U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of Federal Operations P.O. Box 77960 Washington, DC 20013 Kate H.,1 Complainant, v. Megan J. Brennan, Postmaster General, United States Postal Service (Western Area), Agency. Appeal No. 0120180895 Agency No. 1E-641-0006-14 DECISION Complainant filed a timely appeal with the Equal Employment Opportunity Commission (EEOC or Commission) from a final decision (FAD) by the Agency dated December 8, 2017, finding that it complied with the terms of the settlement agreement into which the parties entered. See 29 C.F.R. §§ 1614.402, .405, and .504(b). BACKGROUND In 2013, Complainant worked as a Mail-Handler Assistant at the Agency's Kansas City, Missouri Processing and Distribution Center. The Agency terminated her employment and placed her in "do not rehire" status. Believing that the Agency subjected her to unlawful discrimination, on October 24, 2013, Complainant contacted an Agency EEO Counselor to initiate the EEO complaint process. On January 22, 2014, Complainant and the Agency entered into a settlement agreement to resolve the matter. The settlement agreement provided, in pertinent part, that: (1) [The Manager, Distribution Operations (S1) and the Supervisor, Distribution Operations (S2)] agree to change the recommendation for rehire status on the exit and performance evaluation. (2) [S1 and S2] will fill out the paperwork to make the changes today January 22, 2014. On October 23, 2017, Complainant initiated EEO contact alleging that the Agency breached the settlement agreement. Specifically, Complainant alleged that the Agency failed to change her status in the Agency Human Resources' database so she was not re-hired, without explanation, when she applied for several positions per year. Complainant stated that she contacted her former manager, S1, at a different duty station and inquired about the change, and S1 did not think that the status change had been made. Complainant contacted Agency Operations Support and learned that her status remained "do not rehire." Complainant requested change in status and compensation for the time since January 2014 she could have been working. In a letter, dated November 15, 2017, to the Agency EEO Compliance Manager, Complainant reiterated her allegation of noncompliance. Complainant provided an email, dated November 15, 2017, from an Operations Support Specialist stating "[Complainant] is still in there as do not rehire." In its December 8, 2017 FAD, the Agency concluded that it did not breach the January 2014 agreement. The Agency stated that Complainant's allegation of breach is untimely. The Agency stated that Complainant was informed of potential breach each time she applied for rehire and was denied. Further, the Agency stated that it changed the exit and performance evaluation on January 22, 2014, but the agreement did not state that the PS Form 502 would be changed and that is why the system still indicated "do not rehire." The Agency stated that the PS Form 50 was generated after Complainant's termination. The Agency noted that it hired Complainant as a Postal Support Employee effective December 11, 2017.3 The record contains an Employee Exit Evaluation, dated January 22, 2014 and signed by S24, indicating "yes" in response to would you recommend for rehire. The instant appeal from Complainant followed. ANALYSIS AND FINDINGS EEOC Regulation 29 C.F.R. § 1614.504(a) provides that any settlement agreement knowingly and voluntarily agreed to by the parties, reached at any stage of the complaint process, shall be binding on both parties. The Commission has held that a settlement agreement constitutes a contract between the employee and the Agency, to which ordinary rules of contract construction apply. See Herrington v. Dep't of Defense, EEOC Request No. 05960032 (December 9, 1996). Every contract imposes on the signatories an implicit duty of "good faith and fair dealing in performance and enforcement." Complainant v. Dep't of Defense, EEOC Request No. 0520140248 (August 7, 2015)(citing See Restatement (Second) of Contracts § 205.) This tenet is premised on the "assumption" that parties to a contract will deal fairly with each other "without breaking their word, using shifty means to avoid obligations, or denying what the other party obviously understood." See Complainant v. Dep't of Defense, EEOC Request No. 0520140248 (citing See Cornell Law School Legal Information Institute website at https://www.law.cornell.edu/wex/implied_covenant_of_good_faith_and_fair_dealing.) The Commission finds that the purpose and effect of the settlement agreement were not satisfied when the Agency changed Complainant's rehire status on the exit and performance evaluations only. The Agency's response to the allegation of breach - that the agreement pertained to the exit and performance evaluation and not to the Notice of Personnel action which dictates what is in the Agency database - evidences the Agency's bad faith in carrying out its promise to place Complainant in a rehire status. The status of "do not rehire" on the PS Form 50 and in the Agency database prevented Complainant from getting rehired between January 2014 and December 11, 2017. We disagree with the Agency's finding of compliance. We find that the Agency violated its duty of good faith and fair dealing in the instant matter. Having found that the Agency breached the settlement agreement rendering Complainant ineligible for rehire over a three-year period, we find reinstatement of the underlying complaint for further processing from the point processing ceased the appropriate remedy. Further, we note that Complainant did not receive any other benefits under the settlement agreement so reinstatement is not problematic. CONCLUSION We REVERSE the FAD and REMAND the underlying complaint to the Agency for further processing. ORDER (E0618) The Agency is ordered to process the remanded claims in accordance with 29 C.F.R. § 1614.108. The Agency shall acknowledge to the Complainant that it has received the remanded claims within thirty (30) calendar days of the date this decision was issued. The Agency shall issue to Complainant a copy of the investigative file and also shall notify Complainant of the appropriate rights within one hundred fifty (150) calendar days of the date this decision was issued, unless the matter is otherwise resolved prior to that time. If the Complainant requests a final decision without a hearing, the Agency shall issue a final decision within sixty (60) days of receipt of Complainant's request. As provided in the statement entitled "Implementation of the Commission's Decision," the Agency must send to the Compliance Officer: 1) a copy of the Agency's letter of acknowledgment to Complainant, 2) a copy of the Agency's notice that transmits the investigative file and notice of rights, and 3) either a copy of the complainant's request for a hearing, a copy of complainant's request for a FAD, or a statement from the agency that it did not receive a response from complainant by the end of the election period. IMPLEMENTATION OF THE COMMISSION'S DECISION (K0617) 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 in the digital format required by the Commission, and submitted via the Federal Sector EEO Portal (FedSEP). See 29 C.F.R. § 1614.403(g). 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 (M0617) The Commission may, in its discretion, reconsider the decision in this case if the Complainant or the Agency submits a written request containing arguments or evidence which tend to establish that: 1. The appellate decision involved a clearly erroneous interpretation of material fact or law; or 2. The appellate decision will have a substantial impact on the policies, practices, or operations of the Agency. Requests to reconsider, with supporting statement or brief, must be filed with the Office of Federal Operations (OFO) within thirty (30) calendar days of receipt of this decision. A party shall have twenty (20) calendar days of receipt of another party's timely request for reconsideration in which to submit a brief or statement in opposition. See 29 C.F.R. § 1614.405; Equal Employment Opportunity Management Directive for 29 C.F.R. Part 1614 (EEO MD-110), at Chap. 9 § VII.B (Aug. 5, 2015). All requests and arguments must be submitted to the Director, Office of Federal Operations, Equal Employment Opportunity Commission. Complainant's request may be submitted via regular mail to P.O. Box 77960, Washington, DC 20013, or by certified mail to 131 M Street, NE, Washington, DC 20507. In the absence of a legible postmark, the request to reconsider shall be deemed timely filed if it is received by mail within five days of the expiration of the applicable filing period. See 29 C.F.R. § 1614.604. The agency's request must be submitted in digital format via the EEOC's Federal Sector EEO Portal (FedSEP). See 29 C.F.R. § 1614.403(g). The request or opposition must also include proof of service on the other party. 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 (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 June 28, 2018 __________________ 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 The PS Form 50 is the Notification of Personnel Action. 3 The Agency terminated Complainant's employment again, on January 3, 2018. 4 The Employee Exit Evaluation also indicated Attendance and Work Performance as "Unsatisfactory" and Promptness and Attitude as "Satisfactory." --------------- ------------------------------------------------------------ --------------- ------------------------------------------------------------ 2 0120180895 5 0120180895