A recent decision by the United States Court of Federal Claims emphasizes that settlement agreements between federal agencies and employees create a contractual relationship and that agency officials who violate such agreements expose their agencies to claims for liability damages.
In case No. 07-854 C, the court was considering the claim of an employee who, as part of a settlement agreement, agreed to give up her job with an agency and not reapply there, in return for the agency making a back payment and promising to provide only a neutral employment reference to any future prospective employer, including only such basic information as dates of employment, title and grade. It also provided that if the agency breached the agreement, her EEO complaint would be reinstated.
The employee later complained that the agency violated the agreement through information it provided to another agency where she was seeking employment, which ultimately withdrew a job offer it had made to her. The court agreed, saying the former agency provided derogatory and erroneous information about her work history. It ordered the former agency to pay the difference between what she would have earned had she started the second job per the terms of the employment offer, and what she actually earned through unemployment compensation and other employment at the time.
