Federal Sector Equal Employment Opportunity

SUMMARY: This rule revises the Equal Employment Opportunity

Commission's federal sector complaint processing regulations to

implement the recommendations made by its Federal Sector Workgroup. The

rule revises procedures throughout the complaint process, addressing

the continuing perception of unfairness and inefficiency in the

process. The Commission is requiring that agencies make available

alternative dispute resolution programs, and is revising the counseling

process, the bases for dismissal of complaints and the procedures for

requesting a hearing. EEOC is providing administrative judges with

authority to dismiss complaints and issue decisions on complaints.

Agencies will have the opportunity to issue a final order stating

whether they will implement the administrative judge's decision. The

Commission is also revising the class complaint procedures, the appeals

procedures, and the attorney's fees provisions.

DATES: Effective Date: This final rule will become effective on

November 9, 1999.

Applicability Dates: The requirement in Secs. 1614.102(b)(2) and

1614.105(b)(2) will apply on January 1, 2000 for agencies that do not

currently have ADR programs. All actions taken by agencies and by the

Commission after November 9, 1999 shall be in accordance with this

final rule.

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 final rule is also available in the following

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

computer disk. Requests for the final rule in an alternative format

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

SUPPLEMENTARY INFORMATION:

Introduction

The Equal Employment Opportunity Commission, as part of an ongoing

effort to evaluate and improve the effectiveness of its operations,

established the Federal Sector Workgroup, which 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: 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 reviewed and evaluated EEOC's administrative

processes governing its enforcement responsibilities in the federal

sector and, after consulting with affected agencies and groups of

stakeholders, developed recommendations to improve 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 Commission drafted a Notice of Proposed Rulemaking (NPRM) that

was circulated to all agencies for comment pursuant to Executive Order

12067 and subsequently published in the Federal Register on February

20, 1998. The Notice proposed changes to the Commission's federal

sector complaint processing regulations at 29 CFR Part 1614 to

implement the regulatory recommendations of the Federal Sector

Workgroup. 63 FR 8594 (1998). It sought public comment on those

proposals.

The Commission received over sixty comments on the NPRM. Federal

agencies and departments submitted 19 comments. Ten comments were

submitted by civil rights groups and attorneys groups and law firms,

four were submitted by federal employee unions and union

representatives, one by an association of federal EEO executives, and

one was submitted by a Member of Congress. EEOC also received 27

comments from individuals, including federal employees, attorneys and

other interested persons. The Commission has carefully considered all

of the comments and, as stated in the February Notice, also considered

the comments of agencies made during the interagency comment period.

The Commission has made a number of changes to the proposals contained

in the NPRM in response to the comments. In making these changes, the

Commission intends to continue its efforts to reform the federal sector

discrimination procedures. While the Commission believes that these

changes will make the procedures fairer, the Commission will continue

to seek improvements in the procedures. The comments on the NPRM and

all of the changes to the proposals are discussed more fully below.

Alternative Dispute Resolution

In the NPRM, the Commission proposed to require all agencies to

establish or make available an alternative dispute resolution (ADR)

program for the EEO pre-complaint process. In addition, EEOC proposed

to require that counselors advise aggrieved persons at the initial

counseling session 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.

The commenters generally supported both proposals, agreeing that

providing an ADR mechanism in the pre-complaint stage of the EEO

process will resolve more claims earlier in the process. Many of the

agency commenters emphasized their need for flexibility in developing

their ADR programs. Small agencies, in particular, requested that they

have the authority to determine on a case-by-case basis whether to

offer ADR to an aggrieved person for his or her claim. Other agencies

urged the Commission to ensure that the election provision take into

account that ADR should be voluntary for both parties, the aggrieved

person and the agency. Commenters also requested that EEOC clarify how

the pre-complaint process will operate when ADR is involved and address

the responsibilities of the Counselors throughout that process.

The Commission has revised the ADR and counseling provisions in

response to the comments. Agencies will be required to establish or

make available an ADR program. The ADR program must be available during

both the pre-complaint process and the formal complaint process. The

Commission encourages agencies to use ADR as a valuable tool in

resolving EEO disputes at all stages of the EEO process.

Agencies are free to develop ADR programs that best suit their

particular

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needs. While many agencies have adopted the mediation model, other

resolution techniques are acceptable, provided that they conform to the

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

in Management Directive 110. The Commission believes that agencies

should have flexibility in defining their ADR programs. EEOC expects

that, overall, agencies will develop an array of ADR programs, designed

to suit their particular circumstances. 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 make available

an ADR program.

In keeping with the Commission's emphasis on voluntariness as a

component of ADR, agencies may decide on a case-by-case basis whether

it is appropriate to offer ADR to individual aggrieved persons. EEOC

does not anticipate that ADR will be used in connection with every

claim brought to a Counselor. For example, some agencies may wish to

limit pre-complaint ADR geographically (if extensive travel would be

required), or by issue (excluding, for example, all claims alleging

discriminatory termination). Some agencies may wish to exclude class

allegations from their ADR programs. Agencies may not, however, exclude

entire bases of discrimination from ADR programs. For example, it would

be inappropriate for an agency to exclude from its ADR program all

claims alleging race discrimination.

In response to a comment, the Commission has revised the regulatory

provision governing the initial counseling session. The Commission has

removed from section 1614.105(b)(1) the requirement that Counselors

advise individuals both orally and in writing of their rights and

responsibilities, revising the section to require only that Counselors

provide that information in writing. Counselors are encouraged to

discuss the rights and responsibilities involved in the EEO process

orally with individuals, but are only required to provide that

information to the individuals in writing.

When an agency offers ADR to an individual during the pre-complaint

process, the individual may choose to participate in the ADR program at

any point in the pre-complaint process. In all cases, the Counselor

will conduct an initial counseling session, as currently provided,

identifying claims and fully informing individuals about their rights.

When ADR is selected, resolution attempts through traditional

counseling will be eliminated and the limited inquiry of the

traditional counseling will change. Counselors must also inform

individuals 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. Management Directive 110 will contain

additional guidance on these pre-complaint procedures.

The Commission's intention in requiring an ADR program is that

agencies establish informal processes to resolve claims. Thus any

activity conducted in connection with an agency ADR program during the

EEO process would not be a formal discussion within the meaning of the

Civil Service Reform Act. Generally, the agency should have an official

at any ADR session with full authority to resolve the dispute. To the

extent consultations with other agency officials would be necessary

during any session, the agency is accountable for making sure those

consultations can be accommodated.

If the ADR attempt succeeds in resolving the claim, the agency must

notify the Counselor that the claim was resolved. If the ADR attempt is

unsuccessful, the agency must return the claim to the Counselor to

write the counseling report. That report will describe the initial

counseling session, frame the issues, and report only that ADR was

unsuccessful.

Dismissals

In the NPRM, the Commission proposed three changes to the dismissal

provision contained in section 1614.107. First, the Commission proposed

to remove the provision contained in section 1614.107(h) permitting

agencies to dismiss complaints for failure to accept a certified offer

of full relief. As explained in the preamble to the NPRM, 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. 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). Unless the agency offers the full

amount of damages permitted under the statutory caps in the law, it is

virtually impossible for the complainant to assess whether the agency

has offered full relief.

The non-agency commenters uniformly supported the proposal to

eliminate the full relief dismissal provision. Agency comments were

mixed with nearly as many agencies supporting the change as opposing

it. For the foregoing reasons, the Commission has decided to remove the

failure to accept a certified offer of full relief dismissal basis from

the regulations. At the same time, the Commission is retaining the

provision from the NPRM that permits agencies to make an offer of

resolution in a case. This 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, and is discussed in greater detail

below.

In the NPRM, EEOC proposed to add two dismissal provisions to

section 1614.107. One of the new provisions will require dismissal of

complaints that allege dissatisfaction with the processing of a

previously filed complaint (spin-off complaints). As was explained in

the NPRM, 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. Spin-off complaints continued to be filed, however,

despite there being no provision in either the regulations or the

management directive permitting the filing of a separate complaint on

this issue.

The comments on the proposal to add a dismissal provision for spin-

off complaints fell into three categories. Agencies favored the

addition. Some individual federal employees and attorneys opposed the

dismissal provision and others encouraged EEOC to provide detailed

guidance in Management Directive 110 on how to handle spin-off

allegations outside of the EEO process.

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The Commission continues to believe that 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. The

spin-off allegations are so closely related to the underlying complaint

that a separate complaint would result in redundancy, duplication of

time and waste of resources. Such allegations need to be addressed

within the over-all context of the initial complaint while that

complaint is still pending. The Commission has decided to add the

provision requiring 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 the 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 detailed companion guidance in Management Directive 110

addressing the procedures to be followed to resolve allegations of

dissatisfaction with the complaints process quickly and effectively.

Individuals 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,

the agency EEO manager, 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 by the individuals

responsible for that step of the process, who will be required to take

appropriate action. If any official throughout the process becomes

aware of a systemic problem of discriminatory complaint processing,

that official may refer the matter to the Complaints Adjudication

Division of the Office of Federal Operations at EEOC.

Proper handling of spin-off allegations is important because such

allegations involve the overall quality of the complaints process and

implicate the resources devoted to those allegations. The procedures in

the Management Directive will ensure that any evidence of

discriminatory or improper handling will be considered as part of the

claim before the agency or Commission without unnecessarily adding

complaints to the system. When an individual presents a counselor, an

agency official, or the Commission with a spin-off allegation, the

complainant shall be advised where and how to have the allegation of

dissatisfaction made part of the existing complaint record. The

Commission believes that agency and Commission resources should not be

used to process the allegation as a separate complaint because many of

these allegations involve evidentiary matters or disagreements with

agency decisions made in the processing of the underlying complaint.

Counselors, investigators and agency officials are required to note

these allegations of dissatisfaction in the complaint record so that

reviewing entities can ensure that the allegation was properly

addressed. As a result, individuals who file separate complaints will

have such complaints dismissed by the agency or by the Commission. The

Commission has decided to delegate appellate decision-making authority

for appeals from dismissals of spin-off complaints to the Office of

Federal Operations to ensure expeditious handling of any such appeals.

The second new dismissal provision proposed by the Commission in

the NPRM provides for dismissal of complaints through strict

application of the criteria set forth in Commission decisions where

there is a clear pattern of abuse of the EEO process. The proposed

section would codify the Commission's decisions in Buren v. USPS,

Request No. 05850299 (1985), and subsequent cases, in which the

Commission has defined ``abuse of process'' as a clear pattern of

misuse of the EEO process for ends other than those that it was

designed to accomplish. The Commission has stated that it has the

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

or procedures.

Comments from agencies generally supported the proposal to add

abuse of process as a basis for dismissal, while non-agency commenters

opposed it or, while supporting its purpose, expressed concern that

agencies would invoke this authority too frequently based arbitrarily

on the number of complaints filed by an individual. Several commenters,

including agencies and individuals, suggested the criteria for

dismissal be clearly set forth in the regulation. A few agencies

thought the criteria should be expanded beyond those set forth in the

Commission's decisions and that the Commission should provide for

sanctions for complainants who abuse the process. Some non-agency

commenters maintained that only administrative judges should have the

authority to dismiss complaints for abuse of process because agencies

will abuse their discretion under this provision.

The Commission has decided to include this dismissal provision in

its regulation with additional language defining abuse of process as

``a clear pattern of misuse of the EEO process for a purpose other than

the prevention and elimination of employment discrimination'' and

setting forth the factors found in Commission decisions. The Commission

reiterates 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). Evaluating complaints

for dismissal for abuse of process requires careful deliberation and

application of strict criteria. Agencies must analyze whether a

complainant's behavior evidences an ulterior purpose to abuse the EEO

process. Improper purposes would include circumventing other

administrative processes such as the labor-management dispute process;

retaliating against the agency's in-house administrative machinery; or

overburdening the EEO complaint system, which is designed to protect

individuals from discriminatory practices. Hooks v. USPS, Appeal No.

01953852 (1995). Evidence of numerous complaint filings, in and of

itself, is an insufficient basis for making a finding of abuse of

process. Id. However, as stated in the regulation, evidence of multiple

complaint filings combined with the subject matter of the complaints

(such as frivolous, similar or identical allegations; lack of

specificity in the allegations; and allegations involving matters

previously resolved) may be considered in determining whether a

complainant has engaged in a pattern of abuse of the EEO process. See

Goatcher v. USPS, Request No. 05950557 (1996).

The Commission will require strict adherence to these criteria.

With respect to the argument that only administrative judges should

have the authority to dismiss complaints for abuse of process, the

Commission sees no reason to treat this basis for dismissal differently

than the others listed in section 1614.107 by disallowing it to

agencies. The Commission believes that review by the Commission on

appeal will fully safeguard complainants against arbitrary or unjust

dismissals.

The Commission believes that the new dismissal provisions for spin-

off complaints and abuse of process will improve the efficiency and

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

abuse of process complaints will make the process fairer both for

agencies that must process

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complaints and for complainants who raise bona fide allegations by

focusing resources on bona fide allegations.

Partial Dismissals

In the NPRM, the Commission proposed 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 or fragmentation of complaints that may have resulted from

implementation of the current provision. The Commission proposed to

amend section 1614.401 to remove the right to immediately appeal the

dismissal of a portion of a complaint. In addition, the Commission

proposed 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.

Comments on eliminating interlocutory appeals for partial

dismissals were mixed. Many commenters, agencies and others, supported

the proposal believing that it will simplify the process. The

commenters who opposed the change expressed concerns that there will be

no investigatory record of the portion of a complaint dismissed by an

agency but reinstated by the administrative judge or the Office of

Federal Operations. Some agencies questioned how the administrative

judge will be able to evaluate a partial dismissal if there is no

record on that part of the complaint.

The Commission believes that eliminating interlocutory appeals of

partial dismissals will result in a more efficient complaint process

and will help avoid fragmentation of complaints. The Commission has

decided, therefore, to finalize the proposals without change. The

concerns raised by some of the commenters are addressed by the

procedure contained in new section 1614.107(b). If an agency determines

that a portion of a complaint, but not all of the complaint, meets one

or more of the standards for dismissal contained in section

1614.107(a), the agency must document the file with its reasons for

believing that the portion of the complaint meets the standards for

dismissal. Accordingly, the agency must fully explain its reasons for

dismissing that portion of the complaint, and, if appropriate, include

any evidence or documents necessary to support that conclusion. The

agency's rationale and any record supporting that rationale must be

sufficiently developed for an administrative judge or the Office of

Federal Operations to evaluate the appropriateness of the partial

dismissal without further investigation or inquiry. The agency will

then investigate the remainder of the complaint.

If the complainant requests a hearing, the administrative judge

will, as soon as practicable, evaluate the reasons given by the agency

for believing a portion of the complaint meets the standards for

dismissal. If the administrative judge believes that 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. Where a portion of a complaint is reinstated in the hearing

process and the investigatory record from the agency is incomplete as

to the portion the agency dismissed, the administrative judge will

oversee supplementation of the record by discovery or any other

appropriate method. Administrative judges will no longer remand

complaints or portions of complaints for supplemental investigations by

the agency, but will ensure that the record is sufficiently developed

during the hearing process.

The administrative judge's decision on the partial dismissal will

become part of the decision on the complaint. 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 action, including any partial dismissals, to the

EEOC. If the Office of Federal Operations finds that a dismissal was

improper, it will give the complainant the choice between a hearing and

an agency final decision on the claim.

Offer of Resolution

The Commission proposed to add this provision, limiting attorney

fees and costs when a complainant rejects an offer and subsequently

obtains less relief, in place of the dismissal for failure to accept

full relief. The purpose of the offer of resolution is to provide

incentive to settle complaints and to conserve resources where

settlement should reasonably occur. Some commenters preferred the full

relief dismissal to the proposed offer of resolution. Two stated that

the relief offered should be compared to the relief obtained, rather

than to the decision obtained, in order to determine which is more

favorable. A few commenters asked for clarification of what the offer

must contain, for example, suggesting that it must contain attorney's

fees. Several commenters raised concerns that a complainant might not

have enough information to judge whether the offer is reasonable or may

not fully appreciate the significance of the offer if the offer is made

early in the process. Others questioned how non-monetary remedies would

be evaluated for determining whether the relief awarded was more

favorable than that offered. Some commenters objected that the

``interest of justice'' exception was too vague; some asked that it be

defined in the regulation while others suggested that it be deleted for

that reason. Finally, several commenters believed the proposed

provision was a good alternative to the dismissal for failure to accept

full relief.

After considering these comments, the Commission has decided that

the offer of resolution is an appropriate alternative to and preferable

to the dismissal for failure to accept full relief, but has made

several changes to the provision to address the commenters' concerns.

Simply to clarify, we have revised the provision so that the relief

offered is compared with the final relief obtained rather than with the

decision when determining which is more favorable. That formulation is

more practicable and expresses the Commission's original intent. We

have also added a sentence stating that the agency's offer, to be

effective, must include attorney's fees and costs that have been

incurred and must specify any non-monetary relief. With regard to

monetary relief, an agency may make a lump sum offer or it may itemize

the amounts and types of monetary relief being offered.

We have revised the offer of resolution provision to include a two-

tiered approach. An offer of resolution can be made to a complainant

who is represented by an attorney at any time from the filing of a

formal complaint until 30 days before a hearing. If, however, the

complainant is not represented by an attorney, an offer cannot be made

before the parties have received notice that an administrative

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judge has been assigned. We will include model language in the

Management Directive that agencies are required to include in each

offer of resolution.

We note that, when comparing the relief offered in an offer of

resolution with that actually obtained, we intended that non-monetary

as well as monetary relief would be considered. Although a comparison

of non-monetary relief may be inexact and difficult in some cases, non-

monetary relief can be significant and cannot be overlooked.

The Commission believes that equitable considerations may make it

unjust to apply the offer of resolution provision in particular cases

and, thus, the interest of justice exception is necessary to prevent

the denial of fees in those circumstances. We do not envision many

circumstances in which the interest of justice provision will apply.

One example, however, of appropriate use of the exception would be

where the complainant received an offer of resolution, but was informed

by a responsible agency official that the agency would not comply in

good faith with the offer (e.g., would unreasonably delay

implementation of the relief offered). The complainant did not accept

the offer for that reason, and then obtained less relief than was

contained in the offer of resolution. We believe that it would be

unjust to deny attorney's fees and costs in this case.

Fragmentation

In the NPRM, the Commission requested public comment on the issue

of fragmentation of complaints in the federal sector EEO process.

Specifically, the Commission asked whether regulatory changes are

necessary to correct the fragmentation problem. EEOC believes that

agencies are not properly distinguishing between factual allegations in

support of a legal claim and the legal claim itself, resulting in the

fragmentation of some claims that involve a number of different

allegations. Certain kinds of claims are especially susceptible to

fragmentation, for example, harassment claims and continuing violation

claims. Fragmentation of claims is undesirable both because it

unnecessarily multiplies complaints and can improperly render non-

meritorious otherwise valid and cognizable claims.

The Commission received some comments on the fragmentation issue.

Commenters recommended the elimination of remands by administrative

judges, the elimination of partial dismissals (see discussion above),

and the revision of the consolidation procedures in the regulation.

Commenters also suggested that EEO Counselors need more training to

recognize the difference between claims and allegations.

The Commission has revised the regulation in several places to

address the fragmentation problem. Section 1614.108(b) has been amended

to replace the phrase ``matter alleged to be discriminatory'' with the

word ``claim.'' The Commission believes that agencies may be

interpreting ``matter'' to mean something less than a claim. Where a

complainant raises a claim of retaliation or a claim involving terms

and conditions of employment, subsequent events or instances involving

the same claim should not be filed as separate complaints, but should

be treated as part of the first claim. For the same reasons, the

Commission has revised section 1614.603 to remove the word

``allegations'' and replace it with ``claims.''

The Commission is removing from the hearings section the provision

permitting administrative judges to remand issues to agencies for

counseling or other processing. The Commission intends that

administrative judges will have full responsibility for complaints

after they enter the hearing stage and should no longer remand them to

the agencies. This change and others involving hearings are discussed

more fully below.

Finally, the Commission is adding a provision permitting amendment

of complaints, and is revising the consolidation section of the

regulation. Section 1614.106 now permits complainants to amend

complaints to add issues or claims that are like or related to the

original complaint any time prior to the conclusion of the

investigation. After requesting a hearing, complainants may seek leave

from the administrative judge to amend a complaint to add issues or

claims that are like or related to the original complaint by filing a

motion to amend. The Commission has amended section 1614.606, which

governs joint processing and consolidation of complaints, to require

that agencies consolidate two or more complaints filed by the same

complainant. The current consolidation provision is permissive only.

Moreover, the current provision, the Commission believes, may serve to

discourage consolidation of complaints because it provides that the

date of the first filed complaint controls the applicable complaint

processing time frames. Under this provision, if a complainant filed a

second complaint 175 days after the first complaint, the current

regulation would provide the agency with only 5 days to investigate the

second complaint if it were consolidated with the first complaint. As

part of the revision to the consolidation section, the Commission

provides in the final rule that when a complaint has been consolidated

with an earlier filed complaint the agency must complete its

investigation within the earlier of 180 days after the filing of the

last complaint or 360 days after the filing of the original complaint,

except that a complainant may request a hearing from an administrative

judge on the consolidated complaints any time after 180 days from the

date of the first filed complaint. If a complainant requests a hearing

on consolidated complaints prior to the agency's completion of the

investigation, the administrative judge will decide how best to insure

an appropriate record, whether by staying the hearing process for some

period of time during which the agency can finish its investigation or

by supplementation of the record through discovery or other methods

ordered by the administrative judge. When an administrative judge

becomes aware that one or more complaints in the agency process should

be consolidated with a complaint in the hearing process, the

administrative judge may consolidate all claims at the hearing stage or

hold the complaint in the hearing process until the others are ready

for hearing.

Management Directive 110 will contain additional guidance on

amendment of complaints, consolidation of complaints, and

fragmentation, including what constitutes a cognizable claim under the

employment discrimination statutes.

Hearings

The Commission proposed several changes to the hearings provisions

in the Notice of Proposed Rulemaking, the most significant being the

proposal to make administrative judge's decisions final in complaints

referred to them for hearing. The Commission received dozens of

comments on this proposal, with the majority of agency commenters

opposing it and the non-agency commenters overwhelmingly favoring it. A

number of agencies challenged EEOC's statutory authority to make

administrative judges' decisions final, arguing that section 717(c) of

Title VII requires that agencies take final action on EEO complaints

before a complainant may appeal to EEOC. In addition, an agency argued

that agency final action is required to trigger federal court suit

rights. Section 717(c) permits an individual to file a lawsuit in

federal court in four instances, including within 90 days of receipt of

notice of final

[[Page 37649]]

action. One agency suggested that EEOC could make administrative

judges' decisions final by moving the hearing process to the appellate

stage. Agencies also expressed concern about EEOC's resources,

believing that there will be an increase in requests for hearings if

administrative judges' decisions are made final. Agencies also

questioned the quality and consistency of administrative judges'

decisions in opposing the change. Several agencies complained that they

would be unable to defend themselves if administrative judges'

decisions were made final.

Several agencies, however, supported the proposal. One noted that

EEOC's statistics demonstrate a problem with the EEO process

government-wide that undermines the confidence of complainants in the

system and creates a perception of unfairness. The civil rights groups,

unions and attorneys' groups that commented on the proposal strongly

supported it and some noted that it is the most important change

proposed by EEOC in the NPRM.

The Commission has carefully considered all of the comments on this

issue. The Commission strongly believes that allowing agencies to

reject or modify an administrative judge's findings of fact and

conclusions of law and to substitute their own decision leads to an

unavoidable conflict of interest and creates a perception of unfairness

in the federal EEO system. While the Commission believes that its

interpretation of the statute regarding the Commission's authority is

correct, the Commission has decided to revise the proposal in order to

make needed improvements in the procedures while recognizing the

concerns expressed by the agencies. At the same time the Commission

will preserve the functional goal of the earlier proposal: agencies

will no longer be able to simply substitute their view of a case for

that of an independent decision-maker.

In response to comments from agencies that the Office of Federal

Operations was upholding agency decisions that reversed administrative

judge's decisions finding discrimination, we made two independent

inquiries of EEOC's information systems. The Commission had not

previously studied that information or reported it, although it had

collected it. The first inquiry showed that in 1994 and 1996, there

were 80 administrative judges' decisions favorable to complainants that

were reversed by the agency, appealed to the Office of Federal

Operations, and for which the Office of Federal Operations issued a

decision on the merits. Of those 80 decisions, EEOC upheld the

administrative judge in 53 instances and upheld the agency in 27

instances. In the second inquiry, we found that in fiscal year 1998,

there were 157 decisions by the Office of Federal Operations reviewing

administrative judges' decisions adverse to agencies. Of those

decisions, 135 (86%) affirmed the administrative judge in whole, 8 (5%)

reversed in whole or in part, and 14 (9%) modified the administrative

judge's decision. These inquiries demonstrated that the arguments made

by the agencies were not supported by the facts. EEOC upholds

administrative judges' decisions in a significant majority of all

cases.

The final rule provides that administrative judges will issue

decisions on all complaints referred to them for hearings. Agencies

will have the opportunity to take final action on the complaint by

issuing a final order within 40 days of receipt of the hearing file and

the administrative judge's decision. The final order will notify the

complainant whether or not the agency will fully implement the decision

of the administrative judge and will contain notice of the

complainant's suit and appeal rights. If the agency's final order does

not fully implement the decision of the administrative judge, the

agency must simultaneously file an appeal of the decision with EEOC. In

this way, agencies will take final action on complaints referred to

administrative judges by issuing a final order, but they will not

introduce new evidence or write a new decision in the case. Agencies

will have an additional 20 days to file a brief in support of their

appeal.

To parallel the provision on interim relief in section 1614.502(b),

we are adding a provision requiring an agency to provide interim relief

in limited circumstances when the agency appeals. When the agency

issues a final order notifying the complainant that it will not fully

implement the administrative judge's decision, the case involves

removal, separation or suspension continuing beyond the date of the

order, and the administrative judge's decision provided for retroactive

restoration, the agency must comply with the decision to the extent of

the temporary or conditional restoration of the employee to duty status

in the position stated by the administrative judge pending the outcome

of the appeal. In response to agency comments, we have revised the

regulation to more closely track the MSPB's interim relief provision,

including a provision permitting agencies to decline to return the

complainant to his or her place of employment if it determines that the

return or presence of the complainant will be unduly disruptive to the

work environment. Prospective pay and benefits must be provided,

however. In addition, we have noted in the regulation that an employee

may decline an offer of interim relief, and a grant of interim relief

does not insulate a complainant from subsequent disciplinary or adverse

action for another reason. Interim relief does not apply in cases where

the complainant alleges that she or he was not retained beyond the

period of a temporary appointment which expired prior to the appeal or

that the temporary position was not converted to a permanent position.

For example, where the Census hires temporary employees and the

temporary appointment would have expired prior to the appeal, or the

employee was not converted to a career position, the interim relief

provision would not apply.

In another proposed change to the hearings process in the NPRM, we

proposed that at the end of the investigation or after 180 days,

complainants who want to request a hearing will send their requests

directly to the EEOC office instead of to the agency EEO office in

order to eliminate delays. Almost all of the commenters agreed with

this proposal. A few commenters asked that complainants be required to

notify the agency at the same time that they make the request to EEOC.

That requirement was already contained in the proposal so no change is

being made. We have made some minor changes to the provision. We added

a requirement that all requests for hearings must be in writing. The

proposal stated that EEOC would request the complaint file after it

received a request for hearing. The final rule has been revised to

state that the agency must forward the file within 15 days of the date

of receipt of the request for hearing. Since the agency will be

receiving notice directly from the complainant when a hearing is

requested, eliminating the request from EEOC and the time incident to

preparation of that letter will result in a more efficient process. If

any agency receives a request for a hearing that has not also been

submitted to EEOC, the agency should forward the request along with the

file to EEOC and should advise the complainant of its actions and of

the requirement that requests be submitted directly to EEOC.

In response to comments, the Commission has decided to revise

section 1614.109(a) to better explain the administrative judge's

responsibilities in the hearing process and to remove the current

provision permitting

[[Page 37650]]

administrative judges to remand for counseling issues that are like or

related to those issues raised in the complaint. Section 1614.109(a)

now provides that upon appointment, the administrative judge will

assume full responsibility for adjudication of the complaint, including

overseeing the development of the record. The Commission intends that

the administrative judge will take complete control of the case once a

hearing is requested. The new sentence clarifies that the agency's

authority to dismiss a complaint ceases once a hearing is requested.

Administrative judges will preside over any necessary supplementation

of the record in the hearing process without resort to remands of

complaints to agencies for additional investigations. Remands of

complaints to agencies for supplemental investigations have

proliferated, resulting in fragmentation or unwarranted delays. The

changes to the regulation will eliminate these remands and improve the

timeliness and efficiency of the complaint process.

In the NPRM, the Commission proposed to add a new section

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

dismiss complaints during the hearing process for all of the reasons

contained in section 1614.107. Nearly all commenters, agencies and

others, supported this proposal. In response to comments, the

Commission has revised the regulation to provide that administrative

judges may dismiss complaints on their own initiative, after notice to

the parties, or upon an agency's motion to dismiss a complaint.

The Commission has made several minor revisions to the hearings

section of the regulations. In response to a comment, we have added a

new section (f)(1) providing that the administrative judge must serve

all orders to produce evidence on both parties. We have revised section

1614.109(i) to provide that the time frame for issuing a decision will

run from the administrative judge's receipt of the complaint file from

the agency, rather than, as currently provided, from receipt by EEOC of

a request for a hearing. In addition, the Commission has revised the

section to provide that administrative judges send the hearing record,

rather than the entire record, to the parties with the final decision.

Finally, the Commission has removed the requirement that administrative

judges send final decisions and the record to the parties by certified

mail. This will save the Commission scarce resources.

Procedures for Handling Clearly Meritless Cases

The growing inventory of cases pending at agencies, in the hearings

units and on appeal to the Commission causes delays across the board.

The problem is exacerbated by the allocation of scarce resources to

meritless cases. Many commenters representing all points of view

identified this situation as an urgent priority, and the Federal Sector

Workgroup devoted considerable attention to the problem. The Workgroup

noted the widespread concern among stakeholders that the system is

overburdened by meritless complaints and misused as a forum for

workplace disputes that do not involve EEO matters. Its Report

concluded that ``Government resources should be targeted to addressing

colorable claims of discrimination. Excessive resources devoted to non-

meritorious claims of discrimination undermines the credibility of the

process and impairs the rights of those with meritorious claims.'' The

Commission agrees.

Among the measures proposed by the Commission in its NPRM to

address this problem were two provisions to give administrative judges

additional procedures for quickly resolving complaints that are

inappropriately in the EEO process or that lack merit. First, the

Commission proposed to give administrative judges the authority to

dismiss complaints during the hearing process for all of the reasons

contained in the dismissal section, 29 CFR 1614.107, including for

failure to state a claim. As discussed above, the Commission has

included this proposed section 1614.109(b), which most commenters

supported, in its final rule.

The second proposal was a provision for decisions without a hearing

in cases that lack merit, which would have supplemented administrative

judges' existing authority to issue summary judgment decisions

currently contained in 29 CFR 1614.109(e). The Commission proposed to

add a provision, section 1614.109(g)(4), permitting administrative

judges to issue a 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.

Almost all non-agency commenters as well as about half of the

agency commenters opposed granting administrative judges this new

authority, arguing that there must be a hearing if material facts are

in dispute. Individual commenters and those representing civil rights

groups and unions also doubted that the administrative judge would have

sufficient information in the record to decide the case under this

procedure because the agency compiles the record and the complainant is

likely not to have had an opportunity to develop evidence. Some

suggested that complainants have won cases that may have seemed non-

meritorious when filed, based on discovery and live testimony at the

hearing. Several agency commenters believed the procedure would also

adversely affect agencies by leading to erroneous decisions based on

incomplete evidence. Agencies also thought it was unclear and difficult

to distinguish from traditional summary judgment. A number of agency

commenters supported the proposal as an appropriate way to streamline

the process and deal with the increasing workload. When the

investigatory record is complete, they argued, a hearing may waste

resources and cause agency employees to be absent from work when their

testimony is not really necessary.

The Commission has decided that it is not necessary to add this

provision at this time. We believe that the problem of meritless

complaints can be addressed through appropriate application of the

failure to state a claim dismissal basis and the traditional summary

judgment provision. Dismissal for failure to state a claim is

appropriate when a complaint alleges conduct that does not rise to the

level of a violation of the anti-discrimination statutes. Summary

judgment under section 1614.109(e) is appropriate for complaints that

state a claim but that involve no genuine dispute over material facts.

Continued processing of cases that should have been dismissed for

failure to state a claim or decided on summary judgment contributes to

the growing inventory and the perception that the system gives too much

consideration to trivial matters. Such cases should be resolved more

quickly at earlier stages in the process using existing legal

standards. The Commission summarizes these standards below and intends

to provide more detailed guidance in Management Directive 110.

Dismissal for Failure to State a Claim: Existing section

1614.107(a) requires that agencies dismiss a complaint that fails to

state a claim under section 1614.103. Under the new section

1614.109(b), administrative judges may dismiss complaints for the same

reasons

[[Page 37651]]

as contained in section 1614.107. In determining whether a complaint

states a claim, the proper inquiry is whether the conduct as alleged

would constitute an unlawful employment practice under the EEO

statutes. Cobb v. Department of the Treasury, Request No. 05970007

(March 13, 1997). See Burlington Industries, Inc. v. Ellerth, 118 S.

Ct. 2257, 2268-9 (1998)(referencing cases in which courts of appeals

considered whether various employment actions were sufficient to state

a claim under the civil rights laws).

When a complainant does not challenge agency action or inaction

with respect to an employment decision or a specific term, condition or

privilege of employment, but alleges a hostile and discriminatory

working environment, the severity of the alleged conduct must be

evaluated to determine whether the complaint is actionable under the

statutes. As the Supreme Court has stated, ``Conduct that is not severe

or pervasive enough to create an objectively hostile or abusive work

environment--an environment that a reasonable person would find hostile

or abusive--is beyond Title VII's purview.'' Harris v. Forklift

Systems, Inc., 510 U.S. 17, 21-22 (1993); see Meritor Savings Bank, FSB

v. Vinson, 477 U.S. 57, 67 (1986).

In Faragher v. City of Boca Raton, 118 S. Ct. 2275 (1998), the

Court reemphasized that conduct must rise above a certain minimum level

to be actionable: `` `[S]imple teasing,' * * * offhand comments, and

isolated incidents (unless extremely serious) will not amount to

discriminatory changes in the `terms and conditions of employment.' ''

118 S. Ct. at 2283 (citations omitted). To determine whether an

environment is sufficiently hostile or abusive, courts must look at all

of the circumstances, including the frequency and severity of the

conduct. Id. These standards should ``ensure that Title VII does not

become a `general civility code.' * * * Properly applied, they will

filter out complaints attacking `the ordinary tribulations of the

workplace'' * * *.'' Id. at 2283-84 (citations omitted).

The Commission also has repeatedly stated that isolated comments,

petty slights, and trivial annoyances are not actionable. See EEOC

Compliance Manual Section 8, ``Retaliation,'' No. 915.003 (May 20,

1998) at 8-13; EEOC Policy Guidance on Current Issues of Sexual

Harassment, No. N-915.050 (March 19, 1990) at 14; EEOC Enforcement

Guidance on Harris v. Forklift Systems, Inc., No. 915.002 (March 8,

1994) at 6 n.4; see also, e.g., Cobb v. Department of the Treasury,

supra.; Moore v. United States Postal Service, Appeal No. 01950134

(April 17, 1997); Backo v. United States Postal Service, Request No.

05960227 (June 10, 1996); Phillips v. Department of Veterans Affairs,

Request No. 05960030 (July 12, 1996); Miller v. United States Postal

Service, Request No. 05941016 (June 2, 1995); Banks v. Department of

Health and Human Services, Request No. 05940481 (February 16, 1995) .

However, a persistent pattern of harassing conduct or a particularly

severe individual incident, when viewed in light of the work

environment as a whole, may constitute a hostile environment. See,

e.g., Brooks v. Department of the Navy, EEOC Request No. 05950484 (June

25, 1996).

The Commission cautions that before dismissing a complaint the

administrative judge must ensure that the claim has not been fragmented

inappropriately into more than one complaint. As discussed above under

the heading ``Fragmentation,'' a series of subsequent events or

instances involving the same claim should not be treated as separate

complaints, but should be added to and treated as part of the first

claim.

Summary Judgment: The problem identified by the Workgroup can also

be addressed through more effective use of the existing summary

judgment authority. Summary judgment is proper when ``material facts

are not in genuine dispute.'' 29 CFR 1614.109(e). Only a dispute over

facts that are truly material to the outcome of the case should

preclude summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S.

242, 248 (1986) (only disputes over facts that might affect the outcome

of the suit under the governing law, and not irrelevant or unnecessary

factual disputes, will preclude the entry of summary judgment). For

example, when a complainant is unable to set forth facts necessary to

establish one essential element of a prima facie case, a dispute over

facts necessary to prove another element of the case would not be

material to the outcome. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23

(1986).

Moreover, a mere recitation that there is a factual dispute is

insufficient. The party opposing summary judgment must identify the

disputed facts in the record with specificity and demonstrate that

there is a dispute by producing affidavits or records that tend to

disprove the facts asserted by the moving party. In addition, the non-

moving party must explain how the facts in dispute are material under

the legal principles applicable to the case. 29 CFR 1614.109(e)(2);

Anderson, 477 U.S. at 257; Celotex, 477 U.S. at 322-24; Patton v.

Postmaster General, Request No. 05930055 (1993) (summary judgment

proper where appellant made only a general pleading that his job

performance was good but set forth no specific facts regarding his

performance and identified no specific inadequacies in the

investigation).

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. While an effective

administrative process for class complaints offers several important

advantages over litigation in federal court, including informality,

lower cost, and speed of resolution, the Workgroup found that 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 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, the Commission is making several changes in its regulation

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.

In the NPRM, the Commission proposed four regulatory changes to the

class complaint procedures found at 29

[[Page 37652]]

CFR 1614.204. The Commission proposed 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.

Individual commenters and those representing civil rights groups

uniformly endorsed the proposed change. Some agency commenters

supported the change but asked that the regulation define ``reasonable

point in the process''; some suggested that this point be during the

investigation or within a short time after distribution of the agency

investigative file, rather than during discovery. Other agencies

opposed the change, arguing that it would entail additional

investigative costs, cause delays 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. If a

complainant can move for class certification on the eve of hearing,

they argued, the agency would be required to put the individual

complaint on hold and start its investigation all over again as a class

case. Others objected only to eliminating counseling, as that is how

the complainant is informed of his or her rights and responsibilities

as class agent.

The Commission believes that this revision 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 on class issues; this is different from the situation of a

federal court Rule 23 plaintiff who does have access to pre-

certification discovery on class issues. Similarly, an individual

complainant often will not have reason to know at the counseling stage,

and sometimes even after the agency's investigation, that the

challenged action actually reflects an agency policy or practice

generally applicable to a class of similarly situated individuals.

Because of the importance of discovery, the Commission has decided

not to place the restrictions suggested by some of the commenters on

the time at which a complainant may seek class certification. 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 suspects that the complaint has class implications,

i.e., it potentially involves questions of law or fact common to a

class and is typical of the claims of a class. Normally, this point

will be no later than the end of discovery at the hearing stage. The

complainant must seek class certification within a reasonable time

after the class nature of the case becomes apparent. The administrative

judge will deny class certification if the complainant has unduly

delayed in moving for certification. In response to the comments, the

Commission has added language to this effect in the regulation. The

Commission disagrees with those commenters who advocated returning the

complaint for additional counseling. It will 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 the time the

complainant moves for certification. The Commission believes it is

impracticable and unproductive to require the complainant to return to

counseling at this stage.

A request for class certification made after the filing of an

individual complaint but before the issuance of the notice required by

section 1614.108(f) will be forwarded to an EEOC administrative judge

for a decision on whether to accept or dismiss a class complaint. The

administrative judge's decision will be appealable to the Office of

Federal Operations. The filing of an appeal will not stay further

proceedings, although either party may request that the administrative

judge stay the administrative process pending a decision on appeal.

The Commission proposed in the Notice of Proposed Rulemaking 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. For the same

reasons noted in the discussion of administrative judges' decisions

above, the Commission has decided to provide that administrative judges

will issue decisions to accept or dismiss class complaints, and

agencies will take final action by issuing a final order, and,

simultaneously appealing the decision to EEOC if the final order does

not fully implement the decision of the administrative judge. Some

agency commenters said they supported making certification decisions

final only if the agency is given the right to an interlocutory appeal.

That was the Commission's intent. The Commission has revised current

section 1614.401(b) (redesignated section 1614.401(c)), which sets

forth appeal rights in all the situations that might arise in class

cases, to include agency interlocutory appeals from administrative

judges' certification decisions.

In the proposed rule, the Commission proposed 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.

Some agency commenters supported this proposal while most others

disagreed, arguing that it would add an unnecessary layer of review

when the parties are satisfied with the settlement 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.

Because it believes that the administrative judge's approval of

settlements in all cases is the best way to protect the interests of

the class, the Commission has decided to add this proposal to its

regulation. 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 makes 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. Thus, the same

standard applies whether or not any petitions to vacate the resolution

have been filed. In response to the suggestion of one agency, the

Commission has elaborated upon the standard by revising the regulation

to follow the language used by the Court of Appeals for the District of

Columbia Circuit in Thomas v. Albright, 139 F.3d 227, 233 (1998), which

held that to approve a settlement under Rule 23, a district court must

find that it is ``fair, adequate, and reasonable to the class as a

whole.'' The court is to evaluate the terms of the settlement in

relation to the strength of the plaintiffs' case, and should not reject

a settlement merely because individual class members contend that they

would have received more had they prevailed after a trial. 139 F.3d at

231, 232. See also Manual for Complex Litigation (Third) (1995)

Secs. 30.41-.42.

The Commission also has made additional revisions to the procedures

for notice and approval of settlements contained in section

1614.204(g)(4) to

[[Page 37653]]

reflect the changes in the administrative judge's authority. Currently,

any member of the class who is dissatisfied may petition the agency EEO

Director to vacate the resolution because it benefits only the class

agent or is otherwise not fair and reasonable. The administrative judge

issues a recommended decision, and the agency makes the final decision

whether to vacate the resolution. 29 CFR 1614.204(g)(4). In the new

section 1614.204(g)(4), a class member may petition the administrative

judge to vacate the resolution. The administrative judge reviews the

notice of resolution and considers any petitions filed. The

administrative judge must issue a decision vacating or approving the

settlement on the basis of whether it is fair, adequate and reasonable

to the class as a whole. A decision to vacate a settlement, as well as

a decision to approve settlement over the objections of petitioning

class members, is appealable to the Office of Federal Operations.

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

the proposed rule to clarify the burdens of proof applicable to

individual class members who believe they are entitled to relief. The

change makes explicit that the burdens enunciated in Teamsters v.

United States, 431 U.S. 324 (1977), and subsequent lower court

decisions 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. 431 U.S. at 361-62. Lower courts have held that this presumption

may be rebutted only by clear and convincing evidence that the class

member is not entitled to relief. See McKenzie v. Sawyer, 684 F.2d 62,

77-78 (D.C. Cir. 1982); Trout v. Lehman, 702 F.2d 1094, 1107 (D.C. Cir.

1983), vacated on other grounds, 465 U.S. 1056 (1984); United States v.

City of Chicago, 853 F.2d 572, 575 (7th Cir. 1988); Cox v. American

Cast Iron Pipe Co., 784 F.2d 1546, 1559 (11th Cir.), cert. denied, 479

U.S. 883 (1986); Baxter v. Savannah Sugar Refining Corp., 495 F.2d 437,

444-45 (5th Cir.), cert. denied, 419 U.S. 1033 (1974); Reynolds v.

Alabama Department of Transportation, 996 F. Supp. 1156, 1195 (N.D.

Ala. 1998). Other courts, however, have held that the standard is

preponderance of the evidence. See Wooldridge v. Marlene Indus. Corp.,

875 F.2d 540, 549 (6th Cir. 1989); Craik v. Minnesota State Univ. Bd.,

731 F.2d 465, 470 n.8 (8th Cir. 1984); Sledge v. J.P. Stevens & Co.,

Inc., 585 F.2d 625, 637 (4th Cir. 1978); Richerson v. Jones, 551 F.2d

918, 923-25 (3d Cir. 1977).

Comments on this provision were divided, with non-agency commenters

uniformly endorsing it and most agency commenters objecting that

``clear and convincing'' was too high a standard, inappropriate for a

class case, and a misreading of Teamsters. The objecting commenters

wanted the standard to be preponderance of the evidence.

The Commission has decided to retain the ``clear and convincing''

standard and emphasizes that this regulatory revision merely codifies

the longstanding rule in the federal sector, see McKenzie v. Sawyer,

supra. In 1992, when the Commission first issued its Part 1614

regulation, we considered the burden of proof issue with respect to

relief when discrimination has been found. The Commission determined at

that time that no change was required to its requirement, included in

the predecessor Part 1613 regulation and in the new section 1614.501,

that relief should be provided to an individual when discrimination is

found unless clear and convincing evidence indicates that the personnel

action at issue would have been taken even absent discrimination. See

57 Fed. Reg. 12634, 12641 (April 10, 1992); 29 CFR 1614.501. The

Commission concluded that the Supreme Court's decision in Price

Waterhouse v. Hopkins, 490 U.S. 228 (1989), which held that an employer

could avoid liability in a mixed motive case under a preponderance of

the evidence standard, did not require a change in the regulation. As

we then noted, the Hopkins decision cited and distinguished the

Commission's Part 1613 regulation on the basis that it relates to proof

at the relief stage rather than the liability stage. 490 U.S. at 253-

54. The Commission further noted that the relief provision in the

regulation ``will be applied most often to determining whether class

members are entitled to individual relief after a class finding of

discrimination, but it is also applicable to individual cases where

there has been a finding of discrimination.'' 57 FR at 12641.

The Commission is now making this presumption explicit in its

revised class regulation. The Commission believes that requiring proof

at the ``clear and convincing'' level when the agency has been found to

have engaged in classwide discrimination furthers the remedial and

deterrent purposes of the statutes. ``By making it more difficult for

employers to defeat successful plaintiffs'' claims to retroactive

relief, the higher standard of proof may well discourage unlawful

conduct by employers. . . . In addition, the higher standard of proof

is justified by the consideration that the employer is a wrongdoer

whose unlawful conduct has made it difficult for the plaintiff to show

what would have occurred in the absence of that conduct.'' Toney v.

Block, 705 F.2d 1364,1373 (D.C. Cir. 1983) (Tamm, J., concurring); see

also Teamsters, 341 U.S. at 359 n.45, 372.

Thus, agencies are 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). To be presumptively

entitled to relief, the class member first must have filed a written

claim pursuant to section 1614.204(l)(3) making a specific, detailed

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

discriminatory policy or practice, and that the discriminatory action

took place within the period of time for which class-wide

discrimination was found. To reflect the administrative judge's new

role and to provide a procedure for resolving issues related to

individual relief, the Commission additionally has revised section

1614.204(l)(3) to state that the administrative judge may hold a

hearing or otherwise supplement the record on a claim filed by a class

member.

In response to a comment, we have clarified that the agency or the

Commission may find classwide discrimination, and provide a remedy, for

any policy or practice in existence within 45 days of the class agent's

initial contact with the counselor. We also note, as we stated when

Part 1614 was promulgated in 1992, that the 45-day time limit in

section 204(l)(3) defining the period for which class-wide

discrimination can be found is not intended to limit the two-year time

period for which back pay can be recovered by a class member. See 57 FR

12634, 12644 (April 10, 1992); 29 CFR 1614.204(l)(3). Under the

continuing violation theory, moreover, incidents occurring earlier than

45 days before contact with the counselor must also be remedied

provided that the initial contact with the counselor was timely and the

earlier incidents were part of the same continuing policy or practice

found to have been discriminatory. That is, where contact with the

counselor is timely as to one of the events comprising the continuing

violation, then the counseling contact is timely as to the entire

violation.

Appeals

In the proposed rule, the Commission proposed two different appeal

briefing schedules, depending on the matter

[[Page 37654]]

being appealed: 30 days to file both a notice of appeal and any

statement or brief in support of the appeal from a dismissal (a

``procedural'' appeal); and 30 days to file a notice of appeal and an

additional 30 days thereafter to file a brief or statement in support

of an appeal from a final decision (a ``merits'' appeal). Those who

commented on this section were nearly unanimous that this distinction

was confusing and that there should be a single briefing schedule. The

Commission has revised the regulation to provide that a complainant

must file an appeal within 30 days of receipt of the agency dismissal

or final action, and any supporting statement or brief shall be filed

within 30 days of the filing of the notice of appeal. In cases where

there has been a decision by an administrative judge, agencies must

take final action on the complaint by issuing a final order within 40

days of receipt of the hearing file and the administrative judge's

decision. If the final order does not fully implement the

administrative judge's decision, agencies must simultaneously file an

appeal with the EEOC. They have an additional 20 days to file a brief

in support of that appeal. The final regulation also provides that

briefs or statements in support of an appeal and papers filed in

opposition to an appeal can be filed by facsimile, provided that they

are no more than 10 pages in length. Briefs and statements longer than

10 pages must be mailed or delivered in person.

In response to the Commission's statement in the NPRM that the

Commission will strictly apply appellate time frames, a number of

commenters suggested that provision be made for extending the appellate

time limits for good cause shown. Part 1614 already provides that

regulatory time limits ``are subject to waiver, estoppel and equitable

tolling.'' 29 CFR Sec. 1614.604(c).

Most commenters agreed with the Commission's proposal that the

Office of Federal Operations be empowered to impose sanctions or

otherwise take appropriate action regarding any party who fails,

without good cause shown, to comply with appellate procedures or to

respond fully and timely to a Commission request for information. Some

commenters were concerned that this provision could unfairly impact

unrepresented complainants. To the extent an unrepresented complainant

fails to comply due to mistake, lack of knowledge, or misunderstanding,

the Commission will take such factors into consideration when

determining whether good cause has been shown.

Most commenters also agreed with the proposed appellate standards

of review --factual findings rendered by administrative judges after a

hearing will be subject to a substantial evidence standard of review;

all other decisions will be subject to a de novo review. No new

evidence will be considered on appeal unless the evidence was not

reasonably available during the hearing process. As we noted in the

preamble to the proposed rule, the substantial evidence standard does

not preclude meaningful review of factual findings. Moreover, 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.

Finally, the Commission proposed to revise the reconsideration

process to approximate the process used by the MSPB, reallocate some

resources to the improvement of the appellate process and discourage

automatic requests for reconsideration whenever a party loses on

appeal. Parties may still request reconsideration but it will only be

granted, in the discretion of the Commission, if the requester has

demonstrated that the appellate decision involved a clearly erroneous

interpretation of material fact or law, or the appellate decision will

have a substantial impact on the policies, practices or operations of

the agency. The comments received were mixed. The unfavorable comments

were mostly from agencies although many other agencies favored the

change. The objectors raised the same objections discussed in the

preamble to the proposed rule. After considering all comments, we have

decided to adopt the proposed rule without change. The proposal makes

the reconsideration procedure available for those cases where the

requestor demonstrates that there are errors of fact or law that would

affect the outcomes of the cases and for those cases that will have a

substantial impact. By preserving the Commission's discretion, it also

will allow the Commission to reallocate its resources to the

improvement of the appellate process.

Attorney's Fees

In its NPRM, the Commission proposed two changes to the attorney's

fees regulatory scheme: administrative judges would be authorized to

determine the amount of the fee award, not just entitlement to the

award; and attorney's fees and costs would be available to prevailing

complainants for services rendered prior to the filing of the formal

complaint (e.g., during the counseling and ADR phases). Most commenters

were in favor of the former change. Comments were split on the latter

change; agencies were opposed and plaintiffs' attorneys and employees

were in favor of the proposal.

The commenters opposed to an administrative judge determining the

amount of attorney's fees and costs to be awarded generally were

concerned that an administrative judge would not be able to assess

adequately the reasonableness of the time spent by an attorney working

on the complaint prior to the hearing. The Commission believes that an

administrative judge is in a comparable position to a federal district

court judge in making a determination of attorney's fees. To address

this concern, though, the Commission has clarified section

1614.501(e)(2) to provide that, when a decision-making authority, that

is, an agency, an administrative judge, or the Commission, determines

that a complainant is entitled to an award of attorney's fees and

costs, the complainant's attorney shall submit a statement of fees and

costs to the decision-making authority. The agency may respond to and

comment on the statement of fees and costs. The decision-making

authority will then determine the amount of fees and costs to be

awarded. The Commission believes this procedure will best facilitate

the determination of the amount of attorney's fees and costs to be

awarded, once an entitlement to a fee award has been determined. The

Commission has also updated the discussion in the regulation on

calculating fees. Management Directive 110 will contain additional

guidance on attorney's fees.

The Commission received many comments on the second change to the

attorney's fees provisions, allowing fees for services rendered prior

to the formal complaint filing. Agencies expressed significant concern

about the proposal, arguing that the change would render the

preliminary complaint processing phase more formal and adversarial. The

decision was made to provide that agencies are not required to pay for

attorney's fees for services rendered during the pre-complaint process

unless an administrative judge issues a decision finding

discrimination, the agency issues a final order disagreeing with the

finding, and EEOC upholds the administrative judge's finding on appeal.

In addition, the agency and the complainant can agree that the agency

will pay attorney's fees for pre-complaint process representation.

These changes were made to preserve the incentive to resolve matters

during the

[[Page 37655]]

pre-complaint process and, at the same time, to create the incentive

for agencies to accept administrative judges' decisions, unless they

are clearly erroneous.

Matters of General Applicability

The Commission proposed 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. As we noted in the preamble to the NPRM,

we intended these changes to clarify coverage of these employees and be

consistent with the determination of the Solicitor General, in

connection with litigation, that Commissioned Corps members are covered

by federal sector anti-discrimination statutes. Congress amended the

Public Health Service Act, however, in Public Law 103-183, and, as a

result, we have decided not to finalize the amendment to section

1614.103(b) adding the Public Health Service Commissioned Corps. We are

making final the inclusion of the National Oceanic and Atmospheric

Administration Commissioned Corps. In the final rule, the Commission is

also amending section 1614.103(b) to make the regulation consistent

with the changes made to section 717(a) by the Congressional

Accountability Act of 1995, Pub. L. 104-1, Sec. 201(c), 109 Stat. 8,

and the Workforce Investment Act of 1998, Pub. L. 105-220, Sec. 341(a),

112 Stat. 936, 1092. These Acts amended the scope of coverage of

section 717, eliminating the legislative branch and adding several

agencies. We are amending section 1614.103(b) to remove the legislative

branch from coverage and to add the Government Printing Office and the

Smithsonian Institution to Part 1614 coverage.

Some commenters suggested that the Commission adopt its private

sector charge prioritization procedures in whole or in part in the

federal sector. We are making one change to the regulation related to

those comments. The current regulation requires a full and fair

investigation of every complaint that is not dismissed. Some have

interpreted it to require the same amount of investigative effort in

each case. That interpretation is not reasonable or desirable and is

inconsistent with EEOC's private sector charge prioritization

procedures. The Commission believes that the proper scope of an

investigation should be dictated by the facts at issue and that a

cookie-cutter, one-size-fits-all approach wastes resources and

needlessly delays resolution of that complaint and all other

complaints. The investigation and the amount of effort expended should

be appropriate to determine the issues raised by the complaint. To

remedy the misconception that more is required, we have revised

sections 1614.106(e)(2) and 1614.108(b) to remove the word ``complete''

and replace with ``appropriate.'' An appropriate investigation is one

that allows a reasonable fact finder to draw conclusions as to whether

discrimination occurred.

Based on comments the Commission received pertaining to the

administrative EEO process in general, the Commission has decided to

fine-tune certain sections. In section 1614.604, which pertains to

methods of filing and the computation of time limits, the Commission is

replacing the phrase ``delivered in person'' with the word

``received.'' This change is intended to ensure that a document will be

deemed timely if it is received on or before the applicable due date

regardless of the manner in which it is transmitted or delivered.

Section 1614.605(d), pertaining to service of papers and

computation of time when a complainant has a representative, has been

modified. Under the current language, if a complainant is represented

by an attorney, correspondence is to be served only on the attorney.

The section has been revised to require all papers to be served on both

the attorney and the complainant. Dual notification currently is

required under section 1614.605(d) if the representative is a non-

attorney. For reasons of consistency, the same service rules will apply

regardless of the status of the representative. Timeframes for receipt

of materials shall be computed, however, from the time of receipt by

the attorney where the representative is an attorney.

Regulatory Procedures

Executive Order 12866

In promulgating this final rule, the Commission has adhered to the

regulatory philosophy and applicable principles of regulation set forth

in section 1 of 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, Aged, Civil rights, Equal

employment opportunity, Government employees, Individuals with

disabilities, Religious discrimination, Sex discrimination.

For the Commission.

Ida L. Castro,

Chairwoman.

Accordingly, for the reasons set forth in the preamble, chapter XIV

of title 29 of the Code of Federal Regulations is amended 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.

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

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

(b)(2) and by revising paragraph (c)(5) to read as follows:

Sec. 1614.102 Agency program.

* * * * *

(b) * * *

(2) Establish or make available an alternative dispute resolution

program. Such program must be available for both the pre-complaint

process and the formal complaint process.

* * * * *

(c) * * *

(5) Assuring that individual complaints are fairly and thoroughly

investigated and that final action is taken in a timely manner in

accordance with this part.

* * * * *

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

end of paragraph (b)(3), revising paragraph (b)(4), and adding

paragraphs (b)(5) through (b)(7) to read as follows:

[[Page 37656]]

Sec. 1614.103 Complaints of discrimination covered by this part.

* * * * *

(b) * * *

(4) All units of the judicial branch of the Federal government

having positions in the competitive service, except for complaints

under the Rehabilitation Act;

(5) The National Oceanic and Atmospheric Administration

Commissioned Corps;

(6) The Government Printing Office; and

(7) The Smithsonian Institution.

* * * * *

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 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 claims raised

in precomplaint counseling (or issues or claims like or related to

issues or claims raised in pre-complaint counseling) may be alleged in

a subsequent complaint filed with the agency. * * *

(2) Counselors shall advise aggrieved persons that, where the

agency agrees to offer ADR in the particular case, they may choose

between participation in the alternative dispute resolution program 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 claim 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 redesignating paragraph (d) as

paragraph (e), adding a new paragraph (d), and revising redesignated

paragraph (e) to read as follows:

Sec. 1614.106 Individual complaints.

* * * * *

(d) A complainant may amend a complaint at any time prior to the

conclusion of the investigation to include issues or claims like or

related to those raised in the complaint. After requesting a hearing, a

complainant may file a motion with the administrative judge to amend a

complaint to include issues or claims like or related to those raised

in the complaint.

(e) The agency shall acknowledge receipt of a complaint or an

amendment to a complaint in writing and inform the complainant of the

date on which the complaint or amendment was filed. 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. Such

acknowledgment shall also advise the complainant that:

(1) The complainant has the right to appeal the final action on or

dismissal of a complaint; and

(2) The agency is required to conduct an impartial and appropriate

investigation of the complaint within 180 days of the filing of the

complaint unless the parties agree in writing to extend the time

period. When a complaint has been amended, the agency shall complete

its investigation within the earlier of 180 days after the last

amendment to the complaint or 360 days after the filing of the original

complaint, except that the complainant may request a hearing from an

administrative judge on the consolidated complaints any time after 180

days from the date of the first filed complaint.

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

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

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

removing the word ``or'' at the end of redesignated paragraph (a)(7),

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

and (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 applying the criteria set forth in

Commission decisions, finds that the complaint is part of a clear

pattern of misuse of the EEO process for a purpose other than the

prevention and elimination of employment discrimination. A clear

pattern of misuse of the EEO process requires:

(i) Evidence of multiple complaint filings; and

(ii) Allegations that are similar or identical, lack specificity or

involve matters previously resolved; or

(iii) Evidence of circumventing other administrative processes,

retaliating against the agency's in-house administrative processes or

overburdening the EEO complaint system.

(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 claims 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 final action is taken on the remainder of the

complaint.

7. Section 1614.108 is amended by removing the first sentence of

paragraph (b) and adding two sentences in its place, revising paragraph

(f) and adding a new paragraph (g) to read as follows:

Sec. 1614.108 Investigation of complaints.

* * * * *

(b) In accordance with instructions contained in Commission

Management Directives, the agency shall develop an impartial and

appropriate factual record upon which to make findings on the claims

raised by the written complaint. An appropriate factual record is one

that allows a reasonable fact finder to draw conclusions as to whether

discrimination occurred. * * *

* * * * *

(f) Within 180 days from the filing of the complaint, or where a

complaint was amended, within the earlier of 180 days after the last

amendment to the

[[Page 37657]]

complaint or 360 days after the filing of the original 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 decision from an administrative judge or may request 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 written 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. Within 15 days of receipt of the request for a

hearing, the agency shall provide a copy of the complaint file to EEOC

and, if not previously provided, to 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), removing the introductory text of

redesignated paragraph (f) and adding a heading, adding a sentence at

the end of redesignated paragraph (f)(1), revising the introductory

text of redesignated paragraph (f)(3), in the heading of redesignated

paragraph (g) removing the words ``Findings and conclusions'' and

adding, in their place the word ``Decisions'', in redesignated

paragraphs (g)(2) and (g)(3) removing the phrases ``findings and

conclusions'' and adding, in their place, the words ``a decision'', and

revising redesignated 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 hearing in accordance with

this section. Upon appointment, the administrative judge shall assume

full responsibility for the adjudication of the complaint, including

overseeing the development of the record. Any hearing will be conducted

by an administrative judge or hearing examiner with appropriate

security clearances.

(b) Dismissals. Administrative judges may dismiss complaints

pursuant to Sec. 1614.107, on their own initiative, after notice to the

parties, or upon an agency's motion to dismiss a complaint.

(c) Offer of resolution. (1) Any time after the filing of the

written complaint but not later than the date an administrative judge

is appointed to conduct a hearing, the agency may make an offer of

resolution to a complainant who is represented by an attorney.

(2) Any time after the parties have received notice that an

administrative judge has been appointed to conduct a hearing, but not

later than 30 days prior to the hearing, the agency may make an offer

of resolution to the complainant, whether represented by an attorney or

not.

(3) The offer of resolution shall be in writing and shall include a

notice explaining the possible consequences of failing to accept the

offer. The agency's offer, to be effective, must include attorney's

fees and costs and must specify any non-monetary relief. With regard to

monetary relief, an agency may make a lump sum offer covering all forms

of monetary liability, or it may itemize the amounts and types of

monetary relief being offered. The complainant shall have 30 days from

receipt of the offer of resolution to accept it. If the complainant

fails to accept an offer of resolution and the relief awarded in the

administrative judge's decision, the agency's final decision, or the

Commission decision on appeal 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 expiration of the 30-day acceptance

period. 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 and either party may seek to negotiate a settlement of

the complaint at any time.

* * * * *

(f) Procedures.

(1) * * * The administrative judge shall serve all orders to

produce evidence on both parties.

* * * * *

(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:

* * * * *

(i) Decisions by administrative judges. Unless the administrative

judge makes a written determination that good cause exists for

extending the time for issuing a decision, an administrative judge

shall issue a decision on the complaint, and shall order appropriate

remedies and relief where discrimination is found, within 180 days of

receipt by the administrative judge of the complaint file from the

agency. The administrative judge shall send copies of the hearing

record, including the transcript, and the decision to the parties. If

an agency does not issue a final order within 40 days of receipt of the

administrative judge's decision in accordance with 1614.110, then the

decision of the administrative judge shall become the final action of

the agency.

9. Section 1614.110 is revised to read as follows:

Sec. 1614.110 Final action by agencies.

(a) Final action by an agency following a decision by an

administrative judge. When an administrative judge has issued a

decision under Sec. 1614.109(b), (g) or (i), the agency shall take

final action on the complaint by issuing a final order within 40 days

of receipt of the hearing file and the administrative judge's decision.

The final order shall notify the complainant whether or not the agency

will fully implement the decision of the administrative judge and shall

contain notice of the complainant's right to appeal to the Equal

Employment Opportunity Commission, the right 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. If the

final order does not fully implement the decision of the administrative

judge, then the agency shall simultaneously file an appeal in

accordance with Sec. 1614.403 and append a copy of the appeal to the

final order. A copy of EEOC Form 573 shall be attached to the final

order.

(b) Final action by an agency in all other circumstances. When an

agency dismisses an entire complaint under Sec. 1614.107, receives a

request for an immediate final decision or does not receive a reply to

the notice issued under Sec. 1614.108(f), the agency shall take final

action by issuing 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,

[[Page 37658]]

appropriate remedies and relief in accordance with subpart E of this

part. The agency shall issue the final decision 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 final action shall contain notice of the right to appeal

the final action to the Equal Employment Opportunity Commission, the

right 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

final action.

Sec. 1614.201 [Amended]

10. Section 1614.201 is amended by removing the words ``Federal

Sector Programs, 1801 L St., NW., Washington, DC 20507'' in the second

sentence of paragraph (a) and adding the words ``at P.O. Box 19848,

Washington, DC 20036, or by personal delivery or facsimile'' in their

place, removing the words ``issued a final decision'' in paragraph

(c)(1) and adding the words ``taken final action'' in their place and

removing the words ``the issuance of a final decision'' in paragraph

(c)(2) and adding the words ``final action'' in their place.

11. 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 adding the word

``decide'' in its place in paragraph (d)(6), revising paragraphs

(d)(7), (e)(1), (g)(2), (g)(4), and (l)(3), and removing the word

``agency'' and adding the word ``agent'' in its place in paragraph

(j)(7), 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. The administrative judge shall deny

class certification when the complainant has unduly delayed in moving

for certification.

* * * * *

(d) * * *

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

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

shall take final action by issuing a final order within 40 days of

receipt of the hearing record and administrative judge's decision. The

final order shall notify the agent whether or not the agency will

implement the decision of the administrative judge. If the final order

does not implement the decision of the administrative judge, the agency

shall simultaneously appeal the administrative judge's decision in

accordance with Sec. 1614.403 and append a copy of the appeal to the

final order. A 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

Equal Employment Opportunity Commission 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 pursuant to the notice and approval procedure

contained in paragraph (g)(4) of this section.

* * * * *

(4) Notice of the resolution shall be given to all class members in

the same manner as notification of the acceptance of the class

complaint and to the administrative judge. It shall state the relief,

if any, to be granted by the agency and the name and address of the

EEOC administrative judge assigned to the case. It shall state that

within 30 days of the date of the notice of resolution, any member of

the class may petition the administrative judge to vacate the

resolution because it benefits only the class agent, or is otherwise

not fair, adequate and reasonable to the class as a whole. The

administrative judge shall review the notice of resolution and consider

any petitions to vacate filed. If the administrative judge finds that

the proposed resolution is not fair, adequate and reasonable to the

class as a whole, the administrative judge shall issue a decision

vacating the agreement and may replace the original class agent with a

petitioner or some other class member who is eligible to be the class

agent during further processing of the class complaint. The decision

shall inform the former class agent or the petitioner of the right to

appeal the decision to the Equal Employment Opportunity Commission and

include EEOC Form 573, Notice of Appeal/Petition. If the administrative

judge finds that the resolution is fair, adequate and reasonable to the

class as a whole, the resolution shall bind all members of the class.

* * * * *

(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. Administrative judges shall retain

jurisdiction over the complaint in order to resolve any disputed claims

by class members. The claim must include a specific, detailed showing

that the claimant is a class member who was affected by the

discriminatory policy or practice, and that this discriminatory 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 administrative judge may hold a hearing

or otherwise supplement the record on a claim filed by a class member.

The agency or the Commission may find class-wide discrimination and

order remedial action for any policy or practice in existence within 45

days of the agent's initial contact with the Counselor. Relief

otherwise consistent with this Part may be ordered for the time the

policy or practice was in effect. 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

[[Page 37659]]

subpart D of this part and the applicable time limits.

Sec. 1614.302 [Amended]

12. Section 1614.302 is amended by removing the words ``5 CFR

1201.154(a)'' in paragraph (d)(1)(i) and adding the words ``5 CFR

1201.154(b)(2)'' in their place.

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

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

adding a new paragraph (b), and revising redesignated paragraph (c) to

read as follows:

Sec. 1614.401 Appeals to the Commission.

(a) A complainant may appeal an agency's final action or dismissal

of a complaint.

(b) An agency may appeal as provided in Sec. 1614.110(a).

(c) A class agent or an agency may appeal an administrative judge's

decision accepting or dismissing all or part of a class complaint; a

class agent may appeal a final decision on a class complaint; a class

member may appeal a final decision on a claim for individual relief

under a class complaint; and a class member, a class agent or an agency

may appeal a final decision on a petition pursuant to

Sec. 1614.204(g)(4).

* * * * *

14. Section 1614.402 is amended by revising paragraph (a) to read

as follows:

Sec. 1614.402 Time for appeals to the Commission.

(a) Appeals described in Sec. 1614.401(a) and (c) must be filed

within 30 days of receipt of the dismissal, final action or decision.

Appeals described in Sec. 1614.401(b) must be filed within 40 days of

receipt of the hearing file and decision. Where a complainant has

notified the EEO Director of alleged noncompliance with a settlement

agreement in accordance with Sec. 1614.504, the complainant may file an

appeal 35 days after service of the allegations of noncompliance, but

no later than 30 days after receipt of an agency's determination.

* * * * *

15. 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 shall be dismissed by the Commission as

untimely.

(d) Any statement or brief on behalf of a complainant in support of

the appeal must be submitted to the Office of Federal Operations within

30 days of filing the notice of appeal. Any statement or brief on

behalf of the agency in support of its appeal must be submitted to the

Office of Federal Operations within 20 days of filing the notice of

appeal. The Office of Federal Operations will accept statements or

briefs in support of an appeal by facsimile transmittal, provided they

are no more than 10 pages long.

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

Federal Operations within 30 days of initial 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, or, if

no statement or brief supporting the appeal is filed, within 60 days of

receipt of the appeal. The Office of Federal Operations will accept

statements or briefs in opposition to an appeal by facsimile provided

they are no more than 10 pages long.

16. 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.

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

paragraph (a), by removing the words ``certified mail, return receipt

requested'' from the last sentence of paragraph (a) and adding the

words ``first class mail'' in their place and revising paragraph (b) to

read as follows:

Sec. 1614.405 Decisions on appeals.

(a) * * * The decision on an appeal from an agency's final action

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(i) 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. 1614.407 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.

Sec. 1614.407 [Removed]

Secs. 1614.408 through 1614.410 [Redesignated as Secs. 1614.407

through 1614.409]

18. Section 1614.407 is removed and Secs. 1614.408 through 1614.410

are redesignated as Secs. 1614.407 through 1614.409.

19. Redesignated Sec. 1614.407 is amended by removing the words

``final decision'' from paragraph (a) and adding the words ``final

action'' in their place and by removing the words ``a final decision

has not been issued'' from paragraph (b) and adding the words ``final

action has not been taken'' in their place.

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

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

(e)(1)(iv) and (e)(2)(i), the first sentence of paragraph (e)(2)(ii)(A)

and paragraph (e)(2)(ii)(B) to read as follows:

Sec. 1614.501 Remedies and relief.

* * * * *

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

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

applicant or employee

[[Page 37660]]

reasonable attorney's fees (including expert witness fees) and other

costs incurred in the processing of the complaint.

* * * * *

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

attorney after the filing of a written complaint, provided that the

attorney provides reasonable notice of representation to the agency,

administrative judge or Commission, except that fees are allowable for

a reasonable period of time prior to the notification of representation

for any services performed in reaching a determination to represent the

complainant. Agencies are not required to pay attorney's fees for

services performed during the pre-complaint process, except that fees

are allowable when the Commission affirms on appeal an administrative

judge's decision finding discrimination after an agency takes final

action by not implementing an administrative judge's decision. Written

submissions to the agency that are signed by the representative shall

be deemed to constitute notice of representation.

(2) * * * (i) When the agency, administrative judge or the

Commission determines an entitlement to attorney's fees or costs, the

complainant's attorney shall submit a verified statement of attorney's

fees (including expert witness fees) and other costs, as appropriate,

to the agency or administrative judge within 30 days of receipt of the

decision and shall submit a copy of the statement to the agency. A

statement of attorney's fees and costs shall be accompanied by an

affidavit executed by the attorney of record itemizing the attorney's

charges for legal services. The agency may respond to a statement of

attorney's fees and costs within 30 days of its receipt. The verified

statement, accompanying affidavit and any agency response shall be made

a part of the complaint file.

(ii)(A) The agency or administrative judge shall issue a decision

determining the amount of attorney's fees or costs due within 60 days

of receipt of the statement and affidavit. * * *

(B) The amount of attorney's fees shall be calculated using the

following standards: The starting point shall be the number of hours

reasonably expended multiplied by a reasonable hourly rate. There is a

strong presumption that this amount represents the reasonable fee. In

limited circumstances, this amount may be reduced or increased in

consideration of the degree of success, quality of representation, and

long delay caused by the agency.

* * * * *

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

paragraph (a), revising the introductory text of paragraph (b),

revising 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 Commission decision is mandatory and

binding on the agency except as provided in this section. * * *

(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 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 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.

* * * * *

Sec. 1614.504 [Amended]

22. Section 1614.504 is amended by removing the words ``final

decisions'' from the section heading and adding the words ``final

action'' in their place, removing the words ``A final decision'' from

the second sentence of paragraph (a) and adding the words ``Final

action'' in their place, and removing the word ``final'' from the third

sentence of paragraph (a) and the second sentence of paragraph (b).

23. Section 1614.505 is added to subpart E to read as follows:

Sec. 1614.505 Interim relief.

(a)(1) When the agency appeals and the case involves removal,

separation, or suspension continuing beyond the date of the appeal, and

when the administrative judge's 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 in the decision, pending the outcome of the

agency appeal. The employee may decline the offer of interim relief.

(2) Service under the temporary or conditional restoration

provisions of paragraph (a)(1) of this section shall be credited toward

the completion of a probationary or trial period, eligibility for a

within-grade increase, or the completion of the service requirement for

career tenure, if the Commission upholds the decision on appeal. Such

service shall not be credited toward the completion of any applicable

probationary or trial period or the completion of the service

requirement for career tenure if the Commission reverses the decision

on appeal.

(3) When the agency appeals, it may delay the payment of any

amount, other than prospective pay and benefits, ordered to be paid to

the complainant until after the appeal is resolved. If the agency

delays payment of any amount pending the outcome of the appeal and the

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

the agency shall pay interest from the date of the original decision

until payment is made.

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

writing at the same time it appeals 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 appeal.

(5) The agency may, by notice to the complainant, decline to return

the complainant to his or her place of employment if it determines that

the return or presence of the complainant will be unduly disruptive to

the work environment. However, prospective pay and benefits must be

provided. The determination not to return the complainant to his or her

place of employment is not reviewable. A grant of interim relief does

not insulate a complainant from subsequent disciplinary or adverse

action.

(b) If the agency files an appeal and has not provided required

interim relief, the complainant may request dismissal

[[Page 37661]]

of the agency's appeal. Any such request must be filed with the Office

of Federal Operations within 25 days of the date of service of the

agency's appeal. A copy of the request must be served on the agency at

the same time it is filed with EEOC. The agency may respond with

evidence and argument to the complainant's request to dismiss within 15

days of the date of service of the request.

Sec. 1614.603 [Amended]

24. Section 1614.603 is amended by removing the word

``allegations'' from the last sentence and adding the word ``claims''

in its place.

Sec. 1614.604 [Amended]

25. Section 1614.604 is amended by removing the words ``delivered

in person'' and adding the word ``received'' in their place in

paragraph (b).

26. Section 1614.605 is amended by revising the second sentence of

paragraph (d) to read as follows:

Sec. 1614.605 Representation and official time.

* * * * *

(d) * * * When the complainant designates an attorney as

representative, service of all official correspondence shall be made on

the attorney and the complainant, but time frames for receipt of

materials shall be computed from the time of receipt by the attorney. *

* *

* * * * *

27. Section 1614.606 is revised to read as follows:

Sec. 1614.606 Joint processing and consolidation of complaints.

Complaints of discrimination filed by two or more complainants

consisting of substantially similar allegations of discrimination or

relating to the same matter may be consolidated by the agency or the

Commission for joint processing after appropriate notification to the

parties. Two or more complaints of discrimination filed by the same

complainant shall be consolidated by the agency for joint processing

after appropriate notification to the complainant. When a complaint has

been consolidated with one or more earlier filed complaints, the agency

shall complete its investigation within the earlier of 180 days after

the filing of the last complaint or 360 days after the filing of the

original complaint, except that the complainant may request a hearing

from an administrative judge on the consolidated complaints any time

after 180 days from the date of the first filed complaint.

Administrative judges or the Commission may, in their discretion,

consolidate two or more complaints of discrimination filed by the same

complainant.

[FR Doc. 99-17497 Filed 7-9-99; 8:45 am]

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