October 24, 2017 / 7:24 PM / 5 months ago

Want to kill a sex discrimination class action? Ford case is blueprint

(Reuters) - Last week, U.S. District Judge Sharon Johnson Coleman of Chicago denied an emergency motion by lawyers representing 31 women who claim they were sexually harassed at two Ford Motors plants in the Chicago area. The women’s lawyers wanted to stop the Equal Employment Opportunity Commission from sending out notices to Ford workers who may be eligible for compensation under Ford’s $10 million agreement this summer with the agency. Judge Coleman concluded the women hadn’t met the extremely tough standard to justify court meddling with administrative decisions.

The judge’s three-page order seems perfectly straightforward – until you understand the implications of her decision. Coleman’s ruling will probably spell the end of the long-running sex discrimination class action, in which the two sides are deep in discovery on the women’s request for class certification.

As I’ll explain, both the women and Ford contend the EEOC claims process can’t be reconciled with the class action, the women in their emergency motion to block the EEOC notices and Ford in a motion to deny class certification. Judge Coleman hinted at sympathy for the women’s argument that Ford made a deal with the government to circumvent the class action, writing that the company “seems to be engaging in what might be considered gamesmanship.” But her ruling means Ford’s strategy worked, gamesmanship or not.

Of course, the company’s lawyers at Gibson Dunn & Crutcher contend Ford didn’t exploit the system for civil rights claims at all but in fact played entirely by the rules. Under those rules, in Ford’s telling of the story, the female employees claiming sex discrimination at the two Chicago factories lodged charges at the EEOC before they filed a proposed class action in 2014. The government duly investigated the allegations, with cooperation from Ford and the women, Ford said. The EEOC’s investigation led, in turn, to negotiations between the government and the company.

Those negotiations culminated in an agreement last August that, according to Ford, provides just about everything the women who originated the case could have hoped to achieve in the class action - and more, Ford said, since its EEOC settlement also addresses allegations of race discrimination at the Chicago plants, which the class action is not asserting. As part of the EEOC agreement, Ford will establish a supposedly independent panel of monitors to evaluate discrimination claims, will adopt procedures to prevent discrimination at the plants and will provide as much as $10.1 million in compensation to employees who submit claims of past discrimination. Ford will cover the cost of the claims process.

Soon after Ford announced the EEOC settlement, Gibson Dunn filed the company’s surprise motion to deny class certification, arguing that there was simply no need to complete discovery when the EEOC claims process offered a streamlined process to the same ultimate end (and saves employees from paying legal fees to class counsel). The U.S. Supreme Court held in 2015’s Mach Mining v. EEOC (135 S. Ct. 1645) that EEOC agreements are the “preferred means” of resolving employment discrimination claims, Ford said. And “numerous courts,” Ford said, have refused to certify classes when government enforcement actions effectively resolved class claims. In 2015’s Imber-Gluck v. Google (2015 WL 1522076), for instance, a San Francisco federal judge denied class certification to parents suing Google for allegedly inducing kids to spend real money on videogame treasure because Google had already promised full repayment through a settlement with the Federal Trade Commission.

The women suing Ford for sex discrimination, Ford said, cannot show their class action is superior to a resolution of their claims through the EEOC agreement. Without that showing, the company asserted, they cannot win class certification under the Federal Rules of Civil Procedure.

As plaintiffs’ lawyers from Hunt & Associates marshalled a response to Ford’s surprise motion, the EEOC, which is not a party to the proposed class action, began to implement its agreement with the company. EEOC rules require employees eligible to bring claims to be notified within 75 days. Right before that deadline, Ford informed plaintiffs’ lawyers that at least two named plaintiffs in the sex discrimination case would be receiving EEOC notices. Hunt & Associates responded with its emergency motion to stay the notices.

Hunt claimed Ford’s settlement with the EEOC was a naked tactic to undermine the class action. “Ford Motor Company cut a back-room deal with the EEOC to settle certain race discrimination and gender discrimination claims in a setting not overseen by this court,” their motion argued. “This is a blatant attempt to circumvent this court’s authority by proceeding with the claims process under the conciliation agreement before this court can consider whether to grant or deny class certification.”

Ford, as you would expect, said it struck the EEOC deal with the best of intentions. It also pointed out that employees can fill out the EEOC claim form without releasing any right to sue; they’re only required to agree not to participate in litigation if they accept the company’s offer. The EEOC, meanwhile, said in a letter Ford filed with Judge Coleman that its agreement with the company is not subject to second-guessing by the judge or plaintiffs’ lawyers. “There is no statutory basis and no judicial precedent that authorizes the judicial examination of EEOC’s conciliation process,” the agency said. “We have determined that the (Ford) agreement is acceptable to us and in the public interest. We will not modify or renegotiate the agreement.”

Judge Coleman ended up allowing the EEOC claims notices to go out based on Ford’s procedural arguments. To stop the government from implementing the deal, Ford said, plaintiffs had to meet the same high standard as a party requesting an injunction. The judge agreed the women’s lawyers hadn’t passed that test.

So what happens now? Neither plaintiffs’ lawyer Keith Hunt nor Ford lawyer Eugene Scalia of Gibson Dunn responded to my emails requesting comment, but it looks like the claims process and the litigation will move ahead for the next few months on parallel tracks. Plaintiffs have to file a response to Ford’s motion to deny class certification by Oct. 30. Judge Coleman has scheduled a hearing on the motion for the end of January, by which time employees will have had a few months to file claims through the EEOC process. It’s a good bet that the judge will want to hear how many workers have submitted claims.

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