Court Opinion

ID: 4180857
Source: CourtListenerOpinion
Date Created: 2017-06-26 21:00:19.273179+00
Date Added: 2024-06-11T14:38:59.235762
License: Public Domain

UNITED STATES OF AMERICA
                       MERIT SYSTEMS PROTECTION BOARD
                                       2017 MSPB 2

                             Docket No. DE-3443-12-0472-C-1

                                    Joyce M. Delorme,
                                        Appellant,
                                             v.
                              Department of the Interior,
                                          Agency.
                                      January 4, 2017

           Joyce M. Delorme, Belcourt, North Dakota, pro se.

           Teresa M. Garrity, Esquire, Bloomington, Minnesota, for the agency.

                                         BEFORE

                             Susan Tsui Grundmann, Chairman
                                Mark A. Robbins, Member

                                 OPINION AND ORDER

¶1         The appellant has filed a petition for review of the compliance initial
     decision, which dismissed her compliance appeal for lack of jurisdiction. For the
     reasons set forth below, we GRANT the petition for review, VACATE the
     compliance initial decision, and REMAND the compliance appeal to the field
     office for further adjudication consistent with this Opinion and Order.

                                      BACKGROUND
¶2         The agency appointed the appellant to the excepted-service position of
     Police Officer in the Office of Justice Services for the Bureau of Indian Affairs
     (BIA), in March 2011. Delorme v. Department of the Interior, MSPB Docket
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     No. DE-3443-12-0472-I-1, Initial Appeal File (IAF), Tab 7 at 21-22, 31-32.
     Citing regulations pertaining to the termination of probationers, the agency
     separated the appellant in July 2012. Id. at 21-23 (citing 5 C.F.R. § 315.804).
¶3         The appellant filed a Board appeal.       IAF, Tab 1.    Without holding a
     hearing, the administrative judge dismissed the appeal for lack of jurisdiction,
     finding that the appellant did not meet the definition of “employee” under
     5 U.S.C. § 7511(a)(1). IAF, Tab 17, Initial Decision (ID). The appellant filed a
     petition for review, and the Board remanded the matter for further adjudication.
     Delorme v. Department of the Interior, MSPB Docket No. DE-3443-12-0472-I-1,
     Remand Order (Sept. 13, 2013), Petition for Review (PFR) File, Tab 4.             The
     Board found that the appellant made a nonfrivolous allegation that she was only
     required to serve a 1-year probationary period, which she completed prior to her
     separation, entitling her to a jurisdictional hearing. Remand Order at 7-8.
¶4         On remand, the administrative judge reopened discovery, limited to the
     jurisdictional issue.   Delorme v. Department of the Interior, MSPB Docket
     No. DE-3443-12-0472-B-1, Remand File (RF), Tab 6.          While jurisdiction was
     still unresolved, the parties entered into a settlement agreement.      RF, Tab 9
     at 4-9. The parties stipulated that the agreement was “submitted for enforcement
     by the [Board].” Id. at 7.
¶5         The administrative judge dismissed the appeal as withdrawn. RF, Tab 10,
     Remand Initial Decision (RID). In the remand initial decision, the administrative
     judge found that the settlement agreement was lawful and freely reached. RID
     at 1-2. He noted that, during a teleconference with the parties’ representatives,
     he reminded them that, due to the unresolved question of whether the Board had
     jurisdiction over the underlying matter appealed, any settlement agreement they
     might reach would not be enforceable by the Board, although it still would be a
     binding contract between the parties.    RID at 2.   Recognizing that the parties
     requested in paragraph 6 of the agreement that it “shall be entered into the record
     with the Merit Systems Protection Board” and that “[t]he parties agree that the
                                                                                          3

     Settlement Agreement is an enforceable contract between the parties,” however,
     the administrative judge accepted the agreement into the record for the limited
     purpose of memorializing that this appeal was withdrawn as part of an agreement.
     Id. Neither party filed a petition for review of the remand initial decision.
¶6         Following the dismissal of the appeal, the appellant filed a petition for
     enforcement in October 2015, alleging that the agency violated the agreement .
     Delorme v. Department of the Interior, MSPB Docket No. DE-3443-12-0472-C-1,
     Compliance File (CF), Tab 1 at 5, 14.
¶7         The administrative judge provided the parties with an opportunity to
     address whether the Board has jurisdiction over the petition for enforcement ,
     noting that the agreement had not been accepted for enforcement purposes with
     the Board. CF, Tab 3 at 2-3. Thereafter, the administrative judge dismissed the
     petition for enforcement, concluding that the agreement was not enforceable by
     the Board because the question of whether the Board had jurisdiction over the
     underlying matter appealed had not yet been determined.               CF, Tab 12,
     Compliance Initial Decision at 4-8.
¶8         The appellant has filed a petition for review of the compliance initial
     decision.      Delorme    v.   Department     of   the   Interior,   MSPB       Docket
     No. DE-3443-12-0472-C-1, Compliance Petition for Review (CPFR) File,
     Tabs 1-2. The agency has filed a response, and the appellant has replied. CPFR
     File, Tabs 4-5.

                                         ANALYSIS
¶9         The Board’s “powers and functions” are set forth under 5 U.S.C. § 1204.
     In pertinent part, the statute provides that the Board shall:
           (1) hear, adjudicate, or provide for the hearing or adjudication, of all
           matters within the jurisdiction of the Board . . . ; [and]
           (2) order any Federal agency or employee to comply with any order
           or decision issued by the Board under the authority granted under
           paragraph (1) . . . and enforce compliance with any such order.
                                                                                        4

      5 U.S.C. § 1204(a)(1)-(2). Although section 1204 does not specifically address
      the Board’s authority to settle appeals brought before it, 5 U.S.C. § 7701(h)
      provides that “[t]he Board may, by regulation, provide for one or more alternative
      methods for settling matters subject to [its] appellate jurisdiction which
      shall . . . be in lieu of other procedures provided for under this section. ”   The
      Board’s decision implementing such a settlement is generally final .       5 U.S.C.
      § 7701(h). In turn, the Board’s regulations provide that, for the Board to retain
      jurisdiction to enforce a settlement agreement after the underlying appeal has
      been dismissed with prejudice, the agreement must be entered into the record of
      the case. 5 C.F.R. § 1201.41(c)(2).
¶10         Initially, following the Board’s creation under the Civil Service Reform
      Act of 1978 (CSRA), Pub. L. No. 95-454, 92 Stat. 1111, Board precedent
      provided that the only requirements for it to enter a settlement agreement in the
      record and retain jurisdiction to enforce it were that the agreement was lawful on
      its face and reached freely by the parties.         Richardson v. Environmental
      Protection Agency, 5 M.S.P.R. 248, 250 (1981); see Rivera-Torres v. Department
      of Navy, 26 M.S.P.R. 199, 200 (1985); Placke v. Tennessee Valley Authority,
      13 M.S.P.R. 558, 559 (1982).       In Richardson, the Board explained that the
      resolution of an appeal on the basis of a settlement agreement constitutes a final
      decision issued under the Board’s appellate jurisdiction and, as a result, the Board
      has authority to enforce the settlement agreement.         Richardson, 5 M.S.P.R.
      at 250; see Fredendall v. Veterans Administration, 38 M.S.P.R. 366, 370 (1988)
      (citing Richardson for this proposition), modified on other grounds by Jones v.
      Office of Personnel Management, 61 M.S.P.R. 252, 254 (1994); cf. Banks v. U.S.
      Postal Service, 11 M.S.P.R. 100, 101 (1982) (stating that, in Richardson, the
      Board held that if the settlement agreement is not made a part of the record and
      the appellant withdraws the appeal, the Board loses jurisdiction).      The Board
      concluded that to interpret the CSRA in another way would conflict with public
      policy favoring settlement agreements in civil actions, which serve to avoid
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      unnecessary litigation and to encourage fair and speedy resolution of issues.
      Richardson, 5 M.S.P.R. at 250.
¶11         The U.S. Court of Appeals for the Federal Circuit has long recognized the
      Board’s authority in this regard. Citing Richardson, it found that “[i]f the MSPB
      approves the settlement agreement and makes it part of the record, the MSPB
      ‘retain[s] jurisdiction to ensure compliance with the agreement .’”           Perry v.
      Department of the Army, 992 F.2d 1575, 1577 (Fed. Cir. 1993) (quoting 5 C.F.R.
      § 1201.41(c)(2)(i)).
¶12         The standard set forth in Richardson for accepting a settlement agreement
      into the record for enforcement purposes did not include a requirement that the
      Board first determine whether it has jurisdiction over the underlying matter
      appealed. However, the Board added that requirement in Shaw v. Department of
      the Navy, 39 M.S.P.R. 586, 590-91 (1989), overruled on other grounds by
      Joyce v. Department of the Air Force, 74 M.S.P.R. 112 (1997), overruled by
      Sacco v. Department of Justice, 90 M.S.P.R. 37 (2001). In doing so, the Board
      relied on statutory language, including the language codified in 5 U.S.C. § 7701,
      which concerns the Board’s appellate procedures.          The Board reasoned that,
      under the CSRA, Congress expressed an intent to provide it with authority to
      settle cases, but only those over which it has jurisdiction.      Shaw, 39 M.S.P.R.
      at 590-91. In making this determination, the Board held that such a reading of
      the CSRA, “even if not required, would be a reasonable interpretation of both the
      [CSRA] and the public policy favoring settlements.” Id. at 591. 1 Since Shaw, the
      Board has consistently held that, before an administrative judge accepts a
      settlement agreement into the record for enforcement purposes, he must first find
      that the agreement is lawful on its face; the agreement was freely entered into by

      1
        We recognize that Shaw also concerned the Board’s authority to award attorney fees in
      a case in which the jurisdictional issue had not yet been determined. Because this case
      does not concern an attorney fees award, we need not reach that issue here.
                                                                                          6

      the parties; and the subject matter of the appeal is within the Board’s jurisdiction .
      Evans v. Selective Service System, 91 M.S.P.R. 376, ¶ 8 (2002); see Spidel v.
      Department of Agriculture, 113 M.S.P.R. 67, ¶ 6 (2010); Heath v. U.S. Postal
      Service, 107 M.S.P.R. 366, ¶ 4 (2007).
¶13         As discussed below, we believe that Shaw represents a misreading of the
      Board’s statutory enforcement authority concerning settlement agreements.
      Furthermore, with the benefit of nearly three additional decades promoting efforts
      to settle appeals under the Board’s significantly expanded jurisdiction, we
      conclude that the interpretation of the Board’s enforcement authority in Shaw has
      served to impede, rather than further, the public policy favoring settlements.
      Therefore, we now set forth a more reasonable interpretation of the Board’s
      statutory enforcement authority, which we believe will promote the public policy
      favoring settlements.    Accordingly, we overrule Shaw and its progeny to the
      extent that they required that jurisdiction be established over the underlying
      matter appealed before a settlement agreement could be accepted into the record
      and enforced by the Board.
¶14         We find that the plain language of 5 U.S.C. §§ 1204(a)(1)-(2) and 7701(h)
      supports the exercise of enforcement authority over settlement agreements that
      have been entered into the record, independent of any prior finding of Board
      jurisdiction over the underlying matter being settled.      As previously detailed,
      section 1204(a)(1) authorizes the Board to “hear, adjudicate, or provide for the
      hearing or adjudication, of all matters within the [Board’s] jurisdiction.”         A
      necessary corollary is that the Board retains the authority to hear and adjudicate
      the question of whether, in fact, it possesses jurisdiction over the issues raised in
      a given case. In Cruz v. Department of the Navy, 934 F.2d 1240, 1244 (Fed. Cir.
      1991), the Federal Circuit found that the Board may determine whether a
      resignation is involuntary, and thus an appealable constructive removal, “because
      it has jurisdiction to determine its jurisdiction.” See also Braun v. Department of
      Veterans Affairs, 50 F.3d 1005, 1008 (Fed. Cir. 1995) (finding that an appellant’s
                                                                                           7

      nonfrivolous allegations of a coerced resignation were sufficient to “trigger the
      Board’s jurisdiction [to determine its jurisdiction] at this threshold stage,”
      necessitating an evidentiary hearing); Lloyd v. Small Business Administration,
      96 M.S.P.R. 518, ¶ 16 (2004) (recognizing that the Board has inherent authority
      to determine whether a matter is within its jurisdiction).
¶15         Concurrent with the Board’s authority under 5 U.S.C. § 1204(a)(1) to
      determine whether a given matter falls within its jurisdiction, the Board also
      possesses authority under 5 U.S.C. § 1204(a)(2) to “order any Federal agency or
      employee to comply with any order or decision issued by the Board under the
      authority granted under [section 1204(a)(1)] and enforce compliance with any
      such order.”     Accordingly, pursuant to its authority under sections 1204(a)(1)
      and (2), the Board is authorized to issue, for example, acknowledgment orders,
      discovery      orders,   and   orders    to    show    cause.        See    generally
      5 C.F.R. § 1201.41(b)-(c) (discussing administrative judges’ authority); see also
      5 U.S.C. § 1204(b) (granting the Board authority to issue subpoenas, order the
      taking of depositions, and order responses to written interrogatories). Neither the
      authority to adjudicate and hear the issues in an appeal, nor to issue and enforce
      orders in connection with that adjudication or hearing, is conti ngent on a prior
      finding that the appeal falls within the Board’s jurisdiction, at least in those cases
      where the question of jurisdiction is precisely the one in need of resolution.
¶16         We find that the source of the Board’s authority to enforce settlement
      agreements is likewise independent of the Board’s jurisdiction over the
      underlying matter appealed. As the Federal Circuit expressly found, when a case
      has been resolved through settlement, the question of whether Board jurisdiction
      previously had been established over the underlying matter appealed is irrelevant
      to subsequent enforcement of the agreement, as the underlying appeal has been
      withdrawn and dismissed under the terms of the settlement agreement, thereby
      ending any jurisdiction the Board might have once had.             To that end, the
      court emphasized:
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            Although employees may petition the [B]oard to exercise its
            preexisting jurisdiction to enforce settlement agreements already
            entered into the record, the [B]oard is not then acting under its
            § 1204(a)(1) authority . . . . Once a settlement agreement has been
            entered into the record, the original appealable action is withdrawn
            or dismissed. The [B]oard retains jurisdiction over a settlement
            agreement made part of the record pursuant to its power under
            5 U.S.C. § 1204(a)(2) to enter and enforce its own orders. We
            conclude that under the [B]oard’s retained jurisdiction, 5 U.S.C.
            § 1204(a)(2), the [B]oard may decide whether an agency has
            breached a settlement entered on the record and thus violated
            its order.
      King v. Reid, 59 F.3d 1215, 1218-19 (Fed. Cir. 1995). Thus, per King, in a case
      in which the parties have settled before a jurisdictional determination is made, the
      Board retains jurisdiction under 5 U.S.C. § 1204(a)(2) to enforce the agreement if
      it has been entered into the record for that purpose.
¶17         Although our conclusion is rooted in our interpretation of the law, we
      observe that it also furthers public policy considerations. Richardson and Shaw
      both correctly recognized the long-established public policy favoring settlement
      agreements, which serve to avoid unnecessary litigation and to encourage fair and
      speedy resolution of issues. Shaw, 39 M.S.P.R. at 590; Richardson 5 M.S.P.R.
      at 250. However, in effect, Shaw’s interpretation of the CSRA greatly frustrated
      that policy.
¶18         Because Shaw and its progeny required that an appellant prove jurisdiction
      over the underlying matter appealed before the Board would accept a lawful
      settlement agreement into the record for enforcement, entire classes of appeals
      were cut off from the possibility of settlement and enforcement with the Board.
      For example, in constructive adverse action appeals, in which an appellant alleges
      that her leave, resignation, or retirement was involuntary, the dispositive issue
      before the Board is jurisdictional. See Aldridge v. Department of Agriculture,
      111 M.S.P.R. 670, ¶ 7 (2009) (observing that the jurisdictional issue and the
      merits of an alleged involuntary resignation or retirement are inextricably
                                                                                           9

      intertwined). If the appellant ultimately prevails on the jurisdictional question,
      the case is effectively over and the appellant wins on the merits. Id. The parties
      in such a case may well be motivated to settle their dispute, avoiding the time,
      expense, and risk of litigating the dispositive legal question at issue, i.e., whether
      the leave, resignation, or retirement was involuntary.
¶19         In other types of cases, parties may wish to settle an appeal before
      determining whether an appellant has satisfied any number of complex
      jurisdictional questions, even if jurisdiction is not the dispositive issue.      See
      generally Salerno v. Department of the Interior, 123 M.S.P.R. 230, ¶¶ 5-6 (2016)
      (discussing the jurisdictional standard in an individual right of action —or
      whistleblower    reprisal—appeal);     Miller   v.   Federal    Deposit    Insurance
      Corporation, 121 M.S.P.R. 88, ¶ 6 (2014) (discussing the jurisdictional standard
      in a veterans’ preference Veterans Employment Opportunities Act of 1998
      (VEOA) claim), aff’d, 818 F.3d 1357 (Fed. Cir. 2016); Becker v. Department of
      Veterans Affairs, 115 M.S.P.R. 409, ¶ 5 (2010) (discussing the jurisdictional
      standard in a right-to-compete VEOA claim). Parties may even wish to settle
      seemingly straightforward appeals, which involve the question of whether the
      appellant qualifies as an employee under 5 U.S.C. § 7511(a)(1).
¶20         In each of the aforementioned scenarios, otherwise productive settlement
      efforts, with all their potential benefits for the parties, the Board, and the
      taxpayer, may be complicated or ultimately defeated by the jurisdictional
      requirement introduced in Shaw. Under our current interpretation of the CSRA
      and the Board’s enforcement authority, the public policy objectives cited in
      Richardson and Shaw are furthered, allowing the conservation of resources
      through settlement in all colorable appeals brought before the Board.
¶21         In sum, we find that the Board’s statutory authority and public policy
      considerations both support the exercise of enforcement authority over settlement
      agreements that have been entered into its record for that purpose, independent of
                                                                                   10

      any prior finding of Board jurisdiction over the underlying matter appealed. We,
      therefore, overrule Shaw and its progeny on that issue.

                                           ORDER
¶22         This matter is remanded to the Denver Field Office.      On remand, the
      administrative judge should determine whether the parties intended to enter the
      agreement into the record for enforcement purposes. If the parties so intended,
      the administrative judge should enter the agreement into the record for these
      purposes and adjudicate the compliance matter. If the parties did not so intend,
      then the administrative judge should determine whether the agreement was based
      on mutual mistake, i.e., that the agreement could not be entered into the record
      for enforcement purposes.      If it was based on mutual mistake, then the
      administrative judge must consider whether the underlying appeal must be
      reinstated. If the agreement was not based on mutual mistake and the parties
      did not intend to enter the agreement into the record for enforcement purpose
      then the administrative judge should issue a new compliance initial decision,
      dismissing the petition for enforcement on that basis.

      FOR THE BOARD:

      ______________________________
      Jennifer Everling
      Acting Clerk of the Board
      Washington, D.C.