Formal agreements mean what they say

On Behalf of | Jan 21, 2014 | Employee Disputes

In the United States, there has been a gradual increase in the toleration for informality. At one time, people dressed up in suits, ties and dresses to travel by air. It seems quaint to see photos of baseball games from the 1950s, where virtually every man in the stadium is wearing a hat (and not a baseball cap.) Women of that generation would have worn hats to Sunday church and would have been scandalized by blue jeans in a church.

Maybe it is the lack in formality today that explains why an employee of the Internal Revenue Service felt the need to appeal to the Merit Systems Protection Board (MSPB) her resignation. It had been the result of a settlement agreement between her and the IRS over a discrimination case she had filed.

She settled her discrimination case with retroactive promotions from GS-14-1, to GS-14-3, and almost three years of back pay. In return, she agreed to resign or retire by a specific date. If she failed to resign, the terms of the settlement agreement indicated that it would work as her resignation from the IRS.

Inexplicably, she did not resign and so the IRS issued Standard Form with her resignation date from the settlement agreement. She appealed to the MSPB, which dismissed the case, as did the full board. She then appealed to the Federal Circuit.

That court also affirmed the dismissal by the MSPB. They noted no “reasonable person” would be unclear as to the meaning of the settlement agreement. They are not a note jotted on a lunch napkin or an ephemeral text message.

This is just a reminder that when you sign documents, like a settlement agreement in relation to an adverse job action or a sex discrimination case, you need to fully understand the legal implications.

The terms of these types of legal documents are explicitly drafted with a goal of saying what the mean and meaning what they say. You should always have legal counsel prior to signing any agreement like this and you should not sign any document you do not understand.

Source:, “A Resignation Is a Resignation,” Susan McGuire Smith, January 8, 2014