Agency Misrepresentation in Settlement

Wednesday, July 24, 2013

On May 24, 2013, the Merit Systems Protection Board in Weldon v. Dept. of Veterans Affairs, 2103 MSPB 39 remanded a case for further proceedings to see if a settlement agreement was procured by an agency misrepresentation to Weldon, and thus invalid.

Weldon, a food service worker, had been removed on charges of alleged violence in the workplace and disrespectful conduct, stemming from a physical altercation with a coworker. Weldon appealed her removal to the MSPB, and the parties entered settlement negotiations. According to Weldon, during negotiations, the agency representative told Weldon that neither individual involved in the physical altercation would be reinstated to their prior positions. Relying on this representation, Weldon signed a settlement agreement converting the removal to a resignation and waiving appeal rights, and the appeal was dismissed as settled by the administrative judge. Weldon then learned that the other employee involved in the altercation was reinstated to her prior position. Weldon then filed a petition for review with the Board seeking to vacate the settlement agreement.

The Board began its analysis with the basic principle that a settlement agreement must be knowing and voluntary. Under Board precedent, a settlement agreement is involuntary if it results from an appellant's reasonable reliance on misleading statements by an agency. Here, the Board held that if the agency representative knew that the agency had reinstated, or intended to reinstate, the other employee involved in the physical altercation at the time of the settlement negotiations, then that could conceivably constitute an agency misrepresentation sufficient to void the settlement agreement.

The Board remanded the case to an administrative judge to adjudicate whether enough evidence is present to render the settlement agreement invalid. If the agreement is valid, the case is to be again dismissed as settled. If the agreement is not valid, then the administrative judge is to set it aside and resume processing of Weldon's appeal on its merits.