05/10/2011 09:43:00 AM EST
The Cases Companies Are Watching: EEOC v. Peoplemark, Inc.
A recent disparate impact case out of the United States
District Court for the Western District of Michigan highlights the importance
of continually reassessing and evaluating the strengths and weaknesses in a
case as litigation proceeds. In EEOC v. Peoplemark, Inc. [the enhanced version of the opinion is available to lexis.com
the court awarded Peoplemark over $750,000 in attorneys' fees, expert witness
fees, and costs following the dismissal of the EEOC's claims.
The litigation was a "large, multi-state disparate impact
case" against Peoplemark. The EEOC alleged the temporary staffing company
maintained a policy which automatically denied the hiring or employment of any
person with a criminal record, and that this blanket policy adversely affected
African Americans in violation of Title VII. The EEOC has generally taken the
position that an employer's policy or practice of excluding individuals from
employment based on an applicant's criminal history has an adverse impact on
African American and Hispanic applicants, and any such policy is unlawful
unless it is job related and justified by business necessity.
In this case, however, it turned out that Peoplemark
didn't have such a policy. In fact, 22% of the 286 individuals who were supposedly
not hired because of their felony convictions were actually hired by the
company. As part of a three-year investigation, over 18,000 pages of documents
- "virtually the entire universe of Peoplemark's personnel documents" - were
produced to the EEOC. Peoplemark argued that the authority of the EEOC is not
without limits and requested its fees for having to defend against the EEOC's
"meritless litigation strategy." In particular, Peoplemark claimed that the
EEOC should have realized its claim that Peoplemark had a blanket policy
excluding felons was not well-grounded - especially since the EEOC had the 286
names upon which it relied during the administrative investigation before the
lawsuit even began. While reducing the amount of attorneys' fees requested by
Peoplemark, the court acknowledged that it "is left with the impression that
plaintiff's counsel were content to simply place the matter in the hands of
their experts and let them run with it."
This case should cause all litigants to stop and consider
whether their claims or defenses continue to be viable as litigation progresses
and as information and facts are brought to light through discovery. Even the
perfect strategy or theory of a case that makes sense on day one, needs to be
Read more articles on employment law issues
at Employment and the
Law, a blog by Ashley Kasarjian
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