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Media Alerts - Taylor v. Geithner - Sixth Circuit
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February 5, 2013
  Taylor v. Geithner - Sixth Circuit
Headline: Sovereign Immunity Not Waived for IRS's Alleged Breach of Settlement Agreement

Area of Law: Civil, Employment Law, Title VII, Sovereign Immunity

Issue Presented: Whether Congress has waived sovereign immunity for an IRS employee's Title VII claim alleging that her supervisor breached a settlement agreement.

Brief Summary: An IRS employee sued her supervisor in federal court for retaliating against her and for breaching a settlement agreement that resolved her earlier discrimination claim. The Sixth Circuit affirmed the district court's dismissal, based on sovereign immunity, of her breach-of-settlement-agreement claim. But the Sixth Circuit reversed dismissal of her retaliation claim, finding that her evidence was sufficient to reach a jury.

Significance: This case was one of first impression concerning sovereign immunity for Title VII breach-of-settlement-agreement claims against the federal government as an employer.

Extended Summary: Over a two-year span, an IRS employee applied for a series of promotions and transfers, but supervisors rejected all her requests. Before her application was finally granted, she filed an Equal Employment Opportunity discrimination claim. After this filing, she was transferred to another IRS unit. She alleged that while working in the new unit, her supervisor retaliated against her for filing the discrimination claim. His alleged acts of retaliation included a three-day suspension without pay, written reprimands, and negative references. In response, the employee filed additional agency claims alleging retaliation.

The IRS and the employee eventually settled the discrimination claim. The settlement agreement required the IRS to remove the three-day suspension from the employee's record. She, in turn, waived future litigation on that claim. The settlement agreement also allowed the employee to monitor and report noncompliance. She later invoked this provision to report acts of IRS noncompliance, but the agency denied her claims. The agency found that even if the IRS had breached the agreement, the issue was moot because the IRS was now in compliance. She did not appeal those decisions within the agency.

Later, the employee sued her supervisor in the Western District of Tennessee, alleging retaliation and breach of the settlement agreement. The Western District dismissed both claims.

The Sixth Circuit affirmed dismissal of the breach-of-settlement-agreement claim, reasoning that the government is immune from liability unless Congress has explicitly and unambiguously waived immunity. The court noted that although Congress has waived sovereign immunity for Title VII discrimination suits against the federal government, the employee offered no compelling argument why this waiver extended to claims for settlement noncompliance. The court observed that the EEOC's regulations on reporting settlement noncompliance are silent on potential judicial remedies. And because a waiver of sovereign immunity must be explicit, this regulatory silence - coupled with the lack of an express statutory waiver for this type of claim - could not waive immunity. Thus, the employee was required to exhaust her administrative appeals rather than sue in federal court.

The Sixth Circuit reversed the district court's dismissal of the employee's retaliation claim, finding that she had "produced sufficient evidence to establish a prima facie case of retaliation." Her proofs showed, among other things, that she had applied for 52 positions in two years but was rejected every time. She also received negative references while her agency discrimination claims were pending.

Panel: McKeague, Merritt, and Moore, Circuit Judges

Argument: 10/4/2012

Date of Issued Opinion: 1/2/2013

Docket Number: 11-6122

Decided: Affirmed in part; reversed in part.

Case Alert Author: Kristina Bilowus

Counsel: David H. Shapiro, Swick & Shapiro, P.C Washington, D.C., for Appellant. Harriett Miller Halmon, United States Attorney's Office, Memphis, Tennessee, for Appellee. ON BRIEF: David H. Shapiro, Swick & Shapiro, P.C., Washington, D.C., for Appellant. Harriett Miller Halmon, United States Attorney's Office, Memphis, Tennessee, for Appellee.

Author of Opinion: Judge Moore

Case Alert Circuit Supervisor: Professor Mark Cooney

    Posted By: Mark Cooney @ 02/05/2013 02:03 PM     6th Circuit  

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