The Tenth Circuit of the U.S. Court of Appeals has affirmed a lower court's ruling that the Equal Employment Opportunity Commission regulations (29 C.F.R. § 1614) regarding enforcement of settlement agreements do not permit an employee to file suit to challenge an agency's compliance with a settlement agreement. Lindstrom v. United States of America, No. 06-8059, 2007 WL 4358287 (10th Cir. Dec. 14, 2007).
A Department of the Interior employee requested a transfer from his sedentary position to a more active position because he believed such a position would be more beneficial to medical condition that he suffered as the result of a car accident. The agency denied his request; he filed an EEOC complaint through his agency; and he subsequently requested a hearing before an EEOC administrative judge who ordered the parties to engage in a settlement conference. The parties reached a settlement, and nearly one year later, the employee notified the agency's EEO Director of the agency's alleged non-compliance with the settlement agreement.
The agency issued a decision that it was in compliance with the settlement agreement. The employee then appealed the agency's decision to the EEOC which found that the agency was in compliance with the settlement agreement. The employee moved for reconsideration, but the EEOC denied it. The employee then filed a complaint in federal district court in Montana which was later transferred to a federal district court in Wyoming. The district court in Wyoming asserted subject matter jurisdiction over the claim of enforcing the settlement agreement. However, prior to hearing, the district court reversed itself and dismissed the case for lack of subject matter jurisdiction.
In reliance upon its interpretation of the EEOC regulations, the Tenth Circuit affirmed the district court's dismissal of the case based on a lack of subject matter jurisdiction. The EEOC regulations provide for a specific procedure for a federal employee to challenge whether an agency has failed to comply with a settlement agreement. First, the employee must notify the agency's EEO Director of the alleged noncompliance with the settlement agreement. Then the EEO Director must respond with a decision about whether the agency is in compliance. If the EEO Director either issues a decision finding that the agency is in compliance or fails to timely issue any decision, then the employee must appeal, if at all, to the EEOC.
Upon appeal, the EEOC will issue a decision as to whether the agency is in compliance. If the EEOC finds that the agency is in breach of the settlement agreement, through no fault of the employee, then there are only two remedies available: 1) order the agency to comply; or 2) reinstate the complaint underlying the settlement agreement. In contrast, if an employee appeals a discrimination complaint up to the EEOC and does not prevail, then the employee may file a complaint in U.S. district court. The Circuit Court found that 29 § 1614.504(a) of the EEOC regulations does not authorize a suit to enforce a settlement agreement, but only an opportunity to litigate the underlying complaint of a settlement agreement, if it is first determined that the agency is not in compliance.
In the wake of Lindstrom, it is clear that a federal employee desiring to enforce a settlement agreement reached in the context of a Title VII settlement agreement must strictly follow the regulatory procedures in §1614.504(a). However, it appears that the EEOC is the adjudicative body of last resort for employees to challenge an agency's compliance with a settlement agreement. Moreover, the limitations on appealing a determination of a settlement breach are arguably greater than those placed on a determination of a discrimination complaint. Thus, an employee must be certain that he or she does not enter into a settlement agreement where the employee receives little in return for releasing the right to litigate the claims in the underlying discrimination complaint.