Knowing When to Quit While Ahead

A federal employee won $40,000 in her discrimination complaint. She wasn’t happy with that result and went to court. She lost and was ordered to pay back the $40,000.

A reader brought a recent unpublished federal appeals court decision to our attention that illustrates why a federal employee claiming discrimination needs to fully understand the consequences before taking the complaint to court.

In this case the employee won her administrative case to the tune of a $40,000 damage payment, but now has to pay it back because she lost a subsequent court challenge based on the same discrimination claims.

The case is Hodge v, Potter, C.A.5thCir. No. 06-31243 (unpublished), 12/6/07.

Ms. Hodge, a Postal Service customer relations coordinator, filed an administrative complaint charging the Postal Service with sex discrimination. Following a hearing, the administrative judge found in favor of Hodge on her sexual harassment claim and awarded her $40,000 in compensatory damages. The USPS issued a check in that amount to Hodge. (Opinion pp. 1-2)

Presumably not satisfied with this result, Hodge filed suit against her agency in the United States District Court for the Western District of Louisiana, based on the same discrimination charge and on a claim of retaliation. The agency counterclaimed asking the court to order Hodge to pay back the $40,000. (p. 2)

Unfortunately for Hodge, the district court threw her case out when it granted summary judgment to the government, finding that there was no genuine issue of material fact with regard to her sex discrimination and retaliation claims. The court then asked the parties for briefs on the government’s counterclaim, but Hodge did not submit one. The court granted the government’s claim, ordering Hodge to repay the $40,000. (p. 2)

Following this bad day in court, Hodge took her case to the Fifth Circuit. But she has now had another bad day in court. The appeals court has sustained the district court’s rulings and Hodge still must repay the $40,000 she won at the administrative level.

Without getting into the unfortunate happenstance that Hodge briefed the wrong issue in trying to challenge the summary judgment part of the district court’s order, we found the court’s ruling on the government’s counterclaim much more interesting.

In invoking her right to file her discrimination claim in the district court, Hodge was starting the case over for all intents and purposes. She had the right to a trial "de novo" as the lawyers call it. The appeals court explains: "[W]hen a federal employee comes to court to challenge, in whole or in part, the administrative disposition of his or her discrimination claims, the court must consider those claims de novo, and is not bound by the results of the administrative process…[B]y seeking de novo review in district court, Hodge incurred the risk of losing on the merits, which is precisely what happened." (p. 5; citations omitted)

About the Author

Susan McGuire Smith spent most of her federal legal career with NASA, serving as Chief Counsel at Marshall Space Flight Center for 14 years. Her expertise is in government contracts, ethics, and personnel law.