United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 9, 1997 Decided October 21, 1997
No. 96-5116
Vimla Saksenasingh,
Appellant
v.
Secretary of Education,
Appellee
Appeal from the United States District Court
for the District of Columbia
(No. 94cv02216)
Stephen Z. Chertkof argued the cause for appellant, with
whom James H. Heller was on the briefs.
R. Craig Lawrence, Assistant U.S. Attorney, argued the
cause for appellee, with whom Eric H. Holder, Jr., U.S.
Attorney at the time the brief was filed, and Diane M.
Sullivan, Assistant U.S. Attorney, were on the brief.
Before: Edwards, Chief Judge, Henderson and Garland,
Circuit Judges.
Opinion for the Court filed by Chief Judge Edwards.
Edwards, Chief Judge: Appellant Vimla Saksenasingh ap-
plied for employment at the Department of Education ("De-
partment"). After an interview at which she was asked about
her religion and national origin, she did not receive a position.
Saksenasingh filed an administrative complaint with the De-
partment alleging proscribed discrimination. She subse-
quently signed a settlement agreement with Department
officials that gave her a one-year position at the Department
and guaranteed she would be considered for a permanent
position at the year's end. When the year had passed,
Appellant once again was denied a position. She then
brought suit against the Department under Title VII, 42
U.S.C. s 2000e et seq. for (1) the original denial of employ-
ment, (2) retaliation against her during her employment, and
(3) retaliation in failing to consider her for a permanent
position.
The Department asserted that the settlement agreement
barred the suit. The District Court granted summary judg-
ment to the Department on the grounds that Saksenasingh
was barred by the settlement agreement from litigating the
original denial of employment and that she could not sue for
the Department's failure to hire her at the end of her one-
year term because she had not exhausted her administrative
remedies by appealing to the Equal Employment Opportu-
nity Commission ("EEOC"). Saksenasingh v. Riley, No.
94-2216, slip op. at 5-7 (D.D.C. Mar. 12, 1996), reprinted in
Joint Appendix ("J.A.") 8-10. The District Court also dis-
missed Saksenasingh's remaining retaliation claims for lack of
jurisdiction. Id. at 11-12.
We reverse the grant of summary judgment and the dis-
missal of Saksenasingh's retaliation claims. The settlement
agreement did not, as the District Court believed, grant the
Department the unilateral right to decide whether it had
breached the terms of settlement. Rather, the agreement
specified that "[i]f the Agency fails to carry out this agree-
ment ... the complaint may be reinstated." Memorandum of
Agreement, J.A. 125. This provision entitled Appellant to a
decision by the District Court judge or jury on the threshold
question whether the Department had breached the agree-
ment. If it were found that the Department had breached
the agreement, then Saksenasingh's law suit on her original
claim should have proceeded. She had exhausted her admin-
istrative remedies regarding her original claim before the
employing agency. When the settlement agreement took
effect, more than 180 days had passed without final Depart-
ment action on her claim. 29 C.F.R. s 1614.408(b). On the
record at hand, there is no doubt that Saksenasingh was not
required to appeal to the EEOC as the District Court held.
Finally, because the District Court had jurisdiction over
her original claim even if it were found that the settlement
agreement barred the claim, the District Court had discretion
to exercise jurisdiction over her retaliation claims. Dismissal
of the retaliation claims for want of jurisdiction was error. 28
U.S.C. s 1367 (1994).
I. Background
Saksenasingh applied for a position as an Institutional
Review Specialist with the Department. Following an inter-
view in which she was asked about her religion and national
origin, the Department informed her that she had not been
selected. On February 22, 1991, she filed an administrative
complaint with the Department, alleging unlawful discrimina-
tion. J.A. 92. Before the Department had formally complet-
ed its investigation, Saksenasingh and the Department en-
tered into a settlement agreement. The agreement, dated
January 11, 1993, required the Department to offer Saksena-
singh a one-year appointment and to consider hiring her for a
permanent position at the end of the year. It also stated:
If the Agency fails to carry out this Agreement, in whole
or in part, the complaint may be reinstated, upon the
written request of the Complainant, at the point process-
ing ceased.
J.A. 125. After signing the agreement, the Department tried
to convince Saksenasingh to amend the agreement to omit the
promise to consider her for a permanent post. J.A. 137-38.
Saksenasingh declined to amend the agreement.
Saksenasingh began her one-year term on July 26, 1993,
and completed the term on July 25, 1994. When her one-year
appointment was not converted to a permanent position and
she was passed over for several vacancies, she requested by
letter dated August 19, 1994, that her administrative com-
plaint be reinstated and supplemented by a claim of retalia-
tion. J.A. 165-66. She simultaneously notified the Depart-
ment that she intended to file suit unless she was placed in a
permanent position immediately. Id. The Department ac-
knowledged receipt of this letter. J.A. 168-69. On October
13, 1994, Saksenasingh filed suit in the District Court. She
claimed that the Department discriminated against her by
failing to hire her when she first applied and retaliated
against her by failing to consider her for a permanent posi-
tion at the end of the year as required by the settlement
agreement. On December 7, 1994, the Department issued a
letter advising Saksenasingh that she must file an administra-
tive complaint with the EEOC in order to pursue her retalia-
tion claim. J.A. 171. In a letter dated December 15, 1994,
the Department concluded that it had not breached the
settlement agreement and advised Saksenasingh that she
must appeal to the EEOC before filing suit in District Court.
J.A. 174-76.
The District Court granted summary judgment in favor of
the Department, reasoning: (1) the settlement agreement
prevented the court from reaching the underlying discrimina-
tion claims; (2) Saksenasingh was required to appeal to the
EEOC before filing a judicial complaint for breach of the
settlement agreement and, therefore, she had failed to ex-
haust her administrative remedies; and (3) the trial court
lacked jurisdiction over the retaliation claim because the
other claims were not properly before it. J.A. 8-12.
II. Analysis
A.Settlement Agreement
We review the District Court's grant of summary judgment
and dismissal of Appellant's claims de novo. See Tao v.
Freeh, 27 F.3d 635, 638 (D.C. Cir. 1994) (summary judgment);
National Taxpayers Union, Inc. v. U.S., 68 F.3d 1428, 1432
(D.C. Cir. 1995) (dismissal for lack of jurisdiction). After
Saksenasingh filed her Title VII law suit, based on the
original claim of discrimination and subsequent alleged retali-
ation, the Department raised the settlement agreement as an
affirmative defense to her suit. The Department argued that
the agreement barred her suit because it conferred discretion
upon the Department to permit or refuse reinstatement of the
original complaint. The District Court endorsed this reading
of the settlement agreement and held that the agreement
barred Saksenasingh's suit.
Where a case turns on construction of a contract, the
District Court may decide the matter on summary judgment
if the agreement "admits of only one reasonable interpreta-
tion." UMWA 1974 Pension v. Pittston Co., 984 F.2d 469,
473 (D.C. Cir. 1993). The settlement agreement here admits
of only one reasonable interpretation, but not the one adopted
by the District Court. The agreement provided that:
If the Agency fails to carry out this Agreement, in whole
or in part, the complaint may be reinstated, upon the
written request of the Complainant, at the point process-
ing ceased.
J.A. 125. The District Court interpreted this language to
mean that the Department had the right to decide whether it
had breached the agreement, and did not have to do anything
if it found it had not breached the agreement. J.A. 9. On
this reading, the agreement conferred no right of reinstate-
ment whatsoever on Saksenasingh. In support of its inter-
pretation, the District Court quoted the dictionary to the
effect that the word "may" has a permissive effect. Id.
However, the permissive nature of the word "may" does
not lead to the conclusion the District Court reached. The
agreement does not say that the Department "may" reinstate
the complaint, which would of course mean that it need not do
so. Instead, the agreement employs the passive voice, stating
that the complaint "may be reinstated" upon the occurrence
of a certain event, namely the written request of the com-
plainant. It follows that, under the plain meaning of the
agreement, Saksenasingh had the option of reinstating her
complaint in case of breach by the Department.
Where a party raises a settlement agreement as a defense,
the District Court must factually determine the issues sur-
rounding the agreement. See Bowden v. U.S., 106 F.3d 433,
439 (D.C. Cir. 1997) (District Court resolves factual issues
regarding Title VII settlement agreement). Faced with Sak-
senasingh's assertion of her original discrimination complaint
and the Department's defense that the settlement agreement
barred the suit, the judge or jury in the District Court,
depending upon the circumstances, should have determined,
as a threshold matter, whether in fact the Department had
breached the settlement agreement. No deference was owed
to the Department on this question. It was for the judge or
jury to decide whether the agreement had been breached.
Because this threshold issue was not decided, we must re-
verse and remand the case for further proceedings.
On remand, if it is found that the Department breached,
then the settlement agreement cannot bar Saksenasingh's
original claim. However, if it is found that the Department
did not breach the agreement, then the settlement will bar
Saksenasingh from proceeding with her original claim.
B.Exhaustion of Administrative Remedies
As a result of its mistaken interpretation of the settlement
agreement, the District Court found that Saksenasingh could
not bring an action based on her original complaint, but only
a separate action on the alleged breach of agreement. J.A.
10. Beginning from this mistaken premise, the District Court
went on to hold that Saksenasingh could not sue on the
breach of settlement agreement until exhausting her adminis-
trative remedies by appealing to the EEOC. Id. at 10-11.
This holding was based on 29 C.F.R. ss 1614.401(d),
1614.408(c), and 1614.504(b), which authorize and regulate
appeals to the EEOC.
The judgment of the District Court on exhaustion was in
error. The statute which these regulations interpret, 42
U.S.C. s 2000e-16(c), permits, but does not require, appeal to
the EEOC, and has been so understood by this court. We
have held that under 42 U.S.C. s 2000e-16(c), a complainant
may either file suit after the appropriate number of days has
elapsed since complaining to the agency, or "elect[ ] instead to
appeal the agency's decision to the EEOC." Wilson v. Pena,
79 F.3d 154, 157 (D.C. Cir. 1996). Likewise, the court has
explained that Title VII requires a complainant to file "an
initial charge with the employing agency. Upon exhaustion
of the administrative proceedings, a complainant is entitled to
trial de novo." McRae v. Librarian of Congress, 843 F.2d
1494, 1496 (D.C. Cir. 1988) (citations omitted). This descrip-
tion neither mentions nor envisions required appeal to the
EEOC.
The plain language of the regulations cited by the District
Court similarly does not require appeal to the EEOC, but
instead simply authorizes appeal to the EEOC as one possible
avenue for appeal of agency decisions. Under 29 C.F.R.
s 1614.401(d), a complainant "may" appeal alleged non-
compliance with a settlement agreement to the EEOC, and 29
C.F.R. s 1614.408(c) states that a complainant may file suit in
District Court within ninety days of receiving the EEOC's
final decision. However, 29 C.F.R. s 1614.408(a) and (b)
allow suit after final agency decision or after 180 days in the
case of agency inaction. It seems clear that these provisions
merely offer alternative avenues of redress. Appeal to the
EEOC is not required.
Finally, 29 C.F.R. s 1614.504(b) states that after a com-
plainant has notified the agency that it has breached a
settlement agreement, the complainant "may" appeal to the
EEOC
35 days after he or she has served the agency with the
allegations of noncompliance, but must file an appeal
within 30 days of his or her receipt of an agency's
determination.
Id. This provision simply means that a complainant can
appeal to the EEOC any time past thirty-five days after
notifying the agency with or without waiting for the agency's
final determination, but that if the agency does make a final
determination, the complainant must file within thirty days of
that determination. The provision does not by its terms
require a complainant to appeal to the EEOC before bringing
suit in District Court.
Because Saksenasingh could sue on her original complaint,
and the breach of settlement claim could be brought as a
supplemental retaliation claim, she had only to exhaust her
administrative remedies regarding the original complaint by
applying to the Department itself and awaiting either final
agency action, 29 C.F.R. s 1614.408(c), or the passage of 180
days without final agency action, 29 C.F.R. s 1614.408(d).
See Wilson, 79 F.3d at 157, 167. Saksenasingh filed her
original complaint with the agency on February 22, 1991; she
filed suit on October 13, 1994. The statutory 180 days had
elapsed, and exhaustion of administrative remedies had oc-
curred with respect to the original complaint.
C. Retaliation Claims
The District Court held that because the original claims of
discrimination and breach of settlement were not viable, "the
retaliation claim fails as well." J.A. 12. This conclusion was
in error. Under 28 U.S.C. s 1367, which governs supplemen-
tal jurisdiction, the District Court may, at its discretion,
continue to entertain supplemental jurisdiction even after it
"has dismissed all claims over which it has original jurisdic-
tion." 28 U.S.C. s 1367(c)(3). If the District Court had
original jurisdiction, but dismissed for non-jurisdictional rea-
sons, then it could maintain supplemental jurisdiction at its
discretion. If it dismissed the underlying claim on jurisdic-
tional grounds, then it could not exercise supplemental juris-
diction.
Here, the District Court had supplemental jurisdiction over
Saksenasingh's unexhausted retaliation claims. See Nealon
v. Stone, 958 F.2d 584, 590 (4th Cir. 1992); Gupta v. East
State Univ., 654 F.2d 411, 413 (5th Cir. 1981). Even if the
District Court ultimately dismisses the underlying claim on
the grounds that the Department did not breach the settle-
ment agreement, it would still have exercised original juris-
diction over that claim. The defense that the settlement
agreement bars Saksenasingh's suit is substantive, not juris-
dictional. Therefore, the District Court may exercise supple-
mental jurisdiction even if it dismisses the underlying suit.
The decision whether to entertain the unexhausted retaliation
claims lies within the District Court's discretion.
III. Conclusion
In light of the foregoing, the decision of the District Court
is reversed and remanded.
So ordered.