Melton v. Department of the Army, 664 F. App'x 909

Background

Heather Melton, a civilian Army IT specialist, was suspended in 2009 and entered a settlement with the Army dated August 5, 2010: Army paid $35,000 and Melton voluntarily resigned, releasing pre-effective-date employment claims.
After the settlement, DFAS billed Melton for government-paid health insurance premiums covering pre-settlement leave-without-pay periods; DFAS assessed a debt and garnished roughly $2,998.72.
Melton petitioned the MSPB to enforce the settlement, arguing the settlement canceled that pre-settlement premium debt; the full Board agreed and ordered refund of amounts collected, and later found the Army in compliance based on documentation of a refund check for $2,998.72 and cancellation of the principal debt.
Melton appealed to this court, arguing (1) the Army still deducted $1,019.89 from a post-settlement Leave and Earnings Statement (pay period ending Aug. 28, 2010) to recoup pre-settlement premiums and (2) the Army failed to rehire her as allegedly promised; she also made whistleblower and other claims.
The government concedes post-effective-date collections must be refunded and produced a refund tied to the garnished amount; but the Board did not specifically address whether the $1,019.89 post-settlement deduction was separately refunded.
The Court affirms the Board except it vacates and remands for the Board to consider whether Melton is entitled to an additional $1,019.89 refund; it rejects her other challenges.

Issues

Issue	Melton's Argument	Army's Argument	Held
Whether Army complied with settlement regarding collection of pre-settlement health-premium debt	Army violated settlement by collecting/withholding amounts after effective date, including $1,019.89 deduction; she is owed refund	Army produced refund for garnished amount and contends that refund covers amounts collected post-settlement; therefore no additional money owed	Court affirms Board that debt principal was cancelled and garnishment refunded, but vacates and remands to resolve whether $1,019.89 post-settlement deduction was refunded (remand warranted)
Whether Melton may challenge validity of the settlement (fraud/mistake)	Settlement invalid due to fraud or mutual mistake (alleged)	Such challenges were not pursued below and were not properly before the court	Court refuses to consider new challenges to settlement validity on appeal; not pressed here so not before court
Whether Army promised to rehire Melton per settlement	Melton contends a rehiring promise was made and not honored	Settlement contains merger clause and unambiguous resignation; no supporting documentation of rehiring promise	Court rejects rehiring claim for lack of evidence and because merger clause bars extraneous promises
Whether whistleblower/other employment claims survive settlement and were reviewable by Board	Melton alleges reprisal, discrimination, civil-rights harms tied to reporting spyware	Settlement released all pre-effective-date employment claims; Board’s enforcement jurisdiction is limited to settlement terms	Court affirms Board’s refusal to consider whistleblower and other pre-settlement claims as they were released by the settlement

Key Cases Cited

Lutz v. U.S. Postal Serv., 485 F.3d 1377 (Fed. Cir.) (settlement agreement is a contract; construction reviewed de novo)
Lary v. U.S. Postal Serv., 472 F.3d 1363 (Fed. Cir.) (same principle on settlement interpretation)
McCrary v. Office of Pers. Mgmt., 459 F.3d 1344 (Fed. Cir.) (burden on appellant to show agency error)
Sargent v. Dep’t of Health & Human Servs., 229 F.3d 1088 (Fed. Cir.) (grounds to set aside settlement: unlawful, involuntary, fraud, or mutual mistake)
Kloeckner v. Solis, 133 S. Ct. 596 (U.S.) (procedural limits on appellate jurisdiction over certain employment claims)
Oja v. Dep’t of Army, 405 F.3d 1349 (Fed. Cir.) (jurisdictional considerations for appeals from MSPB decisions)
Manley v. Dep’t of the Air Force, 91 F.3d 117 (Fed. Cir.) (MSPB enforcement power limited to scope of settlement agreement)