[Redacted], Paris F., 1 Complainant,v.Thomas J. Vilsack, Secretary, Department of Agriculture (Agricultural Marketing Service), Agency.

Equal Employment Opportunity Commission

Nov 9, 2021

Appeal No. 2021004322 (E.E.O.C. Nov. 9, 2021)

U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of Federal Operations P.O. Box 77960 Washington, DC 20013 Paris F.,1 Complainant, v. Thomas J. Vilsack, Secretary, Department of Agriculture (Agricultural Marketing Service), Agency. Appeal No. 2021004322 Agency No. AMS-2020-00105 DECISION On July 26, 2021, Complainant filed an appeal with this Commission regarding the alleged breach of a settlement agreement executed with the Agency. The record indicates that Complainant notified the Agency of the alleged breach, in accordance with 29 C.F.R. § 1614.504(a), on June 21, 2021. When the Agency did not respond, Complainant timely appealed to the Commission. The Commission accepts the appeal in accordance with 29 C.F.R. § 1614.405. BACKGROUND During the relevant time, Complainant worked as an Agricultural Commodity Technician, GS 1980-06, at the Agency’s facility in Portland, Oregon. Believing that the Agency subjected him to unlawful discrimination, Complainant contacted an EEO Counselor. On April 9, 2021, Complainant and the Agency entered into a settlement agreement to resolve the matter. The settlement agreement provided, in pertinent part, that the Agency will: (1) Convert [Complainant]’s Leave Without Pay (LWOP) leave to Administrative Leave status from Oct. 22, 2019 through April 9, 2021, . . . [Complainant's] retirement contributions, life insurance contributions, and his monthly contributions to health insurance premiums will be taken out 1 This case has been randomly assigned a pseudonym which will replace Complainant’s name when the decision is published to non-parties and the Commission’s website. 2021004322 2 of his back pay. This will satisfy any outstanding health insurance bills alleged to be owed by Complainant . . . . (2) To pay Complainant a lump sum of Twenty Thousand dollars ($20,000.00), in the form of a [sic] an electronic transfer to Complainant, which is inclusive of any and all pecuniary, nonpecuniary, compensatory damages, and other damages of any type, arising out of or regarding Complainant's employment with the Agency through the effective date of this Agreement. Within sixty (60) calendar days from the effective date of this Agreement, the Agency will submit documentation to the National Finance Center required to effectuate the lump-sum amount . . . . The Agency will have complied with this term by having submitted documentation to NFC . . . regardless of any offsets, levies, or liens that may apply to this settlement payment. By letter to the Agency dated June 21, 2021, Complainant alleged that the Agency was in breach of the settlement agreement and requested that the Agency specifically implement its terms. Specifically, Complainant alleged that the Agency improperly deducted $6,914.54 from the lump sum payment of $20,000, for medical debts that reflected the full cost of his health insurance premiums. Had the Agency first converted his LWOP to Administrative Leave, argued Complainant, he would not have owed this amount. According to Complainant, the language of the agreement specifies that the conversion to Administrative Leave means that “any outstanding health insurance bills alleged to be owed by Complainant” will be “taken out of his back pay.” Further, Complainant contends that the Agency assured him the $6,914.54 debt would be resolved by the conversion to Administrative Leave. In other words, Complainant believed he should have received the full $20,000 lump sum payment, absent any deductions. The Agency did not respond to Complainant’s June 21, 2021 breach allegation. However, on appeal, it contends it is in compliance, or substantial compliance, with the agreement. In the interest of judicial economy and expediency, we will view the Agency's response as its decision and accept the appeal. CONTENTIONS ON APPEAL Complainant argues that, on April 12, 2020, within days of execution of the settlement agreement, he received a collection notice from the U.S. Department of Treasury-Bureau of Fiscal Services advising that it would continue to pursue collection of a debt for the full value of health insurance premiums. On May 3, 2021, Complainant submits that he received notification from the Department of Treasury that $6,914.54 was deducted from the $20,000.00 compensatory damages payment to satisfy a debt that he maintains he never owed. Complainant contends that the four corners of the agreement fully support his position. For support, he points to this language: 2021004322 3 [Complainant]’s retirement contributions, life insurance contributions and his monthly contributions to health insurance premiums will be taken out of his back pay. This will satisfy any outstanding health insurance bills alleged to be owed by Complainant. Complainant also submits that, had the Agency paid back wages first instead of waiting until June 7, 2021 to do so, he would have received the full $20,000.00 and not the $13,090.00 that he was paid for compensatory damages. He speculates that the Agency paid the damages in this order to allow for the recoupment of health insurance premiums. Further, Complainant maintains that he did not owe this debt, for unpaid health insurance premiums, at the time that the Agency sought to recoup full health insurance premiums. Complainant argues that the Agency has not substantially complied with the settlement agreement. He seeks specific performance, as well as interest and attorney’s fees. In response, the Agency counters that, on June 30, 2021, it provided Complainant with a detailed breakdown of the debt. It contends that $6,884.54 of the debt was for Federal Employees Health Benefits (FEHB) premiums plus a $30 administrative fee from the Internal Revenue Service. Furthermore, it submits, regardless of the exact nature of the Federal Employees Group Life Insurance (FEGLI) and health insurance premium debt owed as of December 9, 2020, which was the basis of the offset, the Agency has substantially complied with the settlement agreement and achieved specific performance. The Agency contends there is no impact on Complainant for the recoupment of a debt. It also contends that any discussions between Complainant and Agency counsel have no bearing on either the signing of the agreement or its terms, as the effective date of the agreement was April 17, 2021, eight days after it was signed. Furthermore, according to the Agency, the agreement contemplated that health insurance premiums might be taken from the lump sum payment. In particular, the Agency referenced the following agreement language: “The Agency will have complied with this term by having submitted documentation to NFC required to effect the lump-sum payment regardless of any offsets, levies, or liens that may apply to this settlement payment”. If such an event were to occur, argues the Agency, it would not constitute a breach. Lastly, the Agency argues that the remedy sought by Complainant is unavailable. Rather, the only options are either specific performance, which the Agency argues was achieved, or reinstatement, in which case Complainant must relinquish what he gained from the settlement agreement. 2021004322 4 ANALYSIS AND FINDINGS EEOC Regulation 29 C.F.R. § 1614.504(a) provides that any settlement agreement knowingly and voluntarily agreed to by the parties, reached at any stage of the complaint process, shall be binding on both parties. The Commission has held that a settlement agreement constitutes a contract between the employee and the Agency, to which ordinary rules of contract construction apply. See Herrington v. Dep’t of Def., EEOC Request No. 05960032 (December 9, 1996). The Commission has further held that it is the intent of the parties as expressed in the contract, not some unexpressed intention, that controls the contract’s construction. Eggleston v. Dep’t of Veterans Affairs, EEOC Request No. 05900795 (August 23, 1990). In ascertaining the intent of the parties with regard to the terms of a settlement agreement, the Commission has generally relied on the plain meaning rule. See Hyon O v. U.S. Postal Serv., EEOC Request No. 05910787 (December 2, 1991). This rule states that if the writing appears to be plain and unambiguous on its face, its meaning must be determined from the four corners of the instrument without resort to extrinsic evidence of any nature. See Montgomery Elevator Co. v. Building Eng’g Servs. Co., 730 F.2d 377 (5th Cir. 1984). In the instant case, we find that the Agency has substantially complied with the April 9, 2021 settlement agreement. The parties do not dispute that the Agency paid the lump sum by the date specified in the agreement. The only issue is the deduction of a debt, imposed by another entity, from the lump sum payment of $20,000. Yet, the plain language of the agreement specifically states that “any offsets, levies, or liens that may apply to this settlement payment” may be taken out of the lump sum payment of $20,000 and will still achieve compliance on this provision. Complainant’s speculation, that had the Agency paid back pay first, instead of the lump sum, and any resulting debts were deducted from the back pay, a breach claim would have been avoided, may be true, such intentions were not reduced to writing. If the order of payment was essential to Complainant, he should have bargained for the inclusion of such a term in the settlement agreement. Email discussion, after the contract’s execution, does not affect how we read the intent of the parties at the time of contract execution. CONCLUSION Accordingly, based on a review of the record, the foregoing analysis, and on arguments and evidence not specifically referenced, we AFFIRM the Agency’s decision finding no breach. STATEMENT OF RIGHTS - ON APPEAL RECONSIDERATION (M0920) The Commission may, in its discretion, reconsider this appellate decision if Complainant or the Agency submits a written request that contains arguments or evidence that tend to establish that: 1. The appellate decision involved a clearly erroneous interpretation of material fact or law; or 2021004322 5 2. The appellate decision will have a substantial impact on the policies, practices, or operations of the agency. Requests for reconsideration must be filed with EEOC’s Office of Federal Operations (OFO) within thirty (30) calendar days of receipt of this decision. If the party requesting reconsideration elects to file a statement or brief in support of the request, that statement or brief must be filed together with the request for reconsideration. A party shall have twenty (20) calendar days from receipt of another party’s request for reconsideration within which to submit a brief or statement in opposition. See 29 C.F.R. § 1614.405; Equal Employment Opportunity Management Directive for 29 C.F.R. Part 1614 (EEO MD-110), at Chap. 9 § VII.B (Aug. 5, 2015). Complainant should submit his or her request for reconsideration, and any statement or brief in support of his or her request, via the EEOC Public Portal, which can be found at https://publicportal.eeoc.gov/Portal/Login.aspx Alternatively, Complainant can submit his or her request and arguments to the Director, Office of Federal Operations, Equal Employment Opportunity Commission, via regular mail addressed to P.O. Box 77960, Washington, DC 20013, or by certified mail addressed to 131 M Street, NE, Washington, DC 20507. In the absence of a legible postmark, a complainant’s request to reconsider shall be deemed timely filed if OFO receives it by mail within five days of the expiration of the applicable filing period. See 29 C.F.R. § 1614.604. An agency’s request for reconsideration must be submitted in digital format via the EEOC’s Federal Sector EEO Portal (FedSEP). See 29 C.F.R. § 1614.403(g). Either party’s request and/or statement or brief in opposition must also include proof of service on the other party, unless Complainant files his or her request via the EEOC Public Portal, in which case no proof of service is required. Failure to file within the 30-day time period will result in dismissal of the party’s request for reconsideration as untimely, unless extenuating circumstances prevented the timely filing of the request. Any supporting documentation must be submitted together with the request for reconsideration. The Commission will consider requests for reconsideration filed after the deadline only in very limited circumstances. See 29 C.F.R. § 1614.604(c). COMPLAINANT’S RIGHT TO FILE A CIVIL ACTION (S0610) You have the right to file a civil action in an appropriate United States District Court within ninety (90) calendar days from the date that you receive this decision. If you file a civil action, you must name as the defendant in the complaint the person who is the official Agency head or department head, identifying that person by his or her full name and official title. Failure to do so may result in the dismissal of your case in court. “Agency” or “department” means the national organization, and not the local office, facility or department in which you work. If you file a request to reconsider and also file a civil action, filing a civil action will terminate the administrative processing of your complaint. 2021004322 6 RIGHT TO REQUEST COUNSEL (Z0815) If you want to file a civil action but cannot pay the fees, costs, or security to do so, you may request permission from the court to proceed with the civil action without paying these fees or costs. Similarly, if you cannot afford an attorney to represent you in the civil action, you may request the court to appoint an attorney for you. You must submit the requests for waiver of court costs or appointment of an attorney directly to the court, not the Commission. The court has the sole discretion to grant or deny these types of requests. Such requests do not alter the time limits for filing a civil action (please read the paragraph titled Complainant’s Right to File a Civil Action for the specific time limits). FOR THE COMMISSION: ______________________________ Carlton M. Hadden’s signature Carlton M. Hadden, Director Office of Federal Operations November 9, 2021 Date