Watson, Cecil W. v. Henderson, William J ( 2000 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 98-3955
Cecil W. Watson,
Plaintiff-Appellant,
v.
William J. Henderson, Postmaster General
of the United States,
Defendant-Appellee.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 96 C 7044--David H. Coar, Judge.
Argued April 19, 2000--Decided July 24, 2000
Before Posner, Chief Judge, and Coffey and
Easterbrook, Circuit Judges.
Easterbrook, Circuit Judge. A decade ago Cecil
Watson applied for a managerial position at a
post office. He was turned down, and in 1993 the
Equal Employment Opportunity Commission concluded
that his race influenced the adverse decision.
The EEOC required the Postal Service to promote
Watson and restore salary and benefits lost
during the interim. (When the Postal Service is
the employer, the EEOC has the authority to make
decisions that become final unless contested by
the agency--and the Postal Service did not
contest the EEOC’s position, so the EEOC’s view
became the Postal Service’s final agency
decision. See 42 U.S.C. sec.2000e-16(b); 29
C.F.R. sec.sec. 1614.109, 1614.110.) But the
Postal Service did not promote Watson. His
existing position as a supervisor of customer
services had been reclassified to pay grade EAS-16
before the EEOC issued its decision, and the
Postal Service concluded that this was just as
good as promoting him. It gave Watson back pay,
but only to the day when he began receiving pay
at the EAS-16 rate. He protested to the EEOC, which
initially found that he had received his due. But
after an administrative appeal the Commission
concluded that the record did not permit a
confident decision whether the positions of
Supervisor, Customer Services, and Manager,
Customer Services, are equivalent. It directed
the Postal Service to address that question and,
if the positions are not equivalent, to promote
Watson and afford him "all benefits for make-
whole relief (including, but not limited to,
backpay and interest)." After the Postal Service
informed Watson that it would do nothing further
for him, he filed this civil action under
sec.2000e-16(c), seeking enforcement of the 1993
decision. Whether sec.2000e-16(c) or the APA, 5
U.S.C. sec.706(1), is the right avenue for a
dispute of this kind, see West v. Gibson, 527
U.S. 212, 219 (1999), is an issue that the
parties have not addressed, and that we likewise
bypass.
After a bench trial, the district court
concluded that the two positions are not
equivalent--not only because one is higher than
the other in the chain of command, but also
because the duties and often the salaries differ.
It directed the Postal Service to give Watson the
next managerial EAS-17 job that becomes available
in its Northern Illinois District, and to give
Watson the benefits of an EAS-17 position until
that promotion occurs. But the court declined to
award Watson back pay, or to determine what other
benefits (including, perhaps, promotion to EAS-18)
Watson would have received had he been promoted
in 1990, as he should have been. Accepting the
Postal Service’s argument, the district court
concluded that all forms of relief other than
promotion were forfeited when Watson’s lawyer
failed to file a timely brief in support of his
appeal within the EEOC. Under the EEOC’s
regulations, "[a]ny statement or brief in support
of the appeal must be submitted to the Director,
Office of Federal Operations, and to the agency
within 30 days of filing the appeal." 29 C.F.R.
sec.1614.403(d). (Section 1614.403 has been
rewritten, effective November 9, 1999, see 64
Fed. Reg. 37644, 37659 (July 12, 1999), but the
change does not alter the substance of the quoted
provision.) Watson filed his appeal on October
24, 1995, but did not submit a supporting
statement until December 4, 1995. The Commission
elected not to consider the untimely statement
(or a second, wildly out-of-time statement
received in April 1996). Because the EEOC
disregarded Watson’s statements, the district
judge concluded, Watson has not exhausted his
administrative remedies with respect to the
issues discussed in the statements.
On appeal, the Postal Service has confessed
error on the subject of exhaustion. In evaluating
this new position, we must distinguish two
possibilities. First, it may be unnecessary for
an appellant ever to present arguments on
administrative appeal within the EEOC. That is to
say, "issue exhaustion" may be unnecessary, even
though it is essential to file with the agency a
charge that makes the basic claim of
discrimination. The Supreme Court recently
reached this conclusion with respect to the
Appeals Council of the Social Security
Administration, see Sims v. Apfel, 120 S. Ct.
2080 (2000), and because sec.1614.403(d) is an
invitation rather than a command to file a
statement, the EEOC may receive similar treatment.
Second, it may be unimportant what the appellant
files if the agency has addressed an issue. That
is to say, an issue may be deemed exhausted if
either presented to the EEOC in a statement or
actually addressed by the agency. An issue
neither presented in a statement nor decided by
the agency would not be preserved for judicial
review--although even then the agency’s lawyers
could forfeit the benefits of the private party’s
forfeiture, because an issue-exhaustion
requirement is not jurisdictional. See Sims, 120
S. Ct. at 2083 n.1; Gibson v. West, 201 F.3d 990,
993-94 (7th Cir. 2000). (There is a third
possibility--that because a federal employee may
obtain de novo consideration under sec.2000e-
16(c) without protesting to the EEOC about the
employer’s noncompliance, it does not matter what
happened before the EEOC in 1995 and 1996. But
perhaps an employee who chooses to complain
within the bureaucracy must give the agency a
reasonable opportunity to investigate and decide.
We put this third possibility to one side, as the
parties have not addressed it.)
We assumed in Gibson that an employee engaged
in administrative adjudication must specifically
identify each form of relief the employee seeks.
Whether Sims justifies a different view is a
difficult question. The Court relied on the fact
that the Social Security Administration made
optional a statement of grounds in support of an
administrative appeal; sec.1614.403(d) also
sounds optional. But all nine Justices also
agreed that it is ordinarily essential to raise
each issue before the agency, and Justice
O’Connor, whose vote was essential to the
majority in Sims, explained her position in a way
suggesting that the Social Security
Administration is unique. That agency invited
appellants to include a statement of reasons
within the request for review and provided only
three lines for that purpose. According to the
Social Security Administration, completing the
form requires only 10 minutes. The tiny space and
short time implied to Justice O’Connor that the
Social Security Administration discourages
appellants from providing reasons and thus must
proceed without them. The EEOC, by contrast, gives
appellants 30 days to file a separate statement
in the nature of an appellate brief. It neither
discourages the filing of such statements nor
implies that grounds will be short and easy to
present. Section 1614.403(d) allows the agency to
file a statement in reply. All of the Justices in
the Sims majority deemed it important that the
Appeals Council used inquisitorial rather than
adversarial procedures. See also Johnson v.
Apfel, 189 F.3d 561 (7th Cir. 1999) (anticipating
the holding of Sims). The process the EEOC has
adopted for claims against federal agencies looks
more adversarial. Even after Sims, then, it
remains a distinct possibility that failure to
file a statement in support of an appeal to the
EEOC forfeits all arguments--or at least that the
EEOC may deem the omission a forfeiture if it
chooses.
We need not decide what happens when the EEOC
treats a subject as forfeited, or what happens
when a line of argument is neither raised before
nor addressed by that agency. For although the
EEOC elected to disregard the two statements
Watson filed, it did not say that his delay
forfeited entitlement to any element of relief.
On the contrary, the EEOC discussed back pay,
found the record inadequate, and directed the
Postal Service to address the issue anew and
afford Watson "all benefits for make-whole relief
(including, but not limited to, backpay and
interest)." The EEOC also directed the Postal
Service to determine "what EAS level [Watson]
would now be assigned if he had not been
wrongfully denied the position in 1990." Because
the Postal Service agreed back in 1993 to his
promotion with back pay and interest, Watson is
entitled to judicial review of his contention
that the Postal Service failed to implement that
decision.
Watson seeks an additional form of relief:
compensatory damages on account of the Postal
Service’s failure to implement the EEOC’s
decision, a failure that Watson describes as
retaliation for his continued efforts to secure
promotion and back pay. Here, however, Watson’s
forfeiture is complete. He did not present a
retaliation claim to the EEOC. A second charge of
discrimination was unnecessary, see McKenzie v.
Illinois Department of Transportation, 92 F.3d
473, 482-83 (7th Cir. 1996); Malhotra v. Cotter
& Co., 885 F.2d 1305, 1312 (7th Cir. 1989), but
because the EEOC was the adjudicator as well as
the investigator Watson had to alert it to his
theory, yet did not. The Commission did not raise
or adjudicate the subject on its own, did not
conclude that Watson is the victim of
retaliation, and did not order the Postal Service
to provide any relief. Watson’s claim of
retaliation surfaced for the first time in the
district court, which is too late.
The Postal Service contends that remand is
unnecessary even with respect to back pay and the
appropriate EAS grade, asserting that Watson has
received full relief. Perhaps the record would
support that conclusion, but the district court
did not reach it. The only view the district
judge announced on these subjects is that Watson
had forfeited them. By directing the Postal
Service to promote Watson to a manager’s position
as quickly as possible (and to increase his grade
level to EAS-17 until the promotion occurs) the
district judge implied that back pay, at least,
may well have been appropriate had the request
been preserved. Given our conclusion that the
request has been preserved, the district judge
must determine whether Watson is entitled to
additional relief, and if so to what particular
relief. Only after that decision has been made
will it be appropriate to decide whether the
record supports the judgment.
Reversed and Remanded