Volume XIV, No. 3
Office of Federal Operations
Summer Quarter 2003
The Digest of EEO Law is a quarterly publication of EEOC's Office of Federal Operations (OFO).
Carlton M. Hadden, Director, OFO
Donald Names, Director, OFO's Special Services Staff
Editor: Arnold Rubin
Writers: Robyn M. Dupont, Gerard Thomson, Veronica Villalobos
Available in accessible formats for persons with disabilities. The Digest is now available online through EEOC's homepage at www.eeoc.gov. If you wish to receive a copy in print, you must send a request, in writing, to Arnold Rubin, EEOC, Office of Federal Operations, 1801 L Street, N.W., Washington, D.C. 20507.
Agency Appeal Dismissed. In dismissing the agency's appeal, the Commission noted that the agency had asked EEOC to review solely whether or not the Administrative Judge (AJ) was correct in determining that complainant was an individual with a disability under the Rehabilitation Act. Finding that the agency's final order had adopted the AJ's finding of no discrimination, the Commission determined that the agency had no grounds for appeal. An appeal is properly taken by an agency when it declines to implement the AJ's finding or any portion of the order of relief. The Commission found that the purpose of the agency's appeal in this case was not to address the ultimate disposition of the complaint. Rather, the agency was taking issue with a particular legal predicate leading up to the AJ's decision. The Commission concluded that EEOC's regulations do not authorize such agency appeals. Vacchiano v. United States Postal Service, EEOC Appeal No. 07A10042 (March 3, 2003).
Denial of Class Certification Affirmed. Complainant, who alleged class-wide discrimination with regard to his nonselection for a particular position, did not meet the requirements for class certification. Complainant did not show common facts among class members in that he was not a member of two of the protected classes, females and individuals over 40, whom he sought to represent, and did not clearly identify a policy that had the effect of discriminating against the class as a whole. Complainant also failed to give an approximate number for the purported class, present evidence to establish a number that constituted the class, or raise specific allegations with respect to any member of the purported class. Hudson, et al., v. Department of Veterans Affairs, EEOC Appeal No. 01A12170 (March 27, 2003).
Commission Affirms $40,000 Award for Discriminatory Harassment. The EEOC previously had found that the agency had discriminated against complainant on the basis of her sex when she was harassed by her immediate supervisor. As part of the remedy ordered, the Commission ordered the agency to solicit evidence of compensatory damages from complainant and issue a final decision awarding such damages as might be warranted. The agency awarded complainant $40,000 in non-pecuniary damages in a final decision, which complainant appealed. The Commission affirmed the award, noting that there was no causal connection between one claimed medical condition and the harassing conduct, and that complainant's condition was partially attributable to factors other than her supervisor's conduct. EEOC noted that it was up to complainant to demonstrate a nexus between the harm shown and the unlawful discrimination. Anderson v. United States Postal Service, EEOC Appeal No. 01A14976 (April 2, 2003).
Commission Increases Award of $15,000 in Non-Pecuniary Damages to $30,000. The agency found that complainant had been discriminated against on the basis of his disability when he was charged as being absent without official leave and constructively discharged. As part of its remedy, the agency awarded complainant $15,000 in non-pecuniary compensatory damages. On appeal, the Commission increased the damages awarded to $30,000. The Commission explained that the unlawful discrimination caused complainant to suffer severe emotional problems, which lasted for approximately three months, and less severe emotional stress for three years. It also noted that the discrimination, while not the sole causal factor in this case, did contribute to both complainant's depression and the ultimate dissolution of his 19-year common-law marriage. Williams v. Department of Veterans Affairs, EEOC Appeal No. 01A13275 (March 19, 2003).
Agency Had Right to Send Petitioner for FFDE. The Commission concurred with the MSPB's finding of no discrimination, when petitioner was sent for a FFDE because of a conflict in medical documentation as to whether he possessed the potential for violent behavior in the workplace due to his medical condition (paranoid personality disorder). Further, the Commission found that the agency did not discriminate against petitioner when it placed him in non-duty status for refusing to submit to the examination. Gribcheck v. United States Postal Service, EEOC Petition No. 03A20068 (April 7, 2003). See also Bearfield v. United States Postal Service, EEOC Appeal No. 01A04678 (March 5, 2003) (agency met its burden of showing FFDE was job-related and consistent with business necessity: supervisor had reasonable belief that complainant's ability to perform essential job functions was impaired by her medical condition, based in part on the fact that her doctor opined that she might have to quit her job due to medical conditions, but then refused to provide any details).
In the following cases, the Commission found insufficient evidence to show that complainants were disabled within the meaning of the Rehabilitation Act:
Holstein v. United States Postal Service, EEOC Appeal No. 01A01808 (March 6, 2003)
Complainant had sustained a fracture in his leg which did not heal properly and caused a shortening in his right lower leg with limited range of motion, as well as a condition in his knees that required braces. EEOC found that this evidence was insufficient to establish a substantially limiting impairment. Information was lacking as to the extent complainant's impairments limited his walking in terms of distance and/or duration. Nor was there evidence connecting his stated inability to play sports and do yard work to his limitation in walking.
Petty v. United States Postal Service, EEOC Appeal No. 01A05440 (March 27, 2003)
Complainant failed to show that she was substantially limited as a result of asthma and monocular vision. She did not identify any major life activity in which she was substantially limited due to her asthma. Further, complainant offered no evidence of limitations in peripheral vision and depth perception. Medical records showing 20/20 vision in one eye and 20/800 in the other, while demonstrating poor vision, were not sufficient to show that complainant had a record of a substantially limiting impairment with regard to the major life activity of seeing. Cf. Spencer v. Treasury, EEOC Appeal No. 07A10035 (May 6, 2003) (complainant with no vision in one eye, limiting peripheral vision and depth perception, found to be substantially limited in major life activity of seeing.)
Rubio v. United States Postal Service, EEOC Appeal No. 01A00554 (March 27, 2003)
Complainant, who was limited in the life activity of walking to between one hour to three hours at a time, failed to show a substantial limitation in that life activity. Specifically, complainant did not show that he was significantly restricted with respect to permanence or long-term impact involving his walking limitations. Complainant also failed to present evidence concerning how the walking limitation substantially affected his everyday activities in terms of the average individual.
Miles v. United States Postal Service, EEOC Appeal No. 01A12528 (March 13, 2003)
Complainant, who was restricted to lifting no more than 20 pounds, but could frequently lift and carry objects weighing up to 10 pounds, was not substantially limited with regard to the major life activity of lifting. Complainant's testimony that he was able to remedy his pain by sitting down for 10 minutes, lying down, "snapping his back in place," stretching, or using a heating pad, revealed that the use of mitigating measures minimized the pain caused by lifting, and precluded a finding that complainant was substantially limited in lifting.
Petitioner Not a Qualified Individual With a Disability. The Commission concurred with the Merit Systems Protection Board (MSPB) that petitioner was not a qualified individual with a disability when she was unable to perform the essential functions of her position as Program Analyst, even with reasonable accommodation. Petitioner wanted to work exclusively from her home as an accommodation; however, MSPB determined, and EEOC concurred, that the essential functions of the position included participating in office meetings and conducting field visits, which could not be performed from home. Nanette v. Department of the Treasury (Internal Revenue Service), EEOC Petition No. 03A20095 (March 5, 2003).
Agency Fails to Meet Burden of Showing Undue Hardship in Denying Reasonable Accommodation. In this case, the Commission found that the agency had failed to meet its burden of showing undue hardship when it denied complainant the reasonable accommodation he had requested (needing to work in another area during the cleaning of machinery, which created a great deal of dust) for his disability (asthma), resulting in his being unemployed for two years. An arbitrator sustained complainant's grievance and ordered complainant's immediate reinstatement and make-whole relief. An AJ found, and the Commission agreed, that the sole reason complainant was placed off the clock and kept in off duty status for nearly two years, was because he did not submit forms specifically stating that he was requesting a permanent light duty position within the time frame ordered by agency officials. This, the Commission stated, did not absolve the agency of its duty to provide reasonable accommodation under the Rehabilitation Act. As part of the relief awarded, the Commission directed the agency to retroactively reinstate complainant with modifications consistent with his medical restrictions, provide back pay with interest, and consider compensatory damages. Lawler v. United States Postal Service, EEOC Appeal No. 01A01535 (March 27, 2003).
Burden on Complainant to Establish Likely Vacancies. Complainant bears the burden of establishing likely vacancies in cases of reasonable accommodation involving reassignment. The Commission held that, in the reassignment context, an agency's failure to conduct either any search at all, or a broad enough search for a position, does not, by itself, result in a finding of discrimination. Instead, complainant must show that it is more likely than not that there were vacancies available, during the relevant time period, into which she could have been reassigned. McIntosh v. United States Postal Service, EEOC Appeal No. 01A15285 (January 13, 2003).
Employees May Be Required to Speak English if the Rule is Justified by Business Necessity. Noting that a ban on employees speaking their primary language in the workplace disadvantages an individual's employment opportunities because of national origin and presumptively violates Title VII, the Commission found that an agency official directed employees not to speak Spanish only in the reception area where they serviced non-Spanish speaking customers. No such rule was imposed on private conversations in private offices. The Commission also found insufficient evidence that employees were prohibited from speaking Spanish to the public and customers who preferred to conduct business in Spanish. Accordingly, the Commission found no discrimination. Alvarez v. Department of Veterans Affairs, EEOC Appeal No. 01A10091 (March 6, 2003)
Complainant Entitled to Pursue Discrimination Claims. Although complainant had filed both an EEO complaint and a grievance on the same matter, the Commission found that complainant could pursue discrimination claims because the grievance procedure did not permit claims of discrimination to be raised. Thus, the grievance decision did not operate to bar the claims in the EEO process under the doctrine of res judicata. Laity v. Department of Veterans Affairs, EEOC Appeal No. 01A22476 (March 5, 2003).
Substantially Equivalent Position. In this matter, the Commission addressed the question of what constitutes a "substantially equivalent position" for the purpose of providing make-whole relief where discrimination is found. The Commission found that the agency had discriminatorily reassigned complainant from a Solicitor position to an Attorney Advisor position, and ordered that complainant be reinstated into the Solicitor position. The agency argued that all Solicitor functions had been transferred to the Office of the General Counsel, and the Solicitor's duties had been distributed to other Attorney Advisors in the OGC, including complainant. Complainant argued that her current duties were not substantially equivalent to her former Solicitor position. The Commission concluded that, if the agency could no longer reinstate complainant as it argued, then it must place complainant into a position with duties commensurate with her experience and prior job functions. EEOC found that merely maintaining grade level and pay the same as before did not make complainant whole after discrimination. The Commission ordered the agency to place complainant either in the Solicitor's position or a substantially equivalent position in terms of responsibility, independence, status, and official recognition. Monroig v. United States Commission on Civil Rights, EEOC Request No. 05A20762 (April 9, 2003).
Agency's Award of $50,000 Compensatory Damages and no Entitlement to Front Pay Affirmed. The Commission previously found discrimination based on sex and age when complainant was subjected to a hostile work environment. On remand, the agency found that complainant was not entitled to front pay and awarded $50,000 as compensatory damages. The Commission found that, since complainant was not able to work and had refused a reinstatement offer, she was not entitled to an award of front pay. Clark v. United States Postal Service, EEOC Appeal Nos. 01A21594 and 01A21595 (March 19, 2003).
Nexus Found Between Removal Action and Complainant's Protected Activity in Requesting Reasonable Accommodation. The Commission found that complainant's request to the responsible management official (RMO) for additional floor mats for her leg and foot pain constituted a request for reasonable accommodation and was therefore protected activity. EEOC found substantial evidence in the record to support a finding that the RMO either created or seized upon the opportunity to remove complainant from employment just two days after she engaged in the protected activity of requesting reasonable accommodation. By way of relief, the Commission ordered the agency to consider an award of compensatory damages, as well as to consider disciplining the RMO. Keller v. United States Postal Service, EEOC Appeal No. 01A03119 (April 25, 2003).
Settlement Agreement Unenforceable for Lack of Consideration. Agency's agreement to advise employees who report alleged threats of their options and right to file "an official threat assessment" does not constitute consideration, and renders settlement agreement void. The agency was merely agreeing to abide by its own policy concerning threats against employees. Complainant received nothing more than that to which he was already entitled. Holland v. United States Postal Service, EEOC Appeal No. 01A21524 (April 2, 2003).
Settlement Agreement Invalid When No Meeting of the Minds. The Commission found no meeting of the minds between the parties, which rendered the settlement agreement invalid. Specifically, the agreement raised, but failed to resolve, the issue of back pay, which was inseparable from the claim raised concerning the agency's failure to reinstate complainant after his worker's compensation benefits ceased. Luongo v. United States Postal Service, EEOC Appeal No. 01A24090 (April 3, 2003).
Agency's De Minimus Action Does Not Constitute Breach of Settlement Agreement. The Commission found that a one-day delay in submitting paperwork provided for in the settlement agreement was de minimus and did not undermine the agreement's purpose or effect. EEOC also noted that the fact that agreed upon amounts for attorney's fees and damages were paid in full less than 60 days after the signing of the agreement was sufficient to establish that the agreement was not breached with regard to those matters. Baca v. Department of the Air Force, EEOC Appeal No. 01A21224 (April 3, 2003).
Discriminatory Denial of Family Medical Leave Act (FMLA) States a Claim. Allegation that complainant was denied sick leave under the FMLA after the birth of his son, while female employees received such leave, states a claim within the purview of EEOC's regulations. Urquidez v. United States Postal Service, EEOC Appeal No. 01A30793 (April 2, 2003).
Overheard Comment Fails to State a Claim. Complainant who overheard an allegedly discriminatory remark, made by a management official to another employee, did not state a claim of discrimination or retaliatory harassment. Wagner v. United States Postal Service, EEOC Appeal No. 01A23390 (April 7, 2003).
EEO Contact Regarding Denial of Reasonable Accommodation Not Timely. A complainant must initiate an EEO complaint within 45 days of learning of the denial of a request for reasonable accommodation. The Commission distinguished that situation from one in which an agency fails to address a request for accommodation, stating that the latter incident constitutes a recurring violation that repeats each day that the accommodation is not provided. Henery v. Department of the Navy, EEOC Appeal Nos. 01A22792 and 01A22794 (April 2, 2003).
Title VII of the Civil Rights Act of 1964 provides that all personnel actions affecting employees in the federal sector shall be free from discrimination based on race, color, religion, sex, or national origin. Further, the EEOC complaint processing regulations provide that an agency shall accept a complaint from any aggrieved employee or applicant for employment who believes that he or she has been discriminated against because of race, color, religion, sex, national origin, age, disability, or in reprisal for prior EEO activity. Thus, in order to have standing to bring an action under the EEOC regulations, an individual must be a federal employee or applicant for employment, and an agency can properly dismiss a complaint filed by an individual who does not meet that requirement for failure to state a claim. It is noted that none of the pertinent federal employment discrimination laws precisely define the term "employee." As a result, in determining whether a complainant is in fact an employee of the federal government, the Commission has focused upon the particular facts and circumstances surrounding the individual's relationship with the agency.
In Ma v. Department of Health and Human Services, the Commission applied the common law of agency test for determining who qualifies as an "employee" under Title VII. The Commission noted that while it had previously applied the "economic realities test" enumerated in Spirides, the factors listed for consideration therein are drawn from the common law of agency test, and the practical application of the two has not been appreciably different. The Commission included a non-exhaustive list of factors to be examined when determining an individual's status for purposes of stating a claim under the EEOC regulations. Specifically, the Commission will look at: (1) the extent of the employer's right to control the means and manner of the worker's performance; (2) the kind of occupation, with reference to whether the work usually is done under the direction of a supervisor or is done by a specialist without supervision; (3) the skill required in the particular occupation; (4) whether the "employer" or the individual furnishes the equipment used and the place of work; (5) the length of time the individual has worked; (6) the method of payment, whether by time or by job; (7) the manner in which the work relationship is terminated, i.e., by one or both parties, with or without notice and explanation; (8) whether annual leave is afforded; (9) whether the work is an integral part of the business of the employer; (10) whether the worker accumulates retirement benefits; (11) whether the employer pays social security taxes; and (12) the intention of the parties.
Applying the common law of agency test to the facts in Ma, the Commission determined that the complainants were not employees of the agency, and their complaints were properly dismissed for failure to state a claim. The complainants, who performed research at the agency under Visiting Fellows awards, were not required to complete specific assignments or perform a specified amount of work. Further, the agency did not have the right to assign the complainants additional research projects without their agreement, or to establish the hours when complainants were to perform their research. While the Commission noted that the agency provided complainants with all necessary supplies and equipment, it stated that the agency supervisor met with complainants only periodically and did not supervise their research on a daily basis. Finally, the Commission stated that the agency did not make social security payments for complainants, or withhold state or local taxes, and that complainants were not covered by the agency's retirement or health plan, and did not accrue leave.
The Commission has issued a number of recent decisions applying the common law of agency test to determine whether an individual is an employee of the agency for purposes of stating a claim of discrimination. In Floro v. Department of the Army, the complainant entered into a contract with the agency to serve as Program Director for numerous projects. In finding that the complainant was not an employee of the agency, the Commission observed that there was no evidence that the Program Manager, the agency employee who worked closely with complainant, set complainant's hours and schedule, required him to request leave, conducted routine performance evaluations, administered discipline, or otherwise exercised day to day control over complainant's routine. The Commission noted that while complainant's services necessarily included close coordination with the Program Manager and other contractors, all contractors made weekly status reports which suggested a collaborative working relationship as opposed to one of close supervision by the Program Manager. The Commission also noted that while the complainant performed his duties at the agency's facility, using the agency's supplies and equipment, he was not on the agency's payroll and derived no employment benefits, such as paid leave, medical insurance, or retirement benefits.
In Szayna v. Department of Health and Human Services, as in Ma, the complainant was a Visiting Fellow performing independent research under the mentorship of an agency senior scientist. The Commission noted that the agency's manual provisions implementing the Visiting Fellow program, and the notification letter sent to complainant, explicitly stated that individuals who receive those awards are not agency employees. The Commission stated that while the senior scientist expressed expectations concerning when complainant would work, it did not appear complainant adhered thereto, and that meetings and seminars which he instructed complainant to attend were for her benefit rather than the agency's. The Commission noted that the instructions given to complainant by the senior scientist were more properly viewed as "tutelage," rather than day to day control over a subordinate. Further, complainant was not on the agency's payroll, and received no benefits such as paid leave or insurance. Thus, the Commission concluded that complainant was not an employee of the agency.
In Chung v. Department of Defense, complainant worked as a car salesman through the Overseas Military Sales Corporation. In finding that complainant was not an employee of the agency's Army and Air Force Exchange Service, the Commission noted that complainant received his pay from, and was supervised by managers of the Corporation. The Commission stated that while the agency provided space and equipment, it had essentially no control over any aspect of complainant's work.
In Bradford-Morris v. Department of the Army, complainant worked at an agency health clinic pursuant to a contract between the agency and PhyAmerica. The Commission noted that the record included an Independent Contractor (Physician) Agreement entered into between complainant and PhyAmerica, in which complainant agreed to fully indemnify PhyAmerica, and be responsible for self-employment tax payments and workers' compensation insurance. Further, the agency exerted virtually no control over complainant's performance, and had no authority to discipline or control complainant other than to give her work assignments. Thus, the Commission concluded that complainant was not an employee of the agency.
The complainant in Foley v. Department of Justice worked as a Contract Linguist, providing translation services at an hourly rate. The Commission noted that there was no guarantee of the number of hours per week she would work, and she was not assigned specific, permanent work space. Further, complainant was expected to work alone and provided minimal supervision, and there was no evidence that she received leave, insurance, or retirement benefits from the agency, or that the agency paid social security or taxes for complainant. Thus, the Commission determined that complainant was not an agency employee.
In Miller v. Department of Veterans Affairs, the Commission found that complainant, who worked as a Security Officer, was employed by Superior Protection, Incorporated, an independent contractor, and not the agency. Specifically, the Commission indicated that Superior Protection retained ultimate disciplinary and supervisory authority over complainant, as provided for in the contract between Superior and the agency. The Commission further stated that complainant failed to rebut the evidence showing that she was hired, disciplined, terminated, and paid by Superior.
The complainant in Chiabaudo v. Department of Justice, who was dismissed from his position as a Court Security Officer, was found by the Commission to be employed by an agency contractor rather than the agency itself. The Commission noted that the contractor, AKAL Security, Incorporated, was responsible for providing all management, supervision, manpower, material, supplies and equipment. In addition, the contractor was to plan, schedule, coordinate, and assure effective performance of security services at the agency's facility. Thus, the Commission concluded that the complainant was not covered by EEOC federal sector regulations.
In Covington v. Department of the Interior, the complainant was terminated from employment, and found not eligible for positions with the Colesville Confederated Tribes. The Commission affirmed the agency's dismissal of the complaint for failure to state a claim, finding that the complainant was not employed by the Department of the Interior. The Commission noted that the complainant was supervised by employees of the Tribes, worked on Tribes property, with equipment controlled by the Tribes, and that the positions she sought were also under the control of the Tribes.
In a recent decision, the Ninth Circuit agreed with an EEOC determination that an employee of an independent contractor working for the Department of the Navy was not a federal employee for the purposes of receiving reasonable accommodation under the Rehabilitation Act of 1973. The complainant, who had a prosthesis for his right leg which made walking great distances difficult, asked the Department of the Navy for a parking space inside the shipyard facility in which he was working. His request was denied and he was required to park his car outside the shipyard and walk with difficulty to the work site. The complainant's administrative complaint was dismissed by Navy for failure to state a claim, asserting that he was not a federal employee. EEOC affirmed Navy's dismissal, finding that the complainant was not a federal employee for the purposes of the Rehabilitation Act. In its review of the matter, the Ninth Circuit agreed with EEOC that the complainant was not a federal employee. The Court noted that the contractor for whom the complainant worked was solely responsible for hiring, training, assigning work to, and supervising the complainant. The Court concluded that the complainant was not a federal employee and granted summary judgment in favor of the Navy.
In Koob v. United States Postal Service, the Commission found that complainant, who provided services to the agency as an Occupational Health Nurse Administrator, was an employee and not an independent contractor. The Commission noted that the contract used by the agency in its procurement of health services set forth specific duties to be performed at the agency, on certain days and during certain times, and specified that the Nurse Administrator would be "functionally" supervised by the Senior Area Medical Director, and "administratively" supervised by the Director and the Manager of Human Resources. The Commission applied its previous decision in Woods v. United States Postal Service, EEOC Appeal No. 01971155 (June 12, 1998), which held under virtually identical facts that a complainant who worked as an Occupational Health Nurse Administrator was an agency employee.
In certain cases, an individual may be found to be in a joint employment relationship, working for both the federal agency and another entity, such as a private staffing firm. For example, in Maynard v. Department of the Navy, the Commission found that the complainant, an environmental analyst, was properly deemed an employee of the agency for purposes of invoking Title VII protection. The Commission noted that an agency supervisor recruited, interviewed, and selected complainant, and closely supervised complainant thereafter to the extent that the commercial contractor had little if any input into complainant's daily assignments. The Commission found, therefore, that complainant was an employee of both the private staffing firm and the agency.
In Weikle v. United States Postal Service, the Commission found that a former employee's claim of harassment, including issues which arose after complainant resigned from the agency and was working as a contract employee, stated a claim within the meaning of the EEOC Regulations. The Commission noted that the alleged harassment began while complainant was employed by the agency, and that there was a nexus between the alleged harassment and the subsequent incidents cited.
In Clackamas Gastroenterology Associates, P.C., v. Wells, petitioner Clackamas was a medical clinic in Oregon, which had employed respondent Wells as a bookkeeper from 1986-1997, when she was terminated. Wells filed suit against the clinic under Title I of the Americans With Disabilities Act (ADA). The ultimate question to be determined by the Supreme Court was whether the four physician-shareholders who owned the professional corporation and constituted its board of directors were counted as employees to bring the clinic within the ADA's statutory requirement that a business entity must have 15 or more employees for 20 weeks.
The Supreme Court found persuasive EEOC's focus on the common-law touchstone of control. Citing the Commission's Compliance Manual, Section 605:0009, the Court noted with approval EEOC's assertion that six factors, not necessarily "exhaustive," should be considered as to whether a shareholder-director was an employee. The six factors were: (1) Whether the organization can hire or fire the individual or set the rules and regulations of the individual's work; (2) Whether, and if so to what extent, the organization supervises the individual's work; (3) Whether the individual reports to someone higher in the organization; (4) Whether, and if so to what extent, the individual is able to influence the organization; (5) Whether the parties intended that the individual be an employee, as expressed in written agreements or contracts; and (6) Whether the individual shares in the profits, losses, and liabilities of the organization.
The Supreme Court noted that whether a shareholder-director was an employee depended upon all the incidents of the relationship, with no one factor being determinative. Accordingly, the Court reversed the decision of the Ninth Circuit Court of Appeals, which had held that the use of any corporate form, including a professional corporation, precluded examination into whether the entity was in fact a partnership, and remanded the matter for further proceedings consistent with the Supreme Court's opinion.
In federal sector EEO law, complainants who prevail on claims alleging discrimination in violation of Title VII of the Civil Rights Act of 1964 (Title VII) and Section 501 of the Rehabilitation Act of 1973 (Rehabilitation Act) are presumptively entitled to an award of attorney's fees, unless special circumstances render such an award unjust. Complainants must show that they are represented by an attorney and have attained "prevailing party" status. A complainant typically attains prevailing party status by obtaining a finding of discrimination in the adjudicatory process. The Equal Employment Opportunity Commission (Commission) has recognized, however, that a complainant may achieve prevailing party status through a settlement agreement.
In Buckhannon Bd. and Care Home, Inc. v. West Virginia Dept. of Health and Human Resources, the United States Supreme Court (Court), in a 5 to 4 decision, held that prevailing party status, for purposes of the fee shifting provisions of the Fair Housing Amendments Act of 1988 (FHAA) and the Americans with Disabilities Act of 1990 (ADA), is achieved when a party secures a favorable judgment on the merits of a claim or a court ordered consent decree. This article examines the effect of Buckhannon on the availability of attorneys fees in claims filed under Title VII and the Rehabilitation Act in the federal sector administrative process.
Buckhannon Board and Care Home, Inc. (Buckhannon), a West Virginia assisted living care facility, failed to pass a state inspection because some of its residents were not capable of "self preservation" as defined and required by state law. After receiving cease and desist orders directing the closure of its facilities, Buckhannon brought suit in district court on behalf of itself and others who were similarly situated (petitioners) against the state of West Virginia, two of its agencies, and 18 individuals (respondents). Petitioners sought declaratory and injunctive relief on the theory that West Virginia's "self preservation" requirement violated the FHAA and ADA. While the case was pending in the district court, the West Virginia legislature enacted two bills which eliminated the "self-preservation" requirement. The respondents moved to dismiss the case as moot, and the district court granted the motion. The petitioners then requested attorney's fees as the prevailing party pursuant to the FHAA and the ADA. The petitioners argued that they were entitled to the attorney's fees under the "catalyst theory," which provides that a plaintiff is a prevailing party if he achieves the desired result because the lawsuit brought about a voluntary change in the defendant's conduct.
The Court determined that Congress employed the term prevailing party as a legal term of art. Rejecting the definition of prevailing party contained in the "catalyst theory," the Court adopted the definition contained in Black's Law Dictionary, which states a prevailing party is a "‘party in whose favor a judgment is rendered regardless of the amount of damages awarded.'" The majority rephrased the definition as "one who has been awarded some relief by the court," and noted that its previous decisions supported this definition. The Court further noted that "even an award of nominal damages suffices under this test."
The Court held that only those who obtain enforceable judgments on the merits and court-ordered consent decrees are prevailing parties. Acknowledging that a consent decree does not always include an admission of liability by the defendant, the Court nonetheless found it to be a court-ordered "‘chang[e] [in] the legal relationship'" between the parties. The Court noted that situations where parties enter into voluntary settlement agreements or where a party voluntarily changes his behavior "lack the necessary judicial imprimatur" to create a change in the legal status of the parties. In explaining its position, the Court cited to language in Hanrahan v. Hampton: "It seems clearly to have been the intent of Congress to permit . . . an interlocutory award only to a party who has established his entitlement to some relief on the merits of his claims, either in the trial court or on appeal (emphasis added)."
Pointing to several Courts of Appeals' reliance on dicta in prior cases in approving the catalyst theory, the majority dismissed the dissenters' assertion that the decision upset "long-prevailing Circuit precedent." In addition, the Court noted that, despite the petitioner's argument that defendants may change their conduct in an effort to make the case moot, "a defendant's change in conduct will not moot the case," when the plaintiffs have a cause for damages. The Court refused to endorse a construction of prevailing party which "authorizes federal courts to award attorney's fees to a plaintiff who, by simply filing a nonfrivolous but nonetheless potentially meritless lawsuit (it will never be determined), has reached the ‘sought-after destination' without obtaining judicial relief."
The holding in Buckhannon specifically adressed the FHAA and ADA. The court noted in dicta, however, that the prevailing party provisions in other fee-shifting statutes should be interpreted consistently with the decision and specifically mentioned Title VII, the Voting Rights Act Amendments of 1975, and the Civil Rights Attorney's Fees Awards Act of 1976.
Prior to the Supreme Court decision in Buckhannon, the Commission required that attorney's fees and costs be explicitly provided for in the body of a settlement agreement for the fees to be awarded. According to the Commission's Management Directive, a complainant who prevails through a voluntary settlement agreement is entitled to attorney's fees and costs under the same standards as any other prevailing party. However, a settlement agreement that fails to preserve the issue of fees and costs operates as an implicit waiver of fees and costs. The Commission therefore has strongly encouraged parties to resolve fee and cost issues by negotiated settlement.
A complainant can establish prevailing party status and not receive attorney's fees. In Farrar v. Hobby, the plaintiffs filed a civil rights action under 42 U.S.C. § 1983, seeking $17 million in compensatory damages. The plaintiffs prevailed, but received only $1 in nominal damages. The Court found that, when a plaintiff recovers only nominal damages because of his failure to prove an essential element of claim for monetary relief, the only reasonable fee under civil rights attorney's fees provision is usually no fee at all. The plaintiffs were found to have met the minimum condition for prevailing party status because they obtained an enforceable judgment for $1 in damages. The Court, however, determined that the plaintiffs were not entitled to an attorney's fee award under the civil rights statute because they recovered nominal damages of only $1 on a claim for $17 million in compensatory damages.
The Supreme Court cited to Farrar in Buckhannon and stated that "even an award of nominal damages suffices under this test." However, footnote six in Buckhannon states that in some circumstances such a prevailing party should still not receive an award of attorney's fees.
Several Commission decisions have analyzed the applicability of Buckhannon to Federal sector cases. In Arnold v. Department of the Air Force, petitioner filed a petition with the Commission for a review of the final decision of the Merit Systems Protection Board (MSPB), where an MSPB Administrative Judge (AJ) denied petitioner's claim for attorney's fees and costs on a claim of discrimination. The underlying claim consisted of a finding by the agency that it had discriminated against petitioner on the basis of disability when it removed him from the position of Sheet Metal Mechanic (Aircraft), WG-10, effective July 31, 1998. On August 30, 2001, the Board adopted the finding of discrimination and forwarded the matter to an MSPB Regional Office for further proceedings. On September 6, 2001, petitioner filed a request for extension of time to file his fee petition and sought to defer consideration of a fee award until after the remaining remedies issues were decided. Finding that he had no authority to grant petitioner's request for an extension of time, the MSPB AJ denied the motion for attorney's fees and determined that petitioner had failed to demonstrate that he was a prevailing party in his removal action. In reaching this conclusion, the MSPB AJ noted that, in accordance with an earlier decision, petitioner would have been separated from the agency even if the agency had conducted a proper job search. The AJ concluded that "even if compensatory damages were awarded, [petitioner would not have] return[ed] to the rolls of the agency or be entitled to any back pay."
In his petition to the Commission, petitioner contended that he was a prevailing party based on the finding by the agency. He further asserted that the Commission should have withheld a ruling on his petition because a hearing on compensatory damages was subsequently held before the MSPB AJ on January 25, 2002, and petitioner expected that he would file an additional petition for review once a final decision on that matter was issued. The agency asserted that, by virtue of the FAD, petitioner obtained his entitlement to any and all relief, including compensatory damages. The agency argued, therefore, that since petitioner had not prevailed on his case in the MSPB proceedings, he was not entitled to any attorney's fees incurred in said proceedings.
The Commission differed with the MSPB AJ's decision to the extent that it construed Buckhannon to mean that petitioner must obtain reinstatement or back pay in order to be a prevailing party for purposes of applicable civil rights statutes. The Commission noted that, in Buckhannon, the Court rejected the catalyst theory as a basis for a fee award, since a voluntary change, even if prompted by a lawsuit, was not equivalent to the requisite judicially-sanctioned change in the parties' legal relationship. The Commission determined that, in contrast to the facts in Buckhannon, petitioner's claim did not yield a voluntary change by the agency but rather culminated in a discrimination finding made in a final decision which the agency's EEO office issued in its capacity as a neutral adjudicator. The Commission further disagreed with the MSPB AJ's decision to the extent that it stated that the agency's abandonment of its discriminatory policy in this case was voluntary within the meaning of Buckhannon. The Commission found that the matter was not a catalyst theory case, but rather one which resulted in a finding of discrimination by an adjudicator, making Buckhannon inapposite. Furthermore, the Commission disagreed with the MSPB AJ's decision to the extent that it stated that reinstatement or back pay must be obtained as a remedy in order for a party to be deemed a prevailing party on the claim. The Commission concluded that compensatory damages, or even simply declaratory relief, can be sufficient, even in the absence of reinstatement or back pay, to render a party a prevailing party. The Commission, however, could not reach a decision because the remedies issues were pending before the MSPB and the pertinent record was not before it.
Another analysis of Buckhannon by the Commission is found in Spriesterbach v. United States Postal Service, where a complainant initiated a request (RTR) to the Commission to reconsider its prior decision. There, complainant and the agency had entered into a settlement agreement which provided, in relevant part, that complainant would be placed in the position of Special Delivery Messenger, with the seniority date that she "would have had if [she] had been awarded the position at the time of [her] conversion . . . [on April 9, 1988]." The agency placed complainant in the position effective April 9, 1988, but gave her a seniority date of October 8, 1988, the date she was placed in the position. The agency argued that its collective bargaining agreement (CBA) stipulated that the "seniority date" was the date on which an individual was assigned to a position. Complainant notified the agency of the alleged breach and the agency issued a final decision finding no breach for the aforementioned reason. In its first decision, the Commission reversed the agency's finding that it did not breach the settlement agreement and found that complainant was entitled to a seniority date of April 9, 1988. The Commission noted that there was no provision of the CBA to the contrary. In her RTR, complainant requested attorney's fees for fees and costs she had incurred prosecuting her appeal.
The Commission exercised its discretion to reopen the previous decision on its own motion to rectify an omission in the relief awarded. The Commission found that, to the extent that complainant was a prevailing party in her first appeal, she was entitled to attorney's fees for the work completed in connection with her appeal. The Commission cited Buckhannon to explain that, in order to be considered a prevailing party, complainant must have received a judgment in her favor as to the allegation of breach of settlement agreement. The Commission reasoned that the relief complainant sought would not have been received absent her bringing the action for breach of the settlement agreement. The Commission therefore found that complainant was a prevailing party entitled to attorney's fees incurred in the prosecution of her appeal in connection with her breach of settlement allegation.
In Glazer v. International Trade Commission, complainant maintained that, after providing him with a reasonable accommodation, to include schedule modifications and exemption from travel assignments, his supervisor began to harass him about the accommodations and subsequently revoked the accommodations. As a remedy for the alleged discrimination, complainant sought reinstatement of the previous accommodations, a transfer to another office, compensatory damages, and attorney's fees. The agency first "proposed" to dismiss the complaint for failure to state a claim, and alternatively, for failure to cooperate because after its many requests, the agency still did not have sufficient documentation to determine whether complainant's disability rendered him disabled for the purposes of the Rehabilitation Act. Nonetheless, the letter notified complainant that if he submitted the required medical documentation within fifteen calendar days of his receipt of the proposal, the decision to dismiss the complainant would be "tolled."
The record reflects that complainant timely submitted the requested medical documentation, and by letter dated March 30, 2001, the agency informed complainant of its decision to provide him with a reasonable accommodation, namely a new attorney position in the hearing division. The agency further notified complainant that, if he disagreed with the agency's decision, he could pursue his EEO complaint by stating his reasons for doing so in a formal notification, and if the agency did not receive a notification from complainant, the complaint would be deemed resolved. The agency informed complainant that in either event, his decision regarding his EEO complaint had no bearing on the provision of the reasonable accommodation. Complainant responded by letter and indicated that he was pleased in the progress in resolving his complaint, but noted that several outstanding issues remained, including, among other things, attorney's fees in the amount of $5,000.00. Complainant argued that he was a prevailing party because he would not have received the accommodation without resort to the EEO process, and he requested that his complaint be amended to include this item among two others.
In a May 7, 2001 decision, the agency dismissed the complaint, finding that a complainant, who had initially failed to cooperate by providing required documentation, could not be considered aggrieved. The agency first determined that complainant's accommodation claim had been rendered moot by his reassignment to the new position. Regarding the claim for attorney's fees, the agency determined that complainant was not a prevailing party, because his complaint had never been accepted for investigation, and its determination regarding his request for a reasonable accommodation was made without regard to his EEO complaint.
On appeal, complainant argued that he was a prevailing party and entitled to attorney's fees. He further contended that the agency's final decision not only provided him with the accommodation requested in his complaint regarding a reassignment, but that the agency also admitted that it would have fired him had he not filed an EEO complaint. Complainant argued that the agency's March 30, 2001 letter and May 7, 2001 decision constituted decisions on the merits, appealable to the Commission, and satisfied the Buckhannon criteria for prevailing party. In response, the agency argued that the complaint was dismissed, which precluded a decision on the merits as now required for prevailing party status in Buckhannon.
The Commission determined that, while complainant's EEO complaint primarily concerned the agency's revocation of his reasonable accommodation, and complainant clearly obtained a benefit when the agency subsequently provided him with a reassignment as a reasonable accommodation, he nonetheless could not be considered a prevailing party after Buckhannon. The Commission found that complainant's EEO complaint was not successfully processed, to include reaching a decision on the merits of his claims, because the agency dismissed the complaint pursuant to 29 C.F.R. § 1614.107, a determination which complainant did not appeal. Moreover, the Commission noted that, in light of Buckhannon, the agency's motivation in providing complainant with a reasonable accommodation is immaterial because prevailing party status can no longer be conferred under the catalyst theory. Furthermore, the Commission concluded that, notwithstanding complainant's arguments to the contrary, the agency's notice offering complainant a reassignment to a newly created position as a reasonable accommodation was not a decision on the merits of his EEO complaint, since the agency specifically informed complainant that he was entitled to the accommodation regardless of whether he continued to pursue his EEO complaint. The Commission found that, without a merits determination and/or order from the Commission requiring the agency to provide complainant with a reasonable accommodation, complainant was not a "prevailing party" under the Buckhannon holding.
Arnold, Spriesterbach, and Glazer provide good examples of the manner in which the Commission may apply the Buckhannon decision to Federal sector appeals. These samplings, however, do not analyze the full gamut of cases to which Buckhannon may apply.
Complainants who file complaints alleging discrimination under both the ADA and Title VII may be affected by the decision in Buckhannon. Although the Buckhannon decision specifically addressed the ADA and not Title VII, the court noted in dicta that the prevailing party provision in Title VII required a consistent interpretation with its decision.
The Buckhannon court's holding that only those who obtain enforceable judgments on the merits and court-ordered consent decrees are prevailing parties does not differ significantly from prior Commission precedent and the EEO MD-110. The Buckhannon court, however, also stated in dicta that situations where parties enter into voluntary settlement agreements or where a party voluntarily changes his behavior "lack the necessary judicial imprimatur" to create a change in the legal status of the parties. In cases where a complainant enters into a settlement agreement and wishes to receive attorney's fees, the Commission may require a complainant to provide for attorney's fees in the body of the voluntary settlement agreement or state that the issue is being severed from the agreement. Otherwise, a complainant risks a finding that s/he is not entitled to a recovery of attorney's fees.
In cases where the underlying complaint is brought under Title VII or the ADA, and the complainant alleges that the agency breached a settlement agreement, the complainant may be considered a prevailing party if the Commission finds that the agency breached the voluntary settlement agreement. The Commission may find that, as required by the Buckhannon decision, the complainant received a judgment on the merits of a Title VII or ADA complaint. If, however, the complainant were to succeed on a procedural issue, the Commission may not consider complainant a prevailing party because he or she would have failed to receive a judgment on the merits of his or her claim. Prior to Buckhannon, the Commission applied the same approach to breach of settlement decisions.
With respect to whether a complainant is entitled to attorney's fees if he receives de minimis relief after a finding of discrimination has been made, the Commission may apply the Farrar analysis, as did the Buchannon court, that "a prevailing party" is a "‘party in whose favor a judgment is rendered regardless of the amount of damages awarded.'" Nominal damages will suffice for finding that complainant was a "prevailing party," but in some circumstances such a prevailing party will still not receive an award of attorney's fees.
Finally, an agency's change in conduct will not render a case or issue moot when the complainant has a cause for damages. Only if it can be said with assurance that there is no reasonable expectation that the alleged violation will recur, and if interim relief or events have completely and irrevocably eradicated the effects of the alleged violation will a case or issue be rendered moot.
In light of Buckhannon, parties are encouraged more strongly than ever to resolve attorney's fee and cost issues within the body of the voluntary settlement agreement. When such a resolution impedes negotiations, the settlement agreement can provide for attorney's fees and costs, but need not quantify the actual amount. In such cases, the attorney should submit his or her statement of fees and costs and supporting documentation to the agency for determination of the amount due. When the parties do not preserve the issue of attorney's fees in the settlement agreement, under Buckhannon and the EEO MD-110, the settlement agreement may be read as an implicit waiver of fees and costs. Buckhannon has eliminated the catalyst theory, which provided complainants with attorney's fees if they substantially received the relief sought and were the catalyst motivating the agency to provide the relief. Instead, under the Court's holding, a party must secure either a judgment on the merits or court-ordered consent decree in order to qualify as a prevailing party under Title VII and the ADA.