MSPB Clarifies Due Process Standards Regarding Indefinite Suspensions Based on Suspended or Revoked Security Clearances

An Assistant Federal Security Director at the Grand Junction Regional Airport had her security clearance suspended by the agency after making statements to the local police on January 26, 2011. Thereafter, the agency proposed the employee’s indefinite suspension on February 1, 2011. The proposal cited the suspension of her security clearance “based on allegations regarding [her] mental health and personal conduct” which were outlined in the letter which suspended the employee’s security clearance. When the employee requested the materials relied upon, the agency claimed that it had only relied on the notice from the Personnel Security Division that the employee’s security clearance had been suspended. After amending a pending EEO complaint to include a challenge to her suspension, and the passage of 120 days from that amendment, the employee filed her appeal with the Board challenging her indefinite suspension and her intervening decision to retire after the agency revoked her security clearance in August 2011. The MSPB administrative judge, in applying the Board’s then-controlling case law, found that the agency had satisfied the employee’s due process right to notice of the reasons for the suspension of her clearance and to reply to the official who had authority to change the outcome, and affirmed the indefinite suspension. The employee filed a petition for review to the full Board. On August 27, 2014, the Board affirmed the initial decision to sustain the employee’s indefinite suspension, with modifications to the decision reflecting changes in analysis due to the existence of new precedent.

Although the Board agreed with the administrative judge’s ultimate conclusion sustaining the employee’s indefinite suspension, it opened its opinion by conducting a different analysis than the administrative judge, who did not have the benefit of two decisions that reframe the standard. The first case, Gargiulo v. Department of Homeland Security, 727 F.3d 1181 (Fed. Cir. 2013), was a case that held that employees have “no due process rights with respect to the procedures used to determine whether to suspend or revoke [a] security clearance,” and also explained that while employees have due process rights to contest the indefinite suspensions which often follow the suspension of a security clearance, those rights “[do] not include the right to contest the merits of the decision to suspend [their] security clearance.”

The second case, Buelna v. Department of Homeland Security, 121 M.S.P.R. 262 (2014), reaffirmed the holdings in Garguilo and further held that due process “does not demand that the deciding official consider alternatives to the proposed adverse action that are prohibited, impracticable, or outside management’s purview. According to the Board in Buelna, due process in connection with an adverse action based on the suspension or revocation of a security clearance is limited to “invok[ing] the discretion of a deciding official with authority to change the outcome of the proposed action to the extent that may have been feasible.” According to the Board in this case, this new Buelna standard differed from the standard applied by the administrative judge in that the earlier standard held that due process required the deciding official to have authority to change the outcome of the proposed adverse action by either reinstating the employee’s access to classified information or by reassigning her to a position not requiring such access.

The employee argued, citing pre-Garguilo decisions, that her due process rights were violated because the deciding official did not have the authority to impose a penalty other than her proposed indefinite suspension. The Board, based on Buelna, concluded that due process does not demand that the deciding official have the unfettered discretion to take any action he or she believes is appropriate, only those actions that are not prohibited, impracticable, or outside management’s purview. According to the Board, the employee’s contention that the deciding official had limited authority to impose an alternate penalty was unsupported. The Board cited the deciding official’s testimony, which included a statement that he had the authority to consider reassignment, but exercised his discretion in declining to reassign her under the facts of the case. Although the employee argued that the deciding official’s decicion was in error, the Board stated that it “does not have the authority to review the feasibility of reassignment in the absence of an additional agency regulation or policy statement providing for such a transfer.”

The employee also argued that the deciding official improperly considered the alleged factual reasons supporting the suspension of her security clearance in making a penalty determination, constituting a violation of her due process rights under Ward/Stone.

The Board recalled the Ward/Stone line of authority cited in Buelna, which references Ward v. U.S. Postal Service, 634 F.3d 1274 (Fed. Cir. 2011), and Stone v. Federal Deposit Insurance Corporation, 179 F.3d 1368. These cases state that the only information material to an agency’s charge involving the suspension or revocation of a clearance is whether the employee’s position required a security clearance and whether the clearance was suspended or revoked. In Buelna, however, the Board stated that under Ward/Stone, an employee is entitled to advanced notice of all of the information a deciding official may rely on in considering the employee’s proposed suspension or removal, including information concerning the extent to which the deciding official’s penalty determination may be influenced by the facts which are referenced in the security clearance suspension or revocation which forms the basis for the adverse action.

In analyzing whether a due process violation occurred, the Board cited the Ward/Stone cases for the position that “not all ex parte communications rise to the level of due process violations; rather, only ex parte communications which introduce new and material information to the deciding official are constitutionally infirm.”

Based “on the language and scope of information cited in the proposed indefinite suspension,” the Board found that the deciding official did not consider new and material information when he wrote that the suspension was being proposed based on the suspension of her securing clearance due to allegations regarding the employee’s mental health and personal conduct. Furthermore, the Board stated, the employee specifically addressed and refuted the underlying reasons for the security clearance determination in her reply to the proposed suspension, thereby placing those reasons “into controversy before the deciding official.”

As a final matter, the Board responded to the employee’s argument that the decision to suspend her clearance and place her on an indefinite suspension left her no realistic alternative but to retire by finding that the employee’s allegations failed to meet the demanding legal standard required to demonstrate coercion. According to the Board, because the agency had not yet reached a final decision to permanently revoke the employee’s security clearance at the time of the employee’s retirement, it remained possible that she would be reinstated to employment if her clearance was reinstated. However, the Board concluded, due to jurisdictional issues, the Board could not consider whether the agency committed any improper acts in connection with the security clearance determination itself.

For the above stated reasons, the Merit Systems Protection Board affirmed as modified the initial decision sustaining the employee’s indefinite suspension, affirmed the administrative judge’s decision not to adjudicate the employee’s disability discrimination affirmative defense, and affirmed the initial decision dismissing the employee’s involuntary retirement appeal for lack of jurisdiction.

You can read the full case, Putnam v. Department of Homeland Security, here.

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

Tags: security clearances, federal employment law



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