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Investigating Illegal Aliens’ Charges: Fourth Circuit Says EEOC Can Serve Subpoena On Employer

Posted in Investigation Tactics and Administrative Subpoenas

thSYZKELTSBy Gerald L. Maatman, Jr. and Alex W. Karasik

Seyfarth Synopsis: This Fourth Circuit ruling opens the door for the EEOC to investigate employers as a result of EEOC charges brought by unauthorized employees, even though an illegal alien worker may not be able to seek certain legal remedies.

Undocumented workers and immigration reform are part of the political debate for the upcoming Presidential election.

The Fourth Circuit’s recent validation of an EEOC enforcement subpoena regarding the government’s investigation of an employer’s alleged discrimination against an illegal alien is certainly an eye-opener for employers. It manifests that the Commission will vigorously investigate and litigate claims involving alleged workplace discrimination against unauthorized workers.

In EEOC v. Maritime Autowash, Inc., No. 15-1947 (4th Cir. Apr. 25, 2016), the Fourth Circuit reversed a ruling from the U.S. District Court for the District of Maryland that had denied an application for subpoena enforcement following an illegal alien’s EEOC charge brought against his employer.  This ruling opens the door for the EEOC to investigate employers as a result of EEOC charges brought by illegal alien employees, even though the charging parties may not even be able to seek certain legal remedies.

Case Background

In May 2012, Maritime Autowash, Inc. (“Maritime”) hired Elmer Escalante as a vacuumer at its carwash in Edgewater, Maryland.  At the time, Escalante lacked authorization to work in the United States.  On July 27, 2013, Escalante and other Hispanic employees complained to Maritime of unequal treatment and discrimination targeting Hispanics.  All of them were terminated the day they raised the complaint.  Escalante then filed charges with the EEOC on February 6, 2014 for discrimination on the basis of national origin and retaliation as prohibited under Title VII.   The complaint detailed the unequal employment conditions facing Hispanic employees at Maritime, including longer working hours, shorter breaks, lack of proper equipment, additional duties, and lower wages.  Ten other terminated Hispanic employees lodged similar complaints with the EEOC.  The Commission served Maritime with a notice of the charges on February 25, 2014.  Id. at 3-4.

In responding to the charges, Maritime denied all allegations of discrimination and stated that Escalante had been terminated for failing to appear for a scheduled work shift.  The EEOC served Maritime with a Request for Information (“RFI”) on May 27, 2014 seeking personnel files, wage records, and other employment data related to Escalante, the other charging parties, and similarly-situated employees dating from January 1, 2012 to the time of the request.  Maritime refused to provide records for any Hispanic employee other than Escalante, and further objected that certain of the agency’s requests were unduly burdensome, overly broad, and/or irrelevant. Faced with Maritime’s incomplete response to its RFI, the EEOC issued a subpoena on June 10, 2014, which focused only on Escalante’s charges.  Maritime produced none of the subpoenaed documents.  Id. at 4-5.

The EEOC filed an application to the District Court seeking to enforce the subpoena, which was denied.  Thereafter, the EEOC appealed to the Fourth Circuit, which reversed and remanded the District Court’s denial of the application to enforce the subpoena.

The Decision

The Fourth Circuit noted that it cannot yet know whether the agency’s investigation will uncover misconduct by the employer or ever ripen into a lawsuit, nor could it assess what causes of action or remedies might lie down the road.  Id. at 2.  As such, the only issue it considered was whether the EEOC’s subpoena, designed to investigate Escalante’s Title VII charges, was enforceable.  Id. at 6.  The Fourth Circuit noted that central to the EEOC’s authority to enforce Title VII’s provisions against employment discrimination “is the power to investigate charges brought by employees, including the right to access any evidence . . . that relates to unlawful employment practices covered by [the statute] … as well as the authority to issue administrative subpoenas and to request judicial enforcement of those subpoenas.”  Id. at 6-7 (internal quotation marks omitted).  Further, “The [judicial review] process is not one for a determination of the underlying claim on its merits … courts should look only to the jurisdiction of the agency to conduct such an investigation.” Id. at 7 (quoting EEOC v. Am. & Efird Mills, Inc., 964 F.2d 300, 303 (4th Cir. 1992)).

Noting that the jurisdictional question was central to the dispute here, the Fourth Circuit reasoned that the plain language of Title VII provides that jurisdiction is attained if there is a “plausible” or “arguable” basis for the EEOC’s subpoena.  Id. at 8-9.  Also at issue was Title VII’s definition of employee, which does not specifically bar undocumented workers from filing complaints.  Id. at 9.  Since the charging party was employed at Maritime’s car wash, his charge of discrimination rested squarely on one of the protected grounds.  Accordingly, the Court held that “[t]he EEOC’s investigation of Escalante’s charges was therefore at least plausibly and arguably related to the authority that Congress conferred upon the Commission.  Since Maritime challenged only the agency’s subpoena authority, the district court should have stopped at that point and enforced the subpoena accordingly.”  Id. at 9.

Maritime argued that a reviewing court must ascertain a valid charge of discrimination, which must incorporate a viable cause of action or remedy as a “jurisdictional prerequisite” to enforcing the agency’s subpoena.  Id.  The Fourth Circuit rejected this argument, opining that courts should not venture prematurely into the merits of employment actions that have not been brought.  Id. at 11.  Considering the pragmatic effect of the employer’s argument, the Fourth Circuit explained “Maritime’s challenge to the EEOC’s subpoena envisions a world where an employer could impose all manner of harsh working conditions upon undocumented aliens, and no questions could be asked, no charges filed, and no agency investigation even so much as begun.  The employer is asking the court for carte blanche to both hire illegal immigrants and then unlawfully discriminate against those it unlawfully hired.”  Id. at 14.  Accordingly, the Fourth Circuit reversed and remanded the District Court’s judgement, holding that when the EEOC  is investigating charges plausibly within its delegated powers, the courts should not obstruct.  Id. at 15.

Implications For Employers

This ruling absolutely belongs on the radar of any employer who may have undocumented workers in its labor force.  Even if those workers are unable to seek certain legal remedies, should they bring EEOC charges, the employer will likely have to cooperate with any governmental investigation.  Accordingly, employers should exercise caution in this context, as EEOC investigations can penetrate their walls regardless of the legal status of those employees.

Readers can also find this post on our Workplace Class Action blog here.

Still Cookin’ In California Court: Bakery Employer Survives EEOC Motion For Summary Judgment

Posted in EEOC Litigation

thT9B6FHE7By Gerald L. Maatman, Jr. and Alex W. Karasik

In what has become an oft-used recipe in the EEOC cookbook of Title VII retaliation litigation, the government has once again utilized the strategy of taking an employer’s deposition and thereafter moving for summary judgment.

In EEOC v. Peters’ Bakery, No. 13-CV-04507, 2016 U.S. Dist. LEXIS 54379 (N.D. Cal. Apr. 21, 2016), a case we previously blogged about here, an employee filed an EEOC charge alleging race and national origin discrimination and retaliation against her employer, Peters’ Bakery (“the Bakery”).  Thereafter, following the employee’s Internet postings accusing the Bakery’s owner, Charles Peters, of being racist, Mr. Peters filed a defamation charge against the employee, which subsequently led to the EEOC’s additional retaliation claim for subjecting her to that lawsuit.  After deposing Mr. Peters, the EEOC moved for partial summary judgment.  Judge Freeman of the U.S. District Court for the Northern District of California denied the EEOC’s motion for partial summary judgment, finding there was a disputed issue of material fact as to whether the employee’s filing of the EEOC charge was the but-for cause of Mr. Peters’ filing of the defamation action.

EEOC v. Peters’ Bakery illustrates how broadly the Commission views the concept of retaliation.

Employers facing retaliation claims should take account of this case when being deposed by the EEOC as, pursuant to its “recipe for retaliation claims,” the government will use any unfavorable deposition testimony as the “ingredients” in its likely forthcoming motion for summary judgment.

Case Background

The charging party, a Hispanic employee, had worked for the Bakery for several years.  On September 27, 2011, the employee filed an EEOC charge against the Bakery alleging discrimination based on race and national origin and retaliation based upon protected activity.  On November 3, 2011, the EEOC issued a Notice of Charge of Discrimination informing the employer of the charge asserted by the employee.  After Mr. Peters’ girlfriend found Internet postings by the employee accusing him of being racist, on April 19, 2012, Mr. Peters filed a defamation action against the employee in the Small Claims Division of the Santa Clara County Superior Court, alleging defamation occurring on November 3, 2011 (the date of the EEOC Notice of Charge of Discrimination).  Id. at *2.

On September 30, 2013, the EEOC filed its lawsuit against Peters’ Bakery, asserting two claims under Title VII against the Bakery based upon Mr. Peters’ conduct toward the employee.  The first claim alleged that Mr. Peters harassed and discriminated against the employee on the basis of her race and national origin.  The second claim alleged that the Bakery retaliated against the employee after she engaged in the protected activity of filing an EEOC charge by, among other things, subjecting her to the defamation action filed by Mr. Peters; refusing to pay her back wages and benefits following her reinstatement to employment pursuant to a labor arbitration; subjecting her to retaliatory discipline; and circulating a copy of her EEOC charge to her co-workers in an attempt to chill support for her.  Id. at *2-3.

The EEOC moved for partial summary judgment with respect to the second claim, specifically, that Mr. Peters’ defamation action against the employee constituted unlawful retaliation for protected activity.

The Decision

Judge Freeman denied the EEOC’s motion for partial summary judgment regarding the retaliation claim.  The Court noted that under the relevant provision of Title VII, 42 U.S.C. § 2000e-3(a), the elements of a prima facie retaliation claim are: “(1) the employee engaged in a protected activity, (2) she suffered an adverse employment action, and (3) there was a causal link between the protected activity and the adverse employment action.”  Id. at *4-5 (quoting Davis v. Team Elec. Co., 520 F.3d 1080, 1093-94 (9th Cir. 2008)).

In regards to the first element, the Court noted it was undisputed that the employee filed an EEOC charge against her employer, which constituted protected activity.  Id. at *5.  Addressing the second element, Defendant argued that the filing of his defamation action in this particular case did not dissuade the employee from pursuing her charge and, in fact, three of her co-workers showed up at her defamation hearing to support her.  The Court rejected this argument, noting the standard was objective and looks to whether a reasonable employee may be dissuaded from pursuing or supporting such charges.  Id. at *5-6.

Thereafter, the Court reasoned that the EEOC’s motion turned on the third element — the causal link between the employer’s conduct and the protected activity.  In order to establish this element, “a plaintiff making a retaliation claim under § 2000e-3(a) must establish that his or her protected activity was a but-for cause of the alleged adverse action by the employer.”  Id. at *6-7 (quoting Univ. of Tex. Sw. Med. Ctr. v. Nassar, 133 S. Ct. 2517, 2534 (2013).  The EEOC argued that the record evidence gave rise to only one inference, i.e., that Mr. Peters filed the defamation action against the employee because she filed an EEOC charge against the Bakery.  The EEOC supported this contention by noting that Mr. Peters’ defamation complaint stated on its face that the defamation occurred on November 3, 2011, the date of the EEOC Notice of Charge of Discrimination.

In opposition to the motion, the Bakery asserted that the EEOC excluded critical testimony from Mr. Peters’ deposition excerpt, and that the excluded testimony gave rise to a reasonable inference that Mr. Peters filed the defamation action at least in part because of statements that the employee published on the Internet.  Specifically, the EEOC excluded Mr. Peters’ testimony stating that after his girlfriend found the statements online, “I was very upset about being accused of being a racist on the [I]nternet.  So I filed a defamation lawsuit in small claims court.”  Id. at *8-9.  The EEOC objected to Mr. Peters’ deposition and declaration statements regarding his girlfriend’s discovery of the statements, asserting that the challenged statements constituted inadmissible hearsay under Federal Rule of Evidence 802 and were conclusory.  The Court rejected this argument, finding that they were not presented for the truth of the matter asserted and that the employee actually published the claimed statements to the Internet, which were personally viewed by Mr. Peters after his girlfriend discovered the statements.

As to the merits, the EEOC argued in reply to the Bakery’s opposition that the only reasonable inference to be drawn from Mr. Peters’ deposition testimony is that he filed the defamation action against the employee because she filed an EEOC charge against the Bakery.  To support this argument, the EEOC cited an affidavit submitted by Mr. Peters’ which asserted “She made allegations that weren’t true in the EEOC charge,” and deposition testimony where Peters conceded that the employee never posted derogatory comments about the Bakery.  Id. at *11-12.  Rejecting this contention, the Court found that while the EEOC’s evidence was “quite strong,” it was insufficient to establish as a matter of law that the employee’s filing of the EEOC charge was the but-for cause of Peters’ filing of the defamation action against her.  Id. at *13.  Further, the Court found that “the testimony in question states only that [the employee] never posted a bad comment about the Bakery.  That statement does not actually conflict with Mr. Peters’ assertion that he believed [she] had posted negative comments on the Internet about him.”  Id. at *14.  Accordingly, the Court denied the EEOC’s motion for partial summary judgment, finding there was a disputed issue of material fact as to whether the employee’s filing of the EEOC charge was the but-for cause of Mr. Peters’ filing of the defamation action.  Id. at *14-15.

Implication For Employers

Employers must be aware of this consistently utilized EEOC “recipe for retaliation claims”, where the government takes an employer’s deposition testimony and thereafter bakes it into a motion for summary judgment.  Accordingly, employers must be careful in how they approach these depositions so as to not give the EEOC the ingredients it needs to cook-up a successful summary judgment motion.  Further, when employers have non-retaliatory reasons for actions taken against employees who previously brought EEOC charges, it is crucial that they not only get this testimony into the record on deposition, but also highlight this information when responding to the EEOC’s likely forthcoming summary judgment motion, as the government will almost certainly neglect to use any employer-friendly ingredients in its summary judgment recipe for retaliation claims.

Readers can also find this post on our Workplace Class Action blog here.

Dismissal Denied For Discussing Disability: EEOC Case Against Employer Survives

Posted in EEOC Litigation

Connecticut-sealBy Gerald L. Maatman, Jr. and Alex W. Karasik

Anti-discrimination laws command that “thou shall not retaliate…” The recent ruling in EEOC v. Day & Zimmerman NPS, Inc., Case No. 15-CV-01416 (D. Conn Apr. 12, 2016), is a case study in how employers can be taken to task for allegedly retaliating against workers who claim discrimination.

In this case, the EEOC brought an ADA action against the employer defendant, alleging it retaliated against an employee by sending a letter, which identified the employee and discussed his discrimination charge, to 146 other Day & Zimmerman NPS, Inc. (“DZNPS”) employees who belonged to the same union.  The EEOC also alleged that the letter interfered with the rights of 146 current and former employees under the ADA to communicate with the EEOC regarding potential unlawful discrimination.  After defendant moved to dismiss the ADA retaliation and interference claims, Judge Victor A. Bolden of the U.S. District Court for the District of Connecticut denied the employer’s motion to dismiss on the grounds that the EEOC’s allegations were sufficient to state plausible claims for retaliation and interference under Sections 503(a) and 503(b) of the ADA.

This ruling serves as a cautionary tale for employers facing discrimination charges brought by employees, and shows the breadth of anti-discrimination prohibitions on retaliation.

It illustrates how widespread internal communication regarding such charges could potentially be viewed as retaliation or interference under the ADA in the context of a motion to dismiss.

Case Background

In October 2012, a DZNPS employee, who was a member of Local 35 of the International Brotherhood of Electrical Workers (“Local 35”) filed a charge of discrimination with the EEOC, alleging that his employer failed to accommodate his disability reasonably and unlawfully terminated his employment.  In March 2014, the EEOC sought information from DZNPS as part of its investigation of the employee’s charge, including the names and contact information of other electricians who had worked for DZNPS at the Millstone Power Station in Waterford, Connecticut in the fall of 2012.

In June 2014, before providing the requested information to the EEOC, DZNPS sent a letter to approximately 146 individuals, all of whom were members of Local 35 and all of whom had worked or continued to work for DZNPS.  In the June 2014 letter, DZNPS identified the allegedly aggrieved employee by name and indicated that he had filed a charge of discrimination on the basis of disability.  The letter identified his union local, the medical restrictions on his ability to work, and the accommodation he had requested.  It further informed the recipients of their right to refuse to speak to the EEOC investigator and offered them the option to have DZNPS counsel present if they chose to speak to the EEOC.  Id. at 2-3.

On May 20, 2015, the EEOC issued a Letter of Determination to DZNPS, finding reasonable cause to believe that the ADA had been violated.  Following unsuccessful conciliation, the EEOC filed a complaint on September 28, 2015.  The EEOC alleged that since at least June 2014, DZNPS engaged in unlawful employment practices with respect to a group of electricians hired to work at the Millstone Power Station, in violation of Sections 503(a) and 503(b) of the ADA.  Id. at 3.  Thereafter, DZNPS moved to dismiss the complaint.

The Ruling

Judge Bolden denied DZNPS’s motion to dismiss without prejudice, holding that the EEOC’s claims of retaliation and interference under the ADA may proceed.  Pursuant to Section 503(a) of the ADA, the EEOC alleged that defendant unlawfully retaliated against the employee because he filed a charge of discrimination with the EEOC.  Id. at 4.  The Court noted that to plead a retaliation claim sufficiently in an employment discrimination context, the Second Circuit has held that “the plaintiff must plausibly allege that: (1) defendants discriminated—or took an adverse employment action—against him, (2) ‘because’ he has opposed any unlawful employment practice.”  Id. at 5 (quoting Vega v. Hempstead Union Free Sch. Dist., 801 F.3d 72, 90 (2d Cir. 2015)).  Defendant argued that the ADA retaliation claim should be dismissed because the EEOC’s claims failed on both prongs.  Id.  First, defendant argued that the EEOC had not alleged that DZNPS took any adverse employment action against the employee.  Second, defendant argued that even if the EEOC had plausibly alleged an adverse employment action, it did not allege facts showing that the action was caused by the employee’s protected activity.  Id. at 5.

The Court rejected both of defendant’s arguments.  First, the Court noted how case law authorities have routinely held that when an employer disseminates an employee’s administrative charge of discrimination to the employee’s colleagues, a reasonable fact-finder could determine that such conduct constitutes an adverse employment action.  Id. at 6.  As to the second prong, the Court held that the three-month gap between when the June 2014 letter was sent and when the EEOC contacted DZNPS to request names and contact information for other electricians who had worked for defendant in the Fall of 2012 provided sufficient temporal proximity to satisfy the causation prong.  Id. at 7-8.  Specifically, the Court found it was plausible that the first opportunity to retaliate against the employee, whom they had already terminated, was when the EEOC provided a list of fellow union members to whom defendant could disseminate the potentially damaging EEOC charge.  Id.  Accordingly, denying the motion to dismiss, the Court noted that it could not conclude as a matter of law that defendant’s disclosure of the details of the employee’s EEOC disability discrimination charge in the June 2014 letter could not plausibly have been a retaliatory act in violation of the employee’s rights under the ADA.  Id. at 8.

In regards to the ADA Section 503(b) interference claim asserted by the EEOC, the Court initially noted that neither the Supreme Court nor the Second Circuit has yet outlined a test for an interference claim under the ADA.  Id. at 9.  Thereafter, the Court found that while it was true that the EEOC did not allege any direct evidence of DZNPS’s intent behind the June 2014 letter, the issue of an employer’s intent is a question of fact that cannot be resolved on a motion to dismiss.  Further, the Court held that “the disclosure of sensitive personal information about an individual could well dissuade that individual from making or supporting a charge of discrimination under the ADA. Therefore, the Court reasonably could infer that the letter could have the effect of interfering with or intimidating [the employee] and the letter’s recipients with respect to communicating with the EEOC about potential disability discrimination by [d]efendant.”  Id. at 10.  Accordingly, the Court denied defendant’s motion to dismiss the retaliation and interference claims brought under the ADA, while also deferring to rule on DZNPS’s arguments regarding the available prayers for relief.  Id. at 13-14.

Implications For Employers

This ruling is instructive as to why employers should exercise restraint when considering whether to internally disclose information about charges of discrimination filed by an employee, especially on a widespread basis.  Courts may view such conduct as obstructive to employees’ rights to file charges with administrative agencies.  Accordingly, employers should carefully limit internal communication about such charges to avoid creating the perception that they are retaliating against employees who bring charges or interfering with other employees’ rights to file future charges.

Readers can also find this post on our Workplace Class Action blog here.

U.S. Supreme Court Hears Oral Argument In EEOC v. CRST Van Expedited, Inc.

Posted in EEOC Litigation

moneyBy Gerald L. Maatman, Jr., Christina M. Janice, and Alex W. Karasik

Yesterday the U.S. Supreme Court heard oral arguments in EEOC v. CRST Van Expedited, Inc.

Involving the largest fee sanction award ever levied against the EEOC – nearly $4.7 million –  EEOC v. CRST Van Expedited, Inc. may be one of the most important cases on EEOC litigation issues in years.  The stakes are high for employers and the EEOC alike.

At issue in this case is whether and under what circumstances an employer can recover attorneys’ fees from the EEOC where the EEOC fails to satisfy its pre-suit investigation duties under Title VII.  Here is our analysis of the course of the arguments (a copy of the hearing transcript is here).

A Thumbnail Sketch Of The Key Facts Of The Case

Section 706(k) authorizes district courts to award attorneys’ fees to the “prevailing party” in a Title VII case.  In relevant part, Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421 (1978), held that fee awards to a prevailing defendant are permissible only if the plaintiff’s lawsuit was “frivolous, unreasonable, or without foundation.”

After CRST successfully obtained the dismissal of the EEOC’s Title VII claims for sexual harassment, the District Court granted CRST’s motion for an award of attorneys’ fees and costs and directed the EEOC to pay CRST nearly $4.7 million, finding that the EEOC’s actions in pursuing this lawsuit were unreasonable, contrary to the procedure outlined by Title VII, and imposed an unnecessary burden on both CRST and the District Court.

On the EEOC’s appeal, the Eighth Circuit reversed and held that the District Court “did not make particularized findings of frivolousness, unreasonableness, or groundlessness as to each individual claim” and remanded these claims to the District Court to make such individualized determinations.  Further, the Eighth Circuit found that the District Court’s dismissal of 67 claims based on the EEOC’s failure to satisfy Title VII’s pre-suit obligations “[did] not constitute a ruling on the merits,” and that “[t]herefore, CRST is not a prevailing party as to these claims.”  The Eighth Circuit also held that CRST could not satisfy the Christianburg standard for the same reason: “[P]roof that a plaintiff’s case is frivolous, unreasonable, or groundless is not possible without a judicial determination of the plaintiff’s case on the merits.”  Thereafter, following CRST’s petition for certiorari, the SCOTUS accepted the case for review.

The Employer’s Position

In its briefing, CRST asserted two arguments as to why the Eighth Circuit’s decision was improper.  First, CRST argued that the Eighth Circuit’s rule that a prevailing defendant may recover fees only when a case is decided “on the merits” has no basis in the statute, conflicts with Christiansburg, and severely undermines the policy of Section 706(k).

Second, CRST posited that even if the “on the merits” standard applied, CRST was successful on the merits when it defeated certain claims by demonstrating that the EEOC did not investigate, find reasonable cause for, or attempt to conciliate any of these claims as required by the statute. Accordingly, CRST asserted that the precedent created by the Eighth Circuit’s decision would allow the EEOC to entirely abandon its pre-suit responsibilities with impunity, which would lead to one-sided and inefficient conciliations.

Following the briefs submitted by the EEOC, which clearly abandoned its argument that the Eighth Circuit’s rule that a resolution “on the merits” is a precondition for a fee award, CRST’s reply briefing requested that the SCOTUS abrogate the Eighth Circuit’s rule as being without any foundation under Title VII.  CRST also attacked the EEOC’s newly asserted theory that attorneys’ fees were unwarranted because only preclusive judgments in favor of defendants support “prevailing party” status.  CRST argued that because the EEOC did not raise this “prevailing party” argument at any time during the last six years of litigation, the argument had been waived.  CRST also asserted that the only substantive issue properly before the SCOTUS was whether the EEOC’s pre-suit conduct rendered its lawsuit “frivolous, unreasonable, or groundless” under Christianburg, and that the District Court acted within its discretion when it found that the EEOC abandoned its Title VII obligations.

The Government’s Position

Having abandoned its contention that only a dismissal “on the merits” may be the subject of an attorney fee award, the EEOC argued that the District Court’s finding that the EEOC failed to satisfy Title VII’s administrative preconditions to filing a lawsuit did not authorize an award of attorneys’ fees under 42 U.S.C. 2000e-5(k), because such a dismissal does not make the defendant a “prevailing party.”

The EEOC further noted the District Court’s original dismissal was not “with prejudice,” and that the later agreed-upon “with prejudice” dismissal did not and could not modify the District Court’s earlier dismissal of the claims at issue here, which had already been affirmed by the Eighth Circuit.

Further, the EEOC also contended that the award of attorneys’ fees and costs in this litigation was improper because the Commission’s suit was not “frivolous, unreasonable, or groundless.”  Citing Mach Mining, LLC v. EEOC, 135 S. Ct. 1645, 1656 (2015), which has become routine practice for the Government, the EEOC asserted that the District Court improperly found that the EEOC failed to satisfy its pre-suit obligations because it did not separately investigate, make a reasonable-cause determination, and conciliate with respect to each individual woman for whom it ultimately sought relief.

The SCOTUS Oral Argument

While both sides endured their fair share of questioning from the Justices at yesterday’s hearing, the questioning put to the Government was noticeably pointed and plentiful.

If a questioning scorecard is indicative of the issues, it broke out this way by our rough tally:

Questions To CRST – 46 in the opening argument and 5 questions in the rebuttal argument [questions by Justice – Kagan (16), Ginsburg (14), Sotomayor (13), Kennedy (6), Breyer (3), and Alito (0)]

Questions To The EEOC – 72 in the opposition argument [questions by Justice – Breyer (25), Roberts (21), Alito (9), Kagan (6), Kennedy (6), Sotomayor (4), and Ginsburg (1)]

The EEOC was noticeably pressed about why it should not be held responsible for bringing the lawsuit that was later dismissed.  Moments into the EEOC’s argument, Justice Alito asked “In your brief in opposition, you argued that the Eighth Circuit was correct; did you not?”  After admitting it did so, Justices Alito and Breyer followed up by asking if the EEOC had abandoned its positon.  After several attempts to dance around the question, the Government finally admitted to abandoning the Eighth Circuit’s view regarding the necessity of a disposition on the merits.  Justice Breyer then continued to hammer the Government, asking “So if they won, why isn’t that the end of it?  It says judgment — it says … the case is dismissed with prejudice.  Therefore, they won.  So why aren’t they the prevailing party?”  The EEOC’s responses hardly pleased the questioning Justice.

After constant grilling from several Justices, Justice Kennedy finally summarized the Government’s position in a question where his tone was certainly revealing: “your position that no matter how unreasonable the plaintiff has been, no matter how costly it’s been, no matter how long it’s taken, that you cannot award fees unless …  the case is dismissed, and the judge says you’re barred from bringing this claim in this suit, no fees; that’s your position.”  Not surprisingly, given its recent attitude that it can abandon the pre-suit Title VII obligations and seemingly litigate with impunity, the EEOC responded “that’s correct.”  The Government also asserted that the notion of “prevailing party” was a term of art.  As was the case with most of the Government’s responses, the Justices were left with more questions than answers.

In sum, the SCOTUS hardly seemed convinced by the Government’s ever-evolving arguments.  Justice Sotomayor did float the idea of the case being remanded to the Eighth Circuit.  But perhaps most tellingly, in light of the Government’s persistent use of Mach Mining as a crutch to avoid judicial scrutiny, Chief Justice Roberts posited the notion that conciliation without the threat of fees would not necessarily incentivize the EEOC to abide by Title VII obligations, “But if they were subject to fees because they ignored their duty to conciliate, it seems to me that might give them some incentive to get it right the first time.”

What’s Next

A future SCOTUS ruling should provide guidance regarding whether and under what circumstances an employer can recover attorneys’ fees from the EEOC when the EEOC fails to satisfy its pre-suit investigation duties under Title VII.

Reading the tea leaves at the Supreme Court, the Government offered little justification for its pre-suit conduct (or lack thereof).  The Supreme Court clearly seemed concerned with the Government’s abandonment of its duties, and while the Supreme Court may not go so far as to uphold the District Court’s award of attorneys’ fees to CRST, it would not be surprising to see a ruling that reflects the Supreme Court’s concerns about the EEOC’s pre-suit conduct.  We expect a decision within the next few months so stay tuned.

Readers can also find this post on our Workplace Class Action blog here.

Truckin’ To The Top Court: CRST Files Final Reply Brief Before Supreme Court Argument Against EEOC

Posted in EEOC Litigation

scotusBy Gerald L. Maatman, Jr., Christina M. Janice and Alex W. Karasik

In high-stakes litigation brought by the EEOC against trucking company CRST Van Expedited, Inc., (“CRST”), CRST recently submitted its final reply brief before the U.S. Supreme Court hears oral argument in the case later this month.  At issue in EEOC v. CRST Van Expedited, Inc. is whether and under what circumstances an employer can recover attorneys’ fees from the EEOC when the EEOC fails to satisfy its pre-suit investigation duties under Title VII.

As our loyal blog readers who have been riding with us for the long haul know, we have covered every “pit-stop” of this litigation journey here, here, here, here, here, here, here, here, here, and here.  With the “end of the road” approaching as oral arguments are set for March 28, 2016, this case is a must-follow for all employers, especially those facing EEOC-initiated lawsuits.

The Context And The Stakes

After CRST successfully obtained the dismissal of the EEOC’s Title VII claims for sexual harassment, the District Court granted CRST’s motion for an award of attorneys’ fees and costs and directed the EEOC to pay CRST nearly $4.7 million, finding that the EEOC’s actions in pursuing this lawsuit were unreasonable, contrary to the procedure outlined by Title VII, and imposed an unnecessary burden upon both CRST and the District Court.

On the EEOC’s appeal, the Eighth Circuit reversed and held that the District Court “did not make particularized findings of frivolousness, unreasonableness, or groundlessness as to each individual claim” and remanded these claims to the District Court to make such individualized determinations.  Further, the Eighth Circuit found that that District Court’s dismissal of 67 claims based on the EEOC’s failure to satisfy Title VII’s pre-suit obligations “[did] not constitute a ruling on the merits,” and that “[t]herefore, CRST is not a prevailing party as to these claims.”   The Eighth Circuit also held that CRST could not satisfy the standard of Christianburg Garment Co. v. EEOC, 434 U.S. 412 (1978), for the same reason: “[P]roof that a plaintiff’s case is frivolous, unreasonable, or groundless is not possible without a judicial determination of the plaintiff’s case on the merits.”

The U.S. Supreme Court granted CRST’s petition for certiorari on December 4, 2015.  Thereafter, in its merits brief, CRST asserted two arguments as to why the Eighth Circuit’s decision was improper: (1) the Eighth Circuit’s rule that a prevailing defendant may recover fees only when a case is decided “on the merits” has no basis in the statute, conflicts with Christiansburg Garment, and severely undermines the policy of Section 706(k); and (2) even if the “on the merits” standard applied, CRST was successful on the merits.  In its merits brief the EEOC pivoted away from its earlier argument that fees are recoverable only when dismissal is “on the merits”, and argued that the District Court’s finding that the EEOC failed to satisfy Title VII’s administrative preconditions to filing a lawsuit does not authorize an award of attorneys’ fees under 42 U.S.C. 2000e-5(k), because such a dismissal does not make the defendant a “prevailing party.”  The EEOC also contended that the award of attorneys’ fees and costs in this litigation was improper because the Commission’s suit was not “frivolous, unreasonable, or groundless.”

CRST’s Reply Brief

On March 10, 2016, CRST filed its reply brief, quickly observing the EEOC’s abandonment of the Eighth Circuit’s rule that a resolution “on the merits” is a precondition for a fee award, id. at 1, and requesting the Supreme Court to abrogate that rule as being without foundation in Title VII.  Id. at 3.

CRST then attacked the EEOC’s new theory that attorneys’ fees were unwarranted because only preclusive judgments in favor of defendants support “prevailing party” status, and that the judgment in this case did not preclude further litigation of the 67 claims at issue.  CRST argued that because the EEOC has not raised this “prevailing party” argument at any time during the last six years of litigation, the argument has been “thoroughly and repeatedly waived.”  Id. at 7.  Addressing the substantive argument raised by the EEOC, CRST asserted that the only substantive issue properly before the Supreme Court is whether the EEOC’s pre-suit conduct rendered its lawsuit “frivolous, unreasonable, or groundless” under Christianburg.  Id. at 17-18. CRST argued that during the course of its investigation, the Commission never made a reasonable-cause determination as to any common discriminatory practice, and never attempted to conciliate with CRST over any alleged common discriminatory practice. Id. at 20-22.  Accordingly, CRST contended that the District Court, which has overseen the case for years, acted well-within its discretion when it found that the EEOC abandoned the statutory process required by Title VII.

What’s Next

The Supreme Court is set to hear oral arguments on March 28, 2016.  As we discussed here, with the passing of Justice Scalia, CRST likely has one less vote in its corner.  Nonetheless, the outcome of the case still remains equally important for both employers and the EEOC, as it will likely provide guidance as to the EEOC’s accountability for satisfying its statutory obligations under Title VII.

We will be sure to keep our loyal blog readers updated on the developments of this crucial case.

Readers can also find this post on our Workplace Class Action blog here.

Back On The Butcher’s Block: Court Chops Down Meat Packing Employer’s Witness List In EEOC Religious Discrimination Case

Posted in EEOC Litigation

Bcleavery Gerald L. Maatman, Jr. and Alex W. Karasik

In a pair of EEOC religious discrimination cases brought in Nebraska and Colorado against meat packing company JBS USA, LLC (which we have blogged about here, here, here, here, here, and here), the lawsuits alleged that JBS discriminated against its Muslim employees on the basis of religion by engaging in a pattern or practice of retaliation, discriminatory discipline and discharge, harassment, and denying its Muslim employees reasonable religious accommodations.  While JBS successfully obtained summary judgment in the Nebraska case (with the EEOC still being able to pursue individual claims, as we discussed here), in the ongoing Colorado litigation, EEOC v. JBS USA, LLC, Case No. 10-CV-02103 (D. Colo.), Judge Philip A. Brimmer of the U.S. District Court for the District of Colorado recently ordered that only 30 of the 103 witnesses that were untimely disclosed by the employer may be used in “Phase I” of the pending litigation.

While this Colorado case is still “a work in progress” in terms of the litigation process, this “slice” of an order is important for employers in that it illustrates how identification of witnesses during discovery can later lead to rulings “served cold” from the chopping block of unsympathetic courts.

Case Background

In 2010, the EEOC filed two similar lawsuits alleging that JBS, which does business as JBS Swift & Company, discriminated against a class of Somali Muslim employees at its facilities in Greeley, Colorado and Grand Island, Nebraska.  During Ramadan 2008, the employees requested that JBS accommodate their need to leave the production line to pray at or near sundown.  The employees and JBS were unable to come to an agreement regarding the employees’ need to pray, leading to the suspension and termination of a large number of Muslim employees based on job abandonment.  In the Nebraska case, Chief Judge Laurie Smith Camp of the U.S. District Court for the District of Nebraska entered judgment for JBS, finding that the employer established the affirmative defense of undue hardship since “a religious accommodation for Muslim employees…within the parameters requested [by the EEOC] would have caused more than a de minimis burden on JBS and on its non-Muslim employees.”  However, that Court later ruled that its earlier findings did not necessarily preclude the EEOC from pursuing individual claims for religious discrimination or retaliation.

In the Colorado action, the Court bifurcated the case, resulting in the following “Phase I” issues: (1) the EEOC’s claim that JBS engaged in a pattern or practice of denying Muslim employees reasonable religious accommodations; (2) the EEOC’s retaliation pattern or practice claim; and (3) the EEOC’s discriminatory discipline and discharge pattern or practice claim.  At the close of “Phase I” discovery, JBS sought summary judgment on all three of EEOC’s Phase I claims.  On July 17, 2015, Judge Brimmer denied JBS’ motion for summary judgment, which was based in part on JBS’ argument that its favorable decision in the Nebraska case collaterally estopped the EEOC from advancing its claims.

Relevant here, on October 27, 2011, the magistrate judge entered a scheduling order providing that under Section § 8(d)(2), “[Plaintiffs] will identify aggrieved employees for Phase I only by November 15, 2011. [Defendant] will identify Phase I witnesses by December 15, 2011.  Either party may amend list up to 60 days thereafter. Subsequent amendments may be made only on a showing of good cause, which shall not include lack of diligence.”  Id. at 2.

In February and March of 2013, JBS attempted to disclose 103 additional witnesses through three supplemental disclosures.  The EEOC moved to strike JBS’ additional witnesses, arguing their disclosure violated § 8(d)(2).  On March 25, 2014, the magistrate judge issued an order granting the EEOC’s motion to strike, to which JBS subsequently objected.  On May 7, 2014, JBS filed a motion to amend the Scheduling Order, arguing that good cause existed to allow JBS to disclose the 103 witnesses stricken by the magistrate judge’s March 25, 2014 order.  On March 17, 2015, the magistrate judge granted JBS’ motion, concluding that JBS established good cause to amend its Phase I witness list under § 8(d)(2).  On April 7, 2015, the EEOC filed an objection to the March 17, 2015 order.  Id. at 3.

Addressing both parties’ various objections and motions to amend the scheduling order, on March 16, 2016, Judge Brimmer entered an order that ultimately directed JBS to select and disclose to the EEOC a list of 30 of the 103 additional witnesses it seeks to add to its Phase I witness list, and that such witnesses shall be deemed timely designated on the dates they were originally disclosed to EEOC.  Id. at 25.  In addition, the Court ordered that any motion by the EEOC to reopen discovery is to be filed within two weeks of JBS’ disclosure, and should indicate for how long discovery will be reopened for the limited purpose of deposing JBS’ additional witnesses.  Id.

The Court’s Decision

The Court initially addressed JBS’ objections to the magistrate judge’s order granting the EEOC’s motion to strike the untimely-disclosed 103 witnesses.  First, JBS argued that the magistrate judge misapprehended its position by failing to consider its argument that Rule 26 permitted the additional witness disclosures.  Overruling this objection, the Court noted that under Rule 16, a scheduling order could properly modify the timing of Rule 26 disclosures.  Id. at 5.  JBS also argued that the magistrate judge’s interpretation of § 8(d)(2) was prejudicial to its case, but the Court also rejected this argument given JBS’ current position that it could now show good cause to add witnesses.  Id. at 7-8.  Finally, the Court rejected JBS’ argument that the magistrate judge failed to apply Burks v. Okla. Publ’g Co., 81 F.3d 975 (10th Cir. 1996), which JBS claimed was controlling Tenth Circuit precedent, since JBS never raised the argument before the magistrate judge and therefore it was deemed waived.  Id. at 9.

Next, the Court addressed the EEOC’s challenges to several aspects of the magistrate judge’s March 17, 2015 ruling that JBS showed good cause to allow it to amend its Phase I witness list under § 8(d)(2) of the Scheduling Order.  Id. at 10.  The parties disputed whether good cause was shown.  The EEOC argued that when examining JBS’ justifications for the untimely disclosure of each individual witness, as opposed to examining JBS’ justifications in the aggregate, JBS’ showing was insufficient to establish good cause.  While the Court acknowledged that JBS compiled a significant amount of information to establish good cause, including the dates and citations to relevant deposition testimonies and the identification of prior inconsistent statements, it held that JBS’ attempt to show good cause did not withstand scrutiny.  Id. at 13.

The Court further rejected JBS’ arguments concerning the difficulty of witness identification, which it alleged was caused by language barriers and employees only knowing other employees’ first names, holding that JBS did nothing to address these challenges which should have been apparent at the outset of the case.  Id. at 13-14.  Further, noting that JBS was required to conduct its own investigation of potential witnesses, the Court was unpersuaded by JBS’ argument that it did not uncover certain witness identities until the deposition stage.  Id. at 15.  In addition, in response to JBS’ argument that it had difficulty identifying certain witnesses due to either their discontinued employment or having common first names (i.e., employing over 40 people with the name “Jorge”), the Court again noted that JBS was not diligent in addressing these issues earlier.  Id. at 16.

In sum, the Court found that “[w]ith the exception of [a few] witnesses JBS designated as impeachment witnesses, JBS has largely failed to show that it acted diligently to disclose the additional witnesses. JBS may be correct that it could not have disclosed all of the additional witnesses by the February 2012 deadline, but it is equally clear that JBS could have, in an exercise of diligence, disclosed at least some of the additional 103 witnesses prior to February and March 2012.”  Id. at 19.  Further, the Court opined that “[r]eopening discovery to allow [the] EEOC to depose the additional witnesses would further delay trial in a case where pretrial proceedings have already stretched for more than five years.”  Id. at 22.  However, the Court concluded that denying JBS’ motion to amend the scheduling order would be too harsh of a sanction.  Accordingly, in what it deemed “the most equitable remedy,” the Court found “that good cause exists to amend the scheduling order to grant JBS leave to designate 30 additional witnesses of its choosing…from the 103 witnesses listed in the additional witness disclosures.”  Id. at 25.

Implications For Employers

This ruling is instructive regarding the upside of proactively identifying any potential Rule 26 witnesses as early as possible.  Waiting until the end of discovery to disclose witnesses creates the possibility that a court may preclude some of those individuals’ testimonies, as was the case here.  Finally, this case is yet another example of the EEOC’s recent aggressiveness in litigating religious accommodation claims on a large-scale basis.  Accordingly, employers should take seriously any and all employee requests for religious accommodations in order to avoid being found on the chopping block of an EEOC lawsuit.

Readers can also find this post on our Workplace Class Action blog here.

With Adverse Employment Action Absent, Court Denies EEOC’s Motion For Reconsideration In Religious Accommodation Case

Posted in EEOC Litigation

Flag_of_Colorado_svgBy Gerald L. Maatman Jr. and Alex W. Karasik

In an important EEOC case involving the intersection of company dress code policies and the rights of employees seeking religious accommodations, following a grant of both parties’ summary judgment motions in part, which we previously blogged about here, the EEOC moved for reconsideration of the dismissal of one individual’s claims against the defendant, JetStream Ground Services, Inc. (“JetStream”).  Relevant to the EEOC’s motion for reconsideration, the Court previously held that the EEOC failed to accurately establish the employee’s actual start date at JetStream, limiting the provable loss to a “de minimis” amount of eight hours of pay.  In an order recently issued in EEOC v Jetstream Ground Services, Inc., Case No. 13-CV-02340 (D. Colo. Mar. 8, 2015), Judge Christine M. Arguello of the U.S. District Court for the District of Colorado denied the EEOC’s motion for reconsideration, holding that a worker must be subjected to an adverse action to assert a religious bias claim under Title VII, and that the arguments advocated by the EEOC in its motion did not satisfy the requisite standard of proving clear error or manifest injustice warranting relief.

This case should be on the radar of employers who intend to utilize strict uniform or dress code policies, especially given the backdrop of a diverse workforce that often seeks religious accommodations and the increasingly aggressive stance of the EEOC in religious discrimination litigation.

Case Background

In October 2008, Florida-based JetStream was awarded a cabin cleaning contract with United Airlines at Denver International Airport.  JetStream offered job interviews to employees of its predecessor contractor.  Id.  at 3-4.  JetStream used several criteria in its hiring process, one of which was the applicant’s willingness to wear a gender neutral uniform of pants, shirt, and hat.  Id. at 8.  Five Muslim women of Ethiopian or Somali nationality (“Intervenors”) who had unsuccessfully applied for the position of Aircraft Cleaner filed charges of discrimination locally with the Colorado Civil Rights Division.  They alleged that JetStream discriminated against them on the basis of their sex (female) and religion (Muslim), and denied them the religious accommodations of wearing a hijab to cover their hair, ears, and neck, and of wearing long skirts to cover the form of their bodies.  Id. at 3.  After the charges were filed, JetStream amended its uniform policy “based on legal issues regarding the burka headgear” to allow secured headscarves within specifications for dimension and color.  Id. at 7.

The Colorado Civil Rights Division transferred the charges to the EEOC, who issued its Letter of Determination as to each Intervenor’s charge, stating that it had found reasonable cause to believe JetStream had violated Title VII by: (1) refusing to provide Intervenors and a “class” of other female Muslim employees or applicants a reasonable accommodation based on their religion; (2) refusing to hire the charging parties “and others like” them for the position of Aircraft Cleaner based on sex and religion; and (3) by retaliating against them for engaging in protected activity.  Id. at 9.  After an unsuccessful conciliation process, the EEOC brought its lawsuit against JetStream on August 20, 2013.  In the lawsuit, the EEOC also asserted individual claims on behalf of the two “aggrieved” individuals, Amina Oba and Milko Haji, who had been employed by JetStream and who had not filed charges.  On October 13, 2014, JetStream made offers of full-time employment to the Intervenors, stating that the Intervenors “may wear a headscarf at work that meets their religious requirements but does not present safety risks,” but also requiring that they “wear pants at work, as they claim they are willing to do.”  Id. at 12.

JetStream filed a motion for summary judgment arguing that: (1) the EEOC failed to satisfy its pre-suit conciliation obligations; (2) the claims of Oba and Haji were deficient for various reasons; and (3) the damages alleged were limited by JetStream’s offers of employment to the Intervenors.  The EEOC filed a cross-motion for summary judgment regarding JetStream’s defenses of exhaustion of administrative remedies and prerequisites, statute of limitations, waiver, estoppel and laches, and undue burden.  Id. at 2.

On September 29, 2015, the Court granted and denied each motion, in part.  In relevant part, the Court dismissed Haji’s individual claims pursuant to Rule 56(a).  Id. at 63.  Regarding the EEOC’s allegation that Haji had her hours reduced on account of her religion and desire to wear a hajib and pants, the Court held that the EEOC failed to accurately establish Haji’s actual start date at JetStream, limiting the EEOC’s provable loss to eight hours of pay.  Finding this potential amount of loss to be “de minimis,” the Court granted JetStream summary judgment on the EEOC’s claims for discrimination, failure to accommodate, and retaliation as applied to Haji.  Id. at 39-40.  Thereafter, the EEOC moved for reconsideration of that portion of the Court’s decision.  On March 8, 2016, the Court denied the EEOC’s motion for reconsideration.

The Court’s Decision

The EEOC argued that the Court erred when it determined that Haji’s claim for religious discrimination failed as a matter of law, contending that Haji was not required to show that she was subjected to an adverse employment action by JetStream.  Id. at 3.  The Court rejected this assertion, noting that “[t]his argument easily could have been made in the EEOC’s summary judgment briefing…[but] was not.”  Id. at 3-4.  While the EEOC conceded that it did not previously provide the Court with the arguments it made in its motion for reconsideration, the EEOC nonetheless urged the court to exercise its discretion in granting reconsideration because its newly asserted arguments were purely “legal.”  Id. at 4.  Citing contrary Tenth Circuit precedent, the Court rejected this argument, noting that reconsideration motions are not a license to advance arguments that could have been advanced in prior briefing.  Id. at 5 (citation omitted).

In addition, the EEOC asserted that an employer has an affirmative duty to accommodate an employee’s religious practice, such that an employer’s mere failure to make a religious accommodation – without more – constitutes a distinct, “freestanding” cause of action under Title VII, as supported by Title VII’s definition of religion, which is defined as including “all aspects of religious observance and practice, as well as belief, unless an employer demonstrates that he is unable to reasonably accommodate to an employee’s or prospective employee’s religious observance or practice without undue hardship on the conduct of the employer’s business.”  Id. at 4-5.  The Court rejected this argument, noting that “[a]lthough this language could support an employer’s purported affirmative duty to accommodate ‘all aspects of [an employee’s] religious observance and practice,’ so long as those aspects do not pose an undue hardship, it does not necessarily follow that the statute’s definition of ‘religion’ creates an independent, separate cause of action for an employer’s failure to accommodate.”  Id. at 6.

The EEOC also contended that the U.S. Supreme Court’s recent decision in EEOC v. Abercrombie & Fitch Stores, Inc., 135 S.Ct. 2028 (2015), supported its argument that an employer’s refusal to accommodate a religious practice is a stand-alone violation of the Act.  Citing a footnote in the concurrence of Abercrombie, the EEOC argued that, if the Supreme Court said it is true that “[i]f [an employer] is willing to ‘accommodate’ . . . [then] [an] adverse action ‘because of’ the religious practice is not shown,” it must also be true that “where the employer is not willing to accommodate, an adverse action is shown.”  Id. at 7.  The Court rejected this assertion, which it dubbed as being premised on a “logical fallacy,” finding that it “plainly offer[ed] no support for the EEOC’s arguments in the instant case.”  Id. at 8.

Additionally, the EEOC urged the Court to look to analogous failure-to-accommodate claims under the ADA.  Rejecting this assertion, the Court instructed that the failure to accommodate is a “freestanding,” distinct cause of action under the ADA.  Id. at 9.  The Court then distinguished the statutes, noting that Title VII contains no such stand-alone, failure-to-accommodate claim, and therefore, it “cannot simply equate the two statutes because both involve accommodations.”  Id. at 10-12.

Finally, the EEOC argued that the Court should not have applied the McDonnell-Douglas burden-shifting framework at all in this case because there was “direct” evidence of discrimination, and therefore, the burden-shifting framework (including the usual prima facie case) was inapplicable.  Following Tenth Circuit precedent, which defines “direct” evidence as “proof of an existing policy which itself constitutes discrimination or oral or written statements on the part of a defendant showing a discriminatory motivation,” the Court noted that “an employer’s policy only constitutes ‘direct’ evidence of discrimination if it is discriminatory on its face.”  Id. at 13-14 (citations omitted).  Applied here, the Court held that JetStream’s uniform policy here was “not discriminatory on its face…[since] the policy stated only that employees must wear pants, and in no way explicitly references or disallows religious dress.”  Id. at 14.  Thus, the Court found that the Court properly applied the burden-shifting framework provided for in McDonnell-Douglas to Haji’s claim since the EEOC offered no evidence of an existing policy which itself constituted discrimination.  Id. at 15.  Accordingly, since the EEOC’s arguments did not meet the requisite standard of demonstrating clear error or manifest injustice warranting relief, the Court denied the EEOC’s motion for reconsideration.

Implication For Employers

This decision confirms that religious bias claimants who allege their employer failed to accommodate their practice must also demonstrate they were subject to an adverse employment action.  Beyond illustrating the importance of employer awareness in regards to workplace uniform and dress code policies and the need to be cognizant of how requests for religious clothing accommodations are addressed, this holding demonstrates that employers must be cautious in regards to not taking any potential adverse employment actions.

Readers can also find this post on our Workplace Class Action blog here.

“We Don’t Want To Pay $4.7 Million” – EEOC Files Its Supreme Court Brief in CRST Fee Sanction Case

Posted in EEOC Litigation

moneybagBy Gerald L. Maatman Jr., Christopher DeGroff, Christina M. Janice, and Alex W. Karasik

As we recently blogged here, EEOC v. CRST Van Expedited, Inc. is an important case on the Supreme Court’s docket that employers absolutely need to monitor.  At issue is whether attorneys’ fees are appropriate in instances where the EEOC failed to satisfy its pre-suit investigation duties under Title VII, but the employer was not 100% victorious “on the merits.”

We have been tracking developments in this litigation (here, here, here, here, here, here, here, and here) since its filing.  Earlier this month, we blogged about CRST’s submission of its merits brief to the SCOTUS on January 19, 2016, as well as several amici briefs (here, here, here and here) filed in support of CRST.  On February 24, 2016, the EEOC filed its brief with the Supreme Court.

The Context And The Stakes

As we previously reported, on September 27, 2007, the EEOC filed a single count complaint against CRST under Section 706(f) of Title VII on behalf of a female driver and a class of “similarly situated” but unidentified female employees of CRST.  Petit. Br., at 10.  The U.S. District Court for the Northern District of Iowa noted that in the course of discovery, “it became clear that the EEOC did not know how many allegedly aggrieved persons on whose behalf it was seeking relief,” and that “the EEOC was using discovery to find them.”  Id. at 11.  CRST successfully moved the District Court for the dismissal of Title VII claims for sexual harassment brought by the EEOC on behalf of several hundred female truckers, after demonstrating that EEOC did not conduct any investigation of the specific allegations of the allegedly aggrieved persons for whom it sought relief at trial before filing the Complaint – let alone issue a reasonable cause determination as to those allegations or conciliate them.

After securing the dismissals and settling the claims of the original charging party, CRST moved for an award of attorneys’ fees and costs.  The District Court granted the motion and directed the EEOC to pay CRST nearly $4.7 million, finding that the EEOC’s actions in pursuing this lawsuit were unreasonable, contrary to the procedure outlined by Title VII and imposed an unnecessary burden upon both CRST and the District Court.  Id. at 18.

The fee sanction was the largest ever imposed against the Commission.

However, on the EEOC’s appeal, the Eighth Circuit reversed and held that the District Court “did not make particularized findings of frivolousness, unreasonableness, or groundlessness as to each individual claim” and remanded these claims to the District Court to make such individualized determinations.  Id. at 20.  Further, the Eighth Circuit found that that District Court’s dismissal of 67 claims based on the EEOC’s failure to satisfy Title VII’s pre-suit obligations “[did] not constitute a ruling on the merits,” and that “[t]herefore, CRST is not a prevailing party as to these claims.”  Id. at 21.  The Eighth Circuit also held that CRST could not satisfy the standard of Christianburg Garment Co. v. EEOC, 434 U.S. 412 (1978), for the same reason: “[P]roof that a plaintiff’s case is frivolous, unreasonable, or groundless is not possible without a judicial determination of the plaintiff’s case on the merits.”  Id. (internal quotation omitted). The Eighth Circuit instructed the District Court on remand to assess each claim for which it granted summary judgment for CRST on the merits and explain why it deemed that particular claim to be frivolous, groundless, or unreasonable.

Following the Eighth Circuit’s decision, CRST petitioned for a rehearing en banc, which was denied on February 20, 2015.  Thereafter, CRST petitioned the U.S. Supreme Court for certiorari, which was granted on December 4, 2015.

In its merits brief, CRST asserts two arguments as to why the Eighth Circuit’s decision was improper: (1) the Eighth Circuit’s rule that a prevailing defendant may recover fees only when a case is decided “on the merits” has no basis in the statute, conflicts with Christiansburg Garment, and severely undermines the policy of Section 706(k); and (2) even if Congress intended Section 706(k) to limit defendants’ fee awards to cases decided “on the merits” (which it claims Congress did not do), this case would still qualify under that standard since CRST was successful on the merits.  Id. at 23-25.

The EEOC’s Brief

In its merits brief, the EEOC asserts that a district court’s finding that the EEOC failed to satisfy Title VII’s administrative preconditions to filing a lawsuit does not authorize an award of attorneys’ fees under 42 U.S.C. 2000e-5(k) because it does not make the defendant a “prevailing party.” Resp. Br., at 21-22.  According to the Commission, to be a prevailing party, a defendant must at minimum obtain a judgment barring further litigation on the Commission ’s claim; absent such a judgment, the legal relationship between the parties remains materially unchanged because the plaintiff is free to refile.  Id. at 21.

As has become a common page in the EEOC’s playbook when its satisfaction of its jurisdictional requirements under Title VII is challenged by an employer, the EEOC expansively argues that under Mach Mining, LLC v. EEOC, 135 S. Ct. 1645, 1656 (2015), the proper remedy for a district court finding that the EEOC failed to satisfy Title VII’s administrative pre-conditions to a suit is a stay, not a dismissal, and that under Costello v. United States, 365 U.S. 265, 284-288 (1961), such a dismissal does not preclude the EEOC from returning to court after the pre-condition has been met.  Id.  Under this logic, the EEOC urges the Supreme Court to conclude that dismissal does not constitute the sort of material alteration of the parties’ legal relationship required to confer prevailing party status.  Id. at 21-22.

The EEOC also argues a procedural point — that CRST incorrectly asserts that the dismissal of the relevant claims in this case had the requisite effect of being “with prejudice,” a characterization that notably did not appear in CRST’s petition for a writ of certiorari.  Id. at 22.  The EEOC notes the District Court’s original dismissal was not “with prejudice,” and that after the Eighth Circuit remanded two other claims for further proceedings and the Commission withdrew one of them, the parties settled the Commission’s final claim and agreed to dismiss the case “with prejudice.”  Id.  The EEOC argues that the agreed-upon dismissal did not and could not modify the District Court’s earlier dismissal of the claims at issue here, which had already been affirmed by the Eighth Circuit.  Id.

The EEOC further argues that CRST’s policy argument regarding the need for fee awards to encourage the Commission to adhere to its pre-suit duties under Title VII is misplaced.  Id.  In this respect, the EEOC contends that CRST should have identified and raised earlier in the litigation any allegations that the EEOC failed to satisfy its pre-suit obligations.  As a result of waiting over 18 months into the litigation to raise such issues, CRST is itself responsible for incurring substantial attorneys’ fees.  Id. at 23.

In its second argument, the EEOC contends that the award of attorneys’ fees and costs in this litigation was improper because the Commission’s suit was not “frivolous, unreasonable, or groundless” under Christiansburg Garment.  Resp. Br., at 21-23.

Again, the EEOC raises Mach Mining as a shield, asserting that the District Court’s finding was improper insofar as it determined that the EEOC failed to satisfy its pre-suit obligations because it did not separately investigate, make a reasonable-cause determination, and conciliate with respect to each individual woman for whom it ultimately sought relief.  Here, the EEOC cites Mach Mining, 135 S. Ct. at 1656, as support for the proposition that the EEOC may satisfy its conciliation obligations by identifying the “class of employees” for which it seeks relief.  Id.  The EEOC posits that “[u]nder the Eighth Circuit’s merits decision in this case, no court of appeals had held that the EEOC is required to identify all claimants during its investigation and individually conciliate their claims, and several courts of appeals such as the 9th Circuit had expressly recognized that the EEOC is ‘not required to provide documentation of individual attempts to conciliate on behalf of each potential claimant.’”  Id. at 51 (citing EEOC v. Bruno’s Rest., 13 F.3d 285, 289 (9th Cir. 1993)). In the absence of such authority, the EEOC asserts there is no basis to conclude its position was frivolous, unreasonable, or groundless.  Id. at 52.

In sum, the EEOC makes some bold arguments. In so doing, the Commission is angling to secure further Supreme Court precedent to assist in its prosecution of systemic enforcement litigation.

What’s Next

The Supreme Court is set to hear oral arguments on March 28, 2016.  With Supreme Court Justice Antonin Scalia’s recent passing, it is likely the case may be decided before the vacancy on the Supreme Court is filled.  A 4 – 4 vote would leave the Eighth Circuit decision intact and allow the EEOC to escape meaningful accountability for failure to satisfy its jurisdictional requirements under Title VII.  Further, a 4 – 4 vote may leave other appellate courts across the country without Supreme Court guidance on the EEOC’s latest effort to expand Mach Mining as a protective shield. Stay tuned, as we promise to keep our loyal blog readers updated.

Readers can also find this post on our Workplace Class Action blog here.

Judgment Day Dooms Employer: No New Trial In EEOC Case After Finding Of Failure To Accommodate Anti-Christ Fears

Posted in Motions for Summary Judgment

fingerBy Gerald L. Maatman Jr. and Alex W. Karasik

In EEOC v. Consol Energy, Inc., Case No. 13-CV-215 (N. D. W.Va. Feb. 9, 2015), the EEOC brought a religious discrimination suit on behalf of an employee against his coal mining employer defendants, parent company Consol Energy, Inc. and subsidiary Consolidation Coal Company.  The Commission alleged that defendants refused to provide the employee a religious accommodation by subjecting him to a biometric hand scanner for purposes of clocking in and out of work.  Specifically, the employee believed the hand scanner was used to identify and collect personal information that would be used by the Christian Anti-Christ, as described in the New Testament Book of Revelation, to identify followers with the “mark of the beast.”  Id. at 2. After the jury returned a verdict in favor of the EEOC, and awarded the $150,000 in compensatory damages and over $436,000 in front pay and back pay damages, defendants filed a renewed motion for judgment as a matter of law under Rule 50(b), a motion for a new trial under Rule 59, and a motion to amend the Court’s findings and conclusions under Rule 59.  On February 9, 2016, Judge Frederick P. Stamp, Jr. of the U.S. District Court for the Northern District of West Virginia denied all three of defendants’ motions.

Employers and corporate counsel should have this case on their radar when confronted with an employee who seeks a religious accommodation.

Case Background

In 2012, after defendants decided to implement a new biometric hand scanner technology to assist employees with clocking in and out, a 35-year tenured employee requested a religious exemption from the hand scanner policy, stating that he feared damnation from its use.  Id. at 2.  Despite developing a method of bypassing the hand scanner for miners who were physically incapable of scanning their hands, defendants refused to grant an exception to the employee.  After being told he would be disciplined for refusing to scan his hand, the employee subsequently retired.

The EEOC brought a civil action on the employee’s behalf, alleging that defendants’ failure to provide an accommodation to the employee amounted to religious discrimination under Title VII.  Id. at 3.  Following trial, the jury found: (1) that parent company Consol was the employee’s employer; (2) that the employee had a “sincere religious belief that conflicted with an employment requirement”; (3) that the employee “informed his employer of this belief”; (4) that the employee “was subjected to an adverse employment action . . . by being . . . constructively discharged by his employer for his refusal to comply with the conflicting employment requirement”; (5) that defendants did not provide the employee a reasonable accommodation; and (6) that the accommodations proposed by the EEOC at trial would not have “resulted in more than a de minimis cost” to the defendants.  Id.  The jury awarded $150,000 in compensatory damages and over $436,000 in front pay and back pay damages.  Defendants thereafter filed a renewed motion for judgment as a matter of law under Rule 50(b), a motion for a new trial under Rule 59, and a motion to amend the Court’s findings and conclusions under Rule 59.

The Ruling

Judge Stamp denied all three motions brought by defendants.  In their renewed motion for judgment as a matter of law under Rule 50(b), defendants argued (1) that the EEOC failed to present sufficient evidence to state a prima facie case of religious discrimination; and (2) that there was insufficient evidence to support the jury’s finding that the parent company Consol was the employee’s employer.  The Court rejected these arguments, finding that the EEOC presented sufficient evidence that the employee repeatedly requested a religious accommodation, which was denied despite defendants’ awareness of a reasonable accommodation, and that parent company Consol exercised excessive control and made employment decisions regarding the employees of the subsidiary defendant Consolidation such that it was his employer.  Id. at 8-9.

Defendants also moved for a new trial pursuant to Rule 59, arguing that the Court made various legal errors and that the jury’s damage award was excessive so as to make the judgment a miscarriage of justice.  Id. at 10.  The Court had earlier granted the EEOC’s motion in limine to exclude all evidence regarding the grievance process contained in the United Mine Workers of America’s (“UMWA”) collective bargaining agreement with Consol, which allowed the employee to file a grievance with the union and seek arbitration before he could be discharged.  Defendants argued that the evidence was relevant for several reasons, asserting that its exclusion was prejudicial because the jury was misled into believing that the employee had no option but to retire.  Id. at 11.  The Court rejected this argument, noting that whether defendants’ enforcement of their progressive discipline policy would have resulted in the employee’s eventual discharge, even after arbitration through the grievance process, had no bearing on whether they deliberately denied the employee a religious accommodation.  Id. at 12.  Additionally, the Court rejected defendants’ arguments that the jury instructions and jury’s award were improper, holding that the jury award was supported by the employee’s testimony and his wife’s testimony about the adverse effect of his retirement.  Id. at 29.

Finally, in their motion to amend the findings regarding back pay and front pay damages, defendants argued that the Court’s findings regarding the employee’s efforts to mitigate damages were not supported by the evidence.  The Court rejected this argument, referencing how the employee reasonably mitigated his damages by eventually accepting another job, even though it was lower-paying and in a different industry.  Id. at 32.  Further, defendants argued that the Court’s inclusion of lost pension benefits in front pay damages was erroneous because the Court erred in finding that the pension benefits that the employee had already received since his retirement were from a collateral source and should not offset damages; and that the Court should reconsider its calculation of front pay damages since it resulted in a windfall for the employee.  Id. at 34.  The Court rejected these contentions too. It reasoned that not off-setting the employee’s damages with the pension benefits he had already received would not result in a windfall.  Id. at *-40.  Accordingly, the Court denied defendants’ renewed motion for judgment as a matter of law, motion for a new trial, and motion to amend the Court’s findings and conclusions.

Implications For Employers

The unique factual circumstances of this case, and the jury’s subsequent findings, should alert employers that they must seriously consider any and all religious accommodation requests.  Given that defendants here easily could have allowed the employee to use their already-established alternative to the hand scanner system, granting this accommodation would have saved the employer a significant amount of time and money related to the subsequent litigation.  In sum, employers should take an open-minded and thorough approach when assessing any and all religious accommodation requests in order to avoid potentially costly EEOC litigation.

Readers can also find this post on our Workplace Class Action blog here.

Opening The Vault – The EEOC’s New Position On Handing Over Position Statements To Charging Parties

Posted in Strategic / Policy Initiatives

 untitledBy Christopher DeGroff, Gerald L. Maatman, Jr., and Howard Wexler

With little fanfare, the EEOC  quietly announced on February 18, 2016 its adoption of new “Nationwide Procedures for Releasing Respondent Position Statements and Obtaining Responses from Charging Parties.” Importantly, the Nationwide Procedures retroactively apply to all EEOC requests for position statements made on or after January 1, 2016.  Pursuant to the Nationwide Procedures:

“EEOC will provide the Respondent’s position statement and non-confidential attachments to Charging Parties upon request and provide them an opportunity to respond within 20 days. The Charging Party’s response will not be provided to Respondent during the investigation.” (emphasis added).

Employers often produce highly sensitive materials in defense of an EEOC Charge, with assurances that EEOC files are confidential.  For example, employers often provide confidential comparator information concerning other similarly-situated employees to demonstrate consistent, non-discriminatory approach in cases of alleged disparate treatment.  Employers also sometimes provide the EEOC with protected commercial and trade materials as exhibits to these position statements.  Although it is not unheard of for the EEOC to provide a Charging Party with some of the information submitted by an employer in its Position Statement to get his or her take on the defenses asserted by an employer, the wholesale production of the position statement itself and its supporting documents represents a sea change in practice.   If included with a position statement, “eyes-only” confidential company information could go directly to an individual who is, by definition, disgruntled, with no clear protections as to how those materials can be used.  In litigation, these materials are disclosed to a private party only after iron-clad and detailed protective orders are put in place.  Based on the Nationwide Procedures, this information is available to any all Charging Parties simply “upon request” with no provisions that the information be kept confidential.

But all is not as it seems. On the other hand, Charging Parties are often in denial about the legitimate, non-discriminatory basis of a personnel decision. As such, giving a Charging Party and their legal counsel access to the employer’s position statement and accompanying exhibits allows for a playing field where the continued prosecution of an EEOC charge — or of the filing of a subsequent lawsuit — is no longer due to the worker’s misapprehension or inability to face the reality of the employer’s defense. In other words, in many cases, this may assist an employer by educating a worker and his or her lawyer about the weaknesses in their case and eliminate the filing of lawsuits.

Implications for Employers

Based on the Nationwide Procedures, employers must consider being far more measured about what is contained in, or attached to, position statements given that they likely will end up in a former employee’s hands.  Indeed, the Nationwide Procedures could actually result in more EEOC-initiated subpoena actions, as employers must be more concerned about who will ultimately have access to their confidential documents and may be less willing to voluntarily provide certain information in a position statement.

How the Nationwide Procedures will play out in practice remains to be seen, including whether other information shared during an investigation (e.g., responses to additional requests for information) will also be provided to Charging Parties.  Stay tuned, as we will report any updates as they develop.

Readers can also find this post on our Workplace Class Action blog here.