The State will comply withall applicable Federal statutes, executive orders and regulations concerning equal employment opportunity (EEO).
NOTE:SSA will not fund litigation when the State fails to meet this criteria.
The allowance of particular legal fees and settlement costs in EEO cases will be determined on a case-by-case basis.
Legal fees and settlement costs may be determined reasonable and appropriateif the State would have incurred such settlement costs in non-federally funded programs.
Settlement must not be a means for States to charge the Federal funds for expenses in situations where a finding of discrimination is likely.
The decision by the State to settle a suit, without going to litigation, would likely
be based on the fact that the advantages of settlement are thought to outweigh the advantages of proceeding with the lawsuit.
The State may choose to settle without the approvalof the SSA. However, such a settlement shall involve no costs being chargeable to SSA provided funds.
The State is entitled to reimbursement for reasonable legal expenses in the defense.
The State is liable for all legal expensesincurred in defending the suit and any plaintiff award made by the court.
Notify the ROof the State's intentions and provide a written rationale as soon as possible and prior to the settlement being finalizedif Federal payment is desired.
Receive RO agreementregarding the appropriateness and reasonableness of such costs prior to incurringcost for legal fees and settlement costs that will be charged against Federal funds.
NOTE:The RO will determine, on a case-by-case basis, if the legal fees and settlement costs are allowable, before the State incurs any
costs that will be charged against Federal funds.
Justifythe settlement decision.
The State's rationale must demonstrate and justify that:
The decision was entered into on the basis of a reasonable business decision to settle the controversy at a minimum cost,rather than incur the relatively expensive cost of litigation.
The advantages of settlementare thought to outweigh the advantages of proceedingwith the lawsuit.
NOTE:The RO will give consideration to the time and resources needed to defend a protracted lawsuitand the prospect of unfavorable publicityupon the disability program.
The case would have been similarly settled absent Federal funds.
The entire costof the proposed settlement is less than the legal feesthat would be incurred by pursuing the case to a finding of no discrimination.
Settlement vs. Proceeding
The State will justify this decision by showing both the costs and the advantages of the alternatives as follows:
Calculate the cost of legal charges and settlement feesfor the proposed out-of-court settlement.
Estimate the cost of the legal feesif the case were to be taken to a court settlement.