B-245616, Nov 8, 1991

B-245616: Nov 8, 1991

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GAO declines to review an interest provision in a settlement agreement arising from an employment discrimination complaint because the interest provision is currently under reconsideration by the Equal Employment Opportunity Commission. Department officials later attempted to modify the already -signed agreement by deleting the reference to interest on the basis that there is no statutory authority to pay such interest. It is a well-settled rule of law that interest may be assessed against the government only under an express statutory provision or a provision in a lawful contract. Thus there is no basis to include interest in settlements made pursuant to Title VII. An EEOC interim rule states there is no authority for the payment of interest on backpay to federal employees who prevail in discrimination claims. 54 Fed.Reg. 45.

B-245616, Nov 8, 1991

GAO declines to review an interest provision in a settlement agreement arising from an employment discrimination complaint because the interest provision is currently under reconsideration by the Equal Employment Opportunity Commission.

Robert E. Coy, Esq., Acting General Counsel, Department of Veterans Affairs:

This replies to your letter of September 5, 1991, your reference 024L1, concerning an interest provision contained in a settlement agreement involving a claim of federal employment discrimination filed against your Department under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. Sec. 2000e-16. You ask our assistance in resolving a dispute over this provision.

You state that the settlement agreement in question initially called for the employee's reinstatement, reasonable attorney fees, and full back pay plus interest. Department officials later attempted to modify the already -signed agreement by deleting the reference to interest on the basis that there is no statutory authority to pay such interest. The employee objected under the Equal Employment Opportunity Commission (EEOC) procedures set out in 29 C.F.R. Sec. 1613.217(b) (1990), and later filed an appeal with the EEOC's Office of Federal Operations (OFO). The OFO found that the Department had breached the initial settlement agreement containing the interest provision and ordered specific performance of that agreement. Your office has filed a request with the EEOC to reopen the OFO decision to grant the employee interest under 29 C.F.R. Sec. 1613.235, but pending EEOC's response to the request, you ask that our Office declare the OFO decision on the interest provision invalid because it violates the general rule that the government cannot be charged interest.

As you know, it is a well-settled rule of law that interest may be assessed against the government only under an express statutory provision or a provision in a lawful contract. It has been our view that Title VII of the Civil Rights Act does not contain such authority, and thus there is no basis to include interest in settlements made pursuant to Title VII. Gene A. Albarado, 58 Comp.Gen. 5 (1978); and Juan S. Griego, B-207176, Jan. 6, 1983. As you note, the Assistant Attorney General, Office of Legal Counsel, Department of Justice has reached a similar conclusion. Memorandum for the Solicitor, Department of the Interior, September 18, 1989. In addition, an EEOC interim rule states there is no authority for the payment of interest on backpay to federal employees who prevail in discrimination claims. 54 Fed.Reg. 45,747, and 45,751, cited in Violet M, Dawes, 69 Comp.Gen. 469, 470 (1990), note 2.

As to our specifically ruling on the case you present, we have held that we may determine the legality of awards agreed to by agencies in informal settlements of discrimination complaints. Albert D. Parker, 64 Comp.Gen. 349 (1985); Equal Employment Opportunity Commission, 62 Comp.Gen. 239 (1983). However, since the EEOC has the authority to order final corrective action in discrimination cases, we have held that we will not render a decision on the propriety of a final order of the EEOC, which we have distinguished from an informal settlement. Owen F. Beeder, 69 Comp.Gen. 134 (1989). In addition, it has long been our policy to decline ruling on matters in litigation or under administrative review by an appropriate agency. See e.g. 58 Comp.Gen. 282 (1979); 4 C.F.R. Sec. 22.7 and 22.8 (1991). Therefore, since the matter on which you request our ruling is the subject of the OFO decision, which you have requested the EEOC to reopen, we do not believe it is appropriate for us to rule on it.