By John Dunn

Title VII of the Civil Rights Act of 1964 provides that a court may, in its discretion, award the “prevailing party” reasonable attorney’s fees in employment discrimination lawsuits. Prevailing plaintiffs are entitled to reasonable attorney’s fees in most circumstances. Prevailing defendants are entitled to reasonable attorney’s fees when it is established that the plaintiff’s claim was frivolous, unreasonable, or groundless.  Before determining the appropriateness of attorney’s fees, however, it must be established that the party seeking fees actually prevailed in litigation. 

Plaintiffs “prevail” when they obtain a judgment on the merits.  It is not, however, always clear when defendants “prevail” in Title VII litigation.  Certainly, defendants prevail when a court or jury rules in their favor on the merits of a case.  However, defendants can also “prevail” for non-merit reasons.  For example, defendants can “prevail” on a statute-of-limitations defense or by establishing that the court lacks jurisdiction.  In these situations, defendants obtain a favorable result, but for reasons other than the merits of the case itself.

In 2014, the 8th Circuit Court of Appeals held that defendants are not eligible for reasonable attorney’s fees in these situations.  According to 8th Circuit, a case must be resolved in favor of the defendants on the merits in order for defendants to obtain attorney’s fees under Title VII.  In a recent decision, CRST Van Expedited, Inc. v. EEOC, __ U.S. __ (May 19, 2016), the Supreme Court of the United States rejected the 8th Circuit’s reasoning and held that: “a favorable ruling on the merits is not a necessary predicate to find that a defendant is a prevailing party.”  

In CRST, the Equal Employment Opportunity Commission (“EEOC”) filed suit against CRST, a national trucking company, alleging that CRST subjected a class of female employees to sexual harassment and a sexually hostile work environment.  The EEOC, however, failed to fulfill its Title VII presuit obligation.  Title VII requires the EEOC to fully investigate claims, find reasonable cause, and attempt to conciliate the claims with a defendant before bringing suit.  As a result of the EEOC’s failure to satisfy these obligations, the claims against CRST were dismissed.  Eventually, CRST was awarded over $4 million in attorney’s fees for defending the case.  On Appeal, however, the 8th Circuit reversed the award of attorney’s fees by holding that CRST did not prevail on the merits of the case.  As the Court of Appeals reasoned, the EEOC's failure to satisfy Title VII's presuit obligations did not constitute a ruling on the merits. Therefore, CRST was not entitled to attorney’s fees because it did not “prevail” on the merits of the case.

In CRST, the United States Supreme Court reversed the Court of Appeals decision by holding that defendants can recover reasonable attorney’s fees when they “prevail” in the classical sense of the term. The means by which defendants prevail, reasoned the Court, is not dispositive in a Title VII attorney’s fee analysis.  The intent of Title VII’s attorney’s fee provision is to prevent unjustified lawsuits.  It is now settled that a defendant’s award of attorney’s fees is not contingent on the reasons for the defendant’s success.    

The Supreme Court’s holding in CRST is beneficial for employers across the country.  The holding precludes courts from qualifying a defendant’s success in defending a Title VII claim.  Stated plainly, the CRST decision guarantees that prevailing defendants will be able to obtain attorney’s fees, so long as the plaintiff’s claim was frivolous, regardless of the reasons for the defendant’s success.  An additional benefit of the CRST holding is the possibility that it will foster greater accountability from the EEOC.  Employers should expect the EEOC to take its Title VII presuit obligations more seriously than the agency has in recent years.  In order to avoid costly attorney’s fee awards, the EEOC should now, more than ever, diligently investigate claims and engage in genuine efforts to foster meaningful conciliation.  This will benefit both employers and employees by creating a stronger possibility of resolving Title VII discrimination claims outside the litigation process.        

If you have questions about the decision, would like a copy of the decision, or have a general employment question, do not hesitate to contact a member of our Employment Practices Group.

This has been prepared for informational purposes only. It does not contain legal advice or legal opinion and should not be relied upon for individual situations. Nothing herein creates an attorney-client relationship between the Reader and Reminger. The information in this document is subject to change and the Reader should not rely on the statements in this document without first consulting legal counsel. 

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