John E. Burke v. Department of Veterans Affairs ( 2014 )

UNITED STATES OF AMERICA
MERIT SYSTEMS PROTECTION BOARD
2014 MSPB 48Docket 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
2
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.