Withdrawing Commitment to Retire

In Douglas v. Department of Defense, 2008 MSPB 48 (3/5/08), the The appellant was employed at a Defense Finance and Accounting Service (DFAS) facility in Norfolk, Virginia, which was scheduled for closure. The agency informed employees who were eligible for retirement that they could retire with a buyout under the terms of the VSIP. The agency required those who chose the VSIP to sign a VSIP agreement no later than September 15, 2006. The appellant elected to retire and signed the VSIP agreement on August 31, 2006. Then, on September 18, 2006, only three days after the closure of eligibility for the VSIP, the agency announced that it would retain 15 positions.

The appellant attempted to withdraw her agreement to retire and instead compete for a remaining position, but the agency refused. The appellant then filed an appeal with the Board after she was separated, claiming her retirement was involuntary. The appellant contended that had she been aware that 15 positions would be retained at Norfolk DFAS through the RIF process, "she would not have elected to retire and she would have had sufficient seniority to have obtained a position through the RIF." The appellant claimed that "[i]nducing a retirement based on incomplete or inaccurate information makes [her] retirement decision involuntary."

The administrative judge (AJ) ordered appellant to submit evidence that her appeal is within the Board's jurisdiction because the Board generally lacks jurisdiction over employee-initiated actions such as a voluntary retirement. The AJ determined that the appellant failed to make a non-frivolous allegation that her retirement was involuntary and dismissed the appeal.

The Federal Circuit previously held that if an employee requests to withdraw a commitment to retire, and the agency improperly denies the request, the employee's separation is involuntary. See Green v. General Services Administration, 220 F.3d 1313, 1316 (Fed.Cir.2000). The Board, therefore, found that given the circumstances of this case, the appellant made a non-frivolous allegation that a reasonable person would have been misled by the agency and that the Board has jurisdiction over her appeal.

Further, the Board pointed out that it has consistently held that when an employee withdraws a commitment to retire prior to its effective date, even if previously agreed to through a valid VSIP agreement, the burden is on the agency to demonstrate a valid reason for refusing to permit the withdrawal. See, e.g., Perrine, 81 M.S.P.R. 155, ¶ 11 (1999). Absent such a valid reason, the employee's separation is deemed involuntary.

Board Chairman Neil A.G. McPhie dissented on grounds that the majority ignored another part of the Federal Circuit's holding in Green, i.e., that a formal agreement to separate from the government on a specified date, supported by consideration, is a valid reason for an agency to deny an employee's request to withdraw his resignation. McPhie found in this case that because she had voluntarily entered into a written agreement with the agency to separate on a date certain in exchange for a lump sum payment, the agency's denial of her request to withdraw her commitment to retire was valid.

* This information is provided by the attorneys at Passman & Kaplan, P.C., a law firm dedicated to the representation of federal employees worldwide. For more information on Passman & Kaplan, P.C., go to https://www.passmanandkaplan.com/.

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