Simon V.,1 Complainant,v.Megan J. Brennan, Postmaster General, United States Postal Service (Pacific Area), Agency.

Equal Employment Opportunity Commission

Feb 9, 2017

0120141013 (E.E.O.C. Feb. 9, 2017)

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

Simon V.,1
Complainant,

v.

Megan J. Brennan,
Postmaster General,
United States Postal Service
(Pacific Area),
Agency.

Appeal Nos. 0120141013 & 0120142516

Hearing No. 340-2003-03463X

Agency No. 1F-927-0061-02

DECISION

On January 13, 2014, Complainant filed an appeal, pursuant to 29 C.F.R. § 1614.403(a), from
the Agency’s January 10, 2014, final decision 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. The
appeal was docketed as EEOC Appeal No. 0120141013, and raised as an issue the Agency’s
denial of Complainant’s request for supplemental attorney’s fees.

On March 4, 2014, Complainant filed an appeal from the Agency’s February 10, 2014, final
decision regarding denial of additional claims for equitable relief in the form of contributions
to his Thrift Savings Plan (TSP), overtime compensation, and compensation for adverse tax
consequences arising from receipt of a lump-sum payment for a back pay award received as a
result of a finding of discrimination by an EEOC Administrative Judge (AJ). This appeal was
docketed as EEOC Appeal No. 0120142516.

In accordance with 29 C.F.R. § 1614.606, the Commission exercises its discretion and
consolidates the above-referenced appeals for decision. For the following reasons, the
Commission AFFIRMS the Agency’s final decisions.

1 This case has been randomly assigned a pseudonym which will replace Complainant’s name
when the decision is published to non-parties and the Commission’s website.
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BACKGROUND

On October 2, 2002, Complainant filed an EEO complaint in which he alleged that his
supervisor and other management officials had discriminated against him on the basis of
disability by forcing him to undergo a psychiatric fitness-for-duty examination sometime in
October 2001 and placing him in off-duty status on October 29, 2001, where he remained until
2008. While his case was pending before an AJ, Complainant amended his complaint to
include additional acts of discrimination and reprisal, including providing false information
about him that led to his arrest by the police in June 2005.

On August 3, 2007, the AJ issued a decision finding that Complainant had been subjected to
discrimination and retaliation, and on September 30, 2007, the AJ ordered the Agency, among
other relief, to:

1. Award Complainant back pay for the period between 2001 and 2008, less any interim
earnings;

2. Award interest on back pay and provide all other appropriate benefits;

3. Compensate Complainant for the tax consequences of a lump-sum wage payment,
according to proof to be provided by Complainant; and

4. Pay attorney’s fees and costs.

Due to the Agency’s failure to take final action within the regulatory time frame, the AJ’s
decision became its final action on December 10, 2007. Both parties appealed the Agency’s
final action, but the Commission dismissed both appeals for having been untimely filed.2
Complainant then filed requests for reconsideration on both appellate decisions, which the
Commission denied for failure to meet the reconsideration criteria.3 In accordance with the
AJ’s September 30, 2007 order, the Agency awarded Complainant the following relief, in
pertinent part:

1. Net back pay, including overtime, in the amount of $147,565.95;

2. Interest on net back pay award, including interest on overtime, in the amount of
$78,704.78;

2 See EEOC Appeal No. 0120082503 (Apr. 30, 2009), and EEOC Appeal No. 0720080026
(Apr. 30, 2009). We note that the Agency stated in an appeal brief that on March 18, 2008,
over a year before we issued our dismissal decision, it had withdrawn its appeal.

3See EEOC Request Nos. 0520090475 & 0520090476 (Nov. 4, 2009).
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3. Compensation for adverse tax consequences of lump sum payment in the amount of
$20,959.00; and

4. Attorney’s fees and costs in the amount of $97,811.77.

Following the denial of his requests for reconsideration, Complainant continued to challenge
certain aspects of the relief that the Agency awarded: the calculation of his TSP contributions;
the calculation of back pay for overtime; and the calculation of the amount needed to
compensate him for the adverse tax consequences of receiving a lump-sum back pay award.
Complainant also contended that the Agency failed to address a petition for attorney’s fees
dated May 15, 2009, in which Complainant’s counsel requested additional fees and costs in the
amount of $44,808.27. On December 23, 2010, the Agency issued a new final decision in
which it defended its calculations pertaining to these items. Complainant appealed this
decision, and in EEOC Appeal No. 0120111944 (September 13, 2013), we ordered the Agency
to:

1. Explain how it calculated what his TSP contributions would have been during the back
pay period;4

2. Explain why it utilized certain comparative employees and not others and why it
excluded certain pay periods in calculating Complainant’s back pay for overtime;

3. If necessary, compensate Complainant for any additional increased tax liability that
resulted from being awarded lump-sum payments in tax years 2008 and 2009; and

4. Issue a separate final decision on Complainant’s May 15, 2009, petition for additional
attorney’s fees and costs.

In response to our order, the Agency issued the two final decisions that are now before us on
appeal.

In its decision dated January 10, 20145, which became the subject of Appeal No. 0120141013,
the Agency denied Complainant’s request for the additional $44,808.27 in attorney’s fees and
costs in its entirety. The Agency determined that Complainant’s fee petition included entries
that had been denied and dismissed as well as additional entries during the period in question
that had not been listed on Complainant’s initial fee petition of March 2008. As examples, the
Agency identified 37 such entries between September 30, 2007 and March 22, 2008. The
Agency also noted that Complainant’s counsel had requested a fee increase for herself and her
in-house staff based on federal employee salary increase data from the Office of Personnel

4 The back pay period was determined to run from October 27, 2001 through January 21,
2008.

5 The Agency mistakenly identified the date of this decision as January 10, 2013.
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Management, and had done so without providing a rationale. The Agency further pointed out
that Complainant had not obtained any additional relief as a result of his appeals following the
AJ’s September 2007 order.

In its decision dated February 10, 2014, which became the subject of Appeal No. 0120142516,
the Agency acknowledged, with respect to Complainant’s TSP, that it mistakenly failed to
deduct $596 from the back pay award for his TSP contribution. The Agency stated that it
submitted an invoice in that amount to Complainant and that once Complainant paid the
invoice, the error was corrected and the Agency provided its corresponding matching
contribution. As to overtime, the Agency found that the average amount of overtime worked
by comparative employees during the back pay period was approximately 669 hours while
Complainant was awarded approximately 1,115 hours overtime. According to the Agency,
this resulted in Complainant receiving an overpayment for approximately 445 hours in the
amount of $12,660.79. The Agency did not address the issue of compensation for the adverse
tax consequences of receiving a lump-sum back pay award in its decision. In its accompanying
compliance report submitted to the Commission, however, it found that as Complainant was
not entitled to any additional back pay, there was no increased tax liability for which the
Agency would be responsible. Complainant filed appeals from both Agency decisions,
disputing the Agency’s findings.

ANALYSIS AND FINDINGS

Attorney’s Fees

Title VII authorizes attorney’s fee awards to prevailing parties. See 29 C.F.R.
§ 1614.501(e)(2)(ii)(B). A prevailing party for this purpose is one who succeeds on any
significant issue and achieves some of the benefit sought in bringing the action. Mindy O. v.
Dept. of Homeland Security, EEOC Appeal No. 0720150010 (Sept. 2, 2016).

On appeal, Complainant’s Counsel contends, in essence, that Complainant was a prevailing
party for the purposes of the supplemental fee award because Counsel’s opposition to EEOC
Appeal No. 0720080026 resulted in that appeal being dismissed for untimely filing. At best,
this is speculative. It is just as likely that the Commission would have dismissed the appeal of
its own accord, since the appeal was filed three days after the expiration of the filing period.
Moreover, Counsel has not shown that Complainant attained any additional benefits beyond
what he had already received as a result of the AJ’s September 2007 decision finding
discrimination and ordering relief. To the extent that the subsequent claims for fees and costs
in the May 2009 petition concern the issues on which discrimination was found, as they appear
to, the Agency has shown that the work corresponding to those 37 non-contemporaneous
entries and other such entries was already covered by its prior attorney’s fee award of
$97,811.77, resulting from the March 2008 petition. See Truman B. v. Nuclear Regulatory
Commission, EEOC Appeal No. 0120141720 (May 13, 2016). The Commission therefore
finds that the Agency denial of additional attorney's fees and costs in the amount of $44,808.27
was proper.
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Equitable Relief

When discrimination is found, the Agency must provide the victim of discrimination with full,
make-whole relief to restore him as nearly as possible to the position he would have occupied
had it not been for the Agency’s unlawful actions. See Marguerite W. v. Dept. of Labor,
EEOC Appeal No. 0120142727 (Dec. 21, 2016) citing Franks v. Bowman Transportation Co.,
424 U.S. 747, 764 (1976); Albemarle Paper Co. v. Moody, 422 U.S. 405, 418-19 (1975).
The Agency has the burden of establishing compliance with an order for relief. See Id., citing
Davis v. U.S. Postal Service, EEOC Petition No. 04900010 (Nov. 29, 1990) (burden of
limiting the remedy rests with the Agency).

When the Commission refers to “benefits” in the context of equitable relief, it construes this
term broadly to include such items as overtime pay and retirement contributions. Edgardo D.
v. Dept. of Agriculture, EEOC Appeal No. 0120131723 (Jan. 15, 2016). The term also
covers reimbursements for additional tax liability resulting from lump-sum payments for back
pay awards. Israel F. v. Dept. of Homeland Security, EEOC Petition No. 0420120010 (Aug.
3, 2016).

TSP

“Make whole” relief regarding TSP contributions requires the Agency to make retroactive tax-
deferred contributions to Complainant’s TSP account during the back pay period. Gwendolyn
G. v. U.S. Postal Service, EEOC Appeal No. 0120080613 n.10 (Dec. 23, 2013), citing
Munno v. Dept. of Agriculture, EEOC Petition No. 04A10042 (June 18, 2001). The
Commission has also held that, to the extent an employee would have received government
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 receiving earnings which
the account would have accrued during the relevant period. Id. Complainant contends on
appeal that the Agency failed to comply with our order in Appeal No. 0120111944 to explain
how it calculated his TSP contributions during the back pay period, and that the Agency hid its
failure by not disclosing the election and allocation of funds. The Agency responded that
Complainant’s TSP elections and allocations were on file with the Federal Retirement Thrift
Investment Board, and that it was the Board who made the allocations after receiving the funds
from the Agency. In support of its response, the Agency submitted an 800-page printout from
the Board detailing how the contributions received from the lump-sum back pay award were
allocated. We find, based on its submissions, that the Agency fully complied with our
previous order with respect to its calculation of Complainant’s TSP contributions.

Overtime

When a discrimination victim seeks reimbursement for lost overtime, the Agency should
calculate that overtime pay based on the average number of hours assigned or worked by
employees holding the same position. See Emerson S. v. U. S. Postal Service, EEOC Petition
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No. 0420130026 (Nov. 20, 2015). Complainant contends that the Agency used the wrong
comparative employees in determining his entitlement to overtime pay. He maintains that C1
worked approximately 1,225 overtime hours during the back pay period. The Agency’s
calculations showed that it had utilized two comparative employees (C2 and C3) who had
worked under the same supervisor as Complainant and had the exact same tour of duty and off-
days as Complainant. C2 had worked approximately 1,034 hours of overtime during the back
pay period while C3 had worked for 283 overtime hours. The average worked out to
approximately 664 hours of overtime. The inclusion of penalty overtime hours raised this
figure to 669 hours. The Agency ultimately awarded Complainant 1,115 hours of overtime,
which resulted in an overpayment of 446 hours that the Agency allowed him to keep.
Complainant ultimately received a payment of $35,444.55 that was included in his gross back
pay award. Based upon the documentation submitted by the Agency in response to
Complainant’s appeal, we find that the Agency has fully complied with our order in Appeal
No. 0120111944 as it pertains to the calculation of Complainant’s overtime.

Adverse Tax Consequences

In the case of a lump sum back pay award, individuals are entitled to compensation for the
extra tax liability they are required to pay as a result of receiving a lump sum award, as
opposed to the actual amount they would have had to pay if they had received their pay over a
period of time, usually several years. Emiko S. v. Dept. of Transportation, EEOC Appeal No.
0120161130 (Jul. 19, 2016). It is the receipt of the pay in one lump sum that causes the extra
tax liability, not the back pay award itself. Id. Complainant bears the burden to prove the
amount to which he claims entitlement. Id. citing Cottrell v. Dept. of Transportation, EEOC
Petition No. 04A30015 (Oct. 12, 2004). See also e.g. Cecile S. v. U.S. Postal Service, EEOC
Petition No. 0420120013 (Nov. 4, 2015).

The Agency had produced documentation in support of its December 23, 2010 final decision
showing that its Accounting Service Center had determined the adverse tax consequences
associated with the lump-sum back pay awards in tax years 2008 and 2009. Based upon those
determinations, it had calculated Complainant’s extra tax liability to be $20,959. The Agency
issued Complainant a check for that amount on October 1, 2010. Complainant’s conclusory
argument that the Agency’s response is totally inadequate is without merit. Accordingly, we
find that the Agency satisfied its burden to prove that it had provided Complainant with full
relief regarding compensation for the adverse tax consequences of receiving his lump-sum back
pay award.

Therefore, we find that based on the documentation and explanations provided by the Agency
in response to our Order in EEOC Appeal No. 0120111944, the Agency has satisfied its
obligations to provide full make-whole relief to Complainant in accordance with the AJ’s
September 30, 2007 order.

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CONCLUSION

Based on a thorough review of the record and the contentions on appeal, including those not
specifically addressed, we AFFIRM the Agency’s final decisions.

STATEMENT OF RIGHTS - ON APPEAL

RECONSIDERATION (M0416)

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 Chap. 9 § VII.B (Aug. 5, 2015). All requests and arguments
must be submitted to the Director, Office of Federal Operations, Equal Employment
Opportunity Commission. The requests may be submitted via regular mail to P.O. Box 77960,
Washington, DC 20013, or by certified mail to 131 M Street, NE, Washington, DC 20507. In
the absence of a legible postmark, the request to reconsider shall be deemed timely filed if it is
received by mail within five days of the expiration of the applicable filing period. See 29
C.F.R. § 1614.604. The request or opposition must also include proof of service on the other
party.

Failure to file within the time period will result in dismissal of your request for reconsideration
as untimely, unless extenuating circumstances prevented the timely filing of the request. Any
supporting documentation must be submitted with your request for reconsideration. The
Commission will consider requests for reconsideration filed after the deadline only in very
limited circumstances. See 29 C.F.R. § 1614.604(c).

COMPLAINANT’S RIGHT TO FILE A CIVIL ACTION (S0610)

You have the right to file a civil action in an appropriate United States District Court within
ninety (90) calendar days from the date that you receive this decision. If you file a civil
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action, you must name as the defendant in the complaint the person who is the official Agency
head or department head, identifying that person by his or her full name and official title.
Failure to do so may result in the dismissal of your case in court. “Agency” or “department”
means the national organization, and not the local office, facility or department in which you
work. If you file a request to reconsider and also file a civil action, filing a civil action will
terminate the administrative processing of your complaint.

RIGHT TO REQUEST COUNSEL (Z0815)

If you want to file a civil action but cannot pay the fees, costs, or security to do so, you may
request permission from the court to proceed with the civil action without paying these fees or
costs. Similarly, if you cannot afford an attorney to represent you in the civil action, you may
request the court to appoint an attorney for you. You must submit the requests for waiver of
court costs or appointment of an attorney directly to the court, not the Commission. The court
has the sole discretion to grant or deny these types of requests. Such requests do not alter the
time limits for filing a civil action (please read the paragraph titled Complainant’s Right to File
a Civil Action for the specific time limits).

FOR THE COMMISSION:

______________________________ Carlton M. Hadden’s signature
Carlton M. Hadden, Director
Office of Federal Operations

February 9, 2017
Date