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United States District Court, S.D. New York

March 31, 2004.


The opinion of the court was delivered by: THOMAS GRIESA, Senior District Judge


This is an employment discrimination case brought under the Federal Rehabilitation Act of 1973 ("Rehabilitation Act"), 29 U.S.C. § 701 et seq., and the Americans with Disabilities Act of 1990 (the "ADA"), 42 U.S.C. § 12112-12117. Plaintiff Richard Hodgson resigned from his position as a Customer Service Supervisor with the defendant United States Postal Service and signed a resignation agreement. Hodgson alleges that he was forced to resign without according him a reasonable opportunity for rehabilitation in connection with his alcoholism. He further alleges that the Postal Service breached the resignation agreement. Hodgson requests that the Court vacate the agreement and reinstate him with back pay.

The Postal Service moves for summary judgment dismissing the Page 2 action on the ground that Hodgson has failed to exhaust administrative remedies. In the alternative, the Postal Service moves to dismiss the complaint for failure to assert valid claims. Hodgson moves for preliminary injunction. Hodgson's motion for a preliminary injunction is denied. The motion of the Postal Service for summary judgment is granted to a limited degree. Pursuant to the Rehabilitation Act, which is the federal statute under which Hodgson must sue, Hodgson is required to exhaust `administrative remedies before seeking court relief. Hodgson has not done so. However, for reasons to be described, the court will not dismiss the action, but will stay it to allow Hodgson to use the administrative procedures. As to the motion of the Postal Service to dismiss for failure to state valid claims, the court will not reach those issues, and the motion is denied as moot.

  The Complaint

  The complaint alleges that Hodgson suffers from a disability as a recovering alcoholic and has been discharged in violation of the Rehabilitation Act and the ADA. It is now conceded that he cannot sue the Postal Service under the latter statute. See 42 U.S.C. § 12111(5)(B) (an "employer" subject to the ADA "does not include . . . a corporation wholly owned by the government Page 3 of the United States").

  Hodgson alleges that he was employed by the Postal Service for nearly 25 years. His most recent position appears to have been with the New Rochelle, New York facility. On September 19, 2002 Hodgson had a physical altercation with a co-worker, John Melvin, after Hodgson had consumed large amounts of alcohol during his lunch break. Hodgson alleges that, because of his intoxication, he has no recollection of the incident, but relies on the reports of others with regard to the incident. Hodgson alleges that, on September 25, 2002, his employer presented him with a choice either to be terminated or to resign within the hour, subject to the terms of a resignation agreement. Hodgson signed the agreement. The resignation agreement is attached to the complaint. It provides for Hodgson's resignation and contains certain related provisions. Paragraph 7 provides:

7. Mr. Hodgson agrees to withdraw any current appeals in any administrative forum, including EEO and MSPB [Merit System Protection Board] and further agrees not to file any future appeals in any administrative forums, including EEO and MSPB, concerning his employment and/or this settlement agreement.
  In signing the agreement Hodgson acknowledged "that he understands all of the provisions of this Settlement Agreement and he enters into it voluntarily, without coercion, intimidation or force." Page 4

  Although Paragraph 7 refers to any "current appeals," there was apparently no administrative proceeding pending at the time of the agreement.

  Hodgson complains that he was forced to resign in violation of the Rehabilitation Act. He further alleges that he had been diagnosed as suffering from a disability, namely alcoholism, depression and anxiety, that his behavior on September 19 was directly caused by his disability, and that he should have been given a reasonable opportunity for rehabilitation.

  The complaint also charges that the Postal Service breached the resignation agreement, but does not make any factual allegations as to how, or what aspect of, the agreement was breached.


  An employee suing under the Rehabilitation Act must exhaust administrative remedies before instituting a lawsuit in federal court. Bruce v. United States Dep't of Justice, 314 F.3d 71, 74 (2d Cir. 2002). The administrative procedures are set forth in 29 C.F.R. § 1614.105-1614.106. According to these regulations, a claimant must first consult a Counselor at the Postal Service's Equal Employment Opportunity office within 45 days of the alleged discriminatory action. § 1614.105(a)(1). If the matter is not resolved Page 5 after a mandatory counseling period, the Counselor must provide the employee with a written notice of the employee's right to file a discrimination complaint with the agency's EEO office. The employee has 15 days from the receipt of the notice to file that complaint. § 1614.106(b). After filing a formal administrative complaint, the employee is authorized to file a civil action in federal court (1) within ninety days of the agency's final decision, or (2) if no final decision has been rendered, 180 days from the filing of the complaint with the agency. § 1614.407.

  Because Hodgson served as a supervisor in the Postal Service for one continuous year, he had an additional administrative remedy available to him. He enjoys the protections afforded by Civil Services Reform Act provided under 5 U.S.C. § 7501-7543. See 39 U.S.C. § 1005(a)(4) (Postal Service Supervisors who have held their position for one year are covered by Subchapter II of Chapter 75 of title 5). Hodgson has the right to an administrative review of major adverse agency actions, such as termination or constructive discharge, before the Merit System Protection Board ("MSPB"). 5 U.S.C. § 7513(d) & 7701.

  Hodgson may thus elect to file a complaint with the Postal Service EEO or make appeal to the MSPB, but not both. 29 C.F.R. § 1614.302(b); Page 6 Economou v. Caldera, 286 F.3d 144, 149 (2d Cir. 2002); German v. Pena, 88 F. Supp.2d 222, 225 (S.D.N.Y. 2000).

  Hodgson has not filed a complaint with the Postal Service EEO or an appeal with the MSPB. The Postal Service contends that Hodgson cannot proceed with the present action until he has exhausted the administrative remedies. However, the Postal Service asked Hodgson to agree not to pursue administrative remedies when it presented him with the resignation agreement, which Hodgson signed.

  Courts have found equitable relief appropriate where an agency misleads or misdirects a claimant so as to prevent the claimant from seeking an administrative remedy. Economou, 286 F.3d at 146 n.3. Equitable relief is in order in the present case. This is not to say that the Postal Service was barred from reaching a settlement with Hodgson in which Hodgson agreed to refrain from using administrative procedures. However, there is surely an anomaly now in having the Postal Service insist on the exhaustion of administrative remedies, which it effectively prevented him from using. Under the circumstances there are two possible forms of equitable relief. One would be to allow the court action to proceed and to rule that the Postal Service had waived a right to insist on the exhaustion of administrative remedies. The Page 7 other is to void the ban on administrative proceedings in the resignation agreement and to require Hodgson to make use of these procedures before continuing with his litigation.

  The policy favoring resort to administrative remedies is strong and well founded. In recognition of this, the court rules that Paragraph 7 of the resignation agreement, barring resort to administrative procedures, is null and void. Hodgson is therefore entitled to and required to exhaust administrative remedies before maintaining the court action.

  However, the court will not dismiss the action. The court will stay the action in order to give Hodgson the opportunity to resort to the administrative remedies. As to the time requirement for commencing such proceedings, it shall be deemed to start with the date of this opinion. Moreover, the Postal Service is directed to use its best efforts to expedite the administrative proceedings.

  The court will retain jurisdiction of this action, and will entertain any application by either party for appropriate relief.

  Since the action is being stayed, as already described, there is no Page 8 occasion to deal with the merits of the pleadings. The need to do so will come if and when the litigation is activated. Thus the motion of the Postal Service to dismiss the complaint for failure to assert valid claims is denied as moot.

  SO ORDERED. Page 1


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