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Cochran v. Holder, No. 07-1888 (4th Cir. May 4, 2009); Phillips v. Gates, No. 07-3515 (6th Cir. May 5, 2009)

| May 4, 2009 | Daily Developments in EEO Law |

Here are two federal-sector cases to chew on. The Fourth Circuit considers whether the 90-day trigger for filing a civil action against a federal agency accrues anew under 42 U.S.C. § 2000e-16(c) and 29 C.F.R. § 1614.405(b) when the party files a timely motion to reconsider. It holds in favor of the employee. The Sixth Circuit considers a rare judgment following a Title VII disparate impact trial, affirming a victory for the Department of Defense.

Cochran v. Holder, No. 07-1888 (4th Cir. May 4, 2009):  Federal employees under Title VII may file a civil action within 90 days of a “final” adverse decision by the EEOC. 42 U.S.C. § 2000e-16(c).  But when is “final” final? The panel holds that the statute, though not without ambiguity, provides that a timely motion to reconsider restarts the clock.

Plaintiff, a Deputy U.S. Marshal, believed he was constructively discharged on account of disability. On a claim that began in 1993, and which complaint was originally filed 1995, here is the torturous process that followed:

“After an investigation by the USMS, Cochran chose to pursue a hearing before the Merit System Protection Board, which held against him on May 31, 2001. Cochran then sought a hearing before an EEOC administrative judge, who also found against him. Cochran appealed this decision to the EEOC Office of Federal Operations (OFO), which affirmed the administrative judge’s ruling on December 29, 2005. Cochran then filed a timely motion before the OFO seeking reconsideration of the December 29 decision. The OFO denied this motion on March 10, 2006.”

Plaintiff filed his civil action 90 days after the March 10 date, but the agency argued (and the district court agreed) that the 90 days actually began to run from December 29, thus making the complaint too late.

The Fourth Circuit reverses. The focus of the decision starts with a regulation defining when a decision is deemed “final,” 29 C.F.R. § 1614.405(b). This states that a “decision issued [by the OFO] is final [for purposes of the limitations period] unless the Commission reconsiders the case. A party may request reconsideration within 30 days of receipt of [the decision].” While the government argued that the regulation was conditional on the agency granting reconsideration, the panel holds that (under controlling Supreme Court authority) the better reading is that the filing of the motion extend the period:

“Fortunately, however, the Supreme Court has twice confronted, albeit when interpreting different statutes, the precise legal question at issue here: whether filing a timely motion for reconsideration with an administrative agency tolls the running of the limitations period for seeking review of the agency action. See Stone v. INS, 514 U.S. 386 (1995); ICC v. Bhd. of Locomotive Engineers, 482 U.S. 270 (1987). In these cases, the Court interpreted similar regulatory language in accord with Cochran’s view that a ‘timely petition for administrative reconsideration stay[s] the running of the [statutory] limitation period until the petition ha[s] been acted upon by the [agency].” Locomotive Engineers, 482 U.S. at 284.”

The panel also observes that the consistent interpretation of this regulation by the courts, through several revisions of the language, favored the longer period for filing. “Given this long line of cases supporting Cochran’s interpretation of § 1614.405(b), to interpret the regulation otherwise would upend the settled expectations of parties litigating before the EEOC based solely on arguably ambiguous regulatory language. If the EEOC had wished to change this well established rule of law, we believe that it would have plainly indicated its intent to do so in the regulation.”  Accordingly, the court finds the plaintiff’s civil action timely.

Phillips v. Gates, No. 07-3515 (6th Cir. May 5, 2009):  This suit involved a group of African-American employees with the Defense Finance and Accounting Service in Columbus, Ohio (DFASCO), an agency within the Department of Defense (DOD) in charge of paying contractors. As the agency grew in the early 1990s, minority employees believed that they were not getting their share of promotions.  The agency commissioned a Process Action Team in 1997 to produce a report (“the PAT report”), which concluded that minorities were indeed being left behind.  On the strength of this report, plaintiffs  commenced an administrative action and, after losing there before an ALJ, filed their case in federal district court.

The case made two prior trips to the Sixth Circuit, both reversing summary judgment (once on limitations issues, once on the merits), before it was finally tried to the judge.  The district court entered judgment for the DOD.

The Sixth Circuit affirms.  The court first holds that there was sufficient evidence to support the judgment.  As typically is the case, the trial devolved into a battle of the experts over the statistics.  The case was complicated by the DOD’s erasure of data from the relevant period (“the PAT investigation”), requiring the experts resourcefully to recreate the numbers.

“Appellants’ expert, Dr. Ramona Paetzold, compared the racial composition of all promoted employees to the racial composition of the entire DFAS-CO workforce. This method assumed that every DFAS-CO employee applied for every job opening, irrespective of whether the employee would, in fact, be qualified, unqualified, or overqualified for the position. Dr. Paetzold thus based her statistical analysis on an applicant pool that necessarily included ‘individuals lacking minimal qualifications.’ [citation omitted]. Dr. Paetzold determined that African-American employees were promoted at a significantly lower rate than were white employees.

“The Secretary’s expert, Dr. John Claudy, created ‘constructed pools’ of applicants for each promotion. Dr. Claudy examined employee grades in pairs of successive years to determine when promotions had occurred. For example, if an employee was listed as a grade GS-7 in 1995 but as a grade GS-8 in 1996, then Dr. Claudy assumed that a promotion had taken place. For each promotion, Dr. Claudy constructed a pool of employees in the same (pre-promotion) grade level and job series as the successful applicant. This method had the advantage of using an applicant pool that was more likely to approximate the group of employees who were qualified for and actually applied for a given promotion. It was nonetheless flawed in that it failed to account for the fact that sometimes employees could qualify for and would apply for promotions outside of their job series. Dr. Claudy determined that: in some grade levels African-Americans were promoted at a rate higher than would be expected, in other grade levels African-Americans were promoted at a rate lower than would be expected; and in only one grade level (Grade 5) were African-Americans promoted at a rate lower than two standard deviations from what would be expected.”

The panel holds that the district court did not clearly err in finding that the evidence was in equipoise and that the plaintiffs failed in their burden to establish a prima facie case of disparate impact:

“Although Appellants argue that ‘[t]he trial court erred in finding Dr. Claudy’s expert opinion as credible and trustworthy as Dr. Paetzold’s,’ it might be better said that the magistrate judge found both expert opinions equally problematic. He therefore accepted neither expert’s analysis, and concluded that Appellants had not carried their burden. Although the PAT report, the EEO report, and Appellants’ testimony provided some evidence of a perceived race-based disparity at DFAS-CO, the evidence was not sufficient to require a finding that Appellants had demonstrated the type of statistical disparity necessary to establish a Title VII prima face case.”

The panel also held that the court below did not abuse its discretion in imposing only monetary sanctions for the destruction of data; plaintiffs had sought an adverse inference.  The panel held that such sanctions were not required pursuant to 29 C.F.R. § 1607.4(D), and that “both statistical experts at trial testified that the data from the PAT investigation would not have substantially altered their analyses because it would only have included a sample of information from a two-year period and would not have helped to establish promotion rates for the total period in question.”

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