Diane Bailey v. U.S. Postal Service

Merit Systems Protection Board·Decided August 7, 2026·No. DC-0752-16-0463-C-1·Unpublished

Opinion

UNITED STATES OF AMERICA MERIT SYSTEMS PROTECTION BOARD

DIANE T. BAILEY, DOCKET NUMBER Appellant, DC-0752-16-0463-C-1

v.

U.S. POSTAL SERVICE, DATE: August 7, 2026 Agency.

THIS ORDER IS NONPRECEDENTIAL 1

Casanova Hambrick , Chadburn, North Carolina, for the appellant.

Roderick Eves , Esquire, and Brandon Truman , Esquire, St. Louis, Missouri, for the agency.

Marlee K. Evans , Esquire, Washington, D.C., for the agency.

BEFORE

Henry J. Kerner, Vice Chairman James J. Woodruff II, Member

ORDER

The appellant has filed a petition for review of the compliance initial decision, which dismissed her petition for enforcement as untimely, and, in the alternative, denied her allegations that the agency breached the parties’ global settlement agreement on the merits. For the reasons discussed below, we GRANT

1 A nonprecedential order is one that the Board has determined does not add significantly to the body of MSPB case law. Parties may cite nonprecedential orders, but such orders have no precedential value; the Board and administrative judges are not required to follow or distinguish them in any future decisions. In contrast, a precedential decision issued as an Opinion and Order has been identified by the Board as significantly contributing to the Board’s case law. See 5 C.F.R. § 1201.117(c).

the appellant’s petition for review. We REVERSE the compliance initial decision and find that the agency breached the parties’ settlement agreement by collecting a debt for health insurance premiums after the agreement’s execution. We FIND the agency in noncompliance with agreement regarding this debt. We AFFIRM the administrative judge’s determination that the appellant untimely sought relief for an alleged delay in reissuing her credentials and paying her salary following her reinstatement and that, in any event, she is not entitled to relief on this claim. We also AFFIRM the administrative judge’s determination that the appellant untimely filed her claim regarding a debt for unearned leave and VACATE his alternative finding on the merits of this claim. Finally, we AFFIRM as MODIFIED the administrative judge’s conclusion that the appellant failed to prove that the agency breached the agreement concerning its handling of her life insurance benefit, but we modify his reasoning and VACATE his alternative determination that this claim was untimely filed.

BACKGROUND

The agency removed the appellant from her position as a Customer Services Supervisor effective March 21, 2016. Bailey v. U.S. Postal Service, MSPB Docket No. DC-0752-16-0463-I-1, Initial Appeal File (IAF), Tab 5 at 13, 15-17. She appealed her removal to the Board. IAF, Tab 1 at 4. The administrative judge in that appeal issued an initial decision that affirmed her removal. IAF, Initial Decision, Tab 13 at 1, 3. The appellant filed a petition for review challenging the initial decision. Bailey v. U.S. Postal Service, MSPB Docket No. DC-0752-16-0463-I-1, Petition for Review (PFR) File, Tab 1. The full Board found that the appellant was entitled to a hearing and to have her affirmative defenses adjudicated, vacated the initial decision, and remanded the appeal to the regional office. PFR File, Tab 9, Remand Order at 6.

On remand, the parties entered into a settlement agreement. Bailey v. U.S.

Postal Service, MSPB Docket No. DC-0752-16-0463-B-1, Remand File (RF),

Tabs 25-26. Pursuant to the July 18, 2022 agreement, in relevant part, the appellant would be restored to her previous position at the agency, the roughly 6 years between her removal and return to work would be entered as leave without pay (LWOP), and the agency would pay the appellant a one -time, lump-sum payment of $50,000. RF, Tab 26 at 5-6, 8. The parties further agreed that the $50,000 payment to the appellant was a full settlement and satisfaction of any claims arising from the subject matter of the appeal. Id. at 6. The agreement provided that the appellant was not entitled to any other back pay, leave restoration, compensatory damages, or retroactive benefit, or any other relief that was not specifically set forth in the agreement. Id. Under the terms of the agreement, the appellant was to continue in an LWOP status unless and until she reported to work. Id. at 5-6. Finally, the agreement required that prior to filing any petition for enforcement, the appellant would contact the agency to allow it “a reasonable time to correct any real or perceived difficulties arising from the implementation of th[e] [a]greement.” Id. at 8.

On November 18, 2022, the administrative judge issued a remand initial decision that entered the settlement agreement into the record for enforcement purposes and dismissed the appeal with prejudice as settled. RF, Tab 27, Remand Initial Decision at 1-2. The agency reinstated the appellant effective November 21, 2022, and although the exact date is unclear, it appears that she did report to work after her reinstatement. Bailey v. U.S. Postal Service, MSPB Docket No. DC-0752-16-0463-C-1, Compliance File (CF), Tab 11 at 20-31. The appellant retired from the agency on January 18, 2023. CF, Tab 1 at 3, Tab 11 at 17. On September 5, 2023, the Office of Personnel Management (OPM) issued the appellant a notice that it planned to collect an overpayment arising out of its miscalculation of the appellant’s interim retirement annuity payments. CF, Tab 25 at 24-25.

On April 22, 2024, the appellant filed a petition for enforcement, in which she alleged that the agency was in violation of several provisions of the

settlement agreement. CF, Tab 1 at 4-5. Among other things, she alleged that the agency failed to properly reinstate her as required by the terms of the agreement, failed to timely restore her health insurance once she was reinstated, retroactively charged her for health insurance premiums accrued between her removal and reinstatement, and improperly processed her life insurance paperwork upon her retirement. Id. at 4. She also alleged that the agency garnished her wages from her private employer to recoup that debt, and that OPM improperly sought overpayment of interim annuity benefits. Id.; CF, Tab 25 at 24-25. In response, the agency filed a motion to dismiss the petition for enforcement as untimely filed. CF, Tab 3 at 6. Alternatively, the agency argued that it had materially complied with the settlement agreement and submitted evidence that it had reinstated the appellant to her former position and paid her the $50,000 remittance check. Id. at 8-10.

Acknowledging the agency’s arguments that the petition for enforcement may have been untimely filed, the administrative judge issued a timeliness order to the parties. CF, Tab 24. The timeliness order set forth the applicable legal standards and ordered the appellant to present argument and evidence as to the timeliness of her compliance appeal. Id. at 1-3. The order also instructed the agency to file a reply to any response the appellant submitted. Id. at 3. Both parties filed the required submissions and provided additional argument and evidence. CF, Tabs 25-29.

The administrative judge issued a compliance initial decision, which dismissed the petition for enforcement as untimely filed, and, in the alternative, denied the petition for enforcement on the merits. CF, Tab 31, Compliance Initial Decision (CID) at 1. Specifically, the administrative judge found that the appellant became aware of the agency’s alleged breaches of the settlement between 16 months and 3½ months prior to her filing her petition for enforcement, and she did not introduce evidence or argument as to the reasonableness of her delay. CID at 9, 11, 13. Alternatively, the administrative

judge denied the claims on the merits, finding that the appellant’s requested relief was not provided for by the agreement. CID at 9-14.

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Diane Bailey v. U.S. Postal Service, (Miss. 2026).

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