By Gerald L. Maatman, Jr. and Laura Maechtlen

In a ruling on December 19, 2014, in EEOC v. Global Horizons, Inc., Case No. 11-CV-257 (D. Haw. Dec. 19, 2014), Judge Leslie Kobayashi of the U.S. District Court for the District of Hawaii entered a default judgment of $8.7 million in the EEOC’s favor against two essentially defunct businesses. While the Court entered the default without any opposition from the defaulted businesses, it is the biggest EEOC judgment of 2014. It brings to a close a chapter in a long and tortured history of litigation involving what the EEOC asserted was its pursuit of “human trafficking” discrimination claims (click here to read more).

Background To The Case

The EEOC brought claims against Defendant Global Horizons, Inc. (“Global Horizons”) and Maui Pineapple, Inc., among others, alleging a pattern or practice of unlawful discriminatory employment practices against foreign migrant workers based on their Asian race and/or Thai national original. The EEOC also asserted claims for harassment and hostile work environment, retaliation, and constructive discharge. The Asian and Thai workers were employed by Global Horizons under the U.S. Department of Labor H2‑A guest worker program to provide farm labor at various locations in California, Hawaii, and Washington. Previously, the Court entered a default judgment against Global Horizons and Maui Pineapple, Inc., as both elected to cease doing business. The Commission had sued other companies that had contracted with Global Horizons to supply workers to their farms and operations; those companies either secured dismissals of the EEOC’s claims against them and/or reached settlements with the EEOC.

Relative to its claims against Global Horizons and Maui Pineapple, the EEOC waived its demand for a jury trial, and the Court ordered the EEOC to file proposed findings of fact and conclusions of law relative to its request for damages and injunctive relief as to the two defaulted Defendants.  Based on that submission, the Court entered findings of fact and conclusions of law relative to the EEOC’s claims against Global Horizons and Maui Pineapple, Inc. on December 19 in a 77-page order.

The Court’s Ruling

The Court entered an award of compensatory damages of $50,000 each to every claimant based on the Defendants’ default and uncontested liability for the pattern or practice of discrimination, a hostile work environment, and retaliation relative to the claimants that Global Horizons brought to work in Hawaii. The Court concluded that the award of $50,000 per claimant was justified due to the egregious and pervasive nature of the discrimination at issue. In total, the Court entered this damages award with respect to 82 claimants represented by the EEOC. Further, the Court entered an award of $100,000 to each claimant for punitive damages based on the conduct at issue.  However, the Court rejected the EEOC’s arguments relative to damages.

The Court specifically rejected the EEOC’s argument that each claimant should receive a total of $300,000 in compensatory and punitive damages. The Court reasoned that “all of the claimants were subjected to deplorable conditions, but the Court notes that the records indicate that some claimants were subject to more brutal treatment than others … [and] the EEOC has chosen to seek damages based on generalized proof …, with anecdotal evidence of specific incidents and that evidence overall does not support the requested damages amounts.” Id. at 68. As a result, the Court entered a total damages award of $12.3 million against Global Horizons, and off-set that amount by $3.6 million (representing the total amount from previous settlements between the EEOC and various other Defendants), and entered a total monetary damages award for the 82 claimants in the amount $8.7 million. Id. at 70. Further, the Court found that Global Horizons and Maui Pineapple were jointly and severally liable to 54 of the claimants (representing the number of claimants who worked at Maui Pineapple’s facilities and who were supplied by Global Horizons), and that joint and several liability totaled $8.1 million.

Injunctive Relief Order

The Court also entered a range of injunctive relief against both Global Horizons and Maui Pineapple, including requirements: (i) to develop, implement, and effectively distribute to all employees a policy and complaint procedure with respect to discrimination and retaliation, and to translate the policies and procedures into the dominant language of the foreign-based employees in their workforce; (ii) to develop and implement a procedure regarding how to conduct, document, and report an investigation of discrimination; (iii) to establish annual, live training sessions for all supervisory employees regarding their rights, responsibilities, and obligations under their employer’s non-discrimination and investigation policy and procedure; (iv) to obligate all farm labor contractors engaged by the companies to agree to be accountable for Title VII compliance; (v) to establish and publicize an employee hotline regarding questions, concerns, or complaints pertaining to housing and working conditions; and (vi) to the extent the company engages recruiters, to require in contracts with recruiters that they comply with all policies and procedures regarding Title VII.  Id. at 71-76.

Implications For Employers

The judgment and injunctive relief may be worth little more than the paper it is written on at this point, since enforcement of the judgment may be impossible. As neither business is a going concern, the injunctive relief is also likely to have no effect. Nonetheless, despite the Court’s rejection of the EEOC’s damages requests, its entry of a monetary award in favor of the Commission is apt to serve as a future set of bargaining demands by the EEOC when it sits at the settlement table and asserts how much money it demands to settle like or similar claims.

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