Executive Branch Review

The EEOC as Unwise Gambler by Alison Somin

The EEOC as Unwise Gambler

Maryland Federal District Court Issues Stinging Rebuke in Disparate Impact Attorneys' Fee Case

Alison Somin September 09, 2015

All federal court opinions that begin with Kenny Rogers quotations are worth blogging about, even when they do not touch on fundamental questions of civil rights. Today, however, is that all-too-rare occasion when a Maryland District Court opinion does both.

Judge Roger W. Titus wrote in today’s EEOC v. Freeman order:

World-renowned poker expert Kenny Rogers once sagely advised, “You’ve got to know when to hold ‘em. Know when to fold ‘em. Know when to walk away.” In the Title VII context, the plaintiff who wishes to avoid paying a defendant’s attorneys’ fees must fold ‘em once its case becomes so groundless that continuing to litigate is unreasonable, i.e. once it is clear it cannot have a winning hand. In this case, once Defendant Freeman revealed the inexplicably shoddy work of the EEOC’s expert witness in its motion to exclude that expert, it was obvious Freeman held a royal flush, while the EEOC held nothing. Yet, instead of folding, the EEOC went all in and defended its expert through extensive briefing in this Court and on appeal. Like the unwise gambler, it did so at its peril. Because the EEOC insisted on playing a hand it could not win, it is liable for Freeman’s reasonable attorneys’ fees.” (Footnote omitted)

Freeman concerns defendant-employer’s checks on the criminal backgrounds of all job applicants and on the credit of those who were offered financially sensitive positions. Because African-Americans are disproportionately likely to commit crimes and to have poor credit scores relative to members of other racial and ethnic groups, the EEOC has for the last several years aggressively targeted for investigation employers who use both types of checks. Note that, under disparate impact liabilitythe legal theory on which the EEOC relies in these casesit does not matter whether such employers consciously or unconsciously discriminated against these applicants based on race. An employer can be liable for race discrimination just because of disproportionalities, unless the employment practice causing the disproportionate effect is justified by business necessity and less racially adverse alternative hiring practices are unavailable.

The EEOC is sufficiently committed to disparate impact liability that it has investigated employers who seemingly have unusually strong business justifications for using criminal background checks, such as firearm retailers.  Never mind that its Guidance on the topic has received withering criticism from many quartersit has been called unconstitutional (see pp. 334-7), an act of “administrative legerdemain,” and likely to hurt the employment prospects of the African-American males it was intended to help. This lengthy United States Commission on Civil Rights report*which contains essays signed by four out of eight-then Commissioners criticizing the EEOC’s disparate impact criminal background check policynotes still other important flaws. 

Today’s Freeman decision doesn’t address the core questions about the Guidance’s constitutionality or legality. But it does award attorneys’ fees totaling close to $ 1 million to Freeman and rebukes the EEOC for continuing to litigate on the basis of obviously flawed expert reports (see p. 12.) Here is a taste of the kind of scathing language the opinion uses to describe the problems with the quality of the EEOC's expert testimony: 

It is difficult to read the opinions this case  has generated, in this Court and in the Fourth  Circuit, and come away with any notion that the EEOC had any reasonable basis to rely on Murphy’s reports. This Court described Murphy’s analysis as “completely unreliable,” noted the “plethora of errors and analytical fallacies,” and called his attempt to correct his analysis “laughable.” Freeman, 961 F. Supp. 2d at 793, 796. All three judges on the Fourth Circuit’s panel agreed, noting the “sheer number of mistakes and omissions in Murphy’s analysis,” and characterizing these errors as “troubling.” Freeman, 778 F.3d at 466-67. Judge Agee wrote a concurring opinion for the sole purpose of chastising the EEOC for its “disappointing litigation conduct,” based primarily on the EEOC’s reliance on Murphy’s shoddy work. 468. In Judge Agee’s opinion, it “was not a close question.” Id. Finally, Judge Agee expressed concern that the EEOC continued defending Murphy’s work despite Murphy’s storied history of having similarly flawed analysis excluded and sharply criticized by other federal courts. Id. at 468-71.

Federal judges have a reputation for being restrained, even somewhat staid, prose stylists. It is a reputation that most deserve. Yet the EEOC's pursuit of dubious disparate impact cases has driven other members of the judiciary to wax uncharacteristically fiery: for example. Take, for example,  the similarly sharp language used in EEOC v. Kaplan, another disparate impact case “The EEOC brought this case on the basis of a homemade methodology, crafted by a witness with no particular expertise to craft it, administered by persons with no particular expertise to administer it, tested by no one, and accepted only by the witness himself.” 

So what explains this pattern of errors on the EEOC's part? Many possible explanations exist, but ideological blinkersthe EEOC's attorneys are so devoted to pursuing disparate impact cases that they overlook what should have been obvious flaws in the quality of expert testimonyis likely an important cause. In any case, the taxpayers paying the EEOC's attorneys deserve better, and would-be reformers should take note of the situation.

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*As a special assistant and counsel to Commissioner Gail Heriot at the U.S. Commission on Civil Rights, I assisted Heriot with background research and the editing of her essay included in this report. This blog post does not necessarily reflect the views of the Commission, Gail Heriot, or anyone other than me. 

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