Employer's award of attorney fees reversed by Eighth Circuit in Iowa sexual harassment case

Russ Samson Iowa Employment & Labor Law Iowa Commercial Litigation Law Dickinson Law Firm Des Moines Iowa

Posted on 03/06/2012 at 11:55 AM by Russell Samson

As an employment attorney on the defense side, I am often asked by my employer clients if they can recover their attorney fees when they win a case, because plaintiffs routinely recover theirs after a victory.  What’s good for one side should be good for the other, right?  I have to tell them, in theory, it is possible, but in reality, it is as rare as a blue-rare steak.  Simply put, there is a double standard built into the law regarding the recovery of attorney fees in employment litigation.  Imagine my reaction when a federal judge in the Northern District of Iowa awarded fees and costs to the defendant-employer in EEOC v. CRST Van Expedited, Inc. on February 9, 2010, following a series of rulings which effectively dismissed sexual harassment claims brought by the EEOC on behalf of 270 women.  Judge Linda Reade’s award was also noteworthy because of its sheer size — $4,467,442.90 in attorneys’ fees and expenses, and another $92,842.21 for costs for CRST.  While I and my colleagues in the employment defense bar were pleasantly stunned by Judge Reade’s ruling, we realized, as the size of the award hints, this was not a typical case.  What the district court giveth, the EEOC appealeth, and the Eighth Circuit taketh away.  On February 22, 2012, this huge and unusual fee award for CRST was reversed by a unanimous court of appeals.  Under Title VII and Eighth Circuit precedent, only a “prevailing defendant may recover attorneys’ fees if the plaintiff’s case was frivolous, unreasonable or without foundation.”  The Eighth Circuit also noted that prevailing party status is granted to a Title VII defendant in only “very narrow circumstances.”  Indeed. The Eighth Circuit determined that CRST was not a “prevailing party” because the claims of two of the 270 women were not dismissed and the EEOC was allowed to continue to trial on behalf of those two women.  This decision was the result of the Eighth Circuit re-analysis of the district court’s examination of all 270 claims — which must have been a Herculean task for both courts, not to mention CRST and the EEOC.  One of the surviving claims was that of the initiating complainant, Monika Starke.  The second was that of a woman whom the Eighth Circuit determined made contentions in her deposition which, if believed, could constitute an environment sufficiently severe and pervasive such that CRST could be liable for it.  Even though the EEOC’s success rate here was around 0.007%, two viable claims remained, meaning CRST was not a “prevailing defendant,” so it could not recover any of its costs to defend all 270 of the claims. Circling back to the question often posed to me by my employer clients: "Can we recover our attorney fees, expenses and costs if we win?”  My answer remains the same:  “Fuhgeddaboudit.” For the sake of completeness, it should be noted that the Eighth Circuit tackled several other issues in its 59-page ruling in EEOC v. CRST.  Included among them were what the EEOC must do before bringing a class action discrimination lawsuit, whether lead drivers who trained drivers were “supervisors” under harassment law, and how the doctrine of judicial estoppel applied to EEOC actions as compared with cases brought by individuals.  If you have questions about these additional issues, this case, attorney fee awards for employers, or sexual harassment, please contact attorney Russ Samson or another of Dickinson's Iowa employment and labor law attorneys.

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