How did the breach of settlement happen?
In this post we learn about a breach of settlement. The Settlement Agreement was breached by Agency, but in reality, none of the specific implementation times or issues were ordered by the administrative judge, nor requested by the complainant and agreed by the agency. This is called “contemporaneous meeting of the minds”. Making the settlement agreement void.
Do you know an attorney who would forget to mention attorney fee’s in a final settlement? Breach of settlement occured.
So even if the complainant wins their claim or is offered a settlement, the complainant must be more vigilant when agreeing with the settlement offer. The complainants attorney also forgot to make sure attorney fee’s were paid by the agency. Instead, none of the above was contained in the settlement agreement offer. Another reason a breach of settlement occurred was because the employee file was not updated to remove any investigations by the agency for any wrongdoing.
Dianne M. Beale, )
Complainant, )
)
v. ) Appeal No. 01984227
) Agency No. FDA 028-96
Donna E. Shalala, )
Secretary, )
Department of Health and Human )
Services, )
Agency. )
)
DECISION
Complainant timely appealed the agency’s decision denying her request that a settlement agreement be enforced. (see 64 Fed. Reg. 37,644, 37,659 (1999) (to be codified and hereinafter cited as 29 C.F.R. §1614.402(a)),
and (see 64 Fed. Reg. 37,644, 37,660 (1999) (to be codified and hereinafter cited as 29 C.F.R. §1614.504(b)), EEOC Order No. 960, as amended.<1>
ISSUE PRESENTED
The issue on appeal is whether the agency breached the settlement agreement.
BACKGROUND
Complainant filed a formal EEO complaint wherein she alleged that she was discriminated against on the bases of her race (black) and sex (female) when she was denied a promotion to the position of Small and Disadvantaged
Business Utilization Specialist, GS-14; she was unofficially detailed to OD, Division of Central Services; and she was accused of releasing classified information to a contractor.
The complaint was accepted for investigation. Subsequent to the investigation, complainant requested
a hearing before an EEOC Administrative Judge.
Settlement Agreement Offered By Agency
By letter dated February 26, 1998, agency counsel forwarded to complainant’s counsel an offer to settle the complaint. The offer provided that complainant would receive a lump sum of $3,000.00; and a letter stating that the Office of Internal Affairs investigation of her was “inconclusive,” provided that the settlement included a provision that complainant would be reassigned to the position of Support Services Supervisor, GS-14, Center for Food Safety and Applied Nutrition Services Branch.
Complainant agrees to settlement offer
Pursuant to a series of conference calls, on March 5, 1998, complainant’s counsel by letter accepted the agency’s offer contained in the letter dated February 26, 1998, and complainant withdrew her request for a hearing. The EEOC Administrative Judge remanded the complaint on March 5, 1998. The agency forwarded a formal settlement agreement to complainant’s counsel but complainant did not sign it.
This agreement stated in relevant part that:
… The parties agree that the terms of the Agreement constitute a full and complete settlement of all claims which Complainant may have against the agency, its officers, agents, or employees which are encompassed by or arise out of the above-referenced complaint, including, but not limited to, claims for back pay, damages, or attorney fees.
Complainant and the Agency agree that Complainant will be reassigned to the position of Support Services Supervisor, GS-14, Center for Food Safety and Applied Nutrition Services Branch.
The Agency hereby agrees to issue a letter to Complainant stating that the Office of Internal Affairs Investigation of [complainant], Case No. 96-OIA-971-053 was inconclusive, has been closed, and will not be reopened.
The Agency hereby agrees to pay Complainant $3,000.00.
Agency fails to implement settlement agreement
By letter dated March 30, 1998, complainant’s counsel submitted to the agency’s Director of the Office of Equal Employment and Civil Rights a claim that the agency had completely failed to implement the settlement agreement. Complainant requested specific implementation of the settlement. According to complainant, the specific acts of noncompliance were that:
1. Complainant does not have a permanent office or a position description for her new position of Support Services Supervisor, Center for Food Safety and Applied Nutrition Services Branch. Complainant stated that
she was informed that both items are still in the planning stages.
2. Complainant has not received the promised letter from the agency to the effect that the Office of Internal Affairs investigation of Case No. 96-OIA-971-053, was inconclusive, has been closed, and will not be reopened.
3. Complainant has not received the lump sum check for $3,000.00.
Complainant was awarded $3,000.00 but Attorney fees were $19,736.05
By letter dated April 3, 1998, complainant’s counsel submitted to the agency a request for attorney’s fees in the sum of $19, 736.05.
Why is complainant entitled to Attorney Fee’s if never agreed?
Counsel stated that the settlement agreement was silent on the issue of attorney’s fees because the parties never reached agreement on the issue. Counsel maintained that since complainant is a prevailing party, she is entitled to an award of reasonable attorney’s fees and costs. In support of the position that complainant is a prevailing party, her counsel noted that she was to receive a monetary award in lieu of back pay and compensatory damages, confirmation that the Office of Internal Affairs’ investigation of her was over, and a beneficial reassignment.
No Time Frame given or requested in settlement agreement
In its final decision dated May 1, 1998, the agency determined that the settlement agreement has not been breached. The agency stated that allegations of noncompliance are frivolous. The agency determined
that complainant’s demand for an implementation period of less than one month is unreasonable. According to the agency, no time frame for implementation of the settlement agreement was specified. With regard
to the issue of attorney’s fees, the agency stated that its counsel made it clear to complainant’s counsel that an award of attorney’s fees would not be part of any settlement agreement. The agency determined that it
never agreed to leave the issue of attorney’s fees silent. The agency stated that it included a specific provision in the formal settlement that would have precluded attorney’s fees but that complainant did not sign the formal agreement.
They forgot to have one last meeting to iron out the settlement agreement specifics.
According to the agency, the parties never had a meeting of the minds with regard to the terms which were
to be contained in the settlement agreement. The agency noted that the Administrative Judge overruled its objection to a settlement which was not incorporated into a finalized agreement.
On appeal, complainant contends that the agency has taken an unreasonable amount of time in complying with the settlement agreement. Complainant argues that the measures to be taken by the agency were within the
agency’s control and therefore they could have been implemented promptly.
Complainant admits she received everything mentioned in settlement agreement
In later submissions, complainant acknowledges that she received the $3,000.00 lump sum, and that she was reassigned with a new position description. However, complainant claims that she should receive interest on the $3,000.00 from the date of the final decision to the date of the agency’s check to her.
With respect to the attorney’s fees issue, complainant contends that she was the prevailing party in the
settlement agreement in light of what she received under the agreement. Complainant argues that the agency’s lack of objection in its final decision to the reasonableness of the time expended by her counsel and the amount of attorney’s fees constitutes a concession on these issues.
The agency gave an expiration date on its settlement offer
Further, complainant maintains that the settlement agreement would not have been achieved without leaving the attorney’s fees issue silent. Complainant states that the EEOC AJ was fully aware that the agreement did not address the attorney’s fees issue. Complainant argues that the agency’s position that she is not entitled to attorney’s fees because there were no provisions for attorney’s fees in the settlement is without merit. According to complainant, the agency’s contention that it never agreed to leave the issue of attorney’s fees silent is belied
by its counsel’s statement in the settlement offer that the offer will remain on the table until Thursday, March 5, 1998 at 6 p.m.
In response, the agency asserts that it implemented the settlement in good faith and in a timely manner. According to the agency, it issued a check for $3,000.00 to complainant on June 18, 1998. The agency asserts that the claim for interest on the $3,000.00 lacks merit since payment was made in a short amount of time and there was no time limit specified in the agreement. With regard to the Office of Internal Affairs’ investigation
of her, the agency maintains that its letter of February 26, 1998, offered to issue complainant a letter stating that the investigation was inconclusive rather than complainant’s position that she was to receive a letter stating that the investigation has reached a final conclusion with no evidence of wrongdoing by her. The agency further asserts that complainant’s reassignment was made in good faith and in a timely manner.
According to the agency, its Division of Employee Relations worked as quickly as it could to develop a substantial position description which would sustain complainant’s GS-14. With regard to attorney’s fees, the agency asserts that as a result of that part of the settlement negotiations in which its counsel was allowed to participate subsequent to February 26, 1998, it believed that the parties had agreed that the $3,000.00 lump sum award was inclusive of attorney’s fees. The agency points out that its counsel was excluded from the final two telephone conversations between complainant’s counsel and the AJ. The agency argues that complainant’s counsel may have misconstrued its offer since complainant did not accept the agency’s offer until the latter two
telephone conversations and no one was allowed to represent the agency at that point. The agency maintains that its letter dated February 26, 1998, was only a preliminary offer which would have to be incorporated
into an agreement. In support of this position, the agency notes that its counsel specifically stated in that letter that the agency’s offer was contingent on a settlement which would include a provision that complainant be reassigned.
Here is where we learn what to do if a settlement agreement is breached by the agency.
ANALYSIS AND FINDINGS
Volume 64 Fed. Reg. 37,644, 37,660 (1999) (to be codified and hereinafter cited as 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. If the complainant believes that the agency has failed to comply with the terms of a settlement agreement or final action, 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. The complainant may request that the terms of the agreement be specifically implemented, or, alternatively, that the complaint be reinstated for further processing from the point processing ceased.
Fed. Reg. 37,644, 37,660 (1999) (to be codified and hereinafter cited as 29 C.F.R. §1614.504(b)) provides that the agency shall resolve the matter and respond to the complainant, in writing. If the agency has not responded to the complainant, in writing, or if the complainant is not satisfied with the agency’s attempt to resolve the matter, the complainant may appeal to the Commission for a determination as to whether the agency has complied with the terms of the settlement agreement or action. 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.
A settlement agreement constitutes a contract between the employee and the agency, to which ordinary rules of contract construction apply.
See Herrington v. Department of Defense, EEOC Request No. 05960032 (December 9, 1996). The Commission has consistently held that settlement agreements are contracts between complainant and the agency, and it
is the intent of the parties as expressed in the contract, not some unexpressed intention, that controls the contract’s construction.
There was no contemporaneous meeting of the minds.
Eggleston v. Department 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 v. United States Postal Service, 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, 381 (5th Cir. 1984).
In the present case, the parties disagree as to whether attorney’s fees were to be a part of the resolution of complainant’s case. The agency contends that attorney’s fees were specifically excluded and were not
severed; complainant’s attorney argues that the issue was severed for later determination. The Commission has previously held that a binding settlement agreement requires a contemporaneous meeting of the minds.
Brown v. Department of Defense (DLA), EEOC Request No. 05940628 (November 3, 1994); Mullen v. Department of the Navy, EEOC Request No. 05890349 (May 18, 1989).
Settlement agreement is void
Based on our review of this matter in its totality, we find that there was no meeting of the minds. Complainant contends that her case would not have been settled if the attorney’s fees issue had not been severed; however, the agency contends that the issue was not severed. Clearly, a major issue remains in dispute and was not addressed through the agreement at issue and, therefore, we find that the settlement agreement is void.
This matter shall be remanded for reinstatement of the complaint from the point at which processing ceased. In order to reinstate the complaint, the parties must be returned to the status quo prior to the void settlement agreement, i.e., all monies and benefits conferred pursuant to the agreement must be returned.
ORDER
The agency is ORDERED to take the following actions:
Notify complainant that her complaint is being reinstated for further processing from the point processing ceased, advising complainant that in conjunction with the reinstatement of her complaint, the parties must be returned to the status quo prior to the settlement at issue. Towards that end, the agency should notify complainant that all monies and benefits conferred pursuant to the agreement at issue must be returned.
Within fifteen (15) calendar days of the date this decision becomes final, the agency shall submit a written request for a hearing to the appropriate EEOC District Office.
A copy of the agency’s notice to complainant and request to the District Office should be provided to the Compliance Officer as referenced below.
IMPLEMENTATION OF THE COMMISSION’S DECISION (K1199)
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 19848, Washington, D.C. 20036. 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 64 Fed. Reg. 37,644, 37,659-60 (1999) (to be codified and hereinafter referred to as 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)(Supp. V 1993). If the complainant files a civil action, the administrative processing of the complaint, including any petition for enforcement, will be terminated. See 64 Fed. Reg. 37,644, 37,659 (1999) (to be codified and hereinafter
referred to as 29 C.F.R. §1614.409).
STATEMENT OF RIGHTS – ON APPEAL RECONSIDERATION (M1199)
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 64 Fed. Reg. 37,644, 37,659 (1999) (to be codified and hereinafter referred to as 29 C.F.R. §1614.405). All requests and arguments must be submitted to the Director, Office of Federal Operations, Equal Employment Opportunity Commission, P.O. Box 19848, Washington, D.C. 20036. 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 64 Fed. Reg. 37,644, 37,661 (1999) (to be codified and hereinafter referred to as 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 (R1199)
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 (Z1199)
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 that the Court appoint an attorney to represent you and that the Court 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 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:
February 11, 2000
____________________________
Date Carlton M. Hadden, Acting Director
Office of Federal Operations
CERTIFICATE OF MAILING
For timeliness purposes, the Commission will presume that this decision was received within five (5) calendar days of mailing. I certify that the decision was mailed to complainant, complainant’s representative
(if applicable), and the agency on:
_______________ __________________________
Date 1 On November 9, 1999, revised regulations governing the EEOC’s federal sector complaint process went into effect. These regulations apply to all Federal sector EEO complaints pending at any stage in the administrative process. Consequently, the Commission will apply the revised regulations found at 64 Fed. Reg. 37,644 (1999), where applicable, in deciding the present appeal. The regulations, as amended, may also be found at the Commission’s website at WWW.EEOC.GOV.
