Georgia Hospital Must Pay its Own Attorneys’ Fees Despite a Jury Verdict Finding that its Former Employee Did Not Act in Good Faith

By Ryan T. Garippo, Nicolette J. Zulli, and Gerald L. Maatman, Jr.

Duane Morris Takeaways:  On March 29, 2024, in EEOC v. Phoebe Putney Memorial Hospital, Inc., No. 1:17-CV-201 (M.D. Ga. Mar. 29, 2024), Judge Leslie Gardner of the U.S. District Court for the Middle District of Georgia held that even minimal evidence for the EEOC’s claims may be sufficient to find that its failed lawsuit is not frivolous. Consequently, employers may be forced to pay their own attorneys’ fees even where the claims against them are lost at trial by the Commission. The decision in EEOC v. Phoebe Putney Memorial Hospital, Inc., is well worth a read by corporate counsel facing government enforcement litigation.

Case Background

In 2015, Phoebe Putney Memorial Hospital, Inc. (“Phoebe”) hired Wendy Kelley (“Kelley”) as a medical records analyst for a shift that typically ran from Monday through Friday. Kelley, however, understood that she needed to work weekends from time to time.  Hence, when another employee went on maternity leave, Phoebe asked Kelley to cover some Saturday shifts. Instead, Kelley met with her doctor the next day to discuss an ongoing generalized anxiety disorder diagnosis.

Among other things, Kelley’s doctor recommended that she “take Saturdays and Sundays off work when she had to take an increased dose [of medication] at the end of a stressful workweek.”  Id. at 6. As a result, Kelley submitted a request under the Americans with Disabilities Act (“ADA”) and asked not to work weekends. Phoebe explained that it is “a hospital and [it is] open on the weekend” and it could not accommodate the request. Id. at 8. Phoebe did, however, offer Kelley two days off in a row to give her time to take her medication. At the time, it appeared that this solution would work for everyone. Kelley then submitted another request for time off — this time for two weeks straight — citing her generalized anxiety disorder. Phoebe denied that request and explained that it could not cover her shifts. Kelley then refused to come into work. Accordingly, Phoebe terminated Kelley’s employment.

The Equal Employment Opportunity Commission (“EEOC”), on behalf of Kelley, filed a lawsuit alleging a violation of the ADA. The EEOC asserted that Phoebe fired Kelley because of a perceived disability. Ultimately, Phoebe filed a motion for summary judgment, which was denied, and the EEOC went to trial on Kelley’s claims. The jury sided with Phoebe on the basis that “Kelley’s request for accommodation was not made in good faith,” among other findings.  Id. at 1.  This verdict prompted Phoebe to file a motion for attorneys’ fees and costs that argued the entire lawsuit was frivolous.

The Court’s Decision

Judge Gardner denied Phoebe’s request for its attorneys’ fees and costs.

The Court explained that attorneys’ fees in ADA cases can be awarded only if the claim itself is frivolous. Courts consider three factors to make such a determination, including “(1) whether the plaintiff established a prima facie case; (2) whether the defendant offered to settle; and (3) whether the trial court dismissed the case prior to trial or held a full-blown trial on the merits” along with other considerations in the Eleventh Circuit. Sullivan v. Sch. Bd. Of Pinellas Cnty., 773 F. 2d 1182, 1189 (11th Cir. 1985) (citations omitted). Additionally, even if a plaintiff’s evidence is “weak,” she may be able to defeat a request for attorneys’ fees if there is “any evidence to support [her] claims.” Id.

Based on these principles, the Court held that Kelley’s testimony, even if weak or unpersuasive, was sufficient to establish her prima facie case for the EEOC’s claim of an ADA violation. The Court relied on that testimony to deny summary judgment. The Court stated as long as Kelley had “any evidence” for her claim, the lawsuit was not frivolous. That testimony, along with some medical records, qualified as such evidence. Further, the Court explicitly noted that Phoebe “did not offer to settle” and, therefore, the Court could not determine that this factor cut in Phoebe’s favor. Id. at 8.

Implications Of The Decision

The EEOC is an aggressive litigant. This decision demonstrates that even when the Commission loses its claims, companies nevertheless may have to foot the bill for their attorneys’ fees. Establishing an entitlement to attorneys’ fees is an uphill climb.

Sixth Circuit Upholds Enforcement Of Pre-Lawsuit EEOC Subpoena Despite Alleged Procedural Defects

By Haley Ferise, Kathryn Brown, and Gerald L. Maatman, Jr.

Duane Morris Takeaways: On March 26, 2024, in EEOC v. Ferrellgas LP, No. 23-1719 (6th Cir. Mar. 26, 2024), the Sixth Circuit affirmed the decision of the U.S. District Court for the Eastern District of Michigan to enforce an EEOC subpoena over an employer’s objections. Although the employer raised both procedural and substantive grounds to challenge the pre-lawsuit subpoena, but both the District Court and the Sixth Circuit rejected those arguments. The ruling ought to be a required read for corporate counsel facing EEOC subpoenas issued as part of pre-lawsuit administrative investigations.  

Case Background

April Wells, a Black woman, was a driver for a propane distribution company. She alleged in a discrimination charge filed with the Equal Employment Opportunity Commission that she was subjected to sex discrimination based on (i) her over qualification for the position for which she was hired as compared to that for which she applied, (ii) her compensation that was allegedly lower than that of her male counterparts, and (iii) her termination. She later amended the complaint to include race discrimination claims.

The EEOC began its investigation of Wells’ claims by sending the company two requests for information (RFIs). The employer refused to fully respond to the RFIs on grounds that the scope was overbroad. As is its usual approach, in October 2022, the EEOC issued a subpoena for information the company’s hiring practices. The company objected that the subpoena was unsigned, overly broad, unduly burdensome, and not relevant to the matters arising from the charge. A month later, the EEOC sent a second subpoena, in response to which the employer reiterated its objections.

In December 2022, the EEOC applied for an order to show cause as to why the subpoena should not be enforced, which was granted with a deadline of February 24, 2023. The company responded that (i) the EEOC improperly served the subpoena on the wrong corporate entity and therefore the company had not forfeited its right to challenge the subpoena, (ii) the EEOC could not show the relevance of its subpoena, and (iii) gathering and producing the information sought would be “unduly burdensome.” Id. at 4. The District Court rejected all of the company’s arguments, and it subsequently appealed.

The Sixth Circuit Decision

On appeal, the Sixth Circuit affirmed.

On appeal, the employer raised a new issue of improper service, claiming that the EEOC was required to mail the subpoena to the company itself or utilize another method enumerated in the National Labor Relations Act (NLRA), as the EEOC is authorized to do under Title VII. The Sixth Circuit found that, after directing the EEOC to communicate with its defense counsel, the company could not defeat service via its outside counsel that complied with its own request and that the company’s strict interpretation of the NLRA was erroneously narrow.

In response to the company’s argument that EEOC’s addressing its subpoena to the wrong corporate entity rendered the subpoena invalid, the Sixth Circuit ruled that such an error did not prevent the employer from raising its objections sooner and that the error was harmless, thereby not “preclud[ing] the district court from enforcing the subpoena.” Id.at 7.

At the same time, the Sixth Circuit rejected the EEOC’s argument that the employer had forfeited the right to object to the subpoena because of the company’s allegations the “the EEOC … failed to properly serve a facially valid subpoena.” Therefore, it addressed the company’s substantive objections. The Sixth Circuit reasoned that the District Court did not “abuse its discretion in rejecting” the employer’s arguments that the subpoena was “overbroad and unduly burdensome.” Id. at 11-12. The Sixth Circuit explained that Wells’ charge of discrimination did in fact concern hiring practices in light of her allegations related to discriminatory remarks in the interview process and that, even if the charge did not directly concern hiring practices, information about hiring processes “could cast light on whether [the employer] discriminated against other job applicants.” Id. at 12-13.

Finally, the Sixth Circuit agreed with the District Court that the company did not meet its burden in demonstrating that compliance with the subpoena presented an undue hardship.

Implications Of The Decision

Employers facing administrative subpoenas from the EEOC should be aware that clerical errors or even questionable service likely will not be sufficient to defeat the subpoenas. A better practice is to raise substantive objections to such subpoenas in a timely and formal manner.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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