By Eric M. Lloyd and Laura J. Maechtlen

The EEOC has launched a “Hail Mary pass” just in time for the NFL’s conference championship weekend.  On January 16, 2014, the Commission has asked the Eighth Circuit to reverse what is believed to be the largest fee sanction award against it in the EEOC’s history – of nearly $4.7 million entered in EEOC v. CRST Van Expedited, Inc., Case No. 07-CV-95, 2013 U.S. Dist. LEXIS 107822 (N.D. Iowa Aug. 1, 2013). 

As previously reported here, the U.S. District Court for the Northern District of Iowa ordered the EEOC to pay nearly $4.7 million in attorneys’ fees, expenses, and costs incurred by CRST Van Expedited, Inc. in defense of a sexual harassment case. CRST prevailed on 153 of the 154 individual claims in the case as well as the Commission’s pattern or practice claim. The District Court held that CRST was a prevailing party, and thus, entitled to recover attorneys’ fees under 42 U.S.C. § 2000e-5(k), because the EEOC’s conduct was “frivolous, unreasonable or groundless.” Specifically, the District Court found that the Commission failed to exhaust Title VII’s administrative prerequisites and that its pattern or practice claim was unreasonable since it was based only on anecdotal evidence.

Undeterred, the EEOC has appealed the trial court’s judgment. The Commission contends that it was the prevailing party because the charging party settled with CRST for $50,000. It also now argues that the District Court erroneously viewed the case as comprising 154 claims instead of one. Moreover, the EEOC argues that the fee award was in error even if CRST was a prevailing party because the suit was not frivolous or unreasonable.

Implications For Employers

The fee sanction award in EEOC v. CRST Van Expedited, Inc. is a black eye for the Commission. It has been cited by employers as “Exhibit A” in support of arguments that the Commission has failed to satisfy its statutory obligations under Title VII by “shooting first, and aiming later…”

We are skeptical that the Eighth Circuit – which has seen this case before, as reported here – will disturb the judgment. It seems a stretch for the EEOC to claim prevailing party status when the Commission lost 153 out of 154 claims and settled the lone outlier for a modest amount.  We will keep you posted on any further developments in the litigation.

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