Federal Manager's Daily Report

MSPB: When a contract contains no time limit for the agreed upon terms, those terms will ordinarily control for a "reasonable" time - in this case 16 years.

A settlement agreement between an agency and a federal employee expires after a “reasonable time” has passed unless it specifies otherwise, a court has said in a case in which it found that an agency had met its obligation.

The ruling recounted that as part of a settlement in a whistleblowing case, the agency agreed to transfer the employee to another site and to have him work four days per week for 10 hours a day, including commuting time. After 16 years, though, the agency ordered the employee to return to the original site and to work a standard five-day, eight-hour schedule.

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The employee then filed a complaint with the MSPB alleging a breach of the agreement but a hearing officer ruled for the agency, as has now the Court of Appeals for the Federal Circuit.

“When a contract contains no time limit for the agreed upon terms, those terms will ordinarily control for ‘a reasonable time.’ To determine what amounts to a reasonable time, it is appropriate to consider the underlying circumstances,” according to an MSPB summary of the case.

It said that the reassignment was made to “alleviate any hostilities” in the original office that resulted from the whistleblowing. “After the passage of 16 years, the court found it reasonable to conclude that those hostilities had dissipated, and the record contained no evidence to the contrary.

The court further noted that it was highly unusual for the agency to agree to compensate the appellant for his lengthy commuting time as part of the settlement agreement, thereby suggesting that the parties did not intend for the arrangement to remain in place indefinitely,” it said.

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2020 Federal Employees Handbook