Thomas v. Department of Veterans Affairs

Holding: The court affirmed the Merit Systems Protection Board's decision to uphold the settlement agreement, ruling that the petitioner forfeited her claims of coercion and fraud and failed to meet the heavy burden required to invalidate the agreement.
Standard: Arbitrary, capricious, abuse of discretion, or not in accordance with law; substantial evidence
Vote: Panel decision affirming the Board.
Practical effect: The decision reinforces that parties must raise challenges to the validity of settlement agreements during administrative proceedings to preserve them for judicial review. It also clarifies that conclusory allegations of coercion are not enough to invalidate a settlement agreement.

The United States Court of Appeals for the Federal Circuit affirmed a Merit Systems Protection Board decision upholding a settlement agreement. The court held that the petitioner forfeited arguments regarding coercion and fraud by failing to raise them during the administrative proceedings.

Background

Dietrich Ann Thomas, a medical instrument technician, was removed from her position with the Department of Veterans Affairs. While her appeal to the Merit Systems Protection Board was pending, she entered into a settlement agreement with the agency that waived all claims and appeals. An administrative judge dismissed her appeal, finding the agreement lawful and voluntary. Thomas later petitioned the Board to set aside the agreement, alleging conspiracy, discrimination, and coercion, but the Board denied the petition.

The court’s reasoning

The court reviewed the Board decision for arbitrariness, procedural errors, or lack of substantial evidence. It found that Thomas forfeited her arguments regarding the voluntariness of the settlement because she did not raise them until her petition for review. Even if timely raised, the court found her arguments unpersuasive. The petitioner bears a heavy burden to prove a settlement is improper, and bare allegations of coercion without evidence are insufficient to set aside an agreement.

What it means going forward

The decision reinforces that parties must raise challenges to the validity of settlement agreements during administrative proceedings to preserve them for judicial review. It also clarifies that conclusory allegations of coercion are not enough to invalidate a settlement agreement.