Court Opinion

ID: 9959454
Source: CourtListenerOpinion
Date Created: 2024-04-11 18:01:03.133354+00
Date Added: 2024-06-11T08:17:33.569848
License: Public Domain

UNITED STATES OF AMERICA
                   MERIT SYSTEMS PROTECTION BOARD

DAVID OELBERG,                                  DOCKET NUMBERS
             Appellant,                         PH-0432-18-0114-C-1
                                                PH-531D-17-0196-C-1
             v.

DEPARTMENT OF AGRICULTURE,
            Agency.                             DATE: April 10, 2024

        THIS FINAL ORDER IS NONPRECEDENTIAL 1

      David Oelberg , Selinsgrove, Pennsylvania, pro se.

      Dora Malykin , Washington, D.C., for the agency.

      Sandy S. Francois , Kenner, Louisiana, for the agency.

                                      BEFORE

                           Cathy A. Harris, Chairman
                        Raymond A. Limon, Vice Chairman

                                  FINAL ORDER

      The appellant has filed a petition for review of the compliance initial
decision, which denied his petition for enforcement, finding that he failed to meet
his burden of proving a breach of the settlement agreement. Generally, we grant
petitions such as this one only in the following circumstances: the compliance

1
   A nonprecedential order is one that the Board has determined does not add
significantly to the body of MSPB case law. Parties may cite nonprecedential orders,
but such orders have no precedential value; the Board and administrative judges are not
required to follow or distinguish them in any future decisions. In contrast, a
precedential decision issued as an Opinion and Order has been identified by the Board
as significantly contributing to the Board’s case law. See 5 C.F.R. § 1201.117(c).
                                                                                        2

decision contains erroneous findings of material fact; the compliance initial
decision is based on an erroneous interpretation of statute or regulation or the
erroneous application of the law to the facts of the case; the administrative
judge’s rulings during either the course of the appeal or the compliance initial
decision were not consistent with required procedures or involved an abuse of
discretion, and the resulting error affected the outcome of the case; or new and
material evidence or legal argument is available that, despite the petitioner’s due
diligence, was not available when the record closed.            Title 5 of the Code of
Federal Regulations, section 1201.115 (5 C.F.R. § 1201.115).                 After fully
considering the filings in this appeal, we conclude that the petitioner has not
established any basis under section 1201.115 for granting the petition for review.
Therefore, we DENY the petition for review. Except as expressly MODIFIED to
supplement the administrative judge’s analysis of the agency’s characterization of
the lump sum payment, we AFFIRM the compliance initial decision, which is
now the Board’s final decision. 5 C.F.R. § 1201.113(b).

                                   BACKGROUND
       On June 28, 2019, the appellant and the Department of Agriculture entered
into   a   settlement   agreement.       Oelberg    v.   Department     of   Agriculture,
PH-0432-18-0114-C-1, Compliance File (CF), Tab 1 at 7-13. 2              Thereafter, the
appellant filed the instant petition for enforcement, alleging that the agency
breached the settlement agreement. Id. at 3. He alleged that, although the agency
paid him a $20,000 lump sum pursuant to the settlement agreement, it incorrectly
characterized the payment as “other income” in a tax form filed with the Internal
Revenue Service (IRS), as opposed to characterizing it as “Gross proceeds paid to
an attorney.” Id. at 3, 15. According to the appellant, this characterization will
2
  The settlement agreement here resolved two underlying appeals, MSPB Docket
No. PH-0432-18-0114-I-1 and PH-531D-17-0196-I-1. Upon the filing of the appellant’s
petition for enforcement, the two appeals were joined, resulting in one compliance
initial decision and one petition for review. All of the record citations in this decision
are from the appeal docketed as PH-0432-18-0114-C-1.
                                                                                        3

result in a higher tax burden on him. Id. at 3. The appellant further alleged that,
although he is banned from employment in the agency’s Animal Care Division
under the agreement, the agency breached the settlement agreement by preventing
him from receiving employment in other divisions of the Department of
Agriculture and other Federal agencies. Id.
      The administrative judge advised the appellant of his burden of establishing
that the agency breached the agreement.           CF, Tab 5 at 2-3.       Following the
appellant’s response, the administrative judge issued an initial decision denying
the petition for enforcement.      CF, Tab 6, Tab 9, Compliance Initial Decision
(CID) at 1-2. The administrative judge found that the agency’s reporting of the
$20,000 as “other income” did not violate the settlement agreement. CID at 7-9.
He further found that the appellant failed to meet his burden of proving by
preponderant evidence that the agency banned him from Federal employment in
violation of the settlement agreement. CID at 9-12.
      The appellant filed a petition for review, and the agency responded.
Petition for Review (PFR) File, Tabs 1, 3.         The appellant additionally filed a
motion for sanctions against the agency, alleging that its response to his petition
for review was untimely. 3       PFR File, Tab 4.       The agency responded to the
appellant’s request for sanctions, asserting that it was not untimely in its original
response. PFR File, Tab 5. Finally, the appellant has replied to the agency’s
original response to his petition for review. PFR File, Tab 7.

3
  Contrary to the appellant’s assertion, the agency’s response to his petition for review
was not untimely. In an acknowledgment order, the Clerk of the Board informed the
parties that the agency may file a response on or before July 28, 2019. PFR File, Tab 2
at 1. Because the deadline to file a response fell on a Sunday, the filing period included
the first workday after that date. 5 C.F.R. § 1201.23. Thus, the agency’s response filed
on Monday, July 29, 2019, was timely filed, and we deny the appellant’s motion for
sanctions.
                                                                                  4

                 DISCUSSION OF ARGUMENTS ON REVIEW
The administrative judge properly found that the appellant failed to prove that the
agency breached the settlement agreement.
      As the party asserting noncompliance, the appellant bears the burden of
proving by preponderant evidence that the agency breached the settlement
agreement; however, following the appellant’s filing of a petition for
enforcement, the agency must produce relevant, material, and credible evidence
of its compliance with the agreement. Perkins v. Department of Veterans Affairs,
105 M.S.P.R. 289, ¶ 7 (2007). Further, the appellant must show not only that the
agency acting in a manner that is inconsistent with a term of the settlement
agreement, but that there was material noncompliance with a settlement term.
Lutz v. U.S. Postal Service, 485 F.3d 1377, 1381 (Fed. Cir. 2007). “A breach is
material when it relates to a matter of vital important, or goes to the essence of
the contract.”   Thomas v. Department of Housing and Urban Development ,
124 F.3d 1439, 1142 (Fed. Cir. 1997).

      We modify the administrative judge’s analysis of the agency’s
      characterization of the lump sum payment, but still conclude that he
      properly found that the agency’s characterization was not a breach
      of the settlement agreement.
      On review, the appellant challenges the finding that the agency’s
characterization of the lump sum as “other income,” as opposed to “Gross income
paid to an attorney,” was not a breach of the settlement. PFR File, Tab 1 at 3.
Specifically, he argues that the administrative judge erred in relying on
Commissioner of Internal Revenue v. Banks, 543 U.S. 426 (2005), in finding that
the agency’s characterization of the lump sum payment did not breach the
settlement agreement. Id. He alleges that Commissioner is distinguishable from
the instant appeal because it involved the payment of attorneys’ fees, whereas this
appeal involves the reimbursement for attorneys’ fees already paid by the
appellant. PFR File, Tab 1 at 3. The administrative judge held that, under the
Supreme Court’s precedent in Commissioner, the agency was required to report
                                                                                   5

the lump sum payment as income to the plaintiff, even if it paid the attorney’s
fees directly to the appellant’s attorney.    CID at 8.    The appellant cites no
authority in support of his distinction between payments for attorneys’ fees and
reimbursements for attorneys’ fees already paid, but rather, merely disagrees with
the administrative judge’s conclusions, which we see no reason to disturb. See
Yang v. U.S. Postal Service, 115 M.S.P.R. 112, ¶ 12 (2010) (finding mere
disagreement with the administrative judge’s findings is insufficient to disturb the
initial decision). However, even assuming arguendo that the Supreme Court’s
holding in Commissioner does not apply, the appellant has nonetheless failed to
meet his burden of proving that the agency breached the settlement by
characterizing the lump sum as “other income.”
      The administrative judge found that, regardless of the holding in
Commissioner, the lump sum payment here was paid to the appellant, not to his
attorney, and thus the labeling of such a payment as “Gross proceeds paid to an
attorney” would be incorrect. CID at 7-8. We agree, and modify his findings to
supplement the analysis regarding the agency’s characterization of the lump sum
payment under the actual terms of the agreement.
      The Board interprets settlement agreements by applying the law of
contracts. Felch v. Department of the Navy, 112 M.S.P.R. 145, ¶ 8 (2009). In
construing the terms of a written settlement agreement, the words of the
agreement itself are of paramount importance.      Id. Moreover, in construing a
settlement agreement, the Board examines the four corners of the agreement to
determine the parties’ intent.   Id.   The agreement here states that the agency
“makes no representations regarding any [F]ederal, state, or local tax liability
which may be incurred by Appellant as a result of this payment.” CF, Tab 1 at 8.
It further states that the agency “will report the payment amount to the [IRS],”
and that “[a]ny disputes over taxes are between the IRS and Appellant, and not
the Agency.” Id. The agreement makes no distinction as to how the agency will
characterize the payment for tax purposes, and thus, the agreement does not
                                                                                  6

require the agency to characterize the payment in any particular way. Rather,
pursuant to the settlement agreement, any dispute over the taxes is between the
appellant and the IRS, not the agency. CF, Tab 1 at 8. Accordingly, we agree
with the administrative judge that the appellant failed to meet his burden of
proving that the agency’s characterization of the lump sum payment breached the
settlement agreement. 4

      The administrative judge properly found that the appellant failed to
      prove that the agency banned him from employment in violation of
      the settlement agreement.
      The appellant further challenges the administrative judge’s holding that,
outside of the Animal Care Division, the agreement was silent as to what the
agency could and could not do concerning the appellant’s efforts to obtain
Federal employment.       PFR File, Tab 1 at 3-4.     He takes umbrage with the
administrative judge’s assertion that the agency’s interference with his job
applications, if proven, would nonetheless not constitute a breach of the
settlement agreement.     Id. He additionally challenges the finding that actions
taken by agency officials prior to the signing of the settlement agreement could
not evidence a breach of the agreement. Id. at 4.
      The administrative judge found that the agreement in no way barred the
agency from giving the appellant negative reviews for future applications for
employment. CID at 9-10. He further noted that actions taken by an agency
employee prior to the settlement agreement “cannot be considered as evidence
that a breach occurred.” CID at 6 n.3. The appellant cites no authority casting
doubt on the administrative judge’s findings.        Mere disagreement with the
administrative judge’s findings is insufficient to disturb the initial decision.

4
   The appellant further argues that the agency failed to submit evidence of its
compliance with the settlement agreement, as required, and that the administrative
judge erred by issuing a decision without such evidence. PFR File, Tab 1 at 3.
However, he is not alleging that the agency failed to pay him the $20,000. CF, Tab 1
at 3, 15. His own submission, which demonstrates that the agency did in fact pay him
the $20,000, demonstrates that the agency met its burden of showing compliance.
                                                                                  7

Yang, 115 M.S.P.R. 112, ¶ 12.       Accordingly, we see no reason to disturb the
administrative judge’s finding that the appellant provided no evidence of the
agency interfering with his applications. CID at 10.
      The appellant also argues that the agency failed to submit evidence of its
compliance with the settlement agreement regarding his alleged ban from
employment.    PFR File, Tab 1 at 3.      However, the agency submitted sworn
statements from various agency personnel asserting that they have not had
communications with prospective employers concerning the appellant and that
they were not interfering with his applications for employment in any way.
CF, Tab 7 at 19-25. The sworn statements additionally explain why, with regards
to the appellant’s applications within the agency, the appellant was not referred. 5
Id. at 19-23. We therefore find the appellant’s argument that the agency failed to
submit evidence of compliance unavailing.

We find unpersuasive the appellant’s assertion that the administrative judge
engaged in ex parte communications with the agency.
      On review, the appellant alleges that the agency and the administrative
judge engaged in prohibited ex parte communications. PFR File, Tab 1 at 3. He
alleges that the initial decision contains statements attributed to the agency that
are not in the record.   Id.   As an example, he notes that the initial decision
attributes the agency with pointing out that three of the five positions the
appellant was not selected for were not with the agency.         Id.   We find the
appellant’s assertion unavailing.
      The Board’s regulations describe prohibited ex parte communications as
those communications made between a decision-making official of the Board and
an interested party to a proceeding when the communication is made without
giving the other parties to the appeal a chance to participate and where the
communication involves the merits of the case.         5 C.F.R. § 1201.101; see
5
 One of the applications was for current agency employees only, which the appellant
was not. CF, Tab 7 at 20. The other required graduate-level education or experience
which the appellant did not have. Id. at 23.
                                                                                      8

Gubino v. Department of Transportation, 80 M.S.P.R. 442, 444 (1998).                The
appellant’s original submission includes a screenshot of his USA Jobs profile,
which shows three unsuccessful applications for employment with agencies other
than the Department of Agriculture. CF, Tab 1 at 16-17. Moreover, in both of its
submissions below, the agency stated that the appellant’s applications were to
multiple Federal agencies, not just the Department of Agriculture. CF, Tab 4
at 5, Tab 7 at 7. The appellant provides no other evidence or argument in support
of his allegation that the agency engaged in prohibited ex parte communications
with the administrative judge. Based on the foregoing, we find that there is no
evidence to support a finding of prohibited ex parte communications.

                         NOTICE OF APPEAL RIGHTS 6
      The initial decision, as supplemented by this Final Order, constitutes the
Board’s final decision in this matter.      5 C.F.R. § 1201.113.      You may obtain
review of this final decision. 5 U.S.C. § 7703(a)(1). By statute, the nature of
your claims determines the time limit for seeking such review and the appropriate
forum with which to file. 5 U.S.C. § 7703(b). Although we offer the following
summary of available appeal rights, the Merit Systems Protection Board does not
provide legal advice on which option is most appropriate for your situation and
the rights described below do not represent a statement of how courts will rule
regarding which cases fall within their jurisdiction. If you wish to seek review of
this final decision, you should immediately review the law applicable to your
claims and carefully follow all filing time limits and requirements. Failure to file
within the applicable time limit may result in the dismissal of your case by your
chosen forum.
      Please read carefully each of the three main possible choices of review
below to decide which one applies to your particular case. If you have questions

6
  Since the issuance of the initial decision in this matter, the Board may have updated
the notice of review rights included in final decisions. As indicated in the notice, the
Board cannot advise which option is most appropriate in any matter.
                                                                                         9

about whether a particular forum is the appropriate one to review your case, you
should contact that forum for more information.

      (1) Judicial review in general . As a general rule, an appellant seeking
judicial review of a final Board order must file a petition for review with the U.S.
Court of Appeals for the Federal Circuit, which must be received by the court
within 60 calendar days of the date of issuance of this decision.                5 U.S.C.
§ 7703(b)(1)(A).
      If you submit a petition for review to the U.S. Court of Appeals for the
Federal   Circuit,   you   must   submit   your   petition    to   the   court    at   the
following address:
                              U.S. Court of Appeals
                              for the Federal Circuit
                             717 Madison Place, N.W.
                             Washington, D.C. 20439

      Additional information about the U.S. Court of Appeals for the Federal
Circuit is available at the court’s website, www.cafc.uscourts.gov. Of particular
relevance is the court’s “Guide for Pro Se Petitioners and Appellants,” which is
contained within the court’s Rules of Practice, and Forms 5, 6, 10, and 11.
      If you are interested in securing pro bono representation for an appeal to
the U.S. Court of Appeals for the Federal Circuit, you may visit our website at
http://www.mspb.gov/probono for information regarding pro bono representation
for Merit Systems Protection Board appellants before the Federal Circuit. The
Board neither endorses the services provided by any attorney nor warrants that
any attorney will accept representation in a given case.

      (2) Judicial   or    EEOC    review    of   cases      involving   a   claim      of
discrimination . This option applies to you only if you have claimed that you
were affected by an action that is appealable to the Board and that such action
was based, in whole or in part, on unlawful discrimination. If so, you may obtain
                                                                                10

judicial review of this decision—including a disposition of your discrimination
claims —by filing a civil action with an appropriate U.S. district court ( not the
U.S. Court of Appeals for the Federal Circuit), within 30 calendar days after you
receive this decision.    5 U.S.C. § 7703(b)(2); see Perry v. Merit Systems
Protection Board, 582 U.S. 420 (2017). If you have a representative in this case,
and your representative receives this decision before you do, then you must file
with the district court no later than 30 calendar days after your representative
receives this decision. If the action involves a claim of discrimination based on
race, color, religion, sex, national origin, or a disabling condition, you may be
entitled to representation by a court-appointed lawyer and to waiver of any
requirement of prepayment of fees, costs, or other security.        See 42 U.S.C.
§ 2000e-5(f) and 29 U.S.C. § 794a.
      Contact information for U.S. district courts can be found at their respective
websites, which can be accessed through the link below:
      http://www.uscourts.gov/Court_Locator/CourtWebsites.aspx .
      Alternatively, you may request review by the Equal Employment
Opportunity Commission (EEOC) of your discrimination claims only, excluding
all other issues . 5 U.S.C. § 7702(b)(1). You must file any such request with the
EEOC’s Office of Federal Operations within 30 calendar days after you receive
this decision. 5 U.S.C. § 7702(b)(1). If you have a representative in this case,
and your representative receives this decision before you do, then you must file
with the EEOC no later than 30 calendar days after your representative receives
this decision.
      If you submit a request for review to the EEOC by regular U.S. mail, the
address of the EEOC is:
                         Office of Federal Operations
                  Equal Employment Opportunity Commission
                               P.O. Box 77960
                          Washington, D.C. 20013
                                                                                     11

      If you submit a request for review to the EEOC via commercial delivery or
by a method requiring a signature, it must be addressed to:
                            Office of Federal Operations
                     Equal Employment Opportunity Commission
                                 131 M Street, N.E.
                                   Suite 5SW12G
                             Washington, D.C. 20507

      (3) Judicial    review    pursuant     to   the   Whistleblower       Protection
Enhancement Act of 2012 . This option applies to you only if you have raised
claims of reprisal for whistleblowing disclosures under 5 U.S.C. § 2302(b)(8) or
other protected activities listed in 5 U.S.C. § 2302(b)(9)(A)(i), (B), (C), or (D). If
so, and your judicial petition for review “raises no challenge to the Board’s
disposition of allegations of a prohibited personnel practice described in
section 2302(b) other than practices described in section 2302(b)(8), or 2302(b)
(9)(A)(i), (B), (C), or (D),” then you may file a petition for judicial review either
with the U.S. Court of Appeals for the Federal Circuit or any court of appeals of
competent jurisdiction. 7   The court of appeals must receive your petition for
review within 60 days of the date of issuance of this decision. 5 U.S.C. § 7703(b)
(1)(B).
      If you submit a petition for judicial review to the U.S. Court of Appeals for
the Federal Circuit, you must submit your petition to the court at the
following address:
                                U.S. Court of Appeals
                                for the Federal Circuit
                               717 Madison Place, N.W.
                               Washington, D.C. 20439
7
   The original statutory provision that provided for judicial review of certain
whistleblower claims by any court of appeals of competent jurisdiction expired on
December 27, 2017. The All Circuit Review Act, signed into law by the President on
July 7, 2018, permanently allows appellants to file petitions for judicial review of
MSPB decisions in certain whistleblower reprisal cases with the U.S. Court of Appeals
for the Federal Circuit or any other circuit court of appeals of competent jurisdiction.
The All Circuit Review Act is retroactive to November 26, 2017. Pub. L. No. 115-195,
132 Stat. 1510.
                                                                              12

      Additional information about the U.S. Court of Appeals for the Federal
Circuit is available at the court’s website, www.cafc.uscourts.gov. Of particular
relevance is the court’s “Guide for Pro Se Petitioners and Appellants,” which is
contained within the court’s Rules of Practice, and Forms 5, 6, 10, and 11.
      If you are interested in securing pro bono representation for an appeal to
the U.S. Court of Appeals for the Federal Circuit, you may visit our website at
http://www.mspb.gov/probono for information regarding pro bono representation
for Merit Systems Protection Board appellants before the Federal Circuit. The
Board neither endorses the services provided by any attorney nor warrants that
any attorney will accept representation in a given case.
      Contact information for the courts of appeals can be found at their
respective websites, which can be accessed through the link below:
      http://www.uscourts.gov/Court_Locator/CourtWebsites.aspx .

FOR THE BOARD:                        ______________________________
                                      Gina K. Grippando
                                      Clerk of the Board
Washington, D.C.