               IN THE UNITED STATES COURT OF APPEALS

                       FOR THE FIFTH CIRCUIT

                      ________________________

                     Nos. 95-20419 & 95-20523
                      ________________________


EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,
                                                 Plaintiff-Appellant,

                                versus

WYNELL, INC., d/b/a A & B NURSERY SCHOOL,
                                                 Defendant-Appellee.

_________________________________________________________________

          Appeal from the United States District Court
                for the Southern District of Texas
                           CA-H-92-3938
_________________________________________________________________

                           June 6, 1996
Before KING, WIENER and BENAVIDES, Circuit Judges.

PER CURIAM*:

     This consolidated appeal arises from a bench trial at which

the district court denied injunctive relief by granting Defendant-

Appellee A & B Nursery's ("A & B") motion for judgment as a matter

of law and subsequently awarding attorneys' fees to A & B as

prevailing party in a Title VII action pursuant to 42 U.S.C. §

2000e-5(k).    On   appeal,   Plaintiff-Appellant   Equal   Employment

Opportunity Commission ("E.E.O.C.") challenges the district court's

    *
       Pursuant to Local Rule 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in Local Rule 47.5.4.
judgment dismissing its claim that A & B's English-only rule has a

disparate impact on its Hispanic employees based on their national

origin. The E.E.O.C. also challenges the district court's award of

attorneys' fees on the ground that the E.E.O.C.'s claims are

frivolous, unreasonable, or without foundation.            We affirm the

district court's judgment on the disparate impact claim, but

reverse the court's award of attorneys' fees to A & B.

                                    I.

     The record supports the E.E.O.C.'s claim that a sign was

posted on the employees' bulletin board at A & B dictating the

speaking of English under threat of termination in violation of

section 703(a)(1) of Title VII.1 However, the testimonial evidence

presented at trial shows that no Hispanic employee who spoke

Spanish on the premises of A & B was ever penalized outside of the

reminders made by A & B's owner and administrator L.E. Kline to

"speak   English"   or   "don't   speak   Spanish."   No   evidence   was

presented that any employee was impacted by suspension, demotion,


     1
        Section 703(a)(1) of Title VII of the Civil Rights Act of
1964 provides in pertinent part:

     (a) Employer Practices
     It shall be unlawful employment practice for an employer-
          (1) to fail or refuse to hire or to discharge any
     individual, or otherwise to discriminate against any
     individual with respect to his compensation, terms,
     conditions, or privileges of employment, because of such
     individual's race, color, religion, sex, or national
     origin....

42 U.S.C. § 2000e-2(a)(1).

                                    2
loss of pay, or termination for violating A & B's English-only rule

posted on the employees' bulletin board.

       Under       either    the    "significantly   adverse   impact"      standard

adopted by the district court from the Ninth Circuit in Garcia v.

Spun    Steak      Co.2     or    the   "significantly   discriminatory      impact"

standard enumerated by the Supreme Court in Connecticut v. Teal3,

we must conclude after a review of the record in this case that the

E.E.O.C. failed to make a prima facie showing of disparate impact

because A & B's English-only rule did not have any adverse impact,

significant or otherwise, on the Hispanic employees who spoke

Spanish, in spite of the sign's mandate to only speak English.                     To

the extent that the E.E.O.C. claims the English-only rule precluded

Hispanic employees from communicating with each other in their

first       language      while    English   speaking    employees   were    not   so

precluded, we note that the record reflects that the Hispanic

employees did not follow the rule and did in fact speak Spanish in

the workplace.         The district court did not err in denying relief at

the close of the E.E.O.C.'s case-in-chief.

                                             II.

       In its order awarding attorneys' fees to A & B, the district

court stated that the E.E.O.C. continued to pursue its case even


            2
           998 F.2d 1480, 1486 (9th Cir. 1993), cert. denied,
___U.S.___, 114 S.Ct. 2726, 129 L.Ed.2d 849 (1994).
        3
                457 U.S. 440, 446, 102 S.Ct. 2525, 2530, 73 L.Ed.2d 130
(1982).

                                              3
though it was clear that the English-only rule had no significant

adverse impact, and that the E.E.O.C. could not prove pretext in

its retaliatory discharge claim4.             We find, however, that the

district court abused its discretion in granting A & B's motion for

attorneys' fees.      While the E.E.O.C. did not present sufficient

evidence to show a significant adverse impact in its disparate

impact claim or pretext in its retaliatory discharge claim, we

cannot say that it was clear that the E.E.O.C.'s claims were

frivolous,     groundless,     or   without    foundation.      Abraham     v.

Southwestern Bell Yellow Pages, Inc., No. 93-8178 at 12 (5th Cir.

1993) (unpublished).      Failure to succeed on the merits of a Title

VII claim does not automatically entitle a prevailing defendant to

attorneys' fees.       Attorneys' fees are awarded to a prevailing

defendant in a Title VII action only in extreme cases.              Id.   This

case   is   not   extreme.     Accordingly,    we   reverse   the   award   of

attorneys' fees.

                                     III.

       In   conclusion,   we   AFFIRM   the   district   court's    grant   of

judgment as a matter of law to A & B on the E.E.O.C.'s disparate

impact claim. However, we REVERSE the district court's decision to

award attorneys' fees to A & B.         Accordingly, the decision of the

district court is AFFIRMED in part and REVERSED in part.


        4
          The E.E.O.C.'s Title VII claims also included A & B's
alleged retaliatory discharge of one of the Hispanic employee. The
retaliatory discharge claim was not raised in this appeal.

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