case law update

Federal Circuit Rules MSPB Has Jurisdiction to Review Suitability Removals

The Office of Personnel Management (“OPM”) conducted a background investigation of a Social Security Administration (“SSA”) Contract Representative after the employee was appointed in April 2008. Fifteen months subsequent to his appointment, the employee was informed by OPM that due to “false statements” on his application for the position regarding the allegedly unreported involuntary termination of his employment in positions as a forklift driver and a truck driver with two separate companies and the failure to report any employment with the truck driving company, OPM had a “serious question” regarding his suitability for federal employment.

After OPM notified the employee that it would instruct SSA to remove him based on a charge of “Material, intentional false statement, or deception or fraud in examination or appointment,” the employee responded to OPM, providing supporting documents to support his claims that he was not fired from either position, and failing to report his truck driver employment was an “honest mistake.” OPM rejected these claims, and directed SSA to remove the employee. The employee appealed OPM’s negative suitability decision to the Merit Systems Protection Board.

While the appeal was pending, MSPB decided two cases that called into question a title 5 employee’s ability to appeal an OPM suitability removal as an “adverse action” under title 5. In January 2011, the Board issued its decision in Aguzie v. Office of Personnel Management, 116 M.S.P.R. 64, 66 (2011), which found that when OPM directs an agency to remove a tenured employee, the removal action is subject to the requirements of chapter 75 of title 5, and that Board jurisdiction extended to the review of other suitability actions on appeal, including debarment and cancellation of eligibilities. After the Aguzie decision, an MSPB administrative judge considering this case found that the employee was entitled to appeal his removal as an “adverse action.” The administrative judge then sustained OPM’s false statements charge, but based on an independent review of the Douglas factors, mitigated the penalty from removal to a letter of reprimand. OPM petitioned the full Board for review, and the Director of OPM intervened, but the Board upheld the administrative judge’s decision. The Director of OPM then petitioned the United States Court of Appeals for the Federal Circuit for review. On May 13, 2015, the appeals court affirmed the Board’s decision mitigating the employee’s removal to a letter of reprimand.

OPM argued that the employee’s appeal should have been adjudicated as a suitability action rather than as an “adverse action,” and that the Board had erred in applying mitigating Douglas factors in a suitability appeal. The Board responded that the employee met the Civil Service Reform Act’s (“CSRA”) definition of an employee, and that although the CSRA lists several types of removals that are excepted from Board review, suitability determination removals are not among those listed. The employee agreed with the Board’s position, and argued that the Board was due Chevron deference by the appeals court. Before commencement of its analysis, the appeals court noted that it must affirm a Board decision unless it is “(1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (2) obtained without procedures required by law, rule, or regulation having been followed; or (3) unsupported by substantial evidence.”

The appeals court agreed with the Board that the CSRA makes it clear that federal “employees” can appeal adverse actions defined by statute, including removals, and that nothing in the CSRA excludes suitability-based removals from the coverage of chapter 75. The appeals court noted, as did the Board before it, that Congress had specifically delineated several types of removals outside the scope of Board jurisdiction. Suitability removals, the appeals court stated were not among those removals exempted from Board jurisdiction by Congress. The appeals court applied the legal doctrine of expression unius est exclusion alterius (which translates to “the expression of one thing is the exclusion of another) to hold that it could not read another exception (for suitability removals) into the statute where Congress had specifically excepted just five types of removals.

OPM, for its part, argued that the CSRA preserved OPM’s previous control over suitability matters, and that Congress intended OPM to have control over suitability actions. OPM cited to 5 U.S.C. §§ 1101, 1103, and 1104 in support of its contention that Congress recognized a distinction between suitability actions and adverse actions taken by employing agencies. Analyzing each cited provision in turn, the appeals court held that none of the provisions supported OPM’s position.

The appeals court then addressed OPM’s argument that OPM’s own regulations purported to exclude suitability actions from coverage under chapter 75 of title 5. The appeals court held that, regardless of the content of the regulations, OPM could not introduce ambiguity to unambiguous statutory text through its own regulations. The appeals court also agreed with the Board that the Board’s jurisdiction after Aguzie extends to debarment or cancellation of eligibilities in a negative suitability determination due to those penalties being bound up in a “unitary penalty” arising from the same set of circumstances.

While OPM argued that “mere completion of 12 months of service cannot shield a person from the consequences of, for example, making material, intentional false statements in order to obtain a position with the Federal Government, the appeals court observed that Congress may have intended to circumscribe OPM’s broad authority over individuals once those individuals gain “employee” status.

The appeals court held that, although a charge of obtaining an appointment through misrepresentation is very serious, and may form the basis for removal, concluding that review of the penalty is somehow barred involves “a quantum leap of logic.” Therefore, the appeals court held, the employee in this matter was entitled to the procedural safeguards and review enjoyed by other employees subject to an adverse action, including meaningful review of the reasonableness of the penalty and consideration of the Douglas factors. Although case law has established the proposition that an agency’s penalty determination is entitled to deference unless the penalty is unreasonable, the appeals court found that the Board is not required to defer in the same way “when OPM, rather than the employing agency, makes the penalty determination.” Therefore, the appeals court found, when an employee appeals an OPM-directed suitability removal, the Board “must review the penalty in light of the relevant Douglas factors.”

For the above stated reasons, and because the appeals court discerned no error in the Board’s Douglas factor analysis, the United States Court of Appeals for the Federal Circuit affirmed the Board’s decision to sustain the charge of misrepresentation but mitigate the penalty from a removal to a letter of reprimand.

Read the full case: Archuleta v. Hopper


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



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