Opinion
No. 01 C 6334.
July 13, 2004
JUDGMENT IN A CIVIL CASE
Jury Verdict. This action came before the Court for a trial by jury. The issues have been tried and the jury rendered its verdict.
[x] Decision by Court. This action came to hearing before the Court. The issues have been heard and a decision has been rendered.
IT IS HEREBY ORDERED AND ADJUDGED that defendant's motion for summary judgment [25-1] is granted. Judgment is hereby entered in favor of the defendant. This case is hereby terminated. This is a final and appealable order.
MEMORANDUM, OPINION AND ORDER
This case is before the Court on the motion of the Defendant Anthony Principi, Secretary of Veterans Affairs ("VA"), for summary judgment pursuant to Fed.R.Civ.P. 56. Plaintiff Carolina G. Leal ("Leal"), a former employee of the VA, has filed suit against the VA alleging that it breached a settlement agreement which resolved charges of race and age discrimination Leal filed against the VA in 1997. The uncontested facts and the applicable law, however, demonstrate that the VA did not breach the plain language of the settlement agreement and that Leal has failed to administratively exhaust certain claims. Accordingly, the Defendant's motion for summary judgment is granted.
BACKGROUND
Plaintiff Carolina Leal is a sixty-three year-old Asian-American female. She began her employment with the VA as a staff nurse at the Lakeside VA facility in 1982. Leal held various nursing positions within the VA system but ultimately left her employment with the VA around 1989 in order to pursue other opportunities. A few years later, in January 1996, Leal returned to the VA as a staff nurse at the VA's Chicago Health Care System, West Side Division ("West Side"). Leal was hired at West Side on a temporary basis with an appointment not-to-exceed January 25, 1997. On September 5, 1996, however, Leal received a notice of discharge for unsatisfactory performance and conduct, effective September 22, 1996. Following her termination, Leal appealed to the Merit Systems Protection Board, which dismissed the appeal in November 1996 for lack of jurisdiction. Leal next sought informal counseling from the VA's Equal Employment Opportunity office and received a final interview on May 19, 1997. Thereafter, she filed a formal EEO charge of race and age discrimination against the VA on May 21, 1997.
During processing of her discrimination claims, Leal and the VA entered into settlement negotiations. Throughout negotiations, Leal was represented by an attorney. Leal first received a draft of a proposed settlement agreement with the VA on May 1, 1998, via facsimile from her attorney. Leal admits that she had multiple discussions with her attorney and questioned him about the terms of the settlement agreement prior to signing it. During negotiations, Leal did not have any contact with representatives of the VA and admits that VA officials did not pressure her to sign the proposed agreement at any time. According to Leal, her only conversations about the proposed agreement took place with her husband or her attorney. On May 6, 1998, Leal signed the settlement agreement.
Under the terms of the agreement, Leal agreed to withdraw "all EEO complaints" in exchange for three things from the VA. First, the VA agreed to remove all documents and references to her September 1996 discharge and amend her personnel folder to indicate that Leal had voluntarily resigned. Second, the VA agreed to provide Leal with appropriate letters of recommendation or verbal references if, and when, requested by Leal, without mention of Leal's actual discharge. Third, the VA agreed to provide Leal with "priority consideration" for a period of two years for any registered nursing position at West Side for which Leal was qualified and to which she applied. The priority consideration term began on May 6, 1998, and expired on May 6, 2000. Priority consideration entitled Leal to have her name listed "for any vacant position she applies for and is found qualified for, in the first list considered by the selection panel or selecting official." The settlement agreement also applied a confidentiality clause to both parties but specifically granted the VA an exception to disclose information about the agreement to "authorized EEO officials or other officials responsible for implementing the agreement."
The agreement required Leal to inform the VA of any alleged breach within thirty calendar days of discovery. Failure by the VA to comply with the settlement agreement entitled Leal to reopen her EEO complaint from the point when processing ceased. Although Leal admits that the settlement agreement required her to affirmatively apply for a position at West Side in order to receive priority consideration, Leal never applied for any position. Leal also admits that the settlement agreement did not require West Side to notify her of nursing vacancies and is, in fact, silent as to how she would obtain such notice. Leal had previously obtained employment with the VA in 1982 and 1996, and subsequently applied for another position at West Side in 2000, after learning of the openings from friends already working for the VA.
Despite her failure to apply for a job and the agreement's silence as to notice, Leal alleges that the VA breached the priority consideration clause of the settlement agreement. On July 24, 1999, Leal sent a letter to the VA in which she reported the alleged breach of the priority consideration clause to the VA. Leal's sole allegation of breach is that the VA had failed to notify her of any nursing vacancies prior to July 24, 1999. On July 26, 2000, the VA issued its final agency decision determining that it did not breach the plain language of the priority consideration clause for two reasons. First, the VA determined that the agreement did not require West Side to notify Leal of nursing vacancies. Second, Leal admitted that she failed to apply for a nursing vacancy prior to alleging a breach, as the agreement required her to do.
Leal appealed the VA's decision to the Equal Employment Opportunity Commission ("EEOC") on August 15, 2000. Shortly thereafter, the EEOC issued its first decision affirming the VA's decision on identical grounds: failure to apply and silence as to notice. Leal filed a request for reconsideration with the EEOC on November 27, 2000.
In her request for reconsideration, Leal, for the first time, presented additional allegations of breach that she never presented to the VA. Specifically, Leal alleged for the first time that the VA breached the confidentiality clause of the settlement agreement and that the settlement agreement constituted an ineffective waiver of her age discrimination claim. Leal premised her allegation that the VA breached the confidentiality clause on a phone conversation that she initiated to West Side on November 9, 2000. During this conversation, James E. Williams, the administrative officer for the nursing division at West Side, who handled nurse recruiting at the time, informed Leal that the VA had complied with the terms of the settlement agreement. Williams had been made aware of Leal's priority consideration term by the EEO manager at West Side, John Thomas, because Williams conducts an initial screening of nursing applications.
The EEOC denied Leal's request for reconsideration on May 15, 2001. In its decision, the EEOC noted that its prior decision of November 1, 2000, which affirmed the VA's determination that no breach occurred, stood as the final decision. Leal then filed this lawsuit.
DISCUSSION
I. Standard for Summary Judgment
A court may award summary judgment to the moving party when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). A genuine issue of material fact exists only when a reasonable jury could return a verdict for the non-movant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The movant "can prevail just by showing that the other party has no evidence on an issue on which that party has the burden of proof." Brazinski v. Amoco Petroleum Additives Co., 6 F.3d 1176, 1183 (7th Cir. 1993).
In considering the motion, all reasonable inferences must be drawn in favor of the non-moving party. See, e.g., Adickes v. S.H. Kress Co., 398 U.S. 144, 157 (1970); Bailor v. Salvation Army, 51 F.3d 678, 681 (7th Cir. 1995). However, the party opposing the motion may not avoid summary judgment by resting upon the mere allegations of the pleadings, but instead must come forward with specific evidence showing that there is a genuine issue for trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). The non-movant must present more than a scintilla of evidence to successfully oppose a motion for summary judgment. See Walker v. Shansky, 28 F.3d 666, 671 (7th Cir. 1994). Indeed, the party must go beyond the pleadings, affidavits, depositions, answers to interrogatories, and admissions on file to designate specific facts showing a genuine issue for trial. Bank Leumi Le-Israel, B.M. v. Lee, 928 F.2d 232, 236 (7th Cir. 1991).
II. The VA Did Not Breach the Plain Language of the May 6, 1998 Settlement Agreement
A. The Plain Language of the Settlement Agreement Is Unambiguous and Controlling
Leal's claim that the VA breached the priority consideration and confidentiality clauses of the May 6, 1998 settlement agreement is governed by federal common law because the agreement is a contract involving the federal government. See Funeral Fin. Servs. v. United States, 234 F.2d 1015, 1018 (7th Cir. 2000). While Illinois law may be applied if it does no disservice to federal interests, Lumpkin v. Envirodyne Indus., Inc., 933 F.2d 449, 457-58 (7th Cir. 1991), the results are identical in this case. The first issue is whether the plain language of the contract is clear and unambiguous. Funeral Fin. Servs., 234 F.3d at 1018; Bell v. Potter, No. 00 C 50164, 2001 WL 1636888, at *4 (N.D. Ill. Dec. 20, 2001). "The interpretation of a clear and unambiguous contract is normally a question of law that is suitable for summary judgment." Bell, 2001 WL 1636888, at *4. The language of a contract is ambiguous "if a section of that contract `is subject to reasonable alternative interpretations.'" Funeral Fin. Servs., 234 F.3d at 1018; see also Bell, 2001 WL 1636888, at *4. The court must interpret the language in an ordinary and popular sense as would a person of average intelligence and experience. Funeral Fin. Servs., 234 F.2d at 1018. The court, however, cannot infer particular terms into the contract when the contract is silent on that issue. Francisco v. West, No. 98 C 3007, 2001 WL 563793, at *3 (N.D. Ill. May 23, 2001). This maxim is especially true when the contract, like this one, contains a merger clause indicating that the written contract contains the entire agreement and no other agreements constitute a part of the contract. Bock v. Computer Assoc. Int'l, 257 F.3d 700, 707 (7th Cir. 2001).
If the contract is clear and unambiguous, the written words of the contract control, and the court is prohibited from examining any extrinsic evidence. Funeral Fin. Servs., 234 F.3d at 1018; Bell, 2001 WL 1635888, at *4. Simply put, "any particular interpretations one of the parties may have had at the time the contract was executed is immaterial." Bell, 2001 WL 1636888, at *4. After examining the plain language of the unambiguous contract, the inquiry is over. Funeral Fin. Servs., 234 F.3d at 1018.
B. The VA Did Not Breach the Priority Consideration Clause Because Notice to Leal Was Not Required and Leal Failed to Apply
At issue in Leal's breach allegation is the VA's agreement to give Leal priority consideration for any job for which she was qualified and for which she applied between May 6, 1998, and May 6, 2000. We find that the VA did not breach the settlement agreement.
The settlement agreement entered into by Leal and the VA is clear and unambiguous on its face. The agreement clearly establishes the responsibilities and obligations of each party. Specifically, the agreement provides:
The complainant shall receive priority consideration for any registered nursing (RN) position vacancy that complainant qualifies for at VACHCS, West Side Division, for a period of two years from the date of this agreement. Priority consideration shall require VACHCS, West Side Division to list the complainant's name only for any vacant position she applies for and is found qualified for, in the first list considered by the selection panel or the selecting official. (Emphasis added).
Leal admits that she did not apply for a nursing position at West Side prior to alleging a breach. Short of her applying for a position, the VA had no way to consider her for a vacancy. Leal admits that she is intimately aware of the VA hiring process, having been employed with the VA from 1982-1989. Leal also admits that friends have brought her information regarding nursing vacancies in the past, and she even obtained jobs with the VA through that avenue in 1982 and 1996.
Moreover, the agreement does not impose upon West Side an obligation to notify Leal of nursing vacancies. Because the contract is silent on the issue of notice, the court cannot infer an obligation upon the VA for which the parties did not contract. Francisco, 2001 WL 563793, at *3. This fact is underscored by the merger clause in the contract stating that "[t]his written agreement constitutes the entire agreement and there are no other terms to this agreement, written or verbal, except those specified herein." Leal admits this fact as well — she testified in her deposition that it was entirely her obligation to inquire as to nursing vacancies.
Consequently, the VA cannot be in breach of the priority consideration clause because Leal did not apply for any nursing vacancies prior to alleging a breach on July 24, 1999 and, pursuant to the clear and unambiguous language of the agreement, the VA was not obligated to inform her of nursing vacancies.
C. The VA Did Not Breach the Confidentiality Clause Because Williams Was an Authorized Official Responsible for Implementing the Agreement
Leal's subsequent allegation that the VA breached the confidentiality clause of the settlement agreement is similarly belied by the plain language of the agreement. Although paragraph 3(c) prohibited disclosure of the terms of the agreement by either party, the same paragraph created an exception, permitting disclosure to "authorized EEO officials or other officials responsible for implementing the agreement." Leal's allegation of a breach of this clause stems from a phone call she initiated on November 9, 2000 to James E. Williams, the administrative officer for the nursing division at West Side, who expressed his knowledge of the agreement. In his position as administrative officer for nursing, Williams was intimately involved in the hiring of nurses at West Side. Williams needed to know about Leal's priority consideration so he would not improperly screen-out any application that she might have filed. Consequently, Williams falls squarely within the confidentiality clause exception because he was an authorized official "responsible for implementing the agreement." Therefore, we find that the VA did not breach the confidentiality clause of the agreement by disclosing its terms to James E. Williams, administrative officer for the nursing division at West Side.
III. Leal Failed to Administratively Exhaust Her Ineffective Waiver And Breach Of Confidentiality Clause Claims
A. Federal Employees are Required to Exhaust All Administrative Remedies Prior to Bringing Suit in Federal Court
Federal employees must exhaust all available administrative remedies prior to bringing suit in the district court. Brown v. Gen. Servs. Admin., 425 U.S. 820, 832 (1976); Gibson v. West, 201 F.3d 990, 993 (7th Cir. 2000). If additional claims are brought in federal court that were not previously presented to the proper agency, those claims should be dismissed by the district court. Antol v. Perry, 82 F.3d 1291, 1295-96 (3d Cir. 1996); McKenzie v. Ill. Dep't of Transp., 92 F.3d 473, 481-82 (7th Cir. 1996) ("Generally, a Title VII plaintiff may bring only those claims that were included in her EEOC charge. . . .") (internal citations omitted); Washington v. Jenny Craig Weight Loss Ctrs., Inc., 3 F. Supp. 2d 941, 947 (N.D. Ill. 1998) (noting rule that plaintiff cannot include claims in district court unless brought in EEOC charge).
Several procedures guide the enforcement of settlement agreements between former federal employees and federal agencies. 29 C.F.R. § 1614.504 (2003). Under § 1614.504(a), "[i]f the complainant believes that the agency has failed to comply with the terms of a settlement agreement or decision, the complainant shall notify the EEO Director, in writing, of the alleged noncompliance within 30 days of when the complainant knew or should have known of the alleged noncompliance." Id. The complainant has the right to request that the terms of the settlement agreement be specifically implemented or to request that her EEO charges be reopened from the point at which processing ceased. Id.
The agency shall then resolve the matter and respond to the complainant in writing. 29 C.F.R. § 1614.504(b). If the agency has not responded to the complainant, or if the complainant is not satisfied with the agency's attempt to resolve the matter, the complainant may appeal to the EEOC for a determination as to whether the agency has complied with the terms of the settlement agreement. Id. The complainant may file such an appeal 35 days after he or she has served the agency with the allegations of noncompliance, but must file an appeal within 30 days of his or her receipt of an agency's determination.
Courts have held that failure to take this direct appeal to the EEOC constitutes a failure to exhaust all available administrative remedies and prohibits the plaintiff from subsequently bringing the claim in district court. Blank v. Donovan, 780 F.2d 808, 809-10 (9th Cir. 1986) (affirming district court's decision that failure to exhaust remedies under § 1614.504(b) prohibited judicial review of breach claims); Ramirez v. Runyon, 971 F. Supp. 363, 368-69 (C.D. Ill. 1997) (granting federal defendant's motion for summary judgment because plaintiff sought enforcement of a settlement agreement without exhausting administrative remedies under § 1614.504(b)). Such exhaustion requirements comport with congressional policy to "reduc[e] duplicative litigation and provid[e] a formal process to effect compliance." Ramirez, 971 F. Supp. at 369.
B. Leal Failed To Administratively Exhaust Her Breach Of Confidentiality Clause Claim
Leal failed to administratively exhaust her claim that the VA breached the confidentiality clause of the agreement. Leal alleges that the confidentiality clause breach occurred on November 9, 2000. Leal raised this allegation of breach in her EEOC request for reconsideration, filed on November 27, 2000. Under 29 C.F.R. § 1614.504(b), a complainant may submit an appeal to the EEOC of an agency decision regarding an allegation of breach no sooner than thirty-five days "after he or she has served the agency with the allegations of noncompliance." 29 C.F.R. § 1614.504(b). Here, Leal attempted to raise the confidentiality clause argument less than thirty-five days after her notification to the VA of the alleged breach. Leal is thereby prohibited from raising the confidentiality clause argument in this court because she failed to properly exhaust her administrative remedies on that claim. See Ramirez v. Runyon, 971 F. Supp. 363, 369 (C.D. Ill. 1997).
C. Leal Failed to Administratively Exhaust Her Ineffective Waiver Claim
Leal's claim that the settlement agreement was not an effective waiver of her age discrimination claim fails because she also failed to administratively exhaust this claim. The first time she presented this argument was in her November 27, 2000 request for reconsideration to the EEOC, which was over two and one-half years after she signed the settlement agreement in which she agreed to withdraw "all EEO complaints." Leal's request for reconsideration, however, requested reconsideration of the decision that the VA did not breach the priority consideration clause — it in no way impacted her claim that she ineffectively waived her age discrimination claim. Her argument that she did not effectively waive her age discrimination claim was presented to the EEOC for the first time during this request for "reconsideration." This argument was never presented to the VA prior to this lawsuit. Thus, Leal never allowed the VA an opportunity to respond to her waiver argument in the fashion envisioned by federal law. Ramirez, 971 F. Supp. at 369. Therefore, Leal has not properly administratively exhausted this claim.
Accordingly, we find that Leal failed to timely and properly raise her claim of ineffective waiver of age discrimination, thereby not exhausting all available administrative remedies under § 1614.504 and prohibiting this court's review of this claim.
D. Even if Properly Exhausted, Leal Effectively Withdrew Her Age Discrimination Claim under the Settlement Agreement
Even if we were to reach the merits of Leal's ineffective waiver of her age discrimination claim, her claim will still fail. In 1990, Congress enacted procedures applicable to waivers of rights under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 623 et seq. 29 U.S.C. § 626(f) (2003). The overarching requirement of these waivers is that they be enacted knowingly and voluntarily by the complainant. § 626(f)(1); Seward v. B.O.C. Div. of Gen. Motors Corp., 805 F. Supp. 623, 627 (N.D. Ill. 1992); Manning v. New York Univ., No. 98 Civ. 3300(NRB), 2001 WL 963982 (S.D.N.Y. Aug. 22, 2001).
In order to waive an ADEA claim negotiated in settlement of an EEOC charge, the following requirements must be satisfied: (1) the waiver must be part of an agreement written in a manner calculated to be understood by the complainant, or by the average individual eligible to participate; (2) the waiver must specifically refer to the complainant's rights or claims under ADEA; (3) the complainant does not waive rights or claims that may arise after the waiver is executed; (4) the complainant waives her rights or claims only in exchange for consideration in addition to anything of value to which the individual is entitled; (5) the complainant is advised in writing to consult with an attorney; and (6) the complainant is given a reasonable period of time within which to consider the settlement agreement. § 626(f)(1)(A)-(E) and (f)(2).
In this case, the settlement agreement between Leal and the VA satisfies these requirements. First, the settlement agreement was written so as to be understood by Leal and the "average individual eligible to participate." § 626(f)(1)(A). The agreement states that "[t]he complainant agrees to withdraw all EEO complaints." The average person should clearly understand this language to refer to all EEO complaints which the complainant had filed. Thus, we find that the terms of the agreement were presented to Leal clearly, and in writing, in a manner calculated to be understood by her.
Second, as for the agreement's reference to Leal's ADEA rights in accord with § 626(f)(1)(B), the agreement specifically stated that Leal agreed to withdraw "all EEO complaints." Because Leal filed only two EEO claims — race and age discrimination — we find that the language of the settlement agreement complies with § 626(f)(1)(B). Leal cannot now disavow knowledge that she was agreeing to withdraw both her race and age discrimination claims when she signed the agreement. As the Manning court stated, "strict interpretation does not require placing form entirely over function and [the court] must evaluate the circumstances surrounding each waiver in light of Congress' objectives." Manning, 2001 WL 963982, at *5. The Sixth Circuit has similarly stated that "[h]olding an employer strictly accountable for what might be a technical violation of these imprecise terms, with no indication that this would facilitate the provision's purpose and might even hamper it, is untenable and would elevate form over substance." Raczak v. Ameritech Corp., 103 F.3d 1257, 1260 (6th Cir. 1997).
Keeping in mind that the overarching question is whether Leal's withdrawal of her age discrimination charge was knowing and voluntary, the evidence in this case demands such a determination. See Seward, 805 F. Supp. at 627. The agreement was presented to Leal in writing several days before the parties signed it. See Manning, 2001 WL 963982, at *5. Moreover, Leal reviewed the proposed agreement with her attorney and her husband and had multiple meetings and discussions with her attorney concerning the terms of the agreement prior to signing it. See Manning, 2001 WL 963982, at *5. Leal also admits that no one from the VA placed pressure upon her to sign the agreement. Leal simply presents no credible evidence to show that she did not understand that she was agreeing to withdraw her age discrimination claim. Thus, the evidence shows that Leal carefully considered the terms of the agreement with her attorney and her husband for several days prior to signing it on May 6, 1998, and she should not now be free from the obligations she knowingly and voluntarily assumed.
The third and fourth provisions of § 626(f)(1) merit little discussion because they are not in dispute in this case. The agreement did not require Leal to waive future claims in violation of § 626(f)(1)(C). Moreover, Leal withdrew her race and age discrimination claims in exchange for valuable consideration from the VA in the form of personnel folder adjustments, letters of recommendation, and priority consideration for a period of two years — all things to which Leal was not otherwise entitled. § 626(f)(1)(D).
Fifth, the ADEA waiver requirements also dictate that the complainant be advised in writing to consult with an attorney. § 626(f)(1)(E). As one district court has held, the presence of attorneys representing an individual "plainly met" the ADEA requirements without further proof that the employer advised the plaintiff in writing to consult with an attorney. Manning, 2001 WL 963982, at *7. Leal was represented by an attorney throughout settlement negotiations and the signing of the agreement on May 6, 1998. Accordingly, the provisions of § 626(f)(1)(E) were met.
Finally, the statute requires proof that Leal was given "a reasonable period of time within which to consider the settlement agreement." § 626(f)(2)(B). The statute, however, does not provide further guidance as to what constitutes a "reasonable period of time." See Manning, 2001 WL 963982, at *7. Here, Leal received a draft of the proposed agreement from her attorney on May 1, 1998. She had multiple conversations with him about the terms of the draft agreement. She even brought her husband to a meeting with the attorney to discuss the proposed agreement. There is no credible evidence that Leal was influenced or pressured by any VA official during settlement negotiations. Leal signed the agreement on May 6, 1998, five days after receiving the first draft. In light of these facts, we find that Leal was given a reasonable time in which to consider the agreement prior to signing.
Consequently, even if we were to reach the merits of Leal's claim that she did not knowingly waive her ADEA claim, we find that the settlement agreement's terms complied with § 626(f)(2) and that Leal's withdrawal of her ADEA claim was knowing and voluntary.
CONCLUSION
For the foregoing reasons, the motion of Defendant Anthony Principi, Secretary of Veterans Affairs, for summary judgment is granted. We find that the VA did not breach the 1998 settlement agreement entered into between plaintiff Leal and the VA. Moreover, we find that Leal effectively waived her age discrimination claims by entering into the settlement agreement for the reasons stated above.
Judgment is hereby entered in favor of the Defendant. This case is hereby terminated. This is a final and appealable order.
It is so ordered.