Class Action Suit Dismissed Because EEOC Failed to Properly Investigate Before Suing

03/27/2012 / Christopher Harristhal

On February 22, 2012, the Eighth Circuit Court of Appeals dismissed an EEOC class suit because the EEOC had failed to investigate the claims of the class members before it sued in September 2007 and failed to offer the employer/defendant a chance to settle those claims through conciliation as required by Section 706 of Title VII. EEOC v. CRST Van Expedited Inc. (8th Cir. Feb. 22, 2012). This case has potentially far-reaching implications for those employers facing an EEOC charge where the Commission fails to fully investigate the claims and come to a probable cause determination before suit. 

The defendant, CRST, is a large interstate truck company. The EEOC alleged that female drivers of CRST were subjected to sexual harassment, both verbally and physically, by the lead drivers with whom they traveled. The district court concluded “the EEOC did not know how many allegedly aggrieved persons on whose behalf it was seeking relief . . . but instead . . . was using discovery to find them.” The EEOC attempted to add hundreds of women to the suit after it was commenced. 
Specifically, the district court based its ruling on these key findings:
  1. The EEOC did not investigate the particular allegations of any of the 67 allegedly aggrieved persons until after the federal court complaint was filed.
  2. The EEOC did not interview any witnesses or subpoena any documents to determine whether any of their allegations were true.
  3. The EEOC did not identify any of the 67 allegedly aggrieved persons as members of the “class” contained in the EEOC’s letter of determination until after the federal court complaint was filed.
  4. The EEOC did not make a reasonable cause determination as to the specific allegations of any of the 67 allegedly aggrieved persons prior to filing the complaint. A number of the people the EEOC sought to add to the case had not even alleged they were sexually harassed until after the lawsuit had been filed. The EEOC admitted that it was not even aware of their allegations until after filing of the complaint.

The appellate court held “while the EEOC may seek relief on behalf of individuals beyond the charging parties and for alleged wrongdoing beyond those [persons] originally charged, it must discover such individuals and wrongdoing during the course of its investigation.” Id. citing US EEOC v. Dillards, Inc., 2011 WL 2784516 (S.D. Cal. July 14, 2011). The Eighth Circuit went on to hold “where the scope of [the EEOC’s] pre-litigation efforts are limited – in terms of geography, number of claimants, or number of claims – the EEOC may not use discovery in the resulting lawsuit as a fishing expedition to uncover more violations.” 

Those facing an EEOC charge in which the Commission has failed to fully investigate the claims later asserted in federal court may now have a strong defense based on the holding in EEOC v. CRST Van Expedited Inc. Additionally, if the EEOC fails to exhaust efforts to conciliate the claim or claims which are the subject of the discrimination charge, the subsequent federal court action may be barred.

An additional aspect of the holding was the conclusion that the EEOC is not barred by judicial estoppel when suing under Title VII in its own name even if the individual claimants would be so estopped. The district court had found that some of the individual claimants were barred from pursuing their claims because they had failed to identify their participation in the class action suit in their individual bankruptcies. While the district court had held those claimants were estopped from pursuing claims, the Eighth Circuit reversed, and ruled that the EEOC could nonetheless pursue relief on their behalf.