Canlas v. U.S. Department of the Treasury

Background

Rubio Canlas alleged that the Office of the Comptroller of the Currency’s actions concerning a job offer violated several federal laws. He alleged that he was a veteran, that the agency rescinded his job offer, and that it lowered the offered salary. He asserted claims under the Veterans’ Preference Act, the Veterans Employment Opportunities Act (VEOA), the Equal Pay Act, and Title VII of the Civil Rights Act of 1961, as described in the opinion.

The defendants moved to dismiss. The court considered both lack of subject-matter jurisdiction, meaning the court’s legal authority to hear a claim, and failure to state a claim, meaning that the alleged facts did not sufficiently describe a legally valid claim. The court also considered factual concessions Canlas made in his opposition to the motion as part of evaluating the pleading.

Veterans’ Preference Act

The court dismissed this claim for lack of subject-matter jurisdiction. It held that the federal government has sovereign immunity unless it waives that protection, and that the Veterans’ Preference Act does not waive it. The dismissal was without leave to amend.

Veterans Employment Opportunities Act

The court dismissed the VEOA claim with prejudice for failure to state a claim. The court explained that the VEOA requires veterans applying for jobs listed as merit-promotion positions to receive an opportunity to apply and compete, but does not give them additional special entitlements. Because Canlas alleged that he was able to apply and compete—and was in fact offered the job—the court concluded that he could not properly allege facts making this claim plausible.

Equal Pay Act

The court stated that Canlas appeared correct that lowering an employee’s salary to cure a sex-based wage difference can violate the Equal Pay Act. But the court held that it lacked jurisdiction because the damages Canlas sought—back pay, front pay, lost benefits, and compensation for pain and suffering—were likely to exceed $10,000. Claims seeking more than $10,000 under the Equal Pay Act fall within the exclusive jurisdiction of the Court of Federal Claims. The court dismissed this claim for lack of subject-matter jurisdiction, with leave to amend if Canlas sought no more than $10,000 in damages.

Title VII

The court understood Canlas to assert two Title VII theories: disparate treatment based on sex and retaliation for protected activity.

For disparate treatment, the court concluded that the allegations indicated the two different salary offers resulted from poor communication and the use of two different hiring managers, rather than sex-based discrimination. The court also stated that Title VII does not expressly prohibit correcting a pay disparity by lowering the higher offer and that Canlas had not cited authority interpreting Title VII that way. The alleged facts instead strongly suggested that the salary reduction was a sex-neutral effort to correct an administrative error.

For retaliation, Canlas alleged that the agency rescinded his job offer because he asked about salary information to uncover potentially discriminatory wages. The court held that merely asking why the salary changed was not protected activity and that Canlas did not allege that he told the agency he believed the change was discriminatory or otherwise unlawful. The court further concluded that his own allegations and opposition brief made it implausible that protected activity caused the rescission.

The court dismissed both Title VII claims for failure to state a claim, with leave to amend. Although the court expressed doubt that Canlas could successfully amend, it allowed amendment in part because he was representing himself.

Disposition

The court granted the motion to dismiss. The Veterans’ Preference Act claim was dismissed for lack of subject-matter jurisdiction without leave to amend. The VEOA claim was dismissed for failure to state a claim with prejudice. The Equal Pay Act claim was dismissed for lack of subject-matter jurisdiction with leave to amend. Both Title VII claims were dismissed for failure to state a claim with leave to amend. Canlas had 21 days to file an amended complaint, and that complaint had to contain all allegations without incorporating earlier filings by reference.