U.S. Equal Employment Opportunity Commission
Court Denies Rehearing of Its Earlier Ruling Allowing Systemic Hiring Discrimination Case and Overturning Award of Attorney's Fees; Cintas CEO Likely to be Deposed
WASHINGTON - In a second victory for the U.S. Equal Employment Opportunity Commission (EEOC), the U.S. Court of Appeals for the Sixth Circuit rejected Cintas Corporation's petition to reconsider its earlier ruling that the EEOC was wrongly denied permission to litigate a lawsuit alleging Cintas engaged in hiring discrimination against a class of women in Michigan. The court's one-page order, issued Jan. 15, 2013, indicated that no judge had requested a vote on Cintas' suggestion for full court review. The case will now return to the district court for further proceedings.
With the order, the Sixth Circuit has now made final its ruling of November 9, 2012, in which the Court overturned the district court's dismissal of the EEOC's lawsuit against Cintas, reversed significant procedural rulings, ordered the district court to reconsider whether EEOC should be allowed to depose Cintas CEO Scott Farmer, and found "no basis" for the district court's ordering EEOC to pay Cintas $2.6 million in attorney fees.
"The court of appeals has confirmed EEOC's ability to use all the tools Congress provided in Title VII when EEOC challenges a pattern or practice of discrimination," said EEOC General Counsel David Lopez. He added that the Sixth Circuit's rulings, coupled with Friday's decision in EEOC v. United Parcel Service, where the district court for the Northern District of Illinois reversed its own ruling barring the EEOC from filing a class complaint without complete information on all possible bias victims, are a "tremendous victory for the EEOC's systemic litigation program."
The underlying litigation began in 2005 when the EEOC sued Cintas in the U.S. District Court for the Eastern District of Michigan alleging that it discriminated against women in hiring for its services sales representative position in violation of Title VII of the Civil Rights Act of 1964, which prohibits sex discrimination. The EEOC sued under § 706 of Title VII, which permits the EEOC to bring a lawsuit in federal court.
During litigation, the district court ruled that since the EEOC had filed suit under §706 of Title VII and not under §707, which references suits to redress a "pattern or practice" of discrimination, EEOC could not use the so-called Teamsters proof framework, which allows the focus at the initial stages of litigation to be placed on whether discrimination was the employer's "standard operating procedure, rather than on whether the employer committed individual acts of discrimination. The Teamsters framework is named for a 1977 Supreme Court case (International Brotherhood of Teamsters v. United States).
The district court's ruling required the EEOC to shift its focus to individual acts of alleged discrimination, and away from what it alleged was an overall discriminatory practice that affected a class. The district court later denied EEOC's motions to expand discovery and to depose the Cintas CEO, and the district court ultimately ruled it must dismiss the EEOC's entire case because of a failure to meet the procedural requirements of investigation and conciliation. Following that dismissal, the court awarded Cintas $2.6 million in attorney fees and costs as the "prevailing party" in the litigation.
The EEOC appealed the district court's rulings to the Sixth Circuit (Serrano & EEOC v. Cintas Corp., Dkt. Nos. 10-2629/11-2057). The Sixth Circuit reversed the judgments of the district court and remanded the case for further proceedings. Significantly, the appellate court held that EEOC may use the Teamsters proof framework when it files a lawsuit under §706. The appellate court also held that the EEOC had met its obligation to investigate and conciliate the charges of discrimination, and that further discovery may well be necessary to give EEOC more information as EEOC "proceed[s] with its claims toward trial." The court addressed at length one particular area of discovery: EEOC's desire to depose Cintas CEO Scott Farmer. The court determined that Farmer's statements at a corporate meeting suggested "high-level-corporate awareness of Cintas's failure to hire females," and this awareness "goes to the heart of what the EEOC will seek to prove in proceeding with its claims toward trial."
Finally, the Court of Appeals reversed the lower court's grant of $2.6 million in attorney fees, holding that the district court abused its discretion when it awarded fees on the basis of what it termed "egregious and unreasonable conduct" by EEOC. The Sixth Circuit held that "[t]he EEOC pursued its claim within the bounds of professional conduct and in the good-faith belief that it had done what was necessary . . . ."Following the Court of Appeals' order, Cintas petitioned the Court for rehearing.
"We are pleased that the court of appeals initially recognized that EEOC's efforts to resolve the case at the administrative stage were adequate and that the $2.6 million fee award should be reversed, and that there was no reason to rehear the arguments or revise that opinion," saidJennifer Goldstein, EEOC Appellate Attorney.
EEOC's Indianapolis Regional Attorney Laurie Young added, "We look forward to the opportunity to focus on the merits of this case in district court, where we will now be able to present our evidence of a pattern of sex discrimination in hiring."
The EEOC enforces federal laws prohibiting employment discrimination. Further information about the EEOC is available on the agency's website at www.eeoc.gov.