Earlier this week, a federal district court in Nebraska dealt the EEOC two more blows in addition to its recent trial defeat in EEOC v. JBS USA, LLC, 8:10-CV-318 (D. Neb.), when it denied the EEOC’s request for a new trial and certified its trial ruling as an appealable judgment. We covered the Court’s earlier ruling here. Not only is the ruling a significant one for the case, but also it is significant to employers because an appellate ruling affirming the district court could provide further clarification on the requirements for establishing the “undue hardship” defense under Title VII of the Civil Rights Act of 1964.

Background

In EEOC vs. JBS USA, LLC, the EEOC alleged that JBS, which operates beef processing facilities, engaged in religious discrimination by refusing to allow Muslim employees unscheduled breaks to pray and refusing to move their meal break to a time that coincided with the sunset prayer time during Ramadan in 2008. The case included both “pattern or practice claims” and approximately 150 individual claims against JBS based on similar facts. 

The Court divided the case into two phases. Phase I addressed the merits of the pattern or practice claims. Phase II would address the merits of the individual claims. In October 2013, after a bench trial, the Court dismissed the pattern or practice claims, finding that JBS established the “undue hardship” defense with respect to the requested accommodations. Specifically, the Court found that the requested accommodations would impose more than a de minimis burden on both JBS and its non-Muslim employees. The full text of Court’s ruling can be found here.

After the trial, the parties made three motions. The EEOC filed a motion for a new trial. JBS moved for an award of attorneys’ fees. Perhaps most significantly, JBS also filed a motion to have the Court’s ruling as to its “undue hardship” defense become a final judgment and an immediately appealable order. 

The Court’s Ruling

The Court denied the EEOC’s motion for a new trial and JBS’s request for attorneys’ fees, but granted JBS’s request to have the ruling on its “undue hardship” defense certified as a final judgment and an appealable order. See EEOC v. JBS USA, LLC, 8:10-CV-318, 2014 U.S. Dist. LEXIS 9635, at *2-8 (D. Neb. Jan. 27, 2014).  The Court’s full ruling can be found here.

In granting JBS’s motion to certify the earlier ruling for immediate appeal, the Court made several observations.  First, the Court observed that courts usually only grant certification motions made by the prevailing party in “special” cases. Id. at 3-4. Next, the Court found that its earlier ruling was a final disposition of the EEOC’s pattern or practice claims. Id. at 4. The Court then reasoned that because JBS would base its “undue hardship” defense to the 150 remaining individual claims on the same evidence as it did for the pattern or practice claims, certifying the order for appeal could serve to streamline the litigation of the individual claims. Id. at 5-6. In other words, if the Court of Appeal affirms the ruling on the “undue hardship” defense, it could resolve the remaining individual claims as well.

As mentioned above, the Court also denied the EEOC’s motion for a new trial. The Court noted that the motion essentially restated the EEOC’s previous factual and legal arguments, which it already rejected. Id. at 8. As a result, the Court found that the EEOC’s motion failed to set forth any grounds supporting a new trial and that a new trial was not necessary to prevent a miscarriage of justice. Id. at 8.

The Court also denied JBS’s request for attorneys’ fees. In coming to that conclusion, the Court found that there was “some basis” for the EEOC’s claims because it did establish a prima facie case for its failure to accommodate claims. Id. at 7. The Court also noted the high burden that an employer must carry to recover attorneys’ fees. Id. at 6-7.

The Court’s ruling with respect to JBS’s motion to certify the order for appeal and the EEOC’s motion for a new trial are significant in this case. Essentially, the ruling virtually forces the EEOC to appeal the Court’s dismissal of its pattern or practice claims in order to pursue the remaining individual claims because of the impact of the “undue hardship” defense on those claims. The Court’s ruling on JBS’s attorneys’ fees motion is not entirely surprising given the high threshold for showing that a claim is “frivolous.”

Implications For Employers

The outcome of this case could have important implications for employers. If the EEOC does file an appeal, the ruling could impact the developing case law relative to an employer’s obligation to provide religious accommodations to employees. An appellate ruling could also impact and further clarify what kind of evidence an employer must provide to establish the “undue hardship” defense. The ruling is also significant to employers in that it shows that the EEOC will continue to aggressively litigate a case, even after it loses. This should again underscore to employers the importance of taking proactive and preventative measures to ensure compliance with the law to minimize the potential for litigation and its associated costs.