MSPB May Award Compensatory Damages in Discrimination and EEO Reprisal Appeals Even After Adverse Action Reversed | Practical Law

MSPB May Award Compensatory Damages in Discrimination and EEO Reprisal Appeals Even After Adverse Action Reversed | Practical Law

In Hess v. US Postal Service, the Merit Systems Protection Board (MSPB) held that it could award compensatory damages in discrimination cases even after the agency rescinded the appellant's removal from her US Postal Service (USPS) position.

MSPB May Award Compensatory Damages in Discrimination and EEO Reprisal Appeals Even After Adverse Action Reversed

by Practical Law Labor & Employment
Published on 29 Nov 2016 • USA (National/Federal)
In Hess v. US Postal Service, the Merit Systems Protection Board (MSPB) held that it could award compensatory damages in discrimination cases even after the agency rescinded the appellant's removal from her US Postal Service (USPS) position.
On November 18, 2016, in Hess v. US Postal Service, the Merit Systems Protection Board (MSPB) held that in light of its finding that Savage v. Department of the Army does not alter the MSPB's previous practice of awarding compensatory damages in discrimination cases, it could still award such damages even after the agency rescinded the appellant's removal from her position with the US Postal Service (USPS) ( (M.S.P.B. Nov. 18, 2016)).

Background

Lisa J. Hess (Hess) was removed from her position with USPS effective September 27, 2013. Hess appealed, raising affirmative defenses of:
  • Sex and disability discrimination.
  • Reprisal for equal employment opportunity (EEO) activity.
  • Whistleblower reprisal.
USPS rescinded the action and retroactively returned Hess to the nonpay status that she occupied before her removal. The administrative judge dismissed her appeal as moot.
Shortly after the administrative judge issued its initial decision on Hess's appeal, the MSPB issued Savage v. Department of the Army, in which it observed that:
  • Civil service law defines the MSPB's appeal procedures, including procedures in appeals alleging violations of Title VII.
  • Those procedures do not provide for summary judgment.
(122 M.S.P.R. 612 (2015).)
Hess petitioned for review of the initial decision. The MSPB agreed that Hess's removal and whistleblower retaliation claims were moot but remanded the appeal for a hearing on her discrimination and EEO retaliation affirmative defenses.
On remand, the administrative judge:
  • Ordered the parties to brief the issue of whether, under Savage, the MSPB lacks authority to award compensatory damages if the appellant proves her EEO affirmative defenses.
  • Observed that, because the underlying removal claim is no longer an issue, in the absence of the authority to award compensatory damages, the MSPB lacks jurisdiction over this appeal.
  • Ruled that, despite both parties' responses that they believed that the MSPB has the authority to award compensatory damages, the MSPB lacks such authority.
  • Found that the appeal is moot.
  • Certified his ruling for interlocutory review by the MSPB.

Outcome

The MSPB vacated the stay order issued in this proceeding and remanded, holding that:
  • Savage does not alter the MSPB's previous practice of awarding compensatory damages.
  • Hess's claims were not moot even though the agency had rescinded her removal.
The MSPB noted that:
  • A case is moot when:
    • the issues presented are no longer "live"; or
    • the parties lack a legally cognizable interest in the outcome of the case.
    (Wrighten v. Office of Personnel Management, 89 M.S.P.R. 163, ¶ 5 (2001).)
  • If an appellant raises a claim for compensatory damages that the MSPB has jurisdiction to adjudicate, then:
    • the agency's complete rescission of the removal action does not afford her all of the relief available before the MSPB; and
    • the appeal is not moot.
  • The MSPB's authority to adjudicate discrimination and EEO reprisal claims arises from the "integrated scheme of administrative and judicial review" contained in the Civil Service Reform Act (CSRA) of 1978 (US v. Fausto, 484 U.S. 439, 445 (1988)).
  • The CSRA does not address the MSPB's authority to award compensatory damages in connection with discrimination claims.
  • Under the Civil Rights Act of 1991 (42 U.S.C. § 1981a), Congress authorized compensatory damages for Title VII and disability discrimination claims under 42 U.S.C. § 1981a(a)(1)-(2).
  • The Civil Rights Act of 1991 does not address whether the MSPB has the authority to award compensatory damages. However, because the MSPB is charged with applying substantive discrimination law, the MSPB has long awarded compensatory damages (Savage, 122 M.S.P.R. 612).
  • The MSPB is required to adjudicate an appellant's claim for any compensatory damages resulting from a discriminatory or retaliatory adverse action (Martin v. Department of the Air Force, 73 M.S.P.R. 590, 593–94 (1997)).
  • Whether compensatory damages are available in the administrative process is a question of discrimination law (Crosby v. USPS, 78 M.S.P.R. 263, 8 (1998)).
The MSPB found that Savage did not diminish the MSPB's previous practice of awarding compensatory damages, because:

Practical Implications

In this decision, the MSPB clarified that compensatory damages claims under federal sector anti-discrimination laws are cognizable separate from the adverse personnel action that gave rise to the claims. Even after an agency rescinds an appellant's removal and puts her back in the position she was in before the removal, she may still have live compensatory damages claims if the agency's actions are motivated by discrimination or retaliation under the federal sector EEO laws.