Gillespie v. Department of the Navy , 168 F. App'x 421 ( 2006 )

NOTE: Pursuant to Fed. Cir. R. 47.6, this disposition
is not citable as precedent. It is a public record.
United States Court of Appeals for the Federal Circuit
05-3193
KATHY J. GILLESPIE,
Petitioner,
v.
DEPARTMENT OF THE NAVY,
Respondent.
___________________________
DECIDED: February 15, 2006
___________________________
Before BRYSON, GAJARSA, and DYK, Circuit Judges.
PER CURIAM.
DECISION
Kathy J. Gillespie appeals from a decision of the Merit Systems Protection Board,
Docket No. SF-0752-00-0671-C-1. The Board dismissed as moot her petition to
enforce a settlement agreement. Because we agree with both parties that the Board
erroneously required a showing of material breach of the agreement as a condition of
reinstating Ms. Gillespie’s prior appeal from her removal action, we vacate the Board’s
decision and remand this case to the Board with instructions to reinstate Ms. Gillespie’s
prior appeal.
BACKGROUND
Ms. Gillespie worked as a contract specialist for the Department of the Navy until
she was removed from her position in May 2000. She appealed to the Board from the
removal action, and that appeal was resolved with a settlement agreement. The
settlement agreement provided, inter alia, that she would withdraw her appeal and
resign her position. For its part, the agency agreed that it would “cancel and purge from
the appellant’s Official Personnel Folder (OPF) the Notification of Personnel Action (SF-
50) form that removed her from her position,” and would remove all other termination
documents from other agency files; that it would remove from the agency’s files all
references regarding her performance improvement plan; and that it would “issue a
1999 and 2000 performance appraisal indicating the appellant passed” and would so
advise any third party. The agreement further provided that the parties agreed “that if
the agency or the appellant does not carry out, or rescind any action specified by the
terms of this Agreement for any reason not attributable to the acts or conduct of the
appellant or the agency, the Merit Systems Protection Board shall, upon written request
of the appellant or the agency, reinstate this appeal for further processing.”
In 2003, Ms. Gillespie inspected her OPF. She alleges that she discovered that
the personnel folder contained a copy of the form SF-50 evidencing her removal, as well
as copies of the settlement agreement and the Board’s decision dismissing her appeal
as settled. In addition, she alleges that her personnel file did not contain the revised
1999 and 2000 performance appraisals that the agency had agreed to prepare.
Believing that the agency had breached the settlement agreement, Ms. Gillespie
filed a petition for review with the Board in which she sought reinstatement of her prior
05-3193 2
appeal from the removal action against her. The Board treated her petition as a petition
for enforcement of the settlement agreement and referred the petition to an
administrative judge.
The administrative judge found that the agency had breached the settlement
agreement because, as of July 8, 2003, it had not purged the relevant form SF-50 from
Ms. Gillespie’s OPF and because her OPF contained copies of the settlement
agreement and the Board’s initial decision accepting that agreement. With respect to
Ms. Gillespie’s argument as to the performance appraisals, the administrative judge
found that the agency issued the appraisals in question, and because it was not
required to retain those appraisals in Ms. Gillespie’s OPF, she had failed to show a
breach of that provision of the settlement agreement.
Although the administrative judge found that the agency had breached the
agreement, he concluded that the agency’s breach was not material and that she was
therefore not entitled to rescission of the agreement. He explained that Ms. Gillespie
had subsequently been employed elsewhere in the agency and that her hiring “tends to
show that the agency’s breach did no harm to the vital interest in question; i.e., the
appellant’s employment prospects.” Observing that the agency had since complied with
the provisions of the settlement agreement that were in dispute, the administrative judge
dismissed Ms. Gillespie’s enforcement petition as moot. Ms. Gillespie timely petitioned
this court for review of the Board’s decision.
DISCUSSION
Both parties agree that the Board erred by requiring Ms. Gillespie to prove, as a
condition for obtaining reinstatement of the appeal from her removal action, that the
05-3193 3
breach of the settlement agreement was material. We accept the parties’ joint position
with respect to that issue.
A settlement agreement is a contract. Greco v. Dep’t of the Army, 852 F.2d 558,
560 (Fed. Cir. 1988). In construing a contract, we look to the terms of the agreement to
determine the intent of the parties at the time they contracted. Id. Ordinarily, an
examination of whether a breach is material is required to justify rescission as a
remedy. See Christopher Vill., L.P. v. United States, 360 F.3d 1319, 1335 (Fed. Cir.
2004); Thomas v. Dep’t of Hous. & Urban Dev., 124 F.3d 1439, 1442 (Fed. Cir. 1997).
In this case, however, the parties expressly agreed in the settlement agreement that in
the event of any breach, the prior appeal would be subject to reinstatement at the
behest of the nonbreaching party. Because the agreement specifically provided for
reinstatement of the appeal as a remedy for any breach by the agency, the
administrative judge should not have inquired into the materiality of the breach as a
prerequisite for granting the remedy of reinstatement of the appeal. This is not to say
that any technical departure from the strict terms of the agreement, no matter how
trivial, would necessarily have required reinstatement of the appeal, but in this case the
agency’s noncompliance was not trivial. Accordingly, we hold that the administrative
judge erred in denying Ms. Gillespie’s petition for reinstatement of her prior appeal
based on his conclusion that the agency’s breach was not material, and we vacate the
Board’s order and remand with instructions to reinstate Ms. Gillespie’s appeal from the
removal action.
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