EEOC Stung by $5 Million Fee Award For Failing to Adequately Investigate or Engage in Good Faith Conciliation
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In an order issued on February 9, 2010, a United States District Judge in Iowa sent a stark reminder to the EEOC that its statutory obligations to investigate and conciliate Title VII claims are not to be ignored.  More than three years after the EEOC filed its complaint alleging systemic sex harassment, the court, in its February 9 order, awarded Defendant CRST Van Expedited, Inc. ("CRST") $4.5 million in attorneys' fees and $460,000.00 in expenses as a prevailing party, following a finding that the EEOC abandoned its statutory obligations under Title VII.

Prior to issuing  its February 9 order, the district court dismissed the EEOC's Complaint, which asserted that 270 women had been sexually harassed by CRST.  By the time the EEOC's Complaint was dismissed, the court had disposed of the claims of all but 67 of the claimants on whose behalf the EEOC had brought suit.  In dismissing the EEOC's Complaint on behalf of the remaining 67 claimants, the court found that the EEOC "did not conduct any investigation of the specific allegations [of the 67 remaining claimants]...let alone issue a reasonable cause determination as to th[eir] allegations or conciliate them."  Specifically, the court found that with respect to the remaining claimants the EEOC failed to:  interview any of them or subpoena any documents to determine the veracity of their claims; make a reasonable cause determination as to their specific allegations; or attempt to conciliate any of their claims prior to filing the Complaint.  According to the court, the EEOC's failure to investigate the claims of the remaining claimants "deprived CRST of a meaningful opportunity to engage in conciliation and foreclosed any possibility that the parties might settle all or some of the dispute without the expense of a federal suit."

In awarding nearly $5 million in attorneys' fees and expenses to CRST, the court held that the substantial award to CRST was necessary to guarantee the observance by the EEOC of Title VII's procedures, particularly in the face of the EEOC's unreasonable conduct, which the court found imposed unnecessary burdens on CRST and the court.

This matter underscores the importance of formulating a sound litigation strategy, particularly as it relates to conciliation, during the EEOC's investigation of Title VII-related claims.  In the absence of such a strategy, an employer may miss a rare opportunity to recoup defense costs that are needlessly increased due to the agency’s failure to fulfill its statutory duties, and investigate the matter responsibly and fairly.  Conciliation should never be used or offered for any purpose other than to reach fair resolution of a case.  But an additional benefit of the conciliation position is that, if the EEOC declines to participate reciprocally, and in good faith, its position may expose the wholesale deficiencies of its litigation approach.  The result, as illustrated above, can be very satisfying to the employer.


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