U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of Federal Operations P.O. Box 77960 Washington, DC 20013 Lelah T.,1 Complainant, v. Julian Castro, Secretary, Department of Housing and Urban Development, Agency. Appeal No. 0720150034 Agency No. HUD-00131-2010 Hearing No. 570-2012-00018X DECISION Simultaneously with its final order, on June 19, 2015, the Agency filed a timely appeal with the Equal Employment Opportunity Commission (EEOC or Commission) which the Commission accepts pursuant to 29 C.F.R. § 1614.405(a).2 On appeal, the Agency requests that the EEOC affirm its rejection of the EEOC AJ's Order which dismissed Complainant's case pursuant to 29 C.F.R. § 1614.109(c) on the grounds that she accepted the Agency's offer of resolution and that directed the Agency to provide the relief offered therein. BACKGROUND At the time of events giving rise to this complaint, Complainant worked as an Administrative Officer at the Agency's Office of Equal Employment Opportunity in Washington, DC. In 2010, Complainant filed an equal employment opportunity (EEO) complaint which, as amended, alleged violations of Title VII of the Civil Rights Act of 1964 (Title VII), as amended, 42 U.S.C. § 2000e et seq., Section 501 of the Rehabilitation Act of 1973 (Rehabilitation Act), as amended, 29 U.S.C. § 791 et seq., and the Age Discrimination in Employment Act of 1967 (ADEA), as amended, 29 U.S.C. § 621 et seq., when she was harassed. Complainant filed an amended complaint dated April 13, 2013, which while investigated, was not assigned a new case number.3 In December 2013, Complainant requested a hearing on the amended complaint, and asked that it be consolidated with her underlying complaint, which was pending a hearing. The AJ granted this request, along with various motions by Complainant made from February 2012 to April 2014 to amend the underlying complaint.4 In May 2014, the AJ granted Complainant's motion requesting sanctions relating to certain case files pertaining to conduct and performance related actions against her, and determined that as sanction he would draw an adverse inference that the requested information listed therein would have reflected unfavorably on the Agency. In February 2015, the Agency presented Complainant, who was represented by counsel, with an offer of resolution signed by the Agency's counsel that contained signature lines for Complainant and her attorney. Therein, the Agency warned Complainant that if she did not accept it, and the relief that she was eventually awarded by the AJ or on appeal was less than the amount offered, she would not receive payment for the attorneys' fees or costs she incurred after the expiration of the 30-day acceptance period for the offer, and the only exception to this was where the AJ or Commission ruled that the interests of justice require that she receive her full attorney's fees and costs (hereinafter referred to as "warning language"). In the offer of resolution, the Agency offered: (a) To pay Complainant's attorneys $100,000 toward the fees and costs for their representation of Complainant. (b) To pay her a lump sum of $130,000 in satisfaction of all remaining monetized relief, including, but not limited to any remaining attorney fees and costs. (c) To remove and expunge from Complainant's personnel file the proposed demotion, the decision, any letters of reprimand and counseling, and any documents related thereto. In exchange, the Agency asked Complainant: 1) To withdraw with prejudice her complaint and any related amendments and consolidated grievances. 2) To retire effective no later than the first day of the first pay period immediately following the execution of the Agreement. 3) To not return to the Department in a position as retired annuitant for the Department or a HUD-funded contract, in any location, for 5 years from the effective date of this Agreement. In the offer, the Agency wrote that the parties understood that a fully drafted Agreement would be executed after the offer of resolution was accepted. EEOC Regulation 29 C.F.R. § 1614.109(c) provides: Offer of resolution. (2) Any time after the parties have received notice that an administrative judge has been appointed to conduct the hearing, but not later than 30 days prior to the hearing, the agency may make an offer of resolution to the complainant.... (3) The offer of resolution shall be in writing and shall include a notice explaining the possible consequences of failing to accept the offer. The agency's offer, to be effective, must include attorney's fees and costs and must specify any non-monetary relief. With regard to monetary relief, an agency may make a lump sum offer covering all forms of monetary liability, or it may itemize the amounts and types of monetary relief being offered. The complainant shall have 30 days from receipt of the offer of resolution to accept it. If the complainant fails to accept an offer of resolution and the relief awarded in the administrative judge's decision, the agency's final decision, or the Commission decision on appeal is not more favorable than the offer, then, except where the interest of justice would not be served, the complainant shall not receive payment from the agency of attorney's fees or costs incurred after the expiration of the 30-day acceptance period. An acceptance of an offer must be in writing.... [E]ither party may seek to negotiate a settlement of the complaint at any time. Equal Employment Opportunity Management Directive for 29 C.F.R. Part 1614 (EEO MD-110), at 6-25 (Nov. 9, 1999), in effect at the time, provided that upon acceptance of an offer of resolution, the complaint is settled in full and processing ceases. EEO MD-110 was revised on August 5, 2015, and contains the identical language. Regarding offer of resolution, the language in the revised MD-110 is nearly identical with its prior version, including model language which the Agency used. On February 23, 2015, Complainant rejected the offer of resolution. Among other things, she explained that if she prevailed she would not be required to resign, and that the offer needed to be unconditional - not require her to retire or ban her return. Complainant, by and through her attorney, wrote that it would make more sense for the parties to simply discuss settlement. Among other things, she indicated that she wanted far more in attorney fees. On February 27, 2015, the Agency presented Complainant with a second offer of resolution signed by the Agency's counsel with signature lines for Complainant and her attorney. Therein, the Agency put in the warning language and the language about a future fully drafted agreement. The Agency again offered Complainant terms (a), (b) and (c), but dropped terms 1, 2 and 3 (the retirement requirement and ban on reemployment), albeit it contained language that Complainant agreed to settle her complaint. Along with the offer of resolution, the Agency presented Complainant with an unsigned settlement agreement and general release, which contained terms (a), (b) and (c), and in substance terms 1, 2 and 3. The proposed settlement agreement also contained Older Workers' Benefit Protection Act (OWBPA) waiver language. By and through her attorney, Complainant responded to the Agency that its proposed offer of resolution and proposed settlement agreement were inconsistent, and asked that it clarify what the Agency's offer was. The Agency responded: The Agency's offer of resolution is the "offer." The offer of resolution would only be filed with [the] Commission were the parties to proceed to hearing and Complainant prevailed on some or all of her claims. The proposed settlement agreement is the document the Agency proposes that the parties file with the Commission and embodies the typical verbiage settlement agreements contain. On March 3, 2015, Complainant and her attorney executed the offer of resolution. On the same day, Complainant, through her attorney, advised the Agency of this, and wrote that she declined the proposed settlement agreement because it was inconsistent with the offer of resolution. She wrote the Agency that there was no need for the settlement agreement, albeit it was not prohibited, and she would be willing to sign a settlement consistent with the offer of resolution which explained the waiver of claims. On March 9, 2015, Complainant submitted her acceptance of the offer of resolution to the AJ, and asked that it be implemented. On March 13, 2015, the Agency filed its opposition to this with the AJs. On March 17, 2015, the AJ issued his order pursuant to 29 C.F.R. § 1614.109(c) and Complainant's acceptance of the offer of resolution. The AJ ordered that the Agency provide the relief in terms (a), (b) and (c). He reissued this order with appeal rights on May 12, 2015. Thereafter, the Agency timely issued its final order stating it was appealing the AJ's Order. ANALYSIS AND FINDINGS On appeal, the Agency explains that it started the offer of resolution process as a means toward nudging Complainant toward more reasonable settlement discussions. It argues that by its terms, the second offer of resolution provided that a fully drafted settlement agreement documenting the mutual obligations of the parties would be executed and filed with the Commission after the offer of resolution was accepted, and it presented an (unexecuted) one with the offer. The Agency argues that there was no meeting of the minds, and hence no contract, when, as here, the parties did not agree on the meaning of the agreement. It argues that on its face, the offer of resolution indicates that the mutual obligations of the parties will be embodied in a fully drafted and executed settlement agreement, meaning it was not intended to be a full and legally binding instrument. We disagree. On February 27, 2015, the Agency presented Complainant with two separate documents. The first was the offer of resolution, where the Agency provided more favorable terms and warned that if she did not accept it and received less relief from the AJ or on appeal, she would forfeit Agency payment of some attorney fees. The second was the proposed settlement agreement, with far less favorable terms. When Complainant's attorney pointed out this inconsistency and asked the Agency what the offer was, the Agency replied the offer of resolution was the offer. It added that the offer of resolution would only be filed with the Commission if the parties proceed to hearing and Complainant prevailed on some or all of her claims, and the proposed settlement agreement was what the Agency proposed the parties file with the Commission. The Agency presented Complainant with an offer of resolution with more favorable terms to limit the payment of attorney fees if the AJ or EEOC on appeal awarded Complainant less favorable relief. As acknowledged by the Agency, it would only file the offer with the Commission if the parties proceeded to a hearing and Complainant prevailed on part or all of her claims. This strategy backfired when Complainant accepted the offer of resolution, to the apparent surprise of the Agency. We agree with Complainant that she was free to reject the separate proposed settlement agreement because it was not consistent with the accepted offer of resolution. The OWBPA, which amended the ADEA effective October 16, 1990, provides that a waiver of ADEA claims is not considered knowing and voluntary unless certain procedural requirements are met, including that the waiver specifically refer to rights or claims under the ADEA. The Agency argues that because the accepted offer of resolution does not meet the requirements of the OWBPA, the resolution is void. Assuming without deciding that the OWBPA applies to the offer of resolution process, we disagree with the Agency. As argued by Complainant, the OWBPA is for the benefit of the complainant, not the Agency. Canada v. Department of Health and Human Services, EEOC Appeal No. 01A12056 (June 7, 2002) (where Complainant did not invoke the protection of the OWBPA, and specifically requested the Agency to abide by the terms of the settlement agreement, the parties remain bound by the terms thereof. Accordingly, the Agency improperly reinstated the complaint). The Agency cites four cases in support of its argument. But none of the cases involved an Agency invoking the OWBPA to find a settlement agreement invalid. We understand the Agency's concern about the OWBPA waiver not being addressed in the accepted offer of resolution. Previously Complainant indicated she was willing to address this by signing a settlement agreement consistent with the offer of resolution that contained the proper waivers. We will address this in the order below. Accordingly, the Agency's final order is REVERSED. The parties shall comply with the orders below. ORDER The Agency shall: 1. Pay Complainant's attorneys $100,000 toward the fees and costs for their representation of Complainant. 2. Pay Complainant a lump sum of $130,000 in satisfaction of all remaining monetary relief, including, but not limited to any remaining attorneys' fees and costs. 3. Provide the non-monetary relief of removing and expunging from Complainant's personnel file the proposed demotion, the decision on the proposed demotion, and any letters of reprimand and counseling, and any documents related thereto. The Agency shall complete actions 1 - 3 within 60 calendar days after this decision becomes final.5 The check(s) shall be provided directly to the law firm which represented Complainant in this case, and be paid to the order of the law firm and Complainant. While this order tracks the language in the accepted offer of resolution and the AJ's order, Complainant is entitled to additional attorney fees and costs she incurred after she accepted the offer of resolution. Complainant's attorney may apply for these fees and costs in accordance with the order below entitled "Attorney's Fees (H0610)." Complainant shall cooperate with any request by the Agency to enter into a settlement agreement consistent with the offer of resolution that contains OWBPA and other waiver language, and other routine verbiage the Agency seeks. This obligation to cooperate ceases within 60 calendar days after this decision becomes final. The Agency shall submit a compliance report, as directed below. ATTORNEY'S FEES (H0610) If Complainant has been represented by an attorney (as defined by 29 C.F.R. § 1614.501(e)(1)(iii)), she 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 (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 (S0610) You have the right to file a civil action in an appropriate United States District Court within ninety (90) calendar days from the date that you receive this decision. If you file a civil action, you must name as the defendant in the complaint the person who is the official Agency head or department head, identifying that person by his or her full name and official title. Failure to do so may result in the dismissal of your case in court. "Agency" or "department" means the national organization, and not the local office, facility or department in which you work. If you file a request to reconsider and also file a civil action, filing a civil action will terminate the administrative processing of your complaint. RIGHT TO REQUEST COUNSEL (Z0815) If you want to file a civil action but cannot pay the fees, costs, or security to do so, you may request permission from the court to proceed with the civil action without paying these fees or costs. Similarly, if you cannot afford an attorney to represent you in the civil action, you may request the court to appoint an attorney for you. You must submit the requests for waiver of court costs or appointment of an attorney directly to the court, not the Commission. The court has the sole discretion to grant or deny these types of requests. Such requests do not alter the time limits for filing a civil action (please read the paragraph titled Complainant's Right to File a Civil Action for the specific time limits). FOR THE COMMISSION: ______________________________ Carlton M. Hadden's signature Carlton M. Hadden, Director Office of Federal Operations December 17, 2015 __________________ 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 In opposition to the appeal, Complainant argues in part that the appeal was untimely. We disagree. While the Equal Employment Opportunity Commission (EEOC) Administrative Judge (AJ) initially issued his Order on March 17, 2015, he inadvertently did not include appeal rights. The AJ first issued an Order with appeal rights on May 12, 2015, entitled "Errata Order." Accordingly, the Agency timely issued its final order and timely filed its appeal. 3 Due to a conflict of interest with the Agency ODEEO, at some point the Department of Transportation took on responsibility for processing Complainant's EEO complaint. 4 The record does not contain the complaint file on the underlying complaint, and these motions are not in the record. 5 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. --------------- ------------------------------------------------------------ --------------- ------------------------------------------------------------ 2 0720150034 9 0720150034