U.S. Merit Systems Protection Board 
Case Report for September 14, 2012

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Note:  These summaries are descriptions prepared by individual MSPB employees. They do not represent official summaries approved by the Board itself, and are not intended to provide legal counsel or to be cited as legal authority.  Instead, they are provided only to inform and help the public locate Board precedents.


Appellant:  Alvin H. Hankins
Agency:  Department of Transportation
Decision Number:  2012 MSPB 103
Docket Number:  DE-0752-10-0078-C-1
Issuance Date:  September 11, 2012
Appeal Type:  Adverse Action by Agency
Action Type:  Removal

Back Pay

    The appellant petitioned for review of a compliance initial decision that found the agency to be in compliance with a final Board order.  In the underlying appeal, the Board ordered the agency to cancel the appellant's removal from his position as an Aviation Safety Inspector with the Federal Aviation Administration (FAA).  In his petition for enforcement, the appellant contended that the agency was not in compliance with the Board's final order because it had not paid him back pay.  The administrative judge found that, by statute, the Board was not authorized to order back pay or related benefits for FAA employees, and therefore denied the petition for enforcement.  

Holdings:  The Board ordered the agency to pay the appellant back pay and related benefits:

1.  Historically, the FAA was subject to 5 U.S.C. chapter 75 in the same manner as any other component of an executive agency, and, as such, in appeals where the appellant prevailed, the Board applied the provisions of the Back Pay Act, 5 U.S.C. 5596.  In 1995, however, Congress authorized the FAA to create is own personnel management system; the FAA did so, effective April 1, 1996, exempting itself from many key provisions of Title 5, including chapter 75 and the Back Pay Act.  Accordingly, the Board lacked authority to order the FAA to provide back pay in appeals where it reversed an adverse action under chapter 75.  In 2000, Congress restored to FAA employees the Board appeal rights they had as of March 31, 1996, but this change in the law did not make the FAA subject to the Back Pay Act.  

2.  In 2012, Congress amended 49 U.S.C. 40122(g)(3) to provide as follows:  "Notwithstanding any other provision of the law, retroactive to April 1, 1996, the Board shall have the same remedial authority over such employee appeals that it had as of March 31, 1996."

3.  This language is clear, unambiguous, and mandatory.  The amendment retroactively restores the Board's authority to award back pay to FAA employees.  Accordingly, the Board ordered the agency to prove the appellant back pay and related benefits.  

Appellant:  Cherlyn Phillips
Agency:  Department of Homeland Security
Decision Number:  2012 MSPB 104
Docket Number:  DC-0752-10-0686-X-1
Issuance Date:  September 13, 2012
Appeal Type:  Adverse Action by Agency
Case Type:  Compliance Referral

Compliance - Settlement-Related
 - Timeliness

    This case was before the Board pursuant to the administrative judge's Recommendation finding the agency in noncompliance with a settlement agreement that resolved a Board appeal of a removal action.  The settlement agreement required the agency, among other things, to cancel the removal action, process her voluntary resignation, expunge all removal-related documents from her Official personnel Foler (OPF), and provide prosepective employers only the appellant's dates of employment, position, and rate of pay.  In addition to providing that all documents relating to the removal action be removed from the OPF, the agreement provided that if "anything else relating to the removal action should arise in any other files, it will likewise be destroyed."  The paragraph dealing with responses to prospective employers also provided that "[n]o additional information shall be furnished unless the Appellant authorizes the release or as required by law, court order, or government regulation."  The agency had a contractual arrangement with the TALX Corporation under which TALX responded on the agency's behalf to state unemployment claims.  Shortly after the removal action was effected in July 1010, the agency provided TALX with the proposal and decision notices effecting the appellant's removal.  When the parties entered into the settlement agreement in November 2010, the agency did not provide TALX with the updated Notification of Personnel Action reflecting the appellant's resignation for personal reasons, nor direct TALX to destroy the documents reflecting the removal action.  In July 2011, when the appellant applied for unemployment benefits in Maryland, TALX provided the state agency with the removal documents it had obtained a year earlier, and the Maryland Department of Labor denied the appellant's claim for unemployment benefits on the basis that she had been removed from federal service for "gross misconduct in connection with the work."  

     The appellant filed a petition for enforcement contending that the agency breached the settlement agreement by providing Maryland information regarding her removal, resulting in the denial of her claim for unemployment benefits.  The judge found that the agency had materially breached the settlement agreement and recommended that the Board vacate the settlement agreement and reinstate the initial appeal.  

Holdings:  The Board granted the petition for enforcement, finding that the agency had materially breached the settlement agreement, and reinstated the initial appeal:

1.  The petition for enforcement was timely filed.

a.  A petition for enforcement alleging breach of a settlement agreement must be filed "within a reasonable amount of time of the date the petitioning party becomes aware of a breach of the agreement," and the reasonableness of the time period depends on the circumstances of each case.

b.  Here, although the appellant did not file the petition for enforcement until about 4 months after learning of the breach, she acted diligently and reasonably under the circumstances, as she asked for a copy of her OPF and waited for the agency to respond before filing her petition.

2.  The agency materially breached the settlement agreement by providing the Maryland Department of Labor documents relating to the removal action against the appellant.

a.  TALX was acting as the agency's agent when it provided the removal documents to the Maryland Department of Labor.

b.  The agency breached the settlement agreement when it failed to ensure that the removal-related documents were removed from TALX's files and replaced with the resignation documentation after the agency signed the settlement agreement.

c.  The breach was material because the requirement that the agency cancel the removal action and replace the removal documents with resignation documents was vital and went "to the essence of the contract."  It does not matter whether Maryland would have denied the application for unemployment benefits if TALX had provided the correct documentation to the state.  A breach is material when it relates to a matter of vital importance or goes to the essence of the contract -- even in the absence of harm.

d.  The breach did not fall with an exception for disclosure "as ordered by an administrative body or as otherwise required by law."  Maryland did not mandate full disclosure of the circumstances surrounding the appellant's separation from federal service; it required only sufficient information to ensure "a proper determination."  Here, the circumstances did not require the agency to provide the removal-related documents in order to contest the appellant's eligibility for benefits, as the relevant guidance plainly states that resignation for personal reasons does not entitle the employee to benefits.  Providing Maryland with the document reflecting a resignation for personal reasons would have ensured a proper determination.  

The U.S. Court of Appeals for the Federal Circuit issued nonprecedential decisions in the followings cases:

Jones v. Merit Systems Protection Board, No. 2012-3114 (Sept. 7, 2012) (MSPB Docket No. DE-3330-10-0361-l-1) (affirming the Board's decision, which dismissed Jones's VEOA claims on the ground that his complaint to the Department of Labor was untimely filed)

Young v. U.S. Postal Service, No. 2012-3105 (Sept. 10, 2012) (MSPB Docket No. AT-0752-09-0177-X-1) (affirming the Board's decision, which found that the agency breached the parties' settlement agreement and ordered specific performance)

Graves v. Department of the Air Force, No. 2012-3128 (Sept. 10, 2012) (MSPB Docket No. SF-3330-10-0696-I-3) (affirming the Board's decision, which found that the agency did not violate Graves' veterans' preference rights in making selections for medical records specialist positions)

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