By Ryan J. Foley
The Associated Press
IOWA CITY, Iowa — A judge has ordered the U.S. Equal Employment Opportunity Commission to pay an Iowa trucking company $4.7 million in legal costs for bringing what she called dozens of "unreasonable or groundless" claims of sexual harassment during a lawsuit that's lasted six years.
U.S. District Judge Linda Reade's judgment for CRST Van Expedited, entered last week, is believed to be the largest-ever fee sanction against the EEOC, according to employment attorneys and the agency itself.
"We're deeply disappointed in the decision and we're definitely considering next steps, which may include appealing," EEOC spokeswoman Christine Nazer said Tuesday. She added, "We've got folks who have been here a long time and nobody can recall fees higher than this."
The case began with a 2005 complaint from Monika Starke, an Azle, Texas, driver who alleged that she was paired with a male colleague who constantly made crude sexual remarks and advances. After failing to reach a settlement, the EEOC filed a class-action lawsuit in 2007 on behalf of female CRST drivers who it said were subjected to offensive comments, groped or even assaulted by male trainers and co-drivers during cross-country trips.
After the lawsuit was filed, EEOC eventually said it was bringing claims on behalf of 270 women and alleged CRST had a practice of tolerating harassment. The company disputed the allegations, saying that it had internal procedures for reporting, investigating and taking action to stop harassment.
Reade eventually dismissed all the claims on a variety of legal grounds, including the statute of limitations and EEOC's failure to have some of the women deposed by a court deadline. In 2010, she ordered the EEOC to pay $4.5 million in legal costs, blasting it for a "sue first, ask questions later" litigation strategy.
The 8th U.S. Circuit Court of Appeals overturned the fee award last year and reinstated Starke's claim, but largely upheld Reade's other rulings, agreeing that EEOC must investigate the claims of every potential victim and seek informal settlements before filing class-action lawsuits. The agency says the standard has made it harder to pursue similar class-action cases in the 8th Circuit, which spans from North Dakota to Arkansas.
CRST in February agreed to pay $50,000 to settle Starke's claim, under a deal that allowed the company to renew its request for legal costs from EEOC. Prevailing parties can seek recovery of their costs for claims that are "frivolous, unreasonable, or without foundation," and Reade ruled last week that many of the EEOC's claims against CRST met that standard.
She awarded CRST nearly $4.2 million in attorneys' fees, $413,000 in out-of-pocket expenses and $92,000 in court costs, saying EEOC made 153 "unreasonable or groundless claims" on behalf of women and had little proof to support its allegation that CRST had a practice of allowing harassment.
EEOC's lawyers had argued that its success in obtaining a settlement for one woman made it the prevailing party, but Reade rejected that argument.
On the Workplace Class Action Blog, which has closely followed the case, attorneys Gerald Maatman Jr. and Howard Wexler of Seyfarth Shaw LLP said that was a particularly important finding that will embolden other companies to seek legal fees in similar cases. The firm, which has offices in several U.S. cities, often represents companies facing EEOC lawsuits.
"This is a significant if not stunning decision," they wrote. "The ruling represents yet another powerful broad-side to attack the EEOC's systemic litigation tactics and provides employers with more ammunition with which to challenge unreasonable and groundless claims by the EEOC."