  United States Court of Appeals for the Federal Circuit
                                        2009-3095

                              ROSEMARY O. SLATTERY,

                                                     Petitioner,

                                           v.

                             DEPARTMENT OF JUSTICE,

                                                     Respondent.


      Thomas G. Roth, Law Offices of Thomas G. Roth, of West Orange, New Jersey,
argued for petitioner.

      Michael N. O’Connell, Trial Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice, of Washington, DC, argued for respondent. With him
on the brief were Michael F. Hertz, Acting Assistant Attorney General, Jeanne E.
Davidson, Director, and Kirk T. Manhardt, Assistant Director.

Appealed from: Merit Systems Protection Board
 United States Court of Appeals for the Federal Circuit


                                      2009-3095




                             ROSEMARY O. SLATTERY,

                                                       Petitioner,

                                           v.

                             DEPARTMENT OF JUSTICE,

                                                       Respondent.




Petition for review of the Merit Systems Protection Board in AT0752010756-C-1.
                            ___________________________

                             DECIDED: January 6, 2010
                           ___________________________

Before MICHEL, Chief Judge, NEWMAN and DYK, Circuit Judges.


Opinion for the court filed by Circuit Judge NEWMAN. Dissenting opinion filed by Chief
Judge MICHEL.

NEWMAN, Circuit Judge.

      Ms. Rosemary O. Slattery requests review of the decision of the Merit Systems

Protection   Board   (“MSPB”    or   “Board”),   Slattery   v.   Dep’t   of   Justice,   No.

AT-0752-01-0756-C-1 (M.S.P.B. Aug. 13, 2008) (“Board Op.”), in which the Board held that
the agency’s 1 non-selection of Ms. Slattery for any of the law enforcement positions for

which she applied was not a violation of the Negotiated Settlement and Last Chance

Agreement (“NSLCA”) between Ms. Slattery and the DHS. We affirm the Board’s decision.

                                     BACKGROUND

       Ms. Slattery was employed by the INS as a supervisory immigration officer, GS-12,

when she was arrested and charged with the crime of obtaining money under false

pretenses through a scheme in which she purchased expensive items and returned

substitute items of a lesser value in order to obtain a refund of the higher price. Ms.

Slattery pleaded nolo contendere, paid restitution, and fulfilled the sentence of community

service.

       The agency first suspended and then removed Ms. Slattery from service. During her

appeal of the removal, the parties entered into the NSLCA. Under the NSLCA, the agency

agreed to reinstate Ms. Slattery to a non-law enforcement position with back pay and

attorney fees, established a three-year probationary period during which she was required

to comply with specified “Last Chance Provisions,” and barred her from applying for any law

enforcement or officer corps position within the agency for one year. The relevant

paragraphs of the NSLCA include:

       4. It is further agreed that Ms. Slattery will remain in this position with the
       Agency, and its successor component within the Department of Homeland
       Security (“DHS”), for a period of not less than one year from the date of this
       Agreement. During this year, Ms. Slattery is barred from applying for any law
       enforcement position or officer corps position within the DHS. Nothing in this
       agreement is intended to prevent Ms. Slattery from applying for another
       position with an Agency other than DHS.
       ....



      1
            Agency refers to the Department of Homeland Security (“DHS”) and a
predecessor agency, the Immigration and Naturalization Services (“INS”).


2009-3095                                    2
       11. This Settlement Agreement represents the full and complete agreement
       of, and shall be executed in good faith by, the parties hereto. No other
       promises shall be binding unless placed in writing and signed by both parties.
       ....
       23. The duration of the Last Chance Provisions of this Settlement Agreement
       shall be three (3) years, which begins from the date this Agreement is fully
       executed. At the expiration of the three years, the Last Chance Provisions of
       this Agreement shall become null and void, and any reference to the
       indefinite suspension or removal action shall be removed from Ms. Slattery’s
       Official Personnel File.

The NSLCA was entered into the MSPB record for enforcement purposes. After the one-

year bar expired, Ms. Slattery applied for twenty-four positions in the agency in the area of

law enforcement. She was not selected for any of them. Ms. Slattery then filed a petition

with the MSPB to enforce the NSLCA, arguing that the agency breached the NSLCA by

failing to give her applications “good faith” consideration. Ms. Slattery argued that she

possessed superior qualifications for at least some of the positions for which she applied,

and, therefore, the agency must have held her past criminal conduct against her. The

MSPB found that Paragraph 11’s requirement for “good faith” does not require that the

agency select Ms. Slattery for any law enforcement position. Holding that “nothing in either

cited provision, separately or together, requires that the appellant be selected for any

position,” the Board ruled that the agency did not breach the NSCLA. Board Op. at 3. This

appeal followed.

                                        DISCUSSION

       The MSPB’s decision shall be sustained on appeal unless it is (1) arbitrary,

capricious, an abuse of discretion, or otherwise not in accordance with law; (2) obtained

without procedures required by law, rule or regulation having been followed; or (3)

unsupported by substantial evidence. 5 U.S.C. §7703(c). A settlement agreement is a

contract, and is reviewed, like all contracts, to ascertain its meaning including, if required to



2009-3095                                      3
implement its purposes, determination of contractual intent and mutual understanding. See

Conant v. Office of Pers. Mgmt., 255 F.3d 1371, 1376 (Fed. Cir. 2001); Greco v. Dep’t of

the Army, 852 F.2d 558, 560 (Fed. Cir. 1988). However, when a contract’s words and

meaning are unambiguous, its terms are not subject to variation. George Hyman Constr.

Co. v. United States, 832 F.2d 574, 579 (Fed. Cir. 1987).

                                             I

       The agency states that the MSPB lacked jurisdiction over Ms. Slattery’s petition for

enforcement of the NSLCA because an agency’s non-selection decision is not reviewable

except in certain situations set by statute and not applicable here. See Edwards v. Dep’t of

Justice, 87 M.S.P.R. 518, 521 n.2 (2001) (exceptions to the general rule of non-review are

“claims that the agency’s decision was made in retaliation for whistleblowing, see 5 U.S.C.

§ 2302(a)(2)(A)(i); was the product of discrimination based on uniformed service, see 38

U.S.C. §§4311, 4324; or was violative of the candidate’s veterans’ preference rights, see 5

U.S.C. §3330a(d)(1)”). Absent a designated exception, non-selection is not appealable to

the MSPB. However, the MSPB does have authority to determine whether the agency

complied with a settlement agreement. “[W]hen the issue is compliance with a settlement

agreement, compliance review is not limited to those aspects of the settlement for which an

independent appeal is available.” Manley v. Dep’t of the Air Force, 91 F.3d 117, 119 (Fed.

Cir. 1996). Thus, the MSPB had jurisdiction to resolve whether the NSLCA agreement was

“executed in good faith” by the agency.

                                             II

       Ms. Slattery argues that the NSLCA precludes the agency from considering her past

criminal record, in evaluating her applications for law enforcement positions. She states




2009-3095                                    4
that Paragraph 4 of the NSLCA, which barred her from applying for any law enforcement

position or officer corps position for one year, read with Paragraph 11’s requirement of

good faith, requires the agency to consider her applications, after the expiration of the one

year bar, as if the criminal conduct had not occurred. The MSPB held in effect that the

NSLCA does not include or imply a requirement that the agency must ignore her history in

evaluating her application for a law enforcement or officer corps position.

       Ms. Slattery argues that in reviewing her petition for enforcement the Board is

required to review the qualifications of the applicants who were actually selected for the

positions for which she applied, in order to ascertain whether Ms. Slattery possessed

superior qualifications, and, if she did, to rule that her non-selection was a breach of the

NSLCA. This argument requires the premise that the agency was not acting in good faith if

it took her criminal past into account when evaluating her application for a law enforcement

position. The Board held that consideration of her past was not a breach of “good faith.”

We agree that a contrary mutual understanding cannot be inferred from the NSLCA, which

states that “no other promises shall be binding unless placed in writing and signed by both

parties.” NSLCA ¶ 11.

       We conclude that the NSLCA does not require the agency to ignore Ms. Slattery’s

history, and that “good faith” does not require pretending that this history does not exist. If

it had been intended that knowledge of her past conduct could have no role in evaluating

her applications for law enforcement positions after one year, the NSLCA reasonably would

have included such a critical provision, for a mutual requirement of “good faith” does not

require concealing the truth. Since the basis of Ms. Slattery’s request for review by the

MSPB of the agency’s hiring choices was that the agency had not acted in good faith if it




2009-3095                                     5
had considered Ms. Slattery’s past record, there is no ground for MSPB review of the

agency’s hiring choices. Thus, the MSPB did not err in denying Ms. Slattery’s request for

discovery and related inquiry as to the agency’s selection for the positions for which she

had applied.

       We affirm the Board’s holding that the agency did not breach the NSLCA by not

selecting Ms. Slattery for a law enforcement or officer corps position.

                                          AFFIRMED.




2009-3095                                    6
 United States Court of Appeals for the Federal Circuit

                                       2009-3095


                              ROSEMARY O. SLATTERY,

                                                              Petitioner,

                                            v.

                             DEPARTMENT OF JUSTICE,

                                                              Respondent.


Petition for review of the Merit Systems Protection Board in AT0752010756-C-1.

MICHEL, Chief Judge, dissenting.


      Petitioner Rosemary Slattery appeals the Merit Systems Protection Board’s

(“MSPB’s”) final decision that as a matter of law the Agency 1 could not have breached

the Negotiated Settlement and Last Chance agreement (“NSLCA”) entered into by the

Agency and Ms. Slattery. Because the MSPB’s interpretation of the NSLCA would

render superfluous and meaningless the one-year ban on Ms. Slattery’s applying for law

enforcement positions within the Agency and would nullify the good-faith clause, I would

reverse and remand for fact-finding in light of the correct construction of the agreement.

      Settlement agreement disputes are governed by contract principles. Kasarsky v.

Merit Sys. Prot. Bd., 296 F.3d 1331, 1336 (Fed. Cir. 2002). “A settlement agreement is

a contract, and its construction is a question of law which this court reviews de novo.”


      1
            As in the majority opinion, “Agency” refers interchangeably to the
Department of Homeland Security (“DHS”) and Immigration and Naturalization Services
(“INS”).
Conant v. OPM, 255 F.3d 1371, 1376 (Fed. Cir. 2001). “If there is an ambiguity in the

formation of the agreement or during its performance, we implement the intent of the

parties at the time the agreement was struck.” Harris v. Dep't of Veterans Affairs, 142

F.3d 1463, 1467 (Fed. Cir. 1998). Words of the agreement are given their ordinary

meaning unless the parties intended otherwise. Id.

       There are three possible ways in which Ms. Slattery could allege the Agency

erred in handling her applications for law enforcement positions. First, there might have

been some problem with the Agency’s process of comparing Ms. Slattery to other

candidates, such that Ms. Slattery was not selected even though she should have been.

Second, the Agency might have erred somehow by taking into account Ms. Slattery’s

criminal background.     Finally, the Agency might never have given Ms. Slattery’s

applications any consideration at all.     Given the lack of discovery to date on the

Agency’s selection process, it was impossible for Ms. Slattery to clearly allege any

particular one of these theories, and given the lack of fact-finding by the MSPB, we

cannot rule out the possibility of any of them having occurred. 2 We can only determine



       2
               In her letter initiating the MSPB enforcement action, Ms. Slattery alleged
only that she had “applied for approximately 24 law enforcement and 6 non-law
enforcement positions with DHS” and that, given her non-selection for any of these
positions, it was reasonable to assume that “the Agency is violating the letter and spirit
of the NSLCA by continuing to use [Ms. Slattery’s] prior misconduct as an unspoken
reason to justify her non-selection.” I do not read this as limiting Ms. Slattery’s theories
to the single allegation that the Agency considered her applications and failed to select
her because it paid some allegedly improper attention to her criminal background.
Rather, I read this as a broad allegation that the Agency had used its knowledge of Ms.
Slattery’s criminal background to take some unspecified action that resulted in her never
being selected for any position for which she applied. Because Ms. Slattery was not
privy to the inner workings of the Agency’s selection process, she could not make a
more specific allegation about the improper Agency action. As I have noted, that action
could have been either an acknowledgement when comparing Ms. Slattery’s credentials
to those of the other applicants that Ms. Slattery had a criminal past (the theory


2009-3095                                    2
whether any of these theories, if ultimately proved by Ms. Slattery, would constitute a

breach of the settlement agreement.

       The MSPB addressed the first theory. It understood Ms. Slattery to be arguing

that the Agency was “not in compliance with the” NSLCA because “the [A]gency failed

to select [her] for any one of the 30 vacancies.” 3 On appeal, Ms. Slattery states that

“contrary to the [MSPB]’s suggestion in its decision, [she] does not argue that there is

an express provision in the NSLCA which requires the Agency to select her for any of

the positions for which she applied.” At oral argument, Ms. Slattery made clear that she

was only alleging that the Agency breached the NSLCA by not considering her for

positions, and that she was not alleging that the Agency breached the NSLCA by not

hiring her for a position. Regardless of whether Ms. Slattery’s filings with the MSPB

could be reasonably interpreted to allege the Agency breached the NSLCA by not

selecting her, Ms. Slattery has expressly abandoned this argument on appeal, and it

need not be considered further.




considered by the majority) or a refusal to give Ms. Slattery’s applications full
consideration. Had Ms. Slattery been given the opportunity to take discovery on the
selection process, I might reasonably be able to fault her for failing to choose one of
these allegations. But given the lack of any discovery or fact-finding, we cannot rule out
any of these theories of breach.
       3
               Although the MSPB characterized Ms. Slattery’s argument as urging that
the Agency erred by failing to select her, the MSPB also ruled on the other theories
when it found “no contractural [sic] duty in the agreement that addresses the [A]gency’s
consideration of or action on the appellant’s applications for vacant positions.” This
finding effectively foreclosed the possibility that either (1) the Agency’s consideration of
Ms. Slattery’s criminal background, or (2) the Agency’s failure to read Ms. Slattery’s
applications at all, could constitute a breach of the settlement agreement. The majority
rightly holds that the first of these possibilities could not constitute a breach but fails to
consider the other possibility.


2009-3095                                     3
       The majority addresses the second theory. It characterizes the issue as whether

the Agency was “require[d] . . . to ignore Ms. Slattery’s history” and to “pretend[] that this

history d[id] not exist.” I agree with the majority that the Agency would be permitted

(indeed, expected) to consider Ms. Slattery’s criminal behavior when evaluating her

applications, especially those for law enforcement positions.

       But I do not agree with the majority that the elimination of the first two theories

Ms. Slattery might allege resolves the case. There is more at stake here than whether

the Agency was permitted to consider Ms. Slattery’s earlier criminal conduct when

deciding whether to select her for a law enforcement position. Ms. Slattery suggests

that it is possible that the Agency never considered her applications at all. The majority

neglects this possibility in affirming the MSPB. As discussed below, I would find that, if

ultimately proven, a complete refusal by the Agency to consider Ms. Slattery for open

positions after the expiration of her one-year ban would constitute a breach of the

settlement agreement.

       The portions of the NSLCA relevant to this question provide:

       4. It is further agreed that Ms. Slattery will remain in this [non-law
       enforcement] position with the Agency, and its successor component
       within the [DHS], for a period of not less than one year from the date of
       this Agreement. During this year, Ms. Slattery is barred from applying for
       any law enforcement position or officer corps position within the DHS.
       Nothing in this agreement is intended to prevent Ms. Slattery from
       applying for another position with an Agency other than DHS.

       ....

       11.   This Settlement Agreement represents the full and complete
       agreement of, and shall be executed in good faith by, the parties hereto.
       No other promises shall be binding unless placed in writing and signed by
       both parties.




2009-3095                                     4
       The government argues that this language did not give Ms. Slattery the right to

have her job applications considered for vacant positions. According to this argument,

the agreement does not contain a provision governing Ms. Slattery’s applications for job

vacancies apart from lifting her one-year application ban.         Thus, the government

interprets clauses four and eleven literally and narrowly, such that Ms. Slattery may

apply for vacancies after the ban expires but that the Agency need not consider her

applications. The government’s position is that nothing in the NSLCA addresses the

Agency’s consideration of her applications, meaning that the Agency could not breach

the NSLCA by failing to consider those applications. In spite of the good faith clause,

the government argues that a requirement that the Agency consider Ms. Slattery’s

applications would constitute an additional term that would have to be explicit to be

enforceable. In effect, the government urges that, despite the good-faith clause, there

can be no obligations implied by this agreement. By failing to address the possibility

that the Agency did not even consider Ms. Slattery’s applications, the majority implicitly

agrees with and adopts this reasoning.

       Ms. Slattery, on the other hand, argues that permitting her to apply for job

vacancies but not considering her applications would render the contract illusory.

Although the majority finds nothing in the agreement that affords Ms. Slattery

consideration during the application process, Ms. Slattery alleges that after the

expiration of the one-year ban she was entitled to full consideration along with everyone

else in the applicant pool, based on all the information available to the evaluators.

       I agree with Ms. Slattery. The government’s reading of the NSLCA would render

the one-year ban superfluous and meaningless. Instead, we must assume the parties




2009-3095                                    5
intended for the one-year ban to serve some purpose. For both the one-year-ban and

good-faith clauses to have meaning, Ms. Slattery must be entitled after the expiration of

the one-year ban to apply for job vacancies at DHS and to have her qualifications

evaluated on the merits. I would therefore hold that the MSPB erred by ruling that it

could not under any circumstances constitute a breach for the Agency to fail to consider

Ms. Slattery for the Agency positions for which she applied. I would remand to the

MSPB for discovery and evidentiary proceedings aimed at determining whether DHS

did fail to consider Ms. Slattery for those positions.

       Under the logic of the government’s argument, the Agency must allow Ms.

Slattery to apply for law-enforcement positions after the expiration of the one-year ban,

but the Agency need not evaluate or even read her applications or any supporting

papers; immediately after opening them, the Agency could simply throw Ms. Slattery’s

applications into the waste paper basket. That cannot be how the Agency is permitted

to act. And yet, given the majority’s refusal to address the issue, this is precisely how

the majority permits the Agency to act.

       Of course, I express no opinion as to whether the Agency actually breached the

NSLCA by refusing to consider Ms. Slattery’s applications along with those of other

applicants. The MSPB did not reach this factual issue. Nor do I express any opinion as

to whether, given Ms. Slattery’s earlier criminal conduct, Ms. Slattery could or should

have been selected for a law-enforcement position by the Agency following

consideration of her applications. But the MSPB’s holding that, even if Ms. Slattery’s

applications were never read by the Agency, no breach was possible as a matter of law

was, in my opinion, legally incorrect as based on an unreasonable construction of the




2009-3095                                     6
terms of the settlement agreement. Because I would reverse and remand, I respectfully

dissent.




2009-3095                                7
