Government (EEOC) Must Pay Company's Attorneys' Fees After Delay, Unreasonable Lawsuit

At times, corporate targets of government investigations become frustrated by the apparent lack of responsiveness by the investigating agencies.  Some members of the judiciary evidently share that frustration and last week took a federal agency to task for suing a business after years of feet dragging during its administrative investigation.  In EEOC v. Propak Logistics, Inc., the Fourth Circuit affirmed an order requiring the EEOC to pay the defendant's attorneys' fees to the tune of nearly $200,000.  According to the Court, "the EEOC unreasonably initiated the lawsuit" after years of delay.

This is not necessarily a groundbreaking case.  In 1978, the Supreme Court approved of fee awards against the EEOC in appropriate cases.  But what is somewhat unusual here is the way that the agency was taken to task for its conduct.  In Propak, one appellate judge took the opportunity to remind government agencies that their actions have real-life consequences, and that they are not above the law.

In his concurring opinion, Judge Wilkinson dispels the government's implied argument "that federal agencies, and the Equal Employment Opportunity Commission [] in particular, should be treated differently from private parties."  The EEOC had suggested that it was too burdened by its statutory responsibilities to move any faster than it had.  Rejecting this position, Judge Wilkinson held the government accountable, finding that the government is not beyond reproach.  With a sharp pen, his opinion makes several statements that victims of bureaucratic indifference may find refreshing:

Although critical of the EEOC, Judge Wilkinson's opinion acknowledges the good work of the EEOC in "provid[ing] primary recourse to those victims of discrimination that persists in our society to an unfortunate extent."  In that vein, he suggests that federal agencies may lose much-needed credibility when they engage in such unreasonable litigation, undermining important work.

Few employers will win their attorneys' fees after being subjected to a government investigation or lawsuit.  But for those employers battling a government agency, Judge Wilkinson's opinion may provide ammunition to combat unfair charges and unreasonably drawn-out litigation.

Spotts Fain publications are provided as an educational service and are not meant to be and should not be construed as legal advice. Readers with particular needs on specific issues should retain the services of competent counsel.


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