Court Opinion

ID: 2654752
Source: CourtListenerOpinion
Date Created: 2014-02-27 01:02:03.794561+00
Date Added: 2024-06-11T12:36:16.548006
License: Public Domain

[NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
                ______________________

                  JACK P. MCGEE,
                     Petitioner,

                           v.

        DEPARTMENT OF AGRICULTURE,
                  Respondent.
             ______________________

                      2013-3174
                ______________________

   Petition for review of the Merit Systems Protection
Board in No. AT1221100202-C-2.
                ______________________

              Decided: February 26, 2014
               ______________________

   JACK P. MCGEE, of Smyrna, Georgia, pro se.

    LAUREN S. MOORE, Trial Attorney, Commercial Litiga-
tion Branch, Civil Division, United States Department of
Justice, of Washington, DC for the respondent. With her
on the brief were STUART F. DELERY, Assistant Attorney
General, BRYANT G. SNEE, Acting Director, and PATRICIA
M. MCCARTHY, Assistant Director.
                 ______________________

  Before NEWMAN, BRYSON, and MOORE, Circuit Judges.
2                                    MCGEE   v. AGRICULTURE

PER CURIAM
                        DECISION
    Jack P. McGee appeals from a decision of the Merit
Systems Protection Board denying his second petition for
enforcement of a settlement agreement with the United
States Forest Service. We affirm in part, vacate in part,
and remand for further proceedings.
                      BACKGROUND
     Mr. McGee worked as a Qualified Review Appraiser
for the United States Forest Service (“Forest Service”), an
agency within the Department of Agriculture. Mr. McGee
was hired at grade GS-12 but was eventually promoted to
GS-13.
    In November 2009, Mr. McGee filed an individual
right of action (“IRA”) appeal pursuant to the Whistle-
blower Protection Act of 1989, alleging that the Forest
Service had retaliated against him for engaging in pro-
tected whistleblowing activity. On August 11, 2010, Mr.
McGee and the Forest Service entered into a settlement
agreement in which Mr. McGee agreed to withdraw his
appeal in exchange for the Forest Service’s agreement to
take certain actions with respect to his employment. That
settlement agreement provided, in pertinent part:
    The Agency agrees to:
    1. Reassign Appellant to the Forest Service
    Legacy Program Realty Specialist, GS-1170, with
    the specific staff responsibility in the area of
    State & Private Forestry’s Forest Legacy Pro-
    gram.
                            ***
    c. Appellant will report to Michael Murphy, For-
    est Legacy Program Manager, Southern Region.
MCGEE   v. AGRICULTURE                                    3

   d. Mr. Murphy will prepare a position description
   and the position will be classified in accordance
   with established classification policy and proce-
   dure. Mr. Murphy will work with the classifica-
   tion staff to ensure that the position description
   properly reflects the duties and responsibilities of
   this position. This position will be sent for expe-
   dited classification.
   e. The agency does not represent that the position
   will be classified at a specific grade. Appellant
   acknowledges that the position may be classified
   at the GS-12 or GS-13 grade level.
   f. If the position is classified at the GS-12 level,
   the Agency agrees to a three-year save pay provi-
   sion to include any eligible within-grade increases
   otherwise due to Appellant during this time peri-
   od. At the end of the three year period, Appellant
   would revert to a GS-12, step 10.
   g. The agency agrees to make efforts to reassign
   Appellant to this position no later than October 1,
   2010. Appellant acknowledges that the timing of
   this reassignment is contingent on OPM’s classifi-
   cation of this position, which is not within the
   Agency’s control.
    After the Forest Service graded Mr. McGee’s new
position at the GS-12 level, Mr. McGee filed his first
petition for enforcement (“PFE”) of the settlement agree-
ment. In that action, Mr. McGee alleged that the Forest
Service had breached paragraphs 1(d) and 1(g) by prohib-
iting Mr. Murphy from working with the classification
specialist to develop a position description for Mr.
McGee’s new position and by not sending the position
description to the Office of Personnel Management
(“OPM”) for classification. The Merit Systems Protection
Board ultimately concluded that the Forest Service did
not materially breach the settlement agreement and
4                                    MCGEE   v. AGRICULTURE

denied the PFE. This court affirmed. McGee v. Dep’t of
Agric., 490 F. App’x 347 (Fed. Cir. 2012).
     During his initial appeal to this court, Mr. McGee
raised, for the first time, a claim that the Forest Service
had fraudulently induced him to sign the settlement
agreement by misrepresenting OPM’s role in the classifi-
cation process and by falsely assuring Mr. McGee that he
would be placed in a GS-13 position. We determined that
Mr. McGee had waived his claim of fraudulent induce-
ment because he had failed to raise it before the Board,
even though he had a sufficient factual basis from which
to assert that claim while his case was before the Board—
i.e., he knew at the time he filed the first PFE that his
new position had been graded at the GS-12 level without
OPM’s involvement. See McGee, 490 F. App’x at 352-53.
We added that even aside from waiver, Mr. McGee’s fraud
claim failed on the merits because the settlement agree-
ment made clear that his new position could be graded at
either the GS-12 or the GS-13 level. Id. at 353.
     When Mr. McGee’s position was classified as a GS-12
position on October 10, 2010, the Forest Service inter-
preted the three-year save pay provision as providing for
two years of “grade retention,” followed by a period of “pay
retention,” as those terms are defined in 5 C.F.R. part
536. Consistent with the regulatory requirements for
grade retention, the Forest Service continued to provide
Mr. McGee with the salary he had previously received as
a GS-13, step 3—$91,200—after his new position was
classified as a GS-12. Effective July 31, 2011, Mr. McGee
received an increase in his salary from $91,200 to
$94,049, the GS-13, step 4, level. Two years later, howev-
er, the agency did not grant Mr. McGee another salary
increase to the GS-13, step 5, level. Mr. McGee believed
he was entitled to that increase because the two-year
waiting period for a step increase had passed, and the
three-year save pay term in the agreement had not ex-
pired. The agency, however, asserted that Mr. McGee
MCGEE   v. AGRICULTURE                                   5

was not entitled to that salary increase because the two-
year period of “grade retention” had expired. At that
point, according to the agency, Mr. McGee was entitled
only to “pay retention,” as defined in 5 C.F.R. part 536,
which does not provide for salary increases to which the
employee would have been entitled under the employee’s
previous grade level.
    In June 2012 Mr. Murphy, the supervisor to whom
Mr. McGee was to report under the settlement agreement,
was temporarily assigned to other offices within the
Forest Service for 180 days. During that period, the
Forest Service assigned a different supervisor to Mr.
McGee.
    On June 11, 2012, Mr. McGee filed his second PFE,
which is at issue in the instant appeal. Mr. McGee con-
tended that the Forest Service breached paragraph 1(c) of
the settlement agreement by temporarily forcing him to
report to another supervisor while Mr. Murphy was
reassigned. Likewise, he asserted that the Forest service
anticipatorily breached paragraph 1(f), the three-year
save pay provision, by notifying him that he would not
receive a salary increase to the level of a GS-13, step 5,
effective on July 31, 2013. In effect Mr. McGee claimed
that the agency breached the three-year save pay provi-
sion by implementing that provision with two years of
“grade retention” and one year of “pay retention,” as those
terms are defined in 5 C.F.R. part 536. Finally, Mr.
McGee reasserted his fraud claims, alleging that the
Forest Service had fraudulently induced him to enter into
the settlement agreement by (1) promising him that the
agency would seek classification of his new position from
OPM and (2) promising him a GS-13 position.
    An administrative judge denied Mr. McGee’s second
PFE in its entirety. With respect to paragraph 1(c), the
administrative judge found that “the agency complied
with the terms of the agreement by initially assigning the
6                                    MCGEE   v. AGRICULTURE

appellant to the supervision of Mr. Murphy.” The admin-
istrative judge found that “there was nothing in the
agreement that requires Mr. Murphy to retain supervi-
sion over the appellant until the appellant retires and it
would be unreasonable for the appellant to have believed
that the settlement agreement provided for such given
that people regularly change positions throughout their
careers.” Likewise, the administrative judge found Mr.
McGee had offered no evidence that the Forest Service’s
actions were undertaken with the intent to harm Mr.
McGee or to breach the settlement agreement.
     With respect to the three-year save pay provision, the
administrative judge determined that Mr. McGee had
failed to establish a breach by the Forest Service because
there was “no dispute that [Mr. McGee] is currently
receiving grade retention for two years and after that he
will receive pay retention.”
    Finally, the administrative judge determined that Mr.
McGee’s fraud claims were precluded under the doctrine
of res judicata because Mr. McGee had failed to raise
those claims before the Board during his first PFE, even
though he had been “fully aware of the facts underlying”
those claims at that time.
    The full Board denied Mr. McGee’s petition for review.
With respect to Mr. Murphy’s supervision, the Board
found that Mr. Murphy had supervised Mr. McGee for
almost two years and that Mr. McGee failed to “proffer[]
any evidence of bad faith.” Likewise, the Board affirmed
the administrative judge’s holding that Mr. McGee’s fraud
claims were barred by res judicata because Mr. McGee
had failed to bring those claims in his first PFE.
    The Board found that Mr. McGee’s claim regarding
the three-year save pay provision was ripe for adjudica-
tion, but it denied his claim on the merits. The Board
determined that the parties to the settlement agreement
had used the term “save pay” without defining it, and that
MCGEE   v. AGRICULTURE                                  7

“save pay” was a term of art that means “pay retention”
as defined by OPM regulations in 5 C.F.R. part 536. The
Board then rejected Mr. McGee’s position that he was
entitled to a within-grade increase after spending two
years at the level of a GS-13, step 4. The Board based its
ruling on the provisions in those regulations limiting the
rights of employees subject to “pay retention” to receive
salary increases.
                         DISCUSSION
    1. Mr. McGee first contends that the Forest Service
breached the settlement agreement when it temporarily
reassigned Mr. Murphy to other offices and expected Mr.
McGee to report to a new temporary supervisor. Accord-
ing to Mr. McGee, that action was a breach of paragraph
1(c) of the settlement agreement, which provides that
“Appellant will report to Michael Murphy, Forest Legacy
Program Manager, Southern Region.”
    Mr. McGee’s argument is not persuasive. Paragraph
1(c) provides only that Mr. McGee would report to Mr.
Murphy; it does not provide that he would report to Mr.
Murphy for any defined period of time. “Where a settle-
ment agreement is silent as to the time or duration of
performance, the Board has consistently held that a
reasonable time under the circumstances will be pre-
sumed.” Adams v. U.S. Postal Serv., 72 M.S.P.R. 6, 10
(1996). However, the Board does not look only at the
length of time of compliance when considering whether an
agency has complied with a settlement agreement.
Parkman v. U.S. Postal Serv., 66 M.S.P.R. 410, 413
(1995). The Board also considers “the overall attendant
circumstances, including the motives of the agency . . .
and its efforts to minimize any harmful effects on [the
employee].” Id.; Adams, 72 M.S.P.R. at 10.
   The Board found that Mr. Murphy was Mr. McGee’s
supervisor for a period of almost two years before Mr.
Murphy was temporarily reassigned. That period of time
8                                   MCGEE   v. AGRICULTURE

is reasonable, especially in light of the fact that Mr.
Murphy’s reassignment was only temporary and the fact,
noted by the administrative judge, that “people regularly
change positions throughout their careers.”
    Likewise, Mr. McGee failed to prove that the Forest
Service acted in bad faith with respect to paragraph 1(c)
of the agreement. The Board found that the two years of
specific performance “tends to show the agency’s good
faith.” Additionally, the Board found that “there is no
evidence, nor even any allegation, that the agency intends
to permanently assign someone else to supervise [Mr.
McGee].” The Board’s determination that the Forest
Service did not breach paragraph 1(c) of the settlement
agreement is therefore supported by substantial evidence.
    2. Mr. McGee next claims that his fraud claims are
not precluded by the doctrine of res judicata because he
was not aware of the Forest Service’s alleged misrepre-
sentations until after he filed his first PFE and after he
had agreed to limit the issues before the Board in that
action. Therefore, according to Mr. McGee, he could not
have brought the fraud claims in his first action. As we
noted in Mr. McGee’s first appeal, however, Mr. McGee
“had a fully sufficient basis to argue that the agency had
improperly induced him to enter into the settlement
agreement by promising to give him a GS-13 position and
then breached it by offering him a GS-12 position in-
stead.” McGee v. Dep’t of Agric., 490 F. App’x 347, 352
(Fed. Cir. 2012).
    Even assuming that the Forest Service made fraudu-
lent misrepresentations during the settlement process
regarding the classification of Mr. McGee’s position, he
would have known of the false nature of those representa-
tions as of the date the agency allegedly breached its
promise to grade his new position at the GS-13 level.
Likewise, Mr. McGee knew that OPM was not involved in
the classification process by the time he filed his first
MCGEE   v. AGRICULTURE                                    9

PFE, in which he alleged that the agency had breached
the settlement agreement by not involving OPM in the
process. The Board also found that “Mr. McGee has not
identified any facts that were unknown to him at the time
he filed his first petition for enforcement.” The Board’s
conclusion that Mr. McGee’s fraud claims are barred by
res judicata because the claims could have been brought
in his first PFE is therefore supported by substantial
evidence.
    3. Mr. McGee next argues that the agency breached
the settlement agreement’s three-year save pay provision
by interpreting and implementing that provision as two
years of “grade retention”—the maximum period of “grade
retention” allowed by regulation—followed by a period of
“pay retention,” as those terms are defined in 5 C.F.R.
part 536. Mr. McGee asserts not only that the Forest
Service’s interpretation of the save pay provision is erro-
neous, but that he is entitled to two years of grade reten-
tion after the expiration of the contractual three-year save
pay term. As a consequence of the agency’s interpreta-
tion, Mr. McGee was not granted a salary increase
equivalent to that of GS-13, step 5, on July 31, 2013—the
required two years after his previous increase—because
by that date Mr. McGee was no longer within the two-
year period of “grade retention,” under which step in-
creases corresponding to an employee’s previous grade
may be granted. The Forest Service contends that Mr.
McGee’s pay was subject to the regulations for “pay
retention” as of that date, which do not provide for grant-
ing step increases corresponding to an employee’s previ-
ous grade.
    We reject Mr. McGee’s position that he is entitled to
further grade-retention benefits at the expiration of the
three-year save pay term. Nothing in his agreement with
the Forest Service supports such an interpretation.
Instead, the agreement provides simply that “[a]t the end
10                                   MCGEE   v. AGRICULTURE

of the three year period, [Mr. McGee] would revert to a
GS-12, step 10.”
    In its final order, the Board held that the term “save
pay” in the settlement agreement “is a term of art that
means ‘pay retention’ under the regulations of the Office
of Personnel Management.” To support that conclusion
the Board cited a number of other Board opinions that
held that terms such as “back pay,” “moot,” and “priority
consideration” are terms of art. Additionally, the Board
found support for its interpretation in the settlement
agreement’s use of the terms “eligible” and “otherwise
due” in the phrase “save pay provision to include any
eligible within-grade increases otherwise due.” The Board
reasoned that those terms “incorporate the notion that
the appellant might not be entitled to any pay increases if
he does not meet applicable eligibility criteria.”
    We find that the Board’s interpretation of the three-
year save pay provision of the settlement agreement is
not supported by substantial evidence. The fact that
other terms have been interpreted as terms of art is
irrelevant to determining what the parties to the settle-
ment agreement in this case meant by the phrase “three-
year save pay provision to include any eligible within-
grade increases otherwise due.” Likewise, the use of the
terms “eligible” and “otherwise due” appears to reflect
only that Mr. McGee would continue to be eligible for step
increases that he otherwise would have received were it
not for his grade reduction. The Board’s position that
“save pay” means “pay retention” is in fact inconsistent
with how the Forest Service implemented the save pay
provision, by granting two years of “grade retention” in
addition to a period of “pay retention.”
    As evidence that the parties to the settlement agree-
ment intended the three-year save pay provision to mean
two years of “grade retention” followed by a period of “pay
retention,” the government points to the sworn statement
MCGEE   v. AGRICULTURE                                   11

of a Forest Service Human Resources Specialist who
stated that “Mr. McGee and I have previously spoken
about a three year save pay provision in the . . . settle-
ment agreement. I have explained to Mr. McGee that
through a combination of grade retention and pay reten-
tion, the Agency is maintaining his salary at levels de-
fined by those parameters.” That statement, however,
does not indicate that Mr. McGee was informed about the
agency’s interpretation of the save pay provision before he
entered into the agreement. The same applies to a num-
ber of documents from 2012 in which the agency ex-
plained how it was implementing the agreement. Such
post-agreement evidence is of little help in determining
how the parties interpreted the save pay provision at the
time they executed the settlement agreement.
    The only record evidence pointed to by the govern-
ment that might tend to show that Mr. McGee agreed to
the government’s interpretation of the save pay provision
is a chart dated August 1, 2010—before the August 11,
2010, date of the settlement agreement—that shows how
Mr. McGee’s salary would change with time based on two
years of grade retention followed by a period of pay reten-
tion that would last until the GS-12, step 10, level exceed-
ed his retained pay. According to the government, that
chart was prepared by the Forest Service and “show[s] its
intent to provide Mr. McGee with two years of grade
retention, and one year of pay retention.” The govern-
ment, however, has pointed to nothing in the record that
might establish that Mr. McGee was aware of that chart
before entering into the settlement agreement. Without
such evidence, the chart does not tend to establish that
Mr. McGee agreed to the agency’s interpretation of the
save pay provision.
    The government also argues that “save pay” means
two years of “grade retention” followed by “pay retention”
because that interpretation is “required by applicable
statute and regulation,” specifically 5 U.S.C. §§ 5362-63
12                                   MCGEE   v. AGRICULTURE

and 5 C.F.R. part 536. Neither the statute nor the regula-
tions, however, use the term “save pay.” And although 5
U.S.C. § 5363(b)(1) provides that “[a]ny employee . . .
whose position has been reduced in grade is entitled” to
two years of grade retention, that provision does not state
that the government cannot contractually agree to grade-
retention benefits for a period of three years as part of a
settlement agreement. Nor do the regulations in 5 C.F.R.
part 536 place such a limitation on the government. We
therefore conclude that the Board’s decision to uphold the
Forest Service’s interpretation of the three-year save pay
clause as providing for two years of “grade retention”
followed by a period of “pay retention,” as those retention
policies are described in 5 C.F.R. part 536, is not support-
ed by substantial evidence.
    We therefore vacate that portion of the Board’s deci-
sion and remand for further proceedings. Although
additional evidence or findings may establish that Mr.
McGee agreed to the agency’s interpretation of the three-
year save pay provision, the record now before the court
does not support an interpretation of that clause other
than that Mr. McGee would receive the salary and step
increases associated with his previous GS-13 position for
three years, after which he would revert to the GS-12,
step 10, level.
    Although the Board determined that other eligibility
provisions would have limited Mr. McGee’s right to a
salary increase effective July 31, 2013, the government
has failed to point to any limitation—other than Mr.
McGee’s performance at an acceptable level of compe-
tence—that might have restricted his right to a salary
increase effective through October 9, 2013. The govern-
ment argues that the pay-retention regulations limit the
increases for which Mr. McGee is eligible, but that argu-
ment assumes that the save pay provision in the agree-
ment should be interpreted in the same manner as the
“pay retention” provision in the regulation, even though
MCGEE   v. AGRICULTURE                                  13

the regulation uses the term “pay retention,” not “save
pay,” and even though nothing in the agreement makes
reference to the regulatory limitations on “pay retention.”
    In summary, we affirm the Board’s decision with re-
spect to Mr. McGee’s claims of fraud and breach of para-
graph 1(c) of the settlement agreement. We vacate the
portion of the Board’s decision relating to the Forest
Service’s alleged breach of the three-year save pay provi-
sion, and we remand for further proceedings with respect
to that claim.
   No costs.
  AFFIRMED IN PART, VACATED IN PART, and
               REMANDED