EEOC Sanctioned by Federal Court and Ordered to Pay More than $750,000 in Fees

In a decision ending over three years of litigation, a federal court in Michigan recently sanctioned the Equal Employment Opportunity Commission (EEOC) – the agency of the U.S. Government that enforces the federal employment discrimination laws – and ordered the EEOC to pay $751,942.48 for attorneys fees, expert fees, and court costs to a private employer, PeopleMark, Inc., a staffing company headquartered in Kentucky. 

The EEOC had filed a class action lawsuit against PeopleMark in 2008, alleging that the company violated Title VII of the Civil Rights Act by adopting a blanket policy of refusing to hire job applicants with criminal records. According to the EEOC, the policy had a “disparate impact” on minority groups such as African Americans and Hispanics. 

After the EEOC was unable to prove that PeopleMark had a policy of refusing to hire job applicants with criminal record, or identify any person who had suffered discrimination as a result of Peoplemark’s alleged hiring policies, and was unable to produce statistical or expert evidence to back up its claims of discrimination, the EEOC dismissed its case.

However, since Peoplemark had incurred significant costs in defending the case, the company filed a motion for Fees, Costs, and Sanctions. Peoplemark argued that the EEOC had deliberately caused the company to incur attorneys fees and expert fees when it should have known that the company did not have the blanket no-hire policy and should be required to compensate Peoplemark for all fees and expenses incurred due to the agency’s “unreasonable and meritless litigation strategy.”

The federal court in Michigan agreed with Peoplemark, finding that EEOC v. Peoplemark was “one of those cases where the complaint turned out to be without foundation from the beginning.” The court ruled that it was appropriate to sanction the EEOC and awarded Peoplemark attorneys fees and expert fees in the amount of $751,942.48, one of the largest sanction awards ever against the EEOC.

The court ruling of ‘EQUAL EMPLOYMENT OPPORTUNITY COMMISSION v. PEOPLEMARK, INC.’ is available at: http://www.workplaceclassaction.com/PeopleMark%20Sanctions%20Order.pdf.

About Employment Screening Resources (ESR): Founded in 1996 in the San Francisco Bay area with a mission to help employers and employees maintain safe workplaces, Employment Screening Resources (ESR) wrote the book on background checks with ‘The Safe Hiring Manual’ by ESR founder and President Lester Rosen. ESR is Accredited by The National Association of Professional Background Screeners (NAPBS®) and is a Designated E-Verify Employer Agent helping U.S. businesses maintain legal workforces. For more information about Employment Screening Resources, visit https://www.esrcheck.com or email ESR News Editor Thomas Ahearn at [email protected].

Sources:

http://www.workplaceclassaction.com/PeopleMark%20Sanctions%20Order.pdf

http://www.workplaceclassaction.com/eeoc-litigation/eeocs-shoot-first-aim-later-tactics-result-in-751942-sanction/