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The U.S. Supreme Court will consider whether the Equal Employment Opportunity Commission (EEOC) should be required to pay the costs incurred by an employer in a lawsuit brought by the agency when the court dismissed the suit because of the agency’s failure to investigate or attempt to settle the claims (CRST Van Expedited Inc. v. EEOC, U.S., No. 14-1375).
On Dec. 4, the justices agreed to review an 8th U.S. Circuit Court of Appeals decision overturning a district court order that the EEOC pay $4.7 million in attorney fees and costs to CRST Van Expedited Inc., an interstate trucking firm. The case arose under Title VII of the 1964 Civil Rights Act.
The specific question being raised is whether the EEOC can be held liable for an employer's legal fees when discrimination claims are dismissed because the agency failed to satisfy its pre-lawsuit obligations under the statute, rather than because the agency’s position on the merits of the discrimination claims was groundless.
The 8th Circuit said the district court on remand must determine whether each of some 67 individual claims pursued by the EEOC was “unreasonable.” The EEOC's alleged “unreasonableness” in failing to satisfy the procedural prerequisites to a lawsuit under Title VII couldn't form the basis for an attorney fees award, the appeals court said.
Is There a Conflict in Federal Circuit Courts?
The 8th Circuit's reasoning conflicts directly with at least three other federal circuits, all of which have ruled the EEOC's failure to satisfy its pre-lawsuit obligations under Title VII entitles the prevailing defendant to attorney fees if the agency's conduct was “unreasonable” under previous high court decisions, CRST said in its petition for review.
That Supreme Court precedent “strongly suggests” the Eighth Circuit “has gone astray” by precluding attorney fees when an employer prevails based on the EEOC's unreasonable failures to investigate, find cause or conciliate discrimination claims, CRST said.
The Department of Justice (DOJ), representing the EEOC, said there is no disagreement among the federal circuits on the question presented. Rather, those courts concur that proving a discrimination plaintiff's case was “frivolous, unreasonable or groundless” for purposes of awarding attorney fees isn't possible without a judicial finding on the merits of the bias claims.
Fees Available for EEOC's ‘Total Failure' to Comply
The EEOC originally sued CRST for an alleged pattern or practice of tolerating the sexual harassment of female trainees for interstate driver positions.
But a federal district court in Iowa found the EEOC failed to show a pattern or practice of discrimination. It also dismissed most of the EEOC's individual claims because the agency hadn't separately investigated, found probable cause or attempted to conciliate any of the sex bias claims except for two named claimants.
The 8th Circuit in 2012 affirmed the district court's dismissal of the EEOC's claims, but, in its 2014 decision, the appellate court said the $4.7 million award of attorney fees and costs to CRST must be vacated with regard to claims dismissed because the EEOC hadn't fulfilled its pre-lawsuit prerequisites under Title VII.
Title VII provides for attorney fees awards to prevailing defendants if they can show the EEOC's position was “unreasonable or frivolous,” CRST said. The issue raised is whether such fee awards are available where a claim is dismissed based on the EEOC's “total failure” to comply with its pre-lawsuit obligations or if fees are precluded because the employer's victory wasn't “sufficiently on the merits,” CRST said.
No Decision on Merits, No Fees
In its brief for the EEOC, the Justice Department said the 8th Circuit correctly ruled that a prevailing employer can't obtain attorney fees under Title VII based on a ruling that the EEOC failed to sufficiently investigate and conciliate because that isn't a determination on the merits of the discrimination claims.
Federal circuit courts agree that a prevailing employer must show the EEOC's claims were “frivolous, unreasonable or without foundation” on the merits before a court may order the payment of attorney fees against the agency, the Justice Department said. The district court in CRST's case never addressed the merits of the EEOC's sex discrimination claims regarding those claimants who were dismissed solely because the EEOC failed to sufficiently investigate and conciliate, the DOJ said.
CRST's argument that attorney fees must be available for the EEOC's failure to satisfy its pre-suit obligations can't be reconciled with the Supreme Court’s decision last term in Mach Mining v. EEOC (135 S.Ct. 1645 (U.S. 2015)), the DOJ added.
The premise underlying CRST's argument is “that courts may thoroughly review the EEOC's compliance” with pre-suit requirements including conciliation and dismiss a case if they determine the EEOC hasn't tried hard enough to settle, the DOJ said.
But Mach Mining held that courts should conduct only “bare-bones review” of the EEOC's conciliation efforts so the agency could exercise “all the expansive discretion” Title VII gives it to decide how to conduct conciliation, the DOJ said. According to the Justice Department, the Supreme Court in Mach Mining also clarified that courts shouldn't dismiss EEOC lawsuits based on failure to conciliate.
CRST's arguments “fail to account for Mach Mining,” the DOJ maintained.
Joanne Deschenaux, J.D., is SHRM’s senior legal editor.
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