00-money-bagBy Courtney Bohl, Christopher DeGroff, and Gerald L. Maatman, Jr.

On March 18, 2015, in EEOC v. Global Horizons, Inc., et al., Case No. 2:11-CV-03045, Judge Edward F. Shea of the U.S. District Court for the Eastern District of Washington ordered the EEOC to pay defendants Green Acre Farms, Inc. and Valley Fruit Orchards, LLC (collectively “Grower Defendants”) their reasonable attorney’s fees and costs incurred in defending against the EEOC’s meritless lawsuit. Judge Shea’s scathing opinion chastised the EEOC for: (1) failing to conduct an adequate investigation to ensure that Title VII claims could reasonably be brought against the Grower Defendants; (2) pursuing a frivolous theory of joint-employer liability; (3) seeking frivolous remedies; and (4) disregarding the need to have a factual basis to assert a plausible basis for relief under Title VII against the Grower Defendants.

This is a significant opinion for employers who are currently litigating against the EEOC, as it makes clear that the EEOC should be and will be held accountable for brining unfounded or baseless lawsuits against employers.

Factual Background

In 2004 and 2005, Global Horizons, Inc., a staffing company, brought workers from Thailand to the United States through the H-2A visa program to work on the Grower Defendants’ farms. Id. at 7. A number of these workers absconded from the farms to California where they filed charges of discrimination with the EEOC alleging that Global and the Grower Defendants discriminated and retaliated against them based on their national origin. Id.

Between 2009 and 2010, the EEOC conducted a scant investigation of the charges. The EEOC interviewed some of the workers, but many of the workers indicated that the Grower Defendants never subjected them to unlawful or improper treatment.  The EEOC also received information from Grower Defendants, including position statements where the Grower Defendants argued that they were not the workers’ employer (Global was); that the charges were untimely; and that the allegations in the charges were too vague. Id. at 10. The Grower Defendants also made multiple requests for further information regarding the bases for the charges, but the EEOC never provided this information. Id.

In August and September 2010, the EEOC issued letters of determination, finding that the Grower Defendants discriminated against the charging parties and a class of similarly situated individuals on the basis of their national origin. Id. at 16. The EEOC sent the Grower Defendants a conciliation proposal demanding significant monetary relief and injunctive relief. Id. at 17. The Grower Defendants again requested information that supported the bases for the charges and the EEOC’s monetary demand, but the EEOC refused provide any further information. Id. In September 2010, the EEOC determined conciliation had failed, and, in April 2011 the EEOC filed suit. Id. at 18.

The Grower Defendants moved for summary judgment on the EEOC’s claims. In May 2014 the Court granted summary judgment in the Grower Defendants’ favor, finding that the EEOC failed to present evidence to establish a triable issue of fact that the Grower Defendants violated Title VII. Id. The Grower Defendants subsequently filed a motion for attorneys’ fees and costs.

The Court’s Ruling

In granting the Grower Defendants’ motion for attorneys’ fees and costs, the Court considered “the totality of the information possessed by the EEOC when it filed the lawsuit in order to determine if the filing was reasonable, frivolous, or without foundation.” Id. at 5.

The Court scrupulously analyzed the EEOC’s pre-suit investigation, finding multiple failures on the part of the EEOC. The Court determined that the EEOC failed to provide the Grower Defendants basic information regarding the Thai workers’ allegations, despite their numerous requests. The Court noted that the EEOC failed to consider or react to statements by some of the Thai workers that the Grower Defendants did not treat the Thai workers unfairly, and treated them the same as the Latino workers. Id. at 26. The Court highlighted the EEOC’s failure to interview any of the Grower Defendants’ managers, supervisors, or owners. The Court also found that the EEOC failed to take simple steps to identify and clarify which farm a worker experienced the claimed discriminatory treatment. Id. at 26. The Court noted that the EEOC was well aware of these deficiencies in its investigation, because counsel for the Grower Defendants repeatedly advised the EEOC of these issues. Id.

In addition, the Court found it troubling that the EEOC refused to examine Global’s invoices and other documents that the Grower Defendants had repeatedly offered to the EEOC, until after the start of litigation. Id. at 25. Equally as troubling to the Court was the EEOC’s failure to gather information to support a plausible finding that the Grower Defendants were joint employers with Global, including evidence that the Grower Defendants either (1) discriminated against a Thai worker or (2) knew or should have known that Global discriminated against a Thai worker and failed to take any remedial measures. Id. at 28. Finally, the Court noted that none of the information discovered by the EEOC in its investigation reasonably supported the high damages demands the EEOC made during conciliation. Id. at 27. The Court indicated that it was “unsurprising” that the Grower Defendants’ declined the EEOC’s conciliation proposal “in light of the vague and factually unexplained charges.” Id.

Based on its review of the EEOC’s investigation, the Court held that the information in possession of the EEOC “clearly did not justify the filing of Title VII claims against the Grower Defendants on specific Thai worker’s behalf.”  Id. In short, the Court found the lawsuit “baseless, unreasonable, and frivolous” and the award of attorneys’ fees appropriate. Id. at 24. The Court ordered defense counsel to submit their fee request per the ruling.

Implication For Employers

This ruling is extremely important for employers. Not only does it hold the EEOC accountable for its conduct during its pre-suit investigation, but also it serves as a reminder to all employers to make sure that they engage with the EEOC during the pre-lawsuit investigation and conciliation process, sufficiently documenting their efforts to obtain information and communicate with the EEOC.

The decision is also another significant sanction award against the EEOC. Critics of the Commission are apt to point to the decision as yet another example of the problems with the EEOC’s litigation enforcement program.

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