Last Updated 12/08/03
77 MSPR 453 (1998)
UNITED STATES OF AMERICA
DATE: January 26, 1998
DOCKET NUMBER: SL-1221-94-0179-X-1
JOSEPH CARSON, Appellant,
DEPARTMENT OF ENERGY, Agency.
Robert C. Seldon, Esquire, Government Accountability Project, Washington, D.C., for the appellant
Isiah Smith, Esquire, Washington, D.C., for the agency.
This case is before the Board pursuant to the appellant's petition for enforcement of a Board decision dismissing his individual right of action (IRA) appeal on the basis of a settlement agreement. Carson v. Department of Energy, MSPB Docket No. SL-1221-94-0179-W-1 (February 28, 1994). The appellant alleged that the agency is not in compliance with the terms of the settlement agreement that was entered into by the parties. The administrative judge issued a Recommendation finding both parties derelict in carrying out their responsibilities under the settlement agreement, and recommended that the parties be required to carry out all of the remaining terms of the agreement. For the reasons stated below, we find that the agency has breached the settlement agreement; thus we allow the appellant to rescind the agreement and reinstate his appeal.
The appellant filed an IRA appeal, appealing the agency's actions that denied his within-grade increase, reprimanded him, and rated him as unacceptable or marginal in his performance evaluations. Initial Appeal File (IAF), Vol. 1, Tab 1. The parties agreed to settle the case and the settlement agreement was made a part of the record for enforcement purposes. Carson v. Department of Energy, Docket No. SL-1221-94-0179-W-1 (February 28, 1994). IAF, Vol. 3, Tab 13. That decision became final on April 4, 1994, when neither party petitioned for review.
On September 6, 1996, the appellant petitioned for enforcement of the settlement agreement. The Board has authority to enforce the settlement agreement because it is lawful on its face, it was voluntarily entered into, and it settles a matter within the Board's jurisdiction. See Hill v. Department of the Air Force, 73 M.S.P.R. 176, 177-78 (1997). The following terms of the settlement agreement are relevant to the issues remaining in this enforcement proceeding:
IAF, Vol. 3, Tab 12.
The appellant claimed that the agency was in breach of the agreement in that: (1) he had not been paid his costs and the matter had not been advanced to arbitration; and (2) the agency had failed to devise a process to determine if his whistleblowing allegations have merit. Compliance File (CF), Tab 1. The agency responded by stating that its attempts to comply with provision 3 of the settlement agreement had been frustrated by the appellant's lack of cooperation. As to provision 4, the agency stated that when it agreed that the appellant's allegations of whistleblowing reprisal would be evaluated by the process directed by the Secretary of Energy, no such program was then in place. CF, Tab 5(1). According to the agency, it was the parties' expectations that when the program was finally in place, the appellant's allegations would be handled under that process. Further, the agency asserted that the parties continued to explore the possibility of resolving the appellant's concerns through other means. It also stated that on October 10, 1996, it was announced that the Secretary of Energy had set up an Office of Employee Concerns aimed at resolving whistleblower cases. The agency stated that this office, when fully functional, should represent an opportunity for the appellant to submit his concerns to a "process directed by the Secretary of Energy." Id.
In a Recommendation issued April 29, 1997, granting the petition for enforcement the administrative judge found that the agency was in partial noncompliance with the terms of the agreement. With respect to provision three of the settlement agreement, the administrative judge found that the appellant had not been paid his "costs" and the matter had not been advanced to arbitration. However, he found that the agency had shown good cause for its failure to comply since the appellant was not cooperating with the agency concerning this matter.(1) The administrative judge also found that neither the mediation process nor the alternative dispute resolution process proposed by the agency was the process bargained for by the appellant, and neither would result in a determination of whether the appellant's whistleblower allegations were meritorious. Therefore the administrative judge concluded that the agency had failed to devise a process to determine if Mr. Carson's whistleblower allegations have merit. The administrative judge recommended that the Board order the agency to create a process for determining the merits of the appellant's whistleblower allegations. Compliance File, Tab 12. The case is now before the Board on the AJ's Recommendation. 5 C.F.R. part 1201.183(b).
When a party alleges breach of a settlement agreement, the claiming party bears the burden of proof. Jones v. Office of Personnel Management, 61 M.S.P.R. 252, 254 (1994). A settlement agreement is a contract between the parties, and the Board enforces the agreement according to its terms. See Greco v. Department of the Army, 852 F.2d 558, 560 (Fed. Cir. 1988). If the terms of the agreement are unambiguous, as they are here, the intent of the parties is determined from the words of the agreement. Id.
The agreement clearly states that: "Mr. Carson's allegations of whistleblower reprisal will be evaluated by the process directed by the Secretary of the Department of Energy (i.e. the mechanism described at the PEER Conference which Mr. Thomas McBride is now working on) to determine whether they were meritorious." IAF, Vol. 3, Tab 3 par.4. The agency failed to meet its obligation in this regard when, in response to the Recommendation, the agency offered a substitute process to implement the settlement agreement (i.e., that the Office of Hearing and Appeals would review and adjudicate the matter). The agency argued that it is evident that any references made in the settlement agreement to "the process directed by the Secretary of the Department of Energy (i.e. the mechanism described at the Peer Conference which Mr. Thomas McBride is now working on)" did not refer to any specific process that existed or was contemplated. Compliance Referral File (CRF), Tab 2. The appellant's position is that the agency's proposed process falls strikingly short of what the settlement agreement requires of it. The appellant nevertheless is willing to adopt the agency's proposal to refer the outstanding matters under the settlement agreement to its Office of Hearing and Appeals for review and adjudication, on the condition that two agency proposals be rejected: (1) the agency's proposal to limit his opportunity to present live testimony in his own behalf, and (2) the agency proposal that the appellant be precluded from offering evidence of the agency's continuing course of retaliation in support of his presentation. The appellant contends that the agency seeks by these proposals to exclude anticipated prejudicial evidence. CRF, Tab 5.
Based on the agency's and the appellant's offer of evidence, we find that the process described in provision 4 of the settlement agreement, was not then in place and that it did not refer to any specific process that existed. It is also evident that the process or mechanism which Mr. Thomas McBride was presumed to be working on did not materialize. The agency proposed a specific process and could not or did not produce it; therefore the agency has breached the settlement agreement. Subsequently, the agency has proposed a substitute process, which the appellant is in favor of, except for the two points mentioned above. A settlement agreement is a contract. See Greco v. Department of the Army, at 560; McClain v. U.S. Postal Service, 40 M.S.P.R. 66, 69-70 (1989). A contract may be modified if there is mutual assent to the modification. See 1 Arthur L. Corbin, Corbin on Contracts part 9 (1963). However, here, the parties do not agree to all the terms and conditions of the proposed substitute process; therefore we do not find mutual assent to the proposed substitute process. Accordingly, we find the parties have not modified provision 4 of their settlement agreement. Therefore, we find the agency is in breach of provision 4.
We also find that the agency's breach was material. The Board has held that a material breach is a breach which relates to a matter of vital importance, or goes to the essence of the contract. Littlejohn v. Department of the Air Force, 69 M.S.P.R. 59, 62 (1995) (citing 5 Arthur L. Corbin, Corbin on Contracts part 1104 (1964)). In the instant case, the breach related to a process or mechanism that was specifically described in the agreement. However, the agency admitted that it did not produce this process. CRF, Tab 2. This was a vital part of the agreement. Since the agreement entitled the appellant to have his allegations evaluated by the process or mechanism which Mr. Thomas McBride was presumed to be working on, and the appellant was prevented from doinp so, there was a material breach by the agency.
Where there has been a material breach of the settlement agreement, the breaching party has the option of enforcing the terms of the agreement or rescinding it and going forward with the original claim. Baig v. Department of the Navy, 66 M.S.P.R. 269, 277 (1995), aff'd, 64 F.3d 677 (Fed. Cir 1995) (Table). We therefore find the agency has breached the settlement agreement, and the appellant is entitled to rescind the agreement and reinstate his appeal.
It is not clear whether the appellant desires to reinstate his appeal. Accordingly, the appellant is ORDERED to inform the Board whether he wants to go forward to enforce the remaining terms of the agreement, or to rescind the settlement agreement and reinstate his appeal. The appellant's submission must be filed with the Clerk of the Board within 20 days of the date of this Opinion and Order.
FOR THE BOARD:
Robert E. Taylor
Clerk of the Board
1. The parties' submissions now indicate that they are cooperating with each other concerning provision three and are preparing to advance the "costs" matter to arbitration as required under the settlement agreement.
Questions or comments? Contact Joseph P. Carson, P.E.