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Federal Employment Law
Settlement Agreements at the MSPB

Appeals to the Merit Systems Protection Board (MSPB) are a fundamental right and privilege unique to federal government employees.

However, challenging an agency’s proposed removal, demotion, or other adverse action can be lengthy and stressful.

The settlement process offers employees and agencies a way to avoid some of the time and cost of an MSPB appeal on terms beneficial to everyone involved. 

This blog post will explain what federal employees should know about MSPB settlement agreements. We’ll cover the MSPB settlement process, what these agreements can include, and why federal employees should consider pursuing one. 

What Are MSPB Settlement Agreements?

An MSPB settlement is a legal agreement between a federal employee and their agency. The purpose of the settlement agreement is to resolve the issue the employee appealed to the MSPB without further litigation.

Some common disputes that often end in MSPB settlements include adverse employment actions, whistleblower retaliation cases, and benefits application denials. 

Where Can I See MSPB Settlement Agreement Samples? 

An MSPB settlement is a document detailing the agreement terms between a federal employee and an agency. Both parties consent to specific actions and obligations as conditions for ending the dispute. The specific terms of the settlement can vary widely from case to case.

Since many agreements contain confidentiality clauses, finding MSPB settlement agreement samples to review can be challenging for employees. However, here are some terms and provisions they often include.

Reduction or Revision of Adverse Action

Settlements can offer federal employees the chance to avoid an adverse or disciplinary action proposed by an employer. For example, an employee suspended from work for 30 days for excessive tardiness could have their punishment reduced or waived.

Federal employees facing termination often seek “last chance” agreements in an MSPB settlement. In these situations, an agency allows employees to continue in their jobs if they agree to meet certain behavior or performance standards. 

Clearing Disciplinary Record

Another frequent part of a settlement agreement is removing or correcting unfavorable actions on an employee’s personnel record.

In some cases, even if an employee is ultimately removed, a settlement can grant access to valuable resources for their job search, such as employer references, recommendation letters, or revised performance evaluations. 

Retirement Benefits

Provisions involving retirement benefits are an important way for federal employees to protect their future financial security while resolving an adverse employment action. Retirement benefits in MSPB settlement agreements may include:

  • Continued Thrift Savings Plan contributions (if the employee moves to another federal role),
  • Option for retirement or resignation instead of removal to protect employee benefits eligibility, 
  • Compensation for lost matching funds, and
  • Opportunities to apply for federal disability retirement.

A settlement may also include provisions designed to help employees retain eligibility for other federal benefits programs linked to retirement, such as health and life insurance. 

Waivers and Restrictions

Beyond offering benefits, MSPB settlements also typically require employees to fulfill some obligations to their employer. These obligations could include agreeing to not:

  • Bring further legal claims regarding the original issue,
  • Make negative or disparaging comments about an employer publicly, 
  • Appeal the settlement agreement,
  • Receive back pay, or
  • Attempt to hold an employer liable for alleged wrongdoing.

Other obligations included in MSPB settlements apply to both parties. For example, it’s common for an MSPB settlement agreement confidentiality clause to prevent both a federal employee and their employer from disclosing certain information about an MSPB appeal or its settlement. 

Can the MSPB Award Compensatory Damages?

The MSPB can facilitate compensation to federal employees through a settlement agreement. For example, an employee could negotiate to receive financial compensation for back pay or lost benefits from their agency in exchange for waiving certain legal rights.

However, the MSPB doesn’t have the power to award traditional compensatory damages to employees directly.

How Do You Reach an MSPB Settlement?

The settlement process can begin when a federal employee files their initial appeal with the MSPB. Generally, the employee or agency proposes a settlement offer to the other side.

The two parties and their legal representatives discuss the terms and negotiate back and forth until they are all in agreement. Then, both parties sign the drafted agreement and file it with the MSPB judge for approval. 

Once a settlement is approved, it is a legally binding agreement. Reversal of the agreement can only happen if there’s a legal issue with the contract, e.g., one party breaks the terms of the agreement or misrepresents facts.

In these cases, the other party can begin the MSPB settlement agreement rescission process to reexamine and potentially invalidate the agreement.

What Is the Success Rate of the MSPB Appeal?

According to MSPB data, most appeals decisions favor federal agencies, not employees. In 2023, the MSPB affirmed agencies’ original decisions in 77.9% of the appeals cases they adjudicated. Only 16.7% of the appeals cases were reversed into favorable outcomes for federal employees. 

The relatively low success rate on appeal makes settlement a valuable option for federal employees to be aware of.  

Trusted Advocates for Federal Employees

Settlement agreements can be a strategic tool for federal employees to reduce the stress of an MSPB appeal. If you’re currently involved in an MSPB appeal, it’s essential to have the support of a skilled legal advocate who understands MSPB settlements and can negotiate for your best possible outcome. 

The Federal Employment Law Firm of Aaron D. Wersing PLLC has spent years helping federal employees navigate their rights under the complexity of the MSPB appeals process.

With his knowledge and experience in federal employment law, attorney Aaron D. Wersing has helped hundreds of clients protect themselves and their government careers. Contact our office today to learn more about your rights and how we can help you exercise them.

Author Photo

Aaron Wersing, Attorney at Law

Aaron Wersing is the founder of the Law Office of Aaron D. Wersing. Mr. Wersing graduated from the Georgia State University College of Law with a Doctorate in Jurisprudence and was the recipient of the CALI Excellence for the Future Award. Mr. Wersing previously attended the University of Georgia, where he received a Bachelor of Business Administration degree in Accounting. Mr. Wersing is an active member of his local community. Mr. Wersing acts as a volunteer attorney with Houston Volunteer Lawyers, the pro bono legal aid organization of the Houston Bar Association. He is also a member of professional legal organizations such as the National Employment Lawyers Association and the American Inns of Court. To reach Aaron for a consultation, please call him at (833) 833-3529.

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