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All in a Day's Work® - Insights on Labor & Employment Law

Questionable prosecutions can lead to hefty fee awards against the EEOC

While Wisconsin has had protections in place for years regarding how employers can treat arrest and conviction record information relating to applicants and employees, this issue has been largely ignored by the federal government until recently.

Over the past few years, the Equal Employment Opportunity Commission (EEOC) has ratcheted up enforcement efforts related to this issue. One of the areas that has received increased scrutiny is employer use of criminal background checks when making hiring decisions. Due to disparities in incarceration rates based on race, the EEOC has focused on the potential for a disparate impact when employers use criminal background checks to exclude candidates.

Disparate impact occurs when a neutral employment policy (no intent needed) disproportionately affects individuals who fall into a particular protected class (e.g. individuals of a certain race or those 40 years of age or older). Numerous studies have shown that minorities are incarcerated in the United States in disproportionate rates to their presence in the overall population.

Accordingly, it is the EEOC’s position that a policy that excludes candidates on the basis of criminal history, without digging deeper into the circumstances surrounding the arrest or conviction, violates Title VII of the Civil Rights Act of 1964, as amended. This is because such a policy potentially excludes disproportionate numbers of minorities from a candidate pool and results in a disparate impact.

As the EEOC has increased its enforcement efforts, many commentators have opined that the EEOC can be overly aggressive in its prosecution. It has taken a while for some of the disputed cases to get to the federal courts of appeal, but decisions are now being issued that demonstrate that the EEOC will need to be more careful when choosing what cases to prosecute. 

The Sixth Circuit Court of Appeals recently issued a decision in EEOC v. Peoplemark, Inc. in which it affirmed the award of $751,942.48 in attorneys’ fees to the defendant corporation, Peoplemark, due to costs Peoplemark incurred in defending against the action the EEOC brought against it. The court noted that it was “not focused on the Commission’s theory of the case, but rather, whether the claim was frivolous, unreasonable, or groundless, or whether the Commission continued to litigate after it clearly became so.”

This is not the only award of this type recently granted against the EEOC. In August, an Iowa federal judge ordered the EEOC to pay $4.69 million dollars in fees, costs and expenses that CRST Van Expedited, Inc. incurred in defending itself against a sexual harassment suit filed by the EEOC. During a time when federal budgets are stretched thin and the federal government is in the midst of a fiscal crisis, it is frustrating that tax dollars are being paid out due to overzealous enforcement efforts by the EEOC.

Hopefully, this recent string of awards against it will result in more judicious prosecution efforts by the EEOC.

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