A Resignation Is a Resignation

January 8, 2014 6:18 PM
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The appeals court has upheld a federal employee’s resignation as voluntary under a settlement agreement she reached with the agency to resolve a discrimination lawsuit. (Sherman v. Merit Systems Protection Board (CAFC No. 2013-3015 (nonprecedential), 9/12/13))

Leela Sherman was a Senior Internal Revenue Agent who achieved a settlement agreement in her discrimination lawsuit against the IRS. Under the agreement she got a promotion to GS-14 retroactive almost three years, as well as two-step increase promotions, with full back pay in the bargain.  However, the agreement stipulated Sherman would retire or resign by a date certain. If she failed to do so, the specific terms of the agreement provided that her signature on the settlement document “shall serve as her resignation from employment with the IRS.” (Opinion p. 2)

Sherman did not retire or resign as provided for in the settlement agreement. So the IRS issued a Standard Form noting her resignation effective on the date specified in the settlement agreement. Sherman appealed to the Merit Systems Protection Board, arguing that this amounted to an involuntary resignation and discrimination. The IRS defended by producing the settlement agreement. (pp. 2-3)

MSPB dismissed Sherman’s appeal for lack of jurisdiction. The Administrative Judge held that the settlement agreement’s language was “unambiguous and that Ms. Sherman had voluntarily agreed to resign or retire” by the date specified in the agreement. The full Board affirmed and Ms. Sherman took her case to court.

Bottom line: the appeals court has sustained the MSPB and agrees the Board had no jurisdiction over Sherman’s appeal. The court found “M. Sherman has not offered any persuasive reason calling into question the credibility and effect” of the agency’s letter invoking the settlement agreement as the basis for her resignation. (p. 4)

The court further agreed with the Board that “any reasonable person reading [the settlement agreement] would understand that [Ms. Sherman] had agreed to resign…There is no uncertainty as to what [Ms. Sherman] meant.” (pp. 4-5)

Sherman v. MSPB

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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.