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String of Legal Defeats Leaves EEOC Battered

Volume 2, Issue 9
May 15th, 2014
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Equal-EmploymentIf insanity is doing the same thing over and over again while expecting different results – in Albert Einstein’s famous definition – then the Equal Employment Opportunity Commission should be seeking some serious therapeutic help.

In recent memory no other federal agency has suffered a string of such devastating court defeats and push back from state attorneys general as has the Obama Era EEOC, yet the commission continues to pursue the same actions that have already gotten it into so much trouble.

At the dawn of this year a U.S. District Court judge in New York State issued a summary dismissal of the largest lawsuit on the commission’s docket. Six years earlier EEOC had sued Sterling Jewelers alleging widespread discrimination against its female employees.

The judge agreed with Sterling that there was no evidence the commission had conducted a nationwide investigation prior to filing the lawsuit.

On April 9 the Sixth Circuit U.S. Court of Appeals unanimously affirmed a lower court judge’s award of summary judgment against the EEOC in its suit alleging that the use of credit checks by Kaplan Higher Education Corp. disparately impacted African-American applicants.

Kaplan runs credit checks on applicants for senior executive and financial positions. A third-party vendor flags items such as bankruptcy filings, delinquency on child support, garnishment on earnings, outstanding civil judgments and Social Security numbers that do not match the number the credit bureau has on file.

Although the vendor’s report didn’t include any information about the applicant’s race, EEOC asserted that a disproportionate number of African-Americans were singled out for review of their credit histories.

EEOC relied on evidence provided by a self-proclaimed expert who claimed to have invented a method of identifying a person’s race without interviewing them or reviewing any of their personal information.

The method consists of a five-member team who try to guess an individual’s race by looking at their driver license photo. However, it turned out that these “race raters” frequently were unable to agree on a person’s race, and were just as frequently wrong when they did agree about the person in the photo.

The appeals court judges were not impressed. They noted that EEOC’s expert witness, who holds a doctorate in industrial and organizational psychology, has no evident expertise in constructing methodologies to identify race by visual means.

The judges wrote: “The EEOC brought this case on the basis of a homemade methodology, crafted by a witness with no particular expertise to craft it, administered by persons with no particular expertise to administer it, tested by no one, and accepted only by the witness himself.”

In their unanimous decision the judges also pointed out that the EEOC was suing Kaplan for using the same background check process that the commission relies upon in its own hiring process.

Closer to home for ACWI members, on April 4 the Fourth Circuit Appeals Court upheld awarding of attorneys’ fees to Propack Logistics after it prevailed over EEOC in a class action claim a lower court found by was frivolous and unreasonable.

An employee filed an EEOC charge in 2003 alleging that he was terminated in favor of Hispanic employees. The EEOC investigation went on for five and one-half years, including periods of inactivity lasting years at a time.

The agency eventually found cause to believe the employer had engaged in national origin and race discrimination, and in 2009 filed suit on behalf of an unidentified class of non-Hispanic employees.

A district court eventually dismissed the claim summarily based on unreasonable delay. It also awarded Propack almost $200,000 in attorneys’ fees, concluding that the lawsuit brought by the EEOC was unreasonable.

The Fourth Circuit observed that the company had closed its facility under scrutiny before the suit was filed, making any injunctive relief impossible.

The court also concluded that the EEOC had not told the employer it was investigating the matter as a potential class action until the lawsuit was filed. Because of this, the employer had long since disposed on any records that could identify class members, making monetary relief impossible.

The Propack decision follows two embarrassing decisions last year where courts award massive attorneys’ fees after finding EEOC actions were frivolous, unreasonable or groundless.

In one case EEOC was ordered to pay CRST Inc. nearly $4.7 million in attorneys’ fees, costs and expenses from defending sexual harassment claims.

In another case EEOC was ordered to pay nearly $752,000 in fees and costs to Peoplemark where it claimed the company had denied employment to convicted felons, with a disparate impact on African-Americans. During discovery, the EEOC learned no such company policy existed and yet continued to litigate the case.

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