Breach of Settlement Agreement

In Greenhill v. Dept. of Education, D.C. Cir. No. 06-5030 (April 6, 2007), the United States Court of Appeals for the District of Columbia Circuit held that a former federal employee’s claim for a breach of a Title VII settlement agreement was a contract claim (in excess of $10,000) and thus was under the exclusive jurisdiction of the Court of Federal Claims. The alleged breach in this case came from a negative reference from the employee’s former supervisor, which resulted in the employee losing a job offer.

This case is interesting for several points. First, it is the amount of damages claimed that established jurisdiction. In this case, Ms. Greenhill claimed over $200,000 worth of damages. However, to get her case back to district court, it was alleged that the settlement agreement barred damages for a breach. The court noted that since Ms. Greenhill claimed damages in excess of $10,000, and was not relinquishing that claim, jurisdiction lay in the Court of Federal Claims.

Another argument rejected by the court was that the court should have “read” a claim of retaliation in the complaint, and thus found that the district court had jurisdiction over the retaliation claim, and the appended breach claim. Although noting that pro se complaints (those filed without a lawyer) are held to a less stringent standard than formal pleadings drafted by lawyers, the court of appeals found that the vague references to discrimination did not require the district court to go on a “fishing expedition” and read a claim of retaliation into the complaint.

Lastly, the court of appeals rejected the claim that the Court of Federal Claims did not have jurisdiction over this matter because it would have to “interpret” a federal statute such as Title VII. The court noted that the Court of Federal Claims repudiated this argument and drew a critical distinction between actual discrimination claims which Title VII provides the exclusive remedy and breach of settlement claims which fall outside the scope of Title VII. In those cases, held the Court of Federal Claims, the cases involve settlement agreements which are straightforward contract claims within the purview of that court.

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