EEOC Cut Short for Shortcutting Path to Court – Again

by Orrick - Global Employment Law Group
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Last week, the EEOC suffered another major loss when a New York district court found that the EEOC once again shirked its pre-litigation obligations under Title VII.

In EEOC v. Bloomberg, L.P., No. 1:07-cv-08383-LAP (S.D.N.Y.), the EEOC sued Bloomberg, L.P. (“Bloomberg”) after several current and former employees filed charges with the EEOC alleging sex/pregnancy discrimination and retaliation under Title VII. The EEOC claimed that Bloomberg discriminated and retaliated against the charging parties and other similarly situated women after they announced their pregnancies and returned to work from maternity leave. Specifically, the EEOC’s complaint alleged that Bloomberg discriminated against the pregnant women and mothers by reducing their pay, demoting them in title or in number of direct reports, reducing their responsibilities, excluding them from meetings, and subjecting them to caregiver stereotypes.

After the Court dismissed the EEOC’s pattern or practice claim in 2011 for insufficient evidence, Bloomberg moved for summary judgment on the EEOC’s remaining claims on behalf of twenty-nine non-intervening claimants. In granting Bloomberg’s motion, the Court highlighted that, prior to filing suit, the EEOC had issued a cause decision regarding only a handful of specific Charging Parties and otherwise roped in a vaguely-defined and much larger “potential” class of female employees who took maternity leave, without identifying a single individual. The Commission then asked Bloomberg to pay a set $7.5 million into a Claim Fund for this potential class, explaining that it would only provide class member names and corresponding monetary relief after the EEOC decided on its own who would get money and how much. Despite Bloomberg’s efforts to either limit the class size or get more clarity, the EEOC abruptly declared conciliation unsuccessful and sued on behalf of the so-called potential class members one month later.

Judge Loretta Preska ultimately criticized the EEOC for bringing class-wide claims to root out individual claimants and for completely failing to fulfill its pre-litigation obligations with respect to the individual claims:

“Allowing the EEOC to subvert its pre-litigation obligations with respect to individual claims by yelling far and wide
about class claims would undermine the statutory policy goal of encouraging conciliation.”

The Court noted that, among other things, the EEOC failed to contact several of the individual claimants it purported to represent until after it filed its lawsuit, and one of the claims centered upon conduct that occurred after the litigation commenced.

Additionally, the Court found that because the EEOC spurned any of Bloomberg’s efforts to meaningfully assess the claims of potential class members and refused to formally identify such individuals until five months after filing suit, “the EEOC completely abdicate[d] its role in the administrative process.” Therefore, “the appropriate remedy is to bar the EEOC from seeking relief on behalf of the Non-Intervenors at trial and dismiss the EEOC’s Complaint.”

The court also concluded that Bloomberg may file an application for attorneys’ fees. This essentially means that the court found the EEOC’s actions so egregious to be considered “frivolous, unreasonable, and without foundation”—the standard set forth in Christiansburg Garment Co. v. EEOC in 1978. This is a strong message to the EEOC to step up their compliance with their pre-litigation obligations, particularly given other similar recent decisions. Just last month, an Iowa court slapped the EEOC with $4.7 million in attorneys’ fees and expenses for pursuing “unreasonable or groundless” sexual harassment claims against CRST Van Expedited, Inc.

The Bloomberg case further emphasizes that employers should pay careful attention to the Commission’s findings, investigations, determinations with cause, and the conciliation process to ensure their due process rights have not be violated. If faced with superficial determinations, or if the EEOC is unwilling to provide details regarding individual class members before filing suit, employers should not shy away from defending themselves vigorously.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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