Court Opinion

ID: 4327389
Source: CourtListenerOpinion
Date Created: 2018-11-02 22:00:30.471249+00
Date Added: 2024-06-11T09:36:52.266691
License: Public Domain

In the

    United States Court of Appeals
                For the Seventh Circuit
                    ____________________
No. 17-1828
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,
                                    Plaintiff-Appellant,
                                v.

CVS PHARMACY, INC.,
                                                Defendant-Appellee.
                    ____________________

        Appeal from the United States District Court for the
          Northern District of Illinois, Eastern Division.
             No. 14 C 863 — John W. Darrah, Judge.
                    ____________________

     ARGUED DECEMBER 5, 2017 — DECIDED JUNE 8, 2018

         AS AMENDED ON PETITION FOR REHEARING –
                   NOVEMBER 2, 2018
                 ____________________

   Before WOOD, Chief Judge, and ROVNER and HAMILTON,
Circuit Judges.
   WOOD, Chief Judge. On the surface, this appeal is about a
fee award entered against the Equal Employment Oppor-
tunity Commission (EEOC or Commission). But there is more
than meets the eye. The award relates to a complaint that the
2                                                   No. 17-1828

Commission filed against CVS Pharmacy, Inc., alleging that
CVS was using a severance agreement that chilled its employ-
ees’ 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 “pat-
tern 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).
    The district court rejected this claim on summary judg-
ment, 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 reverse.
                                I
    Because 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 sever-
ance agreement came to the attention of the EEOC in 2011 af-
ter 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 Em-
ployee cannot lawfully waive” and for participation “in a pro-
ceeding with any appropriate federal, state or local govern-
No. 17-1828                                                     3

ment agency enforcing discrimination laws.” The EEOC ar-
gued that the agreement’s broad release and obscure excep-
tions could deter signatories from cooperating with the EEOC
or otherwise exercising their retained rights.
    Ordinarily, 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 ac-
ceptable 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 employ-
ment 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 construed as containing a grant of independent liti-
gation 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. § 2000e-6(a).
    The statute distinguishes between section 706, which al-
lows 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. It thought that section
707(a), unlike section 707(e), gave it a right to litigate without
4                                                     No. 17-1828

an underlying charge or unlawful employment practice, and
by extension, without first conciliating. In drawing this novel
distinction, the EEOC noted the diﬀerence between the lan-
guage 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 or practice of discrimination.”
Id. § 2000e-6(a), (e). The Commission also distinguished be-
tween 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 interpreta-
tion of the statute and held that conciliation is necessary un-
der both sections.
   We are now faced with a diﬀerent question: whether the
EEOC’s position was far enough afield at the time it was ad-
vanced 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 Com-
mission argued otherwise.) The court did not otherwise ad-
dress 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 ground.
                                II
     In our initial opinion, we acknowledged that the standard
of review for a district court’s decision to award fees is abuse
of discretion. Pickett v. Sheridan Health Care Ctr., 664 F.3d 632,
639 (7th Cir. 2011). This is so, we recognized, in order to ac-
count for the district court’s “superior understanding of the
litigation” and to avoid “a second major litigation” over attor-
neys’ fees. Id. (quoting Spellan v. Bd. of Educ. for Dist. 111,
59 F.3d 642, 645 (7th Cir. 1995). We also said, however, that
No. 17-1828                                                    5

“the justifications for the generally deferential standard of re-
view are absent” for questions of law. Jaﬀee v. Redmond,
142 F.3d 409, 412 (7th Cir. 1998). In such cases, we wrote, 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).
    CVS challenges the last step of that analysis in its petition
for rehearing. It argues that any use of a de novo standard of
review conflicts with the Supreme Court’s decision in Pierce
v. Underwood, 487 U.S. 552 (1988), and with this court’s deci-
sion in Mars Steel Corporation v. Continental Bank N.A., 880 F.2d
928 (7th Cir. 1989) (en banc). We have gone back and examined
those cases carefully. As we now explain, we are satisfied that
in substance our decision is faithful to the governing Supreme
Court cases, even if we were too summary in our initial de-
scription of the standard of review in the original opinion.
    In Pierce, the Supreme Court confronted a question about
the proper interpretation of the Equal Access to Justice Act
(EAJA), 28 U.S.C. § 2412. That statute permits an award of at-
torney’s fees against the government in civil actions, unless
the court finds that the position of the United States was “sub-
stantially justified.” The primary question before the Court
was what standard of review should be used in reviewing a
district court’s determination that the government’s position
was not substantially justified. After noting that for purposes
of standard of review, there are three types of questions—
those of law, those of fact, and matters of discretion—the
Court concluded that the substantial-justification question
was deeply intertwined with the facts of a case, and so abuse-
of-discretion review was proper. Often, it observed, “the
question will turn upon not merely what was the law, but
6                                                     No. 17-1828

what was the evidence regarding the facts.” 487 U.S. at 560.
Another consideration motivating the Court’s decision was
that in Pierce itself there was no ruling on the legal issue: the
underlying litigation had been resolved through a settlement.
    This court confronted a similar issue in Mars Steel, where
we had to choose a standard of review for decisions about
sanctions under Federal Rule of Civil Procedure 11. Sitting en
banc, we concluded that we would “use a deferential standard
consistently.” 880 F.2d at 930. We relied in part on Pierce, com-
menting that it “would provide a powerful impetus” toward
the result we had reached. Notions of what is compatible with
“the sound administration of justice,” which also played a
role in Pierce, are inherently questions of judgment that do not
lend themselves to broad generalizations. Id. at 934. That in
turn supports deferential review.
    But Pierce is not the Supreme Court’s last word on these
matters. Having established that the EAJA (which does not
apply in this case, see EEOC v. Consol. Serv. Sys., 30 F.3d 58, 59
(7th Cir. 1994)) calls for an abuse-of-discretion standard of re-
view, the Court then had to decide exactly what that means.
It had the occasion to do so in Cooter & Gell v. Hartmarx Cor-
poration, 496 U.S. 384 (1990), which, like Mars Steel, addressed
the question of the standard of review for Rule 11 determina-
tions. Using language reminiscent of Pierce, the Court began
by stating that the question whether an attorney has violated
Rule 11 “involves a consideration of three types of issues”:
factual questions, legal issues, and discretionary determina-
tions. Id. at 399. As it had done in Pierce, the Court said that it
was adopting a deferential, abuse-of-discretion standard of
review across the board. Id. at 403–05. But in doing so, it gave
No. 17-1828                                                       7

special treatment to questions of law. We reproduce the full
quotation so that the context will be clear:
   Familiar with the issues and litigants, the district court
   is better situated than the court of appeals to marshal
   the pertinent facts and apply the fact-dependent legal
   standard mandated by Rule 11. Of course, this stand-
   ard would not preclude the appellate court’s correction
   of a district court’s legal errors, e.g., determining
   that Rule 11 sanctions could be imposed upon the sign-
   ing attorney’s law firm, see Pavelic & LeFlore v. Marvel
   Entertainment Group, 493 U.S. 120 (1989), or relying on a
   materially incorrect view of the relevant law in determin-
   ing that a pleading was not “warranted by existing law
   or a good faith argument” for changing the law. An ap-
   pellate court would be justified in concluding that, in
   making such errors, the district court abused its discre-
   tion. “[I]f a district court’s findings rest on an errone-
   ous view of the law, they may be set aside on that ba-
   sis.” Pullman–Standard v. Swint, [456 U.S. 273, 287
   (1982)].
496 U.S. at 402 (emphasis added). Lest there be any doubt
about this gloss on the standard of review, the Court reiter-
ated at the end of this part of its opinion that “[a] district court
would necessarily abuse its discretion if it based its ruling on
an erroneous view of the law or on a clearly erroneous assess-
ment of the evidence.” Id. at 405.
    The standard of review in the case before us is thus the
deferential abuse-of-discretion approach, but in the course of
applying that approach, we must assess whether the district
court based its ruling on an erroneous view of the law or a
clearly erroneous assessment of the evidence.
8                                                     No. 17-1828

                                A
    Although section 706(k) of Title VII provides for fee shift-
ing in favor of any “prevailing party,” 42 U.S.C. § 2000e-5(k),
courts have long recognized that fees should be awarded to
prevailing defendants only in exceptional cases. This reflects
the policy underlying the Civil Rights Act—the protections of
Title VII would be undermined if good-faith plaintiﬀs pursu-
ing reasonable theories were deterred from filing because of
the risk of paying a hefty fee award in defeat. A district court
may award fees to a prevailing defendant only “upon a find-
ing that the plaintiﬀ’s action was frivolous, unreasonable, or
without foundation, even though not brought in subjective
bad faith.” Christiansburg Garment Co. v. EEOC, 434 U.S. 412,
421 (1978). In making this finding, district courts must “resist
the understandable temptation to engage in post hoc reason-
ing … .” Id. at 421–22. We have added that “[i]nnovative, even
persistent advocacy in the face of great adversity must not be
unreasonably penalized with hindsight.” Hamer v. Lake Cnty.,
819 F.2d 1362, 1367 (7th Cir. 1987).
    A review of our cases underscores that fees should be
awarded to prevailing defendants only when the plaintiﬀ’s
case is utterly without merit. The determination of such fun-
damental lack of merit might rest on one of two things: a de-
termination that the case is legally frivolous, see Denton v. Her-
nandez, 504 U.S. 25, 31–32 (1992) (noting that in Neitzke v. Wil-
liams, 490 U.S. 319 (1989), the Supreme Court was concerned
with the standard for determining frivolousness of legal con-
clusions), or an assessment that the case is factually frivolous,
Denton, 504 U.S. at 32–33 (“a court may dismiss a claim as fac-
tually frivolous only if the facts alleged are ‘clearly baseless,’”
meaning irrational or wholly incredible). When it is a
No. 17-1828                                                      9

farfetched legal theory that makes a plaintiﬀ’s case frivolous,
we have held that an “award of fees is only permitted when
litigation proceeds in the face of controlling and unambigu-
ous precedent.” Hamer, 819 F.2d at 1368.
    The case before us does not involve disputed issues of fact.
It dealt instead with a purely legal, procedural issue: whether
the EEOC must attempt to conciliate cases filed under section
707(a), 42 U.S.C. § 2000e-6(a), just as it does in other areas. We
must therefore decide whether the district court, in ordering
the EEOC to pay fees, abused its discretion by “bas[ing] its
ruling on an erroneous view of the law.” Cooter & Gell,
496 U.S. at 405.
                                B
    Fee shifting is unwarranted for a suit implicating “an issue
of first impression in an unsettled area of the law.” Reichen-
berger v. Pritchard, 660 F.2d 280, 288 (7th Cir. 1981). A fee
award is also unjustified if it is based on nothing more than
an “aggressive” reading of the EEOC guidelines. LeBeau v.
Libbey-Owens-Ford Co., 799 F.2d 1152, 1162–63 (7th Cir. 1986).
That a defendant spends substantial time and eﬀort defend-
ing against a case also counts against frivolousness. See Ham-
ilton v. Daley, 777 F.2d 1207, 1214 & n.7 (7th Cir. 1985). The fact
that the EEOC lost on the merits is only the first step. We must
turn back the calendar and ask how the EEOC’s theory as a
matter of law looked in light of the available statutes, regula-
tions, and case law at the time the action was litigated. Chris-
tiansburg, 434 U.S. at 421–22.
   As we noted earlier, the linchpin of the EEOC’s legal the-
ory was a subtle textual distinction between section 707(a)
10                                                     No. 17-1828

and section 707(e). We reproduce the relevant language here
for ease of comparison:
     [Section 707(a):] Whenever the Attorney General [now
     the Commission] has reasonable cause to believe that
     any person or group of persons is engaged in a pattern or
     practice of resistance to the full enjoyment of any of the
     rights secured by this subchapter, and that the pattern
     or practice is of such a nature and is intended to deny
     the full exercise of the rights herein described, the At-
     torney General may bring a civil action in the appro-
     priate district court of the United States … .
42 U.S.C. § 2000e-6(a) (emphasis added).
     [Section 707(e):] [T]he Commission shall have author-
     ity to investigate and act on a charge of a pattern or prac-
     tice of discrimination, whether filed by or on behalf of a
     person claiming to be aggrieved or by a member of the
     Commission. All such actions shall be conducted in ac-
     cordance with the procedures set forth in section
     2000e-5 of this title [i.e., section 706 of the Civil Rights
     Act of 1964].
42 U.S.C. § 2000e-6(e) (emphasis added).
    While section 707(e) mandates that the EEOC follow sec-
tion 706’s procedural requirements, section 707(a) says noth-
ing about those procedures (or any others). The EEOC argues
that its inference from the statutory language—that section
706 procedures apply only to section 707(e) proceedings—
was novel, but it had legitimate support. And at this stage, the
Commission reminds us, the EEOC’s legal position did not
have to satisfy a high burden—a colorable legal argument will
No. 17-1828                                                  11

do. Comparing the EEOC’s arguments to then-existing law
shows that it met this low bar.
     First, the EEOC had a textual foothold. Section 707(a) al-
lows for suit against “any person or group of persons.” By
comparison, unlawful employment practices can be commit-
ted only by employers, labor organizations, employment
agencies, and similar actors. 42 U.S.C. §§ 2000e-2, 2000e-3.
This makes section 707(a) something of an odd fit for the rest
of the statutory scheme and for the EEOC’s typical enforce-
ment powers. Title II of the statute contains an analogous pro-
vision with identical language, and before section 707(a) en-
forcement power was transferred in 1974 from the Attorney
General to the EEOC, see 42 U.S.C. § 2000e-6(c), the two pro-
visions were interpreted alike. Compare id. § 2000a-5, with id.
§ 2000e-6. See also United States v. Original Knights of Ku Klux
Klan, 250 F. Supp. 330, 349 (E.D. La. 1965) (interpreting both
provisions as a broad grant of authority to seek injunctive re-
lief “against any person, public or private”). Perhaps this
changed with the transfer of power from the Attorney General
to the EEOC, but it is diﬃcult to envision what conciliation
with a non-employer would look like. Granted, the EEOC
brought this case against an employer, but the EEOC was en-
titled to test its theory that section 707(a) is distinctive and
does not distinguish between employers and non-employers.
   Second, the EEOC had modest support in our prior case
law. The crucial case noted:
   In the course of amending the enforcement provisions
   of Title VII, Congress also transferred to EEOC author-
   ity previously vested in the Attorney General under
12                                                    No. 17-1828

     § 707 of Title VII to institute “pattern or practice” law-
     suits on its own initiative—i.e., without certain of the
     prerequisites to a civil action under § 2000e-5(f).
EEOC v. Harvey L. Walner & Assocs., 91 F.3d 963, 968 (7th Cir.
1996). On the merits appeal in the present case, we said that
this “statement [about the transfer of authority] should not be
interpreted as permitting the EEOC to proceed without a
charge, as the EEOC contends and the district court con-
cluded in the decision below.” CVS Pharmacy, 809 F.3d at 343.
The need for that clarification in and of itself, however,
demonstrates that the EEOC had a legal hook on which to
hang its case.
    Third, no case squarely foreclosed the EEOC’s legal inter-
pretation. CVS emphasizes that courts have “note[d] that the
conciliation requirements do not change depending on
whether the EEOC brings a claim under § 2000e-5 (a § 706
claim) or § 2000e-6 (a § 707 pattern-or-practice claim).” Ari-
zona ex rel. Horne v. Geo Grp., Inc., 816 F.3d 1189, 1201 (9th Cir.
2016). But these cases all rely on section 707(e), which has al-
ways required the use of the section 706 procedures, includ-
ing conciliation. No cases before our earlier decision con-
tended with the possibility of two diﬀerent sorts of section 707
pattern or practice claims. E.g., id.; United States v. State of
South Carolina, 445 F. Supp. 1094, 1110–11 (D.S.C. 1977). In-
deed, we have found no case prior to the filing of the present
one that attempted to parse the language of sections 707(a)
and 707(e) as the EEOC did. Perhaps the best inference from
this silence was that there is no such distinction, but we can-
not say that the EEOC’s reading was frivolous as a result.
Novel interpretations succeed or fail, but the law “grows with
clarity for benefit of the public” whatever the outcome. Kohler
No. 17-1828                                                   13

v. Bed Bath & Beyond of Cal., LLC, 780 F.3d 1260, 1267 (9th Cir.
2015). For similar reasons, we do not hold against the Com-
mission any inconsistent positions it has taken in other cases.
The Commission is entitled to change its mind as new mem-
bers are appointed and it is confronted with new problems.
    CVS contends that even if these arguments made the
EEOC’s case colorable in the abstract, Tonia Ramos’s charge
of unlawful employment practices renders them legally in-
firm as applied to this case. But there is a fallacy in its argu-
ment. It assumes that the EEOC had decided to proceed with
Ramos’s charge. Had it done so, the action would have fallen
squarely within section 707(e) and the section 706 procedures
would have been required. But it did not. Quite to the con-
trary: the Commission dismissed Ramos’s charge, and so that
charge cannot possibly form the basis for this suit. CVS clings
to a lone mention of “unlawful employment practices” in the
complaint as evidence that the Commission’s case was “re-
ally” brought under section 707(e), but we are not persuaded.
Reading the complaint as a whole, it is plain that this is a sec-
tion 707(a) action.
    If the district court had otherwise accepted the EEOC’s le-
gal arguments, it surely would have given the Commission
leave to amend its complaint for the first time to allow it to
delete the oﬀending phrase. See Runnion ex rel. Runnion v. Girl
Scouts of Greater Chi. & Nw. Ind., 786 F.3d 510, 519–20 (7th Cir.
2015) (“Ordinarily … a plaintiﬀ whose original complaint has
been dismissed under Rule 12(b)(6) should be given at least
one opportunity to try to amend her complaint before the en-
tire action is dismissed.”). Further, we found in our merits
opinion that “the EEOC has not alleged that CVS engaged in
14                                                   No. 17-1828

discrimination or retaliation by oﬀering the Agreement to ter-
minated employees … .” CVS Pharmacy, 809 F.3d at 343. Con-
sistent with that opinion, we must assume here that Ramos’s
claim is gone.
    The district court rested its fee award not on the statute,
but on two of the EEOC’s own regulations. Those regulations
require that the Commission first use conciliation to eliminate
any unlawful employment practices, 29 C.F.R. § 1601.24, and
that the Commission “may bring a civil action against any re-
spondent named in a charge” only if conciliation has failed,
id. § 1601.27. But these regulations purport to apply only
when an unlawful employment practice has been alleged or
when the EEOC is proceeding pursuant to a charge. The Com-
mission’s arguments that neither was present here apply just
as well to the regulations as they do to the statute. The district
court erred by failing to interpret the EEOC regulations in the
same light. Regulations that parallel the statutory language
cannot independently render the suit unreasonable.
    Finally, we note that if the real problem with the EEOC’s
case were a failure to conciliate, it is questionable whether a
fee award is appropriate after Mach Mining, LLC v. EEOC,
135 S. Ct. 1645 (2015). Mach Mining holds that where the fail-
ure to conciliate properly is apparent at the outset of litiga-
tion, the “appropriate remedy is to order the EEOC to under-
take the mandated eﬀorts to obtain voluntary compliance.”
Id. at 1656. Dismissal is still an appropriate remedy if the vio-
lations become apparent later. CRST Van Expedited, Inc. v.
EEOC, 136 S. Ct. 1642, 1648–49 (2016) (approving of a fee
award after the EEOC “used ‘discovery in the resulting law-
suit as a fishing expedition to uncover more violations’”
(quoting EEOC v. CRST Van Expedited, Inc., 679 F.3d 657, 676
No. 17-1828                                                    15

(8th Cir. 2012))). CVS incurred legal fees in this case not be-
cause of a failure to conciliate, but because of the novelty of
the EEOC’s claimed independent cause of action under sec-
tion 707(a). Even had the EEOC conciliated, its ability to bring
a pattern or practice of resistance case without underlying dis-
crimination or retaliation would have been at issue, and the
legal arguments the same.
    Our starting point is of course this court’s decision on the
merits. But it takes much more than a loss on the merits to
warrant a fee award. Christiansburg, 434 U.S. at 421 (noting
that “‘meritless’ is to be understood as meaning groundless or
without foundation, rather than simply that the plaintiﬀ has
ultimately lost his case”). We have emphasized the arguments
in favor of the EEOC only to show that its position did not
meet the Christiansburg standard. Obviously, the merits panel
found CVS’s arguments more persuasive. We have no need
here to repeat that analysis. And we freely concede that the
legal novelty of the EEOC’s claim was a strike against it. On
the other hand, CVS spent, by its own account, at least
823.5 hours defending this suit. CVS told the district court
that the case involved “novel issues that required deep under-
standing of Title VII’s text, structure, and history.” If it takes
a “deep understanding” of the statute to refute a legal theory,
one can hardly argue with a straight face that the same case
was squarely blocked by controlling authority. Novelty may
counsel against adopting the EEOC’s reading of its own pow-
ers, but that same novelty also counsels against awarding
fees. Reichenberger, 660 F.2d at 288.
   As we emphasized at the outset, a fee award can be as-
sessed against a losing plaintiﬀ only if its arguments were
16                                                   No. 17-1828

squarely blocked by “controlling and unambiguous prece-
dent.” Hamer, 819 F.2d at 1368. The EEOC’s theory was not
that fruitless. Precedent may not have favored it, but the fee
statute does not punish a civil rights litigant for pursuing a
novel, even if ambitious, theory.
                                C
    While an infirm factual foundation can also support a fee
award, Christiansburg, 434 U.S. at 421, the district court did not
find that the EEOC’s case was factually frivolous. We owe def-
erence to that ruling, and in any event we agree that the EEOC
did not act frivolously by arguing that CVS’s severance agree-
ment might deter former employees from cooperating with
the Commission. The EEOC’s factual case centered on the
contrast between the broad language of the contract’s waiver
provisions and the relatively vague exceptions. On the merits,
we noted that it was “unreasonable to construe the Agree-
ment as restricting the signatory from filing a charge or oth-
erwise participating in EEOC proceedings.” CVS Pharmacy,
809 F.3d at 341 n.4. Again, we take that as a given. But the
EEOC was trying to make a more subtle point: the agreement,
it feared, would have the practical eﬀect of chilling at least
some former employees—presumably none of them legal ex-
perts—from cooperating, whatever the agreement’s legal ef-
fect. True, Tonia Ramos’s actual cooperation may count as ev-
idence against this theory, but it does not render it frivolous.
See Christiansburg, 434 U.S. at 422 (“Decisive facts may not
emerge until discovery or trial.”); Ekanem v. Health & Hosp.
Corp. of Marion Cnty., 724 F.2d 563, 574–75 (7th Cir. 1983) (not-
ing that the “‘pattern or practice’ theory of proof … aﬀords
plaintiﬀs wide latitude in attempting to establish circumstan-
tial evidence of unlawful intent”). We cannot say at this stage
No. 17-1828                                                  17

that the EEOC could not have presented facts in support of its
theory. The district court did not abuse its discretion by find-
ing the suit factually reasonable.
                              III
    Because the EEOC’s suit was neither legally nor factually
frivolous, we REVERSE the district court’s order imposing on
the EEOC the obligation to pay CVS’s fees in part. We
REMAND for the district court to enter an amended judgment
consistent with this opinion.