Tuesday, July 22, 2014

KCNF comments to the EEOC on MD-110

EEO complaints filed by federal employees are governed by the EEOC’s regulations found at 29 C.F.R. Part 1614. The EEOC has also issued instructions for federal agencies to use in processing complaints. These instructions are contained in EEOC Management Directive 110 (MD-110). While the EEOC has not significantly revised MD-110 in more than 15 years, it has recently issued a new version to agencies and the public for comment. Kalijarvi, Chuzi, Newman & Fitch, P.C. was among the first law firms in Washington, D.C. to represent federal employees with discrimination complaints, and we have continued to serve that function for almost 40 years. Because of our experience, we provided comments to the EEOC, and we are presenting here the issues we believe are the most significant.

Chapter 3: ADR and Settlements
The draft revision to MD-110 recognizes the importance of enforcing settlement agreements. Unfortunately, EEOC has limited the remedies available to complainants when an agency breaches an agreement. The Commission currently holds that a complainant may seek specific enforcement of a settlement agreement, or reinstatement of the original discrimination complaint, but not both. The Commission does not impose on agencies any liability for damages resulting when they breach an agreement. The cause of Civil Rights will benefit from changing this policy to permit complainants to recover all damages resulting from a breach, including additional compensatory damages.

We believe that if agencies include in settlement agreements “non-disclosure” provisions, which limit the complainants’ ability to discuss the facts and claims that are being settled, the EEOC should require agencies to include in those agreements certain statements set forth in the Whistleblower Protection Enhancement Act (WPEA). As codified at 5 U.S.C. § 2302(b)(13), the WPEA requires that every non-disclosure agreement state that:

These provisions are consistent with and do not supersede, conflict with, or otherwise alter the employee obligations, rights, or liabilities created by existing statute or Executive order relating to (1) classified information, (2) communications to Congress, (3) the reporting to an Inspector General of a violation of any law, rule, or regulation, or mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety, or (4) any other whistleblower protection. The definitions, requirements, obligations, rights, sanctions, and liabilities created by controlling Executive orders and statutory provisions are incorporated into this agreement and are controlling.

Agencies cannot pressure or discourage employees from making disclosures that are protected by law. The public has a right to know about settlements that touch on the public interest. In settling federal court matters with federal agencies, the Department of Justice has adopted a regulation setting out a general policy against confidentiality clauses. 28 C.F.R. § 50.23. The policy reflects the government's obligation to account to its taxpayers for how their funds are spent. The regulation permits some exceptions, such as in matters involving national security, and in protecting personal information protected by the Privacy Act. However, this policy will not apply in administrative matters involving other federal agencies.

Finally, the revised draft makes the important point that agency representatives must have the authority and responsibility to negotiate in good faith. Agency decisions to designate a representative who does not have adequate authority creates a significant impediment to successful ADR practice. The Commission needs to adopt and enforce this revision.

Chapter 4: Mixed Cases

Chapter 4 governs the processing of mixed cases. While this is a complex topic, the new MD-110 adds to the complexity and makes the subject matter difficult to understand, even for seasoned practitioners.

Section II.B.1 and 2 – Section II.B.1 governs Standing, i.e., who is permitted to file an appeal, while II.B.2 governs the actions that may be appealed. Paragraph 1 notes that probationers “generally” do not have the right to appeal, but also notes there are exceptions. Paragraph 1 is flawed to the extent it does not reference probationers who have a statutory right to appeal to the Board if they claim reprisal for whistleblowing. A probationer is entitled to file an EEO complaint alleging discrimination, and a probationer who has filed a complaint with the Special Counsel alleging whistleblowing reprisal is entitled to file an appeal to the MSPB if the matter has not been resolved by the Special Counsel. 5 U.S.C. § 1221. OFO has previously held that an appeal to the Board from the Special Counsel which includes an allegation of discrimination is not a mixed case. Because an appeal to the MSPB from the Special Counsel which includes an allegation of discrimination satisfies the criteria of 5 U.S.C. § 7702 (“any employee or applicant for employment who has been affected by an action which the employee or applicant may appeal to the Merit Systems Protection Board, and alleges that a basis for the action was discrimination”), MD-110 should address whether employees claiming whistleblowing reprisal and discrimination can pursue a mixed case, or whether they are obligated to file two separate actions.

Chapter 6: Formal Investigations

Section XII invites an Administrative Judge to “exercise his/her discretion to issue sanctions.” When an AJ chooses to not enter sanctions, and fails to give any reason for not entering sanctions, the value of the whole investigative program breaks down. An agency can do no investigation at all and get away with it if the case is assigned to a judge who will not impose sanctions. We believe that the Commission should require an Administrative Judge to impose sanctions unless the Administrative Judge has made specific findings explaining why the sanctions would be unjust and not further the remedial purposes of Title VII.

Chapter 7: The Hearing

We believe that the summary judgment process as used by agencies during the EEOC hearing process imposes additional delays on complainants. Section 7.III.E (Summary Judgment), Paragraph 7.III.E.2 (summary judgment on Administrative Judge’s determination) of the proposed revisions to MD-110 provides as follows:
If the Administrative Judge determines that some or all of the material facts are not in genuine dispute, s/he may, after giving notice to the parties and providing them an opportunity to respond within 15 days of receipt of the notice, issue an order limiting the scope of the hearing or issue a summary judgment decision without conducting a hearing.

This paragraph should require the Administrative Judge to specify in the Notice why he or she believes that the complaint may be ripe for summary judgment, and which issues may not require a hearing. This will allow the parties to focus their efforts on those issues, which will lead to greater efficiency in the briefing.

In addition, Section 7.III.E imposes no burden on the party moving for summary judgment to a) identify the material facts it believes are not in dispute; or b) articulate why, in light of the undisputed facts, it is entitled to judgment as a matter of law (see F.R.Civ.P. 56(c)). Section 7.III.E.4 provides that

For example, when a complainant is unable to set forth facts necessary to establish one essential element of a prima facie case, a dispute over facts necessary to prove another element of the case would not be material to the outcome.

 and also

Moreover, a mere recitation that there is a factual dispute is insufficient. The party opposing summary judgment must identify the disputed facts in the record with specific ity or demonstrate that there is a dispute by producing affidavits or records that tend to disprove the facts asserted by the moving party. In addition, the non-moving party must explain how the facts in dispute are material under the legal principles applicable to the case.

It is fundamental that, before the non-moving party bears any burden regarding the availability of summary judgment, the moving party must demonstrate why it is entitled to judgment. More bluntly, before “the party opposing summary judgment must identify the disputed facts” the moving party must first identify the supposedly undisputed facts. As Section 7.III.E currently reads, the Commission has not imposed any burden on the moving party.


We believe that adoption of the above proposals would significantly enhance the EEO complaint process for federal employees, and make it more fair and equitable for both parties. EEOC received 51 comments about its proposed revisions to MD-110, and we can expect that it will take some time for the Commission’s staff to review them.

However, adopting our recommendations for the MD-110 will not be enough. Congress also needs to adequately fund EEOC’s federal sector program. Waiting 8 or 12 months, or longer, for assignment to an administrative judge is too long. Through the NO-FEAR Act, Congress found that federal managers do not have enough accountability for engaging in unlawful discrimination and retaliation. The long delays in the EEO process further diminish that accountability. Congress must increase funding to the EEOC’s federal sector program so that cases will be decided more quickly.

KCNF’s comments to the EEOC are available here:

By George Chuzi and Richard Renner

Wednesday, July 16, 2014

Nothing is certain but death and taxes: How can you avoid a pyrrhic victory?

    Albert Brown began working for the Mississippi Department of Health on January 1, 1997.  He performed well, and progressed steadily through the ranks until he applied for the position of Chief Systems Information Officer.  Despite his qualifications, Brown was not selected.  On February 16, 2011, he sued MDH for race discrimination and retaliation in the Circuit Court of Hinds County, Mississippi.  On June 14, 2012, he won - a unanimous jury found that the MDH retaliated against him.  To make him whole, the Court awarded him four years of future wages.  
    Perversely, this lump sum award pushed Brown into a higher tax bracket, which cost him an additional $35,620.00 in taxes.  Brown moved the Court for relief, but the Court refused to compensate him for the negative tax consequences of his award.  Brown appealed, and in late 2013, the Fifth Circuit Court of Appeals ruled against him.  

    On April 29, 2014, Brown filed his Petition for Writ of Certiorari with the Supreme Court.  The question he presented is both logical and of vital importance:  May a court, under Title VII of the Civil Rights Act of 1964, increase an award of front or back pay in a discrimination case to offset the negative tax liabilities the prevailing plaintiff will suffer for receiving the wages in a lump sum instead of over several years?  The 3rd, 4th, and 10th Circuits allow courts this discretion.  The 5th, 8th, and D.C. Circuits have found that such a remedy is not available.

    One of MDH’s primary policy arguments is that the tax issue should be left to Congress.  It points to the Tax Reform Act of 1986, which, among other things, repealed “income averaging.”  Between 1943 and 1986, taxpayers were allowed to “income average” over a 5-year period if they chose to do so.  This was beneficial to taxpayers with volatile incomes, because by averaging they could smooth the volatility to avoid higher tax brackets.  If income averaging was still allowed, Brown would likely be able to avoid the negative tax consequences that resulted from the lump sum award.  

    MDH argues that the repeal of income averaging clearly shows that Congress has “spoken on the issue.”  Accordingly, if the negative tax consequences are to be “fixed,” it is Congress, not the courts, that should fix it. 

    This argument is misguided.  Congress’s reasons for eliminating “income averaging” in 1986 were a lot broader than back and future pay awards in Title VII cases, which are not mentioned in the statute or the legislative history.  To conclude that Congress has “spoken” on this specific issue (i.e., whether courts can provide equitable relief for negative tax consequences in discrimination cases) solely because of its repeal of income averaging in general, is to read far too much into the actions of Congress.  The evidence simply does not support this conclusion. 

     Further, the Supreme Court’s 1976 decision in Franks v. Bowman Transportation Co., Inc., 424 U.S. 747, provides precedent that the 5th, 8th, and D.C. Circuits got it wrong when they determined that they lacked the authority to compensate a prevailing discrimination plaintiff for the tax consequences of an award of front or back pay.  In Franks, the Court emphasized that:

    "to effectuate Title VII’s objective of making persons whole for injuries suffered on account of unlawful employment discrimination, vests broad equitable discretion in the federal courts to 'order such affirmative action as may be appropriate, which may include, but is not limited to, reinstatement or hiring of employees, with or without back pay . . . or any other relief as the court deems appropriate.'”  

424 U.S. at 763, quoting Albermarle Paper Co. v. Moody, 422 U.S. 405, 418 (1975) (emphases added).

     For the past 40 years, it has been clear that courts have “broad equitable discretion” to achieve Title VII’s objective of making persons whole for injuries suffered from unlawful employment discrimination.  To remedy those injuries, beyond reinstatement and back pay, the court may include “any other relief deemed appropriate.”  Tax relief falls well within these parameters when higher taxes resulting from a lump sum payment preclude the injured party from being made “whole.”    

     It is critical that the Supreme Court resolve this 3-3 Circuit split.  Until then, in some parts of the country, our tax system prevents successful discrimination plaintiffs from truly being made “whole for [the] injuries [they] suffered on account of unlawful discrimination.”

By Nina Ren

Friday, July 11, 2014

The Perils of Hitting the “Send” Button at the Workplace

While our thoughts and fantasies remain protected from seizure, electronically sending messages containing those thoughts and fantasies while at the workplace is not always protected from seizure by the Fourth Amendment.

Earlier this month, a federal district court in Manhattan overturned the conviction of a former New York City police officer, who had been convicted in 2013 of plotting to kidnap, torture, kill, and eat women.  Judge Gardephe found that although Gilberto Valle had used the Internet to research various ways to abduct, subdue, and cook potential victims, and had entered into agreements with other men to kidnap women, Valle's Internet communications were merely fantasy role plays, with no genuine agreements to harm women.  Judge Gardephe did, however, uphold Valle's conviction for illegally gaining access to the law enforcement database. Valle had accessed the database while riding in a patrol car with his supervising sergeant, compiling dossiers on women that included information on their birthdates, height, weight, and addresses. Valle was terminated by the NYPD upon his conviction.

While the Valle case is extreme in regard to his particular fantasies, it reveals the difficult role that courts must play in balancing the need to protect an individual's right to self-expression, even at the workplace, with the legitimate needs of employers, and how that balance changes over time. 

In 2010, the United States Supreme Court took on this weighty responsibility.  In City of Ontario v. Quon,130 S.Ct.  2619 (2010), the Court had to decide whether a City violated the Fourth Amendment when it reviewed the text messages of a police officer who was using a pager issued by the City.  When the City issued the pagers, it imposed a monthly character limit and announced that the City retained the right to monitor all network activity, including emails.  The City subsequently issued a memo that specifically included text messages as subject to monitoring.  When police officer Quon repeatedly exceeded his monthly limit, the City requested transcripts of his text messages for a two-month period to determine if the existing character limit was too low. Quon's Lieutenant reviewed the messages, and discovered that many of them were not work related, and some were sexually explicit.

The Court held the City did not violate the police officer's Fourth Amendment rights.  The Court applied the two-part approach it had formerly adopted in O'Conner v. Ortega, 480 U.S. 709 (1987), assessing first whether the employee had a reasonable expectation of privacy considering the “operational realities of the workplace,” and second whether the employer's search was reasonable under the circumstances.  The Court side-stepped the first prong when it assumed without deciding that the employee had a reasonable expectation of privacy in the text messages he sent on the City-issued pager.  The Court noted that, “rapid changes in the dynamics of communication and information transmission are evident not just in the technology itself but in what society accepts as proper behavior.” The Court in Quon recognized that cell phones are essentially becoming appendages of our humanity: “Cell phone and text message communications are so pervasive that some persons may consider them to be essential means or necessary instruments for self-expression, even self-identification,” such that individuals do have a reasonable expectation of privacy in those communications.  The Court thought it preferable to decide the case on narrower grounds, since “a broad holding concerning employees' privacy expectations vis-a-vis employer-provided technological equipment might have implications for future cases that cannot be predicted.”

Proceeding to the second prong of the inquiry, the Court in Quon stated that while warrantless searches are per se unreasonable under the Fourth Amendment, there are certain exceptions to that rule.  The “special needs” of the workplace are one such exception.  What is the workplace? In O'Connor, the Court said the workplace “includes those areas and items of the workplace that are related to work and are generally within the employer's control.” An employer's warrantless search is reasonable when it is conducted for a “noninvestigatory, work-related purpose,” or for the “investigation of work-related misconduct,” it is “justified at its inception,” and if “measures adopted are reasonably related to the objectives of the search and not excessively intrusive in light of 'the circumstances giving rise to the search.'”

In Quon, the Court found the search was reasonable from its inception because the search was ordered to determine whether the character limit on the City's contract with the wireless provider was sufficient to meet the City's needs.  Furthermore, the Court reasoned, because the City reviewed only two month's worth of text messages–as opposed to all the months in which the police officer had exceeded the character limit– the search was not excessively intrusive.

While the Court kept its analysis in Quon narrow, it seems that the Court nonetheless has given employers a rather broad brush with which to conduct searches of employee's emails and text messages on employer-provided electronic devices.  An employer could quite easily devise a reason from the inception for a search that would constitute a “noninvestigatory, work-related purpose,” or an investigation of work-related misconduct. As the line between our personal and professional lives becomes more and more blurred (teleworking from home, for example, is quite common), it does not seem reasonable that employers should be able to lawfully seize the personal electronic communications of employees made on employer-provided devices under such opaque guises as “noninvestigatory work-related purposes.”

More troublesome than potential abuses by employers of the ease of establishing a reasonable search, though, is the very issue the Quon court consciously avoided: the parameters of the expectation of privacy employees may have in their electronic communications in the workplace.  Looking at the following cases, it appears that courts are drawing a fine line that deserves attention:
    *    Pure Power Boot Camp v.  Warrior Fitness Boot Camp, 587 F.  Supp.  2d 548 (2008): An employer violated the Stored Communications Act, 18 U.S.C. § 2701 (SCA), when it used on-site work computers to access three personal email accounts belonging to a former employee.  A person violates the SCA if he accesses an electronic communication service, or obtains an electronic communication while it is still in electronic storage, without authorization.

Courts have routinely held that employees have no reasonable expectation or privacy in their workplace computers, when the employer has a policy which clearly informs employees that company computers cannot be used for personal emails, and that they will be monitored. In this case, though, the former employee had not stored any of the emails on his employer's computers, nor were they sent from or received on the company's email system or computer. The employer accessed his emails from third-party communication service providers using on-site work computers and utilizing the automatically-saved passwords to gain access.  The Court found the former employee had a reasonable expectation that his personal email accounts, stored on third-party computer systems, and protected by passwords, would be private.

    *    Sitton v.  Print Direction, Inc.,718 S.E.2d 532 (Ga.  Ct.  App.  2011): An employer did not invade the privacy of its employee Sitton when the employer reviewed Sitton's  emails on his personal laptop which Sitton used in the workplace.  Sitton had connected his personal laptop to the company's system network, and used his personal laptop for work-related purposes.  When Sitton's employer discovered he was also using the laptop to compete with the company, the employer entered his office, moved the computer's mouse, clicked on emails which appeared on the screen, and printed certain of those emails.  These emails were not on the same email address as Sitton's work email address.

    *    Shefts v. Petrakis, 2012 WL 4049509 (D.  Ill.  Sept.  13, 2012): The employer, Access2Go, owned and provided its employees with an electronic communication system comprised of computers, servers, email accounts, and software, including an email server.  The employee Shefts had an email account provided by Access2Go, and his emails were stored on the company's server.  Shefts sent six emails from his Access2Go email account to his personal  Yahoo!  email account, some of which his employer discovered contained confidential documents concerning Access2Go's business.  The court found that Access2Go did not have the power to authorize anyone to access Shefts's Yahoo! emails, since Access2Go was not the provider of that email service.

Sifting through this technological morass, it seems that whether an employee has a reasonable expectation of privacy in his or her emails depends on whether the employee utilizes his employer's network system (Sitton: no expectation of privacy where the employer's network system was used); whether the emails are stored on an email service provided by the employer or a third-party (Shefts: no expectation of privacy where emails are stored on an email service provided by the employer; and Shefts and Pure Power Boot Camp: expectation of privacy where emails were stored on third-party e-mail systems). 

In Quon, the Court assumed without deciding that Quon had a reasonable expectation of privacy in the text messages sent on the pager provided to him by the City.  The Court emphasized a distinction between emails and text messages: “An email sent on a City computer was transmitted through the City's own data servers, but a text message sent on one of the City's pagers was transmitted using wireless radio frequencies from an individual pager to a receiving station owned by the [wireless service provider]...[The text message] was routed through [the wireless service provider's] computer network...The message did not pass through computers owned by the City.”

In Valle, the database he used to get the information on women was the Department’s, and the court sustained his conviction on that charge.

The upshot? If an email or text communication originates from, is received by, or in any way relies upon an employer’s proprietary system, all the employer has to show in order to lawfully seize that communication is a noninvestigatory work-related purpose–a very low bar–or an investigation into work-related misconduct.  Unless you're an electronic communications guru who is able to follow the routing of electronic communications, it's probably safer to confine  those misogynistic, cannibalistic fantasies to your home computer or personal cell phone.  We are indeed living in a Brave New World.

By Valerie Chastain