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Cunningham v. United States

United States Court of Appeals, Federal Circuit

April 9, 2014

ERIC D. CUNNINGHAM, Plaintiff-Appellant,
UNITED STATES, Defendant-Appellee

Appeal from the United States Court of Federal Claims in No. 10-CV-0111, Judge Lynn J. Bush.

JAMES Y. BOLAND, Venable LLP, of Tysons Corner, Virginia, argued for plaintiff-appellant.

Of counsel on the brief were MELANIE JONES TOTMAN and DISMAS LOCARIA, of Washington, DC.

JESSICA R. TOPLIN, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee. With her on the brief were STUART F. DELERY, Acting Assistant Attorney General, JEANNE E. DAVIDSON, Director, and MARTIN F. HOCKEY, JR., Assistant Director.

Before PROST, WALLACH, and CHEN, Circuit Judges.


Page 1173

Chen, Circuit Judge.

Eric Cunningham filed a petition with the Merit Systems Protection Board (" MSPB" ) to enforce a settlement agreement he entered into with the United States Office of Personnel Management (" OPM" ), his former employer. Mr. Cunningham alleged that OPM disclosed details about him to another employer and thereby violated a confidentiality provision in that agreement. The MSPB found that OPM breached the agreement and offered Mr. Cunningham the only remedies its jurisdiction permitted: rescission and reinstatement. When Mr. Cunningham declined

Page 1174

to pursue those remedies, the MSPB dismissed his petition.

Mr. Cunningham then filed suit against the United States in the Court of Federal Claims (" Claims Court" ), seeking monetary damages for breach of contract. The court found that it had subject matter jurisdiction under the Tucker Act over the suit, Cunningham v. United States, 108 Fed.Cl. 208, 213-21 (2012), but ruled that the suit was barred by res judicata because the MSPB had already issued a final judgment on the merits of Mr. Cunningham's claim, id. at 221-24.

While we agree with the Claims Court that it possessed jurisdiction under the Tucker Act to hear Mr. Cunningham's claim for breach of contract, we do not agree that res judicata bars his claim. Because jurisdictional limits on the MSPB's remedial authority did not permit Mr. Cunningham to seek monetary damages for OPM's breach of contract, the MSPB's prior judgment does not preclude his suit in the Claims Court. Accordingly, we reverse the judgment of the Claims Court and remand for proceedings consistent with this opinion.


Mr. Cunningham worked as a criminal investigator in the Inspector's Office of OPM from February 23, 2004 until his termination on January 22, 2005. He appealed his termination to the MSPB, alleging that OPM discriminated against him based on his marital status. During the second day of an administrative hearing at the MSPB, Mr. Cunningham and OPM agreed to a settlement.

Under the terms of the settlement agreement, Mr. Cunningham agreed to withdraw his appeal with prejudice, while OPM agreed to pay him $50,000. The agreement designated the Director of OPM's human resources office as the contact point for reference inquiries about Mr. Cunningham's service as a criminal investigator. In response to such inquiries, the Director was permitted to disclose only Mr. Cunningham's " date of employment and years of Federal service." J.A. 41. The agreement also required OPM to remove Mr. Cunningham's termination letter from his personnel file. Furthermore, the agreement included a confidentiality provision that prohibited both parties from disclosing the terms of the agreement and prohibited Mr. Cunningham from disclosing information about his grievance. On October 28, 2005, the MSPB entered the settlement agreement on the record for purposes of enforcement.

In July 2006, Mr. Cunningham was offered a position as a background investigator with the United States Investigation Service (" USIS" ), a private company that contracts with federal agencies to perform background investigations. After completing a background investigation, USIS told Mr. Cunningham to report to the next training class in the fall of 2007. USIS also informed Mr. Cunningham that it anticipated receiving a new contract from OPM, and that OPM would conduct its own background investigation.

Mr. Cunningham reported for training on October 22, 2007. Less than one week after Mr. Cunningham had commenced initial training, the general manager of USIS informed Mr. Cunningham that he was being suspended without pay at the direction of OPM's security office. Mr. Cunningham remained suspended until February 1, 2008, when he was terminated by USIS. Following his termination, he contacted OPM and requested a copy of his personnel file. The file contained a document showing that two OPM employees--neither of whom was the Director of Human Resources--had discussed Mr. Cunningham's termination and subsequent appeal

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to the MSPB with OPM's background investigator.

On March 24, 2008, Mr. Cunningham filed a petition with the MSPB to enforce the settlement agreement with OPM. On July 16, 2008, an administrative judge found that OPM had materially breached the agreement. The administrative judge explained, however, that enforcement would not be an effective remedy because the MSPB lacked authority to award damages for OPM's breach. Instead, Mr. Cunningham was only entitled to rescind the agreement and reinstate his initial appeal. The administrative judge noted that, if Mr. Cunningham elected to rescind the settlement agreement and reinstate his appeal, he would be required to reimburse the government for the $50,000 payment made to him under the terms of the settlement.

On January 23, 2009, the MSPB issued a final order adopting the findings of the administrative judge. The MSPB sent the case back to the administrative judge to provide Mr. Cunningham with the option of rescinding the agreement and reinstating his appeal. On February 9, 2009, Mr. Cunningham informed the administrative judge that he only wanted compensation for his damages caused by OPM's breach of the settlement agreement; he did not want his ...

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