SCOTUS Dodges EEOC Fee-Shifting

By John Alan Doran

This morning, the Supreme Court dodged the final resolution of an issue we have all been dying to have resolved, but threw a nice bone to employers in the process. CRST Van Expedited, Inc. v. EEOC The case started when the EEOC brought a wide-ranging, scattergun lawsuit against trucking giant CRST Van Expedited, alleging discrimination and harassment on behalf of some 250 female employees.  When it turned out that all but one of the females lacked any sort of a claim, and the one female who had a claim settled cheap, the trial court dismissed the EEOC’s lawsuit on procedural grounds, and awarded CRST over $4 million in attorneys’ fees against the EEOC.  However, the Eighth Circuit reversed the fee award, concluding that Title VII does not allow for fee awards to defendants when there has been no trial on the “merits” of the case.

Today, the Supreme Court held, rather narrowly, that an employer does not need to obtain a decision on the “merits” in order to seek fees under Title VII.  For example, an employer that obtains a dismissal on statutes of limitations grounds (or failure to exhaust administrative remedies grounds) would still qualify as a prevailing party.  As the prevailing party, the employer would be entitled to seek fees under Title VII even though the employer won on procedural grounds and not on the merits of the case.  This is, obviously, very helpful to employers.  However, the EEOC raised a brand new issue before the Supreme Court—whether an employer must obtain a “preclusive” judgment from the trial court before being entitled to a Title VII fee award.  The Court remanded the case to the lower courts for further consideration of the EEOC’s brand new argument, which may or may not alter the outcome of the trial court’s original fee award.  So, we still don’t know whether this $4 million fee against the EEOC will stand.  But at least we are getting closer to the finish line.