Iowa Court Charges the EEOC $4.2 Million in Attorney’s Fees for Raising “Frivolous” Class Action

In a recent decision, the U.S. District Court for the District of Iowa showed employment lawyers that government agencies will be held equally accountable for failures of due diligence by requiring the EEOC to pay $4,189,296.10 in attorneys’ fees for prosecuting a frivolous class action sexual harassment suit. More after the break.

In EEOC v. CRST Van Expedited, Inc., the EEOC brought a class action suit against CRST in the Northern District of Iowa on behalf of 270 individual employees for sexual harassment and the creation of a hostile work environment. The EEOC alleged that CRST’s supervisors harassed its female drivers through unwelcome sexual conduct, unwelcome physical touching, and propositions for sex. The only problem with the EEOC’s case was that few, if any of the allegations were true or could be pursued for procedural reasons.

Initially, 98 of the class members were removed from the case because of the EEOC’s failure to make them available for deposition before the discovery deadline. Through a series of summary judgment motions, CRST demonstrated that all of the remaining class members either did not have actionable claims (based on insufficient evidence or procedural bars preventing them from bringing suit) or that the EEOC was barred from pursuing their claims. According to the Court, the EEOC failed to investigate the class members’ allegations before filing the Complaint, failed to make reasonable cause determinations as to their specific allegations, and did not attempt to conciliate their specific allegations.

As a result, the Court dismissed the case in its entirety and awarded CRST its attorneys’ fees.

The EEOC appealed the district court’s ruling, and the U.S. Court of Appeals for the Eighth Circuit reversed the dismissal as to two of the individual claimants and the district court’s attorneys’ fees award. On remand, the EEOC withdrew its claim on behalf of one of the claimants and settled the remaining claim. In response, CRST moved for $4.2 million in attorneys’ fees, plus costs under 42 U.S.C. § 2000e-5(k) and Christianburg Garment Co. v. EEOC, which give the court discretion to grant prevailing defendants attorneys’ fees for defending against claims that were “frivolous, unreasonable, or without foundation.”

The District Court granted CRST’s motion. The Court held that CRST was the prevailing party, because it was awarded summary judgment on all claims that the EEOC either chose to pursue or did not settle. The Court further held that the EEOC’s claims were frivolous, and therefore afforded CRST the right to attorney’s fees. Prior to filing the complaint, the EEOC failed to exhaust its statutorily required administrative procedures and failed to investigate its claims. The Court found that the EEOC’s claims presented “only anecdotal evidence” lacking any expert, statistical or legal support. For example, the Court previously dismissed six of the claims because the individuals never informed CRST of any harassment. According to the Court, the EEOC’s total failure to fully investigate its alleged claims prior to suit made its lawsuit unreasonable and frivolous. As a result, the Court ordered that CRST receive the full costs of defending the agency’s frivolous action.

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