In Markey v. Dept. of Transportation, 2008 MSPB 238 (October 30, 2008), the MSPB was asked to rule on whether the agency’s disclosure of Ms. Markey’s settlement of her whistleblower complaint to an agency EEO investigator was a breach of the nondisclosure provision of the settlement. The Board held there was such a violation, but in the particular facts of this case, found that there was no viable remedy for the breach.
Ms. Markey filed an Individual Right of Action (IRA) appeal with the MSPB in which she argued that the Department of Transportation terminated her during her probationary period in reprisal for her protected whistleblowing activities. The parties settled Ms. Markey’s appeal which resulted in, among other things, the records being changed to reflect that Ms. Markey resigned, rather than being terminated. Another provision of the parties’ settlement agreement required that the agreement be kept confidential and that it could not be disclosed by either party "except to the MSPB or to other government officials responsible for implementing the agreement." When the agency admittedly disclosed the existence and the terms of the settlement to an agency investigator, who was investigating an EEO complaint Ms. Markey filed, Ms. Markey filed a petition for enforcement with the MSPB. In her petition, Ms. Markey requested that the terms of the settlement remain in force, but that the agency either be "sanctioned" for the disclosure or that her IRA appeal be reinstated. For its part, the agency denied that the disclosure was a breach of the settlement and argued that the terms of the settlement were ambiguous or that, if there was a breach, the breach was not "material."
In finding that a breach occurred, the Board first noted that in construing the terms of a settlement, the words are of paramount importance and parol (other) evidence of the parties’ intent will only be considered if the terms of the agreement were ambiguous. The Board found no ambiguity in the nondisclosure provision of the settlement. Moreover, the Board found no justifiable reason for the breach because the agency could have disclosed that Ms. Markey "resigned" by disclosing the SF-50 Notice of Personnel Action to the EEO investigator without the need to disclose the settlement.
The Board also rejected the agency’s argument that the breach was not "material." The Board noted its past decisions finding that the violation of a nondisclosure provision to be a material breach. The Board that the nondisclosure provision was a major benefit to Ms. Markey who, in exchange, agreed to withdraw her IRA appeal.
Nonetheless, the Board found that there was no available enforcement remedy that would cure the agency’s material breach. The Board noted that in most cases, the non-breaching party may elect to enforce the agreement or rescind the agreement and reinstate the appeal. However, in this case, Ms. Markey specifically requested that the agreement not be rescinded and that it remain in effect. The Board rejected Ms. Markey’s requests for sanctions against the agency, holding that sanctions are a means to enforce compliance. Because the agency had already failed to comply and Ms. Markey wanted the agreement to remain in force, the Board found sanctions to be inappropriate. The Board similarly denied Ms. Markey’s request that her IRA appeal be reinstated, finding no legal basis for allowing Ms. Markey to pursue her appeal without rescinding the settlement agreement.
This case points out the difficulties employees face when an agency breaches a settlement agreement. Often, the only remedy is to reinstate the case the employee settled. That remedy is frequently not a practical solution depending on the employee’s current circumstances at the time of the breach and the risks of litigating the case that was settled. In this case, Ms. Markey’s "victory" was a hollow one.
* This information is provided by the attorneys at Passman & Kaplan, P.C., a law firm dedicated to the representation of federal employees worldwide. For more information on Passman & Kaplan, P.C., go to http://www.passmanandkaplan.com.
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