0120131820
05-14-2015
Complainant, v. Sylvia Mathews Burwell, Secretary, Department of Health and Human Services (Health Resources and Services Administration), Agency.
Complainant,
v.
Sylvia Mathews Burwell,
Secretary,
Department of Health and Human Services
(Health Resources and Services Administration),
Agency.
Appeal No. 0120131820
Agency No. HHS-HRS-02-05
EEOC Hearing No. 531-2011-00367X
DECISION
Complainant filed a timely appeal with this Commission from the Agency's final decision (FAD), dated March 28, 2013, finding that it was in compliance with the terms of the settlement agreement into which the parties entered. See 29 C.F.R. � 1614.402; 29 C.F.R. � 1614.504(b); and 29 C.F.R. � 1614.405.
BACKGROUND
At the time of events giving rise to this complaint, Complainant was a former Agency employee, seeking reinstatement to the Agency. Complainant applied for 24 positions. In Spirer v. Department of Health and Human Services (Health Resources and Services Administration), EEOC Appeal No. 0120080551 (July 1, 2011), this Office reversed the entry of summary judgment in favor of the Agency. We remanded the matter for a hearing before a U.S. Equal Employment Opportunity Commission (EEOC) Administrative Judge (AJ). Prior to the scheduled hearing on the complaint at the Baltimore District Office, the parties engaged in settlement negotiations to resolve Complainant's non-selection claims.
On October 18, 2012, Complainant and the Agency entered into a settlement agreement to resolve the EEO claims. The settlement agreement provided, in pertinent part, that, the Agency agrees:
7(A) To pay a lump sum of four hundred and thirty-seven thousand dollars ($437,000), to Complainant. . . .
7(B) To pay a sum of one hundred and sixty-three thousand dollars ($163,000) to Complainant's attorneys of record . . . for attorneys' fees and legal costs. . . .
7(C) To issue a Form 1099-MISC to Complainant, in accordance with applicable Internal Revenue Service (IRS) regulations and guidance, as the Agency will report to the IRS the lump sum payment to Complainant, as identified in paragraph 7(A), above. The Agency will also indicate the aforementioned lump sum payment amount in Box 3, of the Form 1099-MISC.
. . .
(17) This Agreement constitutes the complete understanding between Complainant and the Agency with respect to the matters encompassed in this Agreement. No other promises or agreements will be binding unless this Agreement is amended by a writing signed by both Parties.
By letter, to the Agency, dated March 1, 2013, Complainant alleged that the Agency was in breach of the settlement agreement. Specifically, Complainant alleged that the Agency breached paragraph 7(A) and 7(C), because the Agency agreed to pay Complainant $437,000 and to report that $437,000 figure to the Internal Revenue Service by issuing a Form 1099-MISC, reflecting the $437,000 as the payment to Complainant. Instead, the Agency reported to IRS that Complainant received $600,000. Complainant requested that the Agency reinstate his complaint from the point that processing ceased.
In its Letter of Determination, the Agency concluded that there was no breach. To support its decision, the Agency referenced an August 27, 2012 "Memorandum of Settlement in Principle." That preliminary memorandum referenced a $600,000 payment to Complainant. The Agency stated that the language reflected the parties understanding "prior to the finalization of a future formal settlement agreement." The Agency did not address the terms of the final Agreement executed on October 18, 2012.
This appeal followed.
ANALYSIS
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 Def., EEOC Request No. 05960032 (December 9, 1996). The Commission has further held that it is the intent of the parties as expressed in the contract, not some unexpressed intention that controls the contract's construction. Eggleston v. Dep't of Veterans Affairs, EEOC Request No. 05900795 (August 23, 1990). In ascertaining the intent of the parties with regard to the terms of a settlement agreement, the Commission has generally relied on the plain meaning rule. See Hyon O v. U.S. Postal Serv., EEOC Request No. 05910787 (December 2, 1991). This rule states that if the writing appears to be plain and unambiguous on its face, its meaning must be determined from the four corners of the instrument without resort to extrinsic evidence of any nature. See Montgomery Elevator Co. v. Building Eng'g Servs. Co., 730 F.2d 377 (5th Cir. 1984).
We find the October 18, 2012 Agreement is valid and binding on both parties. It is also the controlling settlement document agreement. It is not for us to construe the meaning or intention of the Agreement or its terms. The plain meaning of provision 7(A) and 7(C) of the settlement agreement supports Complainant's claim.
In the instant case, the Agency agreed to pay Complainant a specified lump sum payment and to report that specific lump sum payment to the IRS. The Agency did not accurately report the amount it agreed to pay to, and report for, Complainant. See Exhibit 2, Form 1099 MISC, which does not reflect the $437,000 which the Agency agreed to pay Complainant.
We find, therefore, that the Agency has not met its burden of showing compliance, because the Agency failed to issue the Form 1099 MISC consistent with paragraph 7(A) and 7(C) of the Agreement. Therefore, we find that the Agency breached the agreement when the Agency reported that it paid Complainant' $600,000 on the Form 1099 MISC.
Where this Commission finds that the settlement agreement has been breached, the only two remedies available are specific performance of the terms of the agreement or reinstatement of the underlying EEO complaint at the point processing ceased. See 29 C.F.R. � 1614.504 (c). Complainant requested reinstatement of his complaints. If Complainant's complaint is reinstated, he would be required to return any monetary relief that he has received. If he were to seek specific performance (correction of the Form 1099 MISC to reflect $437,000 payment to Complainant), he would not be required to return the money. We therefore give Complainant the option, in accordance with the ORDER below, of either reinstating his underlying EEO complaints, or specifically enforcing the terms of the Agreement.
CONCLUSION
We find that the Agency breached the Agreement. Accordingly, we REVERSE the Agency's Breach Decision and REMAND the matter in accordance with the ORDER below.
ORDER
Within thirty (30) calendar days of the date this decision becomes final, the Agency is ordered to notify Complainant of his option to either return to the status quo prior to the signing of the settlement agreement or to obtain specific performance of the agreement. The Agency shall also notify Complainant that he has fifteen (15) calendar days from the date of his receipt of the Agency's notice within which to notify the Agency either that he wishes to return to the status quo prior to the signing of the agreement or that he wishes to allow the terms of the agreement to stand. Complainant shall be notified that in order to return to the status quo ante, he must return any monetary benefits received pursuant to the agreement. The Agency shall determine its obligations due to Complainant or the return of consideration or benefits due from Complainant, within thirty (30) calendar days of the date this decision becomes final, and shall include such information in the notice to Complainant.
If Complainant elects specific performance, the Agency shall notify Complainant that the terms of the settlement agreement shall stand and the Agency will abide by all of the terms of the Agreement, including a corrected reissuance of the reporting of the specified lump sum payment to Complainant to the IRS.
If Complainant elects to reinstate his EEO complaint, the processing shall resume for the EEO complaint from the point processing ceased, which is the return to the AJ at the pre-hearing stage. The Agency shall acknowledge to the Complainant that it has received the remanded claims within thirty (30) calendar days of the date this decision becomes final and request the appointment of an AJ.
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 the corrective action has been implemented. A copy of the Agency's letter of acknowledgment to Complainant and a copy of the notice that transmits the investigative file and notice of rights must be sent to the Compliance Officer as referenced 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)), he/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 (M0610)
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 tends 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), 9-18 (November 9, 1999). 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 (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 (Z0610)
If you decide to file a civil action, and if you do not have or cannot afford the services of an attorney, you may request from the Court that the Court appoint an attorney to represent you and that the Court also permit you to file the action without payment of fees, costs, or other security. See Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. � 2000e et seq.; the Rehabilitation Act of 1973, as amended, 29 U.S.C. �� 791, 794(c). The grant or denial of the request is within the sole discretion of the Court. Filing a request for an attorney with the Court does not extend your time in which to file a civil action. Both the request and the civil action must be filed within the time limits as stated in the paragraph above ("Right to File a Civil Action").
FOR THE COMMISSION:
______________________________
Carlton M. Hadden, Director
Office of Federal Operations
May 14, 2015
__________________
Date
2
0120131820
U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
Office of Federal Operations
P.O. Box 77960
Washington, DC 20013
2
0120131820