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Beware of the Fine Print

A former federal employee may have inadvertently waived his prior agreement with an agency not to release information about his previous government employment. The fine print on the government application form authorized the release of information and it cost him a new job with Uncle Sam.

A recent Federal Circuit case points to the need to always read the fine print before signing those government forms. (Soler v. Department of the Treasury, U.S.C.A.F.C. No. 05-3331 (non-precedential), 2/9/06)

More than a decade ago, Mr. Soler was terminated from his employment as a revenue agent with the IRS. He appealed to the MSPB where a settlement agreement was hammered out and placed in the record. The termination was rescinded and changed to a voluntary resignation.

Soler agreed not to apply for a job in the future with the IRS, the Department of Treasury, or the corresponding agencies with New York State. In return, the agency agreed not to release information on the termination history unless he applied for one of the restricted positions. Instead, the agency would report to prospective employers that he resigned voluntarily for personal reasons. (The court quotes extensively from the settlement agreement on pp. 2-3 of its Opinion.)

Forward 10 years to find Mr. Soler applying for a customs inspector position with the Department of Homeland Security. He filled out and signed a SF 86 for the required background check. Unfortunately for him, the form included this Release Authorization:

“I Authorize custodians of such records and other sources of information pertaining to me to release such information upon request of the investigator, special agent, or other duly accredited representative of any Federal agency authorized above regardless of any previous agreement to the contrary.” (Emphasis added in the Opinion, p. 3)

You guessed it. Treasury furnished information on the termination history to the background investigator, and Mr. Soler was found unsuitable for employment in the customs inspector position. He went to the MSPB seeking to enforce the earlier settlement agreement, claiming that Treasury had violated it. The Board found that Mr. Soler had released the agency from the non-disclosure provisions of the settlement agreement when he signed the above Release Authorization. (Richard Soler v. Dep’t of the Treasury, No. NY-0752-93-0562-C-3, M.S.P.B. July 28, 2005) (Opinion p. 1)

The appeals court now affirms the Board’s decision, pointing out that Soler had “waived his contractual right under the settlement agreement to hold the agency to its prior undertaking not to disclose information concerning his removal.” (p. 5)

About the Author

Susan McGuire Smith spent most of her federal legal career with NASA, serving as Chief Counsel at Marshall Space Flight Center for 14 years. Her expertise is in government contracts, ethics, and personnel law.