Federal Circuit: Employees Under Investigation Can Still Be Comparator Employees
The United States Court of Appeals for the Federal Circuit overturned an arbitrator’s decision sustaining the employee’s removal for violating the agency’s time and attendance policies after finding that the arbitrator erred by imposing a “categorical rule of exclusion” against using employees who are similarly situated and under investigation as comparators when arguing that a penalty is not reasonable.
After the employee’s supervisor proposed to remove her for violations of the Agency’s time and attendance policy, the American Federation of Government Employees (“AFGE”) submitted a union grievance on behalf of the employee, asserting that the removal “violated the just cause, progressive discipline and warning and counseling provisions contained in Article 23, Section 1 [of the labor agreement], the timeliness provisions of Article 23, Section 2 and the requirements of Douglas v. Veterans Admin., 5 M.S.P.R. 313 (1981)…” The grievance was denied, and AFGE invoked arbitration on behalf of the employee.
In preparation for that arbitration, the employee requested records and time reports of her eight colleagues, the other employees within her component of the Division of Network Engineering (“DNE”) during the relevant time period. The employee retained a Certified Public Accountant (“CPA”), Certified Product Examiner, and Certified Information Technology professional, who reviewed the records and concluded that the eight other employees had committed the same or similar violations as the employee who was fired, but had not received any proposed discipline. Additionally, the CPA concluded that five of the eight employees had “more overall error minutes” than the employee who was fired.
During the arbitration, the employee presented these findings to the arbitrator, arguing that the penalty of removal was unreasonable given that “eight other comparators, employees working within DNE, also engaged in similar misconduct…but had not been disciplined.” At the end of the arbitration hearing, the parties stipulated that the other employees were under investigation for potential violations of the Agency’s time and attendance policy but had not been charged with any misconduct. The arbitrator sustained the removal, finding that the eight comparators were not similarly situated because potential disciplinary action regarding the other employees was still pending an investigation.
Utilizing the same standard of review applied to decisions from the Merit Systems Protection Board, the court of appeals made two significant determinations. First, responding to the government’s argument that the arbitrator should not have considered comparator evidence at all because the issue was not raised in the employee’s written grievance and such consideration would violate a term of the Collective Bargaining Agreement (“CBA”) that stated that “[o]nly issues identified in the written grievance will be considered by the grievance deciding official.”
The appeals court observed that “[u]nder the government’s interpretation, the CBA prohibits the Arbitrator from considering evidence related to a disparate treatment defense unless that specific defense—the “issue” under the CBA—has been presented to the Agency during the grievance process.” The appeals court declined to interpret the word “issue” as narrowly as the government, concluding that the CBA does not require that all evidence supporting an “issue” be raised before the agency in order for the Arbitrator to consider it. Because the employee’s grievance stated that her removal was not in compliance with the requirements of Douglas v. Veterans Admin., 5 M.S.P.R. 313 (1981), the appeals court found that sufficient to raise the issue of disparate treatment given that one of the Douglas factors “requires agencies, when determining a penalty, to consider the consistency of the penalty with those imposed upon other employees for the same or similar offences.”
Second, the appeals court found that the arbitrator erred when concluding that the eight DNE employees could not be comparator employees because they were under investigation. While an ongoing investigation “may be a legitimate basis to exclude an employee as a comparator,” the appeals court found that this determination must be based on the factual circumstances rather than a categorical exclusion. In this case, the appeals court found that the eight employees were under investigation at the time of the arbitration, not the time of the employee’s removal. The appeals court also found that the Agency “knew or should have known” at the time of the employee’s removal “that there were potential problems with the implementation of time and attendance policies in the DNE unit,” but that it waited to begin its investigation of the eight other employees for almost two years, and not until “it discovered that [the employee] was alleging disparate treatment.”
Additionally, the appeals court pointed out that the investigation leading to the employee’s removal took less than two months after her supervisor received an anonymous tip, but the investigation of the other employees took much longer, and was still ongoing when the Arbitrator issued his opinion.
The appeals court noted that it “could be read to suggest that [the Agency] placed—and kept—the comparators under investigation for the sole purpose of evading [the employee’s] disparate treatment allegation,” but that the appeals court did not have to reach a conclusion on that to determine that the case should be remanded to the Arbitrator to make a determination. However, the appeals court found it “troubling” that the agency admitted at oral argument that it had finally concluded the investigation, had not disciplined six of the eight employees, and had merely counseled the remaining two employees. The appeals court stated that “[t]his type of factual evidence is why a categorical rule of exclusion based on an employee’s investigatory status is improper.”
For the above stated reasons, the United States Court of Appeals for the Federal Circuit vacated the Arbitrator’s decision and remanded the case to the Arbitrator, instructing the Arbitrator to reopen the record if he finds that any of the eight employees are comparators, in order to determine if the penalties imposed on those comparators were consistent with the penalty imposed on the fired employee.
Read the full case: Miskill v. Social Security Administration
This case law update was written by Conor D. Dirks, associate attorney, Shaw Bransford & Roth, PC.
For thirty years, Shaw Bransford & Roth P.C. has provided superior representation on a wide range of federal employment law issues, from representing federal employees nationwide in administrative investigations, disciplinary and performance actions, and Bivens lawsuits, to handling security clearance adjudications and employment discrimination cases.
Posted in Case Law Update