Judge orders EEOC to pay nearly $1M in attorneys' fees

EEOC alleged company engaged in a pattern of racial discrimination

By Steve Lash
The Daily Record Newswire

The U.S. Equal Employment Opportunity Commission must pay nearly $1 million in attorney's fees for pursuing a race discrimination claim after becoming aware of the "incredibly shoddy work" of its expert witness, a federal judge in Greenbelt has ruled.

U.S. District Judge Roger W. Titus had dismissed two years ago the EEOC's lawsuit against Freeman, a convention-planning company, after concluding the agency's expert made a "mind boggling" number of errors trying to show that pre-employment criminal and credit background checks have a disparate impact on black job applicants.

Despite its clear defeat, EEOC sought review by the 4th U.S. Circuit Court of Appeals, which also criticized the commission and its expert, Titus said last week in awarding Dallas-based Freeman $938,771.50 for its legal expenses.

"World-renowned poker expert Kenny Rogers once sagely advised, 'You've got to know when to hold 'em. Know when to fold 'em. Know when to walk away,'" Titus wrote. "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."

The EEOC said in a statement it is reviewing its options, including an appeal of the award.

"It is important to remember, however, that the court's decision is based on a previous ruling about the technical admissibility of the commission's expert report on disparate impact in this particular case, and it is not about the merits of background check cases or policy," the EEOC said. "In recent years, numerous employers have reexamined their own criminal and background check policies and have modified them consistent with the requirements of Title VII."

Freeman's chief executive officer said in a statement that background checks are necessary to protect the business from employee mischief.

"We are pleased with the court's ruling as we have always maintained that our policies are fair and do not discriminate against any group," Joe Popolo said.

Freeman's lead counsel, Donald R. Livingston, said "we are hopeful that it brings the case to a close." Livingston is with Akin Gump Straus Hauer & Feld LLP in Washington.

EEOC says pre-employment background checks can constitute unintended but real discrimination against black applicants because blacks comprise a disproportionate percentage of individuals arrested and convicted.

In the Freeman case, filed Sept. 30, 2009, the EEOC alleged the company had engaged in a pattern or practice of discriminating against black job applicants by using criminal and credit history as hiring criteria.

Using the background checks had a disparate impact on blacks and was neither job-related nor consistent with business necessity, EEOC said. The commission alleged bias against 130 people, including at least one person from Prince George's County.

Freeman said the checks are needed to prevent workplace violence, drug use and theft, which the company added it has experienced. The checks also help the company evaluate a candidate's trustworthiness and reliability, without regard to race, Freeman said.

However, the central issue became what Titus called "the poor quality" of data provided on the EEOC's behalf by industrial psychologist Kevin R. Murphy.

For example, of the 41 people for whom the EEOC was seeking back pay in the case, seven were not in Murphy's database and another seven were not listed by race, even though the EEOC was claiming race discrimination, Titus found in dismissing the case.

The 4th Circuit upheld the dismissal in February, saying the EEOC should not have used Murphy's "utterly unreliable analysis."

The consequence of EEOC's lack of vigilance, Titus said last week, is an award of attorneys' fees under Title VII of the 1964 Civil Rights Act, which bans job discrimination on the base of race, color, creed, sex or national origin.

"The EEOC did not face a high burden to avoid paying Freeman's reasonable attorneys' fees," Titus wrote. "It only needed to do what is expected of all litigants: to litigate reasonably. Relying on evidence as severely and obviously flawed as Murphy's reports, without which the EEOC had no case, was clearly unreasonable."

Murphy said in an email after the 4th Circuit's decision that "the fault lies with my team and me" and not with EEOC's request for documents from the company.

"The files [Freeman] produced in response to discovery requests were piecemeal and scattered, with different pieces of necessary data spread across files that lacked a consistent and reliable basis for linking one file to another, and it became our task to try and reassemble a coherent master file from the various pieces we received," Murphy wrote. "We were not able to successfully do that."

The case is Equal Employment Opportunity Commission v. Freeman, 8:09-cv-02573-RWT.

Published: Mon, Sep 21, 2015