Breach of Last Chance Agreement

In Lizzio v. Department of the Army, No. 2007-3224 (Fed. Cir. 7/16/08), the Federal Circuit U.S. Court of Appeals reversed the Merit Systems Protection Board and held that MSPB erroneously relied on a different ground for breach of the settlement agreement than its AJ. After Mr. Lizzio had entered into a last chance agreement to "avoid any misconduct" in exchange for the agency holding in abeyance his removal for one year and promising to cancel it if he refrained from "misconduct" during that period, the agency determined that the appellant had engaged in subsequent misconduct for which he was removed. Mr. Lizzio appealed his removal to the MSPB, alleging that he had not breached the agreement.

Following a hearing on jurisdiction, the AJ issued an initial decision reversing the agency's adverse action. The AJ found that while the appellant had engaged in "rude and obnoxious behavior," it did not violate the cited Army regulation, AR 195-3, which required that the conduct be embarrassing to the government. Accordingly the AJ concluded that Mr. Lizzio had not breached the last chance agreement and the agency could not invoke his appeal rights waiver in the agreement. The Army appealed to the Board which reversed the AJ but did so on a ground different than its AJ, finding that the appellant's behavior constituted misconduct. 105 MSPR 322 (2007).

The court reversed the Board, holding that an employee who signs a last chance settlement agreement is entitled to procedural due process. Because an appellant may establish Board jurisdiction by establishing that he didn't breach the agreement, he "must be told in what way he or she allegedly breached the agreement. Otherwise, the appellant will not know what he or she has to prove that was not done," citing Licausi v. OPM, 350 F.3d 1359, 1363 n.1 (Fed. Cir. 2003). Thus the court concluded that "the Board erred in its reliance on a ground for breach different than the one found by the AJ to have been asserted by the agency in the notice of breach" which effectively deprived Mr. Lizzio of his right to establish Board jurisdiction.

Because the Board never determined whether the agency asserted in the notice of breach that the appellant had engaged in conduct embarrassing to the government or had violated AR 195-3, the case was remanded. If on remand the Board affirms the AJ's initial decision after receiving the views of the parties, it must determine the appropriate relief which will likely be Mr. Lizzio's reinstatement.

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