José M. Sánchez v. Department of Veterans Affairs

United States Court of Appeals
for the Federal Circuit
______________________

JOSÉ M. SÁNCHEZ,
Petitioner

v.

DEPARTMENT OF VETERANS AFFAIRS,
Respondent
______________________

2018-2171
______________________

Petition for review of the Merit Systems Protection
Board in No. NY-1221-01-0225-C-2.
______________________

Decided: February 10, 2020
______________________

M
ARGARITA LUISA MERCADO, Mercado-Echegeray, Des-
pacho Legal, San Juan, PR, argued for petitioner.

BARBARA E. THOMAS, Commercial Litigation Branch,
Civil Division, United States Department of Justice, Wash-
ington, DC, argued for respondent. Also represented by
J
OSEPH H. HUNT, ROBERT EDWARD KIRSCHMAN, JR., LOREN
MISHA PREHEIM.
______________________

Before D
YK, PLAGER, and STOLL, Circuit Judges.
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SANCHEZ v. DVA
2
Opinion for the court filed by Circuit Judge DYK.
Dissenting opinion filed by Circuit Judge PLAGER.
D
YK, Circuit Judge.
Dr. José M. Sánchez filed a petition with the Merit Sys-
tems Protection Board (“Board”) to enforce a 2001 settle-
ment agreement (“Agreement”) that he entered into with
the Department of Veterans Affairs (“VA”). The adminis-
trative judge (“AJ”) denied the petition, and Dr. Sánchez
sought review in this court. We affirm.
B
ACKGROUND
Dr. Sánchez is a urologist at the VA Caribbean
Healthcare System in Puerto Rico. In 1999, when
Dr. Sánchez was working at the San Juan VA Medical Cen-
ter (“San Juan hospital”), he reported to his supervisor and
other superiors what he believed to be improper practices.
His allegations included fraudulent acts by physicians and
technicians who signed in for work while being absent, an
excessive number of patient complaints, and wasted and
abused resources.
On August 21, 2000, Dr. Sánchez received a proficiency
report prepared by his supervisor. Dr. Sánchez did not at
the time have a good relationship with residents and some
other doctors at the San Juan hospital. The report stated
that Dr. Sánchez’s performance “ha[d] shown a significant
[negative] change since his last evaluation” and that his
“harsh criticism and righteous indignation and intoler-
ance” had “given rise to several harsh exchanges.” J.A. 23.
It also noted that Dr. Sánchez complained that “he [was]
‘targeted’ by the rest of the urologists” and that “the resi-
dents may [have] purposely engage[d] in actions in order to
discredit him.” J.A. 23–24. On November 14, 2000,
Dr. Sánchez received a memorandum reassigning him to
the Ambulatory Care Service Line, where he believed that
he would not perform surgery, care for patients, or super-
vise other staff members. He concluded that these actions
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SANCHEZ v. DVA
3
(i.e., the adverse proficiency report and reassignment) were
taken by the VA in retaliation for his whistleblowing activ-
ities.
In 2001, Dr. Sánchez filed an individual right of action
appeal with the Board, alleging that the VA took personnel
actions against him based on the whistleblowing activities.
That appeal was dismissed after Dr. Sánchez and the VA
entered into a settlement agreement. The Agreement pro-
vided:
1. The [VA] and [Dr. Sánchez] mutually agree that
[Dr. Sánchez] will be reassigned to the Ponce Out-
patient Clinic (hereinafter [“Ponce clinic”]) effec-
tive not later than October 21, 2001.
[Dr. Sánchez’s] pay will not be reduced.
2. [Dr. Sánchez] will have a compressed work
schedule at the [Ponce clinic] of ten hours per day
for four days per week, which will include three
hours of travel per day.
J.A. 48. Since the settlement in 2001, Dr. Sánchez has
worked at the Ponce clinic.
The parties adhered to the Agreement for 16 years.
However, on July 28, 2017, Dr. Sánchez received a letter
from Gabriel Miranda-Ramirez, the Chief of Urology Ser-
vice. The letter informed him of a change in his duty effec-
tive August 20, 2017, and that he was physically required
to be at the Ponce clinic from “7:30 a.m. until 4:00 p.m. from
Monday through Friday” to provide services. J.A. 66.
On August 16, 2017, Dr. Sánchez filed a petition for en-
forcement with the Board, arguing that the change in his
work schedule was a breach of the Agreement. The AJ de-
nied Dr. Sánchez’s petition, reasoning that 16 years was “a
reasonable period of time for [Dr. Sánchez] to work a com-
pressed work schedule” at the Ponce clinic and that the
Agreement did not bar the VA from requiring a different
schedule. J.A. 265–66.
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SANCHEZ v. DVA
4
Dr. Sánchez did not seek review from the full Board,
but instead filed a petition for review in our court. The AJ’s
decision became a final decision of the Board. We have ju-
risdiction pursuant to 28 U.S.C. § 1295(a)(9).
D
ISCUSSION
Our review of Board decisions is limited to whether the
decision was “(1) arbitrary, capricious, an abuse of discre-
tion, or otherwise not in accordance with law; (2) obtained
without procedures required by law, rule, or regulation
having been followed; or (3) unsupported by substantial ev-
idence.” 5 U.S.C. § 7703(c).
I. Interpretation of the Agreement
Dr. Sánchez argues that the Agreement includes no
time limit and allowed him to maintain a compressed work
schedule as long as he worked at the Ponce clinic.
When, as here, a contract is silent on the time limit of
its term, it is established that the term is ordinarily effec-
tive for “a reasonable time.” M & G Polymers USA, LLC v.
Tackett, 574 U.S. 427, 441 (2015) (“[C]ontracts that are si-
lent as to their duration will ordinarily be treated not as
‘operative in perpetuity’ but as ‘operative for a reasonable
time.’” (quoting 3 A. Corbin, Corbin on Contracts § 553
(1960))); see also Restatement (Second of Contracts) § 204
(stating that “a term which is reasonable in the circum-
stances is supplied” when it is omitted from the contract);
11 Williston on Contracts § 31:7 (4th ed.) (“[W]hen the con-
tract involved is silent regarding the matter in question,
only reasonable terms will be implied.”); Franklin Pavkov
Const. Co. v. Roche, 279 F.3d 989, 997 (Fed. Cir. 2002)
(“The contract did not specify a time for delivery, thus the
[g]overnment [was] obligated to deliver the [government
furnished property] in sufficient time for it to be installed
in the ordinary and economical course of performance.” (in-
ternal quotation marks and citation omitted)).
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SANCHEZ v. DVA
5
What constitutes a reasonable time is determined
based on the circumstances. Restatement (Second of Con-
tracts) § 204 (“When the parties to a bargain sufficiently
defined to be a contract have not agreed with respect to a
term which is essential to a determination of their rights
and duties, a term which is reasonable in the circum-
stances is supplied by the court.”).
In Bobula v. U.S. Dep’t of Justice, 970 F.2d 854 (Fed.
Cir. 1992), the government settled an employee’s griev-
ances by agreeing to “transfer [the employee] and . . . ‘slot’
[her] to the United States Attorney’s Office, in Cleveland,
Ohio.” Id. at 856. Four years after her transfer, the gov-
ernment reassigned her to an office in Akron, Ohio. Id. In
the context of determining whether the employee’s breach
of contract claim was frivolous, we concluded that “the four
years that [the employee had] been in Cleveland would sat-
isfy [a] requirement” under the parties’ settlement agree-
ment Id. at 862. In other words, the four year period was
a reasonable time.
Other circuits have examined the surrounding circum-
stances of the contract, in particular, “the background
against which it was executed,” to determine a reasonable
time. Eagle-Picher Co. v. Mid-Continent Lead & Zinc Co.,
209 F.2d 917, 918 (10th Cir. 1954). For example, in Eagle-
Picher, the contract was silent as to the duration of a joint
venture contract. Id. at 918–20. The court held that the
continued duration should be determined based on “the
facts and circumstances existing at the time the contract
was entered into,” id. at 921, and “[i]f no date is fixed by
the contract for its termination, the agreement remains in
force until its purpose is accomplished or until such accom-
plishment has become impracticable,” id. at 919. The
agreement there was for development of mining property
under leases. Id. at 918. The court concluded that the joint
venture contract continued during the renewed period af-
ter the original leases expired, because those leases were
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SANCHEZ v. DVA
6
commercially profitable, which was the reason why the
joint venture was formed. Id. at 919, 921.
Similarly, Barco Urban Renewal Corp. v. Housing
Auth., 674 F.2d 1001 (3rd Cir. 1982) involved a contract be-
tween a housing authority and an urban developer for de-
velopment of properties owned by the authority. Id. at
1002–03. No provision stated the duration of the agree-
ment. Id. at 1004. The contract contemplated that the par-
ties would agree to a development plan requiring the
authority to convey all properties to the developer within
five years. Id. If negotiations for the plan failed, however,
the developer had a right to first refusal if the authority
offered the properties to others. Id. Based on the purpose
and background of the contract’s formation, the court con-
cluded that a reasonable time for the right to first refusal
was five years—the deadline to convey all properties for de-
velopment—because its purpose was expeditious develop-
ment. Id. at 1007, 1009–10.
The background of the Agreement here supports the
conclusion that 16 years was a reasonable duration.
First, the circumstances in which the Agreement was
executed do not suggest that an unlimited duration was
necessary to satisfy the contractual purpose. Here, at the
time of the agreement’s execution, Dr. Sánchez claimed
that he faced animosity and retaliation at the San Juan
hospital for his whistleblowing activities. The purpose of
relocating Dr. Sánchez’s workplace to the Ponce clinic was
to mitigate the hostile environment by allowing
Dr. Sánchez to leave that environment and work at an-
other location, i.e., the Ponce clinic. Because Dr. Sánchez
lived in San Juan, the parties also agreed to a compressed
work schedule to accommodate his commute to Ponce.
Dr. Sánchez admitted during oral argument that the pur-
pose of the Agreement was to have him “transferred to
Ponce” because “he suffered reprisals” due to his whistle-
blowing activities and that the “compressed work schedule
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SANCHEZ v. DVA
7
was agreed upon” because he continued to live in San Juan.
Oral Arg. 4:45–7:00, available at http://oralarguments.
cafc.uscourts.gov/default.aspx?fl=2018-2171.mp3. Under
those circumstances, this unusual arrangement specified
in the Agreement was for the period that Dr. Sánchez rea-
sonably would have confronted the alleged hostile environ-
ment at the San Juan hospital. See Eagle-Picher, 209 F.2d
at 919–21 (considering circumstances surrounding for-
mation of the contract).
Second, the compressed work schedule was a very un-
usual term in that Dr. Sánchez would be paid for time that
he was not working during his three hour commute. A fed-
eral employee is generally not eligible to be compensated
for his commuting time. See 5 C.F.R. § 551.422 (“An em-
ployee who travels from home before the regular workday
begins and returns home at the end of the workday is en-
gaged in normal “home to work” travel; such travel is not
hours of work.” (emphasis added)). It would thus seem un-
likely that the parties intended that this unusual arrange-
ment exist indefinitely.
On its face, a 16-year period is a reasonable time for
the alleged hostilities against Dr. Sánchez to dissipate.
1

As the party claiming a breach, Dr. Sánchez had the bur-
den of proof but did not offer evidence that the claimed an-
imosity persisted after that 16-year time period. Tech.
Assistance Int’l, Inc. v. United States, 150 F.3d 1369, 1373
(Fed. Cir. 1998) (“The party alleging a breach of contract
bears the burden of proving the breach.”). Given
Dr. Sánchez’s failure, the Board correctly determined that
16 years was a reasonable time and Dr. Sánchez did not

1
In fact, as recently as 2017, Dr. Sánchez performed
duties at the San Juan hospital due to facility issues at the
Ponce clinic, and he did not claim that he continued to face
a hostile environment.
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SANCHEZ v. DVA
8
satisfy his ultimate burden to prove a breach of the Agree-
ment.
II. Closing of Record and Denial of Hearing
Dr. Sánchez, however, contends that he could not sat-
isfy his burden of proof because the record was closed with-
out proper notice, and that he was deprived of a hearing.
Based on additional evidence, he argues that “he would
have[] showed that the [VA’s] claimed needs for efficiency
[were] not supported.” Reply Br. 11. The issue here is not
a due process issue; rather it is a simple discovery dispute.
And we need not decide whether the record was improperly
closed and whether Dr. Sánchez was entitled to a hearing
because the evidence Dr. Sánchez sought pertained to dis-
puted facts that were irrelevant.
Even if the record closure had been erroneous, the ad-
ditional evidence that he sought in discovery concerns an
irrelevant issue regarding the Ponce clinic’s service needs
as opposed to the Agreement’s purpose to mitigate the al-
leged hostile environment at the San Juan hospital. Noth-
ing in the background of the Agreement suggests that a
reasonable time depended on the VA’s need for additional
services at the Ponce clinic. Thus, evidence of the need for
Dr. Sánchez’s service was irrelevant to the reasonable time
issue, and the Board should not have considered it. See
Briscoe v. Dep’t of Veterans Affairs, 55 F.3d 1571, 1574
(Fed. Cir. 1995).
In cases involving a petition for enforcement, “[t]he
judge may convene a hearing if one is necessary to resolve
matters at issue.” 5 C.F.R. § 1201.183(a)(3). There is “no
right to a hearing regarding a petition for enforcement.”
Weed v. Soc. Sec. Admin., 367 F. App’x 144, 147 (Fed. Cir.
2010). Since the efficiency evidence was irrelevant, a hear-
ing was not required. We do not hold that such evidence is
always irrelevant; we merely hold that, under the facts of
this case, evidence undermining the VA’s claimed needs for
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SANCHEZ v. DVA
9
efficiency is irrelevant to whether 16 years was a reasona-
ble time period.
CONCLUSION
We conclude that the VA did not breach the Agreement
when it changed Dr. Sánchez’s work schedule, and that
Dr. Sánchez’s challenge to the Board’s discovery procedure
lacks merit.
AFFIRMED
C
OSTS
No costs.
Case: 18-2171 Document: 60 Page: 9 Filed: 02/10/2020

United States Court of Appeals
for the Federal Circuit
______________________

JOSÉ M. SÁNCHEZ,
Petitioner

v.

DEPARTMENT OF VETERANS AFFAIRS,
Respondent
______________________

2018-2171
______________________

Petition for review of the Merit Systems Protection
Board in No. NY-1221-01-0225-C-2.
______________________
P
LAGER, Circuit Judge, dissenting.
The Government breached its contract with Dr. José M.
Sánchez (“Dr. Sánchez”). It should be held accountable.
Because the majority concludes otherwise, in a decision
that is not supported by settled law or common sense, I re-
spectfully dissent.
B
ACKGROUND
The outcome of this appeal depends on the proper in-
terpretation of the Settlement Agreement between Dr.
Sánchez and the Department of Veterans Affairs (“VA” or
“Government”). That interpretation depends not only on
the words of the Agreement, but on the factual context in
which it was negotiated and confirmed. As the majority
opinion only partially details these facts, a more complete
description is warranted.
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SANCHEZ v. DVA
2
The facts are these:
In 1999, Dr. Sánchez was employed by the VA in San
Juan, Puerto Rico. Dr. Sánchez is a medical doctor with a
urological specialty and nearly 30 years of service. At the
time, he was assigned to and serving in the San Juan Med-
ical Center.
During the course of his employment he observed what
he believed to be a variety of improper practices, including
fraudulent acts by other physicians regarding, inter alia,
their working hours, as well as by technicians serving the
facility’s patients. These various improper acts resulted in
an especially large number of patient complaints, and what
to him appeared to be wasted and abused government re-
sources.
Dr. Sánchez reported his observations and concerns to
various VA authorities. As a result, and not surprisingly,
Dr. Sánchez’s relationship with his supervisors, as well as
some of the other physicians and residents whose conduct
he reported, deteriorated; as our cases reveal, this is a not
unusual consequence of being a whistleblower.
In due course, Dr. Sánchez was issued a proficiency re-
port by his immediate supervisor indicating that his per-
formance had significantly declined since the last report.
This was followed, in November 2000, by a reassignment of
Dr. Sánchez to the Ambulatory Care Service, which he un-
derstood to remove him from surgical work, care for pa-
tients, and supervision of other staff members.
In a series of interactions between Dr. Sánchez and the
hospital authorities at the VA, Dr. Sánchez alleged that
these hostile actions taken against him were in retaliation
for his whistleblowing activities. The agency did not re-
spond favorably, so in 2001 Dr. Sánchez, pursuant to fed-
eral law, filed an individual right of action appeal with the
United States Merit Systems Protection Board (“MSPB” or
“Board”). In his appeal to the Board, Dr. Sánchez alleged
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SANCHEZ v. DVA
3
that the VA took adverse personnel actions against him
based on his whistleblowing activities, a subject matter
within the jurisdiction of the Board.
A series of negotiations then ensued between repre-
sentatives of the VA and Dr. Sánchez. In the end, the par-
ties reached a Settlement Agreement, and pursuant
thereto Dr. Sánchez withdrew his appeal to the Board. In
the Settlement Agreement the VA and Dr. Sánchez agreed
to his reassignment to a VA medical facility in Ponce,
Puerto Rico. Ponce is located a good distance from San
Juan where Dr. Sánchez worked and lived.
To accept this reassignment meant that Dr. Sánchez
would either have to drive an hour and a half each way
every working day, a total of three hours in the car, or up-
root his home and family from their residence in San Juan
and relocate closer to Ponce.
The solution to this dilemma, to which the VA and Dr.
Sánchez agreed, was that he would drive the three hours a
day on working days, but that the VA would take that into
account as part of his duties and he would be assigned four
working days a week instead of five. This was intended as
a way to compensate him for the time spent on the road
instead of practicing medicine.
This was a mutually acceptable arrangement for both
the VA and for Dr. Sánchez. The VA got him out from un-
derfoot and away from the area so he could no longer trou-
ble the hospital administration about their management
problems. And Dr. Sánchez was given a place to work
where he could practice the medical skills he was trained
in, and he could put behind him the unfriendliness that his
whistleblowing activity brought upon him. The settlement
presumably was thought by the parties under the circum-
stances to be a win-win.
As stated in the Settlement Agreement:
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SANCHEZ v. DVA
4
1. The Agency and the Appellant mutually agree
that the Appellant will be reassigned to the Ponce
Outpatient Clinic (hereinafter “POPC”) effective
not later than October 21, 2001. The Appellant’s
pay will not be reduced.
2. The Appellant will have a compressed work
schedule at the POPC of ten hours per day for four
days per week, which will include three hours of
travel per day.
J.A. 48, 50.
This arrangement was honored by both parties for six-
teen years. Then, without warning, in July 2017, the Chief
of Urology Service at the VA’s San Juan hospital sent Dr.
Sánchez a letter informing him that, effective August 20,
2017, he was to have a new “tour of duty.” He would now
be required to work a regular five-day week at the Ponce
facility, from “Monday through Friday 7:30 a.m. to 4:00
p.m. with Sat.-Sun. off.” J.A. 67. The only explanation of-
fered was that this change was made “[i]n an effort that all
VA resources are appropriately maximized and our Veter-
ans are afforded availability of services.” Id.
Efforts by Dr. Sánchez to discuss this sudden change,
and to remind the VA of its longstanding Settlement Agree-
ment, did not resolve the situation. On August 16, 2017,
he again sought help from the Merit Systems Protection
Board. This time he requested an order for enforcement of
the 2001 Settlement Agreement, again a subject-matter
within the jurisdiction of the MSPB.
The case was submitted to an MSPB administrative
judge who ordered the VA to file “proof that it has complied
with the settlement, or that it has good cause for noncom-
pliance or for incomplete or partial compliance.” J.A. 71.
After an interruption from a hurricane hitting the island
and a related dismissal and refiling of the case, an ex-
tended and contentious evidence discovery period ensued.
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SANCHEZ v. DVA
5
Finally, on May 16, 2018, the administrative judge is-
sued her opinion. She concluded that, because the original
Settlement Agreement provided no duration for the VA’s
obligations, “a reasonable time under the circumstances
[would] be presumed.” J.A. 264. Determining the duration
of that “reasonable time” required “look[ing] beyond simply
the length of time of compliance and mak[ing] an assess-
ment of the overall attendant circumstances, including the
motives of the agency.” Id. The question before her, as
she saw it, was whether sixteen years was “a reasonable
period of time for the appellant to work a compressed work
schedule of ten hours per day/four days per week (including
three hours of travel per day) at the Ponce Out Patient
Clinic.” Id. Her answer was: yes, it was a reasonable time,
and thus the VA had not breached the Agreement; the pe-
tition for enforcement was denied.
As the law allows, Dr. Sánchez appealed her decision
to this court.
D
ISCUSSION
There are two things wrong with the decision of the
Merit Systems Protection Board in this case, in addition to
the fact that the administrative judge seemed to be more
concerned with the Government’s well-being than with the
protection of the Government employee when confronted
by an arbitrary Government action.
The VA’s action in this case is clearly arbitrary and ca-
pricious for two separate but related reasons. First, the
presumption that the test for whether the Government
could unilaterally terminate its Settlement Agreement in
this case—what the Government might deem a “reasonable
time” for the Agreement to expire—is a mistaken presump-
tion on these facts.
It is true that the Agreement did not specify a termina-
tion date. And it is also true that in a case in which a ter-
mination date for an agreement is needed but omitted, a
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SANCHEZ v. DVA
6
court may employ a presumed “reasonable time” in the ab-
sence of something better. But in this case, no “presumed”
termination date is needed, nor was one intended by the
parties.
This is because, on its face, the Agreement was in-
tended by the parties to continue in effect so long as Dr.
Sánchez was assigned to the Ponce medical facility for
work. The compressed work schedule was designed to
make that assignment workable for both parties—the Gov-
ernment got Dr. Sánchez out of town; Dr. Sánchez found a
compatible place to practice medicine, though at some cost
to his being at home, his living arrangements, and the wear
and tear on his vehicle.
The compressed schedule was designed and agreed to
for the purpose of persuading him to accept the assignment
to a distant facility, at which the Government intended he
henceforth would work for whatever time both he and the
VA mutually agreed. Nothing in the circumstances of this
Agreement suggests that the parties intended this Settle-
ment Agreement to be terminable at the will of the Govern-
ment, without any consultation or willingness on the part
of Dr. Sánchez to give up the benefits which he had been
promised while he served the VA at this remote station.
Thus, so long as Dr. Sánchez was assigned to and con-
tinued to serve at the Ponce medical facility, both the
Board and the majority err in reading into the Settlement
Agreement a presumed need for an arbitrary termination
date, one that has no justification under the circumstances
for which this Agreement was intended.
The second thing wrong with the decision of the MSPB,
as well as the majority, is that, even if the agreement is
thought to be subject to termination at some “reasonable
time” to be determined, the unilateral termination by the
Government does not qualify as reasonable under the cir-
cumstances.
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SANCHEZ v. DVA
7
As this court has carefully explained regarding settle-
ment agreements:
A settlement agreement is a contract, and we apply
basic contract principles unless precluded by law.
The interpretation of a settlement agreement is an
issue of law, which we review without deference to
the Board’s decision. In interpreting an agree-
ment, we first ascertain whether the agreement
clearly states the understanding between the par-
ties. If there is an ambiguity in the formation of
the agreement or during its performance, we imple-
ment the intent of the parties at the time the agree-
ment was struck. We give the words of the
agreement their ordinary meaning unless the par-
ties mutually intended and agreed to an alterna-
tive meaning.
Harris v. Dep’t of Veterans Affairs, 142 F.3d 1463, 1467
(Fed. Cir. 1998) (citations omitted). “The paramount focus
is the intention of the parties at the time of contracting;
that intention controls in any subsequent dispute.” King v.
Dep’t of the Navy, 130 F.3d 1031, 1033 (Fed. Cir. 1997). We
cannot change a contract’s terms absent mistake, fraud, ac-
cident, or illegality. Atlas Corp. v. United States, 895 F.2d
745, 750 (Fed. Cir. 1990).
In addition to these basic principles, this court has
noted that “an implied term of every settlement agreement
is that the parties deal in good faith with each other.”
Sweeney v. United States Postal Serv., 159 F.3d 1342, 1344
(Fed. Cir. 1998). And in LaBatte v. United States, 899 F.3d
1373, 1379 (Fed. Cir. 2018), the court said:
The Restatement (Second) of Contracts § 205, Com-
ment d (1981), explains that the duty of good faith
and fair dealing prohibits “interference with or fail-
ure to cooperate in the other party’s performance.”
This is true, even if “the actor believes his conduct
to be justified.” Id. The covenant “‘imposes on a
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SANCHEZ v. DVA
8
party . . . the duty . . . to do everything that the con-
tract presupposes should be done by a party to ac-
complish the contract’s purpose.’” Stockton E.
Water Dist. v. United States, 583 F.3d 1344, 1365
(Fed. Cir. 2009) (quoting 30 Richard A. Lord, Wil-
liston on Contracts § 77.10 (4th ed. 1999)). The
covenant prevents parties from “act[ing] so as to
destroy the reasonable expectations of the other
party regarding the fruits of the contract.” Centex
Corp. v. United States, 395 F.3d 1283, 1304 (Fed.
Cir. 2005).
The contract’s plain language is clear and unambigu-
ous and, given the circumstances, leaves nothing to be
added. See Harris, 142 F.3d at 1467. According to the con-
tract, Dr. Sánchez agreed to drop his claims against the
Government in exchange for, inter alia, a compressed work
schedule in Ponce. The contract as such does not need to
specify a duration of time for the compressed schedule to
continue because it requires that, if Dr. Sánchez is working
in Ponce, then the compressed schedule remains in effect.
The parties recognized that as long as Dr. Sánchez was
working in Ponce, he was guaranteed a certain schedule in
light of the inconvenience in traveling there. Neither the
Government nor this court can rewrite the contract or viti-
ate the parties’ bargained-for exchange—that Dr. Sánchez
would work far from home, but if and only if he were com-
pensated for travel time. “Without the compressed work
schedule, I would have never agreed to be reassigned to the
POPC to travel three hours per day. This was the basis of
the bargain.” J.A. 97. The Government breached the con-
tract when it required that Dr. Sánchez work in Ponce
without the compressed schedule.
It is possible to hypothesize circumstances under which
the Government might be justified in trying to renegotiate
the Settlement Agreement. For example, what if the hos-
tile environment at the San Juan facility had sufficiently
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SANCHEZ v. DVA
9
dissipated due to changes in personnel there, and Dr.
Sánchez’s medical services were needed back at the San
Juan hospital? Presumably the VA could initiate a renego-
tiation, proposing to reverse the decision to exile Dr.
Sánchez to Ponce and thus eliminating his need for the
daily roundtrip travel. A successful renegotiation would
presume that Dr. Sánchez agreed that the new circum-
stances in San Juan vitiated his need to be elsewhere to
practice medicine.
Or perhaps Dr. Sánchez might have moved his home
and family to the Ponce area so that he was no longer hav-
ing to travel the three hours a day. (Nothing in the record
suggests this in fact occurred.) That might be grounds for
a claim by the Government that the special hours and
travel arrangements were no longer binding on the Gov-
ernment.
The Government did not offer any defenses along these
lines to explain its obvious breach of the agreement. Noth-
ing of this type was in evidence in the record in this case—
the Government’s claimed basis for abrogating its commit-
ment being that the hospital management wanted to be
sure that “the VA resources are appropriately maximized.”
J.A. 67. That issue, how best to maximize resources, was
decided regarding Dr. Sánchez in 2001 when the original
Settlement Agreement was entered into by the authorized
representatives of the Government. Nothing in the record
in this case or in the arguments made by either the MSPB’s
administrative judge or the majority in this court estab-
lishes otherwise.
We must reject the Board’s erroneous conclusion as a
matter of law. To hold otherwise contravenes the contract’s
plain language, the parties’ intent, and the covenant of
good faith and fair dealing. See LaBatte, 899 F.3d at 1379
(“The covenant prevents parties from ‘act[ing] so as to de-
stroy the reasonable expectations of the other party regard-
ing the fruits of the contract.’”) (citation omitted).
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SANCHEZ v. DVA
10
The decision of the MSPB must be reversed, and the
matter remanded to the agency with instructions to honor
its Settlement Agreement with Dr. Sánchez. In addition,
the agency should make such monetary compensation as is
necessary to restore him to the situation that prevailed be-
fore the VA breached its agreement.
I dissent from the majority’s failure to follow the law,
which requires that the Government honor its contracts
just as the Government always insists other contracting
parties must. I dissent as well from the majority’s failure
to recognize the judicial obligation to uphold the inherent
values of settlement contracts that benefit both the em-
ployee and the Government, as a method for avoiding un-
necessary and prolonged litigation. The law values these
contracts, and so should we.
Case: 18-2171 Document: 60 Page: 19 Filed: 02/10/2020