Wednesday, February 17, 2010

“Sue first” mentality costs EEOC $4.5 million in sanctions, yet I question whether this is a good thing

Shoot first and ask questions later, and don't worry, no matter what happens, I will protect you.
—Hermann Goering

In EEOC v. CRST Van Expedited (N.D. Iowa 2/9/10) [pdf] (courtesy of Ross Runkel and Workplace Prof Blog), a federal judge tagged the EEOC with $4,467,442.90 in attorneys’ fees and costs for its “sue first, ask questions later litigation strategy” in pursuing a systemic sex discrimination case. What did the EEOC do (or, more accurately, what didn’t it do) that led to this huge fine?

  • Following summary judgment 67 of the original 270 plaintiffs remained in the case. Those 67 claims, however, never made it to trial.

  • The court dismissed the claims of the remaining 67 plaintiffs because the EEOC “did not conduct any investigation of the specific allegations of the allegedly aggrieved persons for whom it seeks relief at trial before filing the Complaint—let alone issue a reasonable cause determination as to those allegations or conciliate them.” Indeed, “the EEOC did not even interview any witnesses or subpoena any documents to determine whether any of their allegations were true.”

  • The EEOC did not make a reasonable cause determination as to the specific allegations of any of the 67 allegedly aggrieved persons prior to filing the Complaint. In fact, 27 of the women alleged they were sexually harassed after the lawsuit was filed, and the EEOC did not learn the substance of the allegations of another 38 until after it filed its Complaint.

  • The court concluded that the EEOC’s failures prejudiced the employer: “The EEOC’s failure to investigate the claims of the 67 allegedly aggrieved persons deprived CRST of a meaningful opportunity to engage in conciliation and foreclosed any possibility that the parties might settle all or some of this dispute without the expense of a federal lawsuit.”

My first instinct is to applaud this court for holding the EEOC’s feet to the fire. It’s comforting to witness governmental accountability for a lack of diligence in an era of increased vigilance in the enforcement of EEO laws.

Yet, I think this decision will have deeper implications for the agency and businesses. While it will act as an important check on the EEOC’s recent run of federal filings, it will also cause the EEOC to dig deeper and wider at the investigatory stage to support the lawsuits that it does file. The agency now has a roadmap from a federal court setting forth what is necessary pre-suit: complainant and witness interviews, document reviews, reasonable cause determinations, and an offer of conciliation.

In other words, applaud the visceral appeal of seeing the EEOC take one on the chin, but be very wary of the increased administrative burden this decision will likely place on your business in future EEOC investigations.

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