Labor & Employment Law Daily Wrap Up, PROCEDURE—9th Cir.: DoD employee’s disability discrimination claim under Rehab Act was not time-barred, (Sep 5, 2025)

By Nicholas Kaster, J.D.

As “this appeal and others demonstrate, electronically transmitted notices present new complications, such as delays caused by encryption, not considered by our previous case law.”

A former Defense Department employee’s Rehab Act disability discrimination claim was not time-barred, the Ninth Circuit ruled, reversing and remanding the court below, which found that the employee’s claims were not filed within 90 days of receipt of the final agency decision (FAD) and equitable tolling was not warranted. The 90-day limitation period, the appeals court, stated did not begin until the employee’s attorney could realistically be held responsible for having access to the FAD and learn what the agency had decided. Under the circumstances here, the employee’s attorney did not have effective notice of the agency’s decision until the day he received by email a decrypted copy of the FAD. Because the employee filed suit in the district court within 90 days of receiving the accessible FAD, the complaint was timely. Alternatively, the Ninth Circuit held that the employee was entitled to equitable tolling because his attorney was diligent in trying to gain access to the agency’s decision and extraordinary circumstances prevented him from succeeding (Asuncion v. Hegseth, No. 23-4044 (9th Cir. Sept. 4, 2025)).

PTSD. The employee worked as a civilian Electronic Duplicating System Technician for the Defense Logistics Agency (DLA) for 30 years. He alleged that he developed post-traumatic stress disorder during his deployment in Iraq as a member of the National Guard and this, among other impairments, made it difficult and burdensome for him to complete his work tasks without a reasonable accommodation.

After a series of incidents in which he made threatening statements in the workplace, the DLA indefinitely suspended him without pay in April 2021 based on its determination that he should no longer be permitted to access classified and sensitive information. The employee argued that the DLA violated the Rehab Act because it “discriminated against [him] by claiming he was a direct threat and failed to provide meaningful and effective accommodations.”

FAD. He filed a claim with the DLA’s Office of Equal Employment Opportunity and Diversity in December 2019 and a formal complaint with the Office in December 2020. The agency did not receive a hard copy of the complaint until September 2021 because of the COVID-19 pandemic. It issued its final agency decision (FAD) regarding his complaint on November 4, 2022.

Case number. The DLA Case Number assigned to the FAD was “DLAF-20-0424.” This case number appeared on the letter enclosing the FAD and on every page of the FAD. A different case number, “DLAF-21-0424,” also appeared once on the first page of the FAD. The employee alleged in his complaint, however, that the correct case number for his EEO claim was “DLAF-20-0424.” The government did not dispute that “DLAF-20-0424” was the correct case number. In the FAD, the DLA concluded that the employee failed to establish that he was subjected to disparate treatment and harassment based on disability or reprisal. It notified the employee about his right to file a civil action “within 90 calendar days of receipt of the final Agency decision.”

The DLA’s EEO Office transmits FADs using the Department of Defense’s Secure Access File Exchange (DoD SAFE). DoD SAFE allows the office to send sensitive documents securely. To send a FAD through DoD SAFE, an EEO official “drops off” the FAD into the DoD SAFE system. The system then sends an email to the EEO official and the specified recipients with a “Claim ID,” a “Claim Passcode,” and a link to the FAD. The EEO official also encrypts the FAD with a “passphrase” in the DoD SAFE system, which the official then sends to the recipients in a separate email. A recipient clicks on the link and enters the Claim ID, Claim Passcode, and passphrase into DoD SAFE in order to access the FAD.

Certificate of Service. The EEO Complaints Manager dropped off the employee’s FAD and a certificate of service into DoD SAFE. The certificate of service stated: “For timeliness purposes, it shall be presumed that the parties received the foregoing DLA final agency decision dated November 4, 2022 for DLA Case Number DLAN-22-0051 within five (5) calendar days after it was mailed. I certify that the DLA final agency decision was mailed to the following parties on November 8, 2022.”

It was undisputed that the certificate of service contained the wrong case number. The employee’s FAD was assigned the case number DLAF-20- 0424, not DLAN-22-0051. The certificate of service did not indicate the substance of the “final agency decision.” Because of the error, the employee was unable to access the file until December 5, 2022. He brought suit on March 3, 2023. The government moved to dismiss the complaint, or, in the alternative, for summary judgment. The government argued that the employee’s complaint was untimely because it was not filed within 90 days of receipt of the FAD.

Lower court proceedings. The district court held that the employee’s complaint was untimely, concluded that equitable tolling was not warranted, and granted summary judgment against the employee.

Timely filing of complaint. Claims brought under the Rehab Act are governed by the same “remedies, procedures, and rights” applicable to Title VII employment discrimination claims brought by federal employees against federal defendants. Under Title VII, civil actions brought by federal employees must be brought within 90 days of receipt of notice of final agency action.

Which email? The parties disagreed as to which email constituted “receipt of notice” of the agency’s final agency action and, thus, triggered the start of the 90-day period. Despite sending the wrong passphrase on November 8, the government argued that the period started on that date, when the employee and his attorney received the initial DoD SAFE email linking to the encrypted FAD. The employee argued that the period did not begin until December 5, when his attorney first received the decrypted copy of the FAD.

For notices transmitted via traditional mail service, the appellate court stated, case law on Title VII’s statute of limitations is clear and uncomplicated. “We measure the start of the limitations period from the date on which a right-to-sue notice letter arrived at the claimant’s address of record.” But electronically transmitted notices present new complications, such as delays caused by encryption.

Errors. The certificate of service in this case stated that the inaccessible document was a “final agency decision” without indicating what that decision was or that the employee had 90 days to file suit. Despite his repeated attempts, his lawyer was unable to access the FAD because of errors made by the DLA. The employee’s attorney did not receive an accessible copy of the FAD until the DLA emailed him the decrypted copy on December 5.

The Ninth Circuit held that the 90-day limitation period did not begin until the employee’s attorney could realistically be held responsible for having access to the FAD and learning what the agency had decided. In this case, the agency made numerous errors when transmitting the passphrase necessary to decrypt the FAD. On November 8, a passphrase was sent that did not match the employee’s case number. On November 14, the same incorrect passphrase was sent. Almost an hour later, a second email was sent—this time with a passphrase that matched the case number, but without an explanation that a different passphrase was sent.

Effective notice. The government conceded that it could not say with certainty whether the DLA ever sent the correct passphrase to the employee. Under the circumstances, the Ninth Circuit determined that the employee’s attorney did not have effective notice of the nature of the agency’s final decision until December 5, the day he received by email a decrypted copy of that decision. The employee filed suit in the district court within 90 days of receiving the accessible FAD. Thus, his complaint was timely.

Equitable tolling. Alternatively, the Ninth Circuit held that the employee was entitled to equitable tolling. A litigant is entitled to equitable tolling of a statute of limitations only if the litigant establishes two elements: (1) that he has been pursuing his rights diligently, and (2) that some extraordinary circumstance stood in his way and prevented timely filing.

And here, said the Ninth Circuit, the employee met both elements. His attorney was diligent in trying to gain access to the agency’s decision and extraordinary circumstances prevented him from succeeding. He sent three emails to the EEO Complaints Manager, explaining that he could not access the encrypted FAD. He asked the Manager to resend the FAD “in a different format” or “via U.S. Mail.” But except for sending two links on the morning of November 14—the first of which was incorrect—the Manager ignored these requests.

The attorney therefore demonstrated sufficient diligence to qualify for equitable tolling, the Ninth Circuit said. Applying equitable tolling, the statute of limitations period did not begin to run until the employee received the decrypted copy of the FAD on December 5. Because he filed his complaint 88 days later, the complaint was timely filed.

Accordingly, the Ninth Circuit reversed the district court’s grant of summary judgment and remanded to allow the district court to address the merits of the employee’s Rehabilitation Act claim.

The case is No. 23-4044.

Judge: Fletcher, W.

Attorneys: Shawn Anthony Luiz, I (Law Office of Shawn A. Luiz) for Rodolfo T. Asuncion, Jr. Sydney Spector, Office of the U.S. Attorney, for Peter Hegseth.

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