Court Opinion

ID: 2723071
Source: CourtListenerOpinion
Date Created: 2014-09-02 23:12:30.727478+00
Date Added: 2024-06-11T08:33:14.438898
License: Public Domain

UNITED STATES OF AMERICA
                         MERIT SYSTEMS PROTECTION BOARD
                                      2014 MSPB 48

                             Docket Nos. CH-1221-09-0288-C-2
                                         CH-1221-09-0288-C-3

                                     John E. Burke,
                                       Appellant,
                                            v.
                             Department of Veterans Affairs,
                                         Agency.
                                      June 23, 2014

           John E. Burke, Saline, Michigan, pro se.

           G.M. Jeff Keys, Esquire, Saint Louis, Missouri, for the agency.

           Gina M. Ozelie, Milwaukee, Wisconsin, for the agency.

                                        BEFORE

                              Susan Tsui Grundmann, Chairman
                              Anne M. Wagner, Vice Chairman
                                 Mark A. Robbins, Member

                                 OPINION AND ORDER

¶1         The appellant has filed petitions for review of two compliance initial
     decisions that denied his petitions for enforcement and found that the agency
     had not materially breached the parties’ 2009 settlement agreement. We JOIN
     these cases because they are interdependent and doing so will expedite their
     processing without adversely affecting the parties’ interests.          5 C.F.R.
     § 1201.36 (a)(2).   For the reasons discussed below, we DENY the appellant’s
     petitions for review.   We MODIFY the compliance initial decision in MSPB
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     Docket No. CH-1221-09-0288-C-3 to dismiss as moot the appellant’s petition for
     enforcement concerning the removal of a reprimand from his Official Personnel
     File   (OPF).     In   all   other    respects,   the   compliance   initial   decisions
     are AFFIRMED.

                                          BACKGROUND
¶2          The appellant filed an individual right of action (IRA) appeal with the
     Board in January 2009 alleging several retaliatory personnel actions. Burke v.
     Department of Veterans Affairs, MSPB Docket No. CH-1221-09-0288-W-1 (W-1
     Appeal), Initial Appeal File (IAF), Tab 1. In October 2009, the parties entered
     into a settlement agreement resolving the appeal. W-1 Appeal, IAF, Tab 74. The
     settlement agreement provided, inter alia, as follows:         the agency agreed to
     rescind the reprimand issued to the appellant in August 2007 and to expunge any
     copy of the reprimand or reference thereto from the appellant’s OPF and any
     other agency record system. Id. at 4. The agency also agreed that it would not
     (1) provide any negative or adverse information relating to the appellant’s
     conduct or performance prior to the effective date of the settlement agreement, or
     (2) disclose the conduct cited in the August 17, 2007 reprimand to any
     prospective employer or hiring official. Id. at 5. In addition, the agency agreed,
     inter alia, to assign the appellant to a GS-15 IT Project Manager Position at a new
     duty station in Michigan, allow him to telework from his new duty station, pay
     his permanent change of station moving costs, give him a guaranteed buyout
     option benefit, and pay him a relocation allowance, bonus, and performance
     award. Id. at 4-5. In exchange, the appellant agreed, inter alia, to withdraw his
     IRA appeal and to waive all rights to process his IRA appeal and related claims in
     any forum. Id. at 5. Both parties agreed to waive any claim or action that either
     party might have against the other as of the effective date of the agreement and to
     enter the settlement into the record for enforcement by the Board. Id. at 5.
                                                                                      3

¶3         The administrative judge issued an initial decision dismissing the appeal as
     settled and entering the agreement into the record for enforcement purposes. W-1
     Appeal, IAF, Tab 75, Initial Decision (W-1 ID). The administrative judge found
     that the settlement agreement was lawful on its face, that the parties had freely
     entered into the agreement and understood its terms, and that the agreement met
     the criteria for inclusion in the Board’s record. W-1 ID at 2. Neither party filed
     a petition for review, and the initial decision dismissing the appeal as settled
     became final in December 2009. See W-1 ID at 3.
¶4         The appellant filed his first petition for enforcement in June 2010, alleging
     that the agency breached the settlement agreement by failing to initiate the
     guaranteed home buyout within 30 days of executing the settlement agreement.
     Burke v. Department of Veterans Affairs, MSPB Docket No. CH-1221-09-0288-
     C-1 (C-1 Appeal), IAF, Tab 1. The administrative judge issued a compliance
     initial decision denying the first petition for enforcement, finding that the
     agreement did not require the buyout to be initiated within 30 days. C-1 Appeal,
     IAF, Tab 16, Initial Decision. The appellant filed a petition for review of that
     compliance initial decision, C-1 Appeal, Petition for Review (PFR) File, Tab 1,
     but the Board denied the appellant’s petition by final order in July 2011, id.,
     Tab 7. Thus, the appellant’s first petition for enforcement is no longer before
     the Board.
¶5         The appellant filed his second petition for enforcement in November 2012.
     Burke v. Department of Veterans Affairs, MSPB Docket No. CH-1221-09-0288-
     C-2 (C-2 Appeal), IAF, Tab 1. He alleged that the agency violated the settlement
     agreement by distributing a training slide to agency managers that depicted
     conduct similar to that which formed the basis for the proposed reprimand the
     appellant raised in his IRA appeal. Id. at 4-9. In the course of investigating the
     appellant’s allegation of a breach, the agency discovered that the August 2007
     reprimand had not been removed from his OPF as required under the settlement
     agreement. By letter dated February 5, 2013, the agency informed the appellant
                                                                                      4

     that it had removed the reprimand on January 10, 2013. C-2 Appeal, IAF, Tab 12
     at 6-7. Upon learning of the delayed removal of the reprimand from his OPF, the
     appellant attempted to add that claim to his pending compliance proceeding. C-2
     Appeal, IAF, Tab 15. However, the administrative judge instructed the appellant
     to file a new petition for enforcement to raise additional claims of breach. C-2
     Appeal, IAF, Tab 17, Initial Decision (C-2 ID) at 2 n.1. The administrative judge
     issued a compliance initial decision denying the appellant’s second petition for
     enforcement, finding that the training slide did not violate the settlement
     agreement. C-2 ID at 2-5.
¶6         The day after the administrative judge denied the second petition for
     enforcement, the appellant filed his third petition for enforcement, alleging that
     the agency breached the settlement agreement by failing to remove the reprimand
     from his OPF until January 2013 and by taking several “personnel actions”
     against him because of his Board activity and the settlement agreement. Burke v.
     Department of Veterans Affairs, MSPB Docket No. CH-1221-09-0288-C-3 (C-3
     Appeal), IAF, Tab 1.     The appellant also alleged that he had new evidence
     relating to the training slide that was the subject of his second petition for
     enforcement. In addition, he alleged that the agency violated the agreement by
     reassigning him to a lower-graded position in December 2010.             Id.   The
     administrative judge issued a compliance initial decision denying the third
     petition for enforcement. C-3 Appeal, IAF, Tab 17, Initial Decision (C-3 ID).
     She found that, although the agency’s compliance with the agreement regarding
     the removal of the reprimand from the appellant’s OPF was delayed, the agency
     had complied with that provision of the agreement.      C-3 ID at 4-5. She also
     found that the appellant had not established a breach of the settlement agreement
     in connection with any alleged retaliatory personnel actions. C-3 ID at 5-7. The
     administrative judge considered the appellant’s alleged new evidence regarding
     the training slide, but she again found that the training slide did not violate the
     settlement agreement.    C-3 ID at 8-9.   Finally, she found that the settlement
                                                                                          5

     agreement did not prevent the agency from reassigning the appellant to the lower-
     graded position more than a year after the effective date of the settlement
     agreement. C-3 ID at 9.
¶7         The appellant has filed petitions for review of the initial decisions denying
     his second and third petitions for enforcement. C-2 Appeal, PFR File, Tab 1; C-3
     Appeal, PFR File, Tab 1. The agency has responded in opposition to the petition
     for review regarding the third petition for enforcement. 1 C-3 Appeal, PFR File,
     Tab 5. The appellant has filed a reply. C-3 Appeal, PFR File, Tab 6.

                                          ANALYSIS
¶8         A settlement agreement is a contract, and, as such, will be enforced in
     accord with contract law. Allen v. Department of Veterans Affairs, 112 M.S.P.R.
     659 , ¶ 7 (2009), aff’d, 420 F. App’x 980 (Fed. Cir. 2011).          The Board will
     enforce a settlement agreement which has been entered into the record in the
     same manner as a final Board decision or order. Id. Where the appellant alleges
     noncompliance with a settlement agreement, the agency must produce relevant
     material evidence of its compliance with the agreement or show that there was
     good cause for noncompliance. Id. The ultimate burden, however, remains with
     the appellant to prove breach by a preponderance of the evidence. Id.

     Although the agency materially breached the settlement agreement by failing to
     remove the reprimand from the appellant’s OPF within a reasonable time, the
     agency is now in compliance and there is no further relief available to
     the appellant.
¶9         Although the agency agreed in October 2009 to remove the August 2007
     reprimand from the appellant’s OPF, W-1 Appeal, IAF, Tab 74 at 4, the agency

     1
       The appellant argues that the agency’s November 18, 2013 response to his petition for
     review was untimely because the filing deadline was November 16, 2013. C-3 Appeal,
     PFR File, Tab 6 at 4. However, the original deadline fell on a Saturday, and, pursuant
     to 5 C.F.R. § 1201.23, the filing deadline was extended to Monday, November 18, 2013.
     We therefore find that the agency filed a timely response to the appellant’s petition.
                                                                                       6

      acknowledged that the reprimand remained in the appellant’s OPF until
      January 2013, more than 3 years after the effective date of the settlement
      agreement, C-2 Appeal, IAF, Tab 12 at 6-7.          The agency discovered and
      addressed its noncompliance regarding the reprimand on its own and there is no
      indication in the record that the appellant or anyone else saw the reprimand in his
      OPF after the execution of the settlement agreement. However, the fact that the
      agency eventually removed the reprimand from the appellant’s OPF does not
      mean that there was no breach.     See Mullins v. Department of the Air Force,
      79 M.S.P.R. 206 , ¶¶ 8-9 (1998) (finding that the agency breached a settlement
      agreement by waiting more than a year to remove documents from the appellant’s
      personnel records).
¶10          We also recognize that the settlement agreement did not specify a deadline
      by which the agency was required to remove the reprimand from the appellant’s
      OPF.    However, when a settlement agreement is silent as to the time of
      performance, a reasonable time under the circumstances will be presumed.
      Eagleheart v. U.S. Postal Service, 110 M.S.P.R. 642 , ¶ 11 (2009). We find that
      the agency’s delay of more than 3 years in removing the reprimand from the
      appellant’s OPF was not reasonable under the circumstances.          See Mullins,
      79 M.S.P.R. 206 , ¶¶ 8-9 (although the settlement agreement did not specify a
      deadline for the agency’s removal of information from the appellant’s personnel
      records, he had the right to expect that the agency would meet its end of the
      bargain before a year was over); Graff v. Department of the Air Force,
      39 M.S.P.R. 639 , 643-44 (1989) (30 days was a reasonable time, under the
      circumstances, for the agency to comply with the requirement to expunge
      performance data from the appellant’s official personnel record).
¶11          A breach of a settlement agreement is material when it relates to a matter
      of vital importance or goes to the essence of the contract. Kitt v. Department of
      the Navy, 116 M.S.P.R. 680 , ¶ 11 (2011).      In his IRA appeal, the appellant
      identified the August 2007 reprimand as one of the personnel actions that the
                                                                                        7

      agency allegedly took against him in retaliation for making protected disclosures.
      C-2 Appeal, IAF, Tab 1 at 11-12. The settlement agreement specifically called
      for the agency to rescind the reprimand and remove all references thereto from
      his OPF. W-1 Appeal, IAF, Tab 74 at 5. We therefore find that the removal of
      the reprimand from the appellant’s OPF went to the essence of the contract and
      that the agency’s failure to timely remove the reprimand was therefore a material
      breach of the agreement. See Kitt, 116 M.S.P.R. 680 , ¶¶ 2-3, 9, 11 (finding that
      the agency materially breached a settlement agreement by retaining a record of
      the appellant’s removal despite a provision in the agreement requiring it to
      change the removal to a 30-day suspension).       Because the agency breached a
      material provision of the settlement agreement, the appellant is not required to
      establish that the breach caused him actual harm. See Mullins, 79 M.S.P.R. 206 ,
      ¶ 11 (the breach was material not because it resulted in a monetary loss but
      because the breached provision was material to the agreement).
¶12         When one party commits a material breach of a settlement agreement, the
      other party ordinarily is entitled to either enforce the settlement agreement or to
      rescind it and to reinstate his appeal.     Kitt, 116 M.S.P.R. 680 , ¶ 12.     If a
      settlement agreement is rescinded, the settlement terms become inoperative, and
      the parties are essentially restored to the status quo ante.            Eagleheart,
      110 M.S.P.R. 642 , ¶ 15.    An appellant who chooses to rescind a settlement
      agreement risks losing any benefits he received under the agreement. Id.
¶13         In this case, the benefits the appellant received included not only
      significant financial benefits but also reassignment to a position in another state.
      W-1 Appeal, IAF, Tab 74 at 4-5.        The appellant has made clear that he is
      unwilling to give up those benefits in order to continue pursuing his IRA appeal.
      C-3 Appeal, IAF, Tab 1 at 5. Therefore, the Board cannot order rescission of the
      settlement agreement and reinstatement of the IRA appeal.          The Board also
      cannot order enforcement of the agreement concerning the removal of the
      reprimand because the reprimand is no longer in the appellant’s OPF. Therefore,
                                                                                          8

      there is no meaningful relief the Board can provide, and the appellant’s petition
      for enforcement regarding the removal of the reprimand from his OPF is moot.
      See Bables v. Department of the Army, 86 M.S.P.R. 171 , ¶¶ 19-20 (2000)
      (dismissing a petition for enforcement as moot despite the agency’s delayed
      compliance in purging a document from the appellant’s file). 2

      The administrative judge otherwise correctly denied the appellant’s petitions
      for enforcement.
¶14         For the first time on review, the appellant argues that the agency’s actions
      constituted bad-faith noncompliance with the settlement agreement. C-3 Appeal,
      PFR File, Tab 1. The Board generally will not consider an argument raised for
      the first time in a petition for review absent a showing that the appellant based
      the argument on new and material evidence not previously available despite the
      party’s due diligence. Banks v. Department of the Air Force, 4 M.S.P.R. 268 ,
      271 (1980).     The appellant has not established a basis for considering his
      argument raised for the first time on petition for review.           Moreover, for the
      reasons set forth below, we find that his argument does not provide a basis for
      reversing the initial decision even if it were properly before us.
¶15         It is well-settled that implicit in any agreement, as under other contracts, is
      a requirement that the parties fulfill their respective contractual obligations in
      good faith. Kuykendall v. Department of Veterans Affairs, 68 M.S.P.R. 314 , 323
      (1995).   A party may breach a settlement agreement by acting in bad faith
      concerning a settlement term, and an appellant may establish that an agency

      2
        On review, the appellant asks the Board to order the agency to designate the name of
      the person responsible for future compliance issues, in the event that the reprimand
      suddenly reappears in his OPF. C-3 Appeal, PFR File, Tab 1 at 7. As a current federal
      employee, the appellant can view an electronic copy of his OPF at any time. See C-3
      Appeal, PFR File, Tab 5 at 7. If the appellant’s future review of his OPF reveals any
      offending documents, he may file a new petition for enforcement. See Bables,
      86 M.S.P.R. 171, ¶ 20.
                                                                                          9

      breached the settlement agreement by showing that the agency’s post-settlement
      harassment    and   retaliation   against   the   appellant   constituted   bad-faith
      noncompliance with a term of the agreement. Id. at 323-24. “Bad faith” is not
      simply bad judgment or negligence but instead implies conscious wrongdoing
      because of dishonest purpose or moral obliquity. See Silva v. U.S. Postal Service,
      59 M.S.P.R. 268 , 272 (1993) (quoting Black’s Law Dictionary (6th Ed.), aff’d,
      40 F.3d 1250 (Fed. Cir. 1994) (Table).         The Board may only consider the
      appellant’s allegations that the agency’s post-settlement actions constituted
      retaliation for filing and settling his Board appeal to the extent that his
      allegations pertain to the alleged breach of the settlement agreement. 3          See
      Kuykendall, 68 M.S.P.R. at 322.
¶16         We find insufficient evidence to establish that the agency’s actions were
      retaliation constituting bad-faith noncompliance with the parties’ settlement
      agreement. The appellant did not submit any independent documentation, such as
      statements by witnesses, to support his allegations of retaliation. In addition, the
      appellant did not prove that the agency’s actions implied the conscious doing of
      wrong because of dishonest purpose or moral obliquity, even considering the
      agency’s delayed compliance with the requirement to remove the reprimand from
      his OPF. See Silva, 59 M.S.P.R. at 272.
¶17         We also agree with the administrative judge that the appellant failed to
      show that the agency’s use of the training slide breached the parties’ settlement
      agreement. As the administrative judge correctly held, C-2 Appeal, C-2 ID at 4,

      3
        The Board has held that it lacks jurisdiction to address claims of reprisal or other
      prohibited personnel practices in a compliance case. See Fitzpatrick v. Department of
      Justice, 91 M.S.P.R. 556, ¶ 12 (2002). The Board’s authority to enforce a settlement
      agreement is limited to determining whether either party has breached the settlement
      agreement. Kuykendall, 68 M.S.P.R. at 329. Thus, to the extent that the appellant is
      alleging that the agency committed prohibited personnel practices under 5 U.S.C.
      § 2302(b), we will not consider such claims in this compliance proceeding. See id.
                                                                                     10

      the agreement does not prohibit the agency from using a picture of an
      unidentified man standing on a chair touching ceiling tiles to demonstrate
      “mistakes to avoid” in training materials, and the Board will not imply terms into
      a settlement agreement where, as here, the agreement is not ambiguous, see Dunn
      v. Department of the Army, 100 M.S.P.R. 89 , ¶ 9 (2005).
¶18         On review, the appellant also argues that the administrative judge
      committed procedural error by failing to issue a close of the record order in
      connection with his second petition for enforcement.       C-2 Appeal, PFR File,
      Tab 1 at 8-9. It appears from the record that the administrative judge failed to
      establish a date on which the record would close. See 5 C.F.R. § 1201.58 (b) (in a
      Board appeal in which no hearing is held, the record closes on the date the judge
      sets as the final date for the filing of submissions of the parties). However, an
      administrative judge’s alleged procedural error is of no legal consequence unless
      it is shown to have adversely affected a party’s substantive rights. Karapinka v.
      Department of Energy, 6 M.S.P.R. 124 , 127 (1981). We find no evidence that the
      administrative judge’s failure to notify the appellant of the record closing date
      precluded him from submitting additional evidence during the 7-month period
      between his initial submission and the issuance of the compliance initial decision
      regarding his second petition for enforcement. The appellant submitted several
      pleadings in support of his second petition for enforcement before the
      administrative judge issued her compliance initial decision.    See C-2 Appeal,
      IAF, Tabs 5, 12, 15-16.    We therefore find that any procedural error by the
      administrative judge was not harmful.
¶19         On review, the appellant reasserts many of the arguments he raised in his
      petitions for enforcement, but he offers no new or material evidence of
      noncompliance. The appellant also argues that the administrative judge failed to
      accord proper weight to his pleadings because he electronically signed and
      submitted them using the e-filing process. C-3 Appeal, PFR File, Tab 1 at 5. We
                                                                                       11

      find no evidence that the appellant’s use of the Board’s e-filing system affected
      the administrative judge’s analysis of his petitions for enforcement.
¶20         Therefore, we AFFIRM the compliance initial decisions regarding all of the
      appellant’s claims other than the agency’s failure to timely remove the reprimand
      from his OPF.

                                            ORDER
¶21         This is the final decision of the Merit Systems Protection Board in these
      appeals.    Title 5 of the Code of Federal Regulations, section 1201.113(c)
      ( 5 C.F.R. § 1201.113 (c)).

                        NOTICE TO THE APPELLANT REGARDING
                           YOUR FURTHER REVIEW RIGHTS
            You have the right to request review of this final decision by the
      United States Court of Appeals for the Federal Circuit. You must submit your
      request to the court at the following address:
                                United States Court of Appeals
                                    for the Federal Circuit
                                  717 Madison Place, N.W.
                                   Washington, DC 20439

      The court must receive your request for review no later than 60 calendar days
      after the date of this order. See 5 U.S.C. § 7703 (b)(1)(A) (as rev. eff. Dec. 27,
      2012). If you choose to file, be very careful to file on time. The court has held
      that normally it does not have the authority to waive this statutory deadline and
      that filings that do not comply with the deadline must be dismissed. See Pinat v.
      Office of Personnel Management, 931 F.2d 1544 (Fed. Cir. 1991).
            If you need further information about your right to appeal this decision to
      court, you should refer to the federal law that gives you this right. It is found in
      Title 5 of the United States Code, section 7703 ( 5 U.S.C. § 7703 ) (as rev. eff.
      Dec. 27, 2012).     You may read this law as well as other sections of the
      United States Code, at our website, http://www.mspb.gov/appeals/uscode/htm .
                                                                             12

Additional     information     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, and 11.

FOR THE BOARD:

______________________________
William D. Spencer
Clerk of the Board
Washington, D.C.