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Federal Circuit: USPS Breached Settlement Agreement with Former Employee

Federal Circuit: USPS Breached Settlement Agreement with Former Employee

A recent Federal Circuit decision held that the Agency breached a settlement agreement it made with its former employee.

The former employee, a USPS worker, was terminated for “Failure to Maintain a Regular Work Schedule/Tardy”. In fact, the Plaintiff suffered from Sleep Apnea, a disability that affected his breathing and sleeping and caused him to frequently arrive late for work.

In settlement of his removal appeal to the MSPB, the Postal Service agreed to provide 3 documents to help the former employee apply for disability retirement. However, they failed to provide the documents until well after that deadline had passed. (Under OPM regulations, an applicant for disability must file for retirement within one year of his separation from the government in order to be eligible.)

The Plaintiff appealed to the MSPB, claiming that the Agency did breach the settlement agreement. The MSPB found in favor of the Agency the Federal Circuit in turn found that the Postal Service had breached the agreement.

Interestingly, the Postal Service tried to argue that the former employee should have filed something – even an incomplete application – with OPM, in order to avoid losing eligibility. The Federal Circuit didn’t buy the argument – according to the Court, he would still have been irreparably harmed by the government’s breach. Apparently, Agency Counsel did not realize that federal disability retirement benefits do not begin to accrue until the application is complete.

The plaintiff received a new removal date so he could make a timely application for disability retirement, as well as back-pay and other remedies.

If you believe the Agency has breached a settlement agreement in your case, or if you need help reducing a settlement agreement to writing, it is best to have a Federal Employee lawyer review your case.