Federal Circuit to the Rescue

A Postal Service employee gets a big win from the Federal Circuit Court of Appeals. He had a sleep disorder that led to excessive drowsiness and he was late to work frequently. He gets another shot at disability retirement as a result of a new court decision.

A former United States Postal Service employee in Omaha, Nebraska won big against the agency in a recent appeals court decision. (Lary v. United States Postal Service, C.A.F.C. No. 06-3050 (Precedential), 12/21/06). Mr. Lary had lost out on his bid for disability retirement due to a lapse in the time limit for filing, but, thanks to the court, he gets another shot at it. The facts are taken from the court’s opinion.

Mr. Lary had a sleep disorder that led to excessive drowsiness. This in turn led to Lary frequently being late for his job at the Benson USPS station. Eventually the agency removed Lary for his failure to maintain a regular work schedule. He had one year from the effective date of his removal to file for disability retirement with the Office of Personnel Management.

Lary appealed his removal to the Merit Systems Protection Board. Ultimately, the parties settled and the MSPB approved the settlement agreement. One provision required the agency to give Lary three documents needed by him to support his disability retirement application within 2 weeks of the date of the settlement agreement. The agency failed to provide the documents within the required time frame. By the time the agency did provide the three documents, the deadline for Lary to file for disability retirement had passed. OPM denied his application as untimely.

Mr. Lary took his complaint back to the MSPB, arguing that the agency had materially breached the settlement agreement by failing to provide the documents. The Administrative Judge held that the failure by the agency to provide the documents was not a material breach since it was Lary’s responsibility to file his disability application by the deadline—he could simply have filed it without complete documentation and supplemented the application when he received the documents from the agency.

The full Board in a split decision agreed with its AJ. (The dissenting Board member was persuaded by the fact that the agency did nothing to inform Mr. Lary that it was his responsibility alone to file the disability retirement application by the deadline).

Mr. Lary took his case to the Federal Circuit.

The court disagreed with the MSPB, found the breach by the agency was indeed material, and sent the case back to the Board. In rejecting the notion that Lary could have simply filed his application as incomplete and supplemented it later, the court pointed out that “disability benefits do not begin to accrue until all application requirements have been met and the application is complete.” (Opinion p. 8) Thus, the agency’s breach would have still irreparably harmed him and therefore was material.

As a remedy for the agency’s breach, the court opted to enforce the agreement by specific performance to effectuate the purpose of the original settlement agreement. The court directed the Board to order the agency to vacate the removal action, expunge the record, issue a new decision letter with a new effective date, and provide the three documents required to support Lary’s application for disability retirement within 2 weeks of the Board’s order of specific performance. Lary can then apply for disability retirement within one year of the new effective date of the new removal action.

In short, Mr. Lary wins big.

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.