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Dewey Publications Inc.
News and Case Alert
Issue #6-5

Federal Circuit Establishes Monetary Remedy for Some Breached Board Settlements

MSPB Proposed Regulatory Amendments and Comments by Peter Broida

OPM v. Miller and MSPB


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Federal Circuit Establishes Monetary Remedy for Some Breached Board Settlements

Cunningham v. United States,
Fed. Cir. 2013-2055

by Peter Broida

When there's a serious breach of a settlement that's been accepted into the MSPB record for purposes of enforcement, the nonbreaching party may seek specific enforcement or rescission of the agreement and return to the Board appeal--at least that's been the approach for decades. But what if the breach results in damages? The Board cannot--or at least does not--award damages, save for compensatory damages in the rare EEO or whistleblowing case finding discrimination or reprisal. The appellant whose settlement is violated with a resultant economic loss is out of luck with the Board unless the claim can be tied to a statutory entitlement through the Back Pay Act or kindred statute.

Cunningham v. United States, Fed. Cir. 2013-2055, decided by the Federal Circuit on April 9, 2014, provides an additional remedy--a suit for contract damages in the Court of Federal Claims. A settlement agreement is, after all, a contract, and the Claims Court has jurisdiction over many contract suits against the federal government.

The Federal Circuit, recognizing the Board's limited role in permitting specific enforcement or recision of a breached settlement agreement, considered the case of Mr. Cunnigham, whose Board-accepted settlement contained a confidentiality clause that was violated when his employer, which happened to be OPM, improperly and indirectly released detrimental information that led to Mr. Cunningham's termination by a new employer. Specific enforcement of the agreement could not be invoked against the new, private sector employer, and rescission of the settlement and return to the MSPB appeal cost Mr. Cunningham the benefit of the bargain--the limitation on disclosures through the confidentiality clause. The Federal Circuit decided that the Claims Court had Tucker Act jurisdiction over a breach of contract suit. The remedial provisions of the Reform Act (and the Board's role in administering those provisions) were not preclusive of a contract suit since, under the Court's analysis, the contract suit did not involve a review of the underlying personnel action leading to the action appealed that was later settled. The Federal Circuit relied principally on a case that permitted a breach of contract suit in the Claims Court arising from a lost-earnings damages claim stemming from a thwarted EEO federal sector settlement, Holmes v. United States, 657 F.3d 1303 (Fed. Cir. 2011). Also cited was VanDesande v. United States, 673 F.3d 1342 (Fed. Cir. 2012), involving an EEO consent decree with an associated damages claim that was not specifically described by the Federal Circuit.

For more on settlement agreements, see Broida on Federal Sector Settlement, a component of Dewey's Civil Service Advocacy Series training videos, now available for purchase; Crafting Durable Settlement Agreements by Tuck; and Settlement Forms for MSPB and EEOC by Broida.


MSPB Proposes Regulatory Amendments and Comments by Peter Broida

by Natania Davis

The MSPB recently proposed to amend its regulations governing how jurisdiction is established over Board appeals. Title 5 CFR 1201.56 provides, without qualification, that issues of jurisdiction are to be resolved by preponderant evidence. The Board notes "that 5 CFR 1201.56 is in conflict with a significant body of Board case law holding that certain jurisdictional elements may be established by making nonfrivolous allegations." To remedy the conflict, the Board proposes to amend the regulation to include the use of nonfrivolous allegations to establish certain jurisdictional elements. Other proposed changes include defining in 5 CFR 1201.4 the phrase "nonfrivolous allegations" as "an assertion that, if proven, could establish the matter at issue." The regulation will further explain that an assertion is nonfrivolous "when it is more than conclusory, plausible on its face, and material to the legal issues in the appeal." Section 1201.57 is also proposed for a change to jurisdictional matters involving claims under USERRA and VEOA.

Peter Broida, author of A Guide to MSPB Law and Practice and co-author of MSPB Case Summaries, submitted his comments to the Board for consideration. Included in his comments, in part, Mr. Broida suggests:

- More than conclusory: the question of what constitutes an assertion that is "more than conclusory" is in the mind of the administrative judge. I have seen detailed allegations of whistleblower reprisal or constructively adverse resignations or demotions dismissed by administrative judges as merely "bald statements," leading to what should have been an unnecessary petition for review or Federal Circuit case, with the attendant delay and expense. The Board needs to set out by example what constitutes more than a conclusory statement.

- Plausible on Its Face: if an allegation is more than conclusory, it should be accepted as plausible on its face; in other words, the requirement is duplicative unless the intent of the Board is to require the appellant to somehow relate a nonconclusory allegation to a legal conclusion that would support an IRA or constructive adverse action case. If the intent of the Board is to require enunciation by the appellant of the legal standard, then say so. Spell out the several statutorily defined forms of personnel actions and prohibited personnel practices that constitute a potential IRA case, and tell the appellant specifically that he or she needs to explain how the nonconclusory allegations demonstrate a personnel action, a protected disclosure, necessary knowledge by a manager, and the necessary requisites for administrative exhaustion required for an IRA case. Do the same for constructive adverse action appeals. Give examples.

- Is Material to the Legal Issues in the Appeal: The pro se appellant is not too likely to understand what the legal issues are in an IRA appeal, so simply generally referring to the term does not assist the pro se or the representative who has little experience with complex jurisdictional issues in IRA cases. So, to educate the pro se, state what the legal issues are in an IRA case and tell the pro se the need to explain the connection between the nonconclusory allegations and the legal issues in the appeal, as defined by the Board regulation. Do the same for constructive adverse action appeals. Give examples.

Mr. Broida further urges the Board to use "plain English calculated to be understood in the context of a particular case" in its regulations given the number of pro se appellants before the Board. The full text of Mr. Broida's comments can be read here.

For more on MSPB law and procedure, see Broida on MSPB Practice, a component of Dewey's Civil Service Advocacy Series training videos, now available for purchase; MSPB Discovery Forms for Agency Representatives; and MSPB Basics: The Agency Edition and MSPB Basics: A Brief Guide for the Distressed and Perplexed by Broida.


OPM v. Miller and MSPB,
2014-119 (2014)

by Natania Davis

Last week, the Federal Circuit granted OPM's petition for review of the MSPB's final order in Miller v. Dept. of Interior, 2013 MSPB 94 (2013), involving Miller's removal for "failure to accept a management directed reassignment," where the Board revised its analysis of such cases. Miller held that an agency must prove "that the reassignment was required because the agency had eliminated or had no need for the appellant's continued performance in her former position or because it needed to address the appellant's performance problems in her former position." The Department of Interior "failed to provide a 'rational basis' for requiring the appellant to accept the geographic reassignment", according to the Board, and the agency instead invoked its discretion to reassign her as a "veil" to effect her separation. Reversing Miller's removal, the Board found that her termination did not promote service efficiency.

Stay tuned for the Federal Circuit's take on the Board's analysis.

For more on agency disciplinary actions, order your copy of the 2014 editions of MSPB Charges and Penalties by Fowler and Vitaro (available in May) and Uncivil Servant by Wiley (available now). Also available now: Adverse Actions and Performance-Based Actions: Process, Law and Cases, Guidance and Pitfalls by Fowler and Vitaro and Adverse Action: A Guide for Federal Managers and Personnel Specialists by Courm.