N.M. Code R. § 1.7.1.13
Any settlement agreement reached by an agency and an employee to resolve a matter between them, that incorporates provisions covered by these rules, must conform to the provisions of these rules, unless otherwise approved by the director. If a potential offer of settlement relates to a personnel action covered by these rules, including, but not limited to, disciplinary appeals, grievance arbitrations, and prohibited practice complaints, or a collective bargaining agreement entered into by the state, an agency must secure approval from the director prior to extending the offer. If in the judgment of the director, the offer of settlement is in the best interest of the state, the director may authorize the agency to extend the offer of settlement to the employee. If such settlement also involves payment of monies by an agency, joint approval of the cabinet secretary of the department of the department of finance and administration and administration signifying budget availability and the director is required.
N.M. Code R. § 1.7.1.13