U.S. District Judge Linda Reade has become the scourge of the EEOC. On August 1 Judge Reade entered an order sanctioning EEOC nearly $4.7 million for attorney’s fees and expenses CRST Van Expedited incurred to defend itself against a largely frivolous complaint alleging that as many as 270 female employees were subject to a pattern and practice of sexual harassment.
This is the second time Judge Reade has ordered sanctions in this case. She sanctioned EEOC $4.5 million in 2010 after granting summary judgment to CRST on the pattern and practice claim, dismissing 154 of the individual claims because of lack of evidence or the EEOC’s failure to investigate, and dismissing 98 claims as a discovery sanction.
The Eighth Circuit reversed the attorney fee award in 2012. The court of appeals found that Judge Reade should not have granted summary judgment with respect to claims of two of the individual plaintiffs. The court found there were genuine factual disputes on the two claims and therefore they were entitled to a trial. Because two plaintiffs remained, the court concluded CRST was not a “prevailing party”, at least not yet. The court left open the possibility CRST could pursue its fee claim after the final two claims disposed.
The case was remanded back to Judge Reade to litigate the claims of the two remaining plaintiffs. After remand, EEOC withdrew its claim on behalf of one of the remaining plaintiffs, and agreed to a $50,000 settlement for the other. Notably, the settlement agreement did not preclude CRST from pursuing attorneys’ fees and costs.
CRST claimed it was entitled to recover attorneys’ fees because, with the exception of a single settlement, it prevailed on all the other claims. EEOC contended, on the other hand, that its recovery on behalf of one of the plaintiffs was enough to defeat CRST’s “prevailing party” status. Judge Reade concluded a single settlement of $50,000 after claiming as many as 270 plaintiffs were sexual harassment victims, plus the unreasonable pursuit of multiple groundless claims, warranted a finding that CRST was a “prevailing party.”
Although it is likely EEOC will appeal this award, it is refreshing that a judge recognized and appropriately responded to the EEOC’s aggressive tactics and the failure to follow the law it is charged with enforcing. Unfortunately, EEOC’s advantage in resources compared to many private litigants allows them to sometimes get away with these tactics. Many defendants can’t afford to fight these battles and therefore settle even questionable cases simply to avoid going head to head with EEOC. Hopefully this ruling will cause EEOC to be more circumspect about the claims it pursues, and perhaps may embolden employers to fight back when the agency overreaches.