State Court Suit Can Bar EEOC's Suit for Monetary Relief - 5th Circuit

A private sector employer got a rare opportunity to have a denial of summary judgment tested by the 5th Circuit Court of Appeals, and came away not with a total victory, but with one that is likely to make it happy.

Anyone who has had to deal with a federal case brought by the EEOC under Title VII and a companion state court suit brought by the same individuals on whose behalf the EEOC is suing, knows how frustrating it can be. In the case decided today, the attorneys for the EEOC had gone so far as to attend the state court mediation and trial, even assisting the plaintiffs' private attorneys in selecting the jury and passing notes during the trial.

When the result of the state court favored the defendant, it tried to trump the EEOC's federal suit by arguing res judicata. Although the district court didn't buy the legal argument, it did note the inherent unfairness in giving the plaintiffs two bites at the apple, so it allowed an interlocutory appeal.

And today, in EEOC v. Jefferson Dental Clinics (5th Cir. 2/12/07) [pdf] the Court held that while the EEOC's entire suit was not barred by res judicata, the claim for make whole (monetary) relief was. The EEOC can continue its suit, but only for injunctive relief. Not the whole enchilada, but nevertheless a satisfying meal for Jefferson Dental.

It also rounded out the 5th Circuit's look at the other side of the coin, where it had held that when the EEOC brings suit on behalf of individuals and loses, their subsequent state court claim should be barred by res judicata. See EEOC Suit Binding on Named Individuals, And A Poke in the Eye to the Louisiana State Courts.

Update: The DLR has a good story on the Jefferson Dental case, EEOC Suit OK Despite Loss of State Case,But Court Says No Second Chance for Money ($), and mentions a key fact I didn't know when I wrote my post. The lawyer handling the case for Jefferson Dental was Ron Chapman, who with a number of my other colleagues in our Dallas office handled not only the federal action, but were the trial team for the successful state court lawsuit that was the basis for the res judicata defense upheld by the 5th Circuit.