"timely appeal" set forth in the statute is satisfied when "an employee or an employee's personal representative initiates an appeal or grievance under an appeal or grievance system, including . . . . a discrimination complaint; . . . ." 5 C.F.R. § 550.804(b). Because the sole function of the Equal Employment Opportunity Commission is to enforce the provisions of Title VII, see, 42 U.S.C. §§ 2000e-4, 2000e-5, the references to the EEOC and to discrimination complaints contained in the Back Pay Act regulations indicate that the Office of Personnel Management operates under the belief that the provisions of the Back Pay Act apply to actions filed under Title VII.
The Equal Employment Opportunity Commission also appears to operate under this assumption. In specifying what remedial actions are appropriate upon a finding of discrimination, the regulations of the EEOC refer, on at least three separate occasions, to back pay "computed in the same manner prescribed by 5 C.F.R. § 550.805," (the regulations of the Back Pay Act, discussed supra). See, 29 C.F.R. § 1613.271(b)(1), (c)(1). The EEOC, therefore, calculates back pay awards according to the provisions and regulations of the Back Pay Act.
These regulations were in effect, and had been in effect for several years, when Congress amended the Back Pay Act in 1987. Although there is virtually no legislative history for the amendment, this Court must assume that, at the time the amendment was enacted, Congress was aware of the statutory and regulatory provisions of the Back Pay Act and of the fact that the EEOC awards back pay according to its provisions. Indeed, since the effective date of the amendment, the EEOC has been granting interest on back pay awards pursuant to those provisions.
In light of this statutory and regulatory framework, the Court concludes that the Congress intended the waiver of sovereign immunity in the Back Pay Act to apply to back pay awarded in Title VII actions. It is illogical to conclude that Congress intended that interest be paid on back pay awarded to federal employees by an arbitrator in a collective bargaining dispute, or by the Merit Systems Protection Board in a civil service dispute, or by the National Labor Relations Board in a labor dispute, or by a court in any employment dispute, but not by the Equal Employment Opportunity Commission or by a court in any action arising under Title VII. Because the provisions of the Back Pay Act were used by the EEOC in calculations of back pay prior to the 1987 amendment, it is logical to conclude that, if Congress had intended to exclude Title VII actions from the waiver of immunity for interest, Congress would have so specified in the amendment. This analysis is in accord with other district courts that have applied the amendment to back pay awards in Title VII actions. See, e.g., Mitchell v. Secretary of Commerce, 715 F. Supp. 409, 411 (D.D.C. 1989); Brown v. Marsh, 713 F. Supp. 20, 24 (D.D.C. 1989); Parker v. Burnley, 693 F. Supp. 1138, 1153 (N.D. Ga. 1988), as modified, 703 F. Supp. 925, 926 (N.D. Ga. 1988).
B. Exclusivity Provisions of Title VII.
The defendants argue that a plaintiff in a Title VII action cannot be awarded interest pursuant to the amendment to the Back Pay Act because Title VII provides the exclusive, preemptive remedy for employees of the federal government who allege discrimination based on one of the categories enumerated in the statute. See, Brown v. General Services Administration, 425 U.S. 820, 48 L. Ed. 2d 402, 96 S. Ct. 1961 (1976). This argument misses the point. The question before the Court is not whether the Back Pay Act can provide a separate or additional remedy to Title VII plaintiffs. The question is whether the waiver of sovereign immunity for the payment of interest in the Back Pay Act applies to back pay awarded in Title VII actions. The Supreme Court has made clear that a waiver of immunity for the payment of interest in a Title VII action may be found in a statute other than Title VII itself.
In Loeffler v. Frank, 486 U.S. 549, 108 S. Ct. 1965, 100 L. Ed. 2d 549 (1988), the plaintiff sued the United States Postal Service for sex discrimination under Title VII. He prevailed in the district court and was awarded reinstatement and back pay, but was denied prejudgment interest. He appealed the denial of interest, arguing that Congress had waived the Postal Service's immunity from interest in the 1970 Postal Reorganization Act, 39 U.S.C. § 401(1), which provides that the Postal Service may "sue and be sued." The Eighth Circuit upheld the district court's decision in reliance upon Library of Congress v. Shaw, 478 U.S. 310, 106 S. Ct. 2957, 92 L. Ed. 2d 250 (1986), discussed supra.
The Supreme Court overturned the decision, holding that by empowering the Postal Service to "sue and be sued," Congress had launched it into the commercial world and "waived its immunity from interest awards, authorizing recovery of interest from the Postal Service to the extent that interest is recoverable against a private party as a normal incident of suit." Loeffler, 108 S. Ct. at 1970. The Court explicitly rejected the Postal Service's argument that the only waiver of sovereign immunity applicable to a Title VII suit is found in Title VII itself. Id. at 1973. The Court also rejected the Postal Service's argument that because § 717 of Title VII, the section that allows suits against the federal government, did not expressly authorize an award of prejudgment interest, such an award is unavailable, noting that § 717 incorporated other provisions of Title VII, applicable to private parties, that do provide for an award of prejudgment interest. The issue, therefore, was not whether interest was authorized as a remedy by the statute, but whether the United States had waived its immunity from interest. Id. at 1974. "In creating the Postal Service, Congress did just that, and therefore, the no-interest rule does not apply to it." Id. at 1974.
This opinion establishes two premises applicable to this case. First, Title VII does not itself have to contain a waiver of immunity from interest in order for the Court to find such waiver exists. Second, the fact that Title VII does not expressly authorize an award of prejudgment interest in a suit against the federal government does not mean that the statute's exclusivity provisions preclude such an award. Accordingly, the Court rejects the defendants' contention that the holding of Brown v. General Services Administration precludes a finding for the plaintiff in this case, and holds that the waiver of immunity for interest in the Back Pay Act applies to back pay awarded in a Title VII action.
II. Requirement of a Reduction in Pay.
The Back Pay Act provides relief when an employee has suffered a "withdrawal or reduction" in pay as a result of an unjustified or unwarranted personnel action. The government argues that, even if the Court holds that the waiver of immunity for interest applies in Title VII actions, the plaintiff in this case is not entitled to invoke the provisions of the Back Pay Act because she did not suffer a "reduction or withdrawal" in her pay. This argument is based upon the fact that the plaintiff's initial discrimination complaint, filed in 1977, alleged a failure to promote. Generally, the provisions of the Back Pay Act do not apply in such cases. See, United States v. Testan, 424 U.S. 392, 407, 47 L. Ed. 2d 114, 96 S. Ct. 948 (1976), discussed infra. The plaintiff offers two arguments in response. First, the Back Pay Act was amended in 1978 to include claims for failure to promote. Second, although her original claim alleges a failure to promote, her current claim is of a different nature. It alleges that her supervisors made false representations that caused her to suffer a reduction in pay.
In United States v. Testan, 424 U.S. 392, 47 L. Ed. 2d 114, 96 S. Ct. 948 (1976), the Supreme Court held that the provisions of the Back Pay Act did not apply when the plaintiff sought back pay to compensate for an incorrect job classification. The Court interpreted the Back Pay Act as applying only when an employee has suffered an actual reduction in pay. Id. at 407. Two years later, as part of the Civil Service Reform Act of 1978, the statute was amended to specify that "an unjustified or unwarranted personnel action" included "the omission or failure to take an action or confer a benefit." 5 U.S.C. § 5596(b)(4); see generally, Spagnola v. Stockman, 732 F.2d 908, 910 (Fed. Cir. 1984). The Senate Report on the amendment states that it was intended to "reflect the broader interpretation of the statute that [had] been given the Back Pay Act in recent years by the Comptroller General and the Civil Service Commission through decisions and regulations." S. Rep. No. 969, 95th Cong., 2d Sess., at 114-115, reprinted in 1978 U.S.Code Cong. & Admin. News 2723, 2836-2837. According to the Report, the amendment provides for coverage under the Back Pay Act "for any employee who is found by an appropriate authority to have suffered a withdrawal, reduction, denial, or denial of an increase in, all or part of the employee's pay, allowances, differentials or any other monetary or employment benefits which would not have occurred but for an unjustified or unwarranted action taken by the agency." Id. (emphasis added). The amendment also acknowledged the Supreme Court's decision in United States v. Testan, supra, by providing that the Back Pay Act does not apply to reclassification actions.
Since the 1978 amendment, courts have been divided on the issue of whether the amendment was intended to expand the scope of the Back Pay Act to cases involving a failure to promote. In Spagnola v. Stockman, 732 F.2d 908 (Fed. Cir. 1984), the plaintiff sought back pay for three years in which he claimed he had performed the duties of a GS-15 position, but had been paid a GS-14 salary. The Federal Circuit rejected his claim, finding that no statute created a substantive right for recovery of back pay in that situation. In its opinion, the court briefly reviewed the 1978 amendments to the Back Pay Act.
The 1978 amendment was not designed to provide payment for all actions which should or might well have been taken, but only for those payments or benefits which were required by law (a statute or regulation). The history of the change emphasizes this limited purpose. Previously, the Back Pay Act literally permitted recovery only when the employee incurred 'a withdrawal or reduction' in pay, 5 U.S.C. § 5596(b) (1976) -- thus omitting in words to blanket failures to make additional payments that were mandated by law, e.g., a statutory periodic increase or a benefit conferred by a non-discretionary administrative regulation. For some years, the General Accounting Office authorized such payment for non-discretionary benefits . . . . and in 1977 the Civil Service Commission adopted regulations along the same line . . . . The 1978 amendment to the Back Pay Act was specifically intended to incorporate that general administrative position into the Act -- and no more.