IOWA CITY, Iowa — A trucking company will pay $50,000 to settle a sexual harassment lawsuit, a token payment to avoid trial in a closely watched case that has sharply limited the government’s ability to file large workplace discrimination lawsuits in several states.
Cedar Rapids-based CRST Van Expedited Inc. agreed to the payment Friday to Monika Starke, the lone remaining plaintiff in what had once been a major lawsuit by the Equal Employment Opportunity Commission. In exchange, the company avoided the cost of defending itself against Starke’s allegations that it was too slow to respond to her claims that a male trainer had sexually harassed her.
The settlement is a pittance compared to what CRST, one of the nation’s largest interstate trucking companies, might have had to pay if federal judges hadn’t drastically narrowed the scope of the lawsuit and made it harder for the EEOC to pursue class-action discrimination cases in the region.
In an unusual provision for an EEOC settlement that underscores how badly it fared, CRST will be allowed to try to recoup from it millions of dollars the company spent fighting allegations by other women that were dismissed.
CRST CEO David Rusch said Monday he believes the company would have prevailed at trial, but agreed to the settlement to avoid spending up to $1 million defending itself. He said the company has already spent more than $12 million on attorneys, and hopes a judge will order the commission to pay some of those costs.
Rusch said the EEOC filed a lawsuit before interviewing all the women who it alleged were victims. He said sexual harassment did happen at CRST, but company officials had procedures for reporting and preventing it.
“Somebody was claiming that we tolerate harassment, which is absolutely erroneous, absolutely a witch hunt, and that’s why we took the aggressive posture that we did,” he said.
The case began with a 2005 complaint from Starke, an Azle, Texas, driver who alleged that she was paired with a male colleague who constantly made crude sexual remarks and advances toward her. The company denied her claims.
After failing to reach settlement, the EEOC filed a class-action lawsuit in 2007 on behalf of female CRST drivers who it said were subjected to offensive comments, groped or even assaulted by male trainers and co-drivers during cross-country trips.
The commission sent letters to notify female employees, and dozens stepped forward with complaints. CRST is known for its “team driving” concept, in which trucks are driven by two drivers who alternate between driving and sleeping.
CRST argued that it immediately investigated reports of harassment and took actions such as reassigning drivers. Complaints by many of the women already had been dealt with internally, Rusch said.
U.S. District Judge Linda Reade faulted the commission for being slow to identify the class and complained that its lawyers were using the discovery process to identify victims and investigate claims, rather than doing so beforehand. Eventually, the agency said it would bring claims for 270 women, but only 150 were deposed by a court deadline.
For various legal reasons, all the claims except Starke’s were ultimately dismissed. Reade acknowledged that she threw out potentially worthy allegations by dozens of women because the commission took a “sue first, ask questions later” litigation strategy.
Last year, a panel of the 8th Circuit Court of Appeals, which hears cases from the Dakotas to Arkansas, largely upheld Reade’s ruling in a 2-1 decision, but reinstated Starke’s claim and set aside Reade’s award to CRST of $4.5 million in legal fees.
The panel ruled that the EEOC must investigate the claims of every potential victim and seek informal settlements on their behalf before filing class-action lawsuits. This made it harder for the government to pursue similar class-action cases in that region than anywhere else in the U.S.
Commission officials have argued that the stricter standard would impede its ability to enforce laws at workplaces with widespread discrimination and harassment. They say it is impractical to identify every possible victim in large cases and the requirement may reward employers who withhold information.
“This case has been a bad dream for the EEOC,” said Chicago lawyer Gerald Maatman, who represents companies sued by the EEOC. “Their position has been rejected pretty thoroughly and it’s created problems for them. And now employers are pressing this argument in other areas of the country.”
He said the standard is important because employers facing commission lawsuits want to know how big damages could be before deciding whether to settle. Judges in the 6th Circuit recently ruled in the commission’s favor in a similar case, ruling that a lawsuit against Cintas Corp. on behalf of female employees in Michigan could proceed.
The parties reached Friday’s settlement after Reade ruled that 15 other women who claimed harassment would not be allowed to testify at Starke’s trial. Maatman said he now expected “a big battle” over whether and how much the commission should pay in fees.