Regulatory power grabs have not gone unchecked
Thursday, February 25, 2016
Consider, for example, the Obama administration’s present aggressive campaign to push the bounds of federal employment and labor law far beyond anything Congress has been willing to pass. As I’ve noted before, judges have repeatedly found these administration power plays to overstep the law. See, for example, posts here (Equal Employment Opportunity Commission suffers epic Sixth Circuit loss in EEOC v. Kaplan), here (Breyer and liberal Supreme Court majority, even while siding with plaintiff in underlying case, smack around EEOC “guidance” ploy); see also here (many more examples, at Overlawyered).
Now here are four more examples from recent months.
1) The US Department of Labor sued oil field contractor Gate Guard demanding it reclassify some independent contract workers as employees. As our friends at the Washington Legal Foundation recount, Judge Edith Jones ruled on behalf of a Fifth Circuit appeals panel that Gate Guard was entitled to fees under an unusual “bad faith” provision (footnotes omitted here and below):
It is often better to acknowledge an obvious mistake than defend it. When the government acknowledges mistakes, it preserves public trust and confidence. It can start to repair the damage done by erroneously, indeed vindictively, attempting to sanction an innocent business.
Rather than acknowledge its mistakes, however, the government here chose to defend the indefensible in an indefensible manner. As a result, we impose attorneys’ fees in favor of Gate Guard as a sanction for the government’s bad faith.
At nearly every turn, this Department of Labor investigation and prosecution violated the department’s internal procedures and ethical litigation practices. Even after the DOL discovered that its lead investigator conducted an investigation for which he was not trained, concluded Gate Guard was violating the Fair Labor Standards Act based on just three interviews, destroyed evidence, ambushed a low-level employee for an interview without counsel, and demanded a grossly inflated multi-million dollar penalty, the government pressed on. In litigation, the government opposed routine case administration motions, refused to produce relevant information, and stone-walled the deposition of its lead investigator.
2) We commented one year ago on the amazing case of EEOC v. Freeman Cos., in which the Fourth Circuit found that the federal commission had relied on “pervasive errors and utterly unreliable analysis” in its attempt to go after a Maryland employer’s policies on criminal background checks of employees.
The appeals court sent the case back for further proceedings to district judge Roger Titus, who had previously shredded the EEOC’s proffered expert evidence as “laughable” and “mind-boggling.”
World-renowned poker expert Kenny Rogers once sagely advised, “You’ve got to know when to hold ‘em. Know when to fold ‘em. Know when to walk away.” In the Title VII context, the plaintiff who wishes to avoid paying a defendant’s attorneys’ fees must fold ‘em once its case becomes so groundless that continuing to litigate is unreasonable, i.e. once it is clear it cannot have a winning hand.
In this case, once Defendant Freeman revealed the inexplicably shoddy work of the EEOC’s expert witness in its motion to exclude that expert, it was obvious Freeman held a royal flush, while the EEOC held nothing. Yet, instead of folding, the EEOC went all in and defended its expert through extensive briefing in this Court and on appeal. Like the unwise gambler, it did so at its peril. Because the EEOC insisted on playing a hand it could not win, it is liable for Freeman’s reasonable attorneys’ fees.”
3) That wasn’t the only bad news for the EEOC’s legal team recently. A Wisconsin federal judge in EEOC v. Flambeau has rejected the commission’s notion that employers violate the Americans with Disabilities Act when they ask employees to take medical exams as part of so-called wellness programs in their health insurance coverage (discussion, Littler and Proskauer; background here and here).
4) And in another widely watched case, the Seventh Circuit in EEOC v. CVS Pharmacy (via Jon Hyman) has rejected the commission’s position that employers violate the law when they proffer widely used garden-variety exit agreements to departing workers (on the theory that the language is not sufficiently encouraging of later legal action, which supposedly constitutes “retaliation”).
Imagine what these agencies and others would be getting away with were our judiciary someday reduced to a spirit of subservience to the executive branch of government.