Finance News & Insights

Role-reversal: EEOC ordered to fork over $1.9M for ‘frivolous’ claims

The EEOC has a long history among employers of filing lawsuits for dubious reasons, and in this case, that strategy seems to have come back to haunt it.

A federal district court just ordered the agency to pay $1.9 million in attorneys’ fees to a delivery company it had filed suit against because of a worker’s sexual harassment claims.

The case was EEOC v. CRST Van Expedited, a delivery company. The suit stemmed from a sexual harassment claim made by a female CRST worker against two male co-workers, and a violation of Title VII of the Civil Rights Act of 1964 against the company.

The long and winding road here

The case has a long, winding history through the court system including a $4.7 million verdict against the EEOC, the largest amount every levied against the agency, and a stop in the Supreme Court.

Eventually, it wound up being decided by the U.S. District Court for the Northern District of Iowa. Not only was CRST able to get the Title VII charges dismissed, it also got a $1.9 million attorneys’ fees award.

Why did it rule that way? Essentially because the EEOC failed to follow procedure.

The court said the agency failed to satisfy two crucial statutory requirements for bringing lawsuits under Title VII by not:

  • conducting a reasonable investigation, and
  • a bona-fide conciliation of the claims.

‘Prevailing party’

Courts are authorized to award attorneys’ fees to the “prevailing party” (or the winning side) in a Title VII case.

Bottom line: If the EEOC fails to do everything required in the pre-suit process, it can be held financially accountable for those skipped steps.

From an employer perspective, if you do ever wind up in the EEOC’s cross-hairs, it’s worthwhile to double-check the feds are following all proper proper protocols in their process and speak up if you find anything is amiss.

(Note: This story was originally published on our sister site, HR Morning.)

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