The EEOC routinely seeks to bifurcate Title VII pattern and practices cases so that any punitive damages will be determined after a finding on pattern or practice liability but before any award of individual compensatory damages and litigation of the employer's defenses to such damages. Federal courts in Maryland, New York, and Indiana have rejected this EEOC tactic. See EEOC v. McCormick& Schmick's, 2008 U.S. Dist. LEXIS 112283 (D. Md. Nov. 4, 2008); EEOC v. Sterling Jewelers, 2011 U.S. Dist. LEXIS 44255 (W.D.N.Y. April 25, 2011), and EEOC v. New Indianapolis Hotels, Case No. 1:10-CV-1234, (S.D. Ind. Feb. 1, 2012). A United States District Court in the Eastern District of Louisiana recently joined a growing chorus of courts rejecting this procedural maneuver, holding that the EEOC's position is inconsistent with governing law on punitive damages, relying on Fifth Circuit and U.S. Supreme Court precedent. EEOC v. Signal Int'l, LLC, Case No. 08-1220, 2013 U.S. Dist. LEXIS 117058 (Aug. 19, 2013).

In the underlying action, the EEOC asserted four Title VII claims against the employer: 1) a § 703 (a) violation for creation and perpetuation of a hostile work environment; 2) a § 703(a) disparate treatment claim for alleged imposition of less favorable terms and conditions of employment on employees of Indian descent; 3) retaliation claims; and 4) a § 706 pattern or practice claim for both hostile work environment and disparate treatment. The EEOC sought to bifurcate the case into two phases. The EEOC requested that Phase I involve both adjudication of the EEOC's pattern and practice claim and a jury determination on its punitive damages claim. Id. at *4. Under the EEOC's conception of the case, Phase II would involve compensatory damage determinations and the employer's defenses to any award of compensatory damages.

The District Court granted the EEOC's request to bifurcate the pattern or practice claim for disparate treatment. The Court will permit a jury to rule on liability and, if the jury found the employer liable for a pattern or practice of disparate treatment, the court would determine appropriate injunctive relief during Phase I. Id. at *1. The Court found that such bifurcation "will aid in the swift and efficient resolution of these claims." Id.

However, the Court declined to permit adjudication of the punitive damages claims during Phase I, reasoning that because the "Supreme Court has made it clear that any punitive damages determination must be 'reasonable and proportionate' to the amount of actual (i.e. compensatory) damages…the EEOC's proposal that the jury in Phase I determine punitive damages runs afoul of the principles articulated [by the Supreme Court] in State Farm and Philip Morris." Id. at *4 (citing State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 426 (2003) and Philip Morris USA v. Williams, 549 U.S. 346, 354 (2007)). The Court expressly relied on Fifth Circuit precedent in finding that "[p]unitive damages cannot be assessed merely upon a finding that the defendant engaged in a pattern or practice of discrimination." Id. at *4-*5 (quoting Allison v. Citgo, 151 F.3d 402, 417 (5th Cir. 1998)). A finding of pattern or practice of discrimination "establishes only that there has been general harm to the group and that injunctive relief is appropriate." Id. at *5.

In essence, the Court determined that the EEOC was requesting to put the cart before the horse. The Court noted that "it would be unfair to ask a jury to determine punitive damages against an employer without determining how many individual employees were actually negatively impacted by the alleged discriminatory conduct." Id. at *4. It similarly observed that "because punitive damages must be reasonably related to the reprehensibility of the defendant's conduct and to the compensatory damages awarded to the plaintiffs, recovery of punitive damages must necessarily turn on the recovery of compensatory damages." Id. at *5. Employers facing this boilerplate EEOC bifurcation strategy now have additional authority on which to base their opposition.