Collecting Attorney Fees in EEOC Discrimination Case

August 18, 2016 by

EEOC Discrimination CaseNew Supreme Court ruling is a boon to employers hoping to collect attorney’s fees in an EEOC discrimination case. If your company is dealing with an EEOC complaint, you will most likely find the Supreme Court’s recent decision in CRST Van Expedited, Inc. v. Equal Employment Opportunity Commission to be welcome news. The case involved a ruling by the U.S. Court of Appeals for the Eighth Circuit, which held that a defendant in a Title VII case (such as an employer) is only entitled to payment for its attorney’s fees if it prevails in court after a “ruling on the merits.” The Supreme Court overturned this decision, and held that it is possible for a defendant to prevail and receive compensation for attorney’s fees, even without a ruling on the merits.

EEOC Discrimination Case Background

CRST’s EEOC discrimination case legal battle (which has lasted for over a decade) began when an employee named Monika Starke filed a complaint with the EEOC in 2005. She alleged that, over the course of her training as a truck driver, she was sexually harassed by two of her trainers. CRST denied the allegations. When the EEOC investigated, it discovered that four other employees had filed complaints. The EEOC ultimately found that there was reasonable cause to believe that an entire class of employees had been subjected to sexual harassment, and filed a lawsuit against CRST under Title VII on behalf of the aggrieved employees.

The EEOC eventually named more than 250 female employees of CRST as victims of sexual harassment. At trial, the District Court found that the EEOC had not satisfied its presuit requirements, and barred the EEOC from seeking relief for any of the employees. When CRST requested compensation for its EEOC discrimination case legal fees, the District Court approved the motion, and awarded CRST over $4 million in attorney’s fees.

An appeal, the Eighth Circuit found that CRST should not receive compensation for attorney’s fees. It reasoned that, due to precedent, only “prevailing” parties can receive compensation for attorney’s fees, and a party can only prevail if there has been a judicial determination of the plaintiff’s case on the merits. Because some of the complaints were thrown out due to the EEOC’s handling of the presuit requirements, the Court found that there had not been a ruling on the merits. According to the Court, there is a distinction between a ruling based on the elements of a claim (which would constitute a determination on the merits), and a ruling based on prerequisites to filing suit.

The Supreme Court disagreed, and held that there should be no requirement that a case be resolved “on the merits” in order for the defendant to be awarded attorney’s fees. According to the Court’s ruling, common sense dictates that a defendant has prevailed whenever a plaintiff’s claim has been rejected. The Court vacated the Eighth Circuit’s ruling, remanded the case for further proceedings, and urged the lower courts to expedite the resolution because the dispute has already taken so much time. [Read more…]

Filed Under: Blog, California Labor Law, Sexual Harassment Tagged With: , , , , ,

Sexual Harassment Claims and Franchisor Liability

September 15, 2015 by

Sexual harassment claims and franchisor liability. If you are a franchisor and you have franchises in the state of California, you should be aware that you may be found liable if a sexual harassment claim is filed against you based on the conduct of one of your franchisees.

sexual harassment claimsThe Supreme Court of California’s decision in the case of Patterson v. Domino’s Pizza, LLC has shed some light on the circumstances in which a franchisor can be held liable. The ruling states that a franchisor will be liable for sexual harassment if “it has retained or assumed the right of general control over the relevant day-to-day operations at its franchised locations.”

The Sexual Harassment Case

The harassment claim was filed by an employee named Taylor Patterson who worked at a Domino’s Pizza franchise owned by a company named Sui Juris. Patterson filed a sexual harassment complaint under California’s Fair Employment and Housing Act (FEHA) against Sui Juris, her supervisor, and Domino’s Pizza itself. Her complaint alleged that the supervisor groped her and made lewd comments and gestures. The complaint also alleged that she faced retaliation after her father reported the supervisor’s behavior to Domino’s human resources department and to the police.

Patterson argued that Domino’s Pizza was vicariously liable for her harassment because her supervisor was Domino’s “agent, employee, servant and joint venturer.” Her complaint also stated that her supervisor acted “within the course, scope, and authority of such agency, employment and joint venture, and within the consent and permission of” Domino’s Pizza.

At trial, Domino’s Pizza argued that it was not vicariously liable for the supervisor’s behavior because the Sui Juris franchise was a separate business, and thus Domino’s was not the supervisor’s employer. The trial court agreed and dismissed the action against Domino’s. An appeals court overturned the summary judgment, but the California Supreme Court ultimately agreed with the trial court’s original ruling.

What the Ruling Means For Future Franchisor Sexual Harassment Cases

In the opinion, the California Supreme Court held that Domino’s Pizza could not be held responsible for sexual harassment by a franchisee because Domino’s never assumed “the traditional right of general control” that an employer would typically have over its employees. The court emphasized that Sui Juris, rather than Domino’s, provided the employees with sexual harassment training, and that Domino’s was not involved in Sui Juris’s hiring process.

While the court dismissed the action against Domino’s, it also affirmed that there are circumstances in which a franchisor will be liable for the conduct of franchisees. The ruling establishes that a franchisor can be liable for such conduct if “it has retained or assumed the general right of control over factors such as hiring, direction, supervision, discipline, discharge, and relevant day-to-day aspects of the workplace behavior of the franchisee’s employees.” [Read more…]

Filed Under: Sexual Harassment Tagged With: , ,

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