December 5, 2017
from the United States District Court for the Northern
District of Illinois, Eastern Division. No. 14 C 863 - John
W. Darrah, Judge.
Wood, Chief Judge, and Rovner and Hamilton, Circuit Judges.
surface, this appeal is about a fee award entered against the
Equal Employment Opportunity Commission (EEOC or Commission).
But there is more than meets the eye. The award relates to a
complaint that the Commission filed against CVS Pharmacy,
Inc., alleging that CVS was using a severance agreement that
chilled its employees' exercise of their rights under
Title VII of the Civil Rights Act of 1964, 42 U.S.C.
§§ 2000e et seq. After an investigation,
the Commission filed suit in 2014 against CVS. It contended
that CVS's use of the severance agreement constituted a
"pattern or practice of resistance" to the rights
protected by Title VII, in violation of section 707(a) of the
statute. 42 U.S.C. § 2000e-6(a).
district court rejected this claim on summary judgment, and
we affirmed in EEOC v. CVS Pharmacy, Inc., 809 F.3d
335 (7th Cir. 2015). After our decision, the district court
awarded CVS $307, 902.30 in attorneys' fees. It reasoned
that the EEOC should have realized even before filing the
suit that EEOC regulations required initial conciliation
before it could proceed with an enforcement action under
section 707(a). But that was not at all clear at the time the
EEOC acted. We conclude that the district court's
decision impermissibly rested on hindsight, and so we
we addressed the facts and legal background of this case at
length in our earlier opinion, see 809 F.3d at 336- 38, a
brief outline suffices for present purposes. CVS's
severance agreement came to the attention of the EEOC in 2011
after a former store manager, Tonia Ramos, filed a charge
with the Commission. Ramos had accepted a severance agreement
that included a broad release of claims and a covenant not to
sue, but which carved out exceptions for "rights that
Employee cannot lawfully waive" and for participation
"in a proceeding with any appropriate federal, state or
local government agency enforcing discrimination laws."
The EEOC argued that the agreement's broad release and
obscure exceptions could deter signatories from cooperating
with the EEOC or otherwise exercising their retained rights.
if the EEOC thinks that a charge has merit, the Commission
first engages in conciliation with the employer pursuant to
section 706's procedural requirements. See 42 U.S.C.
§ 2000e-5(b). If the parties cannot negotiate an
acceptable solution, the Commission has the authority to sue
the employer in federal court, on the employee's behalf.
See id. § 2000e-5(f). But the EEOC took a
different tack in Ramos's case. It abandoned Ramos's
charge of an unlawful employment practice by issuing her a
right-to-sue letter in June 2013. Eight months later, the
EEOC filed suit under section 707(a), which it believed
contained a grant of independent litigation authority. That
section allows for suits against "any person or group of
persons … engaged in a pattern or practice of
resistance to the full enjoyment of any of the rights secured
by this subchapter … ." Id. §
statute distinguishes between section 706, which allows the
EEOC to bring what are essentially individual suits, and
section 707's class-like "pattern or practice"
provisions. Typically, through section 707(e)'s
incorporation of section 706's procedural requirements,
the EEOC must follow the same pre-suit procedures whether the
suit is an individual one or a pattern-or-practice action.
Id. § 2000e-6(e) ("All such actions shall
be conducted in accordance with the procedures set forth in
[section 706] of this title."). But the EEOC took the
position that a distinction between section 707's
subsections excused it from doing so in this matter. Section
707(a), unlike section 707(e), gives the EEOC a right to
litigate without an underlying charge or unlawful employment
practice, and (the EEOC thought) by extension without first
conciliating. In drawing this novel distinction, the EEOC
noted the difference between the language of section 707(a)
and section 707(e): the former refers to a "pattern or
practice of resistance, " while the latter speaks of a
"charge of a pattern of practice of
discrimination." Id. § 2000e-6(a), (e).
The Commission also distinguished between section
707(a)'s broad reach to "any person or group of
persons" and section 707(e)'s limitation to
employers. Id. In our opinion on the merits, we
rejected the EEOC's arguments and held that conciliation
is necessary under both sections.
now faced with a different question: whether the EEOC's
position was far enough afield at the time it was advanced
that a fee award is warranted. The district court thought so,
but only because it believed that the EEOC had taken a
position contrary to its own regulations. (The Commission
argued otherwise.) The court did not otherwise address the
legal foundations of the case. In fact, it ruled that the
EEOC's factual foundations for bringing suit were
reasonable. CVS argues that the district court erred
in this latter finding, and urges us to affirm on either
review a district court's decision to award fees for an
abuse of discretion. Pickett v. Sheridan Health Care
Ctr., 664 F.3d 632, 639 (7th Cir. 2011). This deference
accounts for the district court's "superior
understanding of the litigation"; it is designed to
avoid "a second major litigation" over
attorneys' fees. Id. (quoting Spellan v. Bd.
of Educ. for Dist. 111, 59 F.3d 642, 645 (7th Cir.
1995). But "the justifications for the generally
deferential standard of review are absent" for questions
of law. Jaffee v. Redmond, 142 F.3d 409, 412 (7th
Cir. 1998). As always, we consider the district court's
legal analysis de novo. Pickett, 664 F.3d
at 639; Khan v. Gallitano, 180 F.3d 829, 837 (7th
Cir. 1999). As applied here, we take a ...