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Don’t count on EEOC reimbursement if you win

by on
in Employment Law,Human Resources

If an employer loses a discrimination case, it typically has to pay the employee’s legal fees and associated costs (plus any damages due).

Theoretically, the same is true if the employee loses—the employer would then be entitled to reimbursement for defending the case. As a practical matter, most employees don’t have enough money to pay if they lose.

But what if the case is championed by the EEOC and the agency loses? Surely it has the money to reimburse the employer it dragged into court.

Fat chance you’ll recoup those costs, if this recent Minnesota case is any indication.

Recent case: After James Edstrom’s job offer was rescinded when his potential employer learned he was deaf, he went to the EEOC. The agency filed an ADA lawsuit against the company. The case went to trial and after six days, the jury concluded the company hadn’t violated the ADA.

The company then asked the court to order the EEOC to pay more than $500,000 in legal fees.

The court refused to do so. It reasoned that the EEOC is a public agency that is supposed to push the envelope in enforcing the nation’s employment laws.

Therefore, even if the claims are uncertain and it loses, the court said, the EEOC is still performing an important function. To make it pay the employer in this case would cut into its litigation war chest and might mean other employees would not get the help they need challenging their employers’ actions. (EEOC v. Hibbing Taconite, No. 09-729, DC MN, 2010)

Final note: The company said its attorneys spent more than 2,000 hours defending the case. Those costs—plus the chance the employee might win—show why preventing lawsuits should be your No. 1 goal.

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