"A settlement agreement is a contract, and its construction is a question of law which this court reviews de novo." Lary v. U.S. Postal Serv., 472 F.3d 1363, 1367 (Fed. Cir.2006) (quoting Conant v. Office of Pers. Mgmt, 255 F.3d 1371, 1376 (Fed. Cir.2001)). In order to prevail, Mr. Lutz must show material non-compliance by the agency with the terms of the settlement agreement.

The Board's decision must be affirmed unless it is found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; obtained without procedures required by law, rule, or regulation; or unsupported by substantial evidence. See 5 U.S.C. § 7703(c); Lary v. U.S. Postal Serv., 472 F.3d 1363, 1366-67 (Fed. Cir. 2006). A settlement agreement is a contract, Tiburzi v. Dep't of Justice, 269 F.3d 1346, 1351 (Fed. Cir. 2001), and we review the Board's construction of a settlement agreement without deference, Fomby-Denson v. Dep't of the Army, 247 F.3d 1366, 1371 (Fed. Cir. 2001).

The question therefore is whether the breach was material because only a material breach would permit rescission of the Settlement Agreement and reinstatement of plaintiff's claims. See Lutz v. U.S. Postal Service, 485 F.3d 1377, 1381 (Fed. Cir. 2007) (in order to prevail, plaintiff must show "material non-compliance with the terms of the settlement agreement"); Lary v. U.S. Postal Service, 472 F.3d 1363, 1367 (Fed. Cir. 2006);Thomas v. Dep't of Housing Urban Development, 124 F.3d 1439, 1442 (Fed. Cir. 1997);see also America v. Preston, 468 F. Supp. 2d at 122 (settlement agreements "are in the nature of contracts"). Whether a breach of contract — in this case the Settlement Agreement — is material or, conversely, whether it has been substantially performed turns on the following factors: (1) the extent to which the plaintiff was deprived of the benefit that he reasonably expected under the contract; (2) the extent to which he can be adequately compensated for the part of that benefit of which he was deprived; (3) the extent to which the party failing to perform (the defendant) has suffered forfeiture; (4) the likelihood that the defendant will cure its failure, taking account of all the circumstances including any reasonable assurances; and (5) the extent to which the behavior of the defendant comports with standards of good faith and fair dealing.

"A settlement agreement is a contract, and its construction is a matter of law which this court reviews de novo." Lutz v. U.S. Postal Serv., 485 F.3d 1377, 1381 (Fed. Cir. 2007) (quoting Lary v. U.S. Postal Serv., 472 F.3d 1363, 1367 (Fed. Cir. 2006)). It is Ms. Melton's burden to show material non-compliance with the terms of the settlement agreement.

Finally, we reject the government's argument that all Mr. Bernard seeks is $12,400 in damages, the Board cannot award damages, and therefore the Board cannot award a remedy even if he proves breach. See Lary v. U.S. Postal Serv., 472 F.3d 1363, 1368 (Fed.Cir.2006) (“[T]he Board does not have authority to grant damages....”). The Board did not refuse to reach the merits on any such basis.

"A settlement agreement is a contract, and its construction is a question of law which this court reviews de novo." Lutz v. U.S. Postal Serv., 485 F.3d 1377, 1381 (Fed. Cir. 2007) (quoting Lary v. U.S. Postal Serv., 472 F.3d 1363, 1367 (Fed. Cir. 2006)). Here, Mr. Haith first argues that the settlement agreement is unlawful because the VA made misrepresentations during its negotiation.

To be sure, some recent Federal Circuit decisions have applied the Back Pay Act to Postal Service employees. See Lary v. U.S. Postal Serv., 493 F.3d 1355 (Fed.Cir.2007); Lary v. U.S. Postal Serv., 472 F.3d 1363 (Fed.Cir.2006). Those decisions, however, have not addressed the question whether the Back Pay Act applies to Postal Service employees, and in particular they have not addressed the question whether the attorney fee provision of the Back Pay Act applies to preference eligibles in the Postal Service.

To be sure, some recent Federal Circuit decisions have applied the Back Pay Act to Postal Service employees. See Lary v. U.S. Postal Serv., 493 F.3d 1355 (Fed. Cir. 2007); Lary v. U.S. Postal Serv., 472 F.3d 1363 (Fed. Cir. 2006). Those decisions, however, have not addressed the question whether the Back Pay Act applies to Postal Service employees, and in particular they have not addressed the question whether the attorney fee provision of the Back Pay Act applies to preference eligibles in the Postal Service.

We must affirm the Board's decision unless it is "(1) arbitrary, capricious, an abuse of discretion, 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 evidence." 5 U.S.C. § 7703(c); see also Lary v. U.S. Postal Serv., 472 F.3d 1363, 1366-67 (Fed. Cir. 2006). Under 5 U.S.C. § 8334(c), an "employee" may make a CSRS deposit to receive credit for years of service during which time retirement deductions were not made.

We must affirm the decision of the Board unless it is "(1) arbitrary, capricious, an abuse of discretion, 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 evidence." 5 U.S.C. § 7703(c); see also Lary v. U.S. Postal Serv., 472 F.3d 1363, 1366-67 (Fed. Cir. 2006). On appeal, Davis argues that the IRS breached the 1996 Agreement by "misrepresent[ing] the settlement agreement and [Davis's] professional history with the agency" by disclosing to the U.S. Attorney's Office "that [Davis] falsified his pre-employment application forms when his suitability for employment as a special agent was being considered in 1995."