0120092454
12-15-2010
Leddon Clark, Complainant, v. Eric K. Shinseki, Secretary, Department of Veterans Affairs, Agency.
Leddon Clark,
Complainant,
v.
Eric K. Shinseki,
Secretary,
Department of Veterans Affairs,
Agency.
Appeal No. 0120092454
Hearing No. 490-2006-00060X
Agency No. 200L-0598-2005103181
DECISION
On May 15, 2009, Complainant filed an appeal from the Agency's April 30, 2009, final order concerning his equal employment opportunity (EEO) complaint alleging employment discrimination in violation of Section 501 of the Rehabilitation Act of 1973 (Rehabilitation Act), as amended, 29 U.S.C. � 791 et seq. For the following reasons, the Commission MODIFIES the Agency's final order.
BACKGROUND
At the time of events giving rise to this complaint, Complainant worked as a Housekeeping Aide, WG-1, in Environmental Management Service (EMS) at the Agency's Health Care System in Little Rock, Arkansas. Report of Investigation (ROI), Exhibit C-7.
Complainant filed an EEO complaint dated August 15, 2005, alleging that the Agency discriminated against him on the basis of disability when: (1) From April 26, 2005, through June 8, 2005, management failed to accommodate Complainant; and, (2) On July 18, 2005, Complainant's employment as a Housekeeping Aide, WG-3566-1, was terminated during his probationary period.
At the conclusion of the investigation, the Agency provided Complainant with a copy of the report of investigation and notice of his right to request a hearing before an EEOC Administrative Judge (AJ). Complainant timely requested a hearing and the AJ held a hearing on February 28, 2007. The AJ issued a decision on March 23, 2009, finding the Agency perceived Complainant as disabled and discriminatorily terminated his employment. The AJ did not find Complainant was denied a reasonable accommodation.
As relief, the AJ found Complainant was entitled to back pay and any and all benefits to which he is entitled (i.e., leave, salary increases, seniority, medical, and retirement benefits), including the maximum interest as allowed by law, from July 10, 2005,1 to September 7, 2007.2 The AJ noted that Complainant requested $72,000 plus interest in lost wages. The AJ noted the Agency stated Complainant lost $82,431 in wages during this time frame. However, the AJ recognized that on June 17, 2005, (two days after receiving his termination letter), Complainant applied to the Agency for Individual Unemployability benefits which were granted from July 9, 2005, through September 7, 2007. The AJ noted that Complainant received unemployability benefits from 2006 - 2007 in the amount of $90,893. The AJ recognized that if a monetary benefit conferred on the plaintiff during the back pay period is from a source independent of the defendant, courts may apply the collateral source rule and not treat the monetary benefit as an offset. The AJ noted that the collateral source rule does not apply when the collateral source is the defendant and found Complainant's back pay award including interest must be offset by the Individual Unemployability and Disability Compensation benefits he received from the Agency.
The AJ also found Complainant entitled to annual leave for the period of July 9, 2005 through September 7, 2007. The AJ noted the leave must be offset by the Individual Unemployability and Disability Compensation benefits he received from the Agency.
The AJ noted that on January 29, 2009, Complainant submitted a Front Pay Claim Calculation letter via his attorney. The AJ found Complainant failed to submit evidence which establishes that no position is available; that a subsequent working relationship between the parties would be antagonistic; or, that the Agency has a record of long-term resistance to anti-discrimination efforts. The AJ noted that in his supplemental damages report dated October 30, 2008, Complainant informed the AJ that he did not want to be reinstated to the Agency. Moreover, the AJ noted his request for front pay was untimely. The AJ found Complainant not entitled to front pay.
Additionally, the AJ ordered the Agency to post written notice that discrimination was found. The Agency was also ordered to provide training to all officials involved in the case.
The Agency subsequently issued a final order dated April 30, 2009. The Agency fully implemented the AJ's decision.
Accompanying its June 4, 2009 letter, the Agency provided certified calculations from its Chief of Payroll, stating the total amount owed to Complainant in accordance with the AJ's decision is $66,123.24. The Agency noted that during the relevant time, Complainant received benefits totaling $130,074.03, and determined the amount owed to Complainant is being offset by the amount he has received from the Agency. The Agency stated that since the amount paid to Complainant is greater than the amount owed, Complainant will receive no additional payments.
The Agency stated that once it receives Complainant's Official Personnel Folder, it will remove all references to Complainant's termination. Moreover, the Agency stated that it has completed the training and posting requirements in accordance with its final order.
On appeal, Complainant argues that the AJ erred by refusing to employ the "collateral source doctrine" to preclude deducting Complainant's Veterans Affairs (VA) disability compensation benefits from his back pay award. Complainant does not dispute the calculation of $130,074.03 in VA disability compensation. However, he states that these were not unemployment benefits but were service connected disability compensation benefits. He states that his VA disability benefits increased when he was found "individually unemployable" due to his service connected disability. Complainant states that the disability benefits he received were "gratuitously awarded by the United States" for those who earned the benefit based on their military service. Complainant argues the Commission should focus on the character of the benefits received rather than on whether the source of the benefit was the employer. Complainant claims the VA disability compensation benefits were to compensate him for injuries and resulting disabilities he sustained as a direct result of his military service to his country. He states that these benefits had nothing to do with the damages he was awarded based on a violation of the Rehabilitation Act.
Moreover, Complainant contends the AJ improperly denied his claim for front pay. Complainant contends that he raised his request for front pay in a timely manner since he raised it before the AJ. Complainant states that the Agency did not object to the timeliness of his front pay request and thus, he argues that they waived any objection to this claim. With regard to the AJ's contention that he failed to submit evidence establishing that no position was available with the Agency, Complainant stated that he testified that the Agency would not make a position available to him even though he was a qualified individual with a disability and could perform the essential functions of his job. Complainant acknowledges that he said he was not willing to return to a position with the Agency; however, he said the reason why he was not willing to return to work was because the Agency would not accommodate him. Complainant also stated that the Agency was antagonistic towards him, as evidenced by the Agency terminating his position and refusing to accommodate his disability.
In response to Complainant's appeal, the Agency states that the AJ properly determined Complainant's back pay should be offset by the "individual unemployability" benefits Complainant received. Specifically, the Agency noted that in this case the would-be "gratuitous third party" was in fact the Agency itself, and not a third party. Thus, the Agency stated there simply was no collateral source.
Further, the Agency rejects Complainant's argument that his individual unemployability benefit had nothing to do with his termination. The Agency stated that even the timing of the receipt of his benefit (the day after his termination for medical reasons), shows that they were related.
Additionally, the Agency argues that not offsetting the individual unemployability benefit would undermine one of the major principles of providing remedies, that Complainant should be placed in the position that he would have been in, but for the discrimination, and not in a better or worse position. The Agency states that not permitting the offset would clearly provide a major windfall to Complainant from a non-collateral source.
Moreover, the Agency states that the AJ properly determined Complainant was not entitled to front pay. First, the Agency states that front pay is for those who are willing and able to work. The Agency notes that on October 30, 2008, Complainant informed the AJ that he did not want to be reinstated to the Agency in any capacity. Second, the Agency noted that Complainant has failed to show or even attempt to show that: 1) there is no position available; 2) a subsequent relationship between the parties would be antagonistic; or 3) the employer has a record of long-term resistance to anti-discrimination efforts. Third, the Agency argues that Complainant's request for front pay was untimely.
ANALYSIS AND FINDINGS
At the outset, we note that the Agency did not challenge the AJ's finding that the Agency discriminatorily terminated his employment and Complainant did not contest the AJ's finding that Complainant failed to show he was denied a reasonable accommodation. Accordingly, those findings are AFFIRMED herein.
Backpay
In the present case, Complainant has requested application of the "collateral source" rule, which holds that "benefits received by the plaintiff from a source collateral to the defendant may not be used to reduce that defendant's liability for damages." Finlay v. U.S. Postal Service, EEOC Appeal No. 01942985 (April 29, 1997) (citing 1 Dobbs, Law of Remedies 3.8(1), at 372-73 (2d ed. 1993)).
The Commission examined the application of the collateral source rule to health insurance benefits in Wallis v. U.S. Postal Service, EEOC Appeal No. 01950510 (November 13, 1995).
In Wallis, the Commission determined that health insurance benefits funded by employer-paid premiums are collateral source funds, and not subject to offset. The Commission noted that although the Agency paid a substantial share of Complainant's health insurance premium, the actual funds disbursed to pay Complainant's expenses were overwhelmingly those of the insurance company, as contributed by not just the Agency, but by Complainant and countless others. Id. (citation omitted). The Commission also noted that it could not be said that the Agency contributed to Complainant's health insurance premium in order to respond to some legal liability it might otherwise have toward Complainant. Id. Thus, the Commission found the application of the collateral source rule appropriate and consistent with Commission precedent. Id. (citing Dana v. U.S. Postal Service, EEOC Appeal No. 01921641 (June 11, 1993)).
In Finlay v. U.S. Postal Service, EEOC Appeal No. 01942985 (April 29, 1997), the Commission examined the application of the collateral source rule to workers' compensation wage-replacement benefits under FECA. The Commission noted that FECA does not limit the "make whole" relief to which a victim of discrimination is entitled under Title VII. The Commission stated that under FECA, OWCP disburses funds to the injured employee, and is reimbursed by the Agency. Id. Accordingly, the Commission determined the source of funds used to pay Complainant's medical expenses in Finlay were not collateral to the Agency, and may be used to offset the pecuniary damages which might otherwise be recoverable. The Commission distinguished the wage-replacement benefits paid under FECA, which are paid in full by the Agency, from unemployment benefits, where the Agency pays an insurance premium resulting in a benefit to the employee. Id. In both Finlay and Wallis, the Commission cited Lussier v. Runyon, 50 F.3d 1103 (1st Cir. 1995), which held that the effect to be given to collateral benefits, whatever, their source, is within the equitable discretion of the trier of fact.
More recently, in Franklin v. U.S. Postal Service, EEOC Petition No. 04A20006 (January 28, 2003), the Commission addressed the issue of whether the Agency properly deducted disability retirement benefits from an award of back pay. In Franklin, the Commission stated that it is not equitable for an employer to be permitted to regroup pension payments from a pension plan which, while usually funded by the employer, is a separate legal entity from the employer. Franklin, EEOC Petition No. 04A20006 (citations omitted). The Commission noted that in Arenson v. Social Security Administration, 128 F.3d 1243 (8th Cir.), the court applied the common law collateral source rule, stating that the rule holds that a defendant's liability shall not be reduced merely because the plaintiff's net damages are reduced by payments received from others. Id. In concluding that an offset of disability retirement benefits was improper, the Commission noted that the Arenson court pointed out that "the disability retirement payments to plaintiff were made to carry out a social policy that was wholly independent of back pay awards, and that they did not discharge any direct obligation that the agency had to plaintiff." Id.
In the present case, the Commission is unable to determine whether Complainant's back pay award must be offset by the Individual Unemployability and Disability Compensation benefits he received during the relevant time frame. Specifically, we find the record does not indicate whether the source of the benefits received by Complainant is "separate and distinct" from the general government funds. We note it is unclear whether the benefits were paid in full by the Agency or whether Complainant contributed to these benefits. The record also does not show whether the benefit is in the nature of a "fringe benefit," or instead reflects an attempt by the employer to limit its potential legal liability. Additionally, the Commission cannot determine what triggered Complainant's entitlement to Individual Unemployability benefits, i.e., was Complainant entitled to Individual Unemployability Benefits because he was terminated, because of his service-connected disability, or for some other reason. Moreover, the record does not indicate whether Complainant had been receiving Disability Compensation benefits prior to July 9, 2005, or the amount of such benefits if he had been receiving them while working for the Agency. After supplementing the record with the above-requested information, the Agency shall issue a new final decision analyzing Complainant's back pay award and indicating whether the collateral source rule should apply to the Individual Unemployability Benefits Complainant received.
Front pay
Front pay is a form of equitable relief that compensates an individual when reinstatement is not possible in certain limited circumstances. In general, reinstatement is preferred to an award of front pay. Romeo v. Dept. of the Air Force, EEOC Appeal No. 01921636 (July 13, 1992). Awards of front pay imply that the complainant is able to work but cannot do so because of circumstances external to the complainant. Goetze v. Department of the Navy, EEOC Appeal No. 01991530 (August 22, 2001); Brinkley v. U.S. Postal Service, EEOC Request No. 05980429 (August 12, 1999). The Commission has identified three circumstances where front pay may be awarded in lieu of reinstatement: (1) where no position is available; (2) where a subsequent working relationship between the parties would be antagonistic; or (3) where the employer has a record of long-term resistance to anti-discrimination efforts. York v. Department of the Navy, EEOC Appeal No. 01930435 (February 25, 1994).
There has been no showing that any of these conditions pertain to Complainant's situation. We note that in his supplemental damages report received by the AJ on October 30, 2008, Complainant stated that he is "not seeking employment back at the VA Hospital." Moreover, on appeal Complainant acknowledges that he said he was not willing to return to a position with the Agency. We have previously determined that, in order for an individual to be eligible for an award of front pay, they must be available to work. See Finlay v. U.S. Postal Service, EEOC Appeal No. 01942985 (April 30, 1997); York v. Department of the Navy, EEOC Appeal No. 01930435 (February 25, 1994). Accordingly, because Complainant has stated he is not available to return to work for the Agency, we find that he is not entitled to an award of front pay even if such a claim was timely raised.
CONCLUSION
Accordingly, the Agency's finding that Complainant was subjected to discrimination when he was terminated and that Complainant failed to show he was denied a reasonable accommodation is AFFIRMED. The Agency's decision finding Complainant is not entitled to front pay is AFFIRMED. The Agency's decision on back pay is VACATED and the issue is REMANDED to the Agency for further processing in accordance with this decision and the Order below.
ORDER
To the extent it has not already done so, the Agency shall take the following actions:
1. Within 60 days of the date this decision becomes final, the Agency shall supplement the record with evidence indicating the source of the monies for the Individual Unemployability and Disability Benefits received by Complainant during the relevant timeframe. The Agency shall also place evidence in the record showing whether Complainant paid any monies (such as premiums or other payments) towards the Individual Unemployability and Disability Benefits. The Agency shall also place evidence in the record explaining the purpose of the Individual Unemployability and Disability Benefits. Thereafter, the Agency shall determine and pay Complainant back pay, if any, (with interest, if applicable) and other benefits due Complainant pursuant to 29 C.F.R. � 1614.502.
2. Within 60 days of the date this decision becomes final, the Agency shall expunge from all official Agency records any reference to Complainant's termination.
3. Within 180 days of the date this decision becomes final, the Agency shall provide training to all responsible management officials on the current state of employment discrimination law, with an emphasis on the Rehabilitation Act, and the goals behind the law requiring equal employment opportunities for all.
4. Within 60 days of the date this decision becomes final, the Agency shall consider taking appropriate disciplinary action against the responsible management officials. The Commission does not consider training to be disciplinary action. The Agency shall report its decision on discipline to the Compliance Officer referenced herein. If the Agency decides to take disciplinary action, it shall identify the action taken. If the Agency decides not to take disciplinary action, it shall set forth the reason(s) for its decision not to impose discipline. If any of the responsible management officials have left the Agency's employment, then the Agency shall furnish documentation of their departure date(s).
The Agency is further directed to submit a report of compliance, as provided in the statement entitled "Implementation of the Commission's Decision."
POSTING ORDER (G0610)
The Agency is ordered to post at its Little Rock, Arkansas facility copies of the attached notice. Copies of the notice, after being signed by the Agency's duly authorized representative, shall be posted by the Agency within thirty (30) calendar days of the date this decision becomes final, and shall remain posted for sixty (60) consecutive days, in conspicuous places, including all places where notices to employees are customarily posted. The Agency shall take reasonable steps to ensure that said notices are not altered, defaced, or covered by any other material. The original signed notice is to be submitted to the Compliance Officer at the address cited in the paragraph entitled "Implementation of the Commission's Decision," within ten (10) calendar days of the expiration of the posting period.
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 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), at 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 (T0610)
This decision affirms the Agency's final decision/action in part, but it also requires the Agency to continue its administrative processing of a portion of your complaint. 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 on both that portion of your complaint which the Commission has affirmed and that portion of the complaint which has been remanded for continued administrative processing. 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 your appeal with the Commission, until such time as the Agency issues its final decision on your complaint. 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 (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
12/15/10
__________________
Date
1 The AJ noted the termination was effective July 8, 2005, and the evidence showed Complainant was paid up to July 9, 2005, which was the end of the federal employee pay period.
2 The AJ noted that on September 7, 2007, Complainant was granted 100% service-connected disability. This is also the date Complainant's Individual Unemployability benefits discontinued.
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U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
Office of Federal Operations
P.O. Box 77960
Washington, DC 20013
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