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
2
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¶5 The administrative judge dismissed the appeal as withdrawn.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
5
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:
8
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.