Petitioner,v.Ray Mabus, Secretary, Department of the Navy, Agency.

Equal Employment Opportunity Commission

Jun 5, 2013

0420120012 (E.E.O.C. Jun. 5, 2013)

U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
Office of Federal Operations
P.O. Box 77960
Washington, DC 20013

Petitioner,

v.

Ray Mabus,
Secretary,
Department of the Navy,
Agency.

Petition No. 0420120012

Appeal Nos. 07A10037 & 01A11318

Agency No. 9160259006

DECISION ON SECOND PETITION FOR ENFORCEMENT

On June 20, 2012, the Equal Employment Opportunity Commission (EEOC or Commission)
docketed a petition for enforcement to examine the enforcement of an Order set forth in
v. Department of the Navy, Appeal Nos. 07A10037 & 01A11318 (Sept. 26, 2002).
The Commission accepts this petition for enforcement pursuant to 29 C.F.R. § 1614.503.
Petitioner alleged that the Agency failed to fully comply with the Commission’s order with
respect to back pay.

BACKGROUND

Petitioner worked as an Equipment Specialist, GS-09, at the Agency’s Naval Station in
Miramar, California. Petitioner filed a complaint in which he alleged, in relevant part, that the
Agency discriminated against him in reprisal for his prior EEO activity when in July 1989, he
was denied promotion to the position of Inventory Manager.1

1 Law enforcement officer pay had been authorized for the GS-12 Inventory Manager position.
Petitioner appealed the Agency’s
final order to the Commission. The Commission reversed, concluding that the Agency had
retaliated against Petitioner, and remanded the matter to the Agency to take remedial action.
The Commission’s Order also specified, in relevant part, that the Agency had to retroactively
promote Petitioner to the position of GS-12 Inventory Manager, effective approximately July
1989, and determine the appropriate amount of back pay (with interest, if applicable) and other
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benefits due Petitioner pursuant to 29 C.F.R. § 1614.501. See v. Department
of the Navy, Appeal Nos. 07A10037 & 01A11318 (Sept. 26, 2002).

The matter was assigned to a Compliance Officer and docketed as Compliance No. 06A30046
on September 26, 2002. Petitioner agreed to a voluntary separation from the Agency in 1997.
After the Commission’s 2002 finding of unlawful retaliation, Petitioner engaged in a period of
negotiations over the terms of a potential reinstatement but ultimately decided not to accept the
Agency’s offer. Rather, Petitioner’s effective retirement date was revised to September 3,
2003.

On June 7, 2004, Petitioner submitted a petition for enforcement which the Commission
granted on January 24, 2005. Specifically, we concluded that the back pay should be
calculated retroactively to September 10, 1989. We also determined that: (1) “law
enforcement officer pay” was not included in the back pay award; (2) the Agency failed to
sufficiently explain its life insurance deductions; and (3) the Agency generally failed to explain
its back pay calculations. EEOC Petition No. 0420040043 (Jan. 24, 2005). The matter was
assigned to a Compliance Officer and docketed as Compliance No. 0620050427 on January 25,
2005.

In this second petition, Petitioner contends that the Agency: (1) improperly deducted life
insurance premiums from the back pay amount; (2) failed to provide the Office of Retirement
Program with the proper amount of accrued sick leave including the years 1997 through 2003
and as a result Petitioner’s annuity payments are incorrect; (3) improperly subtracted
retirement deductions by 1% more than what is required; (4) failed to transfer any portion of
his back pay to his Thrift Savings Account; (5) improperly deducted from his back pay amount
the Voluntary Separation Incentive pay (VSIP) of $25,000 that Petitioner had previously
received; (6) failed to pay Petitioner 207 hours of annual leave that had accrued between
September 30, 1997, and his retirement date (i.e., September 3, 2003); (7) improperly
deducted $6,495.00 for interim earnings; (8) used the incorrect date (i.e., September 23, 1989)
as the back pay commencement date rather than the date ordered by the EEOC (i.e.,
September 10, 1989); (9) currently deducts an incorrect amount from Petitioner’s annuity
payments for an overpayment that the Agency claims has been paid to Petitioner; (10)
improperly deducted previously issued retirement annuity payments in the amount of
$194,054.79 from Petitioner’s back pay award when it should have been $144,600.47; and
(11) directly violated the Commission’s previous order and has not provided any documents in
support of its back pay calculations.

On December 20, 2007, the agency submitted its "Final Compliance Report" which asserts that
it has fully complied with the Commission’s Order.

ANALYSIS AND FINDINGS

The Agency is required to make Petitioner “whole” by restoring him to a position in which he
would have been were it not for its acts of unlawful discrimination. Franks v. Bowman
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Transp. Co., 424 U.S. 747, 764 (1976); Albemarle Paper Co. v. Moody, 422 U.S. U.S. 405,
418 (1975). It must therefore, provide a remedy unless it can show, by clear and convincing
evidence, that petitioner would not have been entitled to that remedy even absent
discrimination. Davis v. Dep’t of Justice, EEOC Request No. 05931205 (September 1, 1994);
Day v. Matthews, 530 F.2d 1083, 1085 (D.C. Cir. 1976); 29 C.F.R. § 1614.501(c)(2).

Back Pay Calculations

In our previous decision, we ordered the Agency to award Petitioner back pay, interest, and all
other benefits he would have received absent discrimination from September 10, 1989 until
September 3, 2003 (hereinafter “Back Pay Period”). In accordance with Commission
precedent, the appropriate method of determining the promotions, awards, and overtime that
Petitioner would have likely received, absent discrimination, is to examine the pay of similarly
situated employees during the relevant period. See Sanders v. U.S. Postal Serv., EEOC No.
04990018 (April 23, 2001), citing Sanchez v. U.S. Postal Serv., EEOC Appeal No. 01975022
(Oct. 28, 1999); Hanns v. U.S. Postal Serv., EEOC Petition No. 04960030 (Sept. 18, 1997);
Allen v. Dep’t of the Air Force, EEOC Petition No. 04940006 (May 31, 1996).

Back Pay Period

The record contains Notification of Personnel Action (NPA) forms showing that Petitioner
received a promotion to “Industry Manager” and a change in his retirement coverage effective
on September 10, 1989. In addition, the record contains NPA forms showing the appropriate
step and cost-of-living (COLA) increases throughout the back pay period. However, the
record also contains an explanation by the Agency of its computer generated computation of
the back pay award which indicates that it used September 23, 1989, as the back pay
commencement date rather than September 10, 1989 (i.e., 10 days later than what was ordered
previously by the Commission). In addition, the record shows that Petitioner’s final retirement
became effective on September 3, 2003. However, according to the Agency’s explanation of
its computer generated computation of back pay, it used July 26, 2003, as Petitioner’s
retirement date (i.e., approximately six weeks earlier than Petitioner’s effective date).
Accordingly, we conclude that the Agency failed to fully comply with our previous order when
it used a shorter (by approximately seven weeks) back pay period than what was ordered by
the Commission.

Leave Accrual

Petitioner asserts that the Agency failed to restore the proper amount of sick leave hours which
resulted in a shorter federal service time used to calculate his retirement annuity payments.
Specifically, Petitioner states that when he initially retired on September 30, 1997, he had
accrued 1,891 hours of sick leave. However, only 1,770 accrued sick leave hours were used
to calculate his September 30, 1997 annuity because in 1997 only years and full months were
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counted in the annuity computation.2

Petitioner asserts that even after his retirement date
changed to September 3, 2003, the same 1,770 accrued sick leave hours were used to again
calculate his annuity. Petitioner asserts that he would have earned an additional 616 hours of
sick leave from September 30, 1997 to September 3, 2003 (i.e., his new retirement date).
Accordingly, he argues that the Agency must restore this leave balance so that it can be utilized
for purposes of calculating the proper annuity payments. The Agency does not address this
issue.
Petitioner also asserts that the Agency failed to calculate the correct amount of annual leave in
its back pay calculations. Specifically, Petitioner asserts that the Agency failed to include the
annual leave accrued between September 30, 1997 (i.e., his first retirement date) and
September 3, 2003 (i.e., his new retirement date).

The restoration of leave is equivalent to an award of lost benefits which would have been
earned, retained or accrued absent discrimination. See Marr v. Dep’t of the Air Force, EEOC
Request No. 01941344 (June 27, 1996); Walker v. Ford Motor Co., 684 F.2d 1355 (Sept. 7,
1982). Petitioner is entitled to payment for the accrual of annual leave, with interest. The
record contains the breakdown of the back pay computation which indicates a payment of
$38,702.56 for annual leave during the period September 23, 1989 to July 26, 2003.
However, the record is devoid of supporting documentary evidence to show the accrual of
annual leave, including a computer generated computation explaining how the sum of
$38,702.56 was calculated. Also, as indicated previously, the Agency’s back pay period was
incorrect by approximately 7 weeks. Accordingly, we find that the Agency failed to comply
with this portion of the back pay award.

The record is devoid of any documentation with respect to sick leave during the back pay
period. While the Petitioner is not entitled to payment for unused sick leave, he is entitled to
having his sick leave restored for the purposes of annuity calculations. Accordingly, we find
that the Agency failed to comply with our previous Order when it failed to restore all sick
leave hours during the back pay period.

Deductions

Retirement Deductions

The Commission has held that make whole relief requires the agency to make retroactive tax-
deferred contributions to the Petitioner's retirement account for the relevant period. Ballentine
v. TVA, EEOC Appeal No. 01976157 (Aug. 22, 2001); Fiene v. U.S. Postal Serv., EEOC
Petition No. 04920009 (Sept. 3, 1992). Thus, to the extent Petitioner would have received
agency contributions to a retirement fund as a component of his salary he is entitled to have his
retirement benefits adjusted as part of his back pay award, including sums which the account
would have earned during the relevant period.

2 174 hours equal one month of service credit.
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Retirement Annuity Deductions

Petitioner asserts that the Agency’s retirement annuity deductions from the back pay award
were incorrect. Specifically, Petitioner asserts that the retirement annuity deduction from his
back pay calculation amounted to seven percent (7%) of his gross salary but should have been
six percent (6%) due to a law enforcement exception. We find the record devoid of evidence
to support the current retirement deduction. Accordingly, we find that the Agency failed to
comply with our previous Order.

Petitioner also asserts that there is a discrepancy between the amount of annuity payments that
Petitioner received after his initial retirement in 1997 and hence the amount deducted from
Petitioner’s back pay award. Specifically, the record indicates that Agency deducted
$194,054.79 from the gross back pay award as annuity payments that Petitioner received after
his first retirement. However, the record contains a letter from the United States Office of
Personnel Management (OPM) dated February 7, 2006, advising that Petitioner had received
$144,600.47 in annuity payments after his first retirement. There is no explanation in the
record for the Agency’s deduction of $194,054.79. Since the preponderance of the evidence in
the record indicates that Petitioner received $144,600.47 in annuity payments during the back
pay period, we conclude that the proper amount that should have been deduced is $144,600.47.
Accordingly, we find that the Agency improperly deducted $49,454.32 and failed to comply
with our previous Order.

Thrift Savings Plan Deductions

Petitioner asserts that the Agency failed to transfer the correct amount from his gross back pay
to his Thrift Savings Plan (TSP) account. On August 4, 2003, Petitioner sent a letter to the
Agency requesting that the maximum amount allowed of his gross salary be transferred to his
TSP account.3 The record indicates that the Agency deducted $31,735.60 from Petitioner’s
back pay award as a TSP contribution deduction. However, the Agency failed to present
documentary evidence to explain its calculations and also failed to present documentary
evidence to show that the amount deducted was in fact transferred to Petitioner’s TSP account.4

Accordingly, we find that the Agency has failed to comply without our previous Order.
Interim Earning Deductions

Petitioner asserts that there is no basis for the Agency to deduct $6,495.00 in interim earnings.
We agree with Petitioner and note that the record is devoid of evidence to support the

3 Petitioner also asserts that prior to his first retirement he had always transferred the
maximum amount allowed to his TSP account.
4 The Agency is required to ensure that Petitioner receives not only the principle amount of
TSP savings during the back pay period but also the likely increase in the value of such
investments.
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conclusion that an interim earning deduction is appropriate.5

Accordingly, such deduction
should be removed from the back pay calculations.
VSIP Deduction

The Agency also deducted $25,000 from Petitioner’s gross back pay award. The record shows
that Petitioner received the $25,000 VSIP payment in 1997 when he voluntarily retired from
the Agency. Petitioner asserts that since the VSIP contract was not violated he is entitled to
keep the $25,000 payment. We disagree with Petitioner’s reasoning. The purpose of a back
pay award is to restore to Petitioner the income he would have otherwise earned but for the
discrimination. See Albemarle Paper Co. v. Moody, 442 U.S. 418-19 (1975). The Agency is
permitted to make certain deductions from a back pay award to ensure that the employee does
not receive more in total benefits than he would have received in the absence of the
discriminatory personnel action. Petitioner’s back pay award should include pay that he did
not receive because of the unlawful retaliation. This includes the five-year period after
Petitioner received the VSIP payment. Accordingly, Petitioner’s $25,000 VSIP payment is a
form of interim earnings which the Agency is entitled to deduct from the gross back pay
award.

Life Insurance Deduction

Petitioner asserts that the Agency improperly deducted $2,809.53 for retroactive life insurance
premiums under the Federal Employees’ Group Life Insurance (FEGLI) program. The
Agency asserts that the amount of life insurance payments were assessed in accordance with
the coverage Petitioner elected at the time. Petitioner disputes the Agency’s assertion and
states that he changed his FEGLI coverage effective July 20, 1996 to “basic only” coverage
from “five times annual” coverage. In addition, Petitioner asserts that effective September 30,
1997, he “waived” all life insurance coverage and has not changed his FEGLI status since.

The record supports Petitioner’s assertion with respect to the 1996 and 1997 changes in his
FEGLI coverage. Specifically, the record contains an NPA form showing that the 1996
change took place. With respect to the 1997 waiver of coverage, the record contains a FEGLI
“Life Insurance Election” form dated September 30, 1997, and is signed by Petitioner.
Moreover, the form is “certified” with the signature of an “Authorized Agency Official” “L.
Sullivan OPM” dated October 1, 1997. However, contrary to the clear intent of the Life
Insurance Election form in the record, all NPAs after July 20, 1996, indicate the election of
“basic life” coverage. Although the Agency failed to breakdown its computation pertaining to
the FEGLI deductions, it appears as though the Agency deducted life insurance premiums at
the “basic life” coverage beyond September 30, 1997, for the remainder of the back pay
period. Given the evidence in the record, we find that Petitioner waived his FEGLI coverage

5 Uncertainties involved in a back pay determination should be resolved against the
discriminating employer. See Allen v. Dep’t of the Air Force, EEOC Petition No. 04940006
(May 31, 1996), citing Hairston v. McLean Trucking Co., 520 F.2d 226 (4th Cir. 1975).
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as of September 30, 1997. Accordingly, any deduction that the Agency computed from the
gross back pay for life insurance premiums on or after September 30, 1997, was improper and
should be reimbursed to Petitioner.

Interest

Petitioner asserts that the Agency submitted no records or an accounting to prove that the
correct interest was applied. We find that until the Agency has fully complied with the core
back pay award, it will be unable to correctly calculate the appropriate interest. Accordingly,
the Agency must recalculate its interest award following its full compliance with the order
below.

Repayment of Agency’s Overpayment

The undisputed record shows that the Agency previously advised Petitioner that he owed the
Agency $194,054.79 for an overpayment error it made. As a result, the Agency began
collecting monthly repayments from Petitioner’s annuity payments in the amount of $381.04.
However, the Agency revised the amount of the overpayment error from $194,054.79 to
$58,076.32. Petitioner believes that since the amount of alleged indebtedness has been
substantially reduced, the amount of his monthly repayments should be substantially reduced as
well.

We find that since the Agency failed to comply with a substantial amount of issues pertaining
to Petitioner’s back pay award, including an under-payment of $49,454.32 pertaining to the
incorrect retirement annuity deduction and the incorrect dates used to calculate back pay by
approximately seven weeks, the likelihood that Petitioner received an erroneous overpayment
from the Agency is minimal. Given the fact that it is unlikely that the Agency overpaid
Petitioner, the monthly deductions of $381.04 are inappropriate. Accordingly, we Order the
Agency to suspend any future deductions of any alleged overpayment until the issue of
Petitioner’s back pay award has been resolved.

Failure to Provide Supporting Documentation

We agree with Petitioner that the Agency failed to produce a substantial amount of supporting
documentation and accordingly, for reasons set forth above, conclude that it failed to comply
with our previous Order.

CONCLUSION

Based upon a review of the record, and for the foregoing reasons, the Commission GRANTS,
in part, the Petitioner’s second petition for enforcement of the order in v. Dep’t of the
Navy, EEOC Petition No. 04A40043 (Jan. 24, 2005). The Agency shall take the actions set
forth below.

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ORDER

1. Within thirty (30) days of receipt of this decision, the Agency shall award Petitioner back
pay, interest6, and all other benefits he would have received, absent discrimination, during the
Back Pay Period. The Agency shall provide documentary and/or testimonial evidence to
support compliance with this Order. Petitioner shall cooperate in the Agency's efforts to
compute the amount of back pay and benefits due, and shall provide all relevant information
requested by the Agency.7

If there is a dispute regarding the exact amount of back pay and/or
other benefits, the Agency shall issue a check to Petitioner for the undisputed amount it
believes to be due. In the course of computing outstanding back pay, the Agency shall:
a. Back Pay Period: The Agency shall calculate back pay from September 10,
1989 until September 3, 2003.

b. Restoration of TSP Retirement Account: The Agency shall recalculate
Petitioner’s TSP Account using the maximum amount of his gross salary
during the back pay period.8

The Agency shall provide a detailed
itemization regarding the deductions during each pay period. The Agency
shall also provide a detailed itemization as to the transfers made to the TSP
account during each pay period. The Agency shall produce documentary
and/or testimonial evidence establishing interest and the likely capital gains
increases on Petitioner’s TSP savings during the Back Pay Period as well.
c. Restoration of Leave: The Agency shall award Petitioner all annual leave
that he would have received during the Back Pay Period. The Agency shall
restore all sick leave that would have accrued during the back pay period
and provide OPM with proof that such sick leave has been restored so that
Petitioner’s annuity can be revised. The Agency shall provide a detailed
itemization of the sick and annual leave accrued during each pay period.

d. Revised Deductions Pertaining to Retirement Annuity: The Agency is
authorized to deduct a maximum of $144,600.47 for retirement annuity
payments previously received by Petitioner’s after his first retirement. In

6 Office of Personnel Management Regulation 5.C.F.R. §550.806(d) provides that the rate or
rates used to compute the interest payment on a back pay award shall be the annual percentage
rate or rates established by the Secretary of the Treasury as the overpayment rate under
Internal Revenue Service Regulation 26 U.S.C. §6621(a), for the period or periods of time for
which interest is payable. Further, 5 C.F.R. §550.806(e) provides that the interest rate shall be
compounded daily.
7 The agency shall compute the back pay award in the manner prescribed by 5 C.F.R.
§550.805.
8 If the Agency disputes Petitioner’s assertion that he is entitled to the maximum TSP deduction
allowed it must present documentary and/or testimonial evidence in support of its position.
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addition, the Agency shall recalculate a 6% deduction from Petitioner’s
gross back pay as his annuity contribution for the back pay period. The
Agency shall recalculate the back pay award and provide a detailed
itemization during each pay period showing the appropriate annuity
deductions. Such recalculation must be supported with documentary
evidence.9

e. Interim Earning Deductions: The Agency shall not deduct any interim
earnings from Petitioner’s back pay award, EXCEPT the $25,000 VSIP
payment.

f. FEGLI Coverage Deductions: The Agency shall change the record to reflect
that on October 1, 1997, Petitioner waived his life insurance coverage.
Accordingly, the Agency shall not deduct from the back pay award any
FEGLI coverage as of October 1, 1997. The Agency shall recalculate the
back pay award and provide a detailed itemization during each pay period
showing the appropriate FEGLI deductions.

g. Revised Summary of Back Pay: Following the computation of all
outstanding back pay issues, the Agency shall compile an updated summary
of Petitioner’s back pay award including a breakdown of each portion of the
back pay (e.g., base salary, leave, and interest). The Agency shall also
provide a detailed breakdown of the back pay deductions (e.g., federal
taxes, social security insurance, TSP, and retirement annuity). In addition,
the Revised Summary of Back Pay shall include a history of payments
previously made to Petitioner and the remaining balance due/paid. The
Agency shall provide documentary evidence in support of all payments made
to Petitioner since the year 2002.

2. The Agency shall pay Petitioner reasonable costs associated with his efforts to obtain the
Agency’s compliance with the Order in v. Department of the Navy, Appeal
Nos. 07A10037 & 01A11318 (Sept. 26, 2002), including the present petition for
enforcement.10

3. The Agency shall pay Petitioner interest on the total unpaid balance beginning from
November 25, 2002 (i.e., 60 days after the Agency received a copy of the Commission's

9 If the Agency disputes Petitioner’s assertion that he was not required to contribute more than
6%, it must show that the comparison employee (i.e., the individual who was hired in
Petitioner’s place) was required to contribute more than 6%.
10 In order to be entitled to reimbursement of costs, the Petitioner must submit documentary
evidence in support of said costs to the Agency and EEOC Compliance Officer.

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decision in Appeal Nos. 07A10037 & 01A11318), until such time as the Agency fully complies
with our order.

4. The Agency shall suspend the repayment of the Agency’s alleged erroneous overpayment
to Petitioner until all back pay issues have been resolved. If it is determined that the
overpayment was incorrect, any amount of erroneous repayment received by the Agency must
be returned to Petitioner at the same time the back pay award is resolved.

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 Petitioner. If the Agency does not comply with the
Commission’s order, the Petitioner may petition the Commission for enforcement of the order.
29 C.F.R. § 1614.503(a). The Petitioner 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 Petitioner 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 Petitioner 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 PETITIONER’S RIGHTS – ON PETITION FOR ENFORCEMENT
PETITIONER’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

(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
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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

June 5, 2013
Date