U.S. Merit Systems Protection Board 
Case Report for September 20, 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.

BOARD DECISIONS

Appellant:  Debra J. Chandler
Agency:  Department of the Treasury
Decision Number:  2013 MSPB 74
Docket Number:  AT-0752-13-0583-I-1
Issuance Date:  September 18, 2013
Appeal Type:  Adverse Action by Agency
Action Type:  Furlough (30 Days Or Less)

Furloughs - 30 Days or Less
Discovery

    This matter was before the Board for interlocutory review of a number of discovery-related rulings made by the administrative judge.  The appellant, a Senior Tax Analyst with the IRS, appealed the agency's decision to furlough her for 5 to 7 days.  The furlough action was based on the March 1, 2013 Sequestration Order issued by the President requiring across-the-board reductions in federal spending pursuant to the Balanced Budget and Emergency Deficit Control Act.  Under directions from OMB, the agency was required to reduce spending by 5% for the fiscal year ending on September 30, 2013.  On appeal to the Board, the appellant served a number of discovery requests on the agency, which moved for a protective order to protect itself from what it described as the "harassment, annoyance, undue burden and expense" of responding to the requests.  After denying most of the requests, the administrative judge certified her rulings to the Board for interlocutory review.  There were 12 requests for documents at issue before the Board.  

Holdings:  A majority of the Board, Vice Chairman Wagner dissenting in part, affirmed the administrative judge's rulings as modified.  

The majority opinion approved the following discovery requests:  (1) for records relating to employees who have been hired since the time the agency announced its intention to conduct a furlough; (6) for the identity of non-bargaining unit employees who were not furloughed and to payment of overtime to non-bargaining unit employees; (10) for information related to the amount of bonuses and awards to management officials from March 1 to the end of the fiscal year; and (13) for information regarding specific processes that the agency applied under 5 U.S.C. 7513 and the IRS Manual in conducting the furlough.  

The majority opinion denied the following  discovery requests:  (1) for records relating to employees paid overtime since the agency announced its intention to conduct a furlough; (2) for information related to the cost of conducting the furlough; (3) for information related to the agency's decision to proceed with the furlough while bargaining with the National Treasury Employees' Union; (6) for information relating to whether some employees were allowed greater flexibility than others in scheduling furlough days; (9) for information relating to the hiring of certain contract employees since the agency announced its intention to conduct a furlough; (11) for the amount of funds the agency will continue to expend on items that could have been cut, e.g., conferences, management travel, and training; (12) for information relating to "other alternatives considered," including allowing employees to select furlough days and to serve furlough days for other employees; (13) for information relating to the agency's consideration of Douglas factors; (15) for information regarding projected allocations of funds and actual expenditure of funds for the period from 2011 through 2013; and (16) for information regarding 14 specific decisions centering on how or why the agency chose specific days for furloughs and ramifications of those decisions on operating costs and efficiencies.  

The majority relied on the following principles and considerations in making its rulings:

1. "Furlough" means the placing of an employee in a temporary status without duties and pay because of a lack of work or funds or other nondisciplinary reasons.  A furlough of 30 days or less is appealable to the Board as an adverse action under chapter 75; a furlough of more than 30 days is appealable to the Board as a reduction in force (RIF).  Furloughs of 30 days or less are subject to the "efficiency of the service" standard of 5 U.S.C. 7513(a).  

2. In light of the basic similarities between RIF furloughs and adverse action furloughs, RIF principles are instructive in determining the scope of the Board's review of adverse action action furloughs and what it means for a furlough of 30 days or less to be taken for the "efficiency of the service."  

3. Although the agency is always responsible for proving that an adverse action promotes the efficiency of the service, the analysis of this issue must depend on the problem that the adverse action was meant to address.  Furloughs are unique among adverse actions because by definition they are taken for nondisciplinary reasons and are generally used to address work or funding shortages or other matters that are not personal to the affected employee.  

4. The Board has found that an agency satisfies this standard in a furlough appeal by showing, in general, that the furlough was a reasonable management solution to the financial restrictions placed on it and that the agency applied its determination as to which employees to furlough in a "fair and even manner."  A "fair and even manner" means that the agency applied the adverse action furlough "uniformly and consistently," just as it is required to do in a RIF furlough.  This does not mean that the agency is required to apply the furlough in such a way as to satisfy the Board's sense of equity.  Rather, it means that the agency is required to treat similar employees similarly and to justify any deviations with legitimate management reasons.  

5. The Board's efficiency of the service determination does not encompass agency spending decisions per se, including spending on personnel matters.  Nor does it encompass an agency's decision to allocate furlough days in a certain mannter among employees who are not similarly situated.  Such matters belong to the judgment of agency managers, who are in the best position to decide what allocation of funding will best allow the agency to accomplish its mission.  What the efficiency of the service determination does encompass are issues relating to the uniform and consistent application of the furlough, including whether the agency used a furlough to target employees for personal reasons, or attempted to exempt certain employees from the furlough without legitimate management reasons.

6. An agency need not show that it conducted a furlough in a manner that best promoted the efficiency of the service.  There are many ways in which agency management could have structured the furlough, and it is not the Board's place to select from among them.`

________________________________________

    In her separate opinion, Vice Chairman Wagner stated that she would have granted several of the requests denied by the majority: (1) for records relating to employees paid overtime since the agency announced its intention to conduct a furlough; (2) for information related to the cost of conducting the furlough; (3) for information related to the agency's decision to proceed with the furlough while bargaining with the National Treasury Employees' Union; (6) for information relating to whether some employees were allowed greater flexibility than others in scheduling furlough days; and (9) for information relating to the hiring of certain contract employees since the agency announced its intention to conduct a furlough.  

     The Vice Chairman stated that she dissented from the majority opinion "insofar as it unmoors our review of this furlough appeal from its clear statutory foundation."  She stated that there can be no dispute that the agency bears an evidentiary burden to demonstrate that its decision to furlough was a reasonable management solution to financial restrictions and implemented in a fair and even manner.  The appellant may rebut the agency's evidence as to the reasonableness and fairness of the furlough and also challenge the furlough by proving harmful error, prohibited personnel practices, or that it was not in accordance with law.  The discovery requests in question were calculated to lead to the discovery of admissible evidence as to these matters.  

     The Vice Chairman stated that the majority effectively jettisoned the efficiency of the service standard, as well as the Board's longstanding "reasonable management solution" and "fair and even manner" standards, by analogizing to RIF cases and holding that agency management has almost unfettered discretion in making spending decisions that are not reviewable by the Board.  Where the majority saw "no indication" that Congress intended to differentiate between the two, she saw the plain language of the statute wherein Congress expressly excluded RIFs from the efficiency of the service standard and the Board's statutory review authority, while making furloughs of 30 days or less explicitly subject to those requirements.  Even if analogizing furlough cases to RIF appeals was appropriate, she would still disagree with the majority's denial of the appellant's discovery requests insofar as it appears to be based upon the erroneous premise that the Board's adjudicatory authority in RIF cases amounts to nothing more than rubber stamping an agency's decisions.  

________________________________________

    Chairman Grundmann issued a separate opinion to address the Vice Chairman Wagner's dissent, which she said relied heavily on Clark v. Office of Personnel Management, 24 M.S.P.R. 224 (1984), and its statement that agency actions in furloughs must be conducted in a "fair and even manner."  Until now, the Board has seen very few chapter 75 furlough appeals and has had little occasion to revisit the standard announced in Clark, which came from an analogy to RIF appeals, to define its contours more precisely.  If the Board is to apply Clark in a meaningful way, it must define "fairness" and "evenness" more precisely, by providing a practical, workable standard of review that is fully supported by the law.  She took exception to the dissenting opinion's criticism that the majority opinion "jettisons" the efficiency of the service standard and arrives at a decision that amounts to the "rubber-stamping" of chapter 75 furlough actions.  The Board will reverse a chapter 75 furlough if the agency fails to show that it applied the furlough uniformly and consistently among similarly situated employees as a reasonable response to work or funding shortages, or if the appellant can show that the agency's action was the result of harmful procedural error, constituted a prohibited personnel practice, or was not in accordance with law.



Petitioner:  Department of Labor
Respondents:  Charles R. Avery, et al.
Decision Number:  2013 MSPB 75
Docket Numbers:  CB-7521-13-0070-T-1, et al.
Issuance Date:  September 18, 2013
Appeal Type:  Actions Against ALJ's
Action Type:  Furlough (30 Days Or Less)

Furloughs - 30 Days or Less
Original Jurisdiction - Actions Against ALJs

    The agency petitioned for review, and the respondent administrative law judges (ALJs) cross-petitioned for review, of an initial decision issued by an ALJ that authorized the agency to furlough the respondent ALJs for 4 days rather than the 5.5 days the agency requested.  Actions furloughing ALJs for 30 days or less are different from actions furloughing other federal employees in two significant respects.  An agency must seek and obtain approval from the Board before taking such action, and such actions must be taken for "good cause" rather than "for such cause as well promote the efficiency of the service."  The initial decision found that "good cause" required the agency to prove by preponderant evidence that:  (1) the proposed furlough related to a management plight caused by financial restrictions; (2) the proposed furlough was implemented in accordance with law and consistent with OPM furlough guidance; (3) ALJs were treated like other employees of the agency; and (4) the proposed action was not predicated on grounds which improperly interfere with the ALJs' performance of judicial functions.  The initial decision found that the agency met its burden except that it failed to show that ALJs were treated like other employees in the agency.  It found that the agency engaged in disparate treatment by proposing to furlough ALJs for a greater length of time than it was furloughing other employees whose positions were funded from the same budget account, who were furloughed for an average of 4 days.  

Holdings:  A majority of the Board, Vice Chairman Wagner dissenting in part, vacated the initial decision and found good cause to furlough the respondent ALJs for 5.5 days:

1. Congress has not defined the term "good cause" for purposes of 5 U.S.C. 7521, and the Board has adopted a flexible approach in which good cause is defined according to the individual circumstances of each case, with a baseline being whether the action improperly interferes with the ALJ's ability to function as an independent and impartial decision maker.

2. The initial decision's test failed to recognize that not all furloughs are a result of a shortage of funds; they may also be taken for "other nondisciplinary reasons."  If, hypothetically, the agency experienced a drastic reduction in the ALJs' workload but not in the workload in other parts of the agency, the agency would be unable to establish good cause to furlough its ALJs under the initial decision's formulation.  This is true because the agency would be unable to prove that its action was a "management plight related to financial restrictions," and it would be unable to prove that it treated its ALJs the same as it treated other employees who were not affected by a reduction in the ALJs' workload.

3. The initial decision erred by requiring the agency to prove, as part of its case-in-chief, that it did not engage in disparate treatment toward the ALJs.  This is problematic for two reasons; it requires the agency to prove a negative, and it ignores the possibility of circumstances in which there is good cause for treating ALJs differently from other classes of employees.  

4.  Because it relied on the purported "special status" of ALJs, the initial decision could be deemed to imply that ALJs are entitled to greater protection than non-ALJs in a furlough situation.  An agency may furlough ALJs for precisely the same reasons that it may furlough other employees.  ALJs are not a "protected class," and they have no entitlement to receive favorable substantive treatment in a furlough.

5. The Board will not scrutinize an agency's decision to determine whether the agency has structured a furlough in a manner that second-guesses the agency's assessment of its mission requirements and priorities.  The Board lacks the expertise to review every agency spending decision to determine whether it was wise or whether a particular choice should have been foregone in order to save funds necessary to avoid furloughs.  

6. In reducing the length of the proposed furlough to bring it in line with the hypothetical average employee, the initial decision improperly intruded on the agency's broad discretion to structure its furlough, with the ALJ issuing the decision substituting his judgment for that of the agency as to where the agency could cut spending while performing its mission as it deemed appropriate.  

7. The agency showed by preponderant evidence that it had sound business reasons behind its decision to furlough ALJs, and there is no evidence that the decision was made for an improper reason or to interfere with the ALJs' qualified judicial independence.  Accordingly, good cause was shown to authorize the agency to furlough the ALJs for 5.5 days.

________________________________________

    In her separate opinion, Vice Chairman Wagner agreed that the agency met its burden to show that it had good cause to furlough the ALJ respondents, but she would have affirmed the initial decision as to the duration of the furlough.  In her view, the majority improperly intruded into the initial decision's findings of act, which were not refuted.  She stated her disagreement with the majority's assessment that the ALJ's 4-prong test is erroneous.  In context, this test accurately identified the factual and legal issues raised in this unique case.  As set forth more fully in her dissent in the Chandler case, she disagreed with the majority's use of the Board's highly deferential standard for reviewing RIF cases to adjudicate chapter 75 furloughs of 30 days or less.


Appellant:  Mary D. Davis
Agency:  United States Postal Service
Decision Number:  2013 MSPB 72
Docket Number:  PH-0353-10-0500-B-1
Issuance Date:  September 13, 2013
Appeal Type:  Restoration to Duty
Action Type:  After Partial Recovery from Compensable Injury

Restoration to Duty
 - Partial Recovery from Compensable Injury

    The appellant petitioned for review of a remand initial decision that denied her restoration claim on the merits.  The appellant suffered compensable injuries in 2003, 2005, and 2007.  In April 2009, while she was out of work on leave without pay, she bid on a "non-cons" Mail Handler position, claiming that she had recovered sufficiently to perform in the position with reasonable accommodations.  The agency denied the appellant's request based on its determination that she could not perform the essential functions of the position with or without reasonable accommodation and because it searched for, and was unable to find, a vacant funded position, the essential functions of which she could perform.  The remand initial decision found that the agency did not act arbitrarily and capriciously in denying restoration under these circumstances.  

Holdings:  A majority of the Board, Member Robbins dissenting, reversed the initial decision, finding that the appellant proved that the agency arbitrarily and capriciously denied her restoration:

1. In the case of an employee who has partially recovered from a compensable injury, i.e., one who cannot resume the full range of her regular duties but has recovered sufficiently to return to part-time or light duty or to another position with less demanding physical requirements, an agency must make every effort to restore the individual to a position within her medical restrictions and within the local commuting area.  

2. As set forth in Latham v. U.S. Postal Service, 117 M.S.P.R. 400 (2012), the Postal Service agreed via its internal rules to restore partially recovered individuals to duty in whatever tasks are available regardless of whether those tasks comprise the essential functions of an established position.  This general obligation exists in addition to the requirement that the Postal Service may discontinue a modified assignment consisting of tasks within an employee's medical restrictions only where the duties of that assignment no longer need to be performed by anyone or those duties need to be transferred to other employees in order to provide them with sufficient work.  Accordingly, the agency was obligated to conduct a proper search for tasks for the appellant, regardless of whether she was out of work at the time of her restoration request.

3. The agency did not improperly deny the appellant restoration insofar as it denied her request for the particular bid position.  

4. The agency arbitrarily and capriciously denied the appellant restoration by its failure to search the local commuting area for tasks that the appellant could perform, improperly limiting its search to vacant positions the duties of which she could perform.  

5. Although the appellant has prevailed on the merits of her restoration claim, the Board will not order the appellant restored to an assignment, nor will it order back pay based on such an assignment, as that would put the appellant in a better position than if the wrongful action had not occurred.  Rather, the appropriate remedy is for the agency to conduct an appropriate search within the local commuting area retroactive to the appellant's request for restoration.

6. The appellant did not establish that the agency discriminated against her on the basis of her disability.

________________________________________

    In a dissenting opinion, Member Robbins first noted that he was not a Board member when Latham was decided, but that he has expressed misgivings about it, observing that the holding was based on agency-specific policy that went beyond the minimum entitlements guaranteed by government-wide law and regulation, and he questioned whether the Board had the authority to enforce such rights.  Here, the majority has extended Latham to a situation that was not presented in that case and that is not remediable under the law, as the appellant was out of work at the relevant time.  It is one thing to say that when an employer has assigned "available" work pursuant to contractual obligations it acts unlawfully by arbitrarily ending the assignment.  It is quite another to say that an employer that is obligated to offer "available" work to an injured employee acts unlawfully if it does not provide the injured employee with a set of tasks that are either assigned to someone else or are not being performed by anyone and that do not comprise the essential functions of an established position.  This holding rests on a deeply counterintuitive meaning of "available."  It is unclear how the agency is to determine what work was "available" during the relevant time.  In Latham, the dispositive inquiry was whether the tasks that made up a partially-recovered employee's "former modified assignment" were still being performed by others after the agency terminated the assignment.  Here, there is no modified assignment to be examined, there is nothing more than some hypothetical set of tasks within the appellant's medical restrictions that the agency might be deemed to have been obligated to assign the appellant.  The Board's authority in a restoration case does not extend to deciding whether agency management should create an assignment for an out-of-work injured employee that does not comprise the essential functions of an established position and that consists of tasks that either no one is performing or that must be taken away from other in order to provide work for the injury employee.  



Appellant:  Annamarie R. Francis
Agency:  Department of the Air Force
Decision Number:  2013 MSPB 73
Docket Number:  AT-1221-11-0472-W-1
Issuance Date:  September 17, 2013
Appeal Type:  Individual Right of Action (IRA)

Whistleblower Protection Act
 - Jurisdiction
 - Protected Disclosure
 - Election Under 5 U.S.C. 7121(g)

    The appellant petitioned for review of an initial decision that denied corrective action under the WPA on the ground that the appellant failed to prove that she made a protected disclosure.  Effective September 14, 2009, the appellant received an excepted service appointment in the Federal Career Intern Program.  The appointment was intended to continue for 2 years unless extended for an additional year.  The agency terminated the appellant's employment 14 months later for failure to make satisfactory progress on the training program.  The appellant filed a chapter 75 adverse action appeal with the Board, but later requested that her appeal be treated as an IRA appeal, alleging that the agency terminated her in reprisal for disclosing violations of law and agency policies in failing to properly update and maintain training records and in not training interns in accordance with an agency template.  The administrative judge determined that none of the regulations, statutes, or policies cited by the appellant require that the agency follow a prescribed methodology of maintaining training records, and that the appellant's complaint of improper and untimely documentation of training records merely constitutes disagreement with management regarding how training should be conducted -- not a protected disclosure under the WPA.  

Holdings:  The Board modified the initial decision by dismissing the appellant's IRA appeal for lack of jurisdiction and forwarded the case to the regional office for docketing as a chapter 75 adverse action appeal:

1. The Board will adjudicate the appellant's appeal as both an IRA appeal and as a chapter 75 appeal.  

a. Under 5 U.S.C. 7121(g), an employee who has been subjected to an action that is directly appealable to the Board and alleges that she has been subjected to retaliation for protected whistleblowing may elect just 1 of 3 possible remedies:  a direct appeal to the Board under 5 U.S.C. 7701, a grievance under the negotiated grievance procedure, or a complaint to OSC, which can be followed by an IRA appeal.  In its recent decision in Agoranos v. Department of Justice, 119 M.S.P.R. 498 (2013), the Board found that the filing of an OSC complaint did not constitute a binding election if it was not a knowing and informed as to the legal consequences.  

b. Here, because the appellant's filing of an OSC complaint did not constitute a valid, informed election of remedies, the Board stated that it would adjudicate the appellant's appeal as both an IRA appeal and as a chapter 75 appeal of her "termination."

2. The Board dismissed the appellant's IRA appeal because she failed to make a nonfrivolous allegation that she made a protected whistleblowing disclosure.

3. The file must be forwarded to the regional office to determine whether the Board has jurisdiction over the appellant's termination as a removal.

a. Whether the Board has jurisdiction over the termination of the appellant's employment depends on whether she was an "employee" as defined in 5 U.S.C. 7511 at the time her employment was terminated.  The resolution of that issue in turn depends on whether the appellant was "serving a probationary or trial period under an initial appointment pending conversion to the competitive service."  

b. The agency contended that the entire first  2 years of the appellant's service was a probationary or trial period; the appellant contended that she was subject only to a 1-year probationary period.  Because the present record is insufficient to make a final determination as to that matter, further proceedings in the regional office are necessary.  



COURT DECISIONS

Petitioner: Kathryn King
Intervenor: Diana M. King
Respondent:  Office of Personnel Management
Tribunal:  U.S. Court of Appeals for the Federal Circuit
Docket Number:  2012-3061
Issuance Date:  September 13, 2013

Retirement
 - Survivor Annuity
 - Overpayment - Waiver

    This case was on appeal from a decision of the Board that Kathryn King was not entitled to a waiver of the repayment of an overpayment that OPM claimed she owed the agency.  The source of the dispute was whether Kathryn or Diana King was the legal spouse of Don King, a federal employee who died in 2004.  That controversy was the subject of protected legal proceedings in state court and two settlement agreements, under which it was ultimately determined that Diana was Mr. King's wife at the time of his death.  Kathryn was the first, however, to apply for a survivor annuity benefit with OPM, and OPM paid her benefits from May 2004 to February 2007. Following the resolution of the state court proceedings, OPM revoked Kathryn's entitlement to a survivor annuity based on Mr. King's service and instead awarded such benefits to Diana.  Under the settlement agreement that resolved the state court proceedings, Kathryn agreed that if she "should receive any retirement disbursements from Don's retirement, then such payments shall be the property of Diana or returned to the government for disbursement to Diana."  Kathryn transferred to Diana survivor annuity benefits that she had received from OPM.  Notwithstanding this fact, OPM claimed that Kathryn owed it the amount of money she had transferred to Diana because these funds constituted an overpayment by OPM to Kathryn.  OPM denied Kathryn's request for a waiver of the obligation to repay the overpayment.  A majority of the Board, Vice Chairman Wagner dissenting, affirmed OPM's denial.

Holdings: The court reversed the Boards decision, finding that Kathryn was entitled to a waiver because she had detrimentally relied on the overpayment of survivor annuity funds.  



The U.S. Court of Appeals for the Federal Circuit issued nonprecedential decisions in the following cases:

Jones v. Department of Health & Human Services, No. 2013-3069 (Sept. 16, 2013) (MSPB Docket No. DE-3330-10-0168-X-1) (affirming the Board's decision, which dismissed Jones' petition for enforcement on the basis that the agency had complied with its obligations under the Board's final order)

Steele v. Merit Systems Protection Board, No. 2013-3065 (Sept. 16, 2013) (MSPB Docket No. CH-0752-12-0680-I-1) (affirming the Board's decision, which dismissed Steele's appeal for lack of jurisdiction and as untimely filed)

Johnson v. Office of Personnel Management, No. 2013-3064 (Sept. 16, 2013) (MSPB Docket No. DC-831E-12-0305-I-1) (affirming the Board's decision, which affirmed OPM's denial of Johnson's application for disability retirement benefits)

Noble v. U.S. Postal Service, No. 2013-3045 (Sept. 18, 2013) (MSPB Docket Nos. DC-0752-11-0880-I-1 and DC-0752-12-0054-I-1) (affirming the Board's decision, which sustained Noble's removal from employment)

FEDERAL REGISTER NOTICE

On September 16, 2013, the Merit Systems Protection Board The Merit Systems Protection Board adopted as final an interim rule that conformed the Board's regulations to legislative changes that amended whistleblower protections for Federal employees  and the penalties available in cases where the MSPB determines that a Federal employee or a State or local officer or employee violated restrictions on partisan political activity.  78 Fed. Reg. 56811.  

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