Employment Law Daily Although employer prevailed at bench trial, that did not prove EEOC suit was frivolous
Tuesday, June 21, 2016

Although employer prevailed at bench trial, that did not prove EEOC suit was frivolous

By Dave Strausfeld, J.D. A healthcare company that prevailed at a bench trial in an EEOC suit over pre-offer medical inquiries and other alleged ADA violations was not entitled to recover its attorneys’ fees, because the EEOC’s claims were not frivolous, held a federal district court in Pennsylvania. The fact that a case goes to trial, as here, weighs heavily in favor of a finding that the claims were not frivolous and that attorneys’ fees are therefore not warranted. The court’s ruling at trial that the EEOC failed to establish a prima facie case did not mean its case was frivolous (EEOC v. Grane Healthcare Co., June 15, 2016, Gibson, K.). EEOC enforcement action under the ADA. When a healthcare company purchased a long-term nursing care facility and invited existing employees to apply for positions, more than 300 of them applied to work for the new owner. Several job applicants who were not hired filed EEOC charges alleging they were denied employment because of actual or perceived disabilities and also alleging they were illegally required to undergo pre-offer medical evaluations and drug tests. The EEOC brought this enforcement action on their behalf. On cross-motions for summary judgment, the court denied the company’s motion and granted the EEOC’s to the extent it sought an order enjoining the company from violating the ADA’s prohibitions against pre-offer medical inquiries. The case went to trial on remaining issues. After a seven-day bench trial, the court ruled that the EEOC had failed, at trial, to establish a prima facie case of disability discrimination. Also, the court ruled that because the EEOC was unable to prove disability discrimination or injury, it could not recover damages or back pay on behalf of any of the claimants. The court entered judgment in favor of the company. Sought fees as prevailing defendant. The company then requested an award of attorneys’ fees, asserting it was the prevailing party in the case. Under the Supreme Court’s decision in Christiansburg Garment Co. v. EEOC, a district court may award attorneys’ fees to a prevailing defendant, but only if the district court makes "a finding that the plaintiff’s action was frivolous, unreasonable, or without foundation." As a threshold issue, the EEOC disputed whether the company was, in fact, the "prevailing party" in this case. But the court found no need to resolve this question, because even if the company was indeed the prevailing party, it did not satisfy the Christiansburg standard to recover attorneys’ fees and costs. Relevance of fact that case went to trial. As the company conceded, the fact that a case goes to trial normally weighs against finding that the lawsuit was frivolous. Nevertheless, the company cited a case from the same judicial district, LaGatta v. Pennsylvania Cyber Charter School, arguing that it suggested fees could be granted after trial as compensation for the protracted nature of an otherwise frivolous claim. But the court was "at a loss as to how" LaGatta supported the company’s motion for attorneys’ fees, since LaGatta was procedurally distinct from the case at hand, and the court in that case denied the motion for attorneys’ fees. And in any case, "LaGatta’s reasoning here goes against the vast majority of case law," the court noted, "which holds that the fact that a case goes to trial weighs heavily in favor of a finding that claims are not frivolous." Must avoid post hoc reasoning. The court stressed that the EEOC’s suit had survived summary judgment. To award attorneys’ fees in this case would be to engage "in the very ‘post hoc reasoning’ against which the Supreme Court" warned in Christiansburg. There, the Supreme Court emphasized that district courts should resist the temptation of concluding that, because a party did not ultimately prevail, its action must have been unreasonable or without foundation. Prima facie case ruling at trial. In arguing for an award of attorneys’ fees and costs, the company also reminded the court of its ruling that the EEOC failed to prove its prima facie case at trial. But this argument, the court explained, overlooked the difference in a court’s task at the summary judgment stage versus after a bench trial. "[T]he fact that the Court drew reasonable inferences at the summary judgment stage that were later disproven at trial does not lead to the conclusion that the Court ‘recognized that the EEOC did not have sufficient evidence to proceed to trial,’ as Defendants suggest that it does." Thus the prima facie case ruling at trial did not support an award of attorneys’ fees and costs, the court held.

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