Nealon v. Stone, 958 F.2d 584 (4th Cir. 1992)

OPINION

ERVIN, Chief Judge:

Margaret Nealon filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC) contending that the U.S. Army had violated her rights under the Equal Pay Act of 1963, 29 U.S.C. § 206 et seq. (1988) (EPA), and Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. (1988), by paying her a lower salary than a man who performed similar work. The EEOC initially found that there was reasonable cause to believe that the Army discriminated against her (“EEOC I”), but erroneously applied private sector procedures for the public sector charge. The EEOC reversed its position twenty months later (“EEOC II”), finding that Nealon’s charge of discrimination lacked reasonable cause. Nealon then brought this suit in the Eastern District of Virginia under the EPA and Title VII seeking either to enforce the initial EEOC reasonable cause findings or, alternatively, to bring both EPA and Title VII claims de novo. The district court refused to enforce EEOC I and dismissed the action on the grounds that the statute of limitations barred Nealon’s EPA claim and failure to exhaust administrative remedies barred her Title VII claims. We affirm the district court’s holding that EEOC I did not become enforceable and that Nealon’s Title VII discrimination claim is barred by her failure to exhaust administrative remedies. We reverse with respect to Nealon’s Title VII retaliation claim, however, as she need not exhaust administrative remedies to pursue it. Furthermore, we hold that Nealon’s EPA claim is not time-barred both because she alleges a continuing violation and the apparently favorable EEOC I decision equitably tolled the EPA.

I.

Plaintiff-appellant Margaret Nealon is a female civilian employee of the U.S. Army. She was temporarily assigned as Chief of the Editing Branch, Army Extension Training Directorate (“Directorate”), Army Training and Support Center, U.S. Army Training and Doctrine Command (TRA-

DOC) in April 1981 and was permanently assigned to this position in December 1983. Nealon alleges that the Editing Branch is equivalent to the Design Branch within the Directorate’s Literature Division. The Design Branch Chief, a man, has always been graded at least at the GM-13 level, while Nealon has never been paid higher than a GS-12 salary. She argues that this differential is discriminatory.

The classification of her position has met with some confusion. The Civilian Personnel Office (CPO) graded Nealon’s job as GS-13 in November 1982 but later reversed its position, changing the job’s grade back to GS-12 in September 1983. In January 1984, a contract classification specialist graded her job at GS-13. In November 1984, CPO permanently classified the job as GS-12, and Nealon received official notice of this classification on December 23, 1984.

Nealon first protested the classification decision through internal procedures. On January 4, 1985, she filed a written appeal of the classification to the CPO pro se, alleging violation of “the Equal Pay Act that states that males and females having like duties and responsibilities should also have equal pay.” The CPO rejected her appeal in February 1985. In March 1985, Nealon contacted the Fort Eustis and TRA-DOC Offices of Equal Employment Opportunity (EEO); both informed her that they lacked jurisdiction over an Equal Pay Act violation, and neither they nor the CPO advised Nealon that a Title YII claim was proper on the allegations. Nealon also unsuccessfully appealed to the Office of Personnel Management (OPM) and the Merit Systems Protection Board. Thereafter, Nealon learned that she should file a charge with the EEOC, and she filed a charge under both the EPA and Title VII on August 16, 1985.

The EEOC investigated between March 1986 and March 1987, obtaining statements from Nealon; the higher paid Design Chief; the division chief; and Nealon’s former supervisors, who all agreed that the positions were the same and deserved the same pay. On October 7,1987, the EEOC’s Baltimore Regional Office issued its decision on Nealon’s EPA complaint (“EEOC I”), finding that there was “reasonable cause to believe the [Army] has engaged in an unlawful employment practice in violation of the Equal Pay Act.” Ten months later, on August 24, 1988, the Army requested that the EEOC reconsider its decision. In September 1988, the EEOC reopened the case, apparently based on the uncontroverted fact that it used the procedures for private, not public, employers in processing Nealon’s administrative claim. On June 30, 1989, twenty months after EEOC I, the EEOC concluded that the same evidence it examined before did not warrant a finding of a reasonable cause of discrimination (“EEOC II”).

Nealon brought suit in federal district court on July 21, 1989, requesting enforcement of EEOC I or de novo findings of EPA and Title VII violations, including a retaliation claim. The district court denied enforcement of the EEOC I decision on the ground that such enforcement was inappropriate because the EEOC had processed the claim incorrectly. The court also dismissed the Title VII discrimination claim on the ground that Nealon failed to exhaust her administrative remedies because she did not contact an EEO counselor within the requisite thirty-day period. In addition, the court held that the Title VII retaliation claim was barred for failure to exhaust administrative remedies. Finally, the court dismissed the EPA claim on the ground that the applicable three-year statute of limitations period had run. Nealon timely appealed.

II.

On appeal, Nealon first argues that the passage of time converted EEOC I into a final, binding order which the district court should have enforced. In support of her argument, Nealon relies on the District Court for the District of Columbia’s opinion, Gubisch v. Brady, 50 Empl.Prac.Dec. (CCH) Para. 39,183, 1989 WL 44083, 1989

U.S.Dist. LEXIS 4817 (D.D.C.1989).1 In Gubisch, the EEOC found that the agency discriminated against the plaintiff and issued a compliance order, but reversed itself sixteen months later. Despite the reversal, the district court enforced the original EEOC order because more than “a short and reasonable time” had passed. 1989 WL 44083, at *10, 1989 U.S.Dist. LEXIS 4317, at *32. The court held that after a period measured in weeks rather than years, agency decisions become final and no longer subject to agency reversal.

We decline to apply Gubisch to the facts of this case. In Gubisch, the discrimination finding and compliance order were properly issued. In the case at bar, however, the issuance of the order was marred by application of procedures for private rather than public employers. We disagree with Nealon’s contention that the public and private procedures are virtually equivalent. Under the procedures applicable to private employers, inadvertently used for Nealon, when the EEOC finds reasonable cause of discrimination, either side can litigate the claim de novo in district court. 42 U.S.C. § 2000e-5; 29 C.F.R. § 1601. When the EEOC finds discrimination pursuant to the EPA in a public sector case, it issues a compliance order that is enforceable against the agency. FPM Ltr. No. 551-9(5); MD 107(1.4) (1987). Here, use of the wrong procedures denied the Army the ability to timely appeal the reasonable cause finding to the EEOC. That denial may well have prejudiced the Army in this case, and thus in this case the procedures were materially different.

Nealon argues alternatively that, even if the two procedures have significant differences, the passage of more than reasonable time eliminates the EEOC’s opportunity to rectify its admitted procedural error. See Mazaleski v. Treusdell, 562 F.2d 701, 720 (D.C.Cir.1977) (agency’s procedural errors cannot be rectified after a short and reasonable time period normally measured by weeks, not years, has passed); Gubisch, 1989 WL 44083, 1989 U.S.Dist. LEXIS 4317; see also Dawson v. Merit Systems Protection Board, 712 F.2d 264, 267 (7th Cir.1983) (regulation stating that agency could reopen decision at any time had reasonable time period limitation). However, the passage of time simply does not, and cannot, transform a reasonable cause determination into a final compliance order.2 We therefore affirm the district court’s dismissal of Nealon’s attempted enforcement of EEOC I as a final compliance order.

III.

Nealon next argues that if EEOC I did not become binding on the Army, she should be able to pursue her Title VII discrimination and retaliation claims de novo in district court.

A.

The district court below dismissed Nealon’s Title VII discrimination claim because she did not contact the Army’s EEO counselor within thirty days of the incident giving rise to the complaint. According to the applicable regulation, 29 C.F.R. § 1613.214(a)(l)(i) (1990), a plaintiff must notify the EEO counselor of “the matter causing him/her to believe he/she had been discriminated against within 30 calendar days of ... [when he/she] knew or reasonably should have known of the discriminatory event or personnel action.” Nealon acknowledges that her first contact with the Army EEO counselor was seventy-five days after the triggering event, her permanent GS-12 classification, but argues that her pro se written appeal to the CPO alleging violations of the EPA, sent within thirty days of the classification, put the Army on notice of her discrimination charge. According to Nealon, it was then the Army’s unfulfilled burden to refer her to the EEO counselor.3

We reject Nealon’s contention. Indisputably, Title VII suits against the government are subject to equitable tolling principles. Irwin v. Veterans Administration, — U.S. -, 111 S.Ct. 453, 112 L.Ed.2d 435 (1990). However, where an employee fails to make timely contact with the EEO office, courts will equitably toll the statute of limitations only when the government should be estopped from asserting the time bar or if plaintiff did not know about the time requirement.

Neither of these circumstances was present here. As this court has held, the government cannot be estopped from asserting the thirty-day time limit as a defense if “plaintiff has made no showing of affirmative misconduct on the part of the government, which is the least the court would require, even if that would suffice, to rely upon estoppel.” Zografov v. V.A. Medical Center, 779 F.2d 967 (4th Cir.1985) (citing Schweiker v. Hansen, 450 U.S. 785, 788, 101 S.Ct. 1468, 1471, 67 L.Ed.2d 685 (1981)). Nealon’s only claim of misconduct involves the Army’s failure to inform her of her Title VII rights. That conduct occurred after the relevant thirty-day period expired, too late to save Nealon’s Title VII claim under a theory of government estop-pel.

Neither can Nealon successfully press her claim based on lack of knowledge of the relevant period. The applicable EEO regulation, 29 C.F.R. § 1613.214(a)(4) (1990) (the "(a)(4) exception”), provides:

Evidence in the record supports the district court’s finding that this exception to the thirty-day period is not applicable to Nealon. Nowhere in the record does Nealon state that she was unaware of the thirty-day filing requirement. Moreover, in answer to an interrogatory, Nealon stated that she “recalls generally (but not specifically) knowing of the EEO complaint process before 1979.” Finally, the EEO counselor stated in her affidavit that the Army had complied with regulations requiring the posting of EEO complaint procedures and contact personnel on the work premises, and Nealon did not rebut this claim. Given these circumstances, Nealon failed to demonstrate the requisite lack of knowledge to invoke the (a)(4) exception. Accordingly, Nealon’s Title VII discrimina

tion claim is barred for failure to exhaust administrative remedies. See also Zografov, 779 F.2d 967; Plowman v. Cheney, 714 F.Supp. 196, 198-200 (E.D.Va.1989).4

B.

Nealon further argues that the district court improperly barred her Title VII retaliation claim for failure to exhaust administrative remedies. As the district court noted in dismissing Nealon’s claim, this circuit has not resolved whether a plaintiff asserting a Title VII claim of retaliation for filing a previous EEOC charge must exhaust administrative remedies before suing in federal court. See Aronberg v. Walters, 755 F.2d 1114, 1115 n. 1 (4th Cir.1985) (reserving question). We now consider the issue.

All other circuits that have considered the issue have determined that a plaintiff may raise the retaliation claim for the first time in federal court. On consideration, we find these rationales persuasive and adopt this position. We believe that rule is the inevitable corollary of our “generally accepted principle that the scope of a Title VII lawsuit may extend to ‘any kind of discrimination like or related to allegations contained in the charge and growing out of such allegations during the pendency of the case before the Commission.’ ” Hill v. Western Electric Co., 672 F.2d 381, 390 n. 6 (4th Cir.) (quoting Sanchez v. Standard Brands, Inc., 431 F.2d 455, 466 (5th Cir.1970)), cert. denied, 459 U.S. 981, 103 S.Ct. 318, 74 L.Ed.2d 294 (1982); see also EEOC v. General Electric Co., 532 F.2d 359, 373 (4th Cir.1976). The Seventh Circuit includes retaliation for the filing of an EEOC charge as discrimination “like or reasonably related to ... and growing out of such allegations.” Malhotra v. Cotter & Co., 885 F.2d 1305, 1312 (7th Cir.1989) (quotations omitted). The Malhotra court also rested its decision not to require a second EEOC filing on practical concerns:

Id.; see Brown v. Hartshorne Public School District No. 1, 864 F.2d 680, 682 (10th Cir.1988) (same); Kirkland v. Buffalo Bd. of Educ., 622 F.2d 1066, 1068 (2d Cir.1980) (same); see also Wentz v. Maryland Casualty Co., 869 F.2d 1153, 1154-55 (8th Cir.1989) (same; retaliation claim cognizable even if discrimination claim dismissed, and good faith reasonable belief that underlying challenged action violated law sufficient to establish prima facie case); Gottlieb v. Tulane Univ. of Louisiana, 809 F.2d 278, 284 (5th Cir.1987).

In the case at bar, Nealon correctly filed a Title VII and an EPA charge with the EEOC. She claims that the Army retaliated against her for taking this action. She then brought suit in federal court when the EEOC ruled against her. She clearly had a reasonable, good faith belief that the Army discriminated against her, justifying her original EEOC charge (two classification reviews placed her at GS-13 and three former supervisors concurred that her position merited such a placement). Conciliation with the Army did not improve her position the first time and would be unlikely to do so a second time. Therefore, we hold that she is entitled to have her retaliation claim heard by the district court.

IV.

Nealon argues that her Equal Pay Act claim is not entirely barred by the three-year statute of limitations for willful violations. See 29 U.S.C. § 255(a) (1988). She contends that the violation at issue was continuing and therefore the accruing event was not uniquely the date of her GS-12 job classification, December 23, 1984, but rather every time she was paid.5 Furthermore, she contends that the period should be deemed equitably tolled. We consider each argument in turn.6

A.

Nealon first argues that each issuance of her paycheck at a lower wage than her male counterpart received constituted a new discriminatory action for purposes of EPA limitations accrual. We agree. Instrumental in our determination is the Supreme Court’s treatment of the issue of separate paychecks in Bazemore v. Friday, 478 U.S. 385, 106 S.Ct. 3000, 92 L.Ed.2d 315 (1986) (per curiam). In that case, the Court held that sponsorship by the North Carolina Agricultural Extension Service of single-race clubs did not violate the Fourteenth Amendment where the racial imbalance was the result of the voluntary choice of private individuals. However, the Court also unanimously held that the Extension Service had a positive duty to eradicate salary disparities between white and black workers that had their origin prior to the date when Title VII was made applicable to public employees. Id. at 386, 106 S.Ct. at 3002. As Justice Brennan stated for the Court in explaining the per curiam opinion’s rationale:

Id. at 395-96, 106 S.Ct. at 3006-07 (Brennan, J., joined by all other members of the Court, concurring in part). This principle, “too obvious to warrant extended discussion,” id. at 395, 106 S.Ct. at 3006, which the Court applied to wage discrimination prior to the date Title VII became effective, applies equally well to alleged wage discrimination that occurred after Nealon’s initial classification.

The Supreme Court’s decision in United Air Lines, Inc. v. Evans, 431 U.S. 553, 97 S.Ct. 1885, 52 L.Ed.2d 571 (1977), is not to the contrary. Evans involved suit by a woman terminated as a flight attendant because she was married. After this practice was declared illegal, she was rehired but not given credit for her former seniority. The Supreme Court held her seniority claim not actionable. According to the Court, her rehiring without seniority was lawful because her original termination lacked legal significance as she had failed to file a timely EEOC charge. While plaintiff emphasized the continuing nature of the alleged wrong, “the emphasis should not be placed on mere continuity; the critical question is whether any present violation exists.” Id. at 558, 97 S.Ct. at 1889 (emphasis added). In the case at bar, Neal-on asserts not merely continuing employment, but present violations for limitations purposes. As we stated in Jenkins v. Home Ins. Co., 635 F.2d 310, 312 (4th Cir.1980):

Otherwise, we noted, “discrimination first inflicted at the date of hiring can thereafter continually violate the plaintiff’s rights.” Id.; accord Taylor v. Home Ins. Co., 777 F.2d 849 (4th Cir.1985) (same; age discrimination case), cert. denied, 476 U.S. 1142, 106 S.Ct. 2249, 90 L.Ed.2d 695 (1986). This continuing violation principle that applies under Bazemore to race discrimination violations of Title VII applies also to sex discrimination allegations, under the Equal Pay Act. See Brewster v. Barnes, 788 F.2d 985, 993 (4th Cir.1986) (following Jenkins for EPA claim); Jenkins v. Home Ins. Co., 635 F.2d at 312; Hodgson v. Behrens Drug Co., 475 F.2d 1041, 1050-51 (5th Cir.), cert. denied, 414 U.S. 822, 94 S.Ct. 121, 38 L.Ed.2d 55 (1973).

The Army’s attempts to distinguish Jenkins are unconvincing. It principally relies upon this court’s decision in Woodard v. Lehman, 717 F.2d 909 (4th Cir.1983). In Woodard, we held that a mere allegation of continuing discrimination without any identification of a discriminatory event within the statute of limitations period is insufficient to prove a continuing violation of Title VII. Id. at 914-16. Nealon, however, patently suffers current discrimination each time she is paid less than her male counterpart, if her allegations are true.7

The Army also argues that the continuing violation theory does not apply to cases involving federal employers because private sector employers have wide latitude in paying their employees while public sector employers do not. Accordingly, the Army argues that Nealon’s original classification fixed her pay, which her supervisors were powerless to change, so each paycheck should not be considered a discriminatory event. Bazemore v. Friday, 478 U.S. 385, 106 S.Ct. 3000, 92 L.Ed.2d 315 (1986) (per curiam), requires rejection of this argument. In that case, the Supreme Court squarely held that the theory applies to public employers. See id. at 394-96, 106 S.Ct. at 3006. Finally, the Army argues that the two jobs are not identical and Nealon failed to present “comparable worth” evidence below. However, it is for the district court to determine on the merits whether the two jobs are sufficiently similar to find an EPA violation; Nealon. was never permitted to offer evidence on the merits because her suit was dismissed before trial, on the Army’s motion.

B.

Finally, Nealon argues that the fact that her favorable EEOC I decision was issued during the limitations period, in October 1987, warrants equitable tolling of

the statute of limitations period. We agree.

As a general matter, statutory time limits in suits against the government are subject to equitable tolling principles. See Irwin v. Veterans Administration, — U.S. -, 111 S.Ct. 453, 112 L.Ed.2d 435 (1990) (holding Title VII subject to equitable tolling). Loe v. Heckler, 768 F.2d 409 (D.C.Cir.1985), holding that Title VII time limitations did not begin to run against the plaintiff when she received an apparently favorable agency ruling, is instructive. In Loe, the agency EEO officer found discrimination against the plaintiff. The agency agreed to a favorable remedy, and then reneged more than thirty days later. According to the District of Columbia Circuit Court of Appeals:

Id. 111 S.Ct. at 421.

The same principles apply in this case: Nealon’s apparently favorable EEOC decision equitably tolled the EPA statute of limitations, which had already begun to run. The Army attempts to distinguish Loe because Loe possessed a final decision from the EEOC, while Nealon had merely “an erroneously issued, non-binding, reasonable cause letter, accompanied by an invitation to conciliate.” Army Brief at 24. However, this same EEOC letter to Nealon stated flatly that it provided a “determination as to the merits of the subject charge,” and this determination was that “the two (2) positions require substantially the same level of skill, effort, and responsibility and are performed under similar working conditions.” Just as in Loe’s case, Nealon had no reason at that point to doubt that the Army would follow the EEOC’s determination, and in fact she attempted to conciliate her claim with the Army for a year in hopes that the Army would accept the EEOC’s determination.

The Army attempts further to distinguish Loe because Nealon’s initial filing of her EPA claim with the EEOC was not required by law. However, once she selected the EEOC to investigate her claim, the concerns of judicial economy and EEOC’s administrative mandate to resolve claims of discrimination counsel that the rule stated in Loe applies here too. The Army also cites cases in which the filing of a claim with the EEOC does not toll the statute of limitations. See, e.g., Johnson v. Railway Express Agency, Inc., 421 U.S. 454, 95 S.Ct. 1716, 44 L.Ed.2d 295 (1975). The Army argues that these cases apply with particular force because it notified Nealon by letter before the limitations period ran that filing with the EEOC does not stop the running of the statute of limitations. This argument fails to persuade, however, for it is not the mere filing of a claim that we hold equitably tolls the statute, but rather an apparently favorable agency decision.

Equitable tolling thus provides Nealon an independent ground to preclude a total statute of limitations bar of her EPA claim. Because she brought this suit immediately once it became clear that the administrative process in fact ruled against her, Nealon’s action is not barred by the statute of limitations.

V.

For the foregoing reasons we affirm the district court’s dismissal of Nealon’s claim for attempted enforcement of EEOC I and her Title VII discrimination claim. We reverse the district court’s dismissal of Neal-on’s Title VII retaliation claim and her

Equal Pay Act claim, and remand for trial on these claims.

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.