A federal appeals court recently upheld a $750,000 award to an employer for the attorneys’ fees and expert witness fees it expended defending a frivolous class action brought by the EEOC. EEOC v. Peoplemark, Inc. The EEOC sued staffing agency Peoplemark, Inc. based on what the EEOC claimed to be a company-wide policy of refusing to hire/place convicted felons. The EEOC maintained that this company-wide policy adversely impacted minorities, who tend to experience much higher rates of criminal convictions. The EEOC eventually identified 286 class members. Notably, the EEOC confirmed the existence of Peoplemark’s company-wide policy through the company’s own Vice-President and General Counsel, who admitted that such a company-wide policy existed. However, in the middle of the litigation, Peoplemark presented the EEOC with compelling and irrefutable evidence that Peoplemark did not have any company-wide policy of the sort, and that its senior executive misspoke previously. The EEOC continued to litigate the case in the face of this irrefutable evidence, and it was this continued pursuit of the case that resulted in the $750,000 award.
We post on these fee awards against the EEOC . . . well . . . because we can, and because such awards are unfortunately the exception to the rule. Hopefully, as more courts point a more discerning eye toward the EEOC’s own litigation tactics, employers will come closer to a level playing field when litigating EEOC class actions. The case is also a cautionary tale for employers to use outside counsel when responding to EEOC inquiries and charges to avoid the types of inadvertent admissions made by the senior executive in this case.