[Informal Settlements of Discrimination Complaints]

GAO consolidated four cases and considered them jointly since they presented related questions. The questions asked whether a Federal agency has the authority to informally settle a discrimination case by: (1) awarding backpay without effecting a corresponding personnel action such as a retroactive promotion or reinstatement; (2) awarding a monetary sum not based upon backpay; or (3) paying backpay without deductions or backpay computed without reference to the backpay regulations. After conferring with the Equal Employment Opportunity Commission (EEOC), GAO concluded that Federal agencies have the general authority to informally settle a discrimination complaint and to award backpay with a retroactive promotion or reinstatement without a specific finding of discrimination. In addition, monetary payments can be made for backpay or attorneys' fees independent of any personnel action. EEOC has concluded that a backpay award to an employee who is not to receive a retroactive promotion is not only proper but to be encouraged. The award may not provide for compensatory or punitive damages, and the limit of any monetary award is the amount of backpay or attorney's fees to which the employee would have been entitled had discrimination actually been found. Accordingly, three of the agency monetary awards under consideration may be paid if they represent an award which does not exceed the maximum amount that would be recoverable if a finding of discrimination had been paid. Insufficient information was received concerning the fourth payment. If it was a lump-sum payment unrelated to backpay, or if it was in the nature of compensatory or punitive damages, the payment would not be proper. However, even though it was not stated to be backpay, if it was arrived at on a basis consistent with backpay settlements then the payment may be made. Accordingly, the settlements reached in these four cases may be implemented in accordance with the provisions of the Civil Rights Act and corresponding EEOC regulations.