sixth circuit.jpgBy Christopher DeGroffLaura J. Maechtlen, and Claudia Y. S. Wilson

Three large trade groups representing millions of the country’s businesses and employers entered the appellate fray last Thursday with their filing of an amicus brief before the Sixth Circuit in EEOC v. Peoplemark, Inc. As we previously reported here and hereEEOC v. Peoplemark stems from a Michigan district court’s underlying decision to award approximately $750,000 in attorneys’ fees and costs against the EEOC, as a result of the agency’s failed discrimination suit against defendant Peoplemark, Inc. The trade groups’ amicus submission adds to the growing chorus of voices expressing growing intolerance for the EEOC’s overly zealous enforcement tactics in large-scale pattern or practice cases.  

EEOC v. Peoplemark involved a civil complaint filed by the EEOC against a temporary staffing company. The EEOC alleged the company maintained a no-hire policy against persons with a criminal record, which resulted in a disparate impact on African-Americans in violation of Title VII. The problem with the EEOC’s theory was its assertion that Peoplemark’s had a blanket no-hire policy was simply not true.  In fact, of the 286 individuals the EEOC purported to represent in this case, only 22% actually had been hired and placed by Peoplemark. Eventually, the parties submitted a joint motion to dismiss, in which they agreed that Peoplemark was the “prevailing party” for purposes of attorney’s fees and costs under Title VII. The district court awarded Peoplemark attorneys’ fees and costs in the amount of $751,942.48, one of the largest sanction awards ever against the Commission. The EEOC then appealed the award to the Sixth Circuit.

In their amicus filing with the Sixth Circuit, the employer industry groups — including the U.S. Chamber of Commerce, National Federation of Independent Business Small Business Legal Center, and Equal Employment Advisory Council — side with Peoplemark and take direct aim at the EEOC’s enforcement tactics. They note that the EEOC knew it had no statistical data to support a threshold disparate impact discrimination claim, and that given the agency’s experience in litigating enforcement actions, the EEOC “should have known better” than to pursue its claim against Peoplemark. Employer Amicus Brief at *16. The amici asserted that the EEOC’s commencement of a public enforcement action on behalf of a class of alleged victims in the face of contrary information “defies comprehension — and is unreasonable on its face….” Id. at 23. The amici surmise that the EEOC’s true objective in proceeding to court was either to pressure Peoplemark into settling the case, or to use discovery as a pretense for a fishing expedition for as-yet-undiscovered discrimination claims.  No matter the objective, however, the amici argued that the EEOC’s “unreasonably aggressive enforcement tactics” disadvantage employers and employees alike. Id. at 16. Both groups look to the EEOC “to take seriously its goal of preventing and correcting actual workplace discrimination… [] not to aimlessly pursue frivolous litigation for the sake of litigating.” Id. Observing that the EEOC’s dubious tactics have come under increased criticism by a number of federal courts, the trade groups urge the Sixth Circuit to help remedy the results of the EEOC’s overzealous enforcement efforts by affirming the underlying attorneys’ fee and cost award. 

Thursday’s amicus filing highlights a notable development in EEOC enforcement litigation: businesses and employers, regardless of industry sector or geographical region, are longer content to act as interested bystanders to the EEOC’s increased enforcement activity. It further underscores a growing intolerance by employers and federal courts alike for the EEOC’s “shoot-first, aim later” tactics in large-scale pattern or practice cases.