Category: EEOC Litigation

By Gerald L. Maatman, Jr., Anna Sheridan, George J. Schaller

Duane Morris Takeaways: In EEOC v. Battleground Restaurants, Inc. et al., 1:24-CV-792, 2025 U.S. Dist. LEXIS 32071 (M.D.N.C. Feb. 24, 2025), the Court denied Defendants’ motion to dismiss an EEOC lawsuit alleging discriminatory hiring practices against men at a chain of sports bars.  The EEOC’s complaint asserts sex discrimination in hiring for server, bartender, and host positions, and for failures to preserve employment records in violation of Title VII of the Civil Rights Act of 1964.

This case signals a new wave of anti-discrimination enforcement actions against companies that prioritize hiring practices that may exclude male applicants.  The Commission’s litigation efforts are in full swing, and companies must review their hiring practices to ensure all applicants are weighed neutrally during the application process.

Complaint Allegations

The EEOC’s complaint alleges that between December 1, 2019, and February 18, 2022, Kickback Jack’s restaurants located throughout North Carolina, Virginia, and Tennessee discriminated against males by failing to hire men for front of house, non-managerial positions.  Id. at *1.  Kickback Jack’s is owned and operated by Battleground Restaurants, Inc. and Battleground Restaurant Group, Inc. (“BRGI”) (collectively “Defendants”).  Id. 

Kickback Jack’s employs “servers, hosts, and bartenders in non-managerial front-of-house positions,” all of which require no “special skills or qualifications.”  Id. at *2. Kickback Jack’s advertisements state that applicants need only “[b]ring [their] great attitude to work and [Kickback Jack’s] will train you.”  Id. at *2. 

The underlying charge was filed on July 31, 2020, when a female server, Melody Roe, filed an EEOC charge of discrimination against Kickback Jack’s.  Id.  Included in Roe’s charge of discrimination was statements that Kickback Jack’s “has a policy and/or practice of only hiring females for front of house positions and not into management.”  Id. at *3.  The EEOC’s investigation into Roe’s charge of discrimination found that Battleground Restaurants, Inc. “maintained a policy or practice . . . of failing or refusing to hire males for non-managerial front of house positions because of their sex.”  Id.

The Commission’s investigation further revealed that of the 2,100 non-managerial front-of-house employees employed between December 1, 2019, and February 18, 2022, “approximately 3% were male” and some Kickback Jack’s locations “did not employ male servers at all.”  Id. at *4.

As a result of these newly uncovered hiring practices, the EEOC filed a complaint asserting that “a predominantly female front-of-house workforce cannot be justified by any legitimate business purposes” and that Defendants’ hiring practices “were and are intentional and willful.”  Id.  The Complaint also alleged that Defendants failed to make and preserve records relevant to their employment practices, and specifically failed to retain applications for employment.  Id. at *5.

Defendants moved to dismiss the EEOC’s complaint, dismiss or strike BRGI, and requested the Court certify the case for interlocutory appeal.  Id. at *1.

District Court’s Ruling

The Court denied the Defendants’ motion in all aspects on the basis that the EEOC complied with procedural and administrative requirements, plausibly alleged a pattern or practice of disparate sex discrimination, and that the EEOC could properly include BRGI as a defendant.  Id.

Defendants argued the EEOC failed to provide them with adequate notice of its claims on “behalf of male applicants and the Title VII records violations.”  Id. at *5.  Defendants did not dispute that it received notice of Roe’s charge of discrimination within 10 days (as required by 42 U.S.C. § 2000e-5(b)).  Rather, the Defendants argued the charge of discrimination did not “give them notice of an EEOC investigation into discrimination against males in hiring.”  Id. at *7. 

The EEOC countered that the investigation into discrimination against males was implicit in Roe’s allegations that the restaurant had “a policy and/or practice of only hiring females” for front of house positions.  Id.The Court agreed that the “alleged discrimination against males for front of house positions appears on the face of the charge of discrimination,” Defendants did not allege that they were not on notice of the charge of discrimination, and therefore, the EEOC complied with its administrative and procedural requirements under the statute.  Id. at *8

The Court also denied Defendants’ motion to dismiss the EEOC’s preservation of records claim because no 10-day notice requirement exists under the statutory provisions.  Id. at *8-9.  The Court further disagreed with Defendants that the EEOC’s claims should be limited to 180 days before Defendants received notice of the charge of discrimination because “the complaint [did] not contain the facts necessary to assess whether the EEOC’s claims exceed Title VII’s statute of limitations period.”  Id. at *10-11. 

On Defendants’ argument to dismiss or strike BRGI, the Court opined that the Commission plausibly alleged BRGI is “essentially, Kickback Jack’s operator.”  Id. at *12.  The Court held the EEOC can sue BRGI “despite not naming [BRGI] directly as a party in the charge of discrimination or communicating with it based on both the joint enterprise test and substantial identity exception.”  Id. at *15. 

On the EEOC’s allegations of Title VII sex discrimination in hiring, the Court denied the Defendants’ motion to dismiss because the EEOC “plausibly alleged a pattern or practice of discrimination by using statistics” which demonstrated of the 2,100 non-managerial front-of-house employees approximately only 3% were male.  Id.  at *18.  And in some instances, locations “did not employ any male servers at all.”  Id.  The EEOC also satisfied its pleading requirements under Title VII as it alleged Defendants discriminated “against male applicants –– a protected class — ” and alleged that “male applicants qualified” for the front-of-house roles.”  Id. *17-18.  Based on these findings, the Court reasoned “this type of ‘gross disparity’ plausibly demonstrates an inference of discrimination against males who applied to work as servers.”  Id. at *18. Therefore, the Court found that the EEOC has met its burden of plausibly alleging the elements of its claim sufficiently to survive a motion to dismiss.

The Court also denied Defendants’ request for certification stating it did “not find any esoteric issues meriting an interlocutory appeal.” Id. at *2. 

Implications For Employers

Employers’ hiring practices remain a target for EEOC initiated litigation.  This case is but one example of the EEOC bringing a lawsuit after identifying a pattern of potentially discriminatory practices first alleged in a charge.  While uncommon, the EEOC does regularly bring these “pattern-or-practice” lawsuits under Section 706 or Section 707 of Title VII of the Civil Rights Act of 1964 when it has a case that draws significant public interest or could make an industry-wide impact.  

This is far from the first case of male gender discrimination in the restaurant industry. The popular restaurant chain Hooters has settled several similar lawsuits, one in 1997 for $3.75 million, and one in 2009 for an undisclosed sum.  See Latuga v. Hooters, Inc., 1:93-CV-7709 (N.D. Ill. Nov. 25, 1997); see also Grushevski v. Texas Wings, Inc., No. 09-CV-00002 (S.D. Tex. Apr. 16, 2009).  Lawry’s restaurants were also hit with an EEOC pattern or practice lawsuit in 2006 alleging that Lawry’s practice of only hiring females for its server positions constituted gender discrimination.  See EEOC v. Lawry’s Restaurants, Inc., No. CV 06-01963 (C.D. Cal. Mar. 31, 2006). 

The recent case against Battleground shows that the EEOC continues to closely scrutinize hiring practices which select individuals based on a protected characteristic, including gender. Employers must also monitor and audit their hiring practice outcomes to ensure statistical models don’t demonstrate discrimination otherwise an EEOC action may be on the horizon.   

By Gerald L. Maatman, Jr., and Christian J. Palacios

Duane Morris Takeaways:  On February 18, 2025, in EEOC v. LeoPalace, Case No.: 1:25-CV-00004 (D. Guam), the EEOC settled a lawsuit and entered into a three-year consent decree with LeoPalace Resort, a large hotel in Guam. Under the terms of the agreement, LeoPalace agreed to pay over $1.4 million and hire an external equal employment monitor to settle allegations that it provided employees of non-Japanese national origin with less favorable wages, benefits, and other terms of employment than their Japanese counterparts. This lawsuit is significant because it is the first seven figure settlement that the Commission has procured since President Trump took office in January 2025 and it is accompanied by a statement from the new Acting Chair Andrea Lucas announcing the Commission’s new enforcement agenda and its intent to protect all workers from national origin discrimination and “Anti-American” bias.

The LeoPalace Settlement And Anti-American Bias Enforcement

On February 14, 2025 the EEOC filed suit against LeoPalace in the U.S. District Court for the District of Guam, on behalf of non-Japanese employees Christopher Adams, Thomas Lee and Donald Gueniot Jr., alleging that the hotel subjected these workers to less favorable wages and benefits, and other terms and conditions of employment compared to equivalent or subordinate Japanese employees on the basis of their national origin (non-Japanese), in violation of Title VII of the Civil Rights Act.  Id. at 1.  The Commission settled with LeoPlace shortly thereafter, resulting in the hotel chain agreeing to pay $1,412,500.00 and further agreeing to a three-year external equal opportunity monitor to oversee compliance and training, as well as reinstate former employees interested in going back to work for LeoPalace. Id. at 9.

In the accompanying press release, Acting Chair Andrea Lucas announced, ““Federal anti-discrimination laws ensure equal employment opportunity for jobs performed by all workers regardless of national origin. The President’s Executive Order on Ending Illegal Discrimination and Restoring Merit-Based Opportunity recognizes that the longstanding federal civil rights laws serve as a bedrock to support equality of opportunity for all Americans. This case is an important reminder that unlawful national origin discrimination includes discrimination against American workers in favor of foreign workers.” See EEOC Newsroom, LeoPalace Resort to Pay Over $1.4 Million in EEOC National Origin Discrimination Lawsuit (Feb. 18, 2025). This is the Commission’s first publicized settlement since Lucas was appointed Acting Chair of the EEOC on January 21, 2025.

One day after the settlement was announced, the EEOC published a second press release on its Newsroom “putting employers and other covered entities on notice” that the Commission was committed to protecting all workers from unlawful national origin discrimination, including American workers.  See EEOC Newsroom,  EEOC Acting Chair Vows to Protect American Workers from Anti-American Bias (Feb. 19, 2025). The Commission further explained that, although Title VII’s national origin nondiscrimination requirement generally meant that employers could not prefer American workers, it also meant that employers could not prefer non-American workers, or otherwise disfavor Americans. Id.  It concluded its press release by stating that while employers may have “many excuses” for preferring non-American workers (including lower labor cost, client preference, or a biased perception that foreign workers have a better work ethic than Americans), none of these were legally permissible reasons to violate Title VII. Id.

Takeaway for Employers

Every new presidential administration brings with it an array of objectives focused on different policy priorities. Since President Trump took office, he has taken unique steps to reshape the Commission by firing its Chair, two Commissioners, and its general counsel, all within the course of a few weeks.  The Commission has already indicated it is committed to carrying out President Trump’s policy agenda, consistent with his executive orders related to “unlawful DEI-motivated race and sex discrimination,” “defending the biological and binary reality of sex and related rights,” “protecting workers from religious bias and harassment, including antisemitism” and, as the above settlement illustrates, “anti-American national origin discrimination.” See EEOC Newsroom, President Appoints Andrea R. Lucas EEOC Acting Chair (Jan. 21, 2025).

Employers should take note of the EEOC’s new policy priorities and can likely expect increased enforcement activity in each of these areas for the next four years.

By Gerald L. Maatman, Jr., Christian J. Palacios, and Bernadette Coyle

Duane Morris Takeaways:  On January 17, 2025, the EEOC published its Fiscal Year 2024 Annual Performance Report (“FY 2024 APR”), summarizing the Commission’s recent year of enforcement activity and recovery on behalf of U.S. workers.  As the Annual Performance Report highlights, 2024 was a successful year for the EEOC, and the Commission recovered nearly $700 million for 21,000 individuals (a 5% increase over FY 2023).  Significantly, according to the Commission it successfully resolved 132 merits lawsuits (a 33% increase over FY 2023) and achieved a successful outcome in 128 (or 97%) of all suit resolutions.  See FY 2024 APR at p. 12.  Given the Commission’s spike in enforcement activity, and its odds of prevailing, the Annual Performance Report reminds employers of the risks associated with an EEOC lawsuit and the need maintain and administer EEOC-compliant employment policies. 

FY 2024 Highlights

In the EEOC’s 78-page Annual Performance Report, the Commission discusses, at length, its annual performance results and the significant victories it achieved in FY 2024. Specifically, the Report highlights that the Commission secured nearly $700 million for U.S. workers, the highest monetary amount in recent history, including over $469 million for private sector and state/local government workers through mediation, conciliation, and settlements, as well as more than $190 million for federal workers.  The EEOC also notes that it filed 111 new lawsuits in 2024 on behalf of alleged victims of workplace discrimination, several of which were brought under the newly enacted and untested Pregnant Workers Fairness Act (“PWFA”).  FY 2024 APR at p. 2

The Commission also reported that it received 88,531 new charges of discrimination this past fiscal year, representing a 9% increase over FY 2023.  It experienced increased demand from the public, handling over 553,000 calls through its agency contact center, and receiving over 90,000 emails, which represented a growing demand for the Commission’s services. Id. at p. 3. The Commission also made it clear that it would continue to focus on systemic enforcement, and in 2024 alone, it resolved 16 systemic cases and obtained 23.9 million on behalf of 4,074 victims of systemic discrimination, and other significant equitable relief. Id.

Takeaway for Employers

As the EEOC’s Annual Performance Report highlights, 2024 was a successful year for the Commission and represents a vindication of its ambitious litigation strategy. Although 2025 has ushered in a new presidential administration with different policy priorities and strategic objectives, one thing is certain: the EEOC will continue to aggressively enforce federal anti-discrimination laws and its success at bringing enforcement actions should serve as a reminder to all employers of the risks associated with not maintaining EEOC-compliant employment policies.

By Gerald L. Maatman, Jr., Alex W. Karasik, Jennifer A. Riley, and George J. Schaller

Duane Morris Takeaways:  In FY 2024 (October 1, 2023 to September 30, 2024), the EEOC’s litigation enforcement activity showed a notable decrease in filings in a year of transition for America.  But with an uncertain election season in November 2024, the EEOC’s onslaught of September filings demonstrates the Agency’s principled approach to thwart discrimination in the workplace.

Although the total number of lawsuits filed by the EEOC decreased from 144 in 2023 to 110 in FY 2024, the EEOC’s targeted efforts involve a bevy of September filings concerning discrimination allegations against employers across a myriad of industries.  Each year, the EEOC’s fiscal year ends on September 30, and the final sprint for EEOC-initiated litigation in September 2024 aligned with prior “last-month” enforcement efforts.  This year, 67 lawsuits were filed in September, equal to the 67 filed in September of FY 2023.

Overall, the FY 2024 lawsuit filing data confirms that EEOC litigation continues its steady path in enforcement efforts.  While total filings were down, Employers must recognize the key areas the EEOC continued its litigation including by industry and filing type.  Employers must maintain legal compliance with all EEOC initiatives and this FY 2024 synopsis offers insights into year-over-year EEOC enforcement patterns.

Lawsuit Filings Based On Month

We track the EEOC’s filing efforts across the entire fiscal year with its beginning in October through the anticipated final filings in September.  As with other fiscal years, the EEOC’s filing patterns remained consistent through June 2024, with a slight increase in July 2024, another slight increase in August 2024, and significant jump in September 2024.  Of the 110 total filings this year, more than half – 67 total – were filed in September.  The following chart shows the EEOC’s filing pattern over FY 2024:

Comparing these fiscal filings in FY 2024 to previous years, a significant decrease exists from FY 2023 (144 lawsuits), which was an outlier in terms of EEOC litigation in the post-COVID era.  The following graph shows the EEOC’s year-over-year fiscal year filings beginning in FY 2017 through FY 2024:

Lawsuit Filings Based On EEOC District Offices

In addition to tracking the total number of filings, we closely monitor which of the EEOC’s 15 district offices are most actively filing new cases over the year and throughout September. Some district offices tend to be more aggressive than others, and some focus on different case filing priorities. The following chart shows the number of lawsuit filings by each of the EEOC district offices.

In FY 2024, Philadelphia had the most filings with 14, followed by Atlanta, Chicago, and Indianapolis with 11 each, followed by Phoenix with 9 filings, Charlotte, Houston, and New York with 7 each, and Birmingham, Miami, and San Francisco with 6 filings each.  Dallas, Memphis, and St. Louis had 5 filings.  Notably, Los Angeles had no filings.

While filings across the board were down, the most noticeable trend of FY 2024 is the filing jump in Atlanta (11 lawsuits), compared to FY 2023 where Atlanta had 9 fillings.  In contrast, Philadelphia had a significant decrease in filings (14 lawsuits), compared to FY 2023 where Philadelphia amassed 19 filings. Like FY 2023, Chicago and Indianapolis remained steady near the top of the list again with 11 filings each, down from the 13 filings both districts launched in FY 2023.  On the opposite end of the spectrum, New York filings (7 lawsuits) fell slightly compared to its 10 filings in FY 2023, and Los Angeles (0 lawsuits) significantly fell compared to its 10 filings in FY 2023.

Although filing trends were down for all Districts, the 110 total filings demonstrate the EEOC maintained its litigation strength, both at the national and regional level. 

Lawsuit Filings Based On Type Of Discrimination

We also analyze the types of lawsuits the EEOC filed, in terms of the statutes and theories of discrimination alleged, in order to determine how the EEOC is shifting its strategic priorities.

When considered on a percentage basis, the distribution of cases filed by statute remained roughly consistent compared to FY 2024 and FY 2023. Title VII cases once again made up the majority of cases filed, as they constituted 61% of all filings in FY 2024 (significantly down from 68% of all filings FY 2023, down from the 69% filings in FY 2022, and equal to 61% in FY 2021).

Overall ADA cases also made up a significant percentage of the EEOC’s FY 2024 filings – totaling 41%.  This is an overall increase in previous years where ADA filings amounted to 34% in FY 2023, 29.7% in FY 2022, and just below the 37% in FY 2021.

There was also a downward trend in ADEA filings, as 7 ADEA cases were filed in FY 2024, after 12 age discrimination cases were filed in FY 2023 and 7 age discrimination cases filed in FY 2022.  However, unlike FY 2023, this year the EEOC filed 4 Pregnant Worker’s Fairness Act cases (“PWFA”) after the PWFA went into effect on June 27, 2023.

The first graph below shows the number of lawsuits filed according to the statute under which they were filed (Title VII, Americans With Disabilities Act, Pregnancy Discrimination Act, Equal Pay Act, Age Discrimination in Employment Act, Pregnant Worker’s Fairness Act, and Genetic Information Nondiscrimination Act) and, the second graph, shows the basis of discriminatory allegations.

Lawsuits Filings Based On Industry

In monitoring the EEOC’s filings by industry, FY 2024 has mirrored EEOC-initiated lawsuits in the top three industries compared to FY 2023, demonstrating the Commission’s focus on a few major industries.

Three industries were the primary targets of lawsuit filings in FY 2024:  Hospitality (Restaurants / Hotels / Entertainment) with 23 filings, Healthcare with 22 filings, and Retail with 21 filings. The next set of industries did not amount to double-digit filings, but are still well within the EEOC’s sights, including Manufacturing with 11 filings; Logistics with 7 filings; Construction with 4 filings; and Property Management with 3 filings.  

This aligns with FY 2023, where Hospitality (mainly Restaurants) was the industry at large with 28 filings.  Again in second and third place were Retail and Healthcare, respectively, with 24 filings.  Absent from FY 2024’s industry-based filings were Automotive, Security, and Technology.

Like FY 2023, Hospitality, Retail, and Healthcare employers should continue to monitor their compliance with federal discrimination laws, as the EEOC continues its enforcement against these industries for alleged discriminatory practices.  The industries are regular hotbeds for charges and ultimately lawsuits.  No matter the industry, every employer should recognize they are vulnerable to EEOC-initiated litigation as detailed by the below graph.

Looking Ahead To Fiscal Year 2025

Moving into FY 2025, the EEOC’s budget includes a $33.221 million increase from 2024, and prioritizes five key areas, including advancing racial justice and combatting systemic discrimination on all protected bases, particularly with respect to vulnerable workers; advancing pay equity; addressing the use of artificial intelligence in employment decisions; providing information to assist employers that chose to undertake lawful approaches to fostering diversity, equity, inclusion, and accessibility (DEIA) in their workplaces; and preventing unlawful retaliation and harassment.

The EEOC also maintained its FY 2024 goals for its own Diversity, Equity, Inclusion, and Accessibility (DEIA) program where it seeks to achieve four goals, including workplace diversity, employee equity, inclusive practices, and accessibility. Additionally, the EEOC continues to emphasize and build upon its FY 2021 software initiatives addressing artificial intelligence, machine learning, and other emerging technologies in continued efforts to provide guidance.  The EEOC notably recognized that AI systems may offer new opportunities for employers but cautioned AI’s potential to facilitate discrimination.  Finally, the joint anti-retaliation initiative among the EEOC, the U.S. Department of Labor, and the National Labor Relations Board will continue to address retaliation in American workplaces.

Key Employer Takeaways

In many respects, FY 2024 was a year of targeted enforcement and continued efforts across several discriminatory areas, even if total filings decreased overall.  The EEOC again requested a significant budget increase for its enforcement efforts, and the EEOC’s focus on emerging technologies juxtaposed with discrimination warrants employer recognition. As election season is approaching, the EEOC’s FY 2024 represents the current presidency’s enforcement goals and the Agency’s efforts to combat all areas of discrimination.  We anticipate these figures will grow by next year’s report, so it is more crucial than ever for employers to comply with discrimination laws.

By Gerald L. Maatman, Jr., Jennifer A. Riley, and George J. Schaller

Duane Morris Takeaways: In EEOC v. Cambridge Transportation., Inc., No. 0:23-MC-00101, 2024 U.S. Dist. LEXIS 118857 (D. Minn. July 8, 2024), Judge Nancy E. Brasel of the U.S. District Court for the District of Minnesota accepted U.S. Magistrate Judge Dulce J. Foster’s Report and Recommendation (see EEOC v. Cambridge Transportation, Inc., No. 0:23-MC-00101, 2024 U.S. Dist. LEXIS 121147 (D. Minn. June 10, 2024)) to impose civil contempt sanctions against Cambridge Transportation Inc. for its failure to comply with an EEOC subpoena.  The EEOC sought documents in its administrative charge investigation into Title VII discrimination allegations on behalf of a former Cambridge Transportation, Inc. worker. 

The Court ordered payment to the EEOC of $100 per day for each day Cambridge Transportation, Inc. remains out of compliance beginning on June 7, 2024.  Over one month later, Cambridge remains out of compliance based on the docket.  This ruling is a warning admonisiton for employers facing EEOC subpoenas and the seriousness for any alleged non-compliance with the Commission’s investigation process.

Case Background

On October 19, 2023, the EEOC petitioned for an Application for and Order to Show Cause Why Administrative Subpoena Should Not Be Enforced (the “Application”) against Respondent Cambridge Transportation, Inc. (“Cambridge”).  (See United States EEOC v. Cambridge Transp., Inc., No. 0:23-MC-00101, ECF No. 1.)  The EEOC’s subpoena duces tecum sought information from Cambridge regarding a charge of discrimination under Title VII of the Civil Rights Act of 1964.  (See id.)  In the underlying charge, Charging Party Becky Blechinger alleged that Cambridge “discriminated against her on the bases of her sex (female), race (white), national origin (United States) and disability by paying a higher rate of compensation to men of Somalian national origin,” who worked at Cambridge.  (See id., ECF No. 2, at 2.)

On November 1, 2023, the Court issued an order to show cause for the EEOC’s Application.  (See id., ECF No. 7.)  On November 21, 2023, the EEOC provided a status report that reflected it had not effectuated service on Cambridge.  (See id., ECF No. 9)

On December 19, 2023, the EEOC filed a Motion to Stay Proceedings.  (See id., ECF No. 12.)  Therein, the EEOC stated Cambridge responded and acknowledged receipt of the Court’s order to show cause and further indicated that Cambridge intended to produce the documents identified in the EEOC’s Application by December 26, 2023.  (See id.)  The following day the Court stayed the case.  (See id., ECF No. 13.)

On January 25, 2024, the EEOC filed another status report with a request due to Cambridge’s failure to comply with the subpoena. Thereafter, the Court entered an order for hearing on the EEOC’s Application.  (See id., ECF Nos. 14 & 15.)  On February 22, 2024, Cambridge attended the hearing via telephone through its non-attorney registered agent.  (See id., ECF No. 18.)

On February 27, 2024, the Court granted the EEOC’s Application and determined that Cambridge must comply with the subpoena or otherwise the Court may find Cambridge in civil contempt and impose a daily fine for each day Cambridge remains out of compliance.  (See id., ECF No. 20.)

On May 14, 2024, the EEOC provided a status report to the Court and reiterated that Cambridge failed to comply with the subpoena and requested the Court impose a civil fine of $800 per day, for each day past May 14, 2024, that Cambridge remains non-compliant.  (See id., ECF No. 23.)

On May 20, 2024, the Court ordered a hearing on the EEOC’s Application and required Cambridge to retain counsel to enter an appearance on its behalf to show cause why sanctions should not be imposed for failure to comply with the Court’s February 27 order.  (See id., ECF No. 25.)  On June 7, 2024, the hearing occurred and Cambridge did not appear.  (See id., ECF No. 27.)

The Magistrate’s Report and Recommendation and the District Court Judge’s Finding

On June 10, 2024, Magistrate Judge Dulce J. Foster issued his Report and Recommendation.  (See United States EEOC v. Cambridge Transp., Inc., No. 0:23-MC-00101, 2024 U.S. Dist. LEXIS 121147 (D. Minn. June 10, 2024).  The report detailed the continued failures of Cambridge to respond to the Agency’s subpoena and efforts to enforce its subpoena.  (See id., at *1-6.)

The Court opined Cambridge had “ample time to retain counsel, for its alleged counsel to enter an appearance and to ensure its counsel either would be available to attend the show cause hearing or move to reschedule it” and “despite having months,” it had “faile[d] to do so and made no efforts to explain that failure or seek more time to comply.”  (See id., at *5.)  As a result, the Court found Cambridge waived all of its defenses to the EEOC’s motion and request for sanctions.  (See id., at *5-6.)

The Court reiterated its authority that it “may hold a person who, having been served, fails without adequate excuse to obey the subpoena or an order related to it.”  (See id, at *6) (quoting Fed. R. Civ. P. 45(g).)  The Court found Cambridge’s continued non-compliance with the subpoena warranted contempt and imposition of monetary sanctions.  (See id.)  The Court’s recommendation was not made “lightly, but Cambridge’s intransigent refusal to cooperate” left the Court with few other options.  (See id.)

On the requested $800 per day fine from the EEOC, the Court reasoned at this stage that it was not justified at this stage.  (See id.)  The Court instead recommended an initial daily fine of “$100 per day for each day Cambridge remains noncompliant with the subpoena beginning June 7, 2024, the date of the show cause hearing, and continuing until Cambridge satisfactorily complies.”  (See id., at *7.)  The Court further held “additional sanctions and penalties may be warranted in the future” if Cambridge’s failure to comply continues.  (See id.)

The District Court Judge found no clear error in the Magistrate Judge Foster’s recommendation and report.  (United States EEOC v. Cambridge Transp., Inc., No. 0:23-MC-00101, 2024 U.S. Dist. LEXIS 118857, at * 1 (D. Minn. July 8, 2024).)  In so holding, the Court adopted the report in full, and found Cambridge in civil contempt and ordered payment of $100 per day for each day Cambridge remains out of compliance with the EEOC’s subpoena, beginning on June 7, 2024.  (Id.)  The Court left open whether any additional sanctions and penalties may apply.

Implications For Employers

This recommendation and report, and resulting Court order, illustrates the length to which the EEOC will go to enforce its investigation of allegations of discrimination under Title VII of the Civil Rights Act of 1964.  Companies should recognize the EEOC’s enforcement efforts have teeth, and heed the Court’s response that imposed a daily fine based on total non-compliance.

Companies should take measures to ensure compliance with any EEOC request for information and respond accordingly, and promptly, to any investigation including subpoena requests.  Otherwise, Companies may find themselves footing a $100 bill for every day of non-compliance and possibly expose themselves to further civil contempt sanctions.

By Gerald L. Maatman, Jr., Jennifer A. Riley, Tiffany E. Alberty and George J. Schaller

Duane Morris Takeaways: In Equal Employment Opportunity Commission v. Lakeside Plastics, Inc., No. 1:22-CV-01149 (E.D. Wis. June 3, 20244),  Judge William C. Griesbach of the U.S. District Court for the Eastern District of Wisconsin granted Defendant’s motion for summary judgment and denied the EEOC’s motion for partial summary judgment.  The Court reasoned that the single use of a racial slur in the workplace without direction to an African-American employee was not sufficient to show severe and pervasive harassment for a hostile work environment claim.  The Court also held that a supervisor is not a similarly-situated comparator to a subordinate, regardless if they were subject to the same standards and engaged in similar conduct, dismissing the EEOC’s wrongful termination claim.     

Case Background

The EEOC filed suit on behalf of Brian Turner, an African-American worker, for alleged violations under Title VII of the Civil Rights Act of 1964 (“Title VII”) against Lakeside Plastics, Inc. (“Lakeside”).  Id. at 1.  The EEOC alleged Turner was discriminated against when he was subject to a hostile work environment and his employment with Lakeside was terminated based upon his race, or alternatively that Turner’s employment termination was in retaliation for engaging in protected activity.  Id.

Turner was employed by temporary staffing firm QPS Employment Group (“QPS”) and began his employee assignment at Lakeside on June 6, 2010, as a Production Technician I.  Id. at 3.  On three separate occasions, Turner asserted that he experienced verbal harassment from another production technician named Curt Moraski.  Id. at 5-6.

First, during work Turner and Moraski discussed being from Milwaukee and in their conversation Moraski commented racial slurs about his time in the area.  Id. at 5.  Turner reported this conversation to one of his team leads.  Id.  Second, in an offsite incident, Turner alleged he was traveling home when Moraski pulled up, threated Turner, and directed racial slurs at Turner.  Id.  Finally, after the offsite incident, Turner reported to Lakeside that he did not feel comfortable working around Moraski.  Id. at 6.  Lakeside assigned Turner to label boxes for the day with Moraski; no issues arose at that time. Id.  

On July 1, 2019, Lakeside ended Turner’s assignment based on “holistic considerations,” including a review of his attendance records and a note from team lead, Max Berndt, that demonstrated Turner’s poor performance, poor attendance, inability to take direction, and inability to get along with others.  Id. at 7-8.   That same day QPS informed Turner that he was terminated from his Lakeside assignment.  Id. at 8.   

Shortly thereafter, Lakeside received a complaint from Alex Adams, a white employee, made about Moraski “threatening [Adams].”  Id. at 8-9.  Lakeside also received complaints from other employees about Moraski’s behavior.  Id. at 8.  Moraski denied making any threats against anyone.  Id. at 9.  Moraski was subsequently terminated on Aug 1, 2019, due to his violation of Lakeside’s workplace violence policy.  Id.

On Aug. 1, Lakeside advised a QPS representative that Moraski threatened additional employees, aside from Turner, around the time of Turner’s employment.  Id. at 9.  QPS inquired whether Turner could return to work at Lakeside, to which Lakeside responded that it was open to rehiring Turner.  Id.

Following discovery, Lakeside brought a motion for summary judgment on all of the EEOC’s claims and the EEOC filed a cross-motion for partial summary judgment as to Lakeside’s affirmative defenses.  Id. at 1.

The Court’s Decision

The Court granted Lakeside’s motion for summary judgment on the grounds that Lakeside did not subject Turner to a hostile work environment, did not terminate Turner because of his race, and did not retaliate against Turner for his complaints of harassment.

The EEOC asserted that Lakeside discriminated against Turner by subjecting him to a hostile work environment based on his race.  Id. at 10.  The EEOC argued that Moraski’s exchanges with Turner, at both on-site and off-site locations, created a hostile work environment.  Id.  Central to the EEOC’s assertions was that “harassment involving the N-Word is sufficiently severe to create a hostile work environment.”  Id. at 12.  The Court reasoned that “a single, isolated event can be found to create a hostile work environment,” but the EEOC must present evidence “which a factfinder could reasonably conclude that the harassing conduct was severe or pervasive.”  Id. 

In this instance, the Court disagreed that the EEOC showed Moraski’s alleged use of racial slurs was sufficiently severe or pervasive.  Id.  The Court determined Moraski “did not direct” racial slurs at Turner during the conversation at Lakeside and the racial slurs directed at Turner off-site were reported to Turner’s lead, who immediately took preventative measures by assigning Turner to a new work location.  Id. at 12.  Similarly, Moraski’s instruction on labeling boxes did not create “a reasonable inference that any hostility Turner encountered was connected to his race.”  Id. at 13.

The Court opined that “Moraski’s conduct was undoubtedly offensive and inappropriate, and he was ultimately terminated by Lakeside based on complaints of similar behavior … but with no racially derogatory component.”  Id.  Given the totality of the circumstances, the Court concluded that Moraski’s conduct was not severe or pervasive such that a jury could reasonably conclude that Lakeside’s work environment was “permeated with discriminatory intimidation, ridicule, and insult.”  Id.  Therefore, the Court granted Lakeside’s summary judgment motion as to the EEOC’s hostile work environment claim.

The EEOC next asserted that Lakeside terminated Turner because of his race.  Id. at 14.  The Court reviewed Turner’s termination under the “holistic approach” standard relied on by the EEOC and focused on whether a reasonable jury could conclude that Turner “suffered the adverse employment action because of his … protected class.”  Id.  The Court agreed with Lakeside’s legitimate business reason for terminating Turner based on “poor attendance, an inability to take direction, and an inability to get along with others.”  Id.   In so holding, the Court determined that Lakeside took a holistic approach in reviewing Turner’s performance and took Turner’s attendance into consideration despite the fact that no one recommended to human resources that Turner be terminated based on his attendance.  Id. at 15.  Accordingly, the Court granted Lakeside’s motion for summary judgment on the EEOC’s wrongful termination claims.

The Court also granted Lakeside’s motion for summary judgment on the EEOC’s alternative retaliation claim and held that Lakeside had an “independently sufficient reason to terminate Turner’s assignment” through Turner’s “violations of the attendance policy on three days.”  Id. at 17-18.  The Court further found that the EEOC could not establish retaliation on the basis that Lakeside refused to rehire Turner, because Lakeside was open to rehiring Turner, although a position was not extended.  Id. at 18.

Implications For Employers

Employers that are confronted with EEOC-initiated litigation involving allegations of race discrimination should recognize this opinion draws a fine line on what courts may consider pervasive in terms of the frequency, location, and direction of discriminatory comments.

Further, from a practical standpoint, employers should ensure workplace policies are in place for employees to report any instance of discrimination, including race discrimination, and provide procedures for employers to promptly investigate those allegations.