Grand Rapids Federal Judge "smacks down" EEOC

Several years ago, the Equal Employment Opportunity Commission (EEOC) became concerned that Peoplemark, Inc., a temporary employment agency, was refusing to refer any applicant to employers if the applicant had any prior felony conviction.  The EEOC investigated, and Peoplemark's Vice President and Associate General Counsel acknowledged to the EEOC that "Peoplemark had a companywide policy of rejecting felony applicants." He also told the EEOC that this policy was not a result of client requests.  In response, the EEOC filed suit against Peoplemark to adopt a more individualized policy because of the disaparate impact the existing policy had on blacks.

Peoplemark dug through voluminous records, which it provided to the EEOC, and concluded that its Vice President and General Counsel was wrong:  in fact there was no company-wide policy and occasionally applicants with felony convictions were referred for employment.  This complicated the case substantially, and 2008 through 2010, the parties disputed the content and meaning of the employer's substantial documentation.  Ultimately, the EEOC conceded defeat and stipulated to dismissal of the claim.  Peoplemark then requested that the Court order the EEOC to pay it more than $750,000.00 in attorney and expert fees. 

The District Judge in Grand Rapids awarded the cost sanctions to Peoplemark, giving it full restitution of every dollar spent from the outset of the litigation.  The EEOC appealed to the Sixth Circuit, arguing that the award should have been limited to the latter stages of the litigation--when the documents disclosed by Peoplemark clearly contradicted it's Vice President/General Counsel's claims of blanket policy--and that the $500,000.00 that Peoplemark spent for expert testimony was both unreasonable and exorbitant.  Two of the three Federal judges disagreed with the EEOC and affirmed the award, despite the fact that the entire lawsuit was predicated on the (ultimately false) testimony of Peoplemark's own officer.