Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-16-01780/USCOURTS-ca13-16-01780-0/pdf.json

Parties Involved:
Department of the Army
Respondent
Heather A. Melton
Petitioner

Document Text:

NOTE: This disposition is nonprecedential.

United States Court of Appeals 

for the Federal Circuit ______________________ 

HEATHER A. MELTON,

Petitioner

v.

DEPARTMENT OF THE ARMY,

Respondent

______________________ 

2016-1780

______________________ 

Petition for review of the Merit Systems Protection 

Board in No. CH-0752-09-0448-X-1.

______________________ 

Decided: November 3, 2016 

______________________ 

HEATHER A. MELTON, Clarksville, TN, pro se.

ROBERT C. BIGLER, Commercial Litigation Branch, 

Civil Division, United States Department of Justice, 

Washington, DC, for respondent. Also represented by 

BENJAMIN C. MIZER, ROBERT E. KIRSCHMAN, JR., FRANKLIN 

E. WHITE, JR. 

______________________ 

Before LOURIE, O’MALLEY, and TARANTO, Circuit 

Judges.

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2 MELTON v. ARMY

PER CURIAM. 

Heather Melton was a civilian employee of the Department of the Army when, in 2009, the Army suspended 

her because she did not maintain a needed security clearance. She challenged that suspension before the Merit 

Systems Protection Board. In 2010, she and the Army 

entered into a settlement agreement, which, the Board 

eventually ruled, settled all pre-settlement employmentrelated matters. Ms. Melton later petitioned the Board to 

enforce the agreement, claiming that the Army violated 

the agreement by withholding money from amounts 

otherwise owed to her post-settlement to recoup presettlement government payments of her health care 

premiums. The Board ordered the Army to refund the 

money it had withheld, and the Board later determined 

that the Army complied with the order. 

Ms. Melton now petitions for review by this court. 

She argues that the Army has still not complied with the 

settlement agreement because, among other things, a 

post-settlement Leave and Earnings Statement shows a 

deduction of $1,019.89 for repayment of pre-settlement 

debt to the government. Because the Board did not 

address that Statement, we vacate and remand for further consideration of her entitlement to have that 

$1,019.89 refunded to her. We reject Ms. Melton’s other 

challenges.

I

Ms. Melton was indefinitely suspended without pay

from her position as an Information Technology Specialist 

with the Army on February 12, 2009. She was returned 

to duty on January 31, 2010, but placed on ordinary leave 

without pay on May 23, 2010. After exhausting possibilities of relief from the Office of Special Counsel and the 

Central Clearance Facility, Ms. Melton appealed her 

initial suspension to the Board. 

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MELTON v. ARMY 3

The parties entered into a settlement agreement with 

an effective date of August 5, 2010. In the agreement, the 

Army promised to pay Ms. Melton a lump sum of $35,000 

in exchange for her voluntary resignation and agreement 

to “release the ARMY from all claims or demands she may 

have arising out of her employment with the ARMY 

occurring prior to the effective date of this Agreement.” 

Respondent’s App. 57–58. The agreement states that it is 

a “full and final settlement of all issues involving the 

employment and resignation of Ms. Melton from the 

employment of the ARMY, as well as any other matters 

related to Ms. Melton’s employment with the ARMY.” Id.

at 57. Ms. Melton resigned on August 7, 2010, the Board 

dismissed the appeal as settled on August 16, 2010, and 

Ms. Melton’s attorney was issued a voucher for $35,000 on 

August 23, 2010. 

A dispute arose almost immediately. On September 

9, 2010, Ms. Melton received a bill from the Defense 

Finance and Accounting Service (DFAS) Civilian Pay 

Office for health insurance premiums that the government had paid on her behalf before the settlement—

specifically, while she was on leave without pay from 

February 12, 2009, through January 31, 2010, and from 

May 23, 2010, through August 7, 2010. When Ms. Melton 

did not pay the amount due, the debt was referred to the

Defense Debt Management Service and then to the U.S. 

Department of the Treasury for collection through wage 

garnishment. Ms. Melton requested an administrative 

hearing on September 24, 2013. On December 17, 2013,

the DFAS hearing official upheld the validity of 

Ms. Melton’s $3,797.40 debt (consisting of $2,929.29 in 

principal plus $868.11 in interest plus fees) and determined that garnishment was appropriate. In payment of 

that debt, $2,998.72 was garnished ($2,981.72 towards 

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4 MELTON v. ARMY

the debt and a $17 Treasury fee). Respondent’s App. 65–

67.1

Ms. Melton filed a petition for enforcement of the settlement agreement with the Board on January 28, 2014, 

claiming that any attempt to collect the pre-settlement 

debt was a violation because the settlement agreement 

had cancelled the debt. On January 5, 2015, the Boardassigned administrative judge found that the Army was 

entitled to collect the health insurance premium debt

because that debt was not covered by the settlement 

agreement. On June 18, 2015, the full Board reversed, 

holding that the language of the settlement agreement 

was “unambiguous” in its intent to be a “full and final 

settlement of all employment-related matters,” including 

the health insurance premium debt. Respondent’s App. 

44–45. The Board ordered the Army to document its 

compliance with the settlement agreement within 45 

days. The Army subsequently submitted documentation 

that it had cancelled the $2,929.29 debt principal and had 

refunded to Ms. Melton all the money it had garnished—a 

total of $2,998.72, representing $2,981.72 it had collected 

towards the debt plus a $17 collection fee. Satisfied that 

the Army was in compliance, the Board entered a final 

order dismissing the petition for enforcement.

Ms. Melton petitions for review by this court. She

contends that the Army is not yet in compliance with the 

settlement agreement because, among other things, a 

Leave and Earnings Statement, dated after the settlement took effect, shows that the government deducted 

$1,019.89 from her final paycheck for what she alleges is 

 

1 It is not evident from the limited documentation 

available to us what money owed to Ms. Melton the 

government subtracted the $2,998.72 from. Ms. Melton 

refers both to her “family’s income tax return” and to her 

“wages.” Petitioner’s Br. 8. 

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MELTON v. ARMY 5

a pre-settlement debt. She also claims a violation of the 

agreement on the ground that the Army promised to hire 

her back but has not done so. In addition, her informal 

brief to us makes certain allegations not tied to enforcement of the settlement agreement—that she was suspended and otherwise subjected to discrimination based 

on her reporting of espionage spyware on military computers, that she has been deprived of her civil rights, and 

that the Army’s actions have caused her emotional distress. 

We have jurisdiction under 28 U.S.C. § 1295(a)(9). 

We note that, after she filed her informal brief, Ms. Melton filed Form 10 under this court’s Rules. Respondent’s 

App. 69. In that Form, she states that she has abandoned 

any claims based on race or related matters that in other 

contexts present impediments to this court’s jurisdiction 

in light of 5 U.S.C. §§ 7702(a)(1) and 7703(b)(1)–(2). See 

Kloeckner v. Solis, 133 S. Ct. 596, 607 (2012). We need 

not address whether, based on her informal brief alone, 

we would have faced questions about this court’s jurisdiction. See Oja v. Dep’t of Army, 405 F.3d 1349, 1355 (Fed. 

Cir. 2005). In light of her Form 10, there are no such 

questions now. 

II

We must affirm the Board’s decision unless it is “(1) 

arbitrary, capricious, an abuse of discretion, or otherwise 

not in accordance with law; (2) obtained without procedures required by law, rule, or regulation having been 

followed; or (3) unsupported by substantial evidence.” 5 

U.S.C. § 7703(c). It is Ms. Melton’s burden to establish 

agency error. McCrary v. Office of Pers. Mgmt., 459 F.3d 

1344, 1347 (Fed. Cir. 2006). “A settlement agreement is a 

contract, and its construction is a matter of law which this 

court reviews de novo.” Lutz v. U.S. Postal Serv., 485 

F.3d 1377, 1381 (Fed. Cir. 2007) (quoting Lary v. U.S. 

Postal Serv., 472 F.3d 1363, 1367 (Fed. Cir. 2006)). It is 

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6 MELTON v. ARMY

Ms. Melton’s burden to show material non-compliance 

with the terms of the settlement agreement. Id.

A

Regarding the settlement agreement, we address 

Ms. Melton’s arguments that the Army still has not 

complied with the agreement. We note first that, to the 

extent that Ms. Melton is now challenging the validity of 

the settlement agreement, we do not think that any such 

challenge is properly before us. A petitioner may have a 

settlement set aside if “the agreement is unlawful, was 

involuntary, or was the result of fraud or mutual mistake.” Sargent v. Dep’t of Health & Human Servs., 229 

F.3d 1088, 1091 (Fed. Cir. 2000). The Board acknowledged some language in Ms. Melton’s petition before it 

which alleged “mutual mistake” and “fraud,” but it declined to treat those allegations as a challenge to the 

settlement agreement itself because Ms. Melton did not 

seek to invalidate the settlement agreement. We see no 

error in the Board’s interpretation of Ms. Melton’s petition before it, and, on appeal, Ms. Melton does not press 

her claims of fraud or mutual mistake. To the extent that 

Ms. Melton is now challenging the validity of the settlement agreement on other grounds, those grounds were 

not presented to the Board and are therefore not properly 

before us.

1

As to the Army’s compliance with the settlement 

agreement, Ms. Melton makes essentially two arguments 

about Army non-compliance regarding collection of the 

pre-settlement debt based on government payment of her 

health insurance premiums. First, she contends that the 

Army has not refunded all the money it garnished. She 

does not provide us with any documentation of the garnished amount, but she states in her opening brief that 

the Army “garnished [her] family’s income tax return for 

almost $3,000.” Petitioner’s Br. 8. That statement is 

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MELTON v. ARMY 7

consistent with the $2,998.72 amount the government 

indicates was refunded to her. Respondent’s App. 67. 

Substantial evidence, in the form of a record showing the 

cancellation of Ms. Melton’s debt and a Treasury check for 

$2,998.72, supports the Board’s finding that the government has cancelled the debt and refunded what it garnished.

Ms Melton’s second collection-focused argument is 

that the Army violated the agreement because, after the 

agreement took effect, it deducted $1,019.89, from money 

otherwise due her, to recoup some of the pre-settlement 

government payments of her health insurance premiums. 

The Army does not dispute the Board’s conclusion that it 

must refund money collected after the effective date of the

settlement in payment of pre-settlement employmentrelated debts that Ms. Melton owed the Army. We conclude that the $1,019.89 deduction warrants a remand to 

the Board for further examination.

Ms. Melton has provided evidence suggesting that the 

Army improperly collected, and has not refunded, the 

$1,019.89 she identifies. Specifically, she has provided a 

Leave and Earnings Statement for the pay period ending

August 28, 2010, a period after the effective date of the 

settlement and her resignation.2 Petitioner’s Br. Apps. B, 

C; Respondent’s Br. 68. It shows an amount to be paid 

out for accrued annual leave, but then includes a 

$1,019.89 deduction for prepaid federal employee health 

benefits. Respondent’s App. 68. It is not clear how this 

$1,019.89 amount was calculated, but the figure exactly 

offsets the net amount the Army otherwise would have 

 

2 Ms. Melton shows that she filed the Statement 

with the Board on October 20, 2015, as part of the Compliance Referral docket CH-0752-09-0448-X-1. Petitioner’s Apps. B, C. The government does not challenge the 

timeliness of that submission. See Respondent’s Br. 8–9.

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8 MELTON v. ARMY

paid Ms. Melton for her annual leave accrued before her 

resignation. The statement shows that she was owed 

$2,158.32 of accrued leave, minus $988.35 for advanced 

sick leave she had taken, resulting in $1,169.97. Id. 

From that figure, $150.08 of taxes was deducted ($2.18 for 

Medicare, $9.31 for OASDI, and $138.59 in federal tax), 

leaving $1,019.89 of wages owed her. Id. Exactly that 

amount was then deducted in payment of the health 

insurance premium debt, such that Ms. Melton’s net pay 

for the period was zero. Id. 

It appears undisputed that the $1,019.89 deduction 

was for money owed for a pre-settlement debt for government payment of Ms. Melton’s health insurance premiums and, in addition, that Ms. Melton was entitled to a 

refund of that amount—collected after the settlement—

under the Board’s uncontested interpretation of the 

settlement agreement. The government states: “As the 

pay period covered by the [Leave and Earnings Statement] was after August 5, 2010, Ms. Melton would be 

entitled to a refund of the $1,019.89 deducted during this 

period.” Respondent’s Br. 8. 

The government argues that there nevertheless is not 

harmful error in the Board’s ruling now here on review. 

The government’s rationale is that “the refund check 

[Ms. Melton] provides shows a total of $2,998.72 was 

refunded to her, which presumably would include the 

$1,019.89.” Respondent’s Br. 8–9. Indeed, the government adds, the refund check is greater than $2,336.63, 

“the total prepaid health insurance premium collected 

year to date” shown on the August 28 Leave and Earning 

Statement. Id. at 9. For those reasons, the government 

concludes, Ms. Melton is not “owed any additional money.” Id. at 8.

The Board has not specifically addressed the 

$1,019.89 issue. Nor, therefore, has it addressed the 

argument now advanced by the government for why Ms. 

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MELTON v. ARMY 9

Melton is not owed more than she already has been 

repaid. And we have reason to doubt the soundness of the 

government’s argument. 

The total amount of the premiums the government 

paid on Ms. Melton’s behalf was $5,265.82. In determining the amount Ms. Melton still owed at the time of her 

administrative garnishment hearing, DFAS subtracted 

both the $1,316.64 deducted from the paychecks 

Ms. Melton received during the February 1, 2010, through 

May 22, 2010, period ($164.58 for each of 8 pay periods 

when she was not on leave without pay) and the 

$1,019.89 deducted on the final Leave and Earnings 

Statement for the pay period ending August 28, 2010. 

Because she had already paid back a total of $2,336.53 

($1,316.64 plus $1,019.89), DFAS determined that 

Ms. Melton’s remaining debt principal was $2,929.29

($5,265.82 minus $2,336.53)—to which was added interest 

and fees to arrive at the final debt of $3,797.40. It was 

based on that amount that the government garnished 

“almost $3,000” (according to petitioner) or $2,998.72 

(according to the Army). And the amount eventually 

refunded to her after the Board’s enforcement ruling was 

tied to that garnished amount, collected in payment of a 

debt calculated on the premise that the government had 

already recouped the $1,019.89. 

If that particular recoupment was improper, as the 

government seemingly agrees, the refund seemingly did 

not repay it. That amount appears still to be owed to 

Ms. Melton, in addition to the money already refunded for 

the garnished amount. But we draw no final conclusion. 

Instead, we remand to the Board for consideration of the 

issue.

2

Ms. Melton contends that the Army is out of compliance with the settlement agreement on an additional 

ground: she alleges that the Army promised in the settleCase: 16-1780 Document: 30-2 Page: 9 Filed: 11/03/2016
10 MELTON v. ARMY

ment agreement to rehire her and has not done so. The 

Board did not address this argument, which the government says was not raised before the Board, Respondent’s 

Br. 13. Regardless, we see no merit in the argument. 

Ms. Melton has provided us no documentation of the 

Army’s alleged promise. And the settlement agreement 

not only clearly states that Ms. Melton agreed to resign 

voluntarily but also contains a merger clause declaring: 

“This Agreement constitutes the complete understanding 

between Ms. Melton and the ARMY and supersedes any 

previous agreements or understandings between the 

parties. No other promises or agreements will be binding 

unless signed by both parties.” Respondent’s App. 58–59. 

Ms. Melton has not shown the promise she alleges to 

support this non-compliance argument.

B

There is no error in the Board’s refusal to consider

Ms. Melton’s whistleblower reprisal claim. The Board 

correctly determined that any claims she may have had 

relating to her employment were released as part of the 

settlement agreement, in which she agreed “to release the 

ARMY from all claims or demands she may have arising 

out of her employment with the ARMY occurring prior to 

the effective date of his Agreement.” Respondent’s App. 

58. Ms. Melton does not contend that she has suffered 

retaliation since the effective date of the settlement. 

C

Ms. Melton’s remaining claims were not part of the 

Board’s decision, and we decline to consider them for the 

first time on appeal. The Board noted in its final decision, 

which found the Army in compliance and dismissed the 

petition for enforcement, that Ms. Melton had raised 

many issues in her filings that were unrelated to the 

compliance issues before the Board, and it correctly 

determined that its jurisdiction was limited to enforcing

the terms of the settlement agreement. Respondent’s 

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MELTON v. ARMY 11

App. 53 n.2 (citing 5 C.F.R. §§ 1201.181(a), 1201.182(a)); 

see Manley v. Dep’t of the Air Force, 91 F.3d 117, 119–20 

(Fed. Cir. 1996) (holding that, while the Board’s jurisdiction to enforce a settlement agreement was not limited to 

the aspects of the settlement agreement which are within 

the Board’s independent jurisdiction, the Board’s enforcement power was limited to the scope of the settlement agreement). Ms. Melton has not shown that her 

remaining claims involve the settlement agreement so as 

to come within the Board’s enforcement jurisdiction in 

this proceeding. To the extent that those claims were 

raised before the Board, the Board correctly declined to 

enforce them.

CONCLUSION

For the foregoing reasons, we affirm the Board’s decision with one exception: We vacate the decision to the 

extent it denies a further refund of $1,019.89, and we 

remand for consideration of that issue.

No costs.

AFFIRMED IN PART, VACATED IN PART, AND 

REMANDED

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