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America v. Mills

May 28, 2010


The opinion of the court was delivered by: Paul L. Friedman United States District Judge


This matter came before the Court for a three-day bench trial, which was the first part of a bifurcated trial on plaintiff Richard America's claims against his former employer, the United States Small Business Administration ("SBA"). Plaintiff alleges that the SBA discriminated against him on account of his race (African-American) and retaliated against him for complaining about such discrimination. The parties previously entered into a settlement agreement regarding these discrimination and retaliation claims (the "Settlement Agreement"). Plaintiff now alleges that the SBA breached the Settlement Agreement, and he therefore seeks to have his underlying claims reinstated and tried to a jury. The Court bifurcated the trial into two phases, the first of which was the bench trial which addressed the question of whether the SBA had breached the Settlement Agreement. The second phase, if necessary, will be a jury trial regarding plaintiff's underlying discrimination and retaliation claims.


The relevant facts in this phase of the trial relate to the creation of the Settlement Agreement, plaintiff's lack of success in finding a job following his departure from the SBA in 1997, and two sets of reference check phone calls that plaintiff alleges were made by Documented Reference Check to the SBA in 2000 and 2002.*fn2 Plaintiff argues that through its employees' responses to the 2002 phone calls the SBA materially breached its contractual obligation under the Settlement Agreement to provide neutral references for plaintiff. Upon careful consideration of the testimony of all of the witnesses and the documentary evidence admitted at trial, and making credibility findings as necessary and appropriate to resolve any material discrepancies in the testimony, the Court makes the following findings of fact.*fn3

A. Plaintiff's Employment at the SBA Richard America, an African-American man, began his employment at the SBA in 1980

In 1995, he was working at a GS-14, step 10 level in the Office of Financial Assistance ("OFA") within the SBA. At the time John Cox led the OFA. Jane Butler was his deputy. In the summer of 1995, Mr. America applied for a promotion to a GS-15 position. During the interview for that position, Mr. Cox informed plaintiff that the SBA had decided on a reorganization plan that, among other things, would include the transfer of Mr. America's current position to Kansas City.

Mr. America, who had lived in the District of Columbia area for many years, did not wish to relocate to Kansas City. He began looking for alternative employment within the SBA itself, as well as at other agencies of the federal government by way of a detail from the SBA to another agency. He testified that he was successful in obtaining requests for details from other agencies. For example, in August 1996, the Department of Agriculture requested that the SBA detail Mr. America to an office within the Agriculture Department to help strengthen Agriculture's staff capacity in rural development. See Plaintiff Exhibit ("PX") 25. The SBA denied this request, stating that Mr. America was "the only employee in the Rural Affairs Branch, and the Agency needs his services in his present capacity." See PX 26; see also PX 27 at 2-3.

Mr. America testified that he believed that managers at the SBA refused to allow this detail and others because they wanted to send him to Kansas City for discriminatory or retaliatory reasons. Mr. America also testified that in 1996 he began to suspect that SBA managers were making disparaging remarks about him and giving potential employers of agencies with whom he sought details negative reports about his performance in order to prevent him from obtaining a detail or other employment in the District of Columbia area. Mr. America admitted that he has no personal knowledge that such negative references were given, and he did not present any direct evidence that SBA managers were giving negative references about him. The Court will not credit Mr. America's unsupported suspicions, beliefs, or speculation.

In March 1997, rather than report to Kansas City, Mr. America retired from the SBA. He then filed administrative complaints of race, sex and age discrimination and retaliation against the SBA. These claims were resolved when he and the SBA entered into the Settlement Agreement in September of 1998. The relevant part of the Settlement Agreement for purposes of this trial provides:

The Agency will remove and expunge from Complainant's Official Personnel Folder ("OPF"), and from the official and personal files of Complainant's last line supervisors in the Office of Financial Assistance ("OFA"), all documentation and references, if any, relating to his removal from the Federal Service, which would have become effective in March of 1997, and all documentation and references, if any, to any periods identified as Absent Without Leave ("AWOL") during 1996 and 1997 (such periods of AWOL will be converted to Leave Without Pay). In addition, all inquiries from prospective employers received by OFA shall be referred to and handled by the Agency's Office of Human Resources.

Joint Exhibit ("JX") 3 ¶ 6. Mr. America testified that this provision was important to him because it required the expungement of all records relating to his removal or forced retirement from the SBA and, by requiring the referral of all inquiries about him to Human Resources, it ensured that the SBA would provide neutral references to prospective employers. He stated that the assurance that references be neutral mattered to him because of his belief that the SBA had impeded his efforts to obtain details to other agencies to avoid being transferred to Kansas City and because he believed the SBA was continuing to block his attempts to find full-time employment after his departure from the agency.

After Mr. America left the SBA in March 1997, he actively sought alternative full-time employment (he also had part-time employment as an adjunct professor at the Georgetown University Business School). See PX 36 (letters sent by Mr. America to various potential employers and contacts and his responses to listed job openings); PX 37 (same).*fn4 After signing the Settlement Agreement, Mr. America had a number of discussions or interviews with potential employers, including NationsBank, Fannie Mae, and Telegent, that he felt were positive, but the potential employers never followed up with him. He suspected that SBA managers were giving potential employers negative references despite the requirement of the Settlement Agreement that they not do so. Again, he could provide no evidence to support this suspicion other than the fact that he could not get a job.

Mr. America admitted on cross-examination that he had not provided to NationsBank, Fannie Mae, or Telegent the names of anyone at the SBA as references, and that he had not told anyone at the SBA about these job prospects. In fact, he had never listed individuals at the SBA as references for a possible job, and he had never told anyone at the SBA about a possible job opportunity. He stated, however, that his experience during his search for a detail convinced him that individuals at the SBA were attempting to block his employment. He also stated that he was surprised that it took him so long to find another full-time job, which convinced him that SBA employees were providing negative references to potential employers. The SBA's cross-examination of Mr. America made clear, however, that Mr. America had no personal knowledge to support his suspicion that the SBA was giving negative references. The Court finds no basis from which to conclude that the SBA was providing negative references for Mr. America.

B. Documented Reference Check

In 2000, Mr. America saw an advertisement in the Wall Street Journal regarding reference testing companies which mentioned Documented Reference Check ("DRC"). DRC is a business that tests what kind of references employers are providing for current or former employees. The Court heard and saw videotaped testimony from Michael Rankin, the chief service officer, about DRC's practices. During his deposition, Mr. Rankin refused to answer basic questions about DRC's business, such as the number of employees it has or whether it is incorporated, on the ground that such information constituted trade secrets. One of DRC's employees, Linda Oparnica, also testified about how DRC operates. Despite Mr. Rankin's unwillingness to answer questions about the company's business practices and his general evasiveness and belligerence during his deposition, with the help of Ms. Oparnica's testimony, the Court is able to understand important aspects of how DRC operates, although the full scope of DRC's business operations still remains unclear.

Once DRC receives an application from a client to do a reference check, it is DRC's practice to mail the reference check application to an "associate," a trained court reporter employed by DRC, who conducts the reference checks. See Deposition of Linda Oparnica Gonchar ("Oparnica Dep.") at 7, 15.*fn5 The associates work from home, not from DRC's office, and make the phone calls from their own phone numbers. See id. at 17. They never call the client, id. at 19-20, but they do call each of the individuals listed on the application in the process of performing the reference check. Id. at 19. The associates work from a script which suggests basic questions, such as asking about the former employee's job title, whether he or she had noteworthy projects or accomplishments, whether the employee had ...

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