MSPB Law Blog

By John V. Berry, Esq., www.berrylegal.com

In Mital v. Dep’t of Agriculture, 2011 MSPB 73 (Aug 4, 2011), the Merit Systems Protection Board (MSPB) reversed the decision of the Administrative Judge who had refused to enforce a settlement agreement that had been previously worked out between the Appellant and the Department of Agriculture in an earlier case.   The MSPB reversed the Administrative Judge's decision because the settlement agreement at issue had been ambiguous and required additional fact finding to determine if it applied to Appellant's case

Background

The settlement agreement at issue had involved an earlier disciplinary case where the Appellant and the Department of Agriculture had resolved a 30-day “conduct unbecoming” suspension through a settlement agreement where the Agency agreed to reduce the suspension to 14 days.  In exchange for the Agency's reduction in penalty, the Appellant stipulated in the settlement agreement that he would “limit personal business at work to established breaks, unless granted written permission otherwise from his supervisor.”  The Appellant also agreed to resign and waive any further appeal rights should he engage in personal business at work without permission.

The Agency later alleged, a number of months after the settlement agreement had been executed, that the Appellant had been engaging in personal business at work, by contacting a friend while at work by telephone.  The Department of Agriculture then informed the Appellant that they were going to process his resignation as a result of his actions.  Appellant contested this and the Agency processed the Appellant's resignation anyway.  The Appellant then brought a petition to enforce his settlement agreement to the MSPB, claiming that the agreement required the parties to meet and attempt to resolve any non-compliance issues in “good faith” prior to taking any formal actions against him.

The Administrative Judge dismissed Appellant’s petition to enforce the settlement agreement as to his argument that the Agency had to first attempt to resolve any non-compliance on Appellant’s part prior to moving forward with Appellant’s resignation.  The specific contractual language at issue was the following settlement clause, located at Section 3(3) of the settlement agreement:

“If a party believes the other has not fully complied with one or more terms of this Agreement, that party or his/her representative shall make a good faith effort to contact the other party to discuss and seek correction of any compliance or implementation issues before taking any formal non-compliance actions.”

The Appellant appealed the dismissal of his case by the Administrative Judge to the full Board of the MSPB.  On appeal, the Board reversed the finding of the Administrative Judge, holding that:

“[T]he appellant and the agency have construed the meaning of Section 3(3) differently. The appellant construed the terms “non-compliance action” to include the agency’s actions to effect his resignation, thus obligating the agency to “seek correction” prior to effecting his resignation. The agency interpreted the terms “non-compliance action” to specifically mean a petition for enforcement with the Board, thus obligating the appellant to “seek correction” prior to filing a formal petition for enforcement but not requiring the agency to “seek correction” of the appellant’s behavior prior to effecting his resignation. The settlement agreement is susceptible to two differing, reasonable interpretations, and there is no evidence in the record regarding the parties’ intent at the time they entered into the settlement agreement. See Sweet, 89 M.S.P.R. 28, ¶¶ 13, 15. For these reason, we find that the terms of the settlement agreement are ambiguous and remand this case . . . .”

The end result in Mital was that the case was sent back to the Administrative Judge to re-open the case and to determine what the language in Section 3(3) of the settlement agreement had been intended to mean.

Legal Principles Involved in Board Review of Settlement Agreement in Mital

Some important principles in the Mital Case apply to any MSPB matters involving the enforcement of settlement agreements, and include the following important considerations:

1.  A settlement agreement is a written contract and the interpretation of such terms will be a question of law.  In construing the meaning of a written contract, the MSPB first looks to the terms of the settlement agreement to determine the parties’ intent.  Outside (Extrinsic) evidence, i.e., testimony of parties and writings, other than from the contract itself, should only be considered by the MSPB if the terms of the agreement are ambiguous (i.e. when the contract is susceptible to differing reasonable interpretations).

2.  When a settlement agreement before the MSPB is reasonably susceptible to different interpretations, and there is no evidence in the record regarding the parties' intent at the time they entered the agreement, the MSPB will find that the terms at issue are ambiguous and fact finding on the intent of the provision should be undertaken by the administrative judge.

Conclusions Regarding the Mital Case

In the Mital case, the Board of the MSPB reversed the Administrative Judge’s refusal to evaluate the Appellant’s arguments about whether the Agency had lived up to it’s obligations under the earlier settlement agreement.  This is a good case for those appellants seeking to enforce terms within a settlement agreement.  Often times, Appellants can have difficult times in pursuing enforcement of a settlement agreement before an administrative judge.  In this case, however, the Appellant decided to appeal the enforcement decision to the Board which required that the Administrative Judge evaluate the provision on remand.

After reviewing the opinion, it appears that the Board took a very fair minded view of the settlement agreement and believed that the argument put forth by the Appellant could apply as he had argued and required the Administrative Judge to specifically evaluate the issue of how the “good faith” clause was supposed to function.   This could very well require the Agency to reinstate the Appellant to his former position, along with backpay and lost benefits, depending on the evaluation of the compliance terms in this case.  

Contact Us

This law firm represents federal employees in these types of MSPB cases and can be contacted at (703) 668-0070 or www.berrylegal.com to arrange for an individual consultation regarding MSPB cases.