Supreme Court Orders EEOC to Pay Company’s Legal Fees in Frivolous Case

A judge looking at papers.

The United States Supreme Court recently handed defendant employers a significant victory in discrimination and harassment suits filed under federal law. In CSRT Van Expedited, Inc. v. Equal Employment Opportunity Commission in an opinion given by Justice Kennedy, the Court unanimously held that employers do not need to “prevail on the merits” of a Title VII claim to be able to recover their attorney fees from the plaintiff.

The case below began in 2005 when an EEOC complaint of discrimination was filed by a new female driver, who alleged that two male drivers sexually harassed her on training trips. During its investigation, the EEOC also found evidence, it believed, of a pattern and practice of sexual harassment of women drivers. Conciliation with the employer was unsuccessful, the EEOC filed a class action case in 2007. During discovery, the trial judge dismissed the EEOC’s claims of a “pattern and practice” of sexual harassment, and in a series of further orders (including for discovery violations by the EEOC) dropped almost 200 women from the class, leaving only 67 in the case. The district court ultimately dismissed the case as to them as well, finding that the EEOC had failed to perform its pre-suit duties to perform separate investigations, make individual reasonable cause determinations, or attempt conciliation as to any of the employees. The judge held that CSRT was the prevailing party and entitled to over four million dollars in attorney fees because the filing by the EEOC was frivolous and without merit. The result was twice appealed to the Eighth Circuit, and twice remanded, before finding its way to the Supreme Court because of the Eighth Circuit’s decision that employers were only entitled to recover fees if there was favorable “judicial determination … on the merits.” Since that had not happened, the award of fees was improper.

The Supreme Court reviewed the language of the statute, and its prior authority in the matter, and concluded that the Circuit Courts of Appeal, like the Eighth Circuit, had interpreted the law and its precedent cases incorrectly. US Code states that “

[i]n any action or proceeding [under Title VII] the Court, … may allow the prevailing party… a reasonable attorney’s fee …as part of the costs….” In Christiansburg Garment Co. v. EEOC, the Court long ago held that, although a prevailing plaintiff would always be entitled to attorney fees, a defendant employer could only recover its fees if the plaintiff’s case was frivolous and without merit. But, the Court since that case had never defined how to determine whether the employer had “prevailed.” In his opinion, Justice Kennedy dispensed with the notion that a defendant could only prevail if it obtained a decision on the merits: “Common sense undermines the notion that a defendant cannot ‘prevail’ unless the relevant disposition is on the merits. … The defendant may prevail even if the court’s final judgment rejects the plaintiff ’s claim for a nonmerits (sic) reason. …The Court, therefore, has interpreted the statute to allow prevailing defendants to recover whenever the plaintiff ’s “claim was frivolous, unreasonable, or groundless.” Christiansburg Garment Co. v. EEOC

What this means to you: This decision makes it even less likely that weak claims will be pursued, as it raises the stakes considerably for plaintiffs and their attorneys. Effective performance management by employers and their managers greatly increases the likelihood that challenges to the motivations of managers will fail, not only at court, but also before the EEOC or a state’s fair employment practices agency. Fair Measures Managing Within the Law training programs teach managers good performance management practices to prevent wrongful action, discrimination and harassment cases and thereby enhance productivity in a Respectful Workplace. Fair Measures and its trainers are up to date on the topics that need to be covered, and assisting employers with meeting their compliance and documentation obligations.

Help your employer meet its requirements under the law and EEOC regulations by contacting us today at 800-458-2778 and booking training for your supervisors.

Posted 10-18-2016

Information here is correct at the time it is posted. Case decisions cited here may be reversed. Please do not rely on this information without consulting an attorney first.

2016-11-18T16:00:33+00:00

About the Author:

Steve Duggan graduated from the Law School at the University of Notre Dame while on active duty in the Air Force. He has extensive experience representing management litigating cases of wrongful termination, employment discrimination, and sexual harassment. Steve also has experience in all phases of administrative litigation of unfair labor practice charges, and class and individual complaints of employment discrimination. He has been an instructor of seminars for supervisors and managers on labor management relations and other personnel issues, and for lawyers in basic and advanced trial advocacy courses. Steve came on board with Fair Measures in 1998.