thCAD0SFA4By Christopher M. Cascino and Gerald L. Maatman, Jr.

The EEOC recently announced reaching its largest settlement in the last 2 years in EEOC v. Patterson-UTI Drilling Co. LLC, No. 15-CV-600 (D. Colo. Mar. 24, 2015). In this case, Patterson-UTI agreed to settle a race and national origin pattern or practice claim brought by the EEOC for $12.2 million. This settlement almost equals the approximately $13 million the EEOC received in litigation settlements for the entirety of its Fiscal Year 2014, and represents more than half of the $22.5 million it recovered, in total litigation settlements and verdicts, during the same period.  The high value of this settlement comes as no surprise.  As we reported in our 2014 EEOC-Initiated Litigation Report, found here, the EEOC is focused on achieving high value settlements and verdicts this year to make up for its low recoveries in 2014. This case also confirms another trend we also reported in our 2014 EEOC-Initiated Litigation Report – the EEOC is focused on bringing systemic, class-like cases.

Case Background

The EEOC received a number of charges of discrimination filed by employees and former employees of Patterson-UTI, a Texas-based oil and gas drilling company, alleging discrimination based on race or national origin.  The EEOC concluded that there was reasonable cause to believed that Patterson-UTI engaged in nationwide discrimination against its minority employees.

On March 24, 2015, the EEOC filed suit against Patterson-UTI, alleging that individuals of Hispanic, Latino, African American, American Indian, Asian, and Pacific Islander race and/or national origin were subject to harassment, a hostile work environment, and disparate treatment. Specifically, the EEOC alleged that Patterson-UTI’s minority employees were subject to racial and ethnic slurs, jokes, and comments and verbal harassment and intimidation. The EEOC further alleged that Patterson-UTI’s minority employees were relegated to lower-level positions, were denied training, and were subject to disparate treatment in discipline. Finally, the EEOC alleged that Patterson-UTI retaliated against employees who complained about discrimination or harassment. The EEOC alleged that Patterson-UTI engaged in this prohibited conduct on a nationwide basis.

Settlement Agreement

Patterson-UTI and the EEOC entered into a settlement on the same day the Complaint was filed.  To that end, the parties filed a Proposed Consent Decree with the Court. Under the terms of the settlement as outlined in the Proposed Consent Decree, Patterson-UTI agreed to pay $12,260,000 to a settlement administrator to provide compensation to Patterson-UTI’s purportedly aggrieved minority employees. Such compensation will be available to any minority employee who worked for Patterson-UTI from January 1, 2006, to the date the Proposed Consent Decree is entered.

In addition to agreeing to provide monetary relief, Patterson-UTI also consented to wide-ranging equitable relief.  Among other things, Patterson-UTI agreed to be enjoined from engaging in any employment discrimination practice which discriminates on the basis of race or national origin. It agreed to develop new Equal Employment Opportunity policies and to annually train its employees on its Equal Employment Opportunity policies. It also agreed to create a Vice President position dedicated implementing the Consent Decree and ensuring Patterson-UTI’s employees were protected from unlawful discrimination.

Implications For Employers

This settlement confirms what we predicted in our annual EEOC-Initiated Litigation Report – the EEOC is going to focus this year on recovering large settlements and verdicts this year to try to make up for low recoveries in fiscal year 2014. Employers who find themselves the subject of EEOC conciliation or litigation this year can expect that the EEOC will demand larger recoveries than it has in prior years. Moreover, employers can expect that the EEOC will continue focus on large-scale, systemic litigation. Whether this focus will result in more successes like it achieved in this case or defeats like it received last year in cases like EEOC v. Kaplan Higher Educ. Corp., 748 F.3d 749 (6th Cir. 2014), remains to be seen. Stay tuned.

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