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MSPB May Enforce Settlement Agreements Independent of Board's Jurisdiction Over the Underlying Matter Appealed
Practical Law Legal Update w-005-2735 (Approx. 5 pages)
MSPB May Enforce Settlement Agreements Independent of Board's Jurisdiction Over the Underlying Matter Appealed
by Practical Law Labor & Employment
| Published on 09 Jan 2017 • USA (National/Federal) |
In Delorme v. Department of the Interior, the Merit Systems Protection Board (MSPB) held that it may enforce settlement agreements independent of its jurisdiction over the underlying matter appealed.
On January 4, 2017, in Delorme v. Department of the Interior, the Merit Systems Protection Board (MSPB) held that based on statutory authority and public policy considerations, it may enforce settlement agreements independent of its jurisdiction over the underlying matter appealed. In doing so, the MSPB overruled Shaw v. Department of the Navy.
Background
In March 2011, the Department of Interior (DOI) appointed Delorme as Police Officer in the Office of Justice Services for the Bureau of Indian Affairs. In July 2012, the agency terminated Delorme, citing probation regulations. Delorme filed an MSPB appeal. The administrative judge dismissed the appeal for lack of jurisdiction, because Delorme was not an employee under 5 U.S.C. § 7511(a)(1). The MSPB found that Delorme was entitled to a jurisdictional hearing because she had completed her one-year probationary period.
While the issue of whether the MSPB had jurisdiction over the underlying issue was not yet resolved, the parties reached a settlement agreement. The administrative judge:
- Dismissed the appeal.
- Found the agreement lawful and freely reached.
- Noted that he had reminded the parties that since the matter of whether the MSPB had jurisdiction over the underlying matter was unresolved, it could not enforce any settlement agreement reached (even though the agreement was binding on the parties).
- Accepted the agreement into the record only to memorialize that the appeal was withdrawn as part of the agreement.
Delorme filed a petition for enforcement, alleging that the DOI violated the agreement. The administrative judge dismissed the petition since the agreement was not enforceable by the MSPB due to the unresolved jurisdictional matter. Delorme filed a petition for a review of the dismissal.
Outcome
The MSPB:
- Held that based on statutory authority and public policy considerations, it may enforce settlement agreements independent of its jurisdiction over the underlying matter appealed.
- Overruled Shaw v. Department of the Navy and its progeny concerning the requirement that jurisdiction be established over the underlying matter appealed before a settlement agreement could be accepted into the record and enforced by the MSPB (39 M.S.P.R. 586, 590-91 (1989)).
- Remanded the matter, so the administrative judge could determine whether the parties intended to enter the agreement into the record for enforcement purposes.
The MSPB noted that:
- Under 5 U.S.C. § 1204, the MSPB shall:
- adjudicate or hear all matters within its jurisdiction (5 U.S.C. § 1204(1)); and
- order any federal agency or employee to comply with any MSPB decision issued under 5 U.S.C. § 1204(1) (5 U.S.C. § 1204(2)).
- Section 1204 does not address the MSPB's authority to settle appeals but 5 U.S.C. § 7701(h) allows the MSPB to settle matters subject to its appellate jurisdiction.
- For the MSPB to retain jurisdiction to enforce a settlement agreement after the appeal's dismissal, the agreement must be entered into the case's record (5 U.S.C. § 1201.41(c)(2)).
- According to MSPB precedent, to enter a settlement agreement in the record and retain jurisdiction to enforce it, the agreement must be lawful on its face and reached freely (Richardson v. Environmental Protection Agency, 5 M.S.P.R. 248, 250 (1981); Rivera-Torres v. Department of Navy, 26 M.S.P.R. 199, 200 (1985)).
- A resolution of an appeal based on a settlement agreement constitutes a final decision under the MSPB's appellate jurisdiction and the MSPB can enforce the agreement. This conclusion:
- complies with public policy favoring settlement in civil actions (Richardson, 5 M.S.P.R. at 250); and
- has long been recognized by the US Court of Appeals for the Federal Circuit (Perry v. Department of the Army, 992 F.2d 1575, 1577 (Fed. Cir. 1993)).
- In Shaw, the MSPB added the requirement that the Board first determine whether it has jurisdiction over an appeal before accepting a settlement agreement into the record for enforcement purposes, reasoning that Congress had intended to provide the MSPB with authority to only settle cases over which it has jurisdiction (39 M.S.P.R. at 590-91).
- Since Shaw, the MSPB has held that before an administrative judge accepts a settlement agreement into the record for enforcement, he must find that:
- the agreement is lawful on its face;
- the agreement was freely entered into by the parties; and
- the appeal's subject matter is within the Board's jurisdiction.
- Shaw should be overruled because the decision:
- was a misreading of the MSPB's authority to enforce settlement agreements; and
- had impeded the public policy favoring settlements.
- The source of the MSPB's authority to enforce settlement agreements is independent from its jurisdiction over the underlying matter appealed, based on:
- statutory authority, which supports the conclusion that the MSPB's authority to adjudicate and hear issues in an appeal, or to issue and enforce orders in connection with that adjudication or hearing, is not contingent on the appeal falling within MSPB jurisdiction (at least in cases where jurisdiction is the question needing resolution) (5 U.S.C. §§ 1204(a)(1)-(2) and § 7701(h));
- circuit court findings that when a case is resolved through settlement, the question of the establishment of MSPB jurisdiction over the underlying matter appealed becomes irrelevant, since the underlying appeal has been withdrawn and dismissed under the settlement agreement, ending any jurisdiction the MSPB might have had (King v. Reid, 59 F.3d 1215, 1218-19 (Fed. Cir. 1995); and
- the furtherance of the public policy favoring settlement agreements (see Aldridge v. Department of Agriculture, 111 M.S.P.R. 670, ¶ 7 (2009); Salerno v. Department of the Interior, 123 M.S.P.R. 230, ¶¶ 5-6 (2016); Miller v. Federal Deposit Insurance Corporation, 121 M.S.P.R. 88, ¶ 6 (2014)).
Practical Implications
In Delorme, the MSPB held that it can enforce settlement agreements independent of its jurisdiction over the underlying matter appealed. In addition to the MSPB's legal conclusions concerning the irrelevance of this jurisdictional requirement, it noted that Shaw, and the cases that followed it, cut off entire classes of appeals from the possibility of settlement and enforcement with the MSPB over the past 28 years. The MSPB has set forth a more reasonable interpretation of its enforcement authority. Eliminating the requirement that jurisdictional issues be resolved before enforcing a settlement agreement should provide more efficient results and further the public policies of resolving matters expeditiously and avoiding unnecessary litigation.