{"id":2756,"date":"2026-02-18T15:29:35","date_gmt":"2026-02-18T19:29:35","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/classactiondefense\/?p=2756"},"modified":"2026-02-18T15:29:36","modified_gmt":"2026-02-18T19:29:36","slug":"settlement-stalled-yet-again-second-circuit-affirms-denial-of-consent-decree-to-resolve-decades-long-race-discrimination-lawsuit","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/classactiondefense\/2026\/02\/18\/settlement-stalled-yet-again-second-circuit-affirms-denial-of-consent-decree-to-resolve-decades-long-race-discrimination-lawsuit\/","title":{"rendered":"Settlement Stalled Yet Again: Second Circuit Affirms Denial Of Consent Decree To Resolve Decades\u2011Long Race Discrimination Lawsuit"},"content":{"rendered":"
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By Gerald L. Maatman, Jr., Gregory S. Slotnick, and Elizabeth G. Underwood<\/strong><\/p>\n\n\n\n

Duane Morris Takeaways:<\/strong> On February 12, 2026, the U.S. Court of Appeals for the Second Circuit affirmed <\/a>a district court\u2019s refusal to so order a proposed consent decree between the Equal Employment Opportunity Commission (\u201cEEOC\u201d) and a union that would have substantially modified and terminated court supervision over the union\u2019s referral hall and hiring practices in a Title VII enforcement action that has been pending for fifty-five years.\u00a0 United States Equal Emp. Opportunity Comm\u2019n v. Loc. 580 of the Int\u2019l Ass\u2019n of Bridge, Structural & Ornamental Ironworkers, Joint Apprentice-Journeymen Educ. Fund of the Architectural Ornamental Iron Workers Loc. 580, Allied Bldg. Metal Indus., No. 25-CV-44, 2026 WL 392327, at *1 (2d Cir. Feb. 12, 2026).\u00a0 Applying the standard set out in S.E.C. v. Citigroup Glob. Mkts., Inc., 752 F.3d 285, 294 (2d Cir. 2014), the Second Circuit held that the district court did not abuse its discretion in finding the proposed settlement was not \u201cfair and reasonable\u201d and did not adequately resolve the core discrimination claims in the original 1971 complaint.\u00a0 Id. at *4.\u00a0 The Second Circuit, like the district court, emphasized the union\u2019s consistent failures to comply with court\u2011ordered recordkeeping obligations, the gaps in the critical referral\u2011hall data, and the need for a more extensive factual record before the court may unwind extensive injunctive relief and oversight in this case.\u00a0 Id.<\/em><\/p>\n\n\n\n

Case Background<\/strong><\/p>\n\n\n\n

The litigation began in 1971, when the U.S. Department of Justice (\u201cDOJ\u201d) filed suit against Local 580 of the International Association of Bridge, Structural, and Ornamental Ironworkers and the Join Apprentice-Journeymen Educational Fund of the Architectural Ornamental Iron Workers Local 580 (\u201cLocal 580\u201d), alleging race discrimination in their employment practices, in violation of Title VII of the Civil Rights Act of 1964.  Id.<\/em> at *1.  The complaint asserted that Local 580 engaged in \u201cpatterns and practices\u201d of discrimination that denied non-white individuals employment opportunities because of their race.  Id.<\/em>  Specifically, the complaint alleged that Local 580 systemically excluded non-white individuals from union membership and refused to refer them for available ironworking jobs.  Id.<\/em><\/p>\n\n\n\n

In 1974, the EEOC was substituted as plaintiff for the DOJ.  Id.<\/em> at n.1.  In 1978, following negotiations, the district court entered a consent judgment that: (1) permanently enjoined the union from discriminating against Black and Hispanic ironworkers; (2) established remedial membership benchmarks for Black and Hispanic workers; and (3) imposed specific data\u2011collection and recordkeeping requirements regarding operation of the union\u2019s referral hall \u2014 \u201ca clearinghouse in which the union matches available members with employers requesting ironworking services.\u201d  Id.<\/em><\/p>\n\n\n\n

Over the ensuing decades, however, the union repeatedly failed to comply with its obligations.  Id.<\/em>  Throughout the 1980\u2019s and 1990\u2019s, the district court issued multiple contempt orders addressing non\u2011compliance and increased the scope of its mandatory union remedial obligations.  Id.<\/em><\/p>\n\n\n\n

In 2019, following a period without discrimination complaints, the EEOC assessed whether ongoing court supervision remained necessary.  Id.<\/em> at *2.  Interviews with 41 Black and Hispanic current and former Local 580 members revealed that 17% reported racial discrimination, often involving referral-hall operations or job allocation.  Id.<\/em>  The EEOC\u2019s labor economist analyzed \u201cfund office\u201d data from 2009\u20132019, which showed racial disparities in overtime and working days (attributed to employer rather than union conduct), and \u201chiring hall dispatch\u201d data limited to June 2018\u20132019, which showed no statistically significant disparities and mixed results on unemployment duration.  Id.<\/em>  Based on this record, the EEOC and the union negotiated a proposed consent decree that would impose new, less stringent compliance obligations, vacate all prior remedial obligations and court orders, immediately terminate the special master\u2019s appointment, and end judicial oversight after three years.  Id.<\/em><\/p>\n\n\n\n

In 2020, the parties jointly moved to enter the proposed consent decree.  Id.<\/em>  The district court requested supplemental information, including the union\u2019s 2009\u20132018 referral-hall data, which was missing from the economist\u2019s report but which had been required by court order, and evidence of efforts to address the documented disparities.  Id.<\/em>  Ultimately, the district court denied the motion without prejudice in 2022, determining the EEOC\u2019s submission was insufficient, and the parties had \u201centirely failed\u201d to produce the missing data and had not described remedial actions, as required.  Id.<\/em><\/p>\n\n\n\n

In 2023, the parties renewed their motion for the same proposed decree.  Id.<\/em> at *3.  The district court again denied the motion in 2024, concluding the settlement was not \u201cfair and reasonable\u201d and not in the public interest.  Id.<\/em>  The court reasoned that without mandated referral-hall data and evidence of remedial efforts, it could not conclude the decree would resolve the core discrimination allegations, and that approval could signal that other litigants may ignore court-ordered recordkeeping without consequence.  Id.<\/em><\/p>\n\n\n\n

The EEOC appealed, arguing that the district court abused its discretion in finding the proposed consent decree was not fair and reasonable and was not in the public\u2019s interest.  Id.<\/em><\/p>\n\n\n\n

The Second Circuit\u2019s Ruling<\/strong><\/p>\n\n\n\n

The Second Circuit ultimately affirmed the district court\u2019s denial of the proposed consent decree, finding the district court did not abuse its discretion in concluding that the decree failed the \u201cfair and reasonable\u201d standard.  Id.<\/em> at *1.  The Second Circuit applied the Citigroup<\/em> framework, which requires a proposed consent decree to be both \u201cfair and reasonable\u201d and not disserve the public interest.  Id.<\/em> at *4 (quoting Citigroup<\/em>, 752 F.3d at 294).  According to the Second Circuit, to determine whether a proposed settlement is \u201cfair and reasonable,\u201d a district court considers four factors, including: \u201c(1) the basic legality of the decree; (2) whether the terms of the decree, including its enforcement mechanism, are clear; (3) whether the consent decree reflects a resolution of the actual claims in the complaint; and (4) whether the consent decree is tainted by improper collusion or corruption of some kind.\u201d  Id.<\/em> (quoting Citigroup<\/em>, 752 F.3d at 294\u201395).<\/p>\n\n\n\n

The Second Circuit held that the district court did not abuse its discretion in concluding that the proposed decree failed the third factor \u2013 whether the consent decree reflects a resolution of the original claims.  Id.<\/em>  Specifically, Local 580\u2019s persistent failure to comply with court-ordered recordkeeping requirements left critical gaps in the data about referral-hall operations, rendering the economist\u2019s conclusion of race-neutral operations of \u201climited utility.\u201d  Id.<\/em>  The Second Circuit noted that, given a history of over fifty-five-years and multiple contempt orders, the district court reasonably required a more extensive factual record to evaluate whether the proposed settlement addressed the 1971 complaint\u2019s core allegations.  Id.<\/em><\/p>\n\n\n\n

Regarding the public interest analysis, the Second Circuit found that the district court\u2019s first rationale, that entering a favorable judgment despite Local 580\u2019s disregard for recordkeeping mandates could signal to future litigants that court orders may be ignored without consequence, was a permissible public interest consideration independent of agency policy.  Id.<\/em> at *5.  However, the Second Circuit noted that the district court\u2019s second rationale, declining to defer to the EEOC\u2019s public interest determination based on the agency\u2019s shifting policy priorities\u2014was likely an error under the Citigroup<\/em> standard, which instructs courts not to reject settlements based solely on disagreement with agency policy decisions.  Id.<\/em>  Ultimately, because the proposed decree still failed the \u201cfair and reasonable\u201d requirement, the Second Circuit affirmed the district court\u2019s denial without needing to reverse on the public interest issue.  Id.<\/em><\/p>\n\n\n\n

Implications For Employers<\/strong><\/p>\n\n\n\n

This decision signals that, in long-running cases \u2013 particularly those with a history of noncompliance \u2013 district courts may demand more extensive factual showings before approving proposed consent decrees, even when the parties reach an agreement and even when an enforcement agency also supports settlement.  Moreover, this decision underscores the importance for employers to ensure strict compliance with all court-ordered recordkeeping requirements, as courts may refuse to approve favorable settlements where mandated records are missing or incomplete, despite the parties\u2019 agreement.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Gerald L. Maatman, Jr., Gregory S. Slotnick, and Elizabeth G. Underwood Duane Morris Takeaways: On February 12, 2026, the U.S. Court of Appeals for the Second Circuit affirmed a district court\u2019s refusal to so order a proposed consent decree between the Equal Employment Opportunity Commission (\u201cEEOC\u201d) and a union that would have substantially modified … <\/p>\n

Continue reading “Settlement Stalled Yet Again: Second Circuit Affirms Denial Of Consent Decree To Resolve Decades\u2011Long Race Discrimination Lawsuit”<\/span><\/a><\/p>\n","protected":false},"author":575,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,70],"tags":[],"ppma_author":[7,103,149],"class_list":["post-2756","post","type-post","status-publish","format-standard","hentry","category-general","category-settlement-issues"],"authors":[{"term_id":7,"user_id":575,"is_guest":0,"slug":"gmaatman","display_name":"Gerald L. Maatman, Jr.","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2022\/09\/maatmangerald-100x100.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""},{"term_id":103,"user_id":661,"is_guest":0,"slug":"gsslotnick","display_name":"Gregory Slotnick","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2023\/09\/slotnickgreg-100x100.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""},{"term_id":149,"user_id":744,"is_guest":0,"slug":"eunderwood","display_name":"Elizabeth Underwood","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2025\/10\/underwoodelizabeth-100x100.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/2756","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/users\/575"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/comments?post=2756"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/2756\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/media?parent=2756"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/categories?post=2756"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/tags?post=2756"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/ppma_author?post=2756"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}