After issuing the EEOC a series of defeats on its pattern or practice claims, on January 28, 2015, Judge Laurie Smith Camp of the U.S. District Court for the District of Nebraska found in EEOC v. JBS USA, LLC, No. 8:10-CV-318 (D. Neb. Jan. 28, 2015), that those rulings do not bar the EEOC’s from pursuing individual claims for religious discrimination and retaliation for prayer break requests.

The EEOC suffered a series of defeats in its Phase I pattern or practice claims. First, the Court granted summary judgment as to the EEOC’s pattern or practice claims for unlawful termination and retaliation, finding that a single mass termination of 80 Muslim employees did not constitute a “pattern or practice.” (Read more here.) Second, after a bench trial, the Court dismissed the EEOC’s pattern or practice claims for failure to accommodate, finding that JBS established that accommodating claimants’ prayer requests would have imposed an “undue hardship” on the company. (Read more here.)

The first round of Phase II, however, went to the EEOC when the Court ruled that its earlier findings did not necessarily preclude the EEOC from pursuing individual claims for religious discrimination or retaliation. The Court refused to apply the doctrine of issue preclusion because the Court’s findings on issues other than undue hardship were not “necessary” to its Phase I rulings.

The Court’s opinions are a useful road map for any employer defending an EEOC pattern or practice lawsuit.

Factual Background

The EEOC filed two lawsuits alleging that JBS USA, LLC, which does business as meat packing company JBS Swift & Company, discriminated against a class of Somali Muslim employees at its facilities in Greeley, Colorado and Grand Island, Nebraska.

In the Nebraska suit, the EEOC alleged that JBS Swift engaged in a pattern or practice of religious discrimination when it failed to reasonably accommodate at least 153 Muslim employees by allowing them prayer breaks. The EEOC also alleged that the company: (1) harassed and retaliated against employees who requested that the company move their evening breaks; and (2) improperly terminated about 80 Muslim employees who “walked out” of the facility in protest of JBS’s refusal to change their evening breaks to accommodate prayer during Ramadan.

On April 15, 2011, the parties agreed to bifurcate discovery and trial into two phases. They agreed to address the EEOC’s pattern or practice claims in Phase I and to address all individual claims for relief, as well as any claims for which no pattern or practice was found, in Phase II. Id. at 4.

From May 7, 2013 through May 13, 2013, the Court held a trial on the EEOC’s pattern or practice claims.

The Court found that: (a) JBS did not discipline or discharge any of its Muslim employees for praying; (b) that JBS terminated Somali-Muslim employees who “walked out” of the plant for withholding work and violating the Collective Bargaining Agreement; and (c) that Individual Plaintiffs’ requested religious accommodations would impose an undue hardship on JBS. Id. at 5-6.

JBS then moved for partial summary judgment on two grounds. First, it argued that the Court’s findings in Phase I precluded the Individual Plaintiffs from pursuing claims of religious discrimination and retaliation in Phase II.  Second, it argued that the EEOC failed to meet preconditions for bringing its Phase II claims.

The Court’s Opinion

The Court granted in part JBS’s motion for summary judgment with respect to issue preclusion and denied without prejudice JBS’s motion with respect to preconditions to suit.

JBS claimed that the Court’s findings establish that its reason for termination was legitimate and nondiscriminatory and preclude Individual Plaintiffs from arguing that JBS terminated or otherwise retaliated against them for requesting religious accommodation. Id. at 6.

The Court noted that a party asserting issue preclusion must demonstrate several elements. It must show that the non-moving party was in privity with a party to the original lawsuit, that the issue it seeks to preclude is the same as an issue actually litigated in the prior action, was determined by a valid and final judgment, and was essential to the prior judgment. Id.

First, the Court found privity between the EEOC and the Individual Plaintiffs because, even though the EEOC could not seek damages for the Individual Plaintiffs in Phase I, the interests of the EEOC and those of the Individual Plaintiffs did not diverge. Id. at 7-8.

Second, the Court found identity of issues because the underlying facts supporting the EEOC’s pattern or practice claims in Phase I form the basis for the Individual Plaintiffs’ claims. As the EEOC previously had asserted, the claims “are closely related and stem from essentially the same factual allegations.” Id. at 9.

Third, the Court found that the parties fully litigated JBS’s undue hardship defense and that its findings with respect to such issue were essential to the Phase I judgment. Id. at 11.

Fourth, however, the Court determined that its other findings with respect to the Plaintiffs’ remaining individual claims were not essential to its Phase I judgment. Id. at 12. Although the Court found that Somali-Muslim employees were not disciplined for praying, and their terminations were due to their violation of the CBA, “the Court did not need to address all the EEOC’s claims because JBS proved its undue hardship defense.” Id. at 13.

JBS also moved for summary judgment on the ground that the EEOC failed adequately to conciliate each individual’s claim prior to bringing suit. The Court refused to resolve the issue because the U.S. Supreme Court currently is considering in Mach Mining, LLC v. EEOC whether and to what extent a court may enforce the EEOC’s duty to conciliate. Id. at 18. The Court held that it would not preclude JBS from reasserting its position following the Supreme Court’s ruling.

Implications For Employers

The Court’s opinions in EEOC v. JBS are a useful roadmap for employers litigating a pattern or practice case against the EEOC. During any bifurcated case proceeding along the Teamsters method of proof, issues decided during Phase I might be determinative of claims set for litigation in Phase II. Although the Court in JBS allowed the EEOC to pursue individual claims in Phase II, and did not find her earlier opinions binding, the Judge’s rulings provide a useful guidepost for predicting the outcome of the remainder of the case.