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EEOC DOC 0420150008 (E.E.O.C.), 2016 WL 929890

U.S. Equal Employment Opportunity Commission (E.E.O.C.)

Office of Federal Operations

* * *, STEFAN H., PETITIONER,
v.
LORETTA E. LYNCH, ATTORNEY GENERAL, DEPARTMENT OF JUSTICE (FEDERAL BUREAU OF
PRISONS), AGENCY.
Petition No. 0420150008
Appeal No. 0720110002
Agency No. P-2001-0142

February 18, 2016

DECISION ON A PETITION FOR ENFORCEMENT

*1 On July 6, 2015, the Equal Employment Opportunity Commission (EEOC or Commission) docketed a petition for
enforcement to examine the enforcement of an Order set forth in EEOC Appeal No. 0720110002 (February 23, 2011). The
Commission accepts this petition for enforcement pursuant to 29 C.F.R. § 1614.503.

BACKGROUND

In April 2001, Petitioner, a former Material Handler Supervisor at the Agency's Bureau of Prisons (BOP), Federal Correctional
Institution in Englewood, Colorado, filed a formal complaint of discrimination on the basis of sex (male) when:
1. in 1998, his request pursuant to the Family and Medical Leave Act (FMLA) for twelve weeks of unpaid leave for the birth
of his first child was denied; and
2. he was reassigned to a non-equivalent new position while he was on FMLA leave in 2000, for the birth of his second child.

On February 11, 2008, an EEOC Administrative Judge (AJ) issued a decision finding discrimination. The AJ went on to find
that Petitioner established a causal connection between BOP's discriminatory reassignment of Petitioner to the job of Corrections
Officer leading to his resignation, and the emotional distress and physical harm he suffered. As a result, the AJ awarded Petitioner
$35,000 in non-pecuniary compensatory damages. The AJ also awarded Petitioner $38,850 in attorney's fees; back pay with
interest and benefits starting from August 5, 2000, the time he resigned his position as Correctional Officer. The AJ ordered BOP
to post a notice on all employee bulletin boards stating that it had been found to be in violation of Title VII.

The Agency filed an appeal with the Commission. The Agency accepted the finding of discrimination, but rejected the AJ's award
of relief.

On appeal, the Commission acknowledged that the Agency accepted the findings of discrimination in regard to Petitioner's
request for FMLA leave in 1998, and with his transfer to a non-equivalent position while on FMLA leave in 2000. Further, the
Commission declined to disturb the AJ awards regarding compensatory damages and attorney fees and costs. However, the
Commission nevertheless noted that there remained the following unsolved issue: whether Petitioner was constructively
discharged from his employment with BOP.

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The Commission therefore remanded the matter to the Agency for a hearing on the following issue:
whether Petitioner was constructively discharged from his employment with BOP.

The Commission stated that if constructive discharge were found, the AJ would then proceed to determine whether
Petitioner is entitled to back pay, whether Petitioner made reasonable efforts to mitigate his loss of pay, and whether
Petitioner is entitled to further compensatory damages and/or further attorney's fees and costs. EEOC Appeal No.
0720080041 (October 8, 2008).

*2 On October 22, 2009, a different EEOC AJ conducted a hearing on the constructive discharge issue identified in the
Commission decision of October 8, 2008, referenced above.

On September 7, 2010, the second AJ issued a decision. Therein, the AJ concluded that a reasonable person in
Petitioner's situation would have feared for his safety and that Petitioner had no alternative, but to resign. Therefore,
Complainant's resignation constituted a constructive discharge. The AJ awarded Petitioner back pay and benefits, less
mitigation, for the time period from August 4, 2000 to March 11, 2009.

Specifically, the A3 directed the Agency to pay Petitioner back pay and benefits from August 4, 2000 to March 11,
2009, in the position of Supply Technician, GS-2005/07 at step 10, minus the following amounts in mitigation:

$1,647.21

2000

2001-2004 No income

2005 $6,464.00

2006 $7,532 + $2,945 + $2,578 + $11,280 = $24,335

2007 $29,020.97 + $7,153.06 = $36,174.03

2008 $34,444.38

2009 $8,714.72 (March 1, 2009)

The AJ specifically noted that Petitioner was unemployed from 2001-2004 so that there was no income for the Agency to offset
and Petitioner was entitled to full salary and benefits for those years.

The AJ also awarded Petitioner in $44,205 in attorney's fees and $22.20 in costs; to provide training to managers, supervisors

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and human resources employees, with regard to the appropriate response to complaints of harassment, the prohibitions against
discrimination and retaliation under Title VII; and to post a notice on all employee bulletin boards stating that it had been found
to be in violation of Title VII.

Finally, the AJ ordered the Agency to pay Petitioner an amount to compensate him for the tax consequences of a lump-sum
payment, according to proof to be provided by Petitioner.

The Agency filed an appeal with the Commission. On appeal, the Agency requested that the Commission affirm its final order
that rejected the AJ's decision finding that Petitioner was constructively discharged, as well as the relief ordered.

However, in EEOC Appeal No. 0720110002 (February 23, 2011). the Commission upheld the AJ's finding of constructive
discharge and the portion of the relief concerning back pay, and remanded the matter back to the Agency to remedy Petitioner.
The Agency was ordered; (1) to pay back pay and benefits; (2) pay interest on back pay and provide all other benefits; (3) pay
Petitioner an amount to compensate him for the tax consequences of a lump sum payment; (4) pay $44,205 in attorney's fees and
$22.20 in legal costs; (5) provide training to managers, supervisors and human resources with regard to appropriate response to
complaints of harassment, the prohibitions against discrimination and retaliation under Title VII; and (6) post a Notice.

*3 On July 6, 2015, Petitioner submitted the instant petition for enforcement of the order in EEOC Appeal No. 0720110002.
Petitioner contended that, in regard to portion of the order that the Agency was directed to pay him am amount to compensate
for the tax consequences of a lump sum payment, he calculated and submitted a request in the amount of $22,938.50 to the
Agency to offset the additional taxes. However, Petitioner stated that while the Agency made him the payment, it improperly
reported the amount to the Internal Revenue Service (IRS) as taxable income and, as a result of the payment, incurred an
additional $8,945.00 in tax liability. Petitioner stated that on December 15, 2014, he received a notice from the IRS stating “that
I was delinquent in paying taxes on the $22,938.50. This came as a shock to me because I never received a 1099 for the money,
and because the [$22,938.50] should not have been submitted to the IRS as income. Since I had already paid taxes on the lump
sum payment in tax year 2011, the [$22,938.50] should have been a refund from the Agency [emphasis in the original].”

Petitioner requested an additional payment from the Agency in the amount of $14,341.00 to make up for the additional tax
liability in the December 15, 2014 IRS notice. In support, Complainant submitted a copy of a letter dated February 15, 2015, from
his tax preparer, an Enrolled Agent at H&R Block. The tax preparer stated that in 2013, Petitioner received a payment of
$22,938.00 to compensate him for the additional tax liability incurred because of his original lump sum payment. The tax preparer
further stated:
The 1099 reporting this amount as taxable was not sent to [Petitioner's] correct address and he was not sure of
the tax status of this payment until the IRS recently informed him of the amount due. We now know that the tax
liability on this additional payment, (Federal and Colorado) is $8,945.00; this amount includes interest and
penalty amounts assessed by the IRS due to late payment. To avoid an obvious difficulty of infinite regress, 2
[Petitioner] will need to receive one additional payment that is calculated so that after tax he will have the
$8,945.00 needed to pay the most recent liability. This procedure is commonly referred to as ‘grossing up’ a
payment. In this case, given the tax rates we believe will apply in 2015, the necessary payment is $14,341.00.

14341* .33 = 4732

This assumes a Federal rate of 33 %:

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and a Colorado rate of 4.63%: 14341* .0463 = 664

and 14341 - 4732 - 664 = 8945.

*4 In response to the petition for enforcement, the Agency has requested that the Commission find that it has complied with the
orders of the AJ and the Commission. Specifically, the Agency stated that in 2013, Petitioner received a payment in the amount
of $22,938.00 as compensation for additional tax liability as a result of receiving a lump sum back pay award associated with the
February 2008 AJ's decision and the February 23, 2011 decision by the Commission. The Agency further argued that for the tax
year 2013, the Agency issued the IRS a Form 1099 for the payment of $22,938.00. In support of its assertions, the Agency
submitted a copy of Petitioner's Form 1099 for the year of 2013 indicating that the $22,938.00 payment to Petitioner was listed
under Category 3 as “Other Income.”

Further, the Agency argued that the issue as to whether the $22,938.00 is taxable income is between Petitioner and the IRS. The
Agency stated that Petitioner had not provided any evidence to demonstrate that the Agency now owes him $14,341.00 for tax
liability.

ANALYSIS AND FINDINGS

After a review of record, including our prior decision and compliance reports, we find that the Agency is not in compliance of
our February 23, 2011 order. First, to put this matter in proper focus, we note that in point 3 of the Commission's order in its
decision of February 23, 2011, referenced above, the Agency was expressly directed to pay Petitioner “an amount to compensate
him for the tax consequences of a lump-sum payment, according to proof to be provided by Complainant.” The clear intent of
this order was to ensure that Petitioner was not required to pay any additional taxes as a result of the remedies he received
following our finding of discrimination. Complainant's tax preparer submitted, in detail, Petitioner's additional tax liability and
a methodology (“grossing up”) to avoid a continuing cycle of additional tax penalties, which we addressed above in detail and
will not reiterate herein. We note, as significant, that the Agency has provided no refutation of the amounts of Petitioner's request
for an additional payment to compensate him for the continued tax liability as identified by his tax preparer.

Based on a thorough review of the record and the contentions submitted in support or opposition to this petition for enforcement,
including those not specifically addressed herein, the petition of enforcement is GRANTED. This matter is REMANDED to the
Agency for the Agency to take action in accordance with the ORDER below.

ORDER

The Agency is ORDERED to take the following actions:
Within sixty (60) calendar days of the date this decision becomes final, the Agency shall tender to Petitioner the
amount of $14,341.00 to compensate him for the additional tax liability he incurred as a result of its prior
payment.

The Agency is further directed to submit a report of compliance, as provided in the statement “Implementation of the
Commission's Decision.” The report shall include supporting documentation verifying that the corrective action has been
implemented.

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ATTORNEY'S FEES (H0610)

*5 If Complainant has been represented by an attorney (as defined by 29 C.F.R. § 1614.501(e)(1)(iii), he is entitled to
an award of reasonable attorney's fees incurred in the processing of the complaint. 29 C.F.R. § 1614.501(e). The award
of attorney's fees shall be paid by the Agency. The attorney shall submit a verified statement of fees to the Agency - -
not to the Equal Employment Opportunity Commission, Office of Federal Operations - - within thirty (30) calendar days
of this decision becoming final. The Agency shall then process the claim for attorney's fees in accordance with 29 C.F.R.
§ 1614.501.

IMPLEMENTATION OF THE COMMISSION'S DECISION (K0610)

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 77960,
Washington, DC 20013, 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 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) (1994 & Supp. IV 1999). If the
Petitioner files a civil action, the administrative processing of the complaint, including any petition for enforcement,
will be terminated. See 29 C.F.R. § 1614.409.

COMPLAINANT'S RIGHT TO FILE A CIVIL ACTION (R0610)

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 (Z0815)

*6 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).

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FOR THE COMMISSION:

Carlton M. Hadden
Director
Office of Federal Operations
1. This case has been randomly assigned a pseudonym which will replace Petitioner's name when the decision is
published to non-parties and the Commission's website.

Footnotes

2 We note that a fair reading of the tax preparer's statement supports a determination that the term “infinite regress” as used here means
a sequence of events that would never come to an end.”

EEOC DOC 0420150008 (E.E.O.C.), 2016 WL 929890
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