EEOC Ordered to Pay Employer’s Attorneys’ Fees

Many employers have felt victimized by the federal government’s sometimes overzealous enforcement efforts on behalf of employees against the companies they work for. For example, the current trend regarding any compensation mistake by the employer is to label it “wage theft” and prosecute the employer like a common purse snatcher. (Click here for more information on “wage theft” enforcement efforts).

Obviously, some businesses do discriminate and some purposefully fail to pay required overtime. But the company is not always the bad guy and it is nice to know that occasionally a judge will side with the company instead of the government.

This happened recently in Iowa, where a trucking company had spent $8.5 million in attorneys’ fees, expenses and costs to defend itself against allegations by the Equal Employment Opportunity Commission that the company had a pattern and practice of sexual harassment. The federal judge dismissed the EEOC’s suit against trucking company after the company filed a motion for summary judgment. The female judge also issued scalding criticism of the EEOC’s pursuit of the case.

To punish the EEOC, the judge used her discretion to award money to the prevailing party to cover attorneys’ fees, which in this case was the trucking company. She ordered the EEOC to pay $4.56 million to the company to help with some of their legal fees.

For someone who always represents employers and who constantly has to tell them that the chance of getting reimbursed for attorneys’ fees is slim to none, I found this case as a small glimmer of hope that the small business owners whom I represent could receive justice in an egregious case like this one. However, I must point out that no matter how nice the $4.5 million judgment against the EEOC seems, there are two caveats to consider: (1) the company spent $8.5 million defending itself against these scurrilous claims and will only get half of that back; and (2) the EEOC has already said it will appeal the $4.5 million attorneys’ fee award, meaning the trucking company is not through spending money on legal proceedings yet.

For most of us small business owners, the idea of spending $8.5 million in defending our companies is laughable. Most of us couldn’t spend 1/100th of that on attorneys without bankrupting ourselves.  That’s why I harp so often on preventative measures that an employer can take to avoid employee litigation. It is far better to never be sued at all than to win a very costly victory like the Iowa trucking company did.

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