By Christopher DeGroff and Matthew Gagnon

It is a fact of workplace litigation that trials of employment discrimination cases are rare – only an extremely small number of cases filed in federal district courts ever go to a jury. Most are disposed of by motions or out-of-court settlements. Given scarce funding and a dwindling government headcount, trials of EEOC-initiated lawsuits is even more of a rarity.  Earlier this month, however, the EEOC tried and won a high-profile ADA case that was once dead but resurrected on appeal. The case – EEOC v. Autozone, No. 07-CV-1154 (C.D. Ill. Nov. 8, 2011) – shows the unique risk factors in EEOC litigation whereby a trial loss ultimately translates into implementation of injunctive relief measures on top of a jury’s verdict of monetary damages. The Court’s post-trial injunctive relief order is a cautionary tale for employers.

In EEOC v. Autozone, No. 07-CV-1154 (C.D. Ill.), the EEOC claimed that auto parts retailer AutoZone violated the Americans With Disabilities Act (“ADA”) by failing to accommodate an employee’s disability at its Macomb, Illinois facility. The EEOC asserted that the AutoZone forced one of its sales managers to perform jobs that violated his medical procedures and that he ultimately experienced additional back and neck impairments. The case had a long and unusual history, having been dismissed on a pretrial motion in June 2009, but later given new life after the U.S. Court of Appeals for the Seventh Circuit resurrected the case based on the EEOC’s appeal in 2010 – in EEOC v. Autozone, Inc., 630 F.3d 635 (7th Cir. 2010) – and sent the case back to trial level.

On June 3, 2011, a jury in the U.S. District Court for the Central District of Illinois found against the employer, and awarded the former Autozone manager lost wages, compensatory damages of $100,000, and $500,000 in punitive damages. Under the ADA, employers the size of AutoZone (of over 501 employees) can be held liable to a maximum of $300,000 in combined punitive and compensatory damages. The Court upheld the jury’s $100,000 compensatory damages award, but reduced its punitive damages award from $500,000 to $200,000 to push the total employer limit of the ADA’s damage cap; furthermore, the Court also awarded the employee $115,000 in back pay damages that are not affected by the statutory cap, as well as $9,045 in reimbursed litigation costs to the EEOC.

The EEOC then sought a post-trial injunction against the company designed to keep the employer from engaging in unlawful conduct in the future. The Court agreed with the EEOC’s injunctive relief requests in part, and in its November 8 order found that “the conduct of the defendant’s managerial employees at the highest level was clearly an intentional violation of the ADA” and was concerned with the “possibility of future infractions.” Id. at 12, 25. The EEOC requested wide-ranging injunctive relief, including adoption of policies and procedures to comply with the ADA’s reasonable accommodation provision; training of managers; posting of a notice about the verdict; keeping and retention of HR records relative to the ADA, and an on-going reporting obligation to the EEOC regarding reasonable accommodation requests by employees and Autozone’s responses to those requests.

Autozone objected to the EEOC’s in part on the grounds that the proposed injunctive relief was over broad; it sought to limit any injunction to the sole store that had been at issue in Macomb, Illinois. As it had revised its ADA reasonable accommodation policy after the trial and the lawsuit pertained to personnel decisions 8 years ago, Autozone argued that there was no need for an injunction to ensure its compliance with the ADA. The Court rejected Autozone’s contentions. It determined that as upper level managers had dealt with the reasonable accommodation request at issue in the trial, the case was more than simply about “one employee, one store, and one supervisor. “Id. at 25.As a result, the Court entered an injunction covering all of AutoZone’s stores in Central Illinois (that were subject to the Court’s jurisdiction), and requiring the company to report all requests for accommodations by employees to the EEOC for three years, and to maintain certain company records for four years (including how Autozone responded to each request for a reasonable accommodation). Finally, the order granted access to the EEOC to view any such records during the term of the injunction on 48 hours notice. Id. at 26.

In its 2011 fiscal year, the EEOC filed 177 lawsuits on behalf of individual claimants, and collected over $364 million dollars for those it represented. Employers often succeed in disposing of workplace bias cases well before trial, but are nevertheless well-served to be mindful of how a case will ultimately play at trial and the potential down-side risks – such as injunctive relief – above and beyond a jury verdict in EEOC-initiated litigation.