907 F.3d 968
7th Cir.2018Background
- EEOC sued CVS in 2014 under 42 U.S.C. § 2000e-6(a) (section 707(a)), alleging CVS’s severance agreement chilled employees’ exercise of Title VII rights and therefore constituted a “pattern or practice of resistance.”
- The EEOC had earlier closed the underlying charge by issuing a right-to-sue letter to the charging party (Tonia Ramos) and later pursued an independent § 707(a) enforcement action rather than a § 706/§ 707(e) charge-based action.
- The district court granted summary judgment to CVS; this court affirmed on the merits in EEOC v. CVS Pharmacy, Inc., 809 F.3d 335 (7th Cir. 2015).
- The district court then awarded CVS $307,902.30 in attorney fees, reasoning the EEOC should have known its regulations required initial conciliation before suing under section 707(a).
- On appeal of the fee award, the Seventh Circuit examined whether the EEOC’s legal theory was frivolous, unreasonable, or without foundation, considering the need to avoid hindsight-based fee awards under Christiansburg.
- The Seventh Circuit reversed the fee award, concluding the EEOC’s statutory and regulatory reading—though novel—was a colorable legal position and the suit was not frivolous; it also found the EEOC’s factual basis (risk of chilling cooperation) was reasonable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the EEOC had authority to bring a § 707(a) action without first following § 706 conciliation procedures | §707(a)’s text differs from §707(e); §707(a) authorizes suit against “any person or group” and says nothing about §706 procedures, so conciliation is not required | Section 707(e) incorporates §706 procedures for pattern-or-practice enforcement; agency regulations require conciliation before suit; EEOC should have conciliated | The EEOC’s interpretation was novel but colorable; conciliation requirements did not render the suit frivolous and regulations mirroring the statute could not independently make the suit unreasonable — EEOC not frivolous on this ground |
| Whether the EEOC’s suit was frivolous under Christiansburg such that fee-shifting is warranted | The claim was legally tenable based on statutory text, prior analogies, and lack of controlling precedent; a colorable legal argument suffices | The suit was unreasonable and contrary to EEOC regulations, so fees are appropriate | The court held dismissal on the merits does not alone justify fees; the EEOC’s theory was not barred by controlling and unambiguous precedent, so fees were improper |
| Whether the EEOC’s factual basis (chilling effect of the severance agreement) was without foundation | The agreement’s broad release and vague carve-outs could chill cooperation with the EEOC and deter former employees from participating | CVS argued facts did not support such a chilling effect and that Ramos’s cooperation undermined the claim | The factual theory was reasonable; the district court did not abuse its discretion in finding the factual foundation non-frivolous |
| Whether the district court impermissibly relied on hindsight or misapplied Mach Mining and related remedies | EEOC argued that novelty of its claim and available remedies under Mach Mining counsel against fee awards; novelty does not equal frivolousness | CVS relied on district court’s view that EEOC violated its own regulations and should pay fees | The Seventh Circuit found the district court had relied on hindsight and improperly used EEOC regulations to justify fees; remanded to vacate the fee award |
Key Cases Cited
- Christiansburg Garment Co. v. EEOC, 434 U.S. 412 (establishes standard for awarding fees against plaintiffs: action must be frivolous, unreasonable, or without foundation)
- EEOC v. CVS Pharmacy, Inc., 809 F.3d 335 (7th Cir. 2015) (merits decision rejecting EEOC’s §707(a) theory)
- Hamer v. Lake County, 819 F.2d 1362 (7th Cir. 1987) (fees permitted only when litigation proceeds in face of controlling and unambiguous precedent)
- Reichenberger v. Pritchard, 660 F.2d 280 (7th Cir. 1981) (fees unwarranted for issues of first impression)
- Pickett v. Sheridan Health Care Ctr., 664 F.3d 632 (7th Cir. 2011) (abuse-of-discretion standard for reviewing fee awards)
- Mach Mining, LLC v. EEOC, 135 S. Ct. 1645 (2015) (where failure to conciliate is apparent at outset, remedy is order to conciliate rather than immediate dismissal)
- CRST Van Expedited, Inc. v. EEOC, 136 S. Ct. 1642 (2016) (discusses circumstances where fee awards were appropriate after misuse of discovery to broaden claims)