By Bob Woods, April 4, 2023
The EEOC’s Office of Federal Operations (OFO) recently published an article discussing the “offer of resolution” (29 C.F.R. 1614.109(c)), which they refer to as an “often overlooked tool for agencies to settle EEO complaints.”
For those of you who are relatively new to practice before the EEOC, you may not realize that this “tool” has been available since 1999, when it replaced the “Offer of Full Relief” settlement option (previously available pursuant to then-29 C.F.R. 1614.107(h)).
The principal difference between these tools is that if an agency “offer of resolution” is rejected and the EEOC subsequently awards a lesser remedy than was offered, the agency is relieved of paying costs and attorney fees incurred after the offer acceptance period, whereas if an agency’s offer of “Full Relief” was rejected by a complainant, the agency could dismiss the complaint.
At that point, the complainant could seek review from the EEOC. If the EEOC agreed that the offer contained all of the remedies to which the complainant would have been entitled if the complainant prevailed on the allegations of discrimination, they would sustain the dismissal. See Henderson v. Navy, EEOC Appeal No. 01984538 (EEOC 1999).
The premise of this remedial provision was that it was unnecessary to adjudicate a complaint if the agency was willing to provide full relief. However, with the advent of compensatory damages, provided for by the Civil Rights Act of 1991, it became increasingly difficult to determine whether the Agency’s offer of compensatory damages would be considered enough to constitute “Full Relief.” As a result, the EEOC eliminated the “Offer of Full Relief” from the list of reasons for dismissal provided in 29 C.F.R. 1614.107 and amended the provisions of 29 C.F.R. 1614.109 to include the provision for “Offers of Resolution.”
Fast forward a quarter of a century. The OFO notes that this tool is underutilized and suggests that its use should be revisited by agencies. This suggestion provides an excellent opportunity to review the topic of settlements in EEO cases, something I’ll be covering in the April 12 virtual training Drafting Enforceable and Legally Sufficient Settlement Agreements.
My colleagues at FELTG asked me the below questions and my answers follow:
What are your thoughts about the use of the Offer of Resolution?
I agree the offer of resolution is probably underutilized, but I recognize it can be difficult to calculate and may involve more than an agency might be willing to offer. These offers, in particular, require a thorough analysis of the evidence and the existing EEOC awards of remedies provided in similar cases. This means the agency must ask the complainant for specific evidence to support their claim for compensatory damages and then use that evidence to try to determine its validity and how it will be assessed by the EEOC.
Offers of resolution should be made anytime the agency makes this thorough assessment and believes they are offering full relief or in situations where they believe they have offered full relief but the complainant and her/his attorney refuse to accept the offer and continue to demand additional compensation. In such cases, the agency has nothing to lose in making the offer or resolution. If the EEOC awards the same or lesser relief, the agency obtains some relief in the form of lower reimbursements for costs and attorney fees incurred after the rejection of the offer of resolution. Alternatively, if the EEOC awards greater relief, the agency is in no worse position with regard to reimbursements for costs and attorney fees than it would have been had it not made the offer of resolution. The OFO article describes the intent of the provision “ … is to encourage agencies to avoid costly EEO administrative litigation and to make complainants consider whether continuing with the EEO process would be in their best interests.”
Can you discuss the confidentiality aspect of settlement discussions?
It’s well settled by EEO law that settlement negotiations are confidential and privileged. In fact, the same holds true in the ADR process as well as in judicial proceedings and before many other adjudicative bodies. This includes settlement proposals made or discussed, as well as statements made during the course of negotiations. The reason for this policy is to enable the parties to speak freely when exploring potential options for resolution without fear of those discussions being used against them in future proceedings/litigation. MD-110, Chapter 2, Section IX(C).
Some Federal supervisors or leaders see settlement as indicating a flaw in a case, or as taking the easy way out. What would you like those people to know about settling Federal sector employment disputes?
While this sentiment is somewhat understandable, it often misses legitimate interests involved in settling a case. Every EEO complaint (starting at the pre-complaint phase) deserves an honest, open-minded assessment of the particular circumstances of the concerns/allegations presented. Supervisors and leaders need to be educated on the process generally and on the pros and cons of settlement of the particular case. It may be there is a “flaw in the case.” It may be there is evidence of discrimination or there may be weaknesses in the evidence supporting the management action, including issues of credibility of witnesses. In fact, if management did do something wrong, whether or not it constitutes discrimination, it needs to be corrected as quickly and as thoroughly as possible. Even in cases that don’t appear to have these “flaws,” there may be very good reasons to resolve the matter via settlement.
As we often teach, the best outcomes occur when resolution is freely arrived at by all parties. There are no guarantees in litigation. Early resolution often results in a more amicable return to the working relationship and returns the parties to where they can focus on mission/career. It also enables them to get an unpleasant experience over with before the case can swallow their lives. Settlements do not require any admission of fault. Additionally, the earlier the resolution, the lower the direct and indirect costs.
Are there certain types of cases you would recommend not settling. If so, why?
In my opinion, settlement should be seriously considered/explored in most (maybe even all) cases. Once the circumstances and evidence have been thoroughly reviewed, the main question will be what, if any, resolution terms short of litigation might satisfy the interests of both parties. Typically, agencies try to support the prerogatives of supervisors and will first explore alternatives that provide that support. Assuming a thorough review, I would not recommend settling any case where the evidence supports the agency position and the complainant refuses to compromise on their demands for relief that are disproportionate to the bounds of that analysis. Likewise, I would oppose settling on terms that exceed that to which the complainant would be entitled if they prevailed on the allegations of discrimination.
Instead of trying to capture the types of cases for which I would not recommend settlement, I’d prefer to identify some terms that I would argue are inappropriate. For example, there are times when a supervisor just wants to be rid of a “bad employee” and is willing to agree to terms that would make this employee someone else’s problem (e.g., a reassignment or accepting a “clean paper” resignation). If this is truly a “bad employee,” it is the supervisor’s responsibility to hold them accountable and not let them move on. To accept such terms would be a disservice to both the gaining supervisor/activity/agency and to the taxpayer. It also allows the “bad employee” to continue their misconduct or unacceptable performance in the new environment. Likewise, a settlement agreement should not be used to shield a bad management official. If the evidence suggests wrongdoing on the part of management, corrective action is appropriate. Failure to hold management accountable, like failure to hold the “bad employee” accountable, sends a bad message to the workforce, violates the agency’s legal obligations, and enables the manager to continue to engage in similar conduct.