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Sep 9, 2015

U.S. District Court Judge Roger Titus chose to open his recent memorandum opinion with the timeless lyrics from Kenny Rogers’ hit song, The Gambler, on why he found that the Equal Employment Opportunity Commission was liable for nearly $1 million in attorney’s fees for their overzealous prosecution of Freeman Companies.

Come on. You know the song. Sing along with me: “You better know when to hold em’; know when to fold em’ ... ”

Know when to fold em’

You might recall that back in August 2014, Judge Titus, of the U.S. District Court for the District of Maryland, referred to the EEOC’s case as “Laughable,” “Unreliable,” and “Mind Boggling” when he dismissed it for what the commission alleged as discriminatory hiring practices related to Freeman’s use of criminal background checks and credit reports.

The EEOC appealed the ruling to the Fourth U.S. Circuit Court of Appeals based in Richmond, VA. At issue was the testimony of the EEOC’s expert witness, Dr. Kevin Murphy, which was excluded by the lower court.

In this regard, Judge Titus was unrestrained when it came to his opinion. He described Murphy’s research as:

  • Laughable;”
  • Based on unreliable data;”
  • Rife with analytical error;”
  • Containing “a plethora of errors and analytical fallacies” and a “mind-boggling number of errors;”
  • Completely unreliable;”
  • So full of material flaws that any evidence of disparate impact derived from an analysis of its contents must necessarily be disregarded;”
  • Distorted;”
  • Both over and under inclusive;”
  • Cherry-picked;”
  • Worthless”; and,
  • An egregious example of scientific dishonesty.”

Know when to walk away

When the Fourth Circuit affirmed the lower court’s ruling earlier this year, Freeman petitioned Judge Titus for EEOC to pay reasonable attorneys’ fees. And once again, the judge didn’t disappoint. Check out his opening remarks below:

World-renowned poker expert Kenny Rogers once sagely advised, ‘You’ve got to to know when to hold ‘em. Know when to fold ‘em. Know when to walk away.’ In the Title VII context, the plaintiff who wishes to avoid paying a defendant’s attorneys’ fees must fold ‘em once its case becomes so groundless that continuing to litigate is unreasonable, i.e. once it is clear it cannot have a winning hand. In this case, once Defendant Freeman revealed the inexplicably shoddy work of the EEOC’s expert witness in its motion to exclude that expert, it was obvious Freeman held a royal flush, while the EEOC held nothing. Yet, instead of folding, the EEOC went all in and defended its expert through extensive briefing in this Court and on appeal. Like the unwise gambler, it did so at its peril. Because the EEOC insisted on playing a hand it could not win, it is liable for Freeman’s reasonable attorneys’ fees.”

This ruling is pretty remarkable when you consider the substantial burden a defendant must meet to demonstrate a plaintiff’s negligence in pursuing litigation. As Judge Titus pointed out,

A prevailing defendant may be awarded fees, it must demonstrate that a plaintiff’s claim was ‘frivolous, unreasonable, or groundless, or that the plaintiff continued to litigate after it clearly became so.’ ”

At issue was not whether EEOC’s case was flawed, but rather if it was so flawed that it was unreasonable for the EEOC to litigate based on unreliable or non-existent claims, evidence and, or expert witness studies. I would highly encourage you to read the complete opinion, but these are the main points Judge Titus used to form his opinion.

  • The EEOC should have been aware of the unreliability of Murphy’s analysis no later than after Freeman’s motion to exclude was filed.
  • Murphy’s supplemental reports (those used to avoid exclusion) were flawed.

Know when to run

In this particular case we learned that the EEOC is employing ultra-aggressive tactics to prove discrimination. Their case was built on suppositions which were proven to be untrue and flawed expert reports and testimony. In my estimation, they didn’t set out to deceive the court; they just didn’t yield when it was clear that they had no case.

The most obvious lesson for employers is that you should do everything you can to avoid the EEOC’s ire. Setting aside the court’s rebuke of the EEOC, employers have to realize that these cases are both time consuming and expensive.

The Freeman case has been going on since 2010, and as the court estimates, cost nearly a million dollars to defend. Can you imagine the strain this has placed on Freeman?

While you can’t guarantee that EEOC won’t target you, you can and should take the following steps to limit your exposure.

  • Remove blanket exclusions of candidates with criminal records.
  • Institute a documented Individualized Assessment process for candidates with criminal records.
  • Consider removing check box on your job applications asking if candidates or even existing employees have ever been convicted of a crime.

This was originally published on the EmployeeScreen IQ blog

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