' Kroger, certainly might shed light on the charge of discrimination."). The Court, however, refused to compel disclosure of information related to possible discrimination based on race. It stated that "[w]hile the EEOC is not required to ignore facts it uncovers in the course of a reasonable investigation of the charging party's complaint, that standard does not justify the expansion of the investigation undertaken here." Kronos I, 620 F.3d at 301. Pointing to the fact that Sandy is a white female who alleged disability discrimination, the Court stated that, in its judgment, the inquiry into race discrimination "is wholly unrelated to Sandy's charge and does not fall within the ambit of a reasonable expansion." Id. at 302. The Court said it was not persuaded otherwise by the Commission's reliance on "an article in the public domain and purported charges of race discrimination in its database that are not a part of this record." Id. at 301-02. As to the confidentiality order, this Court said that "[c]ourts have 'inherent equitable power' to grant orders of confidentiality upon a showing of good cause." Kronos I, 620 F.3d at 302 (applying Pansy v. Borough of Stroudsburg, 23 F.3d 772, 785 (3d Cir. 1994)). But this Court said that Kronos bears the burden of demonstrating "with specificity" that such an order is needed to avoid a "clearly defined and serious injury" and that the burden is not met with "broad allegations of harm, unsubstantiated by specific examples or articulated reasoning." Id. Moreover, this Court stated, a district court entering a confidentiality order must conduct a "good cause balancing test" applying various factors and articulating the reasoning and rationale for each term it chooses to impose. Id. at 303. This Court further observed that "[u]nder the good cause balancing test, there is a strong presumption against entering an order of confidentiality whose scope would prevent disclosure of information that would otherwise be accessible under a relevant freedom of information law." Id. at 302. The Court remanded the case to the district court to determine whether good cause exists, cautioning the district court to be mindful on remand that the EEOC should not be required to destroy documents, including notes and memoranda, in conflict with the Federal Records Disposal Act. Id. at 303-04. B. Course of Proceedings on Remand On remand, the district court ordered the parties to meet and confer on the issues in the case, to submit a joint status report, and for each party then to submit proposed orders. II-JA-Tab 7 at 76-77 (11/29/10 Text Order). The EEOC and Kronos conferred pursuant the court's order and submitted a Joint Status Report stating, inter alia, that the parties could not agree on the "appropriateness and/or terms of a confidentiality order." II-JA-Tab 10 at 123 (Joint Status Report in Compliance with 11/29/10 Text Order). Kronos and the EEOC each submitted proposed confidentiality orders. Kronos's proposal contained confidentiality provisions similar to those at issue in Kronos I and stated that Kronos would not be required to produce validity studies or evidence that was developed in compliance with Title VII or to produce employment applications or assessment tests of applicants unless EEOC first proved their relevance to the Sandy charge. II-JA-Tab 11 at 126-28. The EEOC's proposal asked the court to order that "Kronos shall produce all items responsive to Paragraphs 1, 2, 4 (as modified by the Court of Appeals for the Third Circuit), and 5" of the EEOC's subpoena. II-JA-Tab 12 at 134 ¶1. As to paragraph 3 of the subpoena - requiring, among other things, the results, ratings, or scores of individual test takers - the EEOC's proposal stated that Kronos need not immediately provide that information. Id. at 134-35 ¶2. But the EEOC's proposed order further stated that if at a later date the EEOC were to require production of this information, Kronos would need to designate a person knowledgeable about the company's databases and electronic storage systems so that EEOC counsel could meet with that person (with Kronos's counsel present) to discuss the "logistics of production of the applicant data," with any conflicts or alleged non-compliance being resolved by the district court on motion by the EEOC. Id. The EEOC's proposal contained two paragraphs on confidentiality. Consistent with the EEOC stipulation in Kronos I, 620 F.3d at 303 n.8, the EEOC's proposal stated that it would not disclose any subpoenaed information (or information derived therefrom) to Sandy or her agents during the investigation but that if, at the close of the investigation, Sandy were to file a Freedom of Information Act (FOIA) request, the request would be processed according to the FOIA and the EEOC's implementing regulations. II-JA-Tab 12 at 135-36 ¶4. The second proposal speaking to confidentiality varied somewhat from the EEOC's stipulation in Kronos I by stating that the EEOC could disclose subpoenaed materials or information derived therefrom to outside experts whose identities would be filed under seal along with their executed agreements not to disclose any such information outside the EEOC. Id. at 136 ¶5. The district court rejected both the EEOC's and Kronos's first proposed orders and instructed the parties to submit new proposed orders "setting forth their respective positions as to what documents shall be required to be produced, with specificity, as opposed to what documents shall not be produced ... or as opposed to documents required by Subpoena (as modified by the United States Court of Appeals for the Third Circuit) ... including any proposed language regarding confidentiality and cost-shifting." II-JA-Tab 7 at 77 (12/29/10 Text Order). Both parties complied with the district court's instructions and filed second proposed orders. The section of Kronos's second proposed order titled "documents to be produced" contained subheadings generally corresponding to each subpoena item but then narrowly specified what would be produced. II-JA-Tab 14 at 147-50. For example, Kronos's second proposed order did not require Kronos to produce validation studies at all on the ground that no validation studies of any kind existed specifically for Kroger and that "[t]o the extent that Kronos performed any validations studies for other clients it did so for the purpose of analyzing potential adverse impact based on race or protected status other than disability . . . ." Id. at 149 ¶A.4. The section of Kronos's second proposed order addressing confidentiality contained various provisions similar to those the EEOC objected to in Kronos I, but was even more restrictive in that it stated that the EEOC could make "no use" of "personal information regarding any Kroger applicant without prior permission of the Court." Id. at 151 ¶B.3. The EEOC also submitted a second proposed order. II-JA-Tab 13 at 138-41. But the EEOC explained in its accompanying memorandum that, as the requester of information, the EEOC has no way of knowing "with specificity" what responsive documents are in Kronos's possession. Doc. 43 at 1-2. The EEOC noted that, in an attempt to comply with the court's request for specificity, EEOC's counsel e-mailed Kronos's counsel and asked for an inventory of documents responsive to the subpoena but that Kronos's counsel stated that no inventory was available and he did not know when one would be. Id.; II-JA-Tab 13 at 143, 145. In light of this, the Commission's second proposed order was similar to its first proposal, with two exceptions designed to comply as best it could with the district court's instruction to identify documents "with specificity." First, the EEOC paraphrased subpoena items 1, 2, 4, and 5, specifying what its first proposed order meant by referring to Kronos's immediate production of documents called for by "Paragraphs 1, 2, 4 (as modified by the Court of Appeals for the Third Circuit) and 5" of the subpoena. See II-JA-Tab 13 at 138 ¶1, 140 ¶3. Second, regarding Kronos's production of test-taker information called for by item 3 of the subpoena - the logistics of which the EEOC's first proposed order stated would be worked out at a later date after meeting with a person knowledgeable about Kronos's databases and electronic storage systems - the EEOC complied with the district court's request for specificity by elaborating on what the EEOC would request at that meeting. Specifically, the EEOC stated that Kronos would need to produce the data in an electronic format reasonably usable by the SAS statistical software used by the EEOC (and many others) and that Kronos would need to make sure that its electronic submission contained a number of data fields relevant to subpoena item three's request for the results, ratings, or scores of individual test takers - such as name, address, social security number, test score, test result, test date, test location, and work location sought. See Doc. II-JA-Tab 13 at 138-40 ¶2. By text order dated February 8, 2011, the district court instructed the EEOC and Kronos to submit responses to each other's second proposed orders. II-JA-Tab 7 at 78. The parties complied. Then, by text order dated March 7, 2011, the district court ordered the EEOC and Kronos to submit a joint report setting forth the status of the Sandy v. Kroger charge investigation. Id. The parties filed a joint status report on March 14, 2011. II-JA-Tab 15 at 155-56. In the joint status report, the EEOC stated that the investigation remained open and awaited "disposition or resolution of the instant subpoena enforcement action" in order to proceed. Id. at 155 ¶1. Kronos represented that, as a non-party to the underlying charge, it had no knowledge of any specifics regarding the investigation. Id. at 155 ¶2. C. District Court's Decisions on Remand The district court issued a memorandum opinion on subpoena compliance and confidentiality, with an accompanying order, on March 21, 2011. I-JA-Tab 2 at 3-42 (Memorandum Opinion); I-JA-Tab 3 at 43- 46 (Order). The district court characterized the EEOC as having issued three different subpoenas: "subpoena one," which the EEOC withdrew prior to filing its subpoena enforcement action; "subpoena two," which the court acknowledged the Third Circuit upheld except for the requirement that Kronos produce documents discussing, analyzing, or measuring disparate impact based on race; and "subpoena three," the label the district court placed on the EEOC's second proposed order on remand complying with the court's instruction to describe "with specificity" the documents called for by the subpoena upheld by this Court.<2> See generally I-JA-Tab 2 at 3-48. The district court held that the EEOC's proposed orders on remand exceeded the scope of the subpoena reviewed by the Third Circuit in several respects: by requiring production of documents pertaining to companies other than Kroger (I-JA-Tab 2 at 30, 33, 34); by ignoring this Court's ruling in Kronos I that the underlying charge did not support the EEOC's subpoena of documents discussing, analyzing, or measuring disparate impact based on race (I-JA-Tab 2 at 30-31); and by improperly requiring disclosure of the identities and personal information of the individual test takers (I-JA-Tab 2 at 32). In the court's view, moreover, the EEOC's proposed orders on remand confirmed the court's suspicion about the purpose behind the EEOC's investigation: that "Sandy's charge appears to be just a way to target testing and the testing company, Kronos, whether or not the information related to [Kroger] or Sandy." I-JA-Tab 2 at 33. The district court stated that its conclusion in this regard was "reinforced by the EEOC's failure to move forward with the investigation of Sandy's charge and the evaluation of the merits thereof." Id. The court concluded by stating that it would "decline the EEOC's invitation to re- write or re-draft Subpoena Two, and to enforce the EEOC's proposed order ... thus creating Subpoena Three. Instead, the Court will enforce Subpoena Two as written, with slight modifications, and in conformance with" the Third Circuit's decision. I-JA-Tab 2 at 41. By order dated May 3, 2011, I-JA-Tab 4 at 47-49, the district court denied reconsideration and entered final judgment altering the scope of the subpoena from that ordered enforced by this Court in Kronos I. Paragraph 1 of the subpoena as originally written, and as upheld by this Court in Kronos I, requests "any and all documents and data constituting or related to validation studies or validation evidence pertaining to Unicru and/or Kronos assessment tests purchased by The Kroger Company, including but not limited to such studies or evidence as they relate to the use of the tests as personnel selection or screening instruments." Kronos I, 620 F.3d at 294. The district court added language to this paragraph stating that such validity studies or evidence must be provided "even if created or performed for other customer(s), if such studies or evidence were relied upon in creating or implementing the tests for Kroger. The names/identity of any other customer(s) should be deleted/redacted. Said document production is limited to information relating to disabilities, persons with disabilities, or adverse impact upon persons with disabilities." I-JA-Tab 4 at 48 ¶1 (emphasis added). Paragraph 3 of the subpoena as originally written, and as upheld by this Court in Kronos I, requires Kronos to "[p]roduce any and all documents and data, including but not limited to correspondence, notes, and data files, relating to the Kroger Company; its use of the Assessment Tests; results, ratings, or scores of individual test-takers; and any validation efforts made thereto." Kronos I, 620 F.3d at 294. As with paragraph 1, the district court added language to paragraph 3 limiting it to disability information: "Said document production is limited to information relating to disabilities, persons with disabilities, or adverse impact upon persons with disabilities." I-JA-Tab 3 at 44 (emphasis added). In discussing confidentiality, the district court observed in its memorandum opinion that this Court vacated the district court's previous wide-reaching confidentiality order because the court had not conducted a good cause balancing test as articulated in Pansy v. Borough of Stroudsburg, 23 F.3d 772 (3d Cir. 1994). I-JA-Tab 2 at 35. The district court recited the factors set forth in Pansy and stated that [t]he following factors weigh in favor of the entry of a Confidentiality Order: (1) disclosure of the information sought by the EEOC would certainly violate privacy interests of potentially millions of job applicants, and (2) would potentially cause the job applicants embarrassment; (3) the information is not critical to public health or safety; and, (4) Kronos (and presumably the job applicants as well) as the party benefitting from the entry of a Confidentiality Order, is not a public entity or official. I-JA-Tab 2 at 36. The court went on to state that "[p]erhaps the most compelling factor in favor of a Confidentiality Order is that the privacy interests of Kronos would be protected and their trade secrets and/or proprietary information would be kept 'confidential.'" Id. The court further stated that if these materials were to become public, "the potential harm and damage to the business of non-party Kronos would be significant." Id. (citing EEOC v. C&P Tel., 813 F. Supp. 874, 875 (D. D.C. 1993)). On the other side of the ledger, the district court stated, three factors weighed against a confidentiality order: "(1) the fact that the information being sought may be primarily for legitimate purposes; (2) the sharing of information among litigants might promote efficiency and fairness; and (3) this case involves issues which are important to the public." I-JA-Tab 2 at 37. The court concluded, without further analysis, that "good cause exists to necessitate the entry of a Confidentiality order." Id. The confidentiality provisions are contained in paragraphs 6 through 10. See I-JA-Tab 3 at 44-46 ¶¶6-10 (March 21, 2011 Order); I-JA-Tab 4 at 48-49 ¶6 (May 3, 2011 Order on Reconsideration). Paragraph 6 of the district court's order states: EEOC will not disclose any documents or information derived from documents produced pursuant to this Order (hereinafter, collectively referred to as "Confidential Information") to Vicky Sandy or her agents, or any non- EEOC person or entity, during the investigation of her charge. Any EEOC person to whom the Confidential Information is disclosed must agree in writing to this Order and submit to the personal jurisdiction of this Court for the purpose of enforcement. The Confidential Information shall be used solely for the Sandy Charge or any amendment thereof. Once document production occurs pursuant to this Order of Court, should the EEOC believe that good cause exists to lift the 'Confidential Information' designation for any particular document(s), the EEOC may file a motion in that regard, and the Court will conduct the proper inquiry." I-JA-Tab 4 at 48-49 ¶6 (emphasis added).<3> Paragraph 9 of the court's order states that "[n]o use shall be made of personal information regarding any Kroger employee, applicant, and/or test taker without prior permission of this Court." I-JA-Tab 3 at 45 ¶9 (emphasis added). The Commission had asked the court to clarify this provision in its motion for reconsideration, Doc. 54 at 9 n.2, but the court declined to do so. Regarding the treatment of FOIA requests, paragraph 8 of the court's order dictates how FOIA requests would be handled, including language stating that the EEOC would deny FOIA requests if Kronos objected to disclosure: If any party or third party seeks to obtain Confidential Information from the EEOC under either the Freedom of Information Act, 5 U.S.C. § 552 ("FOIA"), or Section 83 of the EEOC Compliance Manual while the EEOC's investigation of the Sandy Charge is open, then the EEOC will notify Kronos (by facsimile and e-mail transmission to Kronos' counsel, R. Lawrence Ashe, Jr., Esquire) as soon as is practicable and will assert that the Confidential Information is exempt from disclosure under FOIA, based on the pending investigation, pursuant to 29 C.F.R. § 1610.10 and/or the EEOC's own rules or procedures. If a FOIA request or any other request for the contents of the file with respect to the Sandy Charge or Confidential Information is received after EEOC has closed the Sandy Charge, the EEOC agrees to notify Kronos in the same manner as described and as soon as is practicable, but in no event more than five (5) business days after the request is received, and the EEOC agrees to give Kronos an opportunity to object to disclosure of the Confidential Information to the requesting party. Kronos shall have five (5) business days after receiving such notice to object to disclosure. If Kronos objects, the EEOC agrees not to disclose the Confidential Information to the requesting party or parties. EEOC further agrees that, if a party sues EEOC under FOIA to obtain a copy of a charge file which includes Confidential Information, EEOC will not object to Kronos intervening to pursue its objections and confidentiality concerns. I-JA-Tab 3 at 45 ¶8 (emphasis added). The court rejected the EEOC's proposal that the order simply state any FOIA request filed by the charging party or her agents at the close of the investigation would be governed by the FOIA and the Commission's implementing regulations. II-JA-Tab 12 at 135-36 ¶4; Doc. 54 at 13. Lastly, the district court's memorandum opinion addressed Kronos's request that the district court shift the cost of compliance with the subpoena to the EEOC. Citing an objection Kronos made during the administrative processing of the subpoena, but not argued by Kronos in the subpoena enforcement action or on appeal in Kronos I, the court rejected the EEOC's argument that Kronos had waived any arguments related to cost shifting. I-JA-Tab 2 at 12 & n.2 (citing Doc. 1-12, Kronos's Petition to Revoke or Modify filed with EEOC). Then, citing United States v. Friedman, 532 F.2d 928 (3d Cir. 1976), where this Court analogized to Fed. R. Civ. P. 45 in holding that a district court has the power to require the government to reimburse a third-party administrative subpoena recipient for the reasonable costs of production, I-JA-Tab 2 at 38-40, the district court stated that it would rule on cost shifting in a separate order after the parties filed a joint status report. Id. at 41. In a separate order on May 3, 2011, I-JA-Tab 5 at 50-53, the district court held "that given the costs of production will amount to approximately $75,000.00, the Court will Order the EEOC and Kronos to split the cost of compliance equally (50%-50%)." I-JA-Tab 5 at 52. The court explained that it was "ever mindful that Kronos, as a non- party 'contractor,' should not be required to bear the costs of subpoena compliance, which are significant, solely." Id. The district court further said the 50-50 split was an attempt to strike a balance between the EEOC's need for the information and the financial burden on Kronos. Id. at 53. STANDARD OF REVIEW The question whether, on remand, a district court properly interpreted and implemented this Court's mandate to enforce the subpoena "is one of law, subject to plenary review." Kilbarr Corp., v. Business Sys. Inc., 990 F.2d 83, 87 (3d Cir. 1993). This Court reviews the district court's confidentiality order for abuse of discretion. Kronos I, 620 F.3d at 295-96. An abuse of discretion occurs when a decision rests on "a clearly erroneous finding of fact, an errant conclusion of law or an improper application of law to fact." Id. (citation and internal quotation marks omitted). SUMMARY OF ARGUMENT On remand the district court failed to enforce the EEOC's subpoena as written as directed by this Court in Kronos I. Instead, the court used this Court's remand as an opportunity to revisit issues already decided by this Court and to narrow the scope of the validity evidence Kronos must produce to that which was "relied upon in creating or implementing the assessment for Kroger" and which "relat[es] to disabilities, persons with disabilities, or adverse impact upon persons with disabilities." Neither limitation is consistent with the letter or spirit of this Court's decision in Kronos I that, pursuant to the broad relevance standard articulated by the Supreme Court in EEOC v. Shell Oil Co., 466 U.S. 54 (1984), all materials related to the validity of the Kronos assessment test(s) used by Kroger are relevant to the EEOC's charge investigation. The district court failed to comply with this Court's explicit direction to enforce the subpoena as modified in Kronos I. The limitations the district court placed on the subpoena should be reversed as a matter of law. The Court should reverse the district court's decision to impose a confidentiality order as an abuse of discretion. While Kronos I held that the district court has inherent power to conditionally enforce an EEOC administrative subpoena upon a showing of good cause, this Court remanded the issue to the district court for an analysis of whether good cause exists. The district court erred in conducting that analysis. Good cause does not support a confidentiality order here because the confidentiality protections afforded by statute, regulation, policy, and stipulation in this case render such an order unnecessary. Moreover, many of the specific confidentiality provisions imposed by the district court are not supported by good cause. The provision dictating how the Commission must treat FOIA requests is contrary to case law as well as regulations which provide an orderly method for determining when information must not be disclosed. Those authorities direct the agency in the first instance to make an independent determination as to the need for confidentiality and then permit the submitter of information the opportunity to challenge the agency's determination. Other provisions dictating how the Commission may use subpoenaed information in the course of its investigation, or requiring the Commission to obtain the court's permission to use the information for any purpose, impermissibly usurp the Commission's independent, statutorily granted law enforcement authority. Finally, the district court erred in considering Kronos's argument on remand that the Commission's subpoena imposes undue burdens or costs when it failed to preserve that argument in Kronos I. Kronos waived this argument because, although Kronos mentioned burden and costs to the Commission in support of its administrative petition to revoke the subpoena, it never developed this argument at any level of the court proceedings in Kronos I. Even if Kronos's costs argument is not deemed waived or forfeited, the district court erred in ordering the Commission to pay half of Kronos's costs of complying with the subpoena. The court did not conduct the required analysis to determine whether the costs are within the realm of what Kronos may reasonably be expected to bear as a cost of doing business. Conducting the proper analysis should have led the court to conclude, as it should this Court, that because Kronos is in the business of selling, administering, scoring, and keeping the records of employment application tests, the cost of complying with the EEOC's subpoena are well within what Kronos should reasonably expect to bear. ARGUMENT A. The District Court failed to comply with the letter or spirit of this Court's decision in Kronos I when it limited the validation evidence Kronos must produce pursuant to the subpoena. In Kronos I, this Court reversed the district court's decision not to enforce the EEOC's subpoena, rejecting the district court's attempt, among other things, to limit Kronos's production of validation information regarding the Kronos assessment test(s) used by Kroger to such information only related to Kroger. Kronos I, 620 F.3d at 297, 299. On remand, the district court was required to "proceed in accordance with the mandate and the law of the case as established on appeal . . . [and had to] implement both the letter and the spirit of the mandate, taking into account the appellate court's opinion and the circumstances it embraces." Bankers Trust Co. v. Bethlehem Steel Corp., 761 F.2d 943, 949 (3d Cir. 1985). The district court failed to do so. Paragraph 1 of the EEOC's subpoena requires Kronos to produce "any and all documents and data constituting or related to validation studies or validation evidence pertaining to" the assessment tests purchased by Kroger. Kronos I, 620 F.3d at 294. This Court held in Kronos I that the district court's previous modification of this paragraph, limiting production of validity information to such efforts performed specifically for and only for Kroger, was an abuse of discretion. This Court held it was not in accord with the broad standard of relevance articulated in EEOC v. Shell Oil Co., 466 U.S. 54 (1984), that the EEOC is entitled to access to any material that "might cast light on" whether Kroger's use of the Kronos assessment constituted an unlawful employment practice. Kronos I, 620 F.3d at 299. This Court specifically agreed with the EEOC that materials related to validation studies are relevant "even if such materials are not specific to Kroger's use of the test." Id. at 297. This Court directed the district court to enforce this provision as is and nothing in the Court's remand instruction permits the limitations placed by the court. Yet, by restricting the information Kronos is required to produce to validation evidence relied upon in creating or implementing the assessment test(s) for Kroger, the district court has essentially undone what this Court did in Kronos I. Contrary to this Court's directive, the district court again has conditioned the production of information relevant to the assessment test(s) Kroger uses on the specificity of its connection to Kronos's services to Kroger. This restriction contravenes Kronos I and should be rejected. It is also clear that by narrowing the subpoena to require Kronos only to produce validity studies or evidence "relied upon in creating or implementing the tests for Kroger," I-JA-Tab 4 at 48 ¶1, the district court again failed to apprehend the broad relevance standard acknowledged and reaffirmed by this Court in Kronos I. It is undisputed that Kronos developed the assessment test for use in hiring for various customer service jobs by many employers, not just Kroger. In this situation, it is highly likely that the type of validity evidence Kronos has, if any, is "validity transportability evidence," meaning that it is evidence gathered by using a test for various jobs at different employers. II-JA-Tab 18 at 165-66 ¶¶5-6 (Declaration of EEOC Chief Psychologist Richard Tonowski). This evidence may or may not have been "relied upon in creating or implementing the tests for Kroger." But in any case, validity studies and evidence that pertain to the Kronos assessment test Kroger uses "might cast light" on the validity of the test. Cf. Kronos I, 620 F.3d at 300 ("We agree with the EEOC that regardless of whether Kronos actually provided Kroger with user's manuals and instructions, the materials may aid the EEOC in understanding the Assessment's potential for disparate impact on the disabled."). The district court also erred in modifying paragraphs 1 and 3 on remand to require Kronos to produce only validity studies and evidence "relating to disabilities, persons with disabilities, or adverse impact upon persons with disabilities." I-JA-Tab 4 at 48 ¶1 (paragraph 1 as finally modified by court after motion for reconsideration); I-JA-Tab 3 at 44 ¶3 (paragraph 3 as modified by court). Nothing in Kronos I supports this change. Although this Court affirmed the district court's judgment "to the extent it decline[ed] to enforce the portion of the subpoena requesting information related to potential discrimination based on race," Kronos I, 620 F.3d at 302, that aspect of the appellate decision pertained not to paragraph 1's request for validity evidence, but to paragraph 4's request for documents discussing, analyzing, or measuring potential adverse impact. Id. at 300 (stating "[w]e now turn to the EEOC's request for 'documents discussing, analyzing or measuring potential adverse impact ... [on the basis of] race,'" quoting subpoena paragraph 4). Moreover, limiting validity materials to those relating to disparate impact based on disability simply makes no sense. Determining validity is wholly distinct from determining whether a selection device has a disparate impact on any particular unlawful basis. II-JA-Tab 18 at 166 ¶7 (Declaration of EEOC Chief Psychologist Richard Tonowski). The concept of validity relates not to a particular discriminatory basis such as disability, race, or sex, but to whether a selection device is "job related for the position in question and consistent with business necessity." 42 U.S.C. § 2000e-2(k)(1)(A)(i) (Title VII); 42 U.S.C. § 12112 (b)(6) (ADA). Simply put, validation studies measure the selection device's capacity to enable the employer to predict job performance; such studies do not measure whether the selection device discriminates. See generally Lanning v. SEPTA, 183 F.3d 478, 485-94 (3d Cir. 1999) (discussing validity and job-related/business-necessity standard). Accordingly, there is no such thing as a validity study specific to disability or disparate impact based on disability. By modifying the subpoena in this way, the district court completely gutted the subpoena request to, in effect, relieve Kronos from having to produce any validity information at all. Kronos in fact admitted as much in its second proposed order submitted to the district court. II-JA-Tab 14 at 149 ¶4 ("No adverse impact or validation studies have been performed by Kronos, or to Kronos's knowledge, by or for Kroger with respect to potential adverse impact on individuals with disabilities."). The district court manifestly failed to comply with the letter and spirit of Kronos I. B. Good cause does not support a confidentiality order in this case because statutory, regulatory, policy, and stipulated protections make such an order unnecessary. 1. In contrast to ordinary court litigation where a district court has broad power under the federal rules of civil procedure to control discovery, an action to enforce an administrative subpoena triggers only "'strictly limited'" judicial review. Univ. of Med. & Dentistry of N.J. v. Corrigan, 347 F.3d 57, 64 (3d Cir. 2003) (quoting FTC v. Texaco, 555 F.2d 862, 871-72 (D.C. Cir. 1977)); EEOC v. Univ. of Pa., 850 F.2d 969, 980 (3d Cir. 1988) ("the role of the court in a subpoena enforcement proceeding is sharply limited") (citation and internal quotation marks omitted), aff'd 493 U.S. 192 (1990). In ruling on an administrative subpoena courts do "have 'inherent equitable power' to grant orders of confidentiality upon a showing of good cause." Kronos I, 620 F.3d at 302 (applying Pansy, 23 F.3d at 785). But "[a] court's inherent power is limited by the necessity giving rise to its exercise." Degen v. United States., 517 U.S. 820, 823, 829 (1996) (explaining the limited nature of inherent power and holding district court erred by exercising inherent power when not necessary). Because a confidentiality order is unnecessary for several reasons, good cause does not support the district court's order. The ADA's confidentiality provisions impose criminal penalties on any EEOC employee who discloses anything in an EEOC investigation to the "public." 42 U.S.C. §§ 2000e-5(b), 2000e-8(e) (Title VII confidentiality provisions); 42 U.S.C. § 12117(a) (ADA incorporating Title VII confidentiality provisions). This means that at all times during and after the EEOC's investigation, the EEOC routinely denies any requests for charge-file information made by persons other than the parties to the charge - for any reason, and whether under FOIA or not - because ADA confidentiality provisions prohibit such disclosure. 29 C.F.R. § 1601.22 (EEOC regulation on confidentiality of investigative files); EEOC FOIA Reference Guide § XI.<4> See also 5 U.S.C. § 552(b)(3) (FOIA exemption 3 exempting material from disclosure when prohibited by another statute). The Privacy Act of 1974 also protects EEOC charge files from public disclosure. 5 U.S.C. § 552a(b). And the Trade Secrets Act forbids government employees from disclosing trade secrets to anyone under threat of criminal penalties. 18 U.S.C. § 1905. The Trade Secrets Act prevents disclosure of covered materials to anyone, including the parties to a charge, at any time. For information in a charge file that is not covered by the Trade Secrets Act, the EEOC may make disclosures to the parties to a charge during the investigation to the extent deemed necessary to effectively enforce the law, as the parties to the charge are not considered members of the "public" within the meaning of the Title VII/ADA confidentiality provisions. EEOC v. Associated Dry Goods, 449 U.S. 590, 599 (1981); 29 C.F.R. § 1601.22; EEOC Compliance Manual Section 83.<5> But in this case the EEOC has stipulated that it will not exercise this authority, i.e., will not disclose subpoenaed material to Sandy or her agents during the investigation. Kronos I, 620 F.3d at 303 n.8. The Commission also has stipulated that at the conclusion of the EEOC's investigation in this case, the EEOC would require a FOIA request in order to consider disclosure. Importantly, however, EEOC invokes FOIA exemption 3 to deny requests for charge-file information by persons other than the parties to the charge in the same way it does during the investigation. If the parties to the charge - here, Sandy or Kroger - were to request charge file information pursuant to FOIA at the close of the investigation, those requests would be granted if the 90- day notice of right to sue period has not expired, but disclosure would be made only after sanitizing the file to remove documents covered by a FOIA exemption. EEOC FOIA Reference Guide § XI. For example, any information impacting personal privacy would be removed pursuant to FOIA exemptions 6 and 7(C). EEOC FOIA Reference Guide § XI. And documents Kronos has designated in good faith as being trade secret or confidential commercial information would be covered by exemptions 3 and 4 and a FOIA request by Sandy or Kroger for such documents would trigger the procedures the Commission promulgated pursuant to its rulemaking authority under Title VII and the FOIA. 42 U.S.C. § 2000e-12; 5 U.S.C. § 552; 29 C.F.R. § 1610.19. Under these procedures, the EEOC would provide Kronos explicit notice of the request; Kronos would have the right to a minimum of five working days to object to disclosure; and, if the EEOC were to disagree with Kronos's objection, the EEOC would provide Kronos an explanation of its reasons so that Kronos could seek an injunction against disclosure. 29 C.F.R. § 1610.19. See also Chrysler v. Brown, 441 U.S. 281, 317-18 (1979) (recognizing that "reverse FOIA" suits seeking to prevent disclosures are cognizable under the Administrative Procedure Act). Accordingly, by statute, regulation, Commission policy, and by stipulation in this case, all documents produced by Kronos pursuant to the subpoena would be legally protected from disclosure to anyone during or after the investigation except according to well-defined FOIA procedures. Those procedures provide Kronos with ample opportunities to protect from disclosure any documents it believes constitute trade secrets or confidential commercial information. Indeed, these procedures already satisfy the good cause factors identified by the district court in its confidentiality order as warranting protection - including the "compelling" proprietary and privacy interests of Kronos, and the privacy interests of employment applicants (factor one); the potential for embarrassment by disclosure (factor three); and the greater protection due private as opposed to public entities (factor six). And although factors two, five, and seven, as the district court recognized, would counsel against a confidentiality order, in this case the Commission has stipulated that it will not make any disclosure to Sandy or her agents during the investigation. In essence, the Commission has voluntarily afforded Kronos protection from disclosure similar to that found wanting by district courts in other cases involving employment tests and validity studies, including the one relied on by the district court. See EEOC v. Aon Consulting, 149 F. Supp. 2d 601, 606-09 (S.D. Ind. 2001) (granting motion for protective order where EEOC did not agree not to disclose documents to charging parties during the investigation, but holding that upon the conclusion of the investigation "the FOIA provisions offer sufficient protection"); EEOC v. C&P Tel. Co., 813 F. Supp. 874, 876-77 (D.D.C. 1993) (ordering EEOC to enter into a confidentiality agreement largely because EEOC would not otherwise assure that information would not be disclosed to charging parties and third parties). As no further protection from disclosure is necessary, there can be no good cause for the court to exercise its inherent power to impose a confidentiality order. Cf. Xiao Xing Ni v. Gonzales, 494 F.3d 260, 270- 71 (2d Cir. 2007) (quoting Supreme Court decision in Degen and holding, "[w]here, as here, existing statutes and regulations provide an 'alternative means of protecting'" the interests at stake there is "'a lack of necessity'" for the exercise of inherent power). Kronos makes no real argument that the statutory, regulatory, and policy regime on confidentiality - as supplemented in this case by stipulation - provide inadequate protection from disclosure. Rather, its argument amounts to a complaint that the EEOC cannot or should not be trusted to maintain confidentiality without a court order. But this argument "runs contrary to the presumption to which administrative agencies are entitled - that they will act properly and according to law." FCC v. Schreiber, 381 U.S. 279, 296 (1965). The presumption cannot be overcome by mere assertions by Kronos untethered to competent and compelling record evidence. This Court should not give credence to Kronos's unsubstantiated or inflated fears. The Supreme Court's approach in Univ. of Pa. v. EEOC, 493 U.S. 182 (1990), is instructive. Even though the Court suggested it had the power to recognize an evidentiary privilege for peer review materials in the university setting, the Court stated that the statutory confidentiality provisions represent the balance Congress struck between the need for confidentiality and the need for the EEOC to be free to ferret out discrimination. See Univ. of Pa., 493 U.S. at 192. Importantly, the Court said it was reluctant to view its authority expansively given that Congress had spoken, id. at 189, and was "reluctant to place a potent weapon" in the hands of those seeking to delay investigations which would lead to a "wave of similar" arguments in other cases. Id. at 194 (omitting citation and internal quotation marks). For like reasons, and to avoid like consequences, in this case the district court's exercise of inherent power to issue a confidentiality order should be reversed as unnecessary. 2. Even if the district court had discretion to impose some confidentiality order in this case - and the EEOC does not believe it did - the court's order should still be vacated. The district court performed a general and cursory recitation of the good cause factors but, as in Kronos I, the court again failed to articulate the good cause reasoning for "the specific terms it chose to include" in light of the needs and circumstances of this case. See Kronos I, 620 F.3d at 303 ("The District Court did not articulate its reasoning for granting the order and its rationale for exercising its broad discretion to fashion the order by imposing the specific terms it chose to include. See Pansy, 23 F.3d at 791 ('Courts have discretion to fashion such orders according to the needs and circumstances of each case.')."). a. Paragraph 8 of the court's order conflicts with the FOIA and requires the Commission to comply with a potentially burdensome and unnecessary procedural step. Paragraph 8 of the court's order dictates how FOIA requests would be handled. I-JA-Tab 3 at 45 ¶8. But it differs from the Commission's FOIA procedures at 29 C.F.R. § 1610.19 in several respects. It requires that if the EEOC receives a FOIA request while the EEOC's investigation of the Sandy Charge is open, then the EEOC will notify Kronos's counsel by both fax and e-mail as soon as is practicable and will assert that the information is exempt from disclosure pursuant to the FOIA, its regulations, and Commission policy. I-JA-Tab 3 at 45 ¶8. But the Commission normally does not notify charge respondents during the investigation that someone has requested charge file information because, as explained above, in every case the Commission routinely denies any such request from members of the public. See 29 C.F.R. § 1610.19(g) (stating requirement of notice to the submitter "shall not apply" if the EEOC determines that the information shall not be disclosed). And in this case the EEOC has stipulated that it will not disclose charge-file information to Sandy or her agents. The district court did not articulate any reason, much less good cause, for requiring the Commission to depart from its regulations to provide this notice to Kronos's attorney in these situations. And there is none. As there would be no disclosure of information under these circumstances, there is no need to notify Kronos of the request. Similarly, after the close of the investigation, paragraph 8 of the court's order requires the EEOC to notify Kronos's attorney by the same means "but in no event more than five (5) business days after the request is received." I-JA-Tab 3 at 45 ¶8. The EEOC's FOIA regulations contain no time period by which the EEOC must notify a submitter that a FOIA request has been made for trade secrets or confidential commercial information. There is no apparent good cause, and the court articulated none, for imposing this requirement. The most troubling aspect of paragraph 8 of the court's order is its provision that "if Kronos objects [to disclosure], EEOC agrees not to disclose the Confidential Information to the requesting party or parties. EEOC further agrees that, if a party sues EEOC under FOIA, EEOC will not object to Kronos intervening to pursue its objections and confidentiality concerns." I-JA-Tab 3 at 45 ¶8. This provision contradicts the EEOC's statutory and regulatory obligation under the FOIA to make an independent determination of whether there is merit to a submitter's objection to the disclosure of specific material. 29 C.F.R. § 1610.19(e)(1) ("The Commission shall consider carefully the objections of a submitter ...."). And, in those circumstances where the EEOC deems Kronos's objection not to have merit, the order would relieve Kronos from any obligation to support or justify to a court its claim that the subject information should be exempted from disclosure under federal law. Id. ("When the Commission decides to disclose information despite such objections, it shall provide the submitter with a written statement briefly explaining why the objections were not sustained. . . . in order that the submitter may seek a court injunction to prevent release of the records if it so chooses."). The provision in effect assumes, probably falsely, that all documents/information produced pursuant to the subpoena constitute trade secrets or confidential commercial information covered by exemption 4. As neither the district court, nor the EEOC, has seen the documents, there is no reason to believe that all the subpoenaed information is protected. See AT&T v. FCC, 582 F.3d 490, 499 n.8 (3d Cir. 2009) ("[D]etermining that each document ... contains some protected content would be difficult enough, but FOIA requires more ... [-] that every 'reasonably segregable portion' of each document contains protected information. . ... Holding, on the very limited record before us, that Exemption 7(C) protects every reasonably segregable jot and tittle of each document ... would be extraordinary ...."), reversed on other grounds, 131 S. Ct. 1177 (2010) (holding that corporations do not have "personal privacy" protected by FOIA exemption 7(C)). The Commission's FOIA regulation instructs the EEOC to make an independent evaluation of any claim that FOIA exemption 4 applies in the first instance. The district court's confidentiality order absolutely undermines this regulatory duty and is contrary to Supreme Court and Third Circuit case law. In FCC v. Schreiber, 381 U.S. 279 (1965), the Supreme Court held that a district court erred by not deferring to an FCC rule requiring a certain investigation to be public and that confidentiality be determined after proof by the respondent that it was warranted, instead of agreeing in advance to provide blanket confidentiality to all the documents called for by the subpoena. Schreiber, 381 U.S. at 188; id. at 295-96 ("If and when information was demanded which if disclosed might in fact injure MCA competitively, there would be ample opportunity to request that it be received in confidence, and to seek judicial protection if the request were denied."). This Court stated in Exxon Corp. v. FTC, 588 F.2d 895 (3d Cir. 1978), that Schreiber made it "abundantly clear that it is within the discretion of an agency to determine what protection must be given the confidential information it receives in the course of its investigations. A court cannot impose its own set of protections unless the agency abused its discretion in determining what protection was necessary." Id. at 903. See also Chrysler v. Schleisinger, 611 F.2d 439, 440 (3d Cir. 1979) (per curiam) ("[W]e conclude that the determination both of the applicability of [the Trade Secrets Act] to the requested information, and of the availability of an exemption from disclosure under [FOIA] should be made in the first instance by the agencies from which the information was requested."). In ordering paragraph 8, the district court clearly disregarded this Court's admonition in Kronos I that "[u]nder the good cause balancing test, there is a strong presumption against entering an order of confidentiality whose scope would prevent disclosure of information that would otherwise be accessible under a relevant freedom of information law." 620 F.3d at 302. The court abused its discretion. b. Paragraphs 6 and 9 of the court's order go beyond any legitimate confidentiality concern and improperly interfere with the EEOC's prerogative as an independent law enforcement agency. Paragraph 6 says that "any documents or information derived from documents produced pursuant to this Order . . . shall be used solely for the Sandy Charge or any amendment thereof. Once document production occurs pursuant to this Order of Court, should the EEOC believe that good cause exists to lift the 'Confidential Information' designation for any particular document(s), the EEOC may file a motion in that regard, and the Court will conduct the proper inquiry." I-JA- Tab 4 at 48-49 ¶6. Paragraph 9 states: "No use shall be made of personal information regarding any Kroger employee, applicant, and/or test taker without prior permission of this Court." I-JA-Tab 3 at 45 ¶9. Good cause does not support these paragraphs. Congress gave the EEOC the authority to investigate charges of discrimination. 42 U.S.C. § 2000e-5(b) ("the Commission ... shall make an investigation"); 42 U.S.C. § 12117(a). Enforcing an administrative subpoena is not an occasion for a court to supervise or otherwise entangle itself in the agency's investigation. See Corrigan, 347 F.3d at 64 (stating "[j]udicial supervision of agency decisions to investigate might hopelessly entangle the courts in areas that would prove to be unmanageable and would certainly throw great amounts of sand into the gears of the administrative process") (internal quotation marks and citation omitted). A court's inherent power to conditionally enforce a subpoena does not mean the court may require the Commission to pre-clear how it uses the subpoenaed information within the bounds of performing the Commission's statutory duties. See Texaco, 555 F.2d at 883-84 & 884 n.62 (stating the district court's order went "too far" by requiring "that any release or use of the documents beyond the investigation first be cleared with the court. [T]he order would unquestionably place the court in a position of supervision and control over the Commission in the exercise of its statutory duties. At least until the subpoenaed information has been made available to the agency and it has had an opportunity to rule on specific requests for confidential treatment, such a protective order is premature and improper"); cf. Gonzales, 494 F.3d at 267 (stating "inherent power generally extends only to a court's management of its own affairs," and that "the Supreme Court has rejected assertions of inherent power that are 'remote from what courts require in order to perform their functions'") (citation omitted). As long as the material the EEOC has subpoenaed is relevant to a legitimate purpose, the court has no discretion to limit the EEOC's use of the documents for any other legitimate purpose. Cf. United States v. Rockwell Int'l, 897 F.2d 1255, 1257, 1263 (3d Cir. 1990) (holding that the "legitimate purpose" inquiry should be made with reference to "the general and overarching institutional purpose of the IRS" and not narrowly with reference to a "specific suspected wrongdoing"). In this case, the subpoenaed information is clearly relevant to the Sandy charge, which is the legitimate purpose that prompted the subpoena in the first place. And as the EEOC argued in Kronos I and on remand, certain subpoenaed material may also be relevant to other EEOC charges. Such charges might exist against Kroger - e.g., filed by other Kroger applicants or by an EEOC Commissioner - or against other Kronos clients. And, information related to the validity - i.e., job- relatedness and business necessity - of the Kronos assessment test would be relevant to any such EEOC charge. Indeed, in amending the order in response to the Commission's motion for reconsideration, the district court required Kronos to produce validity studies or evidence pertaining to the assessment test purchased by Kroger "even if created or performed for other customers(s)," I-JA-Tab 4 at 48 ¶1, acknowledging this Court's recognition in Kronos I of the general relevance of such information. Yet the court gave no reason for restricting the use of subpoenaed material only to the Sandy charge investigation. Good cause does not exist for this restriction. The Supreme Court has held the EEOC may place information in multiple charge files to which the information is relevant. See EEOC v. Associated Dry Goods, 449 U.S. 590, 594 (1981). The Associated Dry Goods rationale applies regardless of whether the information is relevant to multiple charges against the same employer or multiple employers. C. The District Court abused its discretion in ordering the EEOC to pay half of Kronos's costs in complying with the subpoena. There is no statutory basis for ordering the EEOC to bear any of the costs Kronos might incur in complying with the agency's administrative subpoena. See EEOC v. Maryland Cup Corp., 785 F.2d 471, 477 (4th Cir. 1986) ("The statute does not grant the party subject to a subpoena the right to reimbursement for costs of reproducing documents."). Yet the district court ordered the EEOC to bear half of Kronos's estimated $75,000 cost of compliance with the subpoena. I-JA- Tab 5 at 50-53. The court relied on United States v. Friedman, 532 F.2d 928 (3d Cir. 1976), which held that a district court can order the IRS to pay the costs of a third-party recipient of an administrative summons if the court "make[s] an individualized determination that the cost involved in complying with the summons in question exceeds that which the respondent may reasonably be expected to bear as a cost of doing business." Id. at 938. Here, however, the district court abused its discretion in ordering the Commission to pay any part of Kronos's compliance costs for two reasons. First, Kronos has waived or forfeited any objection it could have asserted against subpoena enforcement on grounds of undue burden or costs. See United States v. Olano, 507 U.S. 725, 733 (1993) ("Whereas forfeiture is the failure to make the timely assertion of a right, waiver is the 'intentional relinquishment or abandonment of a known right") (citation and internal quotation marks omitted). In Kronos I, the Commission noted that undue burden appeared not to be at issue: While Kronos has at times used the phrase "undue burden" in its briefing below, the substance of its arguments focused instead on relevance and confidentiality. Kronos has made no record of any burden sufficient to satisfy this element. See, e.g., Maryland Cup, 758 F.2d at 477 ("The burden of proving that an administrative subpoena is unduly burdensome is not easily met. The party subject to the subpoena must show that producing the documents would seriously disrupt its normal business operations. Maryland Cup has not made the required showing of serious disruption. The company merely makes . . . conclusory allegations . . . .") (citations omitted). EEOC Kronos I Opening Br. at 35 n.8. Kronos did not contest this statement in its Response Brief in Kronos I. This was a waiver. See Beazer East, Inc. v. Mead Corp., 412 F.3d 429, 437 n.11 (3d Cir. 2005) ("the appellee waives, as a practical matter anyway, any objections not obvious to the court to specific points urged by the appellant") (citation and internal quotation marks omitted). Indeed, this Court foreshadowed the waiver issue in Kronos I in summarizing the subpoena enforcement issues on appeal: To obtain enforcement of an administrative subpoena, an agency must demonstrate that 1) its investigation has a legitimate purpose, 2) the inquiry is relevant to that purpose, 3) the agency does not already possess the information requested, 4) the agency has complied with relevant administrative requirements, and 5) the demand is not unreasonably broad or burdensome. . . . It is the second requirement, that the inquiry be relevant to a legitimate purpose, that is at issue here. Kronos I, 620 F.3d at 296 n.5 (emphasis added; quotation marks and citations omitted). After ruling on the relevance question, the Court remanded the case for further proceedings on confidentiality, not undue burden. Id. at 304 ("We will vacate and remand the District Court's July 22, 2009 confidentiality order."). Kronos "cannot now, after a remand on an unrelated issue, raise objections that it previously waived." Beazer East, Inc. v. Mead Corp., 525 F.3d 255, 263 (3d Cir. 2008). Kronos contended below that its cost shifting argument is independent of undue burden. To be sure, the Friedman standard on cost shifting, which focuses on what Kronos "may reasonably be expected to bear as a cost of doing business," is slightly different from the undue burden standard, which focuses on whether compliance would seriously disrupt normal business operations. See Maryland Cup Corp., 785 F.2d at 477. But the standards obviously overlap considerably. Cf. id. at 477-78 (holding EEOC not required to reimburse subpoena respondent for reproduction costs because respondent did not prove the subpoena was unduly burdensome, and stating it would hold the same even if Rule 45 applied). And, in any event, as the company made no argument in Kronos I pursuant to Friedman that it should not reasonably be expected to bear the costs of compliance as a cost of doing business, or that incurring the cost of compliance would seriously disrupt its normal business operations, Kronos should be deemed to have waived or forfeited this argument. Second, even if cost shifting is not deemed waived or forfeited, the district court erred by ordering the EEOC to split Kronos's estimated $75,000 cost of compliance with the subpoena. Again, in Friedman, this Court held that before the government is ordered to bear the costs of production "the district court must make an individualized determination that the cost involved in complying with the summons in question exceeds that which the respondent may reasonably be expected to bear as a cost of doing business." 532 F.2d at 938. The district court did not make this individualized determination. Nowhere in the district court's decision does it undertake an analysis of whether Kronos's $75,000 cost estimate, which it accepted at face value, constitutes an unreasonable cost to Kronos of doing business. Further, the court did not consider the EEOC's offer, in lieu of cost-shifting, to work with Kronos to ameliorate the cost and make the process of production efficient. II-JA-Tab 9 at 113; cf. Fed. R. Civ. P. 45(c) ("A party serving a subpoena must take reasonable steps to avoid imposing undue burden or expense on a person subject to the subpoena."). Accordingly, the factual premise to support the court's order is lacking. In any event, not even Kronos's cost estimate of $75,000 would support a finding that the cost of compliance exceeds that which Kronos may reasonably be expected to bear as a cost of doing business. Friedman provided an example that is apt here, drawing a distinction between an IRS summons served on a third party not in the business of keeping records relevant to IRS investigations versus a third party that is: "A manufacturer, who may only have dealt with a taxpayer quite casually and occasionally, for example might not be required, as part of the cost of doing business, to make an unreimbursed record search. A bank, however, whose business is the facilitation of financial transactions, and which keeps records of all customer dealings as a matter of course, if not law, may be required to do so." Friedman, 532 F.2d at 937. Kronos is obviously far more analogous to the bank than to the manufacturer. As a sophisticated vendor of applicant assessment tests, whose business involves administering, scoring, and keeping the records of those tests for clients, Kronos reasonably should expect its business costs to include complying with data requests by agencies that enforce laws regulating the employment application process. CONCLUSION For the foregoing reasons, the Commission respectfully requests this Court to reverse the district court's judgment on remand, vacate its orders on confidentiality and cost shifting, and direct the court to order Kronos immediately to produce all information sought by the EEOC's subpoena. Respectfully submitted, P. DAVID LOPEZ General Counsel CAROLYN L. WHEELER Acting Associate General Counsel LORRAINE C. DAVIS Assistant General Counsel /S/ Corbett L. Anderson CORBETT L. ANDERSON Attorney U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 131 M Street, N.E., 5th Floor Washington, D.C. 20507 (202) 663-4579 CERTIFICATE OF BAR MEMBERSHIP Under Third Circuit L.A.R. 28.3(d), I certify that, as an attorney representing an agency of the United States, I am not required to be admitted to the bar of this Court. I also certify that all other attorneys whose names appear on this brief likewise represent an agency of the United States and are also not required to be admitted to the bar of this Court. See 3d Cir. L.A.R. 28.3, comm. comt. November 14, 2011 /S/ Corbett L. Anderson Corbett L. Anderson Counsel for Appellant EEOC CERTIFICATE OF COMPLIANCE (1) This brief complies with the type-volume limitation of Fed. R. App. P. 32(a)(7)(B) because it contains 11,309 words, excluding the parts of the brief excepted by Fed. R. App. P. 32(a)(7)(B)(iii). (2) This brief complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and the type-style requirements of Fed. R. App. P. 32(a)(6) because this brief has been prepared using Microsoft Word 2003 in 14-point Century Schoolbook font. November 14, 2011 /S/ Corbett L. Anderson Corbett L. Anderson Counsel for Appellant EEOC CERTIFICATE OF IDENTICALLY FILED BRIEFS Pursuant to L.A.R. 31.1(c), I certify that the text of the electronically filed version of this brief is identical to the text of the hard copies of the brief filed with the Court. November 14, 2011 /S/ Corbett L. Anderson Corbett L. Anderson Counsel for Appellant EEOC CERTIFICATE OF VIRUS CHECK Pursuant to L.A.R. 31.1(c), I certify that a virus check using Symantec AntiVirus, program 10.1.6.6000, was performed on the electronic version of this brief on November 14, 2011, prior to electronic filing with the Court. November 14, 2011 /S/ Corbett L. Anderson Corbett L. Anderson Counsel for Appellant EEOC CERTIFICATE OF SERVICE I, Corbett L. Anderson, certify that on November 14, 2011, the same day that I transmitted to the court an electronic version of the brief for Appellant EEOC, I caused ten (10) printed and bound copies of the brief to be sent to the Clerk of the United States Court of Appeals for the Third Circuit, by UPS. I also certify that the following counsel, who have agreed to accept electronic service, will be served by the appellate CM/ECF system and that one paper copy of the brief bound with Volume I of the Joint Appendix will be served by UPS, to: Counsel for Respondent-Appellee R. Lawrence Ashe, Jr. Ashe, Rafuse & Hill LLP 1355 Peachtree Street, N.E., Suite 500 Atlanta, Georgia 30309-3232 (404) 253-6001 lawrenceashe@asherafuse.com Terrence H. Murphy Littler Mendelson, P.C. 625 Liberty Avenue, 26th Fl Pittsburgh, PA 15222-3110 (412) 201-7621 tmurphy@littler.com November 14, 2011 /S/ Corbett L. Anderson Corbett L. Anderson Counsel for Appellant EEOC ********************************************************************************** <> <1> "[#]-JA-Tab [#] at [#]" refers to material in the Joint Appendix, cited by volume, tab, and page number. "Doc. [#]" refers to the district court docket entry. <2> The EEOC's second proposed order required Kronos to produce not just names and test scores of applicants, but also their addresses, social security numbers, and other identifying personal data of applicants as part of Kronos's compliance with paragraph 3 of the subpoena. II-JA- Tab 13 at 138-40 ¶2. The EEOC explained that its request for such information on remand was not an expansion of the subpoena - and not a cause to label the request "Subpoena Three" - but rather the EEOC's attempt to comply with the district court's requirement that EEOC identify "with specificity" what is meant in paragraph 3's requirement of "any and all documents (if any) related to the Kroger Company, including but not limited to . . . . [the] results, ratings, or scores of individual test takers" and the type of data fields the EEOC would discuss with Kronos in order to conduct its investigation. Doc. 54 at 6- 9. <3> In the EEOC's brief in support of its motion for reconsideration, the EEOC's replacement language for this paragraph included the court's language that EEOC personnel must agree in writing to the district court's order and submit to the court's jurisdiction for enforcement. Doc. 54 at 13. This was an inadvertent transcription error. The Commission does not believe good cause necessitates this provision. <4> Available at http://www.eeoc.gov/eeoc/foia/hb-11.cfm <5> Available at http://www.eeoc.gov/eeoc/foia/section83.cfm.