The U.S. Court of Appeals for the 8th Circuit has rejected an order requiring the EEOC to pay $4.7 million in attorney fees and costs to CRST Van Expedited, Inc., one of the nation’s leading transport companies, in an egregious sexual harassment case involving female truck driver trainees.
This lawsuit, perhaps more than any other in recent history, demonstrates the extent to which federal courts have moved away from the worthy goal of addressing serious employment discrimination to engaging in pro-business partisanship, sweeping generalizations and moronic procedural disputes. It also raises questions about whether the EEOC, in the current environment, can actually carry out its goal of promoting more strategic use of agency resources by emphasizing high stakes litigation involving multiple victims.
At various points, Chief Judge Linda R. Reade of the U.S. District Court of Iowa dismissed all of the 154 plaintiffs in the EEOC case and ruled the agency must pay CRST, one of the nation’s leading transport company, a whopping $4.7 million in attorneys’ fees and costs.
The 8th Circuit’s ruling constitutes a step in the right direction. The appeals court remanded the case back to the district court with instructions to reassess the attorney’s fee award. Among other things, the appeals court is asking Reade to explain why she dismissed dozens of sexual harassment claims as frivolous, unreasonable or ungrounded. Moreover, the Court rejected Reade’s award of attorney fees with respect to 67 claimants whom Reade dismissed from the case under a controversial ‘failure to conciliate” theory.
Several federal circuits have ruled the EEOC must engage in individual conciliation or negotiations with an employer with respect to each and every claim in a class action lawsuit, even if the employer has indicated no willingness to settle. This requirement allows guilty employers to delay adjudicting the issue of discrimination, constitutes a colossal waste of EEOC resources, and ultimately severely limits the agency’s ability to file class action employment discrimination lawsuits.
Reade dismissed 67 potential class members from the CRST lawsuit on the grounds that the EEOC failed to engage in “bona fide” conciliation efforts with CRST. She did not even consider the merits of the plaintiff’s claims, some of which involved shocking allegations of sexual harassment and abuse lodged by female truck driver trainees who were stranded in isolated conditions on the road. These women alleged that CRST did little or nothing in response to their complaints.
The 8th Circuit ruled that the EEOC’s duty to conciliate does not constitute an element of a claim. Therefore, the appeals court said , the EEOC didn’t lose those 67 claims and the CRST was not a prevailing party with respect to those claims. The appeals court concluded that CRST is not entitled to an award of attorneys’ fees for the claims dismissed under the “failure to conciliate” theory.
The case has a complicated procedural history. Reade dismissed all of the claims against CRST and then dismissed the EEOC’s complaint as unfounded. She ordered the EEOC to pay $4.5 million in attorney fees to CRST. The EEOC appealed and Reade was forced to reinstate three of the dismissed claims. The EEOC and CRST subsequently settled one claim with CRST agreeing to pay the trainee plaintiff $50,000. Reade then declared that CRST the prevailing party in the lawsuit and ordered the EEOC to pay the original attorneys fee award plus an additional two million stemming because the EEOC appealed. Judge Reade “reasoned” that CRST had lost only one claim, whereas the EEOC lost 153 claims and won only one.
The appeals court criticized Reade’s choice “to make a universal finding that all of the EEOC’s claims were without foundation.” It ruled that a district court must identify why a claim is considered frivolous, unreasonable or groundless in order to award attorneys’ fees
The appeals court also ruled that Reade’s unsupported conclusion that the EEOC’s appeal was groundless “is insufficient to support an appellate award … The district court must explain why ‘no reasonable person would have thought he could succeed on appeal’ or why ‘the appeal had no foundation in law.’”
* The case is EEOC v. CRST Van Expedited, Inc., No. 13-3159, 2014 U.S. App. LEXIS 24130 (8th Cir. Dec. 22, 2014).