U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of Federal Operations P.O. Box 77960 Washington, DC 20013 Emerson S.,1 Petitioner, v. Megan J. Brennan, Postmaster General, United States Postal Service (Capital Metro Area), Agency. Petition No. 0420130026 Appeal No. 0720100031 Agency No. 4K280007607 DECISION ON A PETITION FOR ENFORCEMENT On July 19, 2013, the Equal Employment Opportunity Commission (EEOC or Commission) docketed a petition for enforcement (PFE) to examine the enforcement of an Order set forth in EEOC Appeal No. 0720100031 (April 5, 2012). The Commission accepts this PFE pursuant to 29 C.F.R. § 1614.503. Complainant alleged that the Agency did not fully comply with the Commission's order. For the following reasons, the PFE is GRANTED. ISSUE PRESENTED Whether the Agency has complied with the Commission's Order set forth in EEOC Appeal No. 0720100031. BACKGROUND At the time of events giving rise to this complaint, Petitioner worked as a part-time Flexible City Carrier at the Post Office in St. Paul, North Carolina. Petitioner filed a complaint in which he alleged that the Agency discriminated against him on the bases of disability (degenerative disc disease, disc herniations, and nerve issues) and reprisal for prior protected EEO activity in violation of Section 501 of the Rehabilitation Act of 1973 (Rehabilitation Act), as amended, 29 U.S.C. § 791 et seq. An EEOC Administrative Judge (AJ) found that Petitioner was denied reasonable accommodation based on disability and reprisal. The Agency appealed the AJ's final decision, and in Appeal No. 0720100031, the Commission found that Petitioner proved by a preponderance of the evidence that he was denied reasonable accommodation and subjected to reprisal discrimination. See Appeal No. 0720100031. The Agency was ordered to reinstate Petitioner to his City Carrier or a substantially equivalent position, determine back pay with interest due to Petitioner, provide at least eight hours of EEO training to the responsible management officials, consider taking disciplinary action against the responsible management officials, provide a detailed calculation pertaining to the instant matter and a copy of correspondence sent to the various appropriate government agencies regarding such calculations, pay Petitioner $100,000 in non-pecuniary compensatory damages, pay attorneys' fees, restore sick and annual leave used as a result of discrimination, pay Petitioner back pay for leave without pay used as a result of the discrimination, and post copies of a notice of discrimination. See EEOC Appeal No. 0720100031. The Agency was also ordered to submit a compliance report. The matter was assigned to a Compliance Officer and docketed as Compliance No. 0620120652 on April 9, 2012.2 On July 19, 2013, Petitioner submitted the PFE at issue. Petitioner contends that the Agency failed to fully comply with the Commission's order because it did not compound interest on a daily basis on Petitioner's award of back pay; improperly deducted Office of Workers Compensation benefits from back pay; underpaid Petitioner for overtime hours; improperly deducted a payment for union dues; placed the $100,000 award of compensatory damages on his Internal Revenue Service (IRS) Form 1099 as "income"; did not compensate Petitioner for excess taxes caused by the lump sum back pay award which placed Petitioner in a higher (25%) tax bracket; did not compensate Petitioner for costs of his uniform for years 2006-2009. Petitioner also requests attorneys' fees incurred for filing the instant PFE. ANALYSIS AND FINDINGS The following addresses Petitioner's assertions regarding the Agency's compliance with the Commission's previous decision and order. I. Deduction Of OWCP Payments Complainant challenges various deductions from his back pay related to OWCP payments he received. PFE, p. 1-2. "A Federal Employees' Compensation Act (FECA)3 award that is meant to compensate for lost wages should be deducted from the total amount of back pay to which the petitioner is entitled in order to avoid double wage recovery, but the portion of the OWCP award that is paid as reparation for physical injuries should not be deducted from back pay because it is unrelated to wages earned." Ulloa v. U.S. Postal Serv., EEOC Petition No. 04A30025 (Aug. 3, 2004). First, Petitioner contends that OWCP overpaid Petitioner $13,455.51, however, he made payments to OWCP to compensate for the overpayment in the amount of $10,068.14. Since OWCP awards for lost wages can be deducted from a back pay award, the Agency was correct to deduct the amount that OWCP overpaid Petitioner. To the extent that Petitioner argues that he repaid $10,068.14 of the overpayment, he is directed to submit explicit documentation to the Agency's satisfaction demonstrating that this portion of his debt has been repaid. While Petitioner submitted what appears to be a Compensation Payment History with negative amounts totaling $10,068.14, there is no explanation of whether Petitioner made these payments or what they were for. See PFE, Exhibit (Ex.) C. If Petitioner submits such satisfactory documentation, the Agency is directed to pay Petitioner the overpayment amount that he has already paid. Second, Petitioner contends that the Agency should not have deducted disability retirement benefits sent from OWCP to OPM in the amount of $31,382.77. PFE, p. 2. There is no indication that this amount was deducted from Petitioner's back pay.4 Third, Petitioner contends that the amount of OWCP payments to him is calculated as $142,404.81, but that the Agency deducted $143,379.32 from his back pay. PFE, p. 2. Petitioner requests that the Agency pay $974.51 to account for the difference. In the payment summary that the Agency submitted, it indicates that Petitioner's OWCP earnings totaled $143,379.32. The Agency did not provide a print out or other documentation showing that Petitioner's OWCP earnings totaled $143,379.32, therefore making it an appropriate deduction from his back pay award. Since this was not submitted by the Agency in support of compliance with the previous order to calculate and award an appropriate back pay, the Agency is not in compliance with the back pay portion of the order. II. Overtime Pay Petitioner contends that the Agency did not award him the appropriate amount of overtime compensation. PFE, p. 2-3. Petitioner urges that he is entitled to more overtime because of the amount of overtime he earned in previous and subsequent years. PFE, p. 3. The Agency was ordered to calculate Complainant's overtime pay based on the average number of hours assigned or worked (whichever is greater) to/by persons holding the same position as Petitioner, on the same tour as Petitioner, at the same facility, and during the aforementioned time periods. EEOC Appeal No. 0720100031. The Agency explained that Petitioner was provided overtime pay in relation to the average number of hours worked by persons holding the same position as Petitioner. Response to PFE, p. 2. While this suffices as the Agency's plain language explanation of how overtime pay was calculated, the Agency did not submit documents showing how the overtime calculation was done, including documentation of comparator employees on which it was supposed to base the overtime calculation. Since the previous decision required supporting documentation showing that corrective action was taken, the Agency is not in compliance with the Commission's previous order regarding overtime pay. III. Union Dues Petitioner contends that the Agency improperly deducted union dues from his back pay award. PFE, p. 3. The Agency may properly deduct union dues if: 1) petitioner was a member of the union before his removal; 2) it routinely deducts union dues from employees who were union members and, 3) union dues were routinely deducted from petitioner's pay before he was removed. See Vu v. U.S. Postal Serv., EEOC Appeal No. 04950020 (Apr. 18, 1996). Petitioner contends that the Agency should pay him $1,450.92 plus interest since Petitioner only owed the Union $727.20, but the Agency deducted $2,178.12 for Union dues which it paid directly to the Union. PFE, p. 3. Petitioner was a member of the Union prior to the Agency's denial of accommodation after which Petitioner did not work. The Agency apparently deducted $2,178.12 for Union dues, but Petitioner cancelled his Union membership in 2008. PFE, Exhibit H. Since this was not known to the Agency at the time it paid the membership and deducted the amount from the back pay award, the Agency properly deducted the amount from Petitioner's back pay award.5 IV. Compounding Interest On Award Of Back Pay Petitioner contends that the Agency did not compound interest daily on his award of backpay, as is required by 5 C.F.R. §550.806(a)(1). The Agency submitted a detailed report of the back pay interest computation and the interest was compounded on a daily basis. For example, taking the first line, $659.65 at an 8% annual interest rate, compounded on a daily basis for 14 days is $661.67. Petitioner does not provide any evidence showing that the Agency's calculations were incorrect. Therefore, the Agency is in compliance with the Commission's previous order regarding this element of the back pay calculation and award. V. Agency's Designation of $100,000 in Compensatory Damages as Income on Petitioner's IRS Form 1099 Complainant argues that the Agency designated the $100,000 lump sum payment of compensatory damages ordered by the Commission's previous decision as "income" on IRS Form 1099, even though it is not deemed to be "income." PFE, p. 4. Petitioner requests that the Agency provide him with a corrected Form 1099. PFE, p. 4. Tax reporting of compensatory damages is between a complainant and the IRS. See, for e.g., Watts v. U.S. Postal Serv., EEOC Appeal No. 0120092390 (Oct. 8, 2009) (citing, Cozzino v. Dep't of the Army, EEOC Appeal No. 01A52131 (April 20, 2005). The Agency explained that compensatory damages must still be reported as income at the end of the tax year, and as a result employees may have to pay additional monies in Federal and State taxes that are due when filing. Response to PFE, p. 2. Since a tax reporting matter such as this is between Petitioner and the IRS, the Agency was in compliance with the Commission's order to pay compensatory damages. See, for e.g., Watts, EEOC Appeal No. 0120092390 (taking administrative notice of the fact that the Form 1099 required "things to be reported as "other income" include "all compensatory damages for nonphysical injuries or sickness, such as employment discrimination...."" but finding that such a tax reporting matter was between the complainant and the IRS). Therefore, the Agency will not be held non-compliant with the Commission's previous order regarding payment of $100,000 in compensatory damages by virtue of its reporting it as income on IRS Form 1099. VI. Effect On Federal Tax Rate Of Lump Sum Back Pay Award Petitioner contends that the lump sum back pay award he received as relief placed him in a higher (25%) tax bracket, and that the Agency should pay for the extra taxes he had to pay, since he would have paid less taxes if he received his pay on a yearly basis. PFE, p. 4. Make whole relief requires that an agency be liable for any increased tax liability resulting from receipt of a lump sum of back pay in a single tax year. Lorenzo v. Dep't of Defense (Education Activity), EEOC Appeal No. 01A61644 (Sept. 13, 2006). The burden is on the Petitioner to prove the amount to which he claims entitlement, and the agency's liability extends only to his "proven adverse federal income tax consequences." Id. Since Petitioner asserts that he had a higher tax liability due to receiving his back pay in a lump sum, the Agency must allow Petitioner the opportunity to provide evidence on the difference between taxes paid on the lump sum payment and the amount of taxes that he would have been paid had the salary been earned over time. Petitioner is advised that he needs to provide exact and detailed calculations showing the amount he is claiming. See, for e.g., Barbour v. Medlantic Management Corp., 952 F.Supp. 857, 865 (D.C. 1997) (denied award due to failure to provide evidence on difference between taxes paid on lump sum front pay award and amount of taxes that would have been paid had the salary been earned over time). This matter will be remanded for further processing. VII. Fee For Uniforms Petitioner contends that the Agency is required to compensate him $1600 for his uniform allowance for the four years, 2006-2009, in which he did not receive the $400 per year stipend. PFE, p. 4. Relief which is provided pursuant to Title VII is designed to make a person who has been subjected to discrimination 'whole' by placing him 'as near as may be, in the situation he would have occupied if the wrong had not been committed.' Albemarle Paper Co. v. Moody, 422 U.S. 405, 418-19 (1975). The Agency contends that since Petitioner did not work from 2006-2009, he did not incur an annual need to replace items, and therefore, he is not entitled to the funds. Response to PFE, p. 3. Petitioner explained that almost all of his clothing did not fit when he returned to work, and that some of his gear had rotted. Additional Information for PFE, p. 3. Petitioner would only incur uniform costs and have need for the uniform allowance if he actually worked. Since he did not work during the four years in question, he is not entitled to a uniform allowance. See Perricone v. U.S. Postal Serv., Petition No. 04930007 (Sept. 30, 1993) (noting that "the uniform allowance is a benefit conferred upon its recipient for the purpose of defraying the costs of maintaining the uniform in a clean, neat, and serviceable condition" and declining to award uniform allowance for period of time the petitioner did not work). VIII. Attorney's Fees Incurred As A Result Of This PFE Because Petitioner is a prevailing party in this PFE, at least in part, he is entitled to attorneys' fees incurred as a result of the PFE. Both parties are instructed to see the "Attorney's Fees" Order below. CONCLUSION Based on a thorough review of the record and the contentions in the PFE, including those not specifically addressed, Petitioner's PFE is GRANTED. The Agency did not submit documentation showing that an appropriate amount of OWCP payments was deducted from Petitioner's back pay and that it properly calculated overtime compensation due Petitioner as part of the back pay award. Further, Petitioner's claim for entitlement to reimbursement for the increased federal and state income tax liability that he alleges to have sustained as a result of being paid a lump sum back pay award is REMANDED. ORDER Within one hundred and twenty (120) calendar days from the date this decision becomes final, the Agency is ORDERED to take the following actions: 1. If the Agency has not already taken Petitioner's payments to satisfy his OWCP overpayment into consideration in calculating Petitioner's award of back pay, the Agency shall request that Petitioner submit explicit documentation showing what amount he has repaid to OWCP to satisfy the overpayment. The Agency shall afford Petitioner thirty (30) calendar days to submit his supporting documents. Subsequently, within one hundred and twenty (120) calendar days, the Agency shall determine, verify and award Petitioner the amount he repaid for his OWCP overpayment. 2. Submit documentation showing that Petitioner's total amount of OWCP payments was $143,379.32. 3. Submit documentation showing how Petitioner's overtime calculation was done, which includes information about the comparative employees that were used. 4. The Agency shall request that petitioner submit his claim for compensation for all additional federal and state income tax liability. The Agency shall afford Petitioner sixty (60) calendar days to submit his claim and supporting documents. The burden of proof to establish the amount of additional tax liability, if any, is on the Petitioner. The calculation of additional tax liability must be based on the taxes the petitioner would have paid had he received the back pay in the form of regular salary during the back pay period, versus the additional taxes he paid due to receiving the back pay lump sum award in 2006. Thereafter, the Agency shall issue a decision on this matter within one hundred and twenty (120) calendar days in accordance with 29 C.F.R. § 1614.110(b).6 The agency shall provide a copy of its final decision to the Compliance Officer as referenced below. The Agency is further directed to submit a report of compliance, as provided in the statement entitled "Implementation of the Commission's Decision." The report shall include supporting documentation verifying that all of the corrective action has been implemented. ATTORNEY'S FEES (H0610) If complainant has been represented by an attorney (as defined by 29 C.F.R. § 1614.501(e)(1)(iii)), he is entitled to an award of reasonable attorney's fees incurred in the processing of the complaint. 29 C.F.R. § 1614.501(e). The award of attorney's fees shall be paid by the Agency. The attorney shall submit a verified statement of fees to the Agency -- not to the Equal Employment Opportunity Commission, Office of Federal Operations -- within thirty (30) calendar days of this decision becoming final. The Agency shall then process the claim for attorney's fees in accordance with 29 C.F.R. § 1614.501. IMPLEMENTATION OF THE COMMISSION'S DECISION (K1208) 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. COMPLAINANT'S RIGHT TO FILE A CIVIL ACTION (R0610) This is a decision requiring the Agency to continue its administrative processing of your complaint. However, if you wish to file a civil action, you have the right to file such action in an appropriate United States District Court within ninety (90) calendar days from the date that you receive this decision. 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 filed your appeal with the Commission. 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. 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 11-20-2015 __________________ Date 1 This case has been randomly assigned a pseudonym which will replace Petitioner's name when the decision is published to non-parties and the Commission's website. 2 A memorandum from the compliance division states that the Agency has satisfied all items of the Commission's previous order in except the order to determine back pay and interest, including overtime, and provide detailed statement of the calculations. See June 26, 2013 Memorandum To File. 3 FECA is administered by the Office of Worker's Compensation. 4 Even if it was, it appears that OWCP paid OPM this amount because Petitioner elected OWCP payments instead of disability retirement payments for the period, since he could not collect both. Therefore, this amount would have showed up as a payment made to Petitioner by OWCP. 5 Petitioner can seek reimbursement of the overpayment from the Union itself. 6 Prior decisions on Petitions for Enforcement have allowed Petitioners to submit claims for excess tax liability for lump sum back pay payments in other cases where back pay has been awarded, even where the Commission has not specified it in the original order. See, for e.g., Otis v. Environmental Protection Agency, EEOC Petition No. 0420060035 (Nov. 5, 2007); Lorenzo v. Dep't of Defense (Education Activity), EEOC Petition No. 04A40035 (Sept. 29, 2005). --------------- ------------------------------------------------------------ --------------- ------------------------------------------------------------ 2 04-2013-0026 2 0420130026