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Supreme Court Tells EEOC It May Be on the Hook for Fees if It Does Not Fulfill Its Statutory Pre-Suit Duties

Title VII of the Civil Rights Act of 1964 (Title VII) authorizes the award of attorneys’ fees to a party who prevails in a discrimination or retaliation claim brought under that statute. Although this fee shifting provision applies to both employee plaintiffs and employer defendants, courts routinely award fees to prevailing plaintiffs but have interpreted this provision to allow prevailing defendants to recover fees only in the rare case where the plaintiff’s claim was frivolous or unreasonable. Last week, in a helpful decision for employers, the U.S. Supreme Court clarified that a defendant-employer does not necessarily need to prevail “on the merits” of a discrimination lawsuit to be entitled to fees.

Fee Wars: Supreme Court Eases Defendants’ Burden for Attorneys’ Fees in Baseless Discrimination Actions

In an 8-0 decision, the U.S. Supreme Court has ruled that attorneys’ fees for successfully defending a Title VII action can be recovered by an employer even if the defendant’s victory is not based on the merits of the case. CRST Van Expedited, Inc. v. EEOC, No. 14-1375 (May 19, 2016). The ruling overturned an earlier Eighth Circuit decision that had allowed the Equal Employment Opportunity Commission to escape payment of attorneys’ fees. The ruling is important because defendants sometimes prevail in frivolous lawsuits for procedural reasons that are not merits-based.

Supreme Court Holds a Party May be Entitled to Attorneys' Fees Absent a Favorable Ruling on the Merits

On May 19, 2016, the U.S. Supreme Court issued its decision in CRST, Inc. v. EEOC, which addressed the definition of a “prevailing party” who may be awarded attorneys’ fees in Title VII cases. Although the Court ultimately remanded the case to the Eighth Circuit on other grounds, it unanimously held that a favorable ruling on the merits of a Title VII case is “not a necessary predicate to find that a defendant has prevailed.” A boon to employers, this decision enables defendants to recover attorneys’ fees and costs under Title VII for frivolous, unreasonable, or groundless claims when such claims are disposed of on any grounds, regardless of whether those grounds are merit-based or procedural.
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