In a recent ruling, the U.S. Court of Appeals for the Federal Circuit upheld a lower court's decision to dismiss a severance pay claim filed by Thomas K. Cullerton against the United States. The court ruled that Cullerton's eligibility for a retirement annuity disqualified him from receiving severance pay after his separation from the U.S. Forest Service. This decision affects federal employees seeking severance pay under similar circumstances.

The case, Cullerton v. United States (Docket No. 26-1633), was decided on November 6, 2026. The ruling confirms that federal employees who qualify for immediate retirement benefits cannot also receive severance pay upon termination. This ruling is significant for federal employees who may be in similar situations, as it clarifies the legal boundaries regarding severance pay eligibility.

Background

Thomas K. Cullerton worked for the U.S. Forest Service, part of the Department of Agriculture, from 2023 until his termination on August 23, 2025. Before his employment with the Forest Service, he worked for various federal agencies from 2011 to 2023. In December 2024, Cullerton applied for disability retirement, citing injuries from his military service and work-related injuries. However, the Office of Personnel Management (OPM) initially denied his application, stating that his conditions did not prevent him from performing his job duties.

Following his disability application, the USDA informed Cullerton that it could not accommodate his medical conditions due to cognitive deficits. In July 2025, the Forest Service proposed to remove him from his position due to his inability to perform his job. The removal was finalized on August 20, 2025, with the agency stating that employees terminated for efficiency reasons are not eligible for severance pay. Cullerton subsequently filed a complaint in the Court of Federal Claims, seeking $95,000 in severance pay.

The Ruling

The Claims Court dismissed Cullerton's complaint, stating that he was ineligible for severance pay because he qualified for an immediate retirement annuity. The court noted that under 5 U.S.C. § 5595(b), employees who are involuntarily separated from service and meet specific criteria are entitled to severance pay. However, the law also states that employees who are eligible for immediate annuity benefits are excluded from receiving severance pay.

The Federal Circuit affirmed the lower court's decision, stating, “Mr. Cullerton’s immediate eligibility for an MRA+10 annuity disqualified him from receiving severance pay as a matter of law.” The ruling emphasized that Cullerton's age and years of service made him eligible for the MRA+10 annuity, which he was entitled to upon separation. The court found that Cullerton's arguments against his eligibility were unpersuasive, as his failure to apply for the annuity did not change his legal status.

Impact

This ruling has important implications for federal employees who might be considering severance pay claims after separation. It clarifies that eligibility for retirement benefits can disqualify employees from receiving severance pay, which may influence future cases. Employees in similar situations must now be aware that qualifying for retirement benefits can significantly affect their financial entitlements upon termination.

The decision also reinforces the legal framework surrounding severance pay and retirement benefits, providing clearer guidelines for both employees and employers. It serves as a reminder for federal employees to understand their rights and benefits fully, especially when facing termination or separation from service.

What's Next

Details were not available in the court filing regarding whether Cullerton plans to appeal the ruling. There may also be related cases pending that could further clarify the legal landscape around severance pay and retirement benefits for federal employees.