Joyce M. Delorme v. Department of the Interior

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

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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

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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.

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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

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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.

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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

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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:

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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

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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.