Eighth Circuit Reverses Iowa District Court’s Decision to Impose $4.7 Million in Attorneys’ Fees and Costs on the EEOC

On December 22, 2014, the Eighth Circuit Court of Appeals Reversed a decision by the U.S. District Court from Northern Iowa to require the Equal Employment Opportunity Commission to pay Defendants’ $4.7 million in legal fees and costs in Equal Employment Opportunity Commission v. CRST Van Expedited Inc.

The EEOC originally filed this lawsuit on behalf of Defendant’s female employee Monika Starke, along with about 270 others similarly situated. In its Complaint the commission alleges that these employees had been subjected to “severe and pervasive sexual harassment” in the company’s New Driver Training Program in violation of Title VII and corresponding Iowa state statues. In response to a court order to provide a list of plaintiffs and make all of them available for deposition, the Commission reduced the number of plaintiffs to 155. The District Court then ruled on several motions for summary judgment by the defendant, ultimately trimming the number of potential plaintiffs to two. The EEOC then withdrew one of those claims, so that only the original plaintiff Monica Starke remained.

The company then agreed to a $50,000 settlement with Ms. Starke, stipulating (1) that the Agreement does not preclude CRST from pursuing attorney[s’] fees and costs…, and (2) that the Agreement also does not preclude either of the parties from making arguments relating to CRST’s pursuit of attorney[s’] fees and costs, including arguments relating to whether [the] EEOC or CRST is the prevailing party.

CRST then filed a motion for an award of attorneys’ fees, arguing that, because they had prevailed on the EEOC’s “pattern-or-practice” claim and succeeded in getting all but two of the original claims dismissed, they had successfully defended against many claims that were “frivolous, unreasonable or groundless.” CRST then filed a bill of costs for $4,560,285.11 and moved the Court for an award of fees and costs, which the Court granted.

The EEOC appealed to the Eighth Circuit Court of Appeals, arguing (1) that the District Court erred in granting summary judgment on the pattern-or-practice claim, since it had made no so such claim. In fact, they argued, the EEOC’s “…case was comprised of a single claim (Starke’s claim), and it won that claim;” (2) that CRST was not a prevailing defendant, and thus not eligible for a fee award, because the decision to dismiss clients was not determined on the merits but only a determination that procedural preconditions had not been met. The Appeals court disagreed with the premise of the first argument, finding that the EEOC had actually brought multiple separate actions. They concluded, however, that “the district court’s conclusion that the EEOC’s original action was frivolous, unreasonable, or groundless is insufficient to support an appellate award,” and that “on remand, the district court must individually assess each of the claims for which it granted summary judgment to CRST on the merits.”

In short, since most of the claims were not decided on the merits, most of the fee awards are overturned, and the rest will have to be re-litigated and are likely to fail. So the Eighth Circuit just saved the EEOC millions of dollars.

If you believe you have been sexual harassed on the job and/or suffered retaliation for complaining about harassment in the workplace, please contact The Harman Firm, LLP.