0120140630
01-19-2016
Tera B.,1 Complainant, v. Jacob J. Lew, Secretary, Department of the Treasury (Internal Revenue Service), Agency.
U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
Office of Federal Operations
P.O. Box 77960
Washington, DC 20013
Tera B.,1
Complainant,
v.
Jacob J. Lew,
Secretary,
Department of the Treasury
(Internal Revenue Service),
Agency.
Appeal No. 0120140630
Agency No. IRS-10-0538-F & IRS-11-0566-F
Hearing No. 510-2011-00308X
DECISION
Complainant filed a timely appeal with the Equal Employment Opportunity Commission (EEOC or Commission) from a final Agency determination (FAD 2) dated December 12, 2013, finding that the settlement agreement it entered into with Complainant was valid, and hence complaints IRS-10-0538-F & IRS-11-0566-F were closed (respectively, Complaints 1 and 2). The settlement agreement regarded complaints of unlawful employment discrimination alleging violations of Title VII of the Civil Rights Act of 1964 (Title VII), as amended, 42 U.S.C. � 2000e et seq., and the Age Discrimination in Employment Act of 1967 (ADEA), as amended, 29 U.S.C. � 621 et seq. The appeal is accepted. See 29 C.F.R. � 1614.402; 29 C.F.R. � 1614.504(b); and 29 C.F.R. � 1614.405.
BACKGROUND
At or around the time of events giving rise to Complaints 1 and 2, Complainant worked as a Human Resources Specialist, GS-12, at the Agency's Internal Revenue Service, Business Unit Human Capital Office in Jacksonville, Florida.
In Complaints 1 and 2, Complainant alleged that she was discriminated against based on her age, sex, race, religion, and reprisal for prior equal employment opportunity (EEO) activity.2
On the morning of July 16, 2012, immediately before a scheduled hearing on her complaints, the parties reached an agreement before an EEOC Administrative Judge (AJ) that was transcribed by a court reporting service. The Agency promised to expunge Complainant's three-day suspension, pay associated back pay, and pay her a $5,000 lump sum in a way that would not be characterized as wage income (such as attorney fees). It was agreed this was a "global settlement" - it was specified it would resolve Complaints 1 and 2 and her informal complaint (later designated IRS-12-0539-F - Complaint 3). It was understood that the above would be reduced to writing, and executed by the parties.
Thereafter, Complainant refused to sign what had been reduced to writing. In July 2012, Complainant's attorney wrote the Agency that his client did not want to sign the settlement agreement because an issue that occurred after the transcribed meeting of July 16, 2012. In August 2012, Complainant's attorney wrote the Agency that Complainant proposed several changes to what had been reduced in writing, and attached them. In connection with the language expunging the three-day suspension, Complainant sought to add that she did not engage in any misconduct. She also sought to excise the following language: language that would resolve all employment matters that were filed or could have been filed by the date of the settlement agreement, language that the settlement agreement be reviewed by a specified Agency office, procedures for making a claim of breach (which tracked 29 C.F.R. � 1614.504(a) & (b)), and language designed to fulfill the requirements of the Older Workers' Benefit Protection Act (OWBPA). The Agency refused to agree to these changes, and what had been reduced to writing was never executed by both parties.
On September 12, 2012, the AJ issued an order dismissing Complaints 1 and 2 from the EEOC hearing process. The AJ noted that that Complainant's counsel represented that against his advice, Complainant refused to sign the agreement that was reduced to writing because of events that she perceived to be retaliatory that occurred after the settlement negotiations. The AJ found that Complainant reneged on a valid settlement agreement she freely and voluntarily entered into. Citing Acree v. Department of the Navy, EEOC Request No. 05900784 (October 4, 1990), the AJ found that where a settlement agreement is entered into orally before an AJ and is transcribed, it is binding. The Agency did not reinstate Complaints 1 and 2.
Shortly thereafter, the Agency issued a FAD 1 dismissing Complaint 3. Complainant filed an appeal - EEOC Appeal No. 0120130680. Regarding the written settlement agreement, Complainant argued that there was no meeting of the minds because it was not what she expected. She referred to the changes she sent her attorney, and asserted he told her to sign what the Agency drafted. Complainant argued that the settlement agreement was void for lack of consideration - she did not view the Agency has having incurred a legal detriment.
Complainant further contended that the Agency counsel representative used action or inaction to increase the hostile work environment so she would be forced to "settle" on any terms, and that Agency counsel was behind this duress. Specifically, Complainant contended that on June 5, 2012, she was intimidated by a bargaining unit witness when she emphatically said, "I'll come back when she is gone!" and that on June 18, 2012, a bargaining unit witness appeared to receive an award in the form of a change in duty start time. Complainant contended that on July 10, 2012, she was intimidated by a bargaining unit witness who erupted in anger when Complainant spoke to another employee.
In opposition to the above appeal, the Agency counsel representative submitted a declaration. She stated that she first met Complainant on the hearing date and never set foot in Complainant's work unit when her cases were active. She denied taking any action with the purpose of forcing Complainant to settle on any terms. The Agency counsel stated that during the negotiations on July 16, 2012, Complainant's attorney consulted with Complainant on every single proposal she presented for their consideration, and Complainant also conferred with her union representative who was present for the proceedings.
In EEOC Appeal No. 0120130680 (April 23, 2013), the EEOC affirmed the dismissal on the ground that Complainant failed to timely file Complaint 3. For this reason, we found it unnecessary to address whether the settlement agreement was valid or was breached.
Nevertheless, in EEOC Appeal No. 0120130680, we recounted that the Agency averred it canceled and expunged the three-day suspension and paid associated back pay, but it did not contend it paid the $5,000 lump sum, as agreed. We found that with regard to Complaints 1 and 2, it was unclear whether Complainant wished them to be reinstated on the ground that the settlement agreement was invalid, or whether she wished that the terms of the settlement agreement be enforced. We ordered the Agency to send Complainant a letter inquiring whether she wished Complaints 1 and 2 to be reinstated on the grounds that the settlement agreement was invalid, or in the alternative that the settlement agreement be fully implemented. We ordered that if Complainant expressed a choice, the Agency must process her request in accordance with 29 C.F.R. � 1614.504. We directed that if Complainant responded that she wanted Complaints 1 and 2 reinstated, the Agency must determine the applicability of the OWBPA and Sheehy v. National Security Agency, EEOC Request No. 0520100403 (Feb. 27, 2012).
Pursuant to the order, the Agency sent Complainant an inquiry, and she replied that she wanted an unrelated December 4, 2012 letter of counseling against her removed, and if this did not occur, she wanted Complaints 1 and 2 reinstated on the ground that the settlement agreement was invalid.
Thereafter, the Agency issued FAD 2. It found that while generally a settlement agreement must be signed by the parties, it met the narrow exception outlined in Acree. The Agency found that the unsigned settlement agreement that was reduced to writing contained language designed to satisfy the requirements of the OWBPA/ADEA.
The Agency also found that it implemented the terms of the settlement agreement. It submitted a copy of its November 16, 2012 compliance report which indicated that it expunged all documentation of the three-day suspension, that it paid back pay for the three-day suspension, and provided a payment screen shot showing a $5,000 lump sum payment was in process for Complainant - pending a memorandum of approval.
Based on the above, the Agency found that the settlement agreement was valid and hence it would not reinstate Complaints 1 and 2.
On appeal, Complainant requests that Complaints 1 and 2 be reinstated.
ANALYSIS
Validity of the Settlement Agreement under Title VII
(Claims of discrimination based on sex, race, religion, and reprisal for prior protected activity under Title VII)
When coercion, misrepresentation, misinterpretation, or mistake occurs during the formation of the contract, assent to the agreement is impossible, and the Commission will find the contract void. This Commission examines coercion claims with much scrutiny. The party raising the defense of coercion must show that there was an improper threat of sufficient gravity to induce assent to the agreement and that the assent was in fact induced by the threat. Such a threat may be expressed, implied or inferred from words or conduct, and must convey an intention to cause harm or loss. Cannella v. Department of Veterans Affairs, EEOC Appeal No. 01995444 (December 5, 2000). Complainant has not met this standard. She contended that in the five weeks prior to the settlement meeting on July 16, 2013, there were two incidents of bargaining unit witnesses making harassing comments and one who was granted a favorable start time. These incidents do not rise to the level of duress. We also take note of the Agency's counsel representative's declaration.
We disagree with Complainant's argument that the settlement terms contained no consideration. Consideration took the form of the Agency agreeing to expunge Complainant's three-day suspension with associated back pay and pay her a $5,000 lump sum.
The parties entered into an oral settlement agreement before an EEOC AJ, which was transcribed by a court reporter. The transcript reveals that the parties agreed to terms of the settlement agreement. Hence, even though the settlement agreement was not reduced to writing, it is valid under Title VII because it was formed in the presence of an AJ and transcribed by a court reporter. See Acree, EEOC Request No. 05900784.
Complainant argues that there was no meeting of the minds because the unexecuted written settlement agreement contained language that she did not expect. But this does not prevent a meeting of the minds. Hill v. United States Postal Service, EEOC Appeal No. 0120080243, footnote 2 (February 26, 2008) (where there are inconsistencies between an oral settlement agreement transcribed by a court reporter in front of an AJ and a later written representation of that agreement which complainant refused to sign, the transcribed oral language prevails).
Accordingly, the settlement agreement is valid under Title VII.
Validity of the Settlement Agreement under the ADEA
(Claims of discrimination based on age and reprisal for prior protected activity under the ADEA3)
The OWBPA, which amended the ADEA effective October 16, 1990, provides that a waiver of ADEA claims is not considered knowing and voluntary unless, at a minimum: (1) the waiver is clearly written from the viewpoint of the complainant; (2) the waiver specifically refers to rights or claims under the ADEA; (3) the complainant does not waive rights or claims arising following execution of the waiver; (4) valuable consideration is given in exchange for the wavier; (5) the complainant is advised in writing to consult with an attorney prior to executing the agreement; and (6) the complainant is given a reasonable period of time in which to consider the agreement. Juhola v. Department of the Army, EEOC Appeal No. 01934032 (June 30 1994) (citing 29 U.S.C � 626(f)(2)).
We need not decide whether Acree applies when OWPBA is an issue. Here, the oral transcribed settlement agreement does not meet, at a minimum, element 2 of the OWBPA. The subsequent draft written settlement agreement does not cure this because Complainant refused to sign off on this waiver term, nor did both parties execute the draft written settlement agreement. See Hill, EEOC Appeal No. 0120080243, footnote 2.
Accordingly, the settlement agreement is invalid under the ADEA.
Compliance with the Settlement Agreement
Based on Agency's representations in its compliance report, we find that it is in compliance with the portions of the settlement agreement regarding expunging the three-day suspension and paying associated back pay. But while the record shows the Agency started the process of making the $5,000 lump sum payment to Complainant, it does not show it actually made payment. This will be addressed below.
Agency Conditional Choice on Whether to Keep Closed the Title VII Claims in Complaints 1 and 2
While the settlement agreement is invalid regarding Complainant's ADEA claims in Complaints 1 and 2, it is still valid regarding Complainant's Title VII claims. What this means, without considering any other factors, is that because Complainant requests reinstatement of Complaints 1 and 2, her ADEA claims are to be automatically reinstated, but not her Title VII claims. See Sheehy v. National Security Agency, EEOC Request No. 0520100403 (Feb. 27, 2012).
But the record does not show, at this point, whether the Agency, pursuant to the settlement agreement, completed payment to Complainant a lump sum of $5,000 (the Agency must not categorize this as wage income - it may be categorized as attorney fees). If the Agency has made this payment, the Title VII claims in Complaints 1 and 2 are closed as settled. If the Agency has not done so, and wishes the Title VII claims in Complaints 1 and 2 to remain closed, it must make this payment. Otherwise, the Agency would be in breach of the portion of the settlement agreement which closed the Title VII claims. Given the legal uncertainty on the validity of the settlement agreement up to now, and because Complainant did not raise the compliance matter on appeal, we leave this option open to the Agency. This will be addressed in the order below.
The Agency Must Reinstate the ADEA claims in Complaints 1 and 2 Without Preconditions
Because the settlement agreement is invalid under the ADEA, and Complainant requests reinstatement of Complaints 1 and 2, the Agency must reinstate Complaints 1 and 2, as ordered below. Regarding her ADEA claim, under the OWBPA Complainant's receipt of the benefits of the settlement agreement and failure to tender them back to the Agency does not operate to waive her ADEA claim since the statutory requirement of a knowing waiver was not met. Oubre v. Entergy Operations, Inc., 522 U.S. 422, 426 - 28 (1998). While this statutory based legal principle does not apply to her Title VII claim, requiring Complainant to tender back would undermine the OWPBA, and hence we will not require it. See Smith v. Department of Veterans Affairs, EEOC Appeal No. 0120130700 (May 9, 2013), citing Sheehy v. National Security Agency, EEOC Request Nos. 0520100403 (Feb. 27, 2012) (waiver of ADEA claims under settlement agreement voided under the OWBPA, but the settlement agreement waiver was not defective as to Title VII and Rehabilitation Act claims. To go forward with her ADEA claims Complainant was not required to tender back benefits received under settlement agreement, including a retroactive promotion, back pay, and a lump sum payment); McMahon v. Department of Homeland Security (Customs and Border Protection), EEOC Appeal No. 0120112007 (April 11, 2012) (waiver of ADEA claims under settlement agreement voided under the OWBPA, but not her Title VII claims. To go forward with her ADEA claims, Complainant was not required to tender back benefits received under the settlement agreement, including an offer of employment).
If Complainant eventually prevails on her age claims, the Agency may seek to reduce her award by the benefits she received under the settlement agreement. See Sheehy, EEOC Request No. 0520100403, and McMahon, EEOC Appeal No. 0120112007.
The FAD is MODIFIED.
ORDER
Within thirty (30) calendar days of the date this decision becomes final,4 the Agency shall submit to the Hearings Unit of the EEOC's Miami District Office a request on behalf of Complainant for a hearing on Complaints 1 and 2. If the Agency has paid Complainant the $5,000 lump sum referenced in the transcribed settlement agreement,5 the hearing will only concern Complainant's claims under the ADEA, and Complainant's Title VII claims will be considered fully resolved through settlement.
The hearing request must include a brief explanation that it is being made pursuant to this decision, and be accompanied with this decision, the complaint file(s), report(s) of investigation, and prior hearing record.
Thereafter, an AJ shall process Complaints 1 and 2 in accordance with 29 C.F.R. � 1614.109, and the Agency shall issue a final action in accordance with 29 C.F.R. � 1614.110(a).6
A copy of the letter requesting a hearing must be sent to Complainant and the Compliance Officer as referenced below.
IMPLEMENTATION OF THE COMMISSION'S DECISION (K0610)
Compliance with the Commission's corrective action is mandatory. The Agency shall submit its compliance report within thirty (30) calendar days of the completion of all ordered corrective action. The report shall be submitted to the Compliance Officer, Office of Federal Operations, Equal Employment Opportunity Commission, P.O. Box 77960, Washington, DC 20013. The Agency's report must contain supporting documentation, and the Agency must send a copy of all submissions to the Complainant. If the Agency does not comply with the Commission's order, the Complainant may petition the Commission for enforcement of the order. 29 C.F.R. � 1614.503(a). The Complainant also has the right to file a civil action to enforce compliance with the Commission's order prior to or following an administrative petition for enforcement. See 29 C.F.R. �� 1614.407, 1614.408, and 29 C.F.R. � 1614.503(g). Alternatively, the Complainant has the right to file a civil action on the underlying complaint in accordance with the paragraph below entitled "Right to File a Civil Action." 29 C.F.R. �� 1614.407 and 1614.408. A civil action for enforcement or a civil action on the underlying complaint is subject to the deadline stated in 42 U.S.C. 2000e-16(c) (1994 & Supp. IV 1999). If the Complainant files a civil action, the administrative processing of the complaint, including any petition for enforcement, will be terminated. See 29 C.F.R. � 1614.409.
STATEMENT OF RIGHTS - ON APPEAL
RECONSIDERATION (M0815)
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 or within twenty (20) calendar days of receipt of another party's timely request for reconsideration. See 29 C.F.R. � 1614.405; Equal Employment Opportunity Management Directive for 29 C.F.R. Part 1614 (EEO MD-110), 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, P.O. Box 77960, Washington, DC 20013. 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 request or opposition must also include proof of service on the other party.
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 (T0610)
This decision affirms the Agency's final decision/action in part, but it also requires the Agency to continue its administrative processing of a portion of your complaint. 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 on both that portion of your complaint which the Commission has affirmed and that portion of the complaint which has been remanded for continued administrative processing. In the alternative, you may file a civil action after one hundred and eighty (180) calendar days of the date you filed your complaint with the Agency, or your appeal with the Commission, until such time as the Agency issues its final decision on your complaint. 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
January 19, 2016
__________________
Date
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.
2 Complaints 1 and 2 are not in the record, and except for this description in the FAD, there are no record documents characterizing them.
3 Claims of reprisal for prior ADEA EEO activity fall within the ambit of the ADEA and the OWPBA. See Campo v. United States Postal Service, EEOC Petition No. 03A20012 (Aug. 27, 2002).
4 If neither party files a request for reconsideration, this decision becomes final within 30 days after the parties receive this decision. The Commission presumes the parties will receive this decision within five calendar days after it is mailed.
5 Again, it is noted that the parties agreed that the Agency must not categorize this as wage income - it may be categorized as attorney fees.
6 We remind the parties that compensatory damages and attorney fees and costs are not available under the ADEA. The record does not reflect what Complainant alleged in Complaints 1 and 2, but if only the ADEA claim remains, the AJ, if the facts support it, may consider whether Complaints 1 and 2 are moot.
---------------
------------------------------------------------------------
---------------
------------------------------------------------------------
2
0120140630
2
0120140630