Sara Makowiec began her Master’s degree at Rennselear Polytechnic Institute on January 23, 2012. The next day, she signed an agreement with Benet Laboratories, part of the U.S. Army Armament Research, Development and Engineering Center.  The agreement was entered into under the Government Employees Training Act, and provided that the Center would pay for Makowiec’s graduate degree if she remained an employee for a specified amount of time. The agreement contained language that required Makowiec to pay liquidated damages if she did not remain employed with the Department of Defense for the requisite time.

Makowiec resigned from her position 22 weeks before her contractual obligation ended.  She thereafter repaid the tuition that the Government paid for her.

In 2015, Makowiec sued the Department of Defense in U.S. District Court for the District of Massachusetts, which transferred the case to the U.S. Court of Federal Claims.  In the CFC, she alleged the Government illegally exacted the money she repaid because the continue-in-service obligation only applied if she signed the agreement prior to commencing her training—that is, her graduate studies.  But the Government pointed out that although her first class commenced on January 23, 2012, and she signed the agreement on January 24, 2013, she dropped that class and the Government did not include it in the tuition repayment plan.

The Court analyzed the exaction claim based on Federal Circuit precedent, AT&T v. United States, 117 F.3d 1368 (Fed. Cir. 1999), which emphasized the strong policy of not invalidating a government contract after it has been performed. This precedent also urged the consideration of statutory purpose before invalidating a contract. The Court concluded that Makowiec’s timeliness argument “exalted form over substance.” The Court found that the purpose of the training act was “to assist in achieving an agency’s mission and performance goals by improving employee and organizational performance[.]” Further, Congress specifically withheld tuition payments solely for the “purpose of providing an employee an opportunity to obtain an academic degree.”

The Court noted that Makowiec obtained her degree and under the agreement she was required to maintain her position with the agency for a specific period of time, which she failed to do. The Court therefore granted the Government’s motion for summary judgment, and denied Makowiec’s renewed motion for summary judgment.

Read Judge Damich’s full decision here.