shaw bransford & roth case law update

Federal Circuit: Deciding Official on a Proposed Adverse Action Stemming from a Security Clearance Determination Is Not Required to Have an Alternative, Available Penalty

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The U.S. Court of Appeals for the Federal Circuit recently held that a deciding official has no obligation under 5 U.S.C. § 7513 to have available an alternative penalty when deciding on a proposed adverse action that is based on a security clearance determination.

Shawn Hornseth was an employee of the Department of Navy at the Puget Sound Naval Shipyard and Intermediate Maintenance Facility. The Shipyard is a secure facility and every position there requires a security clearance.

While employed at the Shipyard, Hornseth attended rehabilitation for alcoholism and provided the Navy with documents regarding his treatment. In Hornseth’s rehabilitation discharge letter, the Navy learned Hornseth used marijuana during his employment. On December 12, 2016, the Commander of the Shipyard issued Hornseth a letter suspending his access to classified information and his assignment to a sensitive position. On December 15th, the Commander issued Hornseth another letter notifying him that his security clearance was suspended. That day, the Operations Program Manager also issued Hornseth a letter proposing to indefinitely suspend him from his employment. The Navy assigned Charlie Combs, a supervisor, as the deciding official. Hornseth filed a reply to the proposal.

While the proposal was pending, Combs communicated with Human Resources (HR) staff about the proposal. Thereafter, HR drafted a decision, which Combs signed and issued to Hornseth on January 20, 2017.

Hornseth appealed the decision to the MSPB. Hornseth argued that he was denied minimum due process of law in that the reply process was an empty formality because Combs did not have the ability to take or recommend alternative agency action, and that Combs and the Shipyard HR staff engaged in improper ex parte communications.

The MSPB’s administrative judge (AJ) disagreed with Hornseth’s arguments. The AJ concluded in an initial decision dated September 8, 2017, that a due process violation may occur when a reply process is an empty formality where the deciding official lacks the ability to take or recommend alternative agency action based on an appellant’s reply. Here, the AJ determined that investigative leave was an available alternative, and because Combs could have provided Hornseth with investigative leave, Hornseth was afforded due process.

The AJ also concluded that while Combs engaged in ex parte communications, those communications “were not so substantial and prejudicial such that no employee could fairly be required to be subjected to a deprivation of property under these circumstances.” Before the AJ, Combs testified that his ex parte contacts were only made to clarify the arguments raised in the reply or other materials in the record and procedural matters.

Finding no violations of due process or harmful procedural errors, the AJ affirmed the Navy’s suspension decision. The AJ’s decision became the decision of the MSPB because Hornseth did not appeal the decision to the full MSPB, which at that time lacked a quorum. Hornseth then appealed to the U.S. Court of Appeals for the Federal Circuit.

Hornseth argued that since Combs did not have authority to change the outcome of the proposed action, he did not receive due process. Hornseth referred to MSPB precedent for the proposition that a deciding official must have the authority to change the outcome of an adverse action for the process to comport with due process. In response, the government argued that the court’s review of an adverse action arising out of a security clearance determination is limited, and the court should only review whether the agency provided Hornseth minimal due process. The government argued that minimal due process only requires the court to evaluate whether a security clearance was required, whether the clearance was revoked, and whether Hornseth received the procedural protections of 5 U.S.C. § 7513.

The court of appeals agreed with the government that an alternative action is not needed in a security clearance case, and that review of adverse actions stemming from security clearance determinations is limited to whether a clearance was required, whether it was revoked, and whether the appellant received the protections of 5 U.S.C. § 7513. Because the parties did not dispute that Hornseth’s security clearance was required or revoked, the court turned to the procedure required by 5 U.S.C. § 7513.

The court stated that in a security clearance case, 5 U.S.C. § 7513 requires an agency to provide notice of denial or revocation of the security clearance, a statement of the reasons upon which the negative decision was based, and an opportunity to respond. The court found that these procedures were met in this case. Hornseth received notice, had an opportunity to respond and to be represented, and was provided with a written decision.

The court of appeals noted that the AJ’s review deviated from this framework when the AJ concluded that an alternative position must be available to comport with due process. The court clarified that 5 U.S.C. § 7513 contains no obligation for the agency to transfer an employee to a non-sensitive position, even if possible.

Hornseth next challenged that the AJ’s findings regarding ex parte communication between Combs and the HR staff. The court of appeals noted that the introduction of new and material information through ex parte communication to a deciding official deprives an employee of a guarantee of notice and opportunity to respond. However, the court stated that not every ex parte communication is a procedural defect that prejudices the due process guarantees and entitling an appellant to a new administrative proceeding. Here, the court of appeals found that the AJ applied the appropriate factors in considering Combs’s communications with HR staff when finding that these communications did not deprive Hornseth of due process. In particular, the court credited the AJ’s finding that Combs’s ex parte communications involved only cumulative materials, and materials already known to Hornseth. Therefore, the court found that the AJ did not err in concluding that the ex parte communication did not amount to a due process violation.

As such, the Federal Circuit affirmed the MSPB decision.

Read the full case: Hornseth v. Department of Navy


This case law update was written by Michael J. Sgarlat, 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.

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