[House Report 105-292]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    105-292
_______________________________________________________________________


 
DEPARTMENT OF VETERANS AFFAIRS EMPLOYMENT DISCRIMINATION RESOLUTION AND 
                            ADJUDICATION ACT

_______________________________________________________________________


October 2, 1997.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Stump, from the Committee on Veterans' Affairs,  submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 1703]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Veterans' Affairs, to whom was referred the 
bill (H.R. 1703) to amend title 38, United States Code, to 
provide for improved and expedited procedures for resolving 
complaints of unlawful employment discrimination arising within 
the Department of Veterans Affairs, having considered the same, 
reports favorably thereon with amendments and recommends that 
the bill as amended do pass.

  The amendments are as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Department of Veterans Affairs 
Employment Discrimination Resolution and Adjudication Act''.

SEC. 2. EQUAL EMPLOYMENT RESPONSIBILITIES IN THE DEPARTMENT OF VETERANS 
                    AFFAIRS.

  (a) In General.--(1) Chapter 5 of title 38, United States Code, is 
amended by inserting at the end of subchapter I the following new 
section:

``Sec. 516. Equal employment responsibilities

  ``(a) The Secretary shall provide that the employment discrimination 
complaint resolution system within the Department be established and 
administered so as to encourage timely and fair resolution of concerns 
and complaints. The Secretary shall take steps to ensure that the 
system is administered in an objective, fair, and effective manner and 
in a manner that is perceived by employees and other interested parties 
as being objective, fair, and effective.
  ``(b) The Secretary shall provide--
          ``(1) that employees responsible for counseling functions 
        associated with employment discrimination and for receiving, 
        investigating, and processing complaints of employment 
        discrimination shall be supervised in those functions by, and 
        report to, an Assistant Secretary or a Deputy Assistant 
        Secretary for complaint resolution management; and
          ``(2) that employees performing employment discrimination 
        complaint resolution functions at a facility of the Department 
        shall not be subject to the authority, direction, and control 
        of the Director of the facility with respect to those 
        functions.
  ``(c) The Secretary shall ensure that all employees of the Department 
receive adequate education and training for the purposes of this 
section and section 319 of this title.
  ``(d) The Secretary shall impose appropriate disciplinary measures, 
as authorized by law, in the case of employees of the Department who 
engage in unlawful employment discrimination, including retaliation 
against an employee asserting rights under an equal employment 
opportunity law.
  ``(e) The number of employees of the Department whose duties include 
equal employment opportunity counseling functions as well as other, 
unrelated functions may not exceed 40 full-time equivalent employees. 
Any such employee may be assigned equal employment opportunity 
counseling functions only at Department facilities in remote geographic 
locations (as determined by the Secretary). The Secretary may waive the 
limitation in the preceding sentence in specific cases.
  ``(f) The provisions of this section shall be implemented in a manner 
consistent with procedures applicable under regulations prescribed by 
the Equal Employment Opportunity Commission.''.
  (2) The table of sections at the beginning of such chapter is amended 
by inserting after the item relating to section 515 the following new 
item:

``516. Equal employment responsibilities.''.
  (b) Reports on Implementation.--The Secretary of Veterans Affairs 
shall submit to Congress reports on the implementation and operation of 
the equal employment opportunity system within the Department of 
Veterans Affairs. The first such report shall be submitted not later 
than April 1, 1998, and subsequent reports shall be submitted not later 
than January 1, 1999, and January 1, 2000. Each such report shall set 
forth the actions taken by the Secretary to implement section 516 of 
title 38, United States Code, as added by subsection (a), and other 
actions taken by the Secretary in relation to the equal employment 
opportunity system within the Department of Veterans Affairs.

SEC. 3. DISCRIMINATION COMPLAINT ADJUDICATION AUTHORITY IN THE 
                    DEPARTMENT OF VETERANS AFFAIRS.

  (a) In General.--(1) Chapter 3 of title 38, United States Code, is 
amended by adding at the end the following new section:

``Sec. 319. Office of Employment Discrimination Complaint Adjudication

  ``(a)(1) There is in the Department an Office of Employment 
Discrimination Complaint Adjudication. There is at the head of the 
Office a Director.
  ``(2) The Director shall be a career appointee in the Senior 
Executive Service.
  ``(3) The Director reports directly to the Secretary or the Deputy 
Secretary concerning matters within the responsibility of the Office.
  ``(b)(1) The Director is responsible for making the final agency 
decision within the Department on the merits of any employment 
discrimination complaint filed by an employee, or an applicant for 
employment, with the Department. The Director shall make such decisions 
in an impartial and objective manner.
  ``(2) No person may make any ex parte communication to the Director 
or to any employee of the Office with respect to a matter on which the 
Director has responsibility for making a final agency decision.
  ``(c) Whenever the Director has reason to believe that there has been 
retaliation against an employee by reason of the employee asserting 
rights under an equal employment opportunity law, the Director shall 
report the suspected retaliatory action directly to the Secretary or 
Deputy Secretary, who shall take appropriate action thereon.
  ``(d)(1) The Office shall employ a sufficient number of attorneys and 
other personnel as are necessary to carry out the functions of the 
Office. Attorneys shall be compensated at a level commensurate with 
attorneys employed by the Office of General Counsel.
  ``(2) The Secretary shall ensure that the Director is furnished 
sufficient resources in addition to personnel under paragraph (1) to 
enable the Director to carry out the functions of the Office in a 
timely manner.
  ``(3) The Secretary shall ensure that any performance appraisal of 
the Director of the Office of Employment Discrimination Complaint 
Adjudication or of any employee of the Office does not take into 
consideration the record of the Director or employee in deciding cases 
for or against the Department.''.
  (2) The table of sections at the beginning of such chapter is amended 
by adding at the end the following new item:

``319. Office of Employment Discrimination Complaint Adjudication.''.
  (b) Reports on Implementation.--The Director of the Office of 
Employment Discrimination Complaint Adjudication of the Department of 
Veterans Affairs (established by section 319 of title 38, United States 
Code, as added by subsection (a)) shall submit to the Secretary and to 
Congress reports on the implementation and the operation of that 
office. The first such report shall be submitted not later than April 
1, 1998, and subsequent reports shall be submitted not later than 
January 1, 1999, and January 1, 2000.

SEC. 4. EFFECTIVE DATE.

  Sections 516 and 319 of title 38, United States Code, as added by 
sections 2 and 3 of this Act, shall take effect 90 days after the date 
of the enactment of this Act.

SEC. 5. INDEPENDENT PANEL TO REVIEW EQUAL EMPLOYMENT OPPORTUNITY AND 
                    SEXUAL HARASSMENT PROCEDURES WITHIN THE DEPARTMENT 
                    OF VETERANS AFFAIRS.

  (a) Establishment.--There is hereby established a panel to review the 
equal employment opportunity and sexual harassment practices and 
procedures within the Department of Veterans Affairs and to make 
recommendations on improvements to those practices and procedures.
  (b) Panel Functions Relating to Equal Employment Opportunity and 
Sexual Harassment.--The panel shall assess the culture of the 
Department of Veterans Affairs in relationship to the issues of equal 
employment opportunity and sexual harassment, determine the effect of 
that culture on the operation of the Department overall, and provide 
recommendations as necessary to change that culture. As part of the 
review, the panel shall do the following:
          (1) Determine whether laws relating to equal employment 
        opportunity and sexual harassment, as those laws apply to the 
        Department of Veterans Affairs, and regulations and policy 
        directives of the Department relating to equal employment 
        opportunity and sexual harassment have been consistently and 
        fairly applied throughout the Department and make 
        recommendations to correct any disparities.
          (2) Review practices of the Department of Veterans Affairs, 
        relevant studies, and private sector training and reporting 
        concepts as those practices, studies, and concepts pertain to 
        equal employment opportunity, sexual misconduct, and sexual 
        harassment policies and enforcement.
          (3) Provide an independent assessment of the Report on the 
        Equal Employment Opportunity Complaint Process Review Task 
        Force of the Department.
  (c) Composition.--(1) The panel shall be composed of six members, 
appointed as follows:
          (A) Three members shall be appointed jointly by the chairman 
        and ranking minority party member of the Committee on Veterans' 
        Affairs of the House of Representatives.
          (B) Three members shall be appointed jointly by the chairman 
        and ranking minority party member of the Committee on Veterans' 
        Affairs of the Senate.
  (2) The members of the panel shall choose one of the members to chair 
the panel.
  (d) Qualifications.--Members of the panel shall be appointed from 
among private United States citizens with knowledge and expertise in 
one or more of the following:
          (1) Extensive prior military experience, particularly in the 
        area of personnel policy management.
          (2) Extensive experience with equal employment opportunity 
        complaint procedures, either within Federal or State government 
        or in the private sector.
          (3) Extensive knowledge of the Department of Veterans 
        Affairs, and particularly knowledge of personnel practices 
        within the Department.
  (e) Reports.--(1) Not later than six months after the members of the 
panel are appointed, the panel shall submit an interim report on its 
findings and conclusions to the Committees on Veterans' Affairs of the 
Senate and House of Representatives.
  (2) Not later than one year after establishment of the panel, the 
panel shall submit a final report to the Committees on Veterans' 
Affairs of the Senate and House of Representatives. The final report 
shall include an assessment of the equal employment opportunity system 
and the culture within the Department of Veterans Affairs, with 
particular emphasis on sexual harassment. The panel shall include in 
the report recommendations to improve the culture within the 
Department.
  (f) Pay and Expenses of Members.--(1) Each member of the panel shall 
be paid at a rate equal to the daily equivalent of the annual rate of 
basic pay payable for level IV of the Executive Schedule under section 
5315 of title 5, United States Code, for each day (including travel 
time) during which the member is engaged in the performance of the 
duties of the panel.
  (2) The members of the panel shall be allowed travel expenses, 
including per diem in lieu of subsistence, at rates authorized for 
employees of agencies under subchapter I of chapter 57 of title 5, 
United States Code, while away from their homes or regular places of 
business in the performance of services for the panel.
  (g) Administrative Support.--The Chairman may hire such staff as 
necessary to accomplish the duties outlined under this title.
  (h) Funding.--The Secretary of Veterans Affairs shall, upon the 
request of the panel, make available to the panel such amounts as the 
panel may require, not to exceed $400,000, to carry out its duties 
under this title.
  (i) Termination of Panel.--The panel shall terminate 60 days after 
the date on which it submits its final report under subsection (e)(2).

  Amend the title so as to read:

      A bill to amend title 38, United States Code, to provide 
for improvements in the system of the Department of Veterans 
Affairs for resolution and adjudication of complaints of 
employment discrimination.

                              Introduction

    On May 22, 1997, the Honorable Terry Everett was joined by 
the Honorable Lane Evans, the Honorable Bob Stump, Chairman of 
the Committee on Veterans' Affairs, the Honorable James 
Clyburn, the Honorable Mike Bilirakis, and the Honorable 
Stephen Buyer, in the introduction of H.R. 1703 to amend title 
38, United States Code, to provide for improved and expedited 
procedures for resolving complaints of unlawful employment 
discrimination arising within the Department of Veterans 
Affairs.
    The full Committee met on September 30, 1997 and ordered 
H.R. 1703, as amended, reported favorably to the House by 
unanimous voice vote.

                      Summary of the Reported Bill

    H.R 1703, as amended, would:
    1. LRequire the Secretary of Veterans Affairs to establish 
a new Department of Veterans Affairs (VA) employment 
discrimination complaint resolution system whose employees are 
supervised by and report to an Assistant Secretary or Deputy 
Assistant Secretary for complaint resolution management.

    2. LEstablish a VA Office of Employment Discrimination 
Complaint Adjudication headed by a Director who would report 
directly to the Secretary or Deputy Secretary.

    3. LEstablish an independent commission to assess the 
culture of VA in relationship toward sexual harassment and 
other unlawful employment discrimination.

                       Background and Discussion

    In 1992, the Veterans' Affairs Oversight and Investigations 
Subcommittee conducted an oversight hearing on egregious cases 
of sexual harassment at the Atlanta Veterans Affairs Medical 
Center (VAMC) and elsewhere in VA. The following year, VA 
implemented a ``zero tolerance'' policy against sexual 
harassment and promised to improve its equal employment 
opportunity (EEO) system. During the 105th Congress, the 
Committee revisited the problem of sexual harassment at VA 
facilities. The Subcommittee on Oversight and Investigations 
convened two hearings on sexual harassment and other unlawful 
employment discrimination. The first hearing on April 17, 1997, 
focused on events which occurred at the Fayetteville, North 
Carolina, VAMC from 1995 to 1997. Five current and former 
medical center employees testified. In addition to their sworn 
testimony that the medical center director, who has 
subsequently retired, sexually harassed and abused them and 
other subordinate employees, the Committee reviewed findings of 
the VA Office of Inspector General (VA OIG). In the three cases 
it investigated, the VA OIG found that the director of the 
medical center engaged in sexual harassment in one case and was 
abusive in the other two cases. At the second hearing on July 
17, 1997, the Subcommittee received the results of a 
Department-wide survey on sexual harassment and follow-up 
testimony on the situation at the Fayetteville VAMC, as well as 
testimony on VA's opposition to H.R. 1703 as originally 
introduced.
    The Subcommittee has concluded that a culture of tolerance 
of sexual harassment and abusive behavior exists at certain VA 
facilities, and that the policy of ``zero tolerance'' of sexual 
harassment is insufficient to address these problems. 
Consequently, the Committee believes it is critical for VA to 
establish and maintain an EEO complaint resolution and 
adjudication system that is both in fact and in the perception 
of VA employees fair, impartial and objective. The complaint 
process should be completely free and independent of undue 
influence, and the appearance thereof, from supervisors, line 
managers or directors. Objectivity and fairness should permeate 
the complaint process, from its initial informal stages through 
the Department's final agency decisions. Accordingly, the 
Committee has concluded that the processing of unlawful 
discrimination complaints should occur outside the particular 
facility where the alleged discriminatory conduct was said to 
have arisen, and that final agency decisions on the merits of a 
complaint should be made by a quasi-independent entity, the 
Office of Employment Discrimination Complaint Adjudication 
(OEDCA). The OEDCA would be headed by a Director who would 
report directly to the Secretary of Veterans Affairs or the 
Deputy Secretary. In addition, the Secretary should provide a 
work place free of harassment and discrimination by ensuring 
that employees and managers alike receive the education and 
training necessary for proper behavior in the workplace. The 
Secretary should be held responsible for ensuring that 
employees and managers are accountable for their conduct and 
behavior.

Equal employment responsibilities in the Department of Veterans Affairs

    H.R. 1703, as amended, would direct the Secretary to 
establish a new employment discrimination complaint resolution 
structure within VA, including a new Office of Resolution 
Management (ORM). The ORM would be expected to achieve a 
timely, high quality EEO complaint system built on fairness, 
integrity and trust. The timely processing of employee 
complaints is of critical concern to the Committee. The 
Committee fully expects that the professional staff of the ORM 
will administer the EEO system so as to encourage timely and 
fair resolution of concerns and complaints. If significant 
improvements are not made in this area, the Committee stands 
ready to consider the imposition of tighter time limitations at 
each step of the EEO process. The Committee anticipates the 
establishment of customer service standards to focus on quality 
of employee assistance, respect for privacy, and the responsive 
and timely processing of employee complaints of discrimination. 
Additionally, the ORM should commence its operation and 
planning activities in full compliance with the Government 
Performance and Results Act.
    While the Secretary would be responsible for the structural 
components of the ORM, the Committee anticipates that daily 
operation of the ORM would be the responsibility of a Deputy 
Assistant Secretary for Resolution Management reporting to the 
Assistant Secretary for Human Resources and Administration. The 
ORM would be supported by district managers, field offices, 
full time EEO counselors and investigators, and a limited 
number of collateral duty counselors. Collateral duty EEO 
employees are VA employees who perform EEO functions, such as 
serving as counselors and investigators, in addition to their 
primary responsibilities at VA facilities. Such employees 
currently manage the majority of EEO claims at local 
facilities, with the facility director as the EEO officer 
supervising those employees. In order to reduce the influence 
of facility management over the EEO process at local facilities 
and achieve greater professionalism among VA personnel assigned 
to EEO complaints, the bill would limit the number of 
collateral duty EEO employees to 40 full time employee 
equivalent positions. Currently, there are 1,077 such employees 
within VA. In practical terms, retaining some collateral duty 
EEO employees would allow more geographically remote facilities 
to function in an efficient manner. In another essential step 
to remove facility management from the EEO process, medical 
center, regional office, and other facility directors would no 
longer perform the duties of EEO officer for the facility. 
However, clear responsibility and accountability for 
implementation of the Department's EEO policies and standards 
would remain with the facility directors and management.
    Currently, facility directors are the EEO officers at their 
facilities, and therefore have a substantial amount of control 
and influence over the EEO system. The Committee believes that 
removing the facility director from such duties would address 
the concern among VA employees that an employee who files an 
EEO complaint is, in effect, making a claim against the 
facility director. Some VA employees who have been 
discriminated against believe that it would be futile to file 
an EEO claim because the facility director would oppose the 
claim as reflecting poorly on management. Consequently, too 
many VA employees fear that if they file an EEO claim, not only 
is it unlikely to be resolved in their favor, but they might be 
punished by the facility management via transfer, demotion or 
other forms of retaliation.
    H.R. 1703, as amended, would also eliminate a clear 
conflict of interest in the instances where an EEO claim is 
filed against a facility director. In the situation at the 
Fayetteville VA Medical Center, the complaints of sexual 
harassment and other unlawful employment discrimination were in 
fact against the facility director, who was also the EEO 
officer. As a result, the complainants were required to pursue 
EEO claims with collateral duty EEO employees who also worked 
for the facility director. The bill would eliminate the 
situation where a subordinate employee is charged with 
investigating and assisting in the filing of formal complaints 
against a facility manager or supervisor.
    The Office of Resolution Management (ORM) would be 
responsible for the development and implementation of 
alternative dispute resolution programs at the facility level, 
and guidance of aggrieved employees to an EEO program 
coordinator who could recommend a series of informal resolution 
strategies. The ORM would be expected to advise employees that 
mediation or other forms of alternative dispute resolution may 
be made available to employees as a means to more quickly 
resolve discrimination complaints. In addition, the ORM would 
be authorized to make certain final agency decisions on 
procedural issues, including ``acceptability determinations'' 
based on timeliness, failure to state a claim, mootness, and 
other reasons specified in the regulations of the Equal 
Employment Opportunity Commission (EEOC). See 29 C.F.R. 
1614.107. Final agency procedural decisions of the ORM would 
only be made by a senior EEO specialist or field office 
manager. Timely complaint processing is of critical importance 
to the Committee. The Committee anticipates that allowing final 
agency decisions on procedural issues to be made by the ORM 
would significantly reduce complaint processing time within VA. 
If it does not, the Committee will revisit this authority.
    The bill would require the Secretary of Veterans Affairs to 
submit reports to Congress on the implementation and operation 
of the equal employment opportunity system within VA. The 
Committee would expect to receive specific statistical data on 
complaints received by the OEDCA. Such data should reflect the 
number of complaints received in each region and the total 
number of complaints, and should provide complete information 
on the types and dispositions of cases, including those 
settled. Reports would also provide an accounting of all 
collateral duty EEO employees. The Committee also expects to 
receive information on the transfer of authority to write final 
agency decisions on procedural issues from the Office of 
General Counsel (OGC) to the ORM. The Secretary would be 
required to submit the first report on April 1, 1998, and 
additional reports on January 1, 1999, and January 1, 2000.

 Discrimination complaint adjudication authority in the Department of 
                            Veterans Affairs

    The second component of the reorganization of VA's EEO 
system would result in a transfer of final agency decision 
authority on substantive issues from the OGC to a newly 
established Office of Employment Discrimination Complaint 
Adjudication (OEDCA). The OEDCA, located in VA Central Office, 
would be a quasi-independent complaint adjudication unit, the 
head of which would report directly to the Secretary or Deputy 
Secretary.
    H.R. 1703, as amended, would establish a Director as the 
head of the OEDCA. It would also require that the OEDCA be 
staffed with an adequate number of attorneys and support 
personnel, and that it operate as a quasi-independent unit 
under the administrative supervision of the Secretary or Deputy 
Secretary. The OEDCA is expected to enjoy a level of 
independence comparable to that of administrative law judges 
employed by other federal agencies. The bill specifies that the 
Director of the OEDCA be a career appointee at the SES level, 
assisted by an Associate Director at an appropriate grade. The 
Committee expects that both the Director and Associate Director 
would be attorneys with significant experience in EEO law. The 
Committee anticipates that some, but not all, EEO attorneys in 
OGC's Professional Staff Group IV may be reassigned to the 
OEDCA. The OGC would retain some attorneys to meet its 
remaining EEO responsibilities in advising and representing 
management. The Director would be authorized to hire additional 
attorneys and support personnel as are needed to issue 
substantive decisions in a timely manner. The OEDCA would also 
be responsible for creating an efficient and effective 
complaint tracking system.
    The operating independence of the OEDCA would be its most 
important feature. Under the current structure, if a VA 
employee does not informally resolve his or her complaint at 
the local level, then the claim is adjudicated on the merits by 
the OGC. If the employee files an appeal of the decision to the 
EEOC or the Merit Systems Protection Board (MSPB), then the 
same OGC attorneys who made the earlier final agency decision 
may participate in VA's defense of that decision on appeal at 
the EEOC or MSPB. Consequently, the OGC is the adjudicator of 
substantive issues at one level, and the advocate for the 
Department on the same issues at another level. H.R. 1703, as 
amended, would remove final agency decision-making 
responsibility from OGC. With OEDCA as the final agency 
decision maker on the merits of discrimination complaints, OGC 
would continue to provide legal representation to VA at EEOC 
and MSPB hearings, and assistance to U.S. Attorneys in federal 
court litigation.
    The final agency decision-making process in the OEDCA would 
consist of staff attorneys writing proposed decisions which, if 
approved, would be signed by the Director, or the Associate 
Director in the Director's absence. Only the Director and 
Associate Director would have actual decision-making authority. 
The OEDCA decisions would not be subject to further review by 
anyone within VA, including the Secretary or Deputy Secretary. 
The Director and Associate Director would not be required to 
justify or defend their decisions within the Department in any 
case. In addition, H.R. 1703, as amended, would not permit any 
ex parte communications by or to any employee of the OEDCA with 
respect to a matter on which the Director has responsibility 
for making a final agency decision. However, OEDCA staff 
attorneys would be able to initiate contact with appropriate 
elements within VA solely for the purposes of obtaining 
documents missing from a complaint file, obtaining biographical 
information, and other similar procedural reasons unrelated to 
the merits of the complaint.
    As discussed above, the Subcommittee on Oversight and 
Investigations believes that some VA employees fear that they 
would be retaliated against if they filed a complaint of 
unlawful employment discrimination. The bill requires the 
Director or any other employee of the OEDCA who receives 
credible evidence of international discrimination or 
retaliation to report such evidence to the Secretary and 
recommend appropriate disciplinary measures to be imposed. For 
example, the Director could recommend a stay of adverse 
personnel actions where credible evidence of retaliation or 
discrimination has been received. In addition, should any 
employee of the OEDCA receive evidence of other unlawful 
conduct arising from an investigation of a discrimination 
complaint, then such evidence should be transmitted to the 
Department of Justice. The bill would also prohibit annual 
performance appraisals of the Director or any other employee of 
the OEDCA based in any way on whether claims were granted or 
denied. Finally, the bill would require the Director of the 
OEDCA to submit reports to the Secretary and to Congress on the 
implementation and operation of the OEDCA.

  Independent panel to review equal employment opportunity and sexual 
    harassment procedures within the Department of Veterans Affairs

    The bill would create an independent panel to assess the 
culture of tolerance toward sexual harassment and other 
unlawful employment discrimination at VA. In order to assess 
the ``culture'', the Committee envisions that the panel would 
examine the attitudes and perceptions of VA employees, as well 
as practices within VA pertaining to the EEO system. The panel 
would be required to examine laws, regulations, and policies 
relating to sexual harassment and equal employment opportunity 
in VA, and determine if they have been consistently and fairly 
applied throughout VA. After such examination, the panel would 
be required to recommend methods to correct any disparities it 
found. The panel would also be required to provide an 
independent review of the VA's internal Report of the Equal 
Employment Opportunity Complaint Process Review Task Force.
    Finally, the panel would be required to submit to Congress 
an interim report on the panel's findings and conclusions six 
months after the members of the panel are appointed, and a 
final report one year after the establishment of the panel. The 
panel would be composed of six members--three appointed jointly 
by the chairman and ranking member of the House Committee on 
Veterans' Affairs, and three appointed jointly by the chairman 
and ranking member of the Senate Committee on Veterans' 
Affairs.

                      Section-by-Section Analysis

    Section 1 provides that the title of this Act is the 
``Department of Veterans Affairs Employment Discrimination 
Resolution and Adjudication Act.''

    Section 2(a) would amend chapter 5 of title 38, United 
States Code, by adding a new section 516, ``Equal employment 
responsibilities.'' Section 2(a) would establish in VA Central 
Office a new Office of Resolution Management to carry out equal 
employment responsibilities of the Department.

    Section 2(b) would require the Secretary of Veterans 
Affairs to report to Congress on the implementation and 
operation of the equal employment opportunity system under 
section 516 of title 38, United States Code. The reports would 
be due on April 1, 1998, January 1, 1999, and January 1, 2000.

    Section 3(a) would amend chapter 3 of title 38, United 
States Code, by adding a new section 319, ``Office of 
Employment Discrimination Complaint Adjudication.'' Section 
3(a) would establish in VA Central Office, a new Office of 
Employment Discrimination Complaint Adjudication to issue final 
agency decisions on the merits of claims of unlawful employment 
discrimination.

    Section 3(b) would require the Director of the Office of 
Employment Discrimination Complaint Adjudication to report to 
Congress and the Secretary of Veterans Affairs on the 
implementation and operation of the Office of Employment 
Discrimination Complaint Adjudication. The reports would be due 
on April 1, 1998, January 1, 1999, and January 1, 2000.

    Section 4 would establish an independent panel to assess 
the culture of VA in relationship to issues of sexual 
harassment and other unlawful employment discrimination, 
determine the effect of that culture on VA's operation overall 
and provide recommendations as necessary.

                           Oversight Findings

    No oversight findings have been submitted to the Committee 
by the Committee on Government Reform and Oversight.

               Congressional Budget Office Cost Estimate

    The following letter was received from the Congressional 
Budget Office concerning the cost of the reported bill:

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 30, 1997.
Hon. Bob Stump,
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, DC.

    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1703, the 
Department of Veterans Affairs Employment Discrimination 
Resolution and Adjudication Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Valerie 
Barton, who can be reached at 226-2840.
            Sincerely,
                                           June E. O'Neill,
                                                           Director

    Enclosure

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

  H.R. 1703--Department of Veterans Affairs Employment Discrimination 
                    Resolution and Adjudication Act

As ordered reported by the House Committee on Veterans' Affairs 
on September 30, 1997

    H.R. 1703 would restructure authority and responsibility 
for overseeing equal employment opportunities within the 
Department of Veterans Affairs (VA). CBO estimates that the 
costs of implementing this legislation would have an 
insignificant budgetary impact. The bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act of 1995 and would not affect the 
budgets of State, local, or tribal governments. Because it 
would not affect direct spending or receipts, pay-as-you-go 
procedures would not apply.
    H.R. 1703 would create the Office of Employment 
Discrimination Complaint Adjudication within VA to adjudicate 
complaints by employees of VA of employment discrimination. The 
bill would also reallocate responsibilities within VA so that 
more employees would have duties related only to matters of 
employment discrimination, and it would require that such 
employees be outside of the control of the director of the 
facility where they work. In addition, the bill would establish 
a panel to provide an independent assessment of the agency's 
practices and procedures in relation to equal employment 
opportunity and sexual harassment and to make recommendations 
for their improvement. The bill would authorize the 
appropriation of $400,000 for the costs of the panel.
    VA is currently revising its system for processing and 
adjudicating claims of employment discrimination, and CBO 
expects that many changes required by the bill would probably 
occur under current law. Other changes in procedures would not 
add significant costs.
    The CBO staff contact for this estimate is Valerie Barton, 
who can be reached at 226-2840. This estimate was approved by 
Robert A. Sunshine, Deputy Assistant Director for Budget 
Analysis.

                     Inflationary Impact Statement

    The enactment of the reported bill would have no 
inflationary impact.

                  Applicability to Legislative Branch

    The reported bill would not be applicable to the 
legislative branch under the Congressional Accountability Act, 
Public Law 104-1, because it would apply only to employees and 
facilities of the Department of Veterans Affairs.

                     Statement of Federal Mandates

    The reported bill would not establish a federal mandate 
under the Unfunded Mandates Reform Act, Public Law 104-4.

                 Statement of Constitutional Authority

    Pursuant to Article I, section 8 of the U.S. Constitution, 
the reported bill would be authorized by Congress' power to 
``provide for the common Defence and general Welfare of the 
United States.''

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (new matter is printed 
in italics and existing law in which no change is proposed is 
shown in roman):

                      TITLE 38, UNITED STATES CODE

          * * * * * * *

                       PART I--GENERAL PROVISIONS

          * * * * * * *

               CHAPTER 3--DEPARTMENT OF VETERANS AFFAIRS

Sec.
301.  Department.
     * * * * * * *
319.  Office of Employment Discrimination Complaint Adjudication.
     * * * * * * *

Sec. 319. Office of Employment Discrimination Complaint Adjudication

  (a)(1) There is in the Department an Office of Employment 
Discrimination Complaint Adjudication. There is at the head of 
the Office a Director.
  (2) The Director shall be a career appointee in the Senior 
Executive Service.
  (3) The Director reports directly to the Secretary or the 
Deputy Secretary concerning matters within the responsibility 
of the Office.
  (b)(1) The Director is responsible for making the final 
agency decision within the Department on the merits of any 
employment discrimination complaint filed by an employee, or an 
applicant for employment, with the Department. The Director 
shall make such decisions in an impartial and objective manner.
  (2) No person may make any ex parte communication to the 
Director or to any employee of the Office with respect to a 
matter on which the Director has responsibility for making a 
final agency decision.
  (c) Whenever the Director has reason to believe that there 
has been retaliation against an employee by reason of the 
employee asserting rights under an equal employment opportunity 
law, the Director shall report the suspected retaliatory action 
directly to the Secretary or Deputy Secretary, who shall take 
appropriate action thereon.
  (d)(1) The Office shall employ a sufficient number of 
attorneys and other personnel as are necessary to carry out the 
functions of the Office. Attorneys shall be compensated at a 
level commensurate with attorneys employed by the Office of 
General Counsel.
  (2) The Secretary shall ensure that the Director is furnished 
sufficient resources in addition to personnel under paragraph 
(1) to enable the Director to carry out the functions of the 
Office in a timely manner.
  (3) The Secretary shall ensure that any performance appraisal 
of the Director of the Office of Employment Discrimination 
Complaint Adjudication or of any employee of the Office does 
not take into consideration the record of the Director or 
employee in deciding cases for or against the Department.

            CHAPTER 5--AUTHORITY AND DUTIES OF THE SECRETARY

                    subchapter i--general authorities

Sec.
501.  Rules and regulations.
     * * * * * * *
516.  Equal employment responsibilities.
     * * * * * * *

                   SUBCHAPTER I--GENERAL AUTHORITIES

          * * * * * * *

Sec. 516. Equal employment responsibilities

  (a) The Secretary shall provide that the employment 
discrimination complaint resolution system within the 
Department be established and administered so as to encourage 
timely and fair resolution of concerns and complaints. The 
Secretary shall take steps to ensure that the system is 
administered in an objective, fair, and effective manner and in 
a manner that is perceived by employees and other interested 
parties as being objective, fair, and effective.
  (b) The Secretary shall provide--
          (1) that employees responsible for counseling 
        functions associated with employment discrimination and 
        for receiving, investigating, and processing complaints 
        of employment discrimination shall be supervised in 
        those functions by, and report to, an Assistant 
        Secretary or a Deputy Assistant Secretary for complaint 
        resolution management; and
          (2) that employees performing employment 
        discrimination complaint resolution functions at a 
        facility of the Department shall not be subject to the 
        authority, direction, and control of the Director of 
        the facility with respect to those functions.
  (c) The Secretary shall ensure that all employees of the 
Department receive adequate education and training for the 
purposes of this section and section 319 of this title.
  (d) The Secretary shall impose appropriate disciplinary 
measures, as authorized by law, in the case of employees of the 
Department who engage in unlawful employment discrimination, 
including retaliation against an employee asserting rights 
under an equal employment opportunity law.
  (e) The number of employees of the Department whose duties 
include equal employment opportunity counseling functions as 
well as other, unrelated functions may not exceed 40 full-time 
equivalent employees. Any such employee may be assigned equal 
employment opportunity counseling functions only at Department 
facilities in remote geographic locations (as determined by the 
Secretary). The Secretary may waive the limitation in the 
preceding sentence in specific cases.
  (f) The provisions of this section shall be implemented in a 
manner consistent with procedures applicable under regulations 
prescribed by the Equal Employment Opportunity Commission.
          * * * * * * *

                                   - 
