Taylor G.,1 Complainant,v.Dr. Mark T. Esper, Secretary, Department of the Army, Agency.

Equal Employment Opportunity Commission

Apr 11, 2018

0120170778 (E.E.O.C. Apr. 11, 2018)

U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
Office of Federal Operations
P.O. Box 77960
Washington, DC 20013

Taylor G.,1
Complainant,

v.

Dr. Mark T. Esper,
Secretary,
Department of the Army,
Agency.

Appeal No. 0120170778

Agency No. ARRIA09DEC05689

DECISION

Complainant filed an appeal with the Equal Employment Opportunity Commission (EEOC or
Commission), pursuant to 29 C.F.R. § 1614.403(a), from the Agency’s November 21, 2016, final
decision concerning Complainant’s award for the additional tax liability incurred as the result of
a lump sum payment of back-pay and benefits following a finding of age discrimination. For the
following reasons, the Commission AFFIRMS the Agency’s final decision.

BACKGROUND

At the time of events giving rise to this complaint, Complainant worked as a Machine Tool
Operator at the Agency’s Rock Island Arsenal facility in Rock Island, Illinois. He filed an EEO
complaint alleging that the Agency discriminated against him on the basis of his age in violation
of the Age Discrimination in Employment Act of 1967 (ADEA), as amended, 29 U.S.C. § 621 et
seq., when he was subjected to a hostile work environment from December 2008 to November
2009, culminating in the November 18, 2009 termination of his term appointment. The Equal
Employment Opportunity Commission Administrative Judge (AJ) assigned to the case found
discrimination and ordered the Agency to reinstate Complainant to a Machine Tool Operator
(term employee) position, and to pay Complainant back-pay and benefits. The Agency appealed
the AJ’s decision, and in EEOC Appeal No. 0720120038 (July 31, 2013), the Commission found
that the Agency failed to provide Complainant with interim relief because it did not offer him
reinstatement as ordered by the AJ. Accordingly, we dismissed the appeal, pursuant to 29 C.F.R.

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.
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§ 1614.505(b), and ordered the Agency to reinstate Complainant. The Agency then filed a
Request for Reconsideration, however the Commission denied the request. In our decision in
EEOC Request No. 0520140026 (Jan. 28, 2014), we ordered the Agency again to reinstate
Complainant, and also specified that the Agency had to pay Complainant back-pay and benefits,
conduct training, and consider taking disciplinary actions against the responsible management
officials.

On May 11, 2015, Complainant submitted a Petition for Enforcement, contending in part, that
the Agency failed to properly calculate a payment for increased tax liability due to the lump sum
payment of his back-pay award. In EEOC Petition No. 0420150006 (May 19, 2016), the
Commission remanded the matter of payment for increased tax liability, and ordered the Agency
to allow Complainant to submit his claim for compensation and supporting documents to
establish the amount of increased tax liability due.

The Agency issued a final decision on Complainant’s claim for increased tax liability on
November 21, 2016, and determined that Complainant was entitled to $20,541.00 for tax liability
and $1,610.00 for the cost of Complainant’s certified public accountant (CPA) fees. In so
finding, the Agency’s CPA calculated the amount of taxes Complainant would have paid in
2010-2013 and compared it to the taxes accrued as a result of the lump sum payment in 2014, in
order to determine the additional tax liability.

On appeal, Complainant contends that the Agency failed to consider the additional evidence he
submitted regarding the amount of additional tax liability owed, and that the accurate amount of
additional federal and state income tax paid as a result of the lump sum payment of back-pay and
benefits was $56,198.00. Complainant further argues that he will be obligated to pay income tax
on this liability payment which his CPA has calculated to be $9,993.00 in additional future
federal and state income tax.

ANALYSIS AND FINDINGS

The Commission has held that, where an agency pays back pay and other income payments in a
lump sum payment, the agency is responsible for a petitioner's proven increased income tax
burden. Complainant v. Dep't of the Navy, EEOC Appeal No. 01991530 (Aug. 22, 2001);
Complainant v. Dep't of the Navy, EEOC Appeal Nos. 01982627 & 01990407 (Aug. 22, 2001).
In these cases, the Commission held that an award to cover additional tax liability for receipt of
back pay in a lump sum is available and that a complainant bears the burden to prove the amount
to which he claims entitlement. Id. In the present case, Complainant, who retains the burden of
establishing the amount of his increased tax liability to the Agency, attempted to show that he
was due $56,198.00 for excess tax liability for the lump sum payment. Complainant also argues
that he is entitled to $9,993.00 for future tax liability he would accrue based on the payment of
$56,198.00. In support of this claim, he included a letter from his CPA stating that the total
income tax paid by Complainant was $59,922.00 as a result of the lump sum payment, whereas
his total income tax payment based on his actual earnings for 2014 would have been $3,724.00.

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We find, however, that Complainant received back pay and benefits from January 8, 2010
through February 22, 2014. Therefore, what Complainant was required to demonstrate was the
amount of his tax liability had he been working during the relevant portions of 2010-2014; the
amount of his tax liability in tax year 2015 due to the lump sum payment; and the difference
between those two amounts. That dollar amount would represent the change in tax liability.
Here, the Agency calculated Complainant's tax liability based on what his salary would have
been each year had he not been terminated. Specifically, the Agency determined the difference
between these amounts to be $20,541.00. The Agency also determined that Complainant was
entitled to $1,610.00 for the cost of his CPA. We find this was the proper determination. The
record also shows that the Agency paid Complainant this amount on November 28, 2016.
Complainant is not entitled to any additional payment for the tax liability he claims to have
incurred, nor is he entitled to payment for any future tax liability incurred as a result of the
Agency’s award.

CONCLUSION

Accordingly, the Agency’s final decision is AFFIRMED.

STATEMENT OF RIGHTS - ON APPEAL
RECONSIDERATION (M0617)
The Commission may, in its discretion, reconsider the decision in this case if the Complainant or
the Agency submits a written request containing arguments or evidence which tend to establish
that:
1. The appellate decision involved a clearly erroneous interpretation of material fact
or law; or
2. The appellate decision will have a substantial impact on the policies, practices, or
operations of the Agency.
Requests to reconsider, with supporting statement or brief, must be filed with the Office of
Federal Operations (OFO) within thirty (30) calendar days of receipt of this decision. A party
shall have twenty (20) calendar days of receipt of another party’s timely request for
reconsideration in 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). All requests and arguments must be submitted to the
Director, Office of Federal Operations, Equal Employment Opportunity Commission.
Complainant’s request may be submitted via regular mail to P.O. Box 77960, Washington, DC
20013, or by certified mail to 131 M Street, NE, Washington, DC 20507. In the absence of a
legible postmark, the request to reconsider shall be deemed timely filed if it is received by mail
within five days of the expiration of the applicable filing period. See 29 C.F.R. § 1614.604. The
agency’s request must be submitted in digital format via the EEOC’s Federal Sector EEO Portal
(FedSEP). See 29 C.F.R. § 1614.403(g). The request or opposition must also include proof of
service on the other party.
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Failure to file within the time period will result in dismissal of your request for reconsideration
as untimely, unless extenuating circumstances prevented the timely filing of the request. Any
supporting documentation must be submitted with your 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.
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

April 11, 2018
Date