Appeal of

SARAH M. MITCHELL

PSBCA No. 6173

MEDICAL AGREEMENT WA-07-WA-001

APPEARANCE FOR APPELLANT:
Paul W. Madgett, Esq.

APPEARANCE FOR RESPONDENT:
Shoshana O. Epstein, Esq.
Office of the General Counsel
United States Postal Service
475 L'Enfant Plaza SW
Washington, DC  20260-1127

OPINION OF THE BOARD

            Appellant, Sarah M. Mitchell, entered into a Medical Agreement with Respondent, United States Postal Service, which authorized Respondent to order nursing services from Appellant.  Appellant submitted two claims under the Medical Agreement, which the contracting officer denied.  She appealed those denials as well as what she considered Respondent’s improper termination of the Medical Agreement.

            At the election of the parties, the appeal is being decided on the record without an oral hearing in accordance with 39 C.F.R. §955.12.  Appellant elected application of the Board’s accelerated procedures, 39 C.F.R. §955.13.

FINDINGS OF FACT

            1.  On or about January 3, 2007, the parties entered into Medical Agreement No. WA-07-WA-001, under which Appellant, a Registered Nurse, was to provide services as a Nurse Case Manager for a two-year period, beginning December 26, 2006 (Appeal File, Tab (“AF”) 13 (pp. 78-83); Declaration of W. Phelps (“Phelps Decl.”), ¶ 11).

            2.  The Agreement described in detail the duties and responsibilities of the position, which included ensuring postal workers injured on the job received timely and appropriate medical treatment for their injuries/illnesses and coordinating their safe return to limited or full duty with the Postal Service at the earliest possible time.  The Agreement required that Appellant be licensed and insured to practice in Nebraska, Kansas, and Iowa, all at her expense.  (AF 13 (pp. 82-83)).

            3.  The Agreement provided, “Services must be provided as directed by the Postal Service Medical Officer located at” Respondent’s Western Area Office in Denver, Colorado.  The services were to be performed at Respondent’s Central Plains District Office in Omaha.  (AF 13 (p. 78)).

            4.  The Agreement provided that Appellant would be “paid for services rendered under [the Agreement] according to the Fee Schedule” in the Agreement, which provided for payment at the rate of $26 per hour (“Hourly fee for nursing services  $26.00”) (AF 13 (pp. 78, 81)).

            5.  The Agreement provided that Appellant would “be limited to 1920 hours per year, unless otherwise agreed to by both parties in this Medical Ordering Agreement.”  (AF 13 (p. 82)).

            6.  The Agreement incorporated by reference Respondent’s contract clauses implementing the Service Contract Act (AF 13 (p. 79)).  These require a contractor to pay to each of its service employees employed in the performance of the contract at least the minimum monetary wages and fringe benefits as determined by the Secretary of Labor (Respondent’s Supplying Principles and Practices, Clause 9-10, Service Contract Act (March 2006); Supplemental Appeal File, Tab (“SAF”) 41 (pp. 292-293)).

            7.  The Agreement included a Termination clause that permitted Respondent to terminate at any time with 15 or more days’ written notice to Appellant (AF 13 (p. 79), Termination (July 1985)).

            8.  Respondent had budgeted $115,200 for the Nurse Case Manager position for the contemplated two year period of the position, calculated by multiplying 1920 hours per year times a rate of $30 per hour (AF 13 (pp. 85-88, 100-104)).

            9.  Appellant began work as the Nurse Case Manager on or about December 28, 2006.  At first, during her initial training, she was working approximately 40 hours per week.  In about April 2007, the Manager of the Omaha injury compensation office (“Manager”), who was responsible for the day-to-day assignment and administration of Appellant’s work, reduced Appellant’s work week to four days and her hours to about 30 per week.  Appellant continued that schedule until January 2008.  (October 23, 2008 Declaration of E. Batson (“Batson Decl.”), ¶¶ 5-8; August 9, 2008 Declaration of Appellant, ¶¶ 4, 5; AF 8 (pp. 33, 61-62), 13 (p. 174)).

            10.  On January 17, 2008, the Manager expressed to Appellant some criticism of Appellant’s work and her attention to detail.  A discussion between Appellant and the Manager ensued, and Appellant picked up some of her personal items and left the premises, escorted by the Manager.  (Batson Decl., ¶¶ 11, 12; AF 8 (p. 66), 12 (p. 77)).  Appellant provided no services to Respondent after that date (Stipulation dated October 27, 2008, paragraph (“Stip.”) 4).

            11.  Through counsel, Appellant submitted a claim in the amount of $60,736 on February 4, 2008.  She charged that the Omaha Manager improperly administered the Medical Agreement by creating a hostile working environment and preventing Appellant from performing meaningful work called for under the Agreement.  She complained that the Manager improperly terminated the Agreement on January 17, 2008.  She calculated her claim as follows:  For 2007, Appellant had worked only four days per week.  She claimed that she lost an additional $10,816 for the loss of one workday per week (50 weeks x 8 hours x $26 per hour).^[1]  As she did not perform the second year of the contemplated term of the Medical Agreement, she contended she lost 1920 hours of work at an hourly rate of $26 per hour which totals $49,920. The sum of these two elements constituted Appellant’s claim of $60,736.  Additionally, she claimed damage to her reputation, without stating a dollar amount, and $94 for insurance that she claimed to have purchased and $92 as the cost of obtaining a nursing license in Kansas.  (AF 8 (pp. 26-67, especially pp. 38-39, 66); Phelps Decl., ¶ 20).  Appellant did not seek particular relief stemming from the alleged hostile working environment and poor management at the Omaha office (SAF 15 (p. 187)).

            12.  By letter dated February 11, 2008, the contracting officer issued Appellant a letter of termination (AF 7 (p. 22); Stip. 6; Phelps Decl., ¶ 21), which he confirmed in a final decision dated March 4, 2008.  In the same final decision, the contracting officer denied Appellant’s February 4, 2008 claim for $60,736 (AF 4 (pp. 10-11); Stip. 7; Phelps Decl., ¶ 28).  Appellant appealed that decision to the Board (Stip. 8; AF 1; Phelps Decl., ¶ 29).

            13.  On March 31, 2008, Appellant filed a second claim, in the amount of $24,960.  In that claim, Appellant charged that Respondent breached the Service Contract Act requirements of the Medical Agreement by paying Appellant only $26 per hour when the going rate for nursing services in the area was $30 per hour.  She claimed to have been underpaid $15,200 as a result.  In addition she claimed $9,600, contending she should have received pay for eleven federal holidays during the period she worked, for nine holidays in 2008, and for two two-week vacations she should have been granted.^[2]  (AF 2 (pp. 2-4); Stip. 9; Phelps Decl., ¶ 30).

            14.  By final decision dated April 30, 2008, the contracting officer denied Appellant’s March 31 claim (AF 14; Stip. 10; Phelps Decl., ¶ 31), and Appellant appealed (SAF 35 (p. 249); Stip. 11; Phelps Decl., ¶ 32).

            15.  Appellant has been paid at the rate of $26 per hour for all the hours she worked (Batson Decl., ¶ 10; AF 13 (p. 174)).

DECISION

            In this appeal, Appellant challenges three decisions of the contracting officer who executed the Medical Agreement:  (1) the February 11, 2008 letter purporting to terminate the Medical Agreement, confirmed in the contracting officer’s March 4, 2008 final decision (Finding 12), as well as what she considers an attempted termination by the Omaha Manager on January 17, 2008 (Finding 10); (2) the denial of her February 4, 2008 claim in the amount of $60,736 (Findings 11, 12); and (3) the denial of her March 31, 2008 claim in the amount of $24,960 (Findings 13, 14).  These three are the only matters before the Board.

Termination of the Medical Agreement

            Appellant raises a number of arguments contending that the administration and eventual termination of the Medical Agreement were tainted by the bad faith of Respondent’s officials.  She contends that notwithstanding that there was ample work assisting injured postal employees within the scope of the Agreement, the Manager and others in the Omaha office gave her mainly administrative work and failed to assign her full time work, which is what she understood the Medical Agreement to require.  She complains that the Manager and other postal employees in the Omaha office treated her rudely and unprofessionally; that they treated her like an employee and not like an independent contractor; that they unjustly criticized her work; and that their conduct created a hostile work environment.  Appellant contends the contracting officer failed to follow established procedures regarding designating a contracting officer’s representative and failed to take appropriate action to correct the deficient management of her Agreement by the Omaha office.

            These conditions, Appellant alleges, breached Respondent’s duties under the Agreement, including the duty of good faith and fair dealing, and justified her decision not to return to work at the Omaha office after January 17, 2008.  She argues that Respondent’s termination of the Medical Agreement was a breach of contract that entitles her to damages.  She claims as her damages the compensation she would have earned had she been assigned full time work for 2007 and 2008.

            Respondent denies that the treatment Appellant encountered at the Omaha office constituted bad faith or breached any duty of Respondent under the Medical Agreement, and argues that the termination of the Medical Agreement was proper.  Further, Respondent contends that Appellant is not entitled to payment for hours she did not work because the Medical Agreement did not require that she be assigned any minimum amount of work.

            We base our decision on Respondent’s last argument.  The parties’ execution of the Medical Agreement in January 2007 (Finding 1) did not establish a contractual relationship between them.  As Respondent points out, under the Agreement Respondent did not commit to acquire any minimum amount of nursing services from Appellant.  The Medical Agreement provided that Appellant would provide services “as directed by” Respondent (Finding 3); that Appellant’s work under the Agreement would “be limited to 1920 hours per year,” absent further agreement by the parties (Finding 5); and that Appellant would be “paid for services rendered under [the Agreement].” (Finding 4).^[3]  The 1920 hours mentioned in the Agreement was a maximum amount of services Respondent could order (without further agreement of the parties) and not a statement of the minimum service Respondent was obligated to require of Appellant.  See United Management Inc. v. Department of the Treasury, GSBCA No. 13515-TD, 97-2 BCA ¶ 29,262.

            Until Respondent ordered and Appellant rendered services, neither party had enforceable rights against the other.  Absent a minimum obligation on Respondent’s part, the Medical Agreement lacked consideration and was unenforceable except to the extent Respondent directed Appellant to provide and Appellant did provide services under the Agreement.  See Willard, Sutherland & Co. v. United States, 262 U.S. 489, 493, 43 S.Ct. 592, 67 L.Ed. 1086 (1923); Coyle's Pest Control, Inc. v. Cuomo, 154 F.3d 1302, 1306 (Fed. Cir. 1998); Jolly Joe’s Tire Shop, PSBCA No. 1427, 86-1 BCA ¶ 18,665.

            The Board does not have jurisdiction to consider alleged failures of Respondent to meet the requirements of the Medical Agreement itself.  See Ridge Runner Forestry v. Veneman, 287 F.3d 1058 (Fed. Cir. 2002); Ronald L. Johnson, PSBCA No. 5282, 06-1 BCA ¶ 33,234.  Therefore, to the extent actions of the Omaha Manager and the contracting officer were directed toward terminating the Medical Agreement, they were without effect because there was no contract to terminate.  See Ann Riley & Associates, Ltd., DOT BCA No. 2418, 93-3 BCA ¶ 25,963 at 129,120.  Appellant’s challenge to the “termination” of the Medical Agreement is dismissed as beyond the Board’s jurisdiction, which depends on the existence of a contract as its basis.

Appellant’s February 4, 2008 Claim

            As discussed above, the Medical Agreement did not require Respondent to assign any minimum amount of work to Appellant, and it did not establish a contract between the parties.  Accordingly, there is no basis for her February 4, 2008 claim to the extent the claim is based on Respondent’s failure to assign sufficient (full-time) work to her during the period she was working and failure to assign any work after January of 2008 through the remainder of the expected term of the Medical Agreement.

            However, to the extent Respondent directed that Appellant provide services and Appellant provided the services contemplated by the Medical Agreement, a binding contract (or contracts) between the parties came into being, and the terms of the Medical Agreement established the terms of such contracts.  See Willard, Sutherland & Co. v. United States, 262 U.S. 489, 494 (1923) (“By the conduct and performance of the parties, the contract was made definite and binding as to the [quantity] ordered and delivered according to its terms.”); Ann Riley & Associates, Ltd., DOT BCA No. 2418, 93-3 BCA ¶ 25,963 at 129,121.  Therefore, we have jurisdiction to examine the claims Appellant asserts under the contracts formed by her performance of Nurse Case Manager services ordered by Respondent.

            In the February 4 claim, Appellant complained that Respondent’s officials administered her work in the Omaha office in bad faith, conspired to end her work there, created a hostile work environment for her, and prevented her from performing meaningful work called for under the Agreement (Finding 11).  However, Appellant has not associated any monetary claim submitted to the contracting officer with the alleged misconduct of Respondent’s officials (other than her claim for lost earnings discussed above).  Without such a claim, the Board is without jurisdiction to consider Appellant’s charges.   See Linda Copman, PSBCA Nos. 4889, 4903, 03-2 BCA ¶ 32,342 at 160,030; Sunshine Development, Inc., PSBCA No. 4200, 99-1 BCA ¶ 30,149. ^[4]

            Appellant accuses the Manager of subverting the intent of the Medical Agreement and acting contrary to the needs and interests of Respondent regarding treatment of its injured workers.  To the extent Appellant styles her complaints as a “whistleblower” action seeking to correct mismanagement of the injured workers’ program within the Omaha office, relief is beyond the jurisdiction of the Board.  This relief would involve equitable remedies such as granting injunctive relief, which this Board has no authority to order.  See Lee Ann Wyskiver, PSBCA No. 3621, 95-2 BCA ¶ 27,755; Onice Ulmer, PSBCA No. 2938, PSBCA No. 2938, 91-2 BCA ¶ 23,991, recon. denied, 91-3 BCA ¶ 24,345; F.W.H. Motor Transit, Inc., PSBCA No. 1317, 85-2 BCA ¶ 18,080.
            Finally, the Agreement, as incorporated into the contracts formed by performance, required Appellant to be licensed and insured, but provided that obtaining necessary licenses and insurance would be at Appellant’s expense (Finding 2).  Appellant’s claim for recovery of those costs is denied.

Appellant’s March 31, 2008 Claim

            For the nursing services actually provided, Appellant was required to perform according to the terms of the Medical Agreement, and Respondent was required to pay her for those services according to the terms of the Medical Agreement.  In her March 31, 2008 claim, Appellant contended that the Service Contract Act required that she be paid $30 per hour, which she contends was the going rate in the area at the time of her performance, instead of the $26 per hour rate paid by Respondent.^[5]  She also claimed that she should have been paid for federal holidays and vacation time.  (Finding 13).

            The Service Contract Act, which was implemented by provisions of the Medical Agreement (Finding 6), has no bearing on Appellant’s rate of contract compensation under the Agreement.  The primary purpose of the Service Contract Act is to provide wage and benefit protection to employees of federal contractors.  See Halifax Technical Services, Inc. v. United States, 848 F.Supp. 240, 244 (D.D.C.,1994); S.Rep. No. 89-798 (1965), reprinted in 1965 U.S.C.C.A.N. 3737 (“The purpose of this bill is to provide labor standards for the protection of employees of contractors and subcontractors furnishing services to or performing maintenance service for Federal agencies.”).  The Act does not establish a rate of compensation to be paid by Respondent to Appellant as a contractor herself or establish her entitlement to be paid for federal holidays and vacation time.  See Henry Lee Hayes, PSBCA Nos. 3997, 3998, 98-1 BCA ¶ 29,642 at 146,880; Paul A. Mason, PSBCA No. 1449, 86-3 BCA ¶ 19,144 at 96,758.

            During the course of this proceeding Appellant raised additional grounds to support her claim that she should have been paid at the rate of $30 per hour: (1) that Respondent had budgeted for her position at $30 per hour; and (2) that she was misled in negotiations with the contracting officer before executing the Medical Agreement into accepting $26 per hour because the contracting officer told her only $26 per hour had been budgeted for the position.

            That Respondent’s budget documents reflect a figure of $30 per hour (Finding 8) has no bearing on the rate of compensation agreed upon by the parties and included in the Medical Agreement.  Furthermore, the Agreement is plain on its face regarding the hourly rate Appellant was to receive for her services, and Appellant has offered no basis for considering parol evidence regarding the negotiations leading up to execution of the Medical Agreement.  See Dattel Realty Co., PSBCA No. 2066, 89-2 BCA ¶ 21,874; Cotco Leasing Co., PSBCA No. 586, 81-1 BCA ¶ 14,821, aff’d sub nom. Strick Lease, Inc. v. United States, 229 Ct. Cl. 471 (1981).

Conclusion

            Appellant’s claim for compensation at the rate of $30 (or $33.35) per hour for work she performed is denied.  Respondent has paid Appellant at the rate agreed to in the Medical Agreement, $26 per hour, for all work she performed (Finding 15).  Its duty to pay for that work has been satisfied, and Appellant has failed to establish entitlement to be paid at a higher rate.  Her claim for insurance and license costs is denied.  The appeal is otherwise dismissed for lack of jurisdiction.

Norman D. Menegat
Administrative Judge
Board Member

I concur:
William A. Campbell
Administrative Judge
Chairman

[1]  She calculated her loss for 2007, alternatively, to be $12,240.60, by subtracting from $49,920 (1920 hours times $26 per hour) the $37,679.40 shown on her 2007 W-2 as her earnings for that year (AF 8 (p. 66), 10 (p. 75)).  This would adjust the total of her claim as well.

[2]  The elements do not add up to the total claimed, but we need not resolve the small discrepancy.  Additionally, in later filings Appellant alleged the Service Contract Act rate for nurses in Omaha was $33.35 per hour (SAF 33 (p. 246)).  She recalculated and consolidated her claims using the SCA rate and the total of what she considers hours of work denied and asserted her claim to be $88,832.60.  (Appellant’s Brief in Support of Appellant’s Motion for Summary Judgment docketed August 13, 2008, p. 117).

[3]  The clause limiting hours to 1920 per year specifically refers to their agreement as a Medical Ordering Agreement (Finding 5).

[4]  As we have no jurisdiction over these claims absent their prior presentation to the contracting officer, we make no finding regarding their validity.  However, damages for emotional pain and suffering, damages arising from tort independent of the contract, and punitive or exemplary damages are generally not recoverable before contract appeals boards.  See, e.g., Onice Ulmer, PSBCA No. 2938, 91-2 BCA ¶ 23,991, recon. denied, 91-3 BCA ¶ 24,345; Roger Dean Barrett, PSBCA No. 2490, 89-3 BCA ¶ 22,220.

[5]  She subsequently adjusted the amount of her claim to assert entitlement to payment at the rate of $33.35 per hour (Finding 13, n. 2).