U.S. Merit Systems Protection Board 
Case Report for January 25, 2013

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Note:  These summaries are descriptions prepared by individual MSPB employees. They do not represent official summaries approved by the Board itself, and are not intended to provide legal counsel or to be cited as legal authority.  Instead, they are provided only to inform and help the public locate Board precedents.


Appellant:  Jeffrey Paula
Agency:  Social Security Administration
Decision Number:  2013 MSPB 6
Docket Number:  PH-0752-10-0251-X-1
Issuance Date:  January 23, 2013
Appeal Type:  Adverse Action by Agency
Case Type:  Compliance Referral

 - Status Quo Ante Relief Following Retirement

    This case was before the Board to consider the administrative judge's recommended decision finding the agency in noncompliance of a final Board decision that required the agency to cancel the appellant's removal, restore him to the status quo ante, and pay him appropriate back pay and benefits.  The judge rejected the agency's contention that 5 U.S.C. 7701(j), governing appealability of removals from the service following a retirement, does not require that an agency reinstate and pay back pay to an employee whose removal subsequently is reversed.  The agency renewed that argument before the Board.  

Holdings:  The Board held that section 7701(j) does not limit the relief that may be awarded to an appellant who retires based on an agency's final decision to remove him, but whose removal subsequently is reversed by the Board, found the agency in noncompliance, and ordered it to provide back pay and other appropriate relief:

1.  The agency relied on a line of case law, beginning in 1979, in which the Board's reviewing court held that when an appellant retired after receiving a final decision of removal, he was not entitled to back pay or reinstatement if the removal action was reversed.  The agency maintained that section 7701(j), enacted in 1990, did not supersede or overrule that case law because section 7701(j) governs only whether the Board has jurisdiction over joint removal and retirement cases, and not the relief that may be awarded in such cases.  Section 7701(j) provides that, "In determining the appealability . . . of any case involving a removal from the service . . . , neither an individual's status under any retirement system . . . may be taken into account."  

2.  Following the change to the law in 1990, the Board has consistently recognized that an appellant who retires in the face of a final removal decision, and whose removal is reversed, is entitled to all of the relief he could have received if he had appealed the removal but had not retired.  


Petitioner:  Kathleen Sebelius, Secretary of Health and Human Services
Respondent:  Auburn Regional Medical Center
Tribunal:  United States Supreme Court
Docket Number:  11-1231
Issuance Date:  January 22, 2013

Equitable Tolling

    This case concerned the time within which health care providers may file an administrative appeal from the initial determination of the reimbursement due them for inpatient services rendered to Medicare beneficiaries.  The governing statute sets a 180-day limit for filing appeals to the administrative tribunal.  By regulation promulgated in 1974, the agency authorized the administrative tribunal to extend the 180-day limitation, for good cause, up to 3 years.  Here, the challenges to the determination of the reimbursement rate were more than a decade late, but the health care providers argued that the deadline should be subject to equitable tolling as described in Irwin v. Department of Veterans Affairs, 498 U.S. 89 (1990).  

Holdings: The Supreme Court held that the statutory 180-day limitation is not jurisdictional, and that the Secretary reasonably construed the statute to permit a regulation extending the time for a provider's appeal to 3 years, but that the presumption in favor of equitable tolling does not apply to administrative appeals of this sort:

1.  The 180-day limitation in the statute is not jurisdictional in nature; it is a claim processing rule.

2.  The Secretary's regulation allowing for an appeal up to 3 years after an initial determination is a permissible interpretation of the statute, and entitled to Chevron deference.  

3.  A presumption of equitable tolling generally applies to suits against the United States, but application of this presumption is not in order here.  The Court has never applied Irwin's presumption to an agency's internal appeal dealine.  The presumption was adopted in part on the premise that "[s]uch a prinicple is likely to be a realistic assessment of legislative intent," but that premise is inapt in the context of providers' administrative appeals under the Medicare Act.  

Petitioner:  Kelly L. Stephenson
Respondent:  Office of Personnel Management
Tribunal:  U.S. Court of Appeals for the Federal Circuit
Docket Number:  2012-3074
Issuance Date:  January 18, 2013

Statutory Construction
Disability Retirement Benefits
 - Offset for Social Security Disability Benefits

    This appeal presented an issue of statutory interpretation arising from 5 U.S.C. 8452 and section 223 of the Social Security Act, 42 U.S.C. 423.  Stephenson began receiving a FERS disability annuity in 2005.  He also applied for Social Security disability benefits, as he was required by law to do, and that application was approved.  As required by statute, OPM reduced Stephenson's FERS disability annuity to account for the SSA disability benefits to which he was entitled.  As permitted under the SSA, the appellant engaged in a "trial work period" for 9 months without losing his SSA benefits.  Following Stephenson's successful completion of this trial period, SSA notified him that because he was able to perform "substantial work," it had determined that his disability had ended, and that he was "not entitled to Social Security disability payments beginning September 2009."  SSA further informed him that he was getting an "extended period of eligibility" for 36 months, during which it could "restart payments for any month(s) your work is not substantial if your health problems still meet our rules."  Because Stephenson had stopped receiving SSA disability benefits, he requested that OPM terminate the offset in his FERS annuity.  OPM denied the request, stating that he remained eligible for Social Security benefits, making a distinction between eligibility and actual receipt of such benefits.  In a final decision, the Board, Vice Chairman Wagner dissenting, affirmed OPM's determination.

Holding:  The court reversed the Board's decision and remanded the case for appropriate action.  The court stated that the "only dispute is whether Mr. Stephenson was 'entitled' to SSA disability benefits during his extended period of eligibility for any month in which he did not receive SSA disability benefits because he was working."  The court agreed with Stephenson's contention that, under the plain language of section 223, he was not "entitled" to SSA disability benefits during the period in question.  

Petitioner:  John Berry, Director, Office of Personnel Management
Respondents:  Rhonda K. Conyers, Devon Haughton Northover, and Merit Systems Protection Board
Tribunal:  U.S. Court of Appeals for the Federal Circuit
Docket Number:  2011-3207
Issuance Date:  January 24, 2013

Security Clearances - "Sensitive" Positions

    The Respondents had petitioned the entire court (en banc) to rehear and reconsider a panel decision issued on August 17, 2012, 692 F.3d 1223.  

Holdings:  The court granted the petition for rehearing en banc, vacated the decision issued on August 17, 2012, and invited the filing of briefs by amici curiae.  Parties and amici were directed to address the following issues:

a.  Does the Supreme Court’s ruling in Department of the Navy v. Egan, 484 U.S. 518 (1988), foreclose MSPB review of the merits of determinations that an employee is ineligible for a "sensitive" position, or is the ruling confined to determinations that an employee is ineligible to hold a security clearance?

b.  To what extent, if any, has Congressional action pre or post-Egan demonstrated that Congress intended to preserve MSPB review of adverse actions with respect to employees holding "sensitive" positions that do not involve intelligence agencies or security clearances?

c.  What are the differences between the relevant processes and criteria associated with obtaining security clearances, and those involved in determining whether an individual is deemed eligible to hold a "non-critical sensitive" or "critical sensitive" position that does not require a security clearance?

d.  What problems, if any, would the MSPB encounter in determining adverse action appeals for employees holding "sensitive" positions not requiring a security clearance; to what extent should the MSPB defer to the agency's judgment on issues of national security in resolving such adverse action appeals?

U.S. Merit Systems Protection Board | Case Reports