Attorney Fees in Settlement Upheld

In Dahlman v. Consumer Product Safety Commission, EEOC Appeal No. 0720090004 (March 18, 2009) the Equal Employment Opportunity Commission ordered the agency to comply with the terms of a settlement agreement in which it agreed to pay attorney fees and costs to resolve a claim under the Equal Pay Act of 1963 (EPA), 29 U.S.C. § 206(d), et seq. Pursuant to the Commission's regulations, an agency found liable for violating the EPA does not have to pay attorney fees and costs as part of the relief. See 29 C.F.R. §1614.501(e)(1).

The administrative judge (AJ) consolidated the complainant's EPA claim with a disability discrimination claim she brought pursuant to the Rehabilitation Act. Following the first day of hearing, the parties settled both of the claims. In the settlement agreement, the agency agreed to promote the complainant to GS-13 following a fully successful appraisal; issue retroactive step increases; provide back pay; train agency employees on proper handling of medical information under the Rehabilitation Act; and pay reasonable attorney fees and costs, as determined by the EEOC AJ assigned to this matter, pursuant to the regulations in 29 C.F.R. § 1614.501(e).

Prior to the AJ's ruling on attorney fees and costs, the agency filed a brief arguing that the complainant was not entitled to fees for the EPA claim pursuant to EEOC regulations and Equal Employment Management Directive - 110 (MD-110), at 11-1 (November 9, 1999), which provides that while a complainant who prevails on claims under Title VII and the Rehabilitation Act is presumptively entitled to attorney fees and costs, a complainant who prevails under the EPA is not entitled to attorney fees at the administrative level. The agency did not contest that the parties intended fees and costs to be awarded for both the claims at issue in this case.

The AJ decided to award $62,369 in attorney fees and $773 in costs arising from the legal work performed in connection with both claims. The AJ stated that he was involved in all major settlement discussions, and that the parties intended that fees cover the attorney's work on all claims raised in the case. The AJ also ruled that neither contract law nor the Commission prevents the agency from agreeing to attorney fees to settle any complaint and noted that the agency may have reasonably traded off fees for other damages it may have been liable for after a hearing, e.g., more back pay, liquidated damages, and compensatory damages for the Rehabilitation Act claim. Additionally, the AJ noted that if the complainant went to federal court, the court could award attorney fees under the EPA, so payment of fees at the administrative level could deter the complainant from pursuing her claim in federal court.

In the agency's final order, it implemented the AJ's decision only in part. The agency agreed to pay $8,537 in attorney fees for the Rehabilitation Act claim, and total costs of $773.39, but rejected the AJ's award of $53,832.50 in attorney fees for work on the EPA claim. On appeal, the Commission found that the AJ properly awarded attorney fees for the work done on both claims for the reason in the AJ's decision, i.e., the AJ was authorized to do so by the agency in the settlement agreement it signed. The Commission, limiting its analysis solely to one of contract interpretation, determined that the language of the settlement agreement intended to include attorney fees for legal work performed on both claims; thus it declined to interpret the language to the contrary. The Commission ordered the agency to pay the full amount of attorney fees awarded by the AJ to the complainant.

* This information is provided by the attorneys at Passman & Kaplan, P.C., a law firm dedicated to the representation of federal employees worldwide. For more information on Passman & Kaplan, P.C., go to https://www.passmanandkaplan.com/.

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