Title VII Defendant Need Not Obtain Favorable Judgment on Merits to Be "Prevailing Party"

The U.S. Supreme Court recently clarified, for the first time, that a Title VII defendant need not obtain a favorable judgment on the merits to be a “prevailing party” for the purpose of an award of attorney fees. A Title VII defendant can be a “prevailing party” even if the [trial] court’s final judgment rejects the plaintiff’s claim for a non-merits reason.” CRST Van Expedited, Inc. vs. Equal Employment Opportunity Commission, Case No. 14-1375, ___ U.S. ___ (May 19, 2016), Slip. Op. at *12. The trial court has the discretion to award attorney fees to such a prevailing defendant when it determines that the plaintiff’s claims were “frivolous, unreasonable, or groundless.”

In the CRST case, a CRST employee filed a charge with the Equal Employment Opportunity Commission (EEOC) alleging that she had been sexually harassed by two male trainers. The EEOC informed CRST of the charge, investigated the allegations, and then informed CRST that CRST had subjected the charging employee and “a class of employees and prospective employees to sexual harassment.” The EEOC offered to conciliate, but conciliation did not resolve the dispute.

The EEOC then filed suit against CRST, in its own name, under section 706 of Title VII. During discovery, the EEOC identified an additional 250 women who allegedly had been discriminated against. The district court dismissed all of these claims, including claims on behalf of 67 women whose claims were barred on the ground that the EEOC had not adequately investigated or attempted to conciliate them.

The district court dismissed the suit and invited CRST to apply for attorney fees. The court awarded CRST $4 million in fees, finding that CRST had prevailed on the claims for over 150 of the women, including the 67 claims dismissed because of the EEOC’s failure to satisfy its presuit requirements.

The Eighth Circuit reversed, holding that a Title VII defendant can be a prevailing party only by obtaining a “ruling on the merits.”

The Supreme Court reversed. It emphasized that a Title VII plaintiff must obtain an “enforceable judgment[t] on the merits” or a “court-ordered consent decre[e],” to be a prevailing party. However, a Title VII defendant can prevail if it obtains a favorable final judgment for any merits or non-merits reason. If a defendant prevails under that standard, the court then has the discretion to award attorney fees if it determines that the plaintiffs’ claims were “frivolous, unreasonable, or groundless.”

_{John Stock is with Benesch Friedlander Coplan & Aronoff LLP in Columbus, Ohio.}

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