01974634_r
03-16-1999
Mark A. Haines, Appellant, v. William J. Henderson, Postmaster General, United States Postal Service, Agency.
Mark A. Haines, )
Appellant, )
)
v. ) Appeal No. 01974634
) Agency No. 4C-150-1093-94
William J. Henderson, )
Postmaster General, )
United States Postal Service, )
Agency. )
______________________________)
DECISION
INTRODUCTION
Appellant timely filed an appeal with this Commission from the agency's
failure to respond to his request for implementation of the agency's
February 10, 1997 final decision (FAD) concerning his complaint of
unlawful employment discrimination in violation of Section 501 of the
Rehabilitation Act of 1973, as amended, 29 U.S.C. �791 et seq.
ISSUE PRESENTED
The issue on appeal is whether the agency properly calculated the amount
of backpay, benefits and interest due appellant.
BACKGROUND
The record indicates that on December 7, 1994, appellant filed a formal
complaint, alleging that he was the victim of unlawful employment
discrimination on the basis of physical disability (Carpal Tunnel
Syndrome) when he was terminated from his employment on September
13, 1994. A hearing was conducted before an Administrative Judge
(AJ), who ultimately found in appellant's favor. On February 10,
1997, the agency issued a FAD adopting the AJ's recommended decision
and awarding appellant, inter alia, �back pay calculated in accordance
with 5 C.F.R. Section 550.805, retroactive to the date of [appellant's]
termination at issue.�
On or about November 18, 1997, appellant received a check for $45,717.47
in net back pay, and on or about November 25, 1997, appellant received a
second check in the amount of $7,005.57 in interest on the back pay, for
a total of $52,723.04. On December 22, 1997, appellant filed a Request
for Specific Implementation of the agency's February 10, 1997 FAD.
Therein, appellant contended that the agency erred in its calculation
of back pay due appellant when:
The agency deducted $1,344.72 earned by appellant from weekend reserve
duty. Appellant asserted that 5 C.F.R. �550.805(e) provides only for
deductions from amounts earned from other employment engaged in by the
employee to take the place of employment from which the employee has
been separated by the unjustified or unwarranted personnel action.
As the money earned from appellant's weekend reserve duty was money
that he would have earned regardless of whether he was employed by the
agency, appellant contended that it should not have been deducted from
the back pay due him.
The agency deducted unemployment compensation in the amount of $3,458.00,
in contradiction to the holding of Craig v. Y & Y Snacks, Inc., 721
F.2d 77, 82-85 (3d Cir. 1983), which prohibits such a deduction.
The agency failed to use the correct interest rates authorized by 5
C.F.R. �550.806(d) and 26 U.S.C. �6621(a)(1).
The agency calculated the interest on the back pay after taxes rather
than on the pre-tax back pay.
The agency calculated only simple interest on the back pay due, rather
than interest compounded in accordance with 5 C.F.R. �550.806(e).
In response to appellant's appeal, the agency asserts that appellant's
military reserve wages were not deducted from his back pay, but were
actually deducted from his outside earnings, in effect increasing
appellant's back pay and interest payments. Additionally, the agency
contends that under the applicable state law, repayment of unemployment
compensation is required when an employee later receives back pay for
that period. Finally, the agency argues that it properly calculated the
amount of interest on appellant's back pay in accordance with its standard
procedures and the Memorandum of Understanding with the Postal Unions
of 1990. Specifically, the agency asserted that appellant improperly
used the IRS Overpayment Interest Rate, rather than the Federal Judgement
Interest Rate used by the agency.
ANALYSIS AND FINDINGS
EEOC Regulation 29 C.F.R. �1614.501(b)(ii) provides that back pay is to
be computed in the manner prescribed by 5 C.F.R. �550.805. Office of
Personnel Management Regulation 5 C.F.R. �550.805(e)(1), in turn,
provides for the deduction of any amounts earned by an employee from
other employment undertaken to replace the employment from which the
employee had been separated by the unjustified or unwarranted personnel
action during the period covered by the corrective action, but not
including additional employment the employee may have engaged in both
while federally employed and erroneously separated.
In the instant case, the record discloses that appellant would have
obtained income from his military reserve duty even had he not been
improperly discharged. Accordingly, this income should not have been
deducted from the back pay he was due. The agency asserts that this
income was not deducted from his back pay, but instead was deducted from
the total of his outside employment income for that period, thereby
increasing the net amount of back pay due him. However, the record
contains neither a clear representation of the agency's computation
of appellant's back pay, nor a clear identification of the specific
deductions made therein. Absent this information the Commission is unable
to determine whether appellant's military reserve pay was deducted from
his back pay.
The Commission has determined that certain interim earnings may
be deducted from gross wages. See 29 C.F.R. Part 1613, App. A,
Policy Statement of Remedies and Relief for Individual Cases of
Unlawful Discrimination. However, the Commission has also held that
unemployment compensation may not be deducted from a back pay award.
See Scott v. USPS, EEOC Appeal No. 01921641 (June 11, 1993); Collick-Brown
v. Department of the Navy, EEOC Appeal No. 01910904 (March 26, 1991).
In reaching this conclusion, the Commission relied on the Third
U.S. Circuit Court of Appeals decision in Craig v. Y & Y Snacks, Inc.,
721 F.2d 77 (3d Cir. 1983), which held that although the legislative
history of Title VII did not specifically address whether unemployment
compensation is to be regarded as deductible "interim earnings," guidance
could be found in the National Labor Relations Board (NLRB) practice
of awarding back pay. The Court held that since the NLRB's refusal to
deduct unemployment benefits has been upheld by the United States Supreme
Court, and the Title VII back pay provision was based on the NLRA's back
pay provision, employers in Title VII cases could not deduct unemployment
compensation as an offset from back pay awards. Craig, 721 F.2d at 82-85.
See also Gaworski v. ITT Commercial Financial Corp., 17 F.3d 1104 (8th
Cir. 1994). Based on the foregoing, we find that the agency incorrectly
deducted unemployment compensation from appellant's back pay.
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.
The agency acknowledged that it utilized the Federal Judgement Interest
rate instead of the rate established under Internal Revenue Service
Regulation 26 U.S.C. �6621(a), for the period or periods of time for which
interest was payable. Consequently, we find that the agency was in error.
In contention (4), appellant also claimed that the agency erroneously
calculated interest owed to him on the basis back pay due after taxes.
Appellant asserted that the agency should have calculated interest on
the basis of the pre-tax back pay due him. However, the Commission has
previously held that interest should be computed on all net back pay due.
See Wrigley v. United States Postal Service, EEOC Petition No. 04950005
(February 15, 1996), citing Williams v. United States Postal Service,
EEOC Appeal No. 01933156 (May 4, 1994), request for reconsideration
denied EEOC Request No. 05940680 (February 17, 1995). Accordingly, the
Commission finds that the agency properly determined that the interest
due appellant was to be on the basis of back pay after taxes, rather
than back pay before taxes.
CONCLUSION
Accordingly, the agency's determination concerning contention (4) was
proper, and is AFFIRMED for the reasons set forth herein. The agency's
determination concerning contention (1) is hereby VACATED. The agency's
determination concerning contentions (2), (3), and (5) was improper,
and is hereby REVERSED. This matter is REMANDED to the agency for
further processing in accordance with this decision and the Order below.
ORDER
The agency is ORDERED to take the following actions:
(1) Within fifteen (15) calendar days of the date this decision becomes
final, the agency shall calculate the amount of back pay due appellant
pursuant to 5 C.F.R. �550.805, and using the following guidelines:
Appellant's military reserve pay shall not be deducted from the gross
back pay;
Unemployment compensation shall not be deducted from the gross back pay;
In determining the interest owed appellant, the interest rate identified
in 5 C.F.R. �550.806(d) (and 26 U.S.C. �6621(a)(1)) shall be used,
it shall be compounded daily in accordance with 5 C.F.R. �550.806(e),
and it shall be applied to the back pay due appellant after deductions,
including taxes.
(2) Within thirty (30) calendar days of the date this decision
becomes final, the agency shall pay appellant the difference between
the amount he received on or about November 18 and 25, 1997, and the
amount calculated pursuant to section (1) of this Order, plus interest
on the difference as calculated pursuant to 5 C.F.R. �550.806.
A copy of the agency's calculations and copy of the check issued to
appellant must be sent to the Compliance Officer as referenced below.
IMPLEMENTATION OF THE COMMISSION'S DECISION (K0595)
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 appellant. If the agency does not comply with the Commission's
order, the appellant may petition the Commission for enforcement of
the order. 29 C.F.R. �1614.503(a). The appellant 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. ��1614.408, 1614.409, and 1614.503(g). Alternatively,
the appellant 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. ��1614.408 and 1614.409. 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
appellant files a civil action, the administrative processing of the
complaint, including any petition for enforcement, will be terminated.
See 29 C.F.R. �1614.410.
STATEMENT OF RIGHTS - ON APPEAL
RECONSIDERATION (M0795)
The Commission may, in its discretion, reconsider the decision in this
case if the appellant or the agency submits a written request containing
arguments or evidence which tend to establish that:
1. New and material evidence is available that was not readily available
when the previous decision was issued; or
2. The previous decision involved an erroneous interpretation of law,
regulation or material fact, or misapplication of established policy; or
3. The decision is of such exceptional nature as to have substantial
precedential implications.
Requests to reconsider, with supporting arguments or evidence, MUST
BE FILED WITHIN THIRTY (30) CALENDAR DAYS of the date you receive this
decision, or WITHIN TWENTY (20) CALENDAR DAYS of the date you receive
a timely request to reconsider filed by another party. Any argument in
opposition to the request to reconsider or cross request to reconsider
MUST be submitted to the Commission and to the requesting party
WITHIN TWENTY (20) CALENDAR DAYS of the date you receive the request
to reconsider. See 29 C.F.R. �1614.407. All requests and arguments
must bear proof of postmark and 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 filed on the date it is received
by the Commission.
Failure to file within the time period will result in dismissal of your
request for reconsideration as untimely. If extenuating circumstances
have prevented the timely filing of a request for reconsideration,
a written statement setting forth the circumstances which caused the
delay and 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).
RIGHT TO FILE A CIVIL ACTION (T0993)
This decision affirms the agency's final decision 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 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.
It is the position of the Commission that 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.
You should be aware, however, that courts in some jurisdictions have
interpreted the Civil Rights Act of 1991 in a manner suggesting that
a civil action must be filed WITHIN THIRTY (30) CALENDAR DAYS from the
date that you receive this decision. To ensure that your civil action
is considered timely, you are advised to file it WITHIN THIRTY (30)
CALENDAR DAYS from the date that you receive this decision or to consult
an attorney concerning the applicable time period in the jurisdiction
in which your action would be filed. 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. 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 (Z1092)
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:
March 16, 1999
____________________________
DATE Ronnie Blumenthal, Director
Office of Federal Operations