Perry v. Department of Army, 92-3438

• Decision Date: 11 May 1993
• Docket Number: No. 92-3438,92-3438
• Citation: 992 F.2d 1575
• Parties: Janice PERRY, Petitioner, v. DEPARTMENT OF the ARMY, Respondent.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1575

992 F.2d 1575

Janice PERRY, Petitioner, v. DEPARTMENT OF the ARMY, Respondent.

No. 92-3438.

United States Court of Appeals Federal Circuit.

May 11, 1993.

Neil C. Bonney, Neil C. Bonney & Associates, of Virginia Beach, VA, submitted for petitioner. Of counsel were M. Jefferson Euchler and Charles H. Allenberg.

Brad Fagg, Commercial Litigation Branch, Dept. of Justice, of Washington, DC, submitted for respondent. With him on the brief were Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director and Martha H. DeGraff, Asst. Director. Also on the brief was Captain Loriann Campanella, Dept. of The Army, of counsel.

Before NIES, Chief Judge, ARCHER and CLEVENGER, Circuit Judges.

ARCHER, Circuit Judge.

Janice Perry appeals from the decision of the Merit Systems Protection Board (MSPB or board) dismissing her petition to enforce a settlement agreement against the Department of the Army. Perry v. Department of the Army, 54 M.S.P.R. 45 (MSPB 1992). We reverse and remand.

I.

In 1989, the Army demoted Perry from her GS-5 position and she appealed that adverse action to the MSPB. In September 1989, Perry and the Army entered into an agreement settling the appeal and made it part of the official record. Accordingly, the MSPB dismissed the appeal but retained jurisdiction to ensure compliance with the settlement agreement. See 5 C.F.R. §§ 1201.41(c)(2)(i), 1201.181-.183 (1992).

According to the agreement Perry was to continue in a GS-5 position for 120 days. She was then to suffer a demotion to a GS-4 position and after 10 months of satisfactory performance in that position, she would then be entitled to "one priority promotion consideration" for a GS-5 position. The pertinent portion of the agreement reads:

The agency agrees to grant [Perry] one priority promotion consideration to the position of Real Property Clerk, ... or any other Clerical or Secretarial, GS-5/10 position in the GS-300 series for which [Perry] qualifies, provided [Perry] completes satisfactory performance for a minimum period of ten (10) months from the date of the detail in the position and grade level of Clerk-Typist, GS-0322-04....

Pursuant to the agreement, the Army reinstated Perry to a GS-5 position for 120 days and then demoted her. At the end of 10 months, on July 28, 1990, the Army placed Perry on a "Priority Promotion Consideration Register." Almost six months later, on January 15, 1991, the Army Civilian Personnel Office referred Perry for a GS-5 position by placing her name alone on a DA Form 2600 (Referral and Selection Register), listing her as an exception to the merit selection procedures under "5D & FP Reg 690-11, App A, para 1a." ¹ The personnel office submitted this form to a designated selecting supervisor. That same day, the selecting supervisor signed the form and returned it to the Civilian Personnel Office without selecting Perry for the position. The only notation he placed on the form was the statement "REQUEST AREA WIDE CONSIDERATION."

By letter dated April 18, 1991, the Army notified Perry that, three months earlier, she had been referred for a GS-5 position but had not been selected, and that the Army had fulfilled its obligations under the agreement to grant her one priority promotion consideration. The letter contained no explanation for the decision not to select her.

On May 6, 1991, Perry filed a petition with the MSPB for enforcement of the settlement agreement, alleging that the Army's referral of Perry for the position did not comply with the agreement because she was not given "priority promotion consideration." Perry argued, and the MSPB administrative judge (AJ) agreed, that the Army was required to produce evidence of a "justifiable reason for its failure to select" Perry. Because the Army offered no reason for not selecting Perry, the AJ recommended enforcing compliance. The Army petitioned for review of the AJ's decision to the board. The board held that Perry was required to prove that the Army did not comply with the agreement, citing Fredendall v. Veterans Administration, 38 M.S.P.R. 366 (MSPB 1988). The board then found that the agreement did not require the Army to explain its reasons for not selecting Perry, but only required that the Army consider Perry before considering anyone else. The board also found no evidence of bad faith because, among other things, there was "no evidence that the selecting official knew [Perry], was aware of either the disciplinary action against her or the settlement agreement, or had any other reason to act in bad faith (or in retaliation) with respect to her referral as a candidate for priority consideration." The board thus concluded that Perry failed to carry her burden of proof. This appeal followed.

II.

This court's standard for reviewing a decision of the MSPB is established by statute. We will affirm a decision of the board unless it is

(1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;

(2) obtained without procedures required by law, rule, or regulation having been followed; or

(3) unsupported by substantial evidence.

5 U.S.C. § 7703(c) (1988).

An agreement between an agency and a petitioner settling their dispute is a final and binding resolution of an appeal in the MSPB. 5 C.F.R. § 1201.41(c)(2) (1992). If the MSPB approves the settlement agreement and makes it part of the record, the MSPB "retain[s] jurisdiction to ensure compliance with the agreement." 5 C.F.R. § 1201.41(c)(2)(i). A party may then petition the board for enforcement of such a settlement agreement under 5 C.F.R. § 1201.182. See Richardson v. Environmental Protection Agency, 5 MSPB 289, 5 M.S.P.R. 248 (1981); Fredendall v. Veterans Admin., 38 M.S.P.R. 366 (MSPB 1988).

When a party to a settlement agreement petitions for enforcement, the petitioner "must describe specifically the reasons the [petitioner] believes there is noncompliance" with the settlement agreement. 5 C.F.R. § 1201.182(a). The alleged noncomplying party must then file one of the following: (1) evidence of compliance; (2) evidence of compliance actions that have been taken, that are in process, and that remain, and a reasonable schedule for full compliance; or (3) a statement showing good cause for failure to comply completely. 5 C.F.R. § 1201.183(a)(1)(i)-(iii); cf. Fredendall, 38 M.S.P.R. at 371 (discussing burden of production when agency asserted to be in noncompliance). Thereafter the petitioner may respond to the alleged noncomplying party's submissions. 5 C.F.R. § 1201.183(a)(1). ²

In this case the board placed on Perry the burden of proving the Army's noncompliance with the settlement agreement, citing the Fredendall case. There the board likened a petition for enforcement to an action for breach of contract, stating

The courts have determined that a court-approved settlement agreement of the parties is subject to the general rules of construction and enforceability regarding contracts. An action to enforce a settlement agreement is analogous to an action for breach of contract. In the usual case, the burden of proof in an action for breach of contract rests on the plaintiff. The courts, thus, require the plaintiff in an action based on the alleged breach of a settlement agreement to prove that the defendant committed such breach.

... Therefore, the Board concludes that in a proceeding seeking the enforcement of a settlement agreement ... the burden rests on the party asserting that the settlement agreement has been breached to prove such noncompliance.

Fredendall, 38 M.S.P.R. at 371 (citations omitted). In relying on these contract principles, the board made no mention of the requirements placed upon a noncomplying party by its own regulations, 5 C.F.R. § 1201.183(a)(1)(i)-(iii). It recognized, however, the greater resources, expertise and access to disputed records of the agency and said:

Thus, the board expects the agency in this case, and in all enforcement proceedings of a settlement agreement, to produce relevant, material, and credible evidence of its compliance with the agreement upon the request of the appellant. [Emphasis added.]

Fredendall, 38 M.S.P.R. at 371.

There is discernable tension between the board's regulations and its decision in Fredendall. The regulations at a minimum obligate the respondent (usually the agency) to produce in most cases "evidence of compliance" within 15 days after the filing of a petition that merely "describes specifically the reasons the petitioning party believes there is noncompliance." Yet Fredendall indicates that the petitioner must request agency records and evidence before they have to be produced. Read more expansively, the regulations place a greater burden on the respondent than on the petitioner, i.e., to prove complete compliance or when and how complete compliance will be achieved and to do so with "narrative explanation ... and supporting documents," or to show good cause for noncompliance. Yet Fredendall expressly places the burden of proof on the petitioner.

Without deciding whether Fredendall is reconcilable with the board's regulations, a matter that we believe should be considered by the board in the first instance, ³ we conclude that it is sufficient to say in this case that both Fredendall and the regulations place a heavy burden of production on the agency. Here, the agency charged with failing to comply with the settlement agreement is wholly possessed of the evidence. It, therefore, has the duty of producing all of the evidence that it has to show that the provision of the agreement at issue has been satisfied.

As discussed infra, we are convinced that the agency has failed in this regard; it has not produced "all of the relevant material and credible evidence of its compliance" that was available to it. Fredendall, 38 M.S.P.R. at 371. Thus, the board legally erred in denying petitioner's claim on the basis that she failed to satisfy her ultimate burden of proof as...