Federal Sector Equal Employment Opportunity

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

29 CFR Part 1614

RIN 3046-AA66

Federal Sector Equal Employment Opportunity

AGENCY: Equal Employment Opportunity Commission (EEOC).

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Equal Employment Opportunity Commission is proposing

revisions to its federal sector complaint processing regulations to

implement recommendations made by the Chairman's Federal Sector

Workgroup. The Commission proposes to require that agencies establish

or make available alternative dispute resolution (ADR) programs during

the EEO pre-complaint process. The Commission proposes revisions to the

counseling process, the bases for dismissal of complaints, and

procedures for requesting a hearing. The Commission also proposes to

provide administrative judges with the authority to issue dismissals

and final decisions on complaints. The Commission proposes a number of

changes to the class complaint procedures, including authorizing

administrative judges to issue final decisions on class certification

and requiring that administrative judges determine whether a settlement

agreement is fair and reasonable. The Commission proposes changes to

the appeals procedures to provide agencies the right to appeal an

administrative judge's final decision, to revise the appellate briefing

schedule, to establish different standards of review for agency final

decisions and administrative judges' final decisions, and to revise the

process for seeking reconsideration of a decision on appeal. Finally,

the Commission proposes to amend the remedies section of the regulation

to permit administrative judges to award attorney's fees and to provide

for payment of attorney's fees for all services provided by an attorney

throughout the equal employment opportunity (EEO) process, including

counseling.

DATES: Comments on the notice of proposed rulemaking must be received

on or before April 21, 1998.

ADDRESSES: Written comments should be submitted to Frances M. Hart,

Executive Officer, Executive Secretariat, Equal Employment Opportunity

Commission, 1801 L Street, N.W., Washington, D.C. 20507. As a

convenience to commentators, the Executive Secretariat will accept

comments transmitted by facsimile (``FAX'') machine. The telephone

number of the FAX receiver is (202) 663-4114. (This is not a toll free

number.) Only comments of six or fewer pages will be accepted via FAX

transmittal. This limitation is necessary to assure access to the

equipment. Receipt of FAX transmittals will not be acknowledged, except

that the sender may request confirmation of receipt by calling the

Executive Secretariat staff at (202) 663-4078 (voice) or (202) 663-4077

(TDD). (These are not toll free numbers.) Copies of comments submitted

by the public will be available for review at the Commission's Library,

room 6502, 1801 L Street, N.W., Washington, D.C. between the hours of

9:30 a.m. and 5:00 p.m.

FOR FURTHER INFORMATION CONTACT: Nicholas M. Inzeo, Deputy Legal

Counsel, Thomas J. Schlageter, Assistant Legal Counsel or Kathleen

Oram, Senior Attorney, Office of Legal Counsel, 202-663-4669 (voice),

202-663-7026 (TDD). This notice is also available in the following

formats: large print, braille, audio tape and electronic file on

computer disk. Requests for this notice in an alternative format should

be made to EEOC's Publications Center at 1-800-669-3362.

SUPPLEMENTARY INFORMATION:

Introduction

As part of an ongoing effort to evaluate and improve the

effectiveness of the Equal Employment Opportunity Commission's

operations, the Chairman established the Federal Sector Workgroup to

review the federal sector equal employment opportunity process. The

Workgroup was composed of representatives from offices throughout the

Commission. The Workgroup focused on the effectiveness of the EEOC in

enforcing the statutes that prohibit workplace discrimination in the

federal government, namely: section 717 of Title VII of the Civil

Rights Act of 1964, which prohibits discrimination against applicants

and employees based on race, color, religion, sex and national origin;

section 501 of the Rehabilitation Act of 1973, which prohibits

employment discrimination on the basis of disability; section 15 of the

Age Discrimination in Employment Act, which prohibits employment

discrimination based on age; and the Equal Pay Act, which prohibits

sex-based wage discrimination.

The Workgroup's review evaluated the Commission's administrative

processes governing its enforcement responsibilities in the federal

sector and developed recommendations to improve

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its effectiveness. In addition, the review sought to implement the

goals of Vice President Gore's National Performance Review (NPR),

including eliminating unnecessary layers of review, delegating

decision-making authority to front-line employees, developing

partnership between management and labor, seeking stakeholder input

when making decisions, and measuring performance by results.

The Federal Sector Workgroup issued a report entitled ``The Federal

Sector EEO Process * * * Recommendations for Change'' in May 1997. The

report contains numerous recommendations for changing the federal

sector complaint process, including changes to the Part 1614

regulations, changes to EEOC's Management Directive 110 which contains

additional guidance and instructions on the federal complaint process,

and changes to EEOC's internal procedures.

The Commission proposes to amend Part 1614 to implement the

regulatory recommendations. The proposed changes, which are discussed

in greater detail below, address the continuing perception of

unfairness and inefficiency in the federal sector complaint process. In

addition, the proposals accomplish the National Performance Review

goals of removing unnecessary layers of review and delegating decision-

making authority to front-line employees.

EEOC spent over a year and a half in the development of the federal

sector NPRM. During that time period, EEOC consulted extensively with

all stakeholders in the federal sector process, very much including the

other federal agencies. On April 22, 1996, prior to the development of

any recommendations, the EEOC's Federal Sector Workgroup held a meeting

with federal EEO and Civil Rights personnel organized by the President

of the Council of Federal and Civil Rights Executives. At that time the

Council supported EEOC's interest in making the administrative judge

decisions final and eliminating agency final decisions following those

decisions. The Council subsequently changed its view on this question.

On May 21, 1996, then-Chairman Casellas wrote to the EEO Directors of

all departments and agencies requesting their written comment on a

number of subjects related to the federal sector complaint process. We

received comments from 27 agencies, all of which were fully considered

in developing the recommendations contained in the Workgroup's report.

On September 26, 1997, the Workgroup held a briefing for EEO Directors

on the Workgroup's recommendations.

The Commission coordinated this proposed regulation with all

federal agencies pursuant to Exec. Order No. 12067 (1978). A number of

comments were received from agencies, which included helpful

suggestions to improve the proposed regulation as well as criticisms of

essential elements of the proposals. The Commission has included a

discussion of its proposal, the rationale for the changes, as well as

the criticisms of the agencies, in this statement of Supplementary

Information and has made certain changes to the proposal. It prefers to

decide whether or how to make other changes to this proposal after the

benefit of public comment. Federal agencies are, of course, the

entities whose conduct would be regulated by these proposals and making

decisions based only on their input, without having the opportunity to

consider the input of other stakeholders, including complaining parties

and their representatives, would be insufficient. The Commission will

seriously consider the agency comments in conjunction with the public

comments. The Commission will retain the comments received from the

agencies during the coordination period in the rulemaking file and will

consider and address those comments in the final rule.

In proposing these changes, the Commission seeks to serve two

different yet intertwined purposes: first, to ensure that the process

for federal employee complaints is fair and is perceived to be fair,

and second, to make the process more efficient by eliminating

unnecessary layers, dealing expeditiously with meritless claims and by

delegating authority to front-line employees.

Alternative Dispute Resolution

The Commission proposes to amend section 1614.102 to require all

agencies to establish or make available an alternative dispute

resolution (ADR) program for the EEO pre-complaint process. The

required pre-complaint ADR program would be in addition to the

provisions in the current regulation that encourage the use of ADR at

all stages of the complaint process. Agencies would be free to develop

the programs that best suit their particular needs. While many agencies

have adopted the mediation model as their ADR initiative, other

resolution techniques would be acceptable, provided that they conform

to the core principles set forth in EEOC's policy statement on ADR,

which will be contained in Management Directive 110. Although ADR is

believed to be most effective at the early stages of a dispute,

agencies may continue their ADR efforts at any stage in the process,

including after the formal complaint has been filed. An effective ADR

program will serve both goals set out by the Commission. By resolving

complaints early on, ADR will make the process more efficient. ADR will

also serve to make the process fairer, by giving complainants an

alternative to the counseling process that has been criticized by

agency officials and employee representatives.

The Commission also proposes changes to section 1614.105, which

covers pre-complaint processing, to require that counselors advise

aggrieved persons that they may choose between participation in the ADR

program offered by the agency and the traditional counseling activities

provided for in the current regulation. If a matter is not resolved

during ADR or during traditional counseling activities, the counselor

will conduct a final interview and the aggrieved person may file a

formal complaint. As noted above, agencies would be free to establish

the type of ADR program they offer during the counseling period as long

as it is consistent with the ADR program core principles set out by

EEOC. Before aggrieved persons make a choice between counseling and

ADR, they will have an initial counseling session in which counselors

must fully inform them about their rights and the choice between the

counseling process and the ADR program. Counselors must also inform

aggrieved persons that if the ADR process does not result in a

resolution of the dispute, they will receive a final interview and have

the right to file a formal complaint. If the aggrieved person chooses

to participate in the agency's ADR program, the role of the counselor

would be limited to advising that person of his or her rights and

responsibilities in the EEO complaint process, as set forth currently

in section 1614.105(b). Counselors would not be required, in those

instances, to attempt to resolve the dispute, but would not be

precluded from doing so, if they believe a matter could be resolved

quickly.

Many agencies who submitted comments on the draft revisions when it

was coordinated under Exec. Order No. 12067 (1978) welcomed Alternative

Dispute Resolution (ADR) at the pre-complaint process stating that ADR

would result in an early resolution of many cases and create a positive

view of the EEO process. A number of agencies suggested that not all

cases are appropriate for ADR. Rather, these

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agencies requested that they should have the flexibility to establish

what type of matter or circumstance would be eligible for ADR. Several

agencies also requested that consideration be given to the practical

difficulties of creating an ADR program, and accordingly, that ample

time be provided to them to obtain the necessary expertise, personnel

and funds for ADR. An effective date will be included in the final rule

and the governing management directive.

Under the proposed regulations, agencies would be free to develop

ADR programs that would best serve their particular needs and unique

circumstances. The EEOC encourages creativity and flexibility in

establishing ADR programs. This would certainly encompass an array of

ADR programs. Agencies with limited funds and resources could use the

services, in whole or in part, of another agency, a volunteer

organization or other resources to provide for their ADR programs.

Keeping with our emphasis on flexibility, an agency could exclude

circumstances or matters that it believes are not appropriate for its

ADR program. The Commission does not anticipate that ADR will be used

in connection with every complaint. For example, agencies may exclude

class allegations from its ADR program. As circumstances and needs

change within a particular agency, it could modify its ADR program.

However, it is essential that all agency ADR programs comply with the

spirit of the EEOC's policy statement on the core principles of ADR.

Equal Employment Opportunity Commission's Alternative Dispute

Resolution Policy Statement (July 17, 1995). Management Directive 110

(MD 110) will provide further information and amplify these core

principles.

Some agencies urged that the regulations should clarify the precise

roles and responsibilities of the person responsible for conducting ADR

during the pre-complaint process and the EEO counselor, for example,

whether the mediator or counselor will complete the counselor's report

if mediation or other means of ADR fails. These concerns and other

questions raised by the agencies about how ADR and EEO counseling will

coexist will be explained in MD 110. Each agency will have discretion

to develop its own procedures in accordance with the regulation and MD

110. With this flexibility, there will most likely not be uniformity

among agencies in the precise roles and responsibilities of EEO

counselors and persons conducting ADR activities.

Dismissals

The Commission proposes to amend section 1614.107 to remove one

basis for dismissal of EEO complaints and add two new bases for

dismissal. The Commission proposes to eliminate the provision in

section 1614.107(h) that permits agencies to dismiss complaints for

failure to accept a certified offer of full relief. The full relief

dismissal policy was premised on the view that adjudication of a claim

is unnecessary if the agency is willing to make the complainant whole.

The regulatory process, however, has been criticized because

complainants are placed in the position of risking dismissal of their

complaints if they do not believe the offer of their opposing party is

an offer of full relief. If a complainant makes the wrong assessment of

the offer and EEOC decides on appeal that the agency did offer full

relief, the complainant is precluded from proceeding with the complaint

or from accepting the offer. In addition, difficulties assessing what

constitutes full relief increased when, as a result of the Civil Rights

Act of 1991, damages became available to federal employees. Unless the

agency offers the full amount of damages permitted under the statutory

caps in the law, it is virtually impossible to assess whether the

agency has offered full relief. The Commission found that offers of

full relief must address compensatory damages, where appropriate.

Jackson v. USPS, Appeal No. 01923399 (1992); Request No. 05930306

(1993).

During coordination of EEOC's proposals pursuant to Exec. Order No.

12067, some agencies agreed with EEOC's position that full relief

dismissals have become rare since compensatory damages became available

to federal employees. Other agencies recommended that EEOC revise the

procedure to permit an independent review and certification of full

relief offers by EEOC, arguing that certification of offers by EEOC

would minimize the risk complainants must now take in determining on

their own whether an agency's offer constitutes full relief. Finally,

some agencies simply disagreed with the proposal to eliminate the full

relief dismissal provision, arguing that they continue to use it in

some cases. As noted above, without certification of full relief offers

by EEOC, complainants are in the unfortunate position of trying to

evaluate whether the agencies they believe discriminated against them

have truly offered them all the relief they would be entitled to in a

federal court, and jeopardizing their whole case if they decide in

error. The Commission has determined that it would not be a wise use of

our limited resources at this time to create a certification procedure

for full relief offers. In response to agency comments, though, as more

fully explained below, the Commission has added a provision permitting

agencies to make an ``offer of resolution'' in a case. The offer of

resolution is similar, but not identical, to the procedure under Rule

68 of the Federal Rules of Civil Procedure for an offer of judgment.

Hence, for all of the reasons set forth above, the Commission proposes

eliminating the regulatory provision permitting agencies to dismiss

complaints for failure to accept a certified offer of full relief.

The Commission proposes to add dismissal provisions permitting

agencies to dismiss complaints for two reasons. First, the Commission

proposes to permit agencies to dismiss complaints that allege

dissatisfaction with the processing of a previously filed complaint

(commonly called spin-off complaints). EEOC's regulations at 29 CFR

Part 1613, which were superseded by 29 CFR Part 1614 in 1992, expressly

permitted complainants to file separate complaints alleging

dissatisfaction with agencies' processing of their original complaints.

29 CFR 1613.262 (1991). The procedure resulted in the filing of

multiple spin-off complaints. The Commission recognized the need to

limit these complaints, and did not include the Part 1613 provision in

Part 1614. Guidance was provided in Management Directive 110.

Complainants continued, however, to file spin-off complaints. Any

alleged unfairness or discrimination in the processing of a complaint

can--and must--be raised during the processing of the underlying

complaint and there is ample authority to deal with such allegations in

that process. There is no provision in either the regulations or the

management directive permitting the filing of a separate complaint on

this issue. Accordingly, separate complaints should be dismissed. The

Commission proposes to add the dismissal provision permitting dismissal

of spin-off complaints to ensure that a balance is maintained between

fair and nondiscriminatory agency processing of complaints and the need

to eliminate multiple filing of burdensome complaints about the manner

in which an original complaint was processed.

In conjunction with this regulatory change, the Commission will

issue companion guidance in Management Directive 110 addressing the

procedures agencies must follow to resolve allegations of

dissatisfaction with the complaints process quickly. Individuals

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who are dissatisfied with the processing of a complaint will be advised

to bring this dissatisfaction to the attention of the official

responsible for the complaint, whether it be an investigator, an EEOC

administrative judge, or the Commission's Office of Federal Operations

on appeal. The allegation of dissatisfaction, and any appropriate

evidence, will then be considered during the processing of the existing

complaint. Proper handling of spin-off allegations is important to the

Commission because it involves the overall quality of the complaints

process. Individuals who do not follow the process set out in the

Management Directive for allegations of dissatisfaction will have such

complaints dismissed by the agency or by the Commission. The procedure

to be used will ensure that any evidence of discrimination or improper

handling will be considered as part of the claim before the agency or

Commission without unnecessarily adding complaints to the system.

The Commission also proposes to add a dismissal provision to

section 1614.107 permitting an agency to dismiss a complaint where it

finds a clear pattern of abuse of the EEO process through strict

application of the criteria set forth in Commission decisions. The

proposed section codifies the Commission's decision in Buren v. USPS,

Request No. 05850299 (1985). The Commission has stated that it has the

inherent power to control and prevent abuse of its processes, orders or

procedures. It is within the Commission's purview to determine that

either complainants or agencies are engaging in conduct that

constitutes a scheme designed to frustrate the administrative process.

The Commission also has recognized that dismissing complaints for abuse

of process should be done only on rare occasions because of the strong

policy in favor of preserving complainants' EEO rights whenever

possible. Kleinman v. Postmaster General, Request No. 05940579 (1994).

The Commission believes that evaluating complaints for dismissal for

abuse of process requires careful deliberation and application of

strict criteria. Agencies must analyze whether a complainant's prior

behavior evidences an ulterior purpose to abuse the EEO process.

Evidence of numerous complaint filings, in and of itself, is an

insufficient basis for making such a finding. Hooks v. USPS, Appeal No.

01953852 (1995). However, multiple filings combined with the nature of

the subject matter of the complaints, lack of specificity in the

allegations, and allegations involving matters previously raised may be

considered in determining whether a complainant has engaged in a

pattern of abuse of the EEO process. Goatcher v. USPS, Request No.

05950557 (1996). The Commission proposes to add the dismissal provision

based on abuse of process, as well as the dismissal for spin-off

complaints, because it believes that they will improve the efficiency

and effectiveness of the EEO process. In addition, dealing summarily

with abusive complaints will make the process fairer for agencies that

must process complaints and for complainants who raise bona fide

allegations by focusing resources on bona fide allegations.

Offer of Resolution

The Commission proposes to add a provision to the procedures

permitting agencies to make offers of resolution to complainants as

long as they are made at least 30 days prior to the hearing. Offers of

resolution must be in writing and must explain to the complainant the

possible consequences of failing to accept the offer. Complainants will

have 30 days to consider the offer and decide whether to accept it. If

a complainant is represented by an attorney at the time that the offer

is made and fails to accept an offer of resolution, and the decision on

the complaint is not more favorable than the offer, then, except where

the interest of justice will not be served, the complainant will not

receive payment from the agency of attorney's fees or costs incurred

after the date of rejection or the expiration of the 30-day period of

the offer of resolution if there has been no rejection. If the offer of

resolution is not accepted within thirty days it is deemed to have been

rejected. Failure to accept an offer of resolution will not preclude an

agency from making other offers of resolution or either party from

seeking to negotiate a settlement of the complaint at any time. If an

agency believes that it has made a fair offer to an unrepresented

complainant who later obtains representation and seeks to avoid further

liability for attorney's fees, the agency can make a new offer in

writing at that time.

The Commission proposes the offer of resolution procedure, in part,

in response to comments from the agencies requesting that the failure

to accept a certified offer of full relief dismissal provision be

retained or modified. The Commission wishes to encourage resolution of

complaints at all times in the complaint process and believes the

proposed offer of resolution provision will provide incentive for

agencies and complainants to resolve complaints. The Commission seeks

comment on the offer of resolution proposal, particularly on the

interest of justice exception to the preclusion of costs and fees. The

Commission believes that the interest of justice standard in the

proposal will apply to those situations in which an administrative

judge determines that it would be unfair to preclude payment of

attorney's fees and costs.

Fragmentation of Complaints

The Commission seeks public comment on whether regulatory changes

are necessary to correct the problem of fragmented processing of EEO

claims. A recurring problem found by the Federal Sector Workgroup was

that many agencies do not distinguish between allegations in support of

a legal claim and the legal claim itself. As a result, some claims

involving a number of different allegations are fragmented or

separated. What should be one legal claim then becomes a number of

miscellaneous events, losing its character as a claim. A hypothetical

example would be a harassment claim where a pattern of incidents are

used to support a claim, but the separate incidents would not

constitute a legally cognizable claim of discrimination. As a result of

fragmentation, the number of discrimination complaints by federal

employees is unnecessarily multiplied and cognizable claims are

fragmented to such an extent that potentially valid claims become

meaningless. The Commission plans on amending its Management Directive

to address this problem and seeks comment on what, if any, regulatory

changes are necessary to correct this problem.

Partial Dismissals

The Commission proposes changes to the regulations to eliminate

interlocutory appeals of partial dismissals of complaints. Currently,

where an agency dismisses part of a complaint, but not the entire

complaint, the complainant has the right to immediately appeal the

partial dismissal to EEOC. The Commission provided for interlocutory

appeals of partial dismissals in Part 1614, hoping to streamline the

process and avoid holding two or more hearings on the same complaint.

Multiple hearings could have occurred absent an interlocutory appeal

when EEOC reversed an agency's partial dismissal after a hearing was

held on the rest of the complaint. The Commission believes that this

result can be accomplished without the unintended delays of complaints

or fragmentation of complaints that may have resulted from the current

provision.

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The Commission proposes to amend section 1614.401 to remove the

right to immediately appeal the dismissal of a portion of a complaint.

In addition, the Commission proposes to add a paragraph to the

dismissals section, section 1614.107, explaining how to process

complaints where a portion of the complaint, but not the entire

complaint, meets one or more of the standards for dismissal contained

in that section. In those circumstances, the agency will document the

file with its reasons for believing that the portion of the complaint

meets the standards for dismissal and will investigate the remainder of

the complaint. If the complainant requests a hearing from an

administrative judge, the administrative judge will evaluate the

reasons given by the agency for believing a portion of the complaint

meets the standards for dismissal before holding the hearing. If the

administrative judge believes that all or a part of the agency's

reasons are not well taken, the entire complaint or all of the portions

not meeting the standards for dismissal will continue in the hearing

process. The parties may conduct discovery to develop a record for all

portions of the complaint continuing in the hearing process. The

administrative judge's decision on the partial dismissal will become

part of the final decision on the complaint, which either party may

appeal to EEOC, in accordance with proposed section 1614.401. Where a

complainant requests a final decision from the agency without a

hearing, the agency will issue a decision addressing all claims in the

complaint, including its rationale for dismissing claims, if any, and

its findings on the merits of the remainder of the complaint. The

complainant may appeal the agency's final decision, including any

partial dismissals, to the EEOC.

Hearings

The Commission proposes four changes to the hearings process.

First, the Commission proposes to amend section 1614.108, by adding a

new paragraph (g), providing that complainants who wish to have a

hearing on their complaints after the 180 days period for investigation

has expired would be required to submit requests for hearings directly

to EEOC, rather than to their agencies, as is the current practice.

Agencies will be required to inform complainants in their

acknowledgment letters of the EEOC office and address where a request

for hearing is to be sent. When requesting a hearing from EEOC,

complainants will be required at the same time to send a copy of the

request for a hearing to their agencies' EEO offices. Upon receipt of a

request for hearing, EEOC would request that the agency provide copies

of the complaint file to EEOC and, if not previously provided, to the

complainant. The Commission believes that the proposed change will

expedite the complaint process. Complainants will communicate directly

with EEOC with copies to their agency, rather than through their agency

whose only function was to serve as a conduit for getting the request

to EEOC. In addition, the proposed change would alleviate concerns that

agencies are not responding to requests for hearings quickly enough by

allowing the parties to communicate directly with EEOC.

Second, the Commission proposes to specify in the regulation at

section 1614.109(b) that administrative judges have the authority to

dismiss complaints during the hearing process for all of the reasons

contained in the dismissal section, 29 CFR 1614.107. Currently,

administrative judges do not have the authority to dismiss complaints

that are in the hearing process, but will remand a complaint back to

the agency for dismissal, where appropriate. The proposed change would

eliminate an unnecessary layer by giving the administrative judge the

authority to dismiss without the need for remanding the complaint to

the agency.

Third, the Commission proposes to add a provision permitting

administrative judges to issue a final decision without a hearing where

they determine, even though material facts remain in dispute, that

there is sufficient information in the record to decide the case, that

the material facts in dispute can be decided on the basis of the

written record, that there are no credibility issues that would require

live testimony in order to evaluate a witness' demeanor and that the

case lacks merit. A new paragraph 1614.109(f)(4) would contain this

provision, which would supplement administrative judges' existing

authority to issue summary judgment decisions currently contained in 29

CFR 1614.109(e). While the decision is like a dismissal in that it will

result in a ruling against the complainant, it is set out as a separate

subsection because it will be an adjudication on the merits of the

complaints.

Finally, the Commission proposes to amend the regulations to

provide that administrative judges issue final decisions on complaints

that have been referred to them for a hearing. Complainants or agencies

could appeal administrative judges' final decisions to EEOC. Agencies

would continue to issue final decisions in cases where the complainants

request an immediate final decision without a hearing.

The Commission believes that allowing agencies to reject or modify

an administrative judge's findings of fact and conclusions of law leads

to an unavoidable conflict of interest. This is particularly true

because those cases have been referred to a neutral third party, an

EEOC administrative judge, to hear the dispute. Historically, agencies

have rejected or modified a majority of administrative judges' findings

of discrimination, but have adopted nearly all findings of no

discrimination. In fiscal year 1996, Commission administrative judges

issued 3,083 decisions, of which 284, or 9.2%, found discrimination.

Agencies accepted only 101 of those decisions and rejected 178, or

62.7%. Conversely, of the 2,799 findings of no discrimination, agencies

rejected only four or 0.1%. The Commission does not have available

current information containing the percentage of agency decisions it

accepts or rejects on appeal following administrative judge decisions.

The Commission believes that the proposed change will address the

perception of unfairness and conflict of interest in agencies deciding

complaints of discrimination against them. In addition, this proposal

eliminates a layer of review and permits decision-making at an earlier

state, central goals of the National Performance Review, thus making

the process more efficient.

Of those federal agencies that commented on the draft regulation

when the regulation was coordinated under Exec. Order No. 12067 (1978),

some supported the proposal to make the decision of the administrative

judge final. A number of agencies opposed it, however, chiefly arguing

that the Commission did not have authority to allow administrative

judges to issue final decisions, while some agencies believed that the

administrative judge could only issue a final decision if the hearing

was the first level of an appeal to the Commission. The Commission

believes that it has broad authority to restructure the discrimination

complaint process for federal employee complaints and that

administrative judges can issue decisions as proposed.

Section 717(b) of the Civil Rights Act of 1964 authorizes the

Commission to ``issue such rules, regulations, orders, and instructions

as it deems necessary and appropriate to carry out its responsibilities

under this section.'' 42 U.S.C. Sec. 2000e-16(b). Such broad language

has been interpreted by the courts to constitute a delegation of

legislative rulemaking authority. E.g.,

[[Page 8599]]

Mourning v. Family Publications Service, Inc., 411 U.S. 356 (1973);

Public Utilities Commission of California v. United States, 355 U.S.

534, 542-43 n. 4 (1958).

In 1972 Congress gave this rulemaking authority to the Civil

Service Commission, which was the predecessor to the EEOC in having

responsibility for enforcing the employment discrimination laws in the

federal sector. In so doing, Congress made it clear that it was

granting the Commission complete authority to restructure the complaint

process to ensure protection of the interests of all parties involved

in the process. It explained:

One feature of the present equal employment opportunity program

which deserves special scrutiny by the Civil Service Commission is

the complaint process. The procedure under the present system,

intended to provide for the informal disposition of complaints, may

have denied employees adequate opportunity for impartial

investigation and resolution of complaints.

Under present procedures, in most cases, each agency is still

responsible for investigating and judging itself. Although provision

is made for the appointment of an outside examiner, the examiner

does not have the authority to conduct an independent investigation,

and his conclusions and findings are in the nature of

recommendations to the agency head who makes the final agency

determination on whether there is, in fact, discrimination in that

particular case. The only appeal is to the Board of Appeals and

Review in the Civil Service Commission.

The testimony before the Labor Subcommittee reflected a general

lack of confidence in the effectiveness of the complaint procedure

on the part of Federal employees. Complainants have indicated

skepticism regarding the Commission's record in obtaining just

resolution of complaints and adequate remedies. This has, in turn,

discouraged persons from filing complaints with the Commission for

fear that doing so will only result in antagonizing their

supervisors and impairing any future hope of advancement. The new

authority given to the Civil Service Commission in the bill is

intended to enable the Commission to reconsider its entire complaint

structure and the relationships between the employee, agency, and

Commission in these cases.

S. Rept. No. 92-415 (1971), reprinted in Legislative History of the

Equal Employment Opportunity Act of 1972, 410 at 423 (1972) (emphasis

added).

In 1979, the authority for enforcement of the federal employee

complaint process was transferred from the Civil Service Commission to

EEOC. In proposing this transfer, the President stated:

Transfer of the Civil Service Commission's equal employment

opportunity responsibilities to EEOC is needed to ensure that: (1)

Federal employees have the same rights and remedies as those in the

private sector and in state and local government; (2) Federal

agencies meet the same standards as are required of other employers;

and (3) potential conflicts between an agency's equal employment

opportunity and personnel management functions are minimized.... The

Civil Service Commission has in the past been lethargic in enforcing

fair employment requirements within the Federal government.

Hearings Before a Subcommittee of the Committee on Government

Operations, Reorganization Plan No. 1 of 1978 (Equal Employment

Opportunity), at 6-7 (1978). In its report on the Plan, the Office of

Management and Budget stated that ``The Civil Service Commission is

expected to be lawmaker, prosecutor, judge and jury on employment

discrimination in the Federal workforce. Organizational deficiencies

like these inevitably lead to less rigorous compliance.'' Hearings,

Reorganization Plan No. 1 of 1978 at 186. In addition, OMB stated that

``[t]he Civil Service Commission's regulations concerning the filing of

class action complaints are highly restrictive.'' Hearings,

Reorganization Plan No. 1 of 1978 at 193. The type of organization

conflict of interest that the Commission seeks to eliminate in this

proposal, where an agency both takes an action and then serves as the

final decision maker on the complaint, has been of concern for years.

By proposing these changes, the EEOC is doing precisely what the

Congress envisioned would be done, i.e., the Commission is

reconsidering the complaint structure and the relative positions of the

employee, the agency and the Commission. The language of section 717,

its legislative history, and the transfer of that responsibility to

EEOC under Reorganization Plan No. 1 of 1978 all confirm that the EEOC

has been given the broadest possible authority to restructure the

complaints process for individual and class complaints.

Those agencies that assert that EEOC lacks the authority to change

its regulations to make administrative judges' decisions final, or that

it can only be done as part of an appellate procedure, rely on section

717(c), 42 U.S.C. Sec. 2000e-16(c). Section 717(c) provides:

Within thirty days of receipt of notice of final action taken by a

department, agency, or unit referred to in subsection 717(a), or by

the Civil Service Commission upon an appeal from a decision or order

of such department, agency, or unit on a complaint of

discrimination, * * * or after one hundred and eighty days from the

filing of the initial charge with the department, agency, or unit,

until such time as final action may be taken by a department, or

unit, an employee or applicant for employment, if aggrieved by the

final disposition of his complaint, or by the failure to take final

action on his complaint, may file a civil action as provided in

section 706, * * *

This language, which permits a federal employee to file suit against

the agency alleged to have discriminated, waives the government's

sovereign immunity from suit. Chandler v. Roudebush, 425 U.S. 849

(1976); Brown v. GSA, 425 U.S. 820 (1976). Nothing in this statutory

language limits EEOC's ability to issue regulations under subsection

717(b) or to structure the administrative process to enhance its

effectiveness and fairness. The language delineates when, under the

procedures that existed at that time, an individual could file suit in

court. There is no indication that Congress also intended to codify any

parts of the existing administrative procedures by the language of this

sentence. Indeed, the legislative history of section 717 demonstrates

that Congress expected the then-Civil Service Commission to make

significant changes to the complaint process. The importance of

administrative flexibility to improve the complaint process was

reaffirmed in 1978 when the President transferred the responsibilities

for federal employee complaints to EEOC.

Class Complaints

The Federal Sector Workgroup identified a series of concerns with

the class complaint process. It found that despite studies indicating

that class-based discrimination may continue to exist in the federal

government, recent data reflect that very few class complaints are

filed or certified at the administrative level. Only a very small

number of cases are brought as class actions and those that are filed

generally result in a denial of class certification. While an effective

administrative process for class complaints offers several advantages

over litigation in federal court, including informality, lower cost,

and the speed of resolution, the Workgroup found there is a perception

the current process does not adequately address class-based

discrimination in the federal government. As a result, complainants

often have elected to pursue their complaints in federal court.

Class actions play a particularly vital role in the enforcement of

the equal employment laws. They are an essential mechanism for

attacking broad patterns of workplace discrimination and providing

relief to victims of discriminatory policies or systemic practices. The

courts have long

[[Page 8600]]

recognized that class actions ``are powerful stimuli to enforce Title

VII,'' providing for the ``removal of artificial, arbitrary, and

unnecessary barriers to employment when the barriers operate

invidiously to discriminate on the basis of racial or other

impermissible classification.'' Wetzel v. Liberty Mutual Ins. Co., 508

F.2d 239, 254 (3d Cir.), cert denied, 421 U.S. 1011 (1975). The class

action device exists, in large part, to vindicate the interests of

civil rights plaintiffs. See 5 James W. Moore, Moore's Federal Practice

Sec. 23.43[1][a], at 23-191 (3d ed. 1997).

These same policies apply with equal force in the federal sector.

Accordingly, we propose several changes to strengthen the class

complaint process. The purpose of these changes is to ensure that

complaints raising class issues are not unjustifiably denied class

certification in the administrative process and that class cases are

resolved under appropriate legal standards consistent with the

principles applied by federal courts. Where a class of individuals have

been affected by a policy or practice, it is far more efficient to

address those concerns in one action rather than requiring numerous

individual complaints. These proposed changes seek to make the class

complaint process fairer by allowing individuals to seek class

certification at any reasonable stage in the process. The class

implications of a complaint may not be apparent until the complainant

receives the investigative file or information in discovery that would

indicate that the agency has acted in a way that will have implications

for a class. In addition, to further address the concerns identified by

the Workgroup, the Commission has undertaken a pilot program in which

all decisions on class certification will be made centrally by the

Complaint Adjudication Division of its Office of Federal Operations to

explore possible operational changes.

The Commission proposes four regulatory changes to the class

complaint procedures found at 29 CFR 1614.204. The Commission proposes

to revise section 1614.204(b) to provide that a complainant may move

for class certification at any reasonable point in the process when it

becomes apparent that there are class implications raised in an

individual complaint. If a complainant moves for class certification

after completing counseling, the complainant will not be required to

return to the counseling stage. Some agencies who commented on this

proposal when it was coordinated under Exec. Order No. 12067 supported

the change but asked that the regulation define ``reasonable point in

the process'' and indicate what criteria would be used to determine

that a complaint has class implications. Some agencies opposed the

change, arguing that it would entail additional investigative costs and

invite abuse by complainants seeking to bypass the counseling process

by making frivolous class allegations. They maintained that a

complainant should have to elect between a class or an individual claim

at the pre-complaint stage. Others objected only to eliminating

counseling, as that it is how the complainant is informed of his or her

rights and responsibilities as class agent.

The Commission believes that the proposed change is an important

step toward removing unnecessary barriers to class certification of

complaints that are properly of a class nature. The Commission has

consistently recognized that its decisions on class certification must

be guided by the complainant's lack of access to pre-certification

discovery; this is different from the situation of a Rule 23 plaintiff

who does have access to pre-certification discovery on class issues.

Similarly, often an individual complainant will not have reason to know

at the counseling stage that the challenged action actually reflects an

agency policy or practice generally applicable to a class of similarly

situated individuals. The Commission intends that ``reasonable point in

the process'' be interpreted to allow a complainant to seek class

certification when he or she knows or should know that the complaint

has class implications, i.e., it potentially involves questions of fact

common to a class and is typical of the claims of a class. Normally,

this point would be no later than the end of discovery at the hearing

stage. It would be the responsibility of the agency or administrative

judge, as appropriate, to ensure that the class agent is advised of his

or her obligations at this time. The Commission believes it would be

impracticable and unproductive to require the complainant to return to

counseling at this stage.

The Commission proposes to amend section 1614.204(d) to provide

that administrative judges would issue final decisions on whether a

class complaint will be accepted (or certified) or dismissed.

Currently, administrative judges make recommendations to agencies on

acceptance or dismissal. The Commission particularly invites comment on

this proposal. Agencies who commented on this proposal when it was

coordinated under Exec. Order No. 12067 said they either supported or

opposed it for the same reasons they gave with respect to the proposal

for administrative judges to issue final decisions on individual

complaints. Some agencies said they supported it only if the agency is

given the right to appeal a certification decision. Under the

Commission's proposal, an agency would have such a right under section

1614.401(b), which provides that an agency may appeal an administrative

judge's final decision. The Commission also seeks public comment on

whether to make administrative judges' decisions on the merits final in

class cases, consistent with the proposal to allow administrative

judges to issue final decisions in section 1614.109(h).

In addition, the Commission proposes to amend section

1614.204(g)(2) to require that administrative judges must approve class

settlement agreements pursuant to the ``fair and reasonable'' standard,

even when no class member has asserted an objection to the settlement.

Several agency commenters under Exec. Order No. 12067 supported this

proposal while others disagreed, arguing that it would add an

unnecessary layer of review and that adequate safeguards exist in

section 1614.204(g)(4), which gives dissatisfied class members the

right to petition to vacate a settlement, and 1614.204(a)(2), which

requires the class agent to fairly and adequately represent the class.

The Commission believes this proposed change is necessary to protect

the interests of the class. As one agency commenter noted, class agents

sometimes seek to settle their individual claims without full regard

for the interests of the class. The change would make the regulations

consistent with the practice in federal courts where the court must

approve any settlement of a class case under a fair and reasonable

standard.

Finally, the Commission proposes to amend section 1614.204(l)(3) to

clarify the burdens of proof applicable to individual class members who

believe they are entitled to relief. The proposed change would make

explicit that the burdens enunciated in Teamsters v. United States, 431

U.S. 324 (1977), apply. In Teamsters, the Court stated that where a

finding of discrimination has been made, there is a presumption of

discrimination as to every individual who can show he or she is a

member of the class and was affected by the discrimination during the

relevant period of time. Agencies then would be required to show by

clear and convincing evidence that any class member is not entitled to

relief, as is provided currently in sections 1614.501 (b) and (c).

[[Page 8601]]

Appeals

In addition to the proposal to allow complainants or agencies to

appeal administrative judges' final decisions, noted above, the

Commission proposes to revise the briefing schedules for appeals to

EEOC, to add a provision permitting the Office of Federal Operations to

sanction parties for failure to comply with the regulations, to change

the standard of review for some appeals, and to revise the process for

seeking reconsideration of appeals decisions. The Commission proposes

to amend section 1614.403 of the regulations to require that

complainants submit any statement or brief in support of an appeal of

dismissal of a complaint to EEOC within 30 days of receipt of the

dismissal. Any statement or brief in support of an appeal of a final

decision on a complaint would have to be submitted to EEOC within 30

days of filing the notice of appeal. Statements or briefs in opposition

to appeals would have to be served on the opposing party within 30 days

of receipt of a statement or brief in support of an appeal. The

Commission will strictly apply appellate time frames. Currently,

complainants have 30 days after filing the notice of appeal to submit a

statement or brief. The Commission believes that 30 days is sufficient

time to file briefs in procedural cases (cases that are dismissed by

the agency or the administrative judge) because those cases usually do

not raise voluminous factual issues. On the other hand, appeals of

final decisions on the merits of cases generally require a thorough

review of the record and warrant additional time to formulate arguments

to support the appeals. In connection with the briefing schedule

changes, the Commission proposes to amend the regulation to require

agencies to submit the complaint file to EEOC within 30 days of

notification that the complainant has filed an appeal or within 30 days

of submission of an appeal by the agency.

The Commission proposes to amend section 1614.404 to add a

paragraph authorizing the Office of Federal Operations to take

appropriate action where a party to an appeal fails without good cause

shown to comply with the appellate procedures or to respond fully and

in timely fashion to a request for information. The proposal would

allow the Office of Federal Operations to draw an adverse inference

that requested information a party failed to provide would have

reflected unfavorably on that party, to consider the matters to which

the requested information pertains to be established in favor of the

opposing party, to issue a decision fully or partially in favor of the

opposing party, or to take such other actions as appropriate.

The Commission proposes to amend section 1614.405 of the

regulations to provide that decisions on appeal from final decisions by

administrative judges after a hearing will be based on a substantial

evidence standard of review, but review of all other decisions will be

based on a de novo standard of review. The version of the NPRM

circulated for interagency coordination had included a clearly

erroneous standard of review for administrative judges' factual

findings; this was changed to the substantial evidence standard now in

the NPRM at the request of agencies, who took the position that the

clearly erroneous standard was too restrictive. No new evidence will be

considered on appeal unless the evidence was not reasonably available

during the hearing process. It should be emphasized that the

substantial evidence standard does not preclude meaningful review of

factual findings. However, applying the de novo standard of review to

the factual findings in administrative judges' final decisions after

hearings would be an inefficient use of EEOC's limited resources. In

addition, since EEOC's Office of Federal Operations did not see and

hear the witnesses, it would not be in a position to second-guess the

administrative judge during the appellate process, especially with

respect to credibility determinations based on a witness' demeanor.

Factual findings based on documentary evidence are more susceptible to

review in the appellate process.

Finally, the Commission proposes to amend sections 1614.405 and

1614.407 to model its reconsideration process after the process used by

the Merit Systems Protection Board (MSPB). Reconsideration is an extra

layer of review that is duplicative and time-consuming but that does

little to improve the complaints process. The Commission denies the

majority of requests for reconsideration, whether in procedural or

merits cases. The purpose of this change is to enable the Commission to

direct more resources to decision-making at the first appellate level,

focusing on policy issues it deems important and developing a

consistent body of decisional law on those issues. Restructuring the

reconsideration process will permit the Commissioners to become more

involved in the initial appellate decision. This proposal would also

effectuate one of the central goals of the National Performance Review

by, in many cases permitting decision-making at an earlier stage. The

Commission will retain its discretion to reconsider any decision under

section 1614.407(a).

Most agency commenters who commented on this proposal when it was

coordinated under Exec. Order No. 12067 opposed eliminating the right

to seek reconsideration. They urged retention of the right to request

reconsideration as a safeguard for agencies against mistakes and

inconsistencies by the Office of Federal Operations. It would be unfair

to deny agencies this last opportunity for recourse, they maintained,

particularly if administrative judges' decisions are made final and

given greater deference. They argued the change would unjustifiably tip

the balance in favor of complainants, who have the right to file suit

in federal court and receive a de novo review. As they noted, agencies

do not have the right to any court review if dissatisfied with a

Commission decision. Several commenters also argued in favor of

preservation of the right to request reconsideration of at least those

decisions involving important legal issues or having a significant

impact on agency policies or programs beyond the case at hand. In

response to these comments the Commission has provided standards for

parties to meet in seeking reconsideration. While reconsideration will

continue to be discretionary, parties can seek reconsideration where

there is a clear mistake of fact or law or where the decision will have

a far ranging impact on the agency.

Reformation of the reconsideration process is an important

component of the proposed federal sector reforms. It will provide the

resources to improve the timeliness and quality of the Commission's

Office of Federal Operations decisions across the board. The broad

availability of reconsideration has not significantly enhanced the

overall decision-making process. Many requests are simply a reargument

of previously unsuccessful positions. They are sometimes used only to

delay the finality of an adverse decision. The overwhelming majority of

requests are denied. For example, in fiscal year 1997, requests for

reconsideration resulting in a reversal of an order on the merits

occurred in only seven instances or about 4% of the cases. For fiscal

years 1996, 1995, 1994 and 1993, the figures were 5%, 2%, 2% and 3%,

respectively.

To the extent agencies have legitimate complaints about erroneous

Office of Federal Operations decisions, the Commission believes the

principal remedy is to seek to improve the quality timeliness and

consistency of the

[[Page 8602]]

decision-making process as a whole. This is best accomplished by

shifting resources to the appeal stage. Although the agencies view it

as unfair that, unlike complainants, they cannot go to court if they

are dissatisfied with the administrative process, the Commission does

not believe that this argument supports adding another layer to the

process. Regardless of how the reconsideration process is structured,

complainants will still have the right to obtain court review while

agencies will not. This inherent aspect of the process does not

outweigh the need for finality at an earlier stage and the value of a

more streamlined process. Finally, some agencies have argued that

reconsideration is an important step to ensure full consideration of

the agency position in cases involving significant legal issues or

broader consequences for agency policies and programs. In the first

instance, it is incumbent upon the agency to identify and thoroughly

address such policy or legal issues in its brief at the appellate stage

so that the Commission can give the case the level of scrutiny

warranted at the most appropriate level of review. Moreover, the

proposed standards address this concern.

Attorney's Fees

The Commission proposes to amend the attorney's fees section of the

regulations to authorize administrative judges to calculate reasonable

attorney's fees in cases where a hearing is requested. Currently,

administrative judges decide the entitlement to attorney's fees.

Agencies, however, calculate the amount of the award. The Commission

believes that administrative judges are in a better position to render

an impartial decision on the reasonableness of the fees request. They

have heard the evidence and can assess the complexity of the case as

presented by the attorney as the basis of the award. Moreover, because

administrative judges are neutral third parties to the dispute, their

attorney's fees calculations will not be perceived as biased in favor

of one party or the other. This proposal has been questioned by some

agencies because administrative judges generally have not issued such

awards previously. In light of these concerns, the Commission will

issue guidance to administrative judges on the calculation of

reasonable attorney's fees. The Commission will consult with other

agencies prior to issuing the guidance.

In addition, the Commission proposes to amend section

1614.501(e)(1)(iv) to provide that an award of attorney's fees may

include compensation for the time spent during the counseling period

including any ADR process. The Commission believes that the current

regulation, which limits attorney's fees awards to fees for work

performed after a formal complaint is filed, could serve as a

disincentive to participate in alternative dispute resolution, which

often occurs during the counseling period, or otherwise settle a case

during counseling.

During inter-agency coordination of the proposed rule, many

agencies expressed opposition to this proposal to provide for

attorney's fees awards for pre-complaint activities, arguing that

providing for attorney's fees will formalize the informal counseling

process and make it more legalistic and adversarial. While the

Commission believes that the availability of attorney's fees will

permit settlement early on, agencies believe that it will draw out the

process. The Commission proposes the change, in part, to make the EEO

complaint remedies consistent with the remedies available to Federal

employees in other forums. The Office of Personnel Management's (OPM)

Back Pay Act regulations provide for the payment of attorney's fees

without a temporal restriction in cases correcting unjustified or

unwarranted personnel actions. 5 CFR 550.807. In other words, OPM's

regulations provide for full attorney's fees, including cases resolved

during the informal stage (first step) of the grievance process.

Likewise, the Merit System Protection Board's (MSPB) regulations do not

contain any restriction on attorney's fees. 5 CFR 1201.37. The

Commission does not believe that federal employees who have been

discriminated against should receive a lesser remedy than federal

employees who prevail in grievances and MSPB appeals. The Commission is

particularly interested in comments on this proposal.

In addition to the proposed changes outlined above, the Commission

proposes to amend section 1614.103(b) of the regulations to include the

Public Health Service Commissioned Corps and the National Oceanic and

Atmospheric Administration Commissioned Corps in the coverage of Part

1614. This inclusion is consistent with prior Commission decisions and

with the determination of the Solicitor General that Commissioned Corps

member are covered by federal sector anti-discrimination statutes.

In proposing these changes, the Commission wishes to reiterate its

intention to monitor the federal employee complaint process and to

propose changes that may become necessary to correct problems that may

develop. In order to better monitor the system, the Commission will

examine the data that it maintains on complaints and appeals to ensure

that appropriate information about appeals from final decisions,

attorney's fees awarded and other costs exists.

Regulatory Procedures

Executive Order 12866

In promulgating this notice of proposed rulemaking, the Commission

has adhered to the regulatory philosophy and applicable principles of

regulation set forth in section 1 of the Executive Order 12866,

Regulatory Planning and Review. This regulation has been designated as

a significant regulation and reviewed by OMB consistent with the

Executive Order.

Regulatory Flexibility Act

In addition, the Commission certifies under 5 U.S.C. Sec. 605(b),

enacted by the Regulatory Flexibility Act (Pub. L. 96-354), that this

rule will not have a significant economic impact on a substantial

number of small entities, because it applies exclusively to employees

and agencies and departments of the federal government. For this

reason, a regulatory flexibility analysis is not required.

Paperwork Reduction Act

This regulation contains no information collection requirements

subject to review by the Office of Management and Budget under the

Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 29 CFR Part 1614

Administrative practice and procedure, Age discrimination, Equal

employment opportunity, Government employees, Individuals with

disabilities, Race discrimination, Religious discrimination, Sex

discrimination.

For the Commission.

Paul M. Igasaki,

Chairman.

Accordingly, for the reasons set forth in the preamble, it is

proposed to amend chapter XIV of title 29 of the Code of Federal

Regulations as follows:

PART 1614--[AMENDED]

1. The authority citation for 29 CFR Part 1614 continues to read as

follows:

Authority: 29 U.S.C. 206(d), 633a, 791 and 794a; 42 U.S.C.

2000e-16; E.O. 10577, 3 CFR, 1954-1958 Comp., p. 218; E.O. 11222, 3

CFR, 1964-1965 Comp., p. 306; E.O. 11478, 3 CFR, 1969 Comp., p. 133;

E.O. 12106, 3 CFR, 1978 Comp., p. 263; Reorg. Plan No. 1 of 1978, 3

CFR, 1978 Comp., p. 321.

[[Page 8603]]

2. Section 1614.102 is amended by redesignating paragraphs (b)(2)

through (b)(6) as paragraphs (b)(3) through (b)(7), and by adding

paragraph (b)(2) to read as follows:

Sec. 1614.102 Agency program.

* * * * *

(b) * * *

(2) Establish or make available an alternative dispute resolution

program for the equal employment opportunity pre-complaint process.

* * * * *

3. Section 1614.103 is amended by removing the word ``and'' at the

end of paragraph (b)(3), removing the period at the end of paragraph

(b)(4), adding the word ``; and'' at the end of paragraph (b)(4) and

adding paragraphs (b)(5) and (b)(6) to read as follows:

Sec. 1614.103 Complaints of discrimination covered by this part.

* * * * *

(b) * * *

(5) The Public Health Service Commissioned Corps, except when, in

time of war or national emergency, the President declares the Corps to

be a military service in accordance with 42 U.S.C. 217;

(6) The National Oceanic and Atmospheric Administration

Commissioned Corps.

* * * * *

4. Section 1614.105 is amended by redesignating paragraph (b) as

paragraph (b)(1), revising the first sentence of redesignated paragraph

(b)(1), adding paragraph (b)(2), revising the first sentence of

paragraph (d) and revising paragraph (f) to read as follows:

Sec. 1614.105 Pre-complaint processing.

* * * * *

(b)(1) At the initial counseling session, Counselors must advise

individuals orally and in writing of their rights and responsibilities,

including the right to request a hearing or an immediate final decision

after an investigation by the agency in accordance with

Sec. 1614.108(f), election rights pursuant to Secs. 1614.301 and

1614.302, the right to file a notice of intent to sue pursuant to

Sec. 1614.201(a) and a lawsuit under the ADEA instead of an

administrative complaint of age discrimination under this part, the

duty to mitigate damages, administrative and court time frames, and

that only the matter(s) raised in precomplaint counseling (or issues

like or related to issues raised in pre-complaint counseling) may be

alleged in a subsequent complaint filed with the agency. * * *

(2) Counselors shall advise aggrieved persons that they may choose

between participation in the alternative dispute resolution program

offered by the agency and the counseling activities provided for in

paragraph (c) of this section.

* * * * *

(d) Unless the aggrieved person agrees to a longer counseling

period under paragraph (e) of this section, or the aggrieved person

chooses an alternative dispute resolution procedure in accordance with

paragraph (b)(2) of this section, the Counselor shall conduct the final

interview with the aggrieved person within 30 days of the date the

aggrieved person contacted the agency's EEO office to request

counseling. * * *

* * * * *

(f) Where the aggrieved person chooses to participate in an

alternative dispute resolution procedure in accordance with paragraph

(b)(2) of this section, the pre-complaint processing period shall be 90

days. If the matter has not been resolved before the 90th day, the

notice described in paragraph (d) of this section shall be issued.

* * * * *

5. Section 1614.106 is amended by adding a sentence after the first

sentence of the introductory text of paragraph (d) to read as follows:

Sec. 1614.106 Individual complaints.

* * * * *

(d) * * * The agency shall advise the complainant in the

acknowledgment of the EEOC office and its address where a request for a

hearing shall be sent. * * *

* * * * *

6. Section 1614.107 is amended by redesignating paragraphs (a)

through (h) as paragraphs (a)(1) through (8), redesignating the

introductory text as paragraph (a) introductory text and revising it,

revising paragraph (a)(8) and adding new paragraph (a)(9) and paragraph

(b) to read as follows:

Sec. 1614.107 Dismissals of complaints.

(a) Prior to a request for a hearing in a case, the agency shall

dismiss an entire complaint:

* * * * *

(8) That alleges dissatisfaction with the processing of a

previously filed complaint; or

(9) Where the agency strictly applies the criteria set forth in

Commission decisions and finds a clear pattern of misuse of the EEO

process.

(b) Where the agency believes that some but not all of the claims

in a complaint should be dismissed for the reasons contained in

paragraphs (a)(1) through (9) of this section, the agency shall notify

the complainant in writing of its determination, the rationale for that

determination and that those allegations will not be investigated, and

shall place a copy of the notice in the investigative file. A

determination under this paragraph is reviewable by an administrative

judge if a hearing is requested on the remainder of the complaint, but

is not appealable until a final decision is issued on the remainder of

the complaint.

7. Section 1614.108 is amended by revising paragraph (f) and adding

a new paragraph (g) to read as follows:

Sec. 1614.108 Investigation of complaints.

* * * * *

(f) Within 180 days from the filing of the complaint, within the

time period contained in an order from the Office of Federal Operations

on an appeal from a dismissal, or within any period of extension

provided for in paragraph (e) of this section, the agency shall provide

the complainant with a copy of the investigative file, and shall notify

the complainant that, within 30 days of receipt of the investigative

file, the complainant has the right to request a hearing and final

decision from an administrative judge or may receive an immediate final

decision pursuant to Sec. 1614.110 from the agency with which the

complaint was filed.

(g) Where the complainant has received the notice required in

paragraph (f) of this section or at any time after 180 days have

elapsed from the filing of the complaint, the complainant may request a

hearing by submitting a request for a hearing directly to the EEOC

office indicated in the agency's acknowledgment letter. The complainant

shall send a copy of the request for a hearing to the agency EEO

office. Upon receipt of a request for a hearing, EEOC will request that

the agency provide copies of the complaint file to EEOC and, if not

previously provided, the complainant.

8. Section 1614.109 is amended by revising paragraph (a),

redesignating paragraphs (b) through (g) as paragraphs (d) through (i),

adding new paragraphs (b) and (c), revising the introductory text of

redesignated paragraph (f)(3), in redesignated paragraph (g) removing

the phrases ``findings and conclusions'' and adding, in their place,

the words ``final decisions'', adding a new paragraph (g)(4), and

revising paragraph (i) to read as follows:

Sec. 1614.109 Hearings.

(a) When a complainant requests a hearing, the Commission shall

appoint an administrative judge to conduct a

[[Page 8604]]

hearing in accordance with this section. Any hearing will be conducted

by an administrative judge or hearing examiner with appropriate

security clearances. Where the administrative judge determines that the

complainant is raising or intends to pursue issues like or related to

those raised in the complaint, but which the agency has not had an

opportunity to address, the administrative judge may remand any such

issue for counseling in accordance with Sec. 1614.105 or for such other

processing as ordered by the administrative judge.

(b) Dismissals. Administrative judges shall dismiss complaints

pursuant to Sec. 1614.107.

(c) Offer of resolution. Any time after the initial counseling

session but more than 30 days prior to the hearing, the agency may make

an offer of resolution of the complaint to the complainant. The offer

of resolution shall be in writing and shall include a notice explaining

the possible consequences of failing to accept the offer. The

complainant shall have 30 days from receipt of the offer of resolution

to accept or reject it. If the complainant is represented by an

attorney when the offer is made and fails to accept an offer of

resolution, and the final decision on the complaint is not more

favorable than the offer, then, except where the interest of justice

would not be served, the complainant shall not receive payment from the

agency of attorney's fees or costs incurred after the date of rejection

or the expiration of the 30-day period of the offer of resolution if no

rejection has been made. An acceptance of an offer must be in writing

and will be timely if postmarked or received within the 30-day period.

Where a complainant fails to accept an offer of resolution, an agency

may make other offers of resolution or either party may seek to

negotiate a settlement of the complaint at any time.

(f) * * *

(3) When the complainant, or the agency against which a complaint

is filed, or its employees fail without good cause shown to respond

fully and in timely fashion to an order of an administrative judge, or

requests for the investigative file, for documents, records,

comparative data, statistics, affidavits, or the attendance of

witness(es), the administrative judge shall, in appropriate

circumstances:

* * * * *

(g) * * *

(4) Where the administrative judge determines, even though material

facts remain in dispute, that there is sufficient information in the

record to decide the case, that the material facts in dispute can be

decided on the basis of the written record, that there are no

credibility issues that would require live testimony in order to

evaluate a witness' demeanor and that the case lacks merit, the

administrative judge may issue a final decision without a hearing.

* * * * *

(i) Final decisions by administrative judges. Unless the

administrative judge makes a written determination that good cause

exists for extending the time for issuing a final decision, within 180

days of receipt by EEOC of a request for a hearing, an administrative

judge shall issue a final decision on the complaint, and shall order

appropriate remedies and relief where discrimination is found with

regard to the matter that gave rise to the complaint. The

administrative judge shall send copies of the entire record, including

the transcript, and the final decision to the parties by certified

mail, return receipt requested. The final decision shall contain notice

of the right of either party to appeal to the Commission, notice of the

right of the complainant to file a civil action in Federal district

court, the name of the proper defendant in any such lawsuit and the

applicable time limits for appeals and lawsuits. A copy of EEOC Form

573 shall be attached to the decision.

9. Section 1614.110 is amended by revising the title and first and

second sentence to read as follows:

Sec. 1614.110 Final decisions by agencies.

Within 60 days of receiving notification that a complainant has

requested an immediate decision from the agency, or within 60 days of

the end of the 30-day period for the complainant to request a hearing

or an immediate final decision where the complainant has not requested

either a hearing or a decision, the agency shall issue a final

decision. The final decision shall consist of findings by the agency on

the merits of each issue in the complaint, or, as appropriate, the

rationale for dismissing any claims in the complaint and, when

discrimination is found, appropriate remedies and relief in accordance

with subpart E of this part.* * *

10. Section 1614.204 is amended by revising paragraph (b), removing

the words ``recommend that the agency'' from paragraphs (d)(2), (d)(3),

(d)(4), and (d)(5), removing the word ``recommend'' and replacing it

with the word ``decide'' in paragraph (d)(6), revising paragraph

(d)(7), paragraph (e)(1), paragraph (g)(2) and paragraph (l)(3) to read

as follows:

Sec. 1614.204 Class complaints.

* * * * *

(b) Pre-complaint processing. An employee or applicant who wishes

to file a class complaint must seek counseling and be counseled in

accordance with Sec. 1614.105. A complainant may move for class

certification at any reasonable point in the process when it becomes

apparent that there are class implications to the claim raised in an

individual complaint. If a complainant moves for class certification

after completing the counseling process contained in Sec. 1614.105, no

additional counseling is required.

* * * * *

(d) * * *

(7) The administrative judge shall transmit his or her decision to

accept or dismiss a complaint to the agency and the agent. The

dismissal of a class complaint shall inform the agent either that the

complaint is being filed on that date as an individual complaint of

discrimination and will be processed under subpart A or that the

complaint is also dismissed as an individual complaint in accordance

with Sec. 1614.107. In addition, it shall inform the agent of the right

to appeal the dismissal of the class complaint to the Office of Federal

Operations or to file a civil action and shall include EEOC Form 573,

Notice of Appeal/Petition.

(e) (1) Within 15 days of receiving notice that the administrative

judge has accepted a class complaint or a reasonable time frame

specified by the administrative judge, the agency shall use reasonable

means, such as delivery, mailing to last known address or distribution,

to notify all class members of the acceptance of the class complaint.

* * * * *

(g) * * *

(2) The complaint may be resolved by agreement of the agency and

the agent at any time as long as the administrative judge finds the

agreement to be fair and reasonable.

* * * * *

(l) * * *

(3) When discrimination is found in the final decision and a class

member believes that he or she is entitled to individual relief, the

class member may file a written claim with the head of the agency or

its EEO Director within 30 days of receipt of notification by the

agency of its final decision. The claim must include a specific,

detailed showing that the claimant is a class member who was affected

by a personnel action or matter resulting from the discriminatory

policy or practice, and that this discriminatory

[[Page 8605]]

action took place within the period of time for which the agency found

class-wide discrimination in its final decision. Where a finding of

discrimination against a class has been made, there shall be a

presumption of discrimination as to each member of the class. The

agency must show by clear and convincing evidence that any class member

is not entitled to relief. The period of time for which the agency

finds class-wide discrimination shall begin not more than 45 days prior

to the agent's initial contact with the Counselor and shall end not

later than the date when the agency eliminates the policy or practice

found to be discriminatory in the agency decision. The agency shall

issue a final decision on each such claim within 90 days of filing.

Such decision must include a notice of the right to file an appeal or a

civil action in accordance with subpart D of this part and the

applicable time limits.

11. Section 1614.401 is amended by redesignating paragraphs (b)

through (d) as paragraphs (c) through (e), revising paragraph (a) and

adding a new paragraph (b) to read as follows:

Sec. 1614.401 Appeals to the Commission.

(a) A complainant may appeal an agency's final decision or the

agency's dismissal of a complaint.

(b) A complainant or an agency may appeal an administrative judge's

final decision or an administrative judge's dismissal of a complaint.

* * * * *

12. Section 1614.403 is revised to read as follows:

Sec. 1614.403 How to appeal.

(a) The complainant, agency, agent, grievant or individual class

claimant (hereinafter appellant) must file an appeal with the Director,

Office of Federal Operations, Equal Employment Opportunity Commission,

at P.O. Box 19848, Washington, DC 20036, or by personal delivery or

facsimile. The appellant should use EEOC Form 573, Notice of Appeal/

Petition, and should indicate what is being appealed.

(b) The appellant shall furnish a copy of the appeal to the

opposing party at the same time it is filed with the Commission. In or

attached to the appeal to the Commission, the appellant must certify

the date and method by which service was made on the opposing party.

(c) If an appellant does not file an appeal within the time limits

of this subpart, the appeal will be untimely and shall be dismissed by

the Commission.

(d) Where an appellant appeals a dismissal, any statement or brief

in support of the appeal must be submitted to the Office of Federal

Operations within 30 days of receipt of the dismissal. Where an

appellant appeals a final decision, any statement or brief in support

of the appeal must be submitted within 30 days of filing the notice of

appeal.

(e) The agency must submit the complaint file to the Office of

Federal Operations within 30 days of notification that the complainant

has filed an appeal or within 30 days of submission of an appeal by the

agency.

(f) Any statement or brief in opposition to an appeal must be

submitted to the Commission and served on the opposing party within 30

days of receipt of the statement or brief supporting the appeal.

13. Section 1614.404 is amended by adding a new paragraph (c) to

read as follows:

Sec. 1614.404 Appellate procedure.

* * * * *

(c) When either party to an appeal fails without good cause shown

to comply with the requirements of this section or to respond fully and

in timely fashion to requests for information, the Office of Federal

Operations shall, in appropriate circumstances:

(1) Draw an adverse inference that the requested information would

have reflected unfavorably on the party refusing to provide the

requested information;

(2) Consider the matters to which the requested information or

testimony pertains to be established in favor of the opposing party;

(3) Issue a decision fully or partially in favor of the opposing

party; or

(4) Take such other actions as appropriate.

14. Section 1614.405 is amended by revising the third sentence of

paragraph (a) and revising paragraph (b) to read as follows:

Sec. 1614.405 Decisions on appeals.

(a) * * * The decision on an appeal from a final decision shall be

based on a de novo review, except that the review of the factual

findings in a decision by an administrative judge issued pursuant to

Sec. 1614.109(h) shall be based on a substantial evidence standard of

review. * * *

(b) A decision issued under paragraph (a) of this section is final

within the meaning of Sec. 1614.408 unless the Commission reconsiders

the case. A party may request reconsideration within 30 days of receipt

of a decision of the Commission, which the Commission in its discretion

may grant, if the party demonstrates that:

(1) The appellate decision involved a clearly erroneous

interpretation of material fact or law; or

(2) The decision will have a substantial impact on the policies,

practices or operations of the agency.

15. Section 1614.407 is removed and sections 1614.408 through

1614.410 are redesignated sections 1614.407 through 1614.409.

16. Section 1614.501 is amended by revising the last sentence of

the introductory text of paragraph (e)(1), and revising paragraph

(e)(1)(iv) to read as follows:

Sec. 1614.501 Remedies and relief.

* * * * *

(e) Attorney's fees or costs--(1) * * * In a final decision, the

agency, administrative judge, or Commission may award the applicant or

employee reasonable attorney's fees or costs (including expert witness

fees) incurred in the processing of the complaint.

* * * * *

(iv) Attorney's fees shall be paid for all services performed by an

attorney, provided that the attorney provides reasonable notice of

representation to the agency, administrative judge or Commission.

Written submissions to the agency that are signed by the representative

shall be deemed to constitute notice of representation.

* * * * *

17. Section 1614.502 is amended by revising the first sentence of

paragraph (a), revising paragraph (b) introductory text and paragraph

(b)(2) and adding a new paragraph (b)(3) to read as follows:

Sec. 1614.502 Compliance with final Commission decisions.

(a) Relief ordered in a final decision on appeal to the Commission

is mandatory and binding on the agency except as provided below. * * *

(b) Notwithstanding paragraph (a) of this section, when the agency

requests reconsideration and the case involves removal, separation, or

suspension continuing beyond the date of the request for

reconsideration, and when the decision orders retroactive restoration,

the agency shall comply with the decision to the extent of the

temporary or conditional restoration of the employee to duty status in

the position specified by the Commission, pending the outcome of the

agency request for reconsideration.

* * * * *

(2) When the agency requests reconsideration, it may delay the

payment of any amounts ordered to be paid to the complainant until

after the request for reconsideration is resolved. If the agency delays

payment of any

[[Page 8606]]

amount pending the outcome of the request to reconsider and the

resolution of the request requires the agency to make the payment, then

the agency shall pay interest at the rate set by the IRS for the

underpayment of taxes compounded quarterly from the date of the

original appellate decision until payment is made.

(3) The agency shall notify the Commission and the employee in

writing at the same time it requests reconsideration that the relief it

provides is temporary or conditional and, if applicable, that it will

delay the payment of any amounts owed but will pay interest as

specified in paragraph (b)(2) of this section. Failure of the agency to

provide notification will result in the dismissal of the agency's

request.

* * * * *

[FR Doc. 98-4165 Filed 2-19-98; 8:45 am]

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