NOTICE OF SETTLEMENT OF CLASS ACTION, HEARING ON PROPOSED SETTLEMENT AND RIGHT TO SHARE IN SETTLEMENT FUND

FROM: Administrative Judge Marlin D. Schreffler, Equal Employment Opportunity Commission, Baltimore District Office, 10 South Howard Street, 3rd Floor, Baltimore, MD 21201

TO: All African-American males employed at SSA's Headquarters Office in Baltimore, Maryland, on or after January 1, 1987.

PLEASE READ THIS NOTICE CAREFULLY. YOUR RIGHTS MAY BE AFFECTED BY A CLASS ACTION COMPLAINT AND PROPOSED SETTLEMENT PENDING BEFORE THE EEOC.

SUMMARY OF THE STIPULATION AND RELATED MATTERS

Purpose of this notice.

This notice is given pursuant to 29 C.F.R. § 1614.204. The purpose of this notice is to advise you of a proposed settlement with the Social Security Administration dated January 11, 2002 ("the Settlement") which would finally settle this complaint with the Social Security Administration. The Settlement will affect all Class Members' rights. This Notice describes rights you may have under the proposed Settlement and what steps you may take in relation thereto. This Notice is not an expression of any opinion by the EEOC as to the merits of any claims or any defenses asserted by any party in this complaint. However, by according this Settlement my preliminary approval, I have determined, subject to consideration of any comments or objections by Class Members that the Settlement appears fair and reasonable.

Class Recovery under the Proposed Settlement

Pursuant to the terms of the Settlement Agreement, a copy of which is attached to this notice, the Social Security Administration will pay a total of $6.35 million to the Class pursuant to a formula developed by Class Counsel incorporated into the Settlement Agreement. This formula seeks generally to allocate the recovery in proportion to the injury suffered by each Class Member. The Settlement also provides for non-monetary relief as described further in Paragraph 16.

The amount each Class Member will receive cannot be determined at this point. The amount each will receive depends on the number of Class Members who choose to accept the monetary allocation and the information provided by Class Members, as well as information contained in the Agency's electronic databases concerning their entitlements under the formula.

Statement of Potential Outcome of the Complaint

The Social Security Administration has denied wrongdoing of any kind or any liability to the Class. The parties disagreed on both liability and damages and do not agree on the average amount of damages that would have been recoverable if the Class prevailed on each claim alleged. In addition to the liability issues in dispute, there are additional issues relating to monetary damages on which the parties disagree, including the appropriate economic model for determining damages as well as nonreceipt of promotions and awards and other personnel actions for which compensation would be due.

Statement of Attorney Fees and Costs Sought

The Settlement Agreement provides that $1.4 million will be paid as attorneys fees, costs and expenses in this matter. In addition to attorney fees for Class Counsel's continuing efforts in this litigation, this payment includes payment for the services of expert witnesses, deposition transcripts, travel and related expenses as well as all costs associated with Class Counsel's role in the administration of the Settlement Agreement. In addition, Class Counsel will be paid not more than an additional $50,000 by the Agency for monitoring responsibilities for the first year of implementation of the Settlement Agreement. For the next two years of implementation of the Settlement Agreement, the Agency agrees to provide not more than $20,000 per year in attorney fees and costs for monitoring responsibilities associated with the Settlement Agreement.

Further Information

The EEOC cannot provide you with legal advice. Further information regarding the case and this Notice can be obtained by contacting Class Counsel Michael J. Kator, Cathy A. Harris and Jessica L. Parks, Kator, Parks & Weiser, P.L.L.C., 1020 19th Street, NW Suite 350, Washington, DC 20036, Telephone (202) 898-4800. Informational meetings about the Settlement will be conducted by Class Counsel and held for class members at the following dates and locations from 12 to 2 p.m.:

March 4th Room 1109 Metro West Building March 5th Cafeteria - Room 2, 3 & 4 Security West Building

Additional meeting times may be posted on Class Counsel's website at www.katorparks.com.

Reasons for the Settlement

The principal reason for the Settlement is the substantial benefit to be provided to the Class now. Continued litigation would subject the Class to numerous uncertainties, such as the risk of an unfavorable outcome at the hearing or on appeal.

NOTICE OF SETTLEMENT HEARING

1. NOTICE IS HEREBY GIVEN, pursuant to 29 C.F.R. §1614.204, that a hearing will be held before Administrative Judge Marlin D. Schreffler, Baltimore, MD at the Baltimore District Office of the Equal Employment Opportunity Commission, 10 South Howard Street, Baltimore, Maryland, 21201, on May 3, 2002, at 10:00 a.m., to determine whether the proposed settlement of the case is fair, reasonable and adequate.

The Administrative Judge has previously certified the Class as all African?American males employed at SSA's Headquarters Office in Baltimore, Maryland, who, on or after January 1, 1987, were not selected or promoted, or were otherwise subjected to disparate treatment in regard to performance appraisals, awards and bonuses, and disciplinary action. Headquarters, as defined by the Administrative Judge, includes the Woodlawn complex, Security West and Metro West in Baltimore, Maryland. Specifically excluded from this class action are employees of the Office of Hearings and Appeals and employees in field offices in the Baltimore vicinity.

BACKGROUND OF THE LITIGATION

The litigation, which commenced in 1995, asserted that the Social Security Administration discriminated against African-American males employed at SSA's Headquarters Office in Baltimore, Maryland, from 1987 to the present, in terms of promotions, awards, bonuses, performance appraisals and disciplinary actions.

The Class was recommended to be certified by Administrative Judge Schreffler in 1997. The Social Security Administration rejected this recommendation. The Class Agents appealed to the EEOC's Office of Federal Operations in 1997, seeking that the Agency's decision be reversed. On July 8, 1998, the EEOC's Office of Federal Operations reversed the Agency's decision. On August 12, 1998, the Agency sought reconsideration from the Commission. The Agency's request for reconsideration was denied by the Commission on January 22, 1999. The case was then remanded for further processing.

The parties conducted and completed extensive research, discovery and investigation during the prosecution of the case, including inspection and analysis of hundreds of thousands of documents produced by the Social Security Administration and others, interviews and/or depositions of Social Security Administration employees, conducted and/or defended depositions of more than 20 witnesses, including expert witnesses, and consultation with economic, statistical and damages experts retained by Class Counsel. Class Counsel also filed a motion to expand the class, which was granted in part and denied in part. The parties also prepared prehearing statements, exhibits and witnesses for hearing, which was scheduled to begin in November 2001.

The Class Agents, on behalf of themselves and the Class, have entered into the Settlement with the Social Security Administration. The Settlement must be approved by the Administrative Judge pursuant to 29 C.F.R. §1614.204. 8.

THE SETTLEMENT

Class Counsel, the Class Agents and the Social Security Administration have engaged in significant motion practice and discovery and conducted in-depth discussions and extensive negotiations concerning key liability and damages issues underlying the claims and defenses in this case. These negotiations have produced the proposed settlement.

The Settlement Agreement is attached to this Notice. The purpose of this Notice is to provide basic information concerning the Settlement Agreement. The Settlement Agreement is a detailed document and it is not feasible to discuss in this Notice every provision contained in that document. You should consult the Settlement Agreement itself for a detailed discussion of the terms of the Settlement

The Settlement Agreement provides for non-monetary relief and monetary relief to Class Members. The non-monetary relief includes:

-The creation of an Oversight Committee, composed of seven members, the majority of whom will be appointed by Class Counsel. The Oversight Committee shall remain in existence during the 4 years that the Administrative Judge retains jurisdiction over this complaint. The duties of the Oversight Committee will be to provide oversight and monitoring of the implementation of this Settlement Agreement. In carrying out its duties, the Oversight Committee may, among other things, review data provided by the Agency to monitor trends in the Agency's personnel policies and practices.

-The Agency will collect data and compile such reports as the Oversight Committee might reasonably require to fulfill its role of monitoring the Agency's compliance with the Settlement Agreement. These reports will include, but not necessarily be limited to, the following: quarterly reports of competitive and non-competitive promotions within each SSA Headquarters component broken down by the demographic characteristics of the applicants on the best-qualified or well-qualified list and the selectee; quarterly reports of monetary awards, including Quality Step Increases, given to SSA Headquarters employees, broken down by component and the demographic characteristics of the employees receiving such awards; quarterly reports of training classes attended by SSA Headquarters employees, broken down by component and the demographic characteristics of the employees attending such training; quarterly reports of disciplinary actions taken against SSA Headquarters employees, broken down by component and the demographic characteristics of the employees receiving such discipline; and, annual reports on the numbers of competitive selections in which assessment panels were not utilized.

These reports will contain only demographic information for employees. All reports will be generated based on data maintained and stored in the Agency's electronic databases. It is understood that this will not entail new data collection or storage efforts, but only that reports may be generated based on data already collected by the Agency. The Oversight Committee, may, in its discretion, request additional information and data from the Agency. If the Agency does not agree to provide any such data, and after the parties have made a good faith effort to resolve the dispute, the matter may be presented to the Administrative Judge for resolution. a. The Oversight Committee will designate a pool of employee volunteers who will be trained by the Agency and will serve as non-voting monitors for promotion assessment panels. The role of the non-voting monitor is to ensure compliance with relevant merit promotion guidelines and Equal Employment Opportunity (EEO) principles during the rating and ranking of applicants by the assessment panel. a. Class Counsel may establish a Class Advisory Board comprised of no more than nine Class Members who are current employees of the Agency. The Class Advisory Board shall remain in existence for so long as the Administrative Judge retains jurisdiction over this complaint. Nothing in the Settlement Agreement shall entitle any member of the Class Advisory Board to administrative leave to participate in meetings or otherwise perform his duties. The Agency will provide facilities for the Class Advisory Board to meet. The duties of the Class Advisory Board are to serve as an advocate for Class Members before the Oversight Committee and the Administrative Judge, if necessary. Any class member who believes that he was treated adversely because of his race and sex in connection with promotions, awards, training or discipline after the Effective Date of this Settlement Agreement may notify the Class Advisory Board of his concerns. In its discretion, the Class Advisory Board may elect to present the matter to the Oversight Committee or to Class Counsel, as appropriate.

- The Agency agrees that its policies and practices for granting performance awards and Quality Step Increases will be fair and equitable and consistent with merit principles. The Agency agrees that it will correct any misapplications of its policies for granting performance awards and Quality Step Increases to ensure fair and equitable distribution of such awards, consistent with merit principles. At the Agency's discretion, an expert may be retained to recommend ways to assess these policies and practices and to ensure compliance with relevant statutes, regulations, EEO principles, and applicable collective bargaining agreements in the Agency's awards process.

-The Agency will notify all Class Members who are current Agency employees of their opportunity to create, in conjunction with their supervisors, an Individual Development Plan (IDP).

-Any Class Member who is denied training, as that term is defined in the Settlement Agreement, during the time the Administrative Judge retains jurisdiction over this complaint may, within 15 days of learning that he was denied training, ask the supervisor of the manager who denied the request for training to investigate the alleged denial of the training request. The Class Member may also report the alleged denial of training, and the Agency's response, if any, to the Class Advisory Board and the Oversight Committee.

- During the time the Administrative Judge retains jurisdiction over this complaint, when a disciplinary action, as that term is defined in the Settlement Agreement, is proposed against a Class Member, the Agency agrees to provide Class Counsel with a copy of the official proposal of disciplinary action, contingent upon consent of the Class Member. Class Counsel may recommend that the Agency review the proposed disciplinary action. No disciplinary action may be effected against a Class Member who consents to have notice of the disciplinary action provided to Class Counsel sooner than 30 days (or the time allotted under 5 U.S.C. §§ 7513(b), if appropriate) after Class Counsel is notified of the proposal.

-Beginning 90 days after the Effective Date of the Settlement Agreement, the Oversight Committee will meet with the Commissioner or her designee on a quarterly basis to report on its conclusions and to raise any concerns with the Commissioner it might have. The Commissioner will make reasonable efforts to personally attend at least two of the first four quarterly meetings and at least one meeting each subsequent year for the period of the Settlement Agreement.

-Any employee may, during the time the Administrative Judge retains jurisdiction over this complaint, ask the Oversight Committee to review the selection or award process. In its discretion, the Oversight Committee may, or may not, refer the matter to the Deputy Commissioner for Human Resources for appropriate corrective action or include the matter as part of a compliance action brought before the Administrative Judge. a. The Agency will consider taking disciplinary action against any employee whom, during the time that the Administrative Judge retains jurisdiction over this complaint, it, or any adjudicatory body, finds to have unlawfully discriminated against any other Agency employee.

The Settlement Agreement also provides for monetary relief for Class Members. Pursuant to the Settlement, no Class Member may opt out of this Settlement Agreement; however, any Class Member may elect not to receive the monetary relief afforded under this Settlement Agreement. Any monetary relief that is unclaimed or rejected will be reallocated to the participating Class Members pursuant to the distribution formula. No Agency official who participated in the negotiation of this Settlement Agreement will receive monetary relief as a result of the Settlement Agreement.

Pursuant to the Settlement Agreement, Class Members who have filed complaints of discrimination against the Agency shall, prior to receipt of any monetary relief in connection with this settlement, execute a release specifically waiving any claims for compensatory damages or any other claims the Class Members may have against the Agency during the time period covered by the Class Definition.

The Settlement Agreement also provides that any Class Member who already has filed a claim or complaint in any administrative forum alleging that he was discriminated against solely on the bases of race and sex with regard to personnel actions by the Agency that allegedly occurred in whole or in part between January l, 1987, and the date of Preliminary Approval of the Settlement Agreement shall, within 60 days of the Effective Date of the Settlement Agreement, withdraw all claims and requests for relief. In the alternative, if such Class Member fails to withdraw any such claim, civil action, or other request for relief, such Class Member shall be determined to have consented to the withdrawal of such action by virtue of the Settlement Agreement.

Pursuant to the Settlement Agreement, the Class Agents and their heirs, administrators, successors, or assigns release and forever discharge the Agency and any Department, Agency, or establishment thereof and any officers, employees, agents, or successors of any such department, Agency, or establishment:

- from any and all claims and causes of action that have been or could have been asserted in the above-captioned action, or administratively, by reason of, or with respect to, or in connection with, or that arise out of, any of the matters alleged in the above-captioned action, including, without limitation, claims or causes of action that pertain or relate to, or that are based upon or challenge, the policies or practices described in the Settlement Agreement;

-from any and all claims and causes of action that hereafter could be asserted by reason of, or with respect to, or in connection with, or that arise out of, or that pertain or relate to, or that are based upon or challenge, the policies, or practices described in the Settlement Agreement, which programs, plans, policies or practices were in effect on the date of Preliminary Approval of the Settlement Agreement or at any time prior thereto; and,

-upon the Effective Date of the Settlement Agreement, the Class Agents agree to the dismissal with prejudice of any and all individual claims or causes of action described above that are presently pending in any administrative, State, or Federal forum. Upon cessation of the Administrative Judge's jurisdiction over this Agreement, the class claims contained in the EEO Class Complaint of Ken A. Burden, et al. v. Jo Anne B. Barnhart, Commissioner, Social Security Administration, EEOC Nos. 120-99-6378X, 120-99-6379X, 120-99-6380X, shall be dismissed.

The Settlement will become effective at such time as when the Administrative Judge approves the Settlement and all appeals have been finally determined or the time for filing such appeals has expired ("Effective Date").

PLAN OF ALLOCATION OF SETTLEMENT MONETARY RELIEF

The Social Security Administration shall distribute the total sum of six million, three hundred and fifty thousand dollars ($6,350,000), in full, complete and final satisfaction of all claims, including interest, arising out of the Class Agents' allegations of discrimination in employment practices as described in the Settlement Agreement, but excluding attorney fees, expenses and costs.

Class Counsel has devised a formula for distributing the proceeds of this settlement. Six million, three hundred and fifty thousand dollars ($6,350,000) will be paid by the Agency in accordance with the Formula attached to the Agreement as Appendix A. Class Counsel will provide to the Agency a list identifying the exact gross amounts to be paid to each Class Member. Class Members who left the Agency before November 21, 1991 are precluded from recovery of either compensatory damages or back pay by virtue of the Civil Rights Act of 1991.

Except as may otherwise be determined by the Internal Revenue Service, each Class Member will be solely responsible for making payment to the appropriate taxing authorities for all tax liability. The Agency has requested a Private Letter Ruling from the Internal Revenue Service concerning its obligations, if any, to make withholdings and to pay employer contributions for FICA, Medicare, or any other required payments or contributions. The parties specifically intend that all payments made to Class Members pursuant to this Settlement Agreement represent compensatory damages and not wages.

In order to receive a monetary award, each Class Member must execute a Verification of Claim and Release. The Verification of Claim will be prepared by Class Counsel and sent to each Class Member after the Agreement has been finally approved. Each Class Member will be required to verify or correct the information provided and attest to the applicable elements of the formula. After the time for submitting the Verification has expired, Class Counsel will provide to the Agency a list identifying the exact gross amounts to be paid to each Class Member. The Release will be jointly prepared by the parties and will be approved by the Administrative Judge. The Release must be signed by each Class Member prior to receiving any payment under this Settlement Agreement.

Within 10 business days of the Effective Date of the Settlement Agreement, or the receipt of the Private Letter Ruling from the Internal Revenue Service, whichever is later, or as soon thereafter as reasonably possible, the Agency shall make distributions of payments to each Class Member.

RIGHTS OF CLASS MEMBERS

If you are an African-American male who was or is employed at SSA's Headquarters Office in Baltimore, Maryland, on or after January 1, 1987, and you were not selected or promoted, or were otherwise subjected to disparate treatment in regard to performance appraisals, awards and bonuses, or disciplinary action, you are a class member. 18. 19. You may share in the monetary award provided you

(a) qualify for such allocation under the formula and

(b) timely submit your Verification of Claim and Release. You may also elect to not share in the monetary award even if you are otherwise eligible.

If you object to the Settlement in any of its terms, you must present any such objections in writing to Administrative Judge Marlin D. Schreffler, Equal Employment Opportunity Commission, Baltimore Regional Office, 10 South Howard Street, 3rd Floor, Baltimore, MD 21201.

All objections must be postmarked by April 5, 2002.

You should also send a copy of any written objections by regular U.S. mail to Michael J. Kator, Class Counsel, Kator, Parks & Weiser, PLLC, 1020 19th Street, NW, Washington, DC 20036 and to Dean Landis, Agency Representative, Social Security Administration, Suite No. 56, P.O. Box 26430, Baltimore, MD 21207.

If you do not present your objections in this time period, your opportunity to present such objection will have been waived. Your objection must show proof that you are a member of the class and a statement that provides your basis for objection, along with any documentation in support of such objection.

The EEOC cannot provide you with legal advice. You may direct any comment or inquiry by mail to Class Counsel Michael J. Kator, Cathy A. Harris and Jessica L. Parks, Kator, Parks & Weiser, P.L.L.C., 1020 19th Street, NW Suite 350, Washington, DC 20036, telephone (202) 898-4800. 24. 25. 26. 27. 28. 29. Date: February 22, 2002 _________________________________ Administrative Judge Marlin D. Schreffler