Thumbnail image for SupremeCourt.jpgBy Christopher DeGroff and Gerald L. Maatman, Jr.

The explosive ruling in EEOC v. CRST Van Expedited, Inc., 670 F.3d 897 (8th Cir. 2012), in which the Eighth Circuit reversed and remanded the U.S. District Court for the Northern District of Iowa’s order that sanctioned the EEOC a whopping $4.5 million, is easily a contender for our “Top 5 Most Intriguing Decisions In EEOC Cases Of 2012.” (Click here for a discussion of our 2011 choices). 

In EEOC v. CRST, the Commission filed suit on behalf of a charging party and a class of approximately 270 similarly-situated female employees who the EEOC alleged had suffered sexual harassment in violation of Title VII. The charging party later intervened in the lawsuit, as did two other individual plaintiffs. CRST moved for summary judgment on a number of grounds, including that the alleged victims were not subject to conduct rising to the level of harassment and had not availed themselves of the company’s complaint mechanisms. CRST also argued that certain class members and the EEOC were precluded from pursuing the claim because of a failure to disclose the claims in earlier bankruptcy proceedings. Importantly, CRST also sought dismissal of all claims based on the EEOC’s failure to identify, investigate, and conciliate on behalf of dozens of its purported “class” members. The U.S. District Court for the Northern District of Iowa ruled in CRST’s favor and dismissed the entire action. It subsequently entered a whopper of fee sanction award – of nearly $4.5 million against the EEOC – in EEOC v. CRST Van Expedited, Inc., 257 F.R.D. 513 (N.D. Iowa 2010). 

We have blogged about EEOC v. CRST on numerous occasions, beginning with the Eighth Circuit’s opinion and judgment on February 22, 2012 in which it affirmed the District Court’s holding that the EEOC had failed to adequately investigate and conciliate before filing suit. The Eighth Circuit’s decision admonished that the EEOC cannot use discovery as a way to find its class members, but instead the EEOC must identify its class members during its investigation and then must conciliate those claims before filing suit. On the other hand, the Eighth Circuit reversed the District Court’s grant of summary judgment on the EEOC’s claims as to the charging party who had failed to disclose her claims in bankruptcy proceedings, holding that the EEOC sued in its own capacity, and was not bound to a judicial estoppel theory applicable to the claimant/intervener. The District Court therefore held that CRST was not a “prevailing party” in the case at large. As a result, the Eighth Circuit reversed the award of $4.5 million in fees and expenses. 

Following the three-judge panel’s decision, the EEOC petitioned for reconsideration of the ruling and requested review by the Eighth Circuit’s full panel of eleven judges. On May 8, 2012, the Eighth Circuit granted the EEOC’s petition and vacated its well-known February 22, 2012 opinion and judgment – containing the same resounding criticism of the EEOC’s “sue first, ask questions later.” We discussed the implications of the Eighth Circuit’s May 8 decision and how the ruling in EEOC v. CRST is a significant defeat for the Commission’s tactical approach to systemic litigation. 

On the heels of the EEOC’s resounding loss and at the hands of the Eighth Circuit panel, the EEOC renewed its petition for rehearing – again requesting the full Eighth Circuit panel’s opinion and judgment – just one day after its loss. We blogged about the implications of the EEOC’s renewed petition, and how the EEOC demonstrated that it would not go down without a fight.  In June of 2012, the Eighth Circuit put the issue to rest and rejected the EEOC’s bid for rehearing en banc.

Recent Developments In EEOC v. CRST

The EEOC’s focus on large-scale, high-impact and high-profile investigations and cases led many to assume that the EEOC would exhaust every available avenue to undermine the Eighth Circuit’s decision in EEOC v. CRST. To that end, we have rather surprising news of the Commission’s about face. Recently, the EEOC opted not to file a petition for certiorari to the U.S. Supreme Court to review the Eighth Circuit’s ruling, and the Eighth Circuit issued its mandate.

The recent developments in EEOC v. CRST have significant implications for CRST because the Eighth Circuit’s ruling that dismissed almost all of the claims against CRST is left in place. As for a broader impact, employers can continue to rely on EEOC v. CRST for the proposition that the EEOC must identify every potential “class” member before filing suit. This is good news for employers, as the decision is a powerful broad-side to attack the EEOC’s systemic litigation tactics.

For more discussion regarding the EEOC’s investigation and litigation tactics, check out our recent submission to the EEOC that provides recommendations to the EEOC for ways in which it can better achieve the goal of discrimination-free workplaces while not disregarding employer interests and involvement in the process.

Readers can also find this post on our EEOC Countdown blog here.