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Even if Ford ‘gamed system’ by settling with EEOC to undercut class action, court won’t stay settlement notice

By Lorene D. Park, J.D.

Though acknowledging the seriousness of claims by 33 named plaintiffs in this putative class action that Ford allowed ongoing sexual harassment of its female employees for decades, and despite Ford’s apparent “gamesmanship” in seeking to undercut class certification by settling with the EEOC through its conciliation process, a federal district court in Illinois refused to stay the issuance of notice of the settlement until it decided whether to certify a class in this suit (Van v. Ford Motor Co., October 18, 2017, Coleman, S.).

According to the plaintiffs, since the 1980’s, male employees and supervisors at Ford’s two Chicago plants routinely made discriminatory and harassing remarks and gestures towards female employees and Ford took no action. They also claimed that Ford maintains a pattern and practice of inferior treatment of female employees in the terms and conditions of employment, including assignments, training, and promotions.

Prior proceedings, EEOC conciliation. In a March 2016 order, the court denied Ford’s motion to strike the class claims, finding the motion premature. Though Ford argued that the proposed class definition would result in conflicts of interest because the class would include both managerial and nonmanagerial employees, that issue could be resolved by refining the class definition. On August 1, 2017, Ford and the EEOC entered a conciliation agreement, notices of which were scheduled to issue on October 16. (The EEOC issued a press release regarding the $10.125 million settlement on August 15.)

On August 30, Ford filed a motion to deny class certification, arguing that the conciliation agreement moots much of the relief sought by the plaintiffs. The conciliation agreement, including information about the timing of the notice, was an exhibit to Ford’s motion.

Plaintiffs want conciliation notices stayed. On October 14, two days before notices of the settlement from the conciliation agreement were to issue, the plaintiffs filed a motion asking the court to enter an order staying issuance of the notices, arguing that the class certification issue should be resolved first. The plaintiffs asserted that Ford “cut a back-room deal with the EEOC” in a settlement not overseen by the court in order to undercut class certification. They pointed out that Ford had argued, in a hearing on its motion to deny certification, that the entire class certification process should be halted because it had entered the conciliation agreement.

The plaintiffs also found “many problems with the Conciliation Agreement,” including that it “purports to cover a class of individuals based on both race and sexual harassment,” while the claims here are based solely on sexual harassment. Another “glaring problem” in their view was that the claim form language was “confusing, complex and difficult to understand,” as explained by their expert. The plaintiffs argued that staying the notices until the court could review Ford’s actions would cause little or no prejudice to Ford but distributing the claim forms at this time had the potential to “cause tremendous harm and confusion.”

In its opposition to the motion, Ford argued that the plaintiffs cited no legal authority and gave no cause for the court to interfere with the EEOC’s claims process and that the plaintiffs had known about the settlement for two months before filing the “emergency” motion. Ford also argued that the plaintiffs could not satisfy the criteria for a preliminary injunction.

The plaintiffs replied that Ford was ignoring the scheduling order that gave them until October 30 to respond to the motion to deny class certification and they were “shocked” that Ford was proceeding with the notice anyway. They asserted that, by moving forward, Ford was “forcing absent class members to proceed at their own peril. If this Court certifies a class of females, then those women should have the opportunity to submit claims under that process. If someone were to wait for the class certification in this case to be complete, they would be time-barred from filing under the EEOC process.”

Despite Ford’s “gamesmanship,” relief denied. Denying the motion to stay notice of the settlement from conciliation, the court acknowledged the “seriousness of the allegations” that Ford has allowed “sexual harassment and discrimination of its women employees for decades despite prior Conciliation Agreements with the EEOC.” The court also recognized that Ford seemed to be engaging in gamesmanship, trying to limit liability and undercut class certification. That said, however, the plaintiffs simply failed to satisfy the requirements for injunctive relief.

Significantly, courts rarely issue a stay of any administrative decision pending judicial review because that would require showing that the administrative process “misfired,” explained the court. Moreover, the requirements for issuing a stay were the same as those for a preliminary injunction, including showing likely success on the merits, no adequate remedy at law, and irreparable harm absent the requested relief. Here, the plaintiffs failed to make this showing, beyond minimally asserting that a balance of harms weighed in favor of an injunction. Consequently, their motion had to be denied.