EEOC Ordered to Pay $750,000 For Overzealous Prosecution Tactics

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Oct 14, 2013

Back in 2011, a federal judge ordered the Equal Employment Opportunity Commission (EEOC) to reimburse the staffing company, PeopleMark, for over $750,000 worth of legal fees and expert witness costs it incurred as a result of overzealous prosecution tactics concerning their employment background check practices.

The premise of the case (EEOC v. PeopleMark, Inc.) was the EEOC’s contention that PeopleMark automatically rejected candidates that had criminal records. Even worse was that they ignored evidence that would have torpedoed their case.

Court: EEOC should have dropped the case

The EEOC put together a list of 286 applicants they said were denied employment based on PeopleMark’s blanket policy. Evidently, they wouldn’t release the names of these applicants until they were compelled to do so by the court.

When PeopleMark received the list, they discovered that 22 percent of these applicants with criminal records were actually hired. They even notified the EEOC of this fact, yet the EEOC continued to pursue the case.

EEOC appealed the court’s ruling to the Sixth U.S. Circuit Court of Appeals in Cincinnati, and earlier this week the court affirmed the lower court’s ruling that PeopleMark was in fact entitled to reimbursement of attorney’s fees.

According to an article on Law360:

The majority (of the court) held that because the EEOC’s case hinged on the allegation that Peoplemark had a blanket, company wide policy of denying employment opportunities to people with felony records that had an unlawful disparate impact on African-Americans, the agency should have dropped the case when it learned during the course of the litigation that — despite what a Peoplemark vice president had said to the agency during its investigation — the company had no such policy.”

Changing the approach

In light of this case and many others that we’ve chronicled, I’ve argued that EEOC needs to change its “Sue First, Ask Questions Later” approach to when it comes to its pursuit of allegations on the supposed discriminatory use of employment background checks.

I think that Seyfarth Shaw’s Gerald Maatman summed it up best when he said, “The Sixth Circuit’s ruling further damages the EEOC’s credibility in terms of dealing across the table with employers in high-stakes pattern or practice litigation. It becomes another exhibit to the notion that the EEOC refuses to adjust its settlement positions or litigation posture in the face of facts brought to the table by employers.”

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