House Committee on Oversight and Government Reform Chairman James Comer announced on May 11 that he is investigating the use of taxpayer-funded payouts to federal employees to settle employment disputes. The committee is examining concerns about data collection gaps, rising costs, and incentives that may encourage frivolous claims or discourage proper discipline of employees.
The issue matters because these settlements involve significant taxpayer money and may impact government accountability. Comer said in a letter to Scott Kupor, Director of the U.S. Office of Personnel Management, that relevant agencies are being asked to provide documents and information for this review.
“In fiscal year 2023, the Biden administration’s Equal Employment Opportunity Commission (EEOC) reported securing more than $202 million in taxpayer payouts to federal workers through mediation and settlements, compared to just over $22.6 million through litigation. Similarly, in the Merit Systems Protection Board (MSPB) under the Biden administration, attorney fee payouts in sue-and-settle cases alone surged to nearly $11 million, compared to $3.6 million during President Trump’s first term. Settlements across these systems routinely involve taxpayer-funded payments including back pay, compensatory damages, attorney’s fees, and other monetary relief,” wrote Chairman Comer. “Efforts to track and account for these settlements appear woeful. Agencies often fail to reimburse the [U.S. Department of the Treasury] for settlements paid on their behalf.”
According to Comer’s letter, case outcomes show agencies opt for settlement in 68% of adverse action cases not dismissed at MSPB; however when agencies contest claims they win more than 80% of decisions. He said this suggests agencies are settling cases with taxpayer funds even when they might otherwise prevail if they pursued litigation further.
“Despite the scale and significance of settlement activity, comprehensive data on settlement frequency, costs, and distribution across agencies is not publicly available, and may not exist in any centralized form. Prior Government Accountability Office (GAO) reporting has identified persistent challenges in tracking settlement payments and their underlying causes, limiting Congress’s ability to assess whether agencies are addressing misconduct or simply buying it off,” concluded Chairman Comer. “This is not merely an administrative inconvenience. The absence of consistent, reliable data on settlement patterns means that repeat offenders can accumulate costly settlement histories without triggering scrutiny or corrective action. Effective oversight requires collection, organization, and reporting of this data to Congress.”
The committee has requested additional documentation from relevant agencies as part of its ongoing oversight efforts.
