Guest Post by James M. Eisenmann
In a series of precedential decisions in 2020 (and early 2021), the Federal Circuit limited the impact of the Department of Veterans Affairs Accountability and Whistleblower Protection Act — holding that U.S. Merit Systems Protection Board (MSPB) still may review the reasonableness of imposed penalties and that Veterans Affairs (VA) may not use 38 U.S.C. § 714 to remove employees for conduct or performance that occurred prior to the enactment of the Act. See, Sayers v. Dep’t of Veterans Affairs, 954 F.3d 1370 (Fed. Cir. 2020); Harrington v. Dep’t of Veterans Affairs, 981 F.3d 1356 (Fed. Cir. 2020); and Brenner v. Dep’t of Veterans Affairs, No. 19-2032 (Fed. Cir. March 9, 2021).
The Department of Veterans Affairs Accountability and Whistleblower Protection Act
In June 2017, Congress enacted the Department of Veterans Affairs Accountability and Whistleblower Protection Act. See, 131 Stat. 862; 38 U.S.C. § 714. This law was intended to make it easier to fire and discipline VA employees for misconduct or poor performance. Indeed, the Act made it much easier to fire VA employees than under existing law. The Act also sought to significantly limit the ability of the MSPB — the federal agency that reviews appeals by federal employees who are fired or suffer a significant disciplinary action — to review VA’s decisions to remove employees. The Act did this by lowering the burden of proof for the VA in cases appealed to the MSPB and prohibiting the MSPB from mitigating the VA’s selected penalty.
There are generally two ways a federal agency can remove an employee — either for misconduct under 5 U.S.C. Chapter 75 or for poor performance under 5 U.S.C. Chapter 43 of the Civil Service Reform Act of 1978 (“CSRA”). Each path provides certain procedural rights before and after termination, including a) advance notice of the reasons for proposing to take the action; b) opportunity to respond to the notice; and c) appeal of a termination decision to the MSPB.
The Act provided the VA an alternative and easier process to remove its employees for misconduct or poor performance. Section 714 permits the Secretary of the VA to remove, demote, or suspend an employee if the Secretary “determines the performance or misconduct of the . . . [employee] warrants such removal, demotion or suspension.” 38 U.S.C. § 714(a)(1). The period to take an action under § 714 is much shorter than under Title 5, and the VA’s burden of proof before the MSPB was reduced from preponderance of the evidence to substantial evidence. See 38 U.S.C. §§ 714(c) and (d).
Moreover, and most significantly, the Act eliminated the long-held authority of the MSPB to mitigate the penalty imposed by the VA if the MSPB finds the penalty to be unreasonable under the circumstances. See Sayers, 954 F.3d at 1375 (citing Douglas v. Dep’t of Veterans Affairs, 5 M.S.P.R. 280, 297 (1981)). Section 714(d)(3)(C) provides in pertinent part that the MSPB “shall not mitigate the penalty prescribed by the Secretary.”
In Sayers and Harrington, the VA fired the respective employees based upon conduct that occurred prior to enactment of the Act. In Brenner, the VA fired the employee for performance reasons that occurred before and after the Act. In Sayers and Harrington, the Federal Circuit held that the Act was not retroactive: the VA could not use the new expedited procedure from § 714 to fire or discipline an employee for conduct or performance that occurred prior to the enactment of the Act in June 2017.
But Sayers, Harrington, and Brenner also addressed a much more significant issue — whether the MSPB had the authority to consider the reasonableness of the penalty imposed by the Secretary notwithstanding the Act’s prohibition on mitigation by MSPB. In short, the Court held that the MSPB had the authority to review the entirety of the Secretary’s decision — both whether the misconduct occurred as alleged by the VA but also the penalty selected by the Secretary.
MSPB Review of the Secretary’s “Decision” Includes the Penalty
In the proceedings below, the MSPB concluded that, because the Act explicitly prohibited mitigation of the Secretary’s selected penalty, it was without authority to consider the reasonableness of that penalty. In other words, the MSPB held that so long as the VA presented substantial evidence to support the charged misconduct, the MSPB’s hands were tied, and it was required to sustain the removal decision regardless of how extreme or unreasonable the penalty was in relation to misconduct.
However, the analysis of the Act was not that simple. Though related, the Federal Circuit explained that the issue of mitigating a penalty and reviewing the Secretary’s “decision” are mutually exclusive.
In Sayers, the Federal Circuit held that the MSPB is required to review the entire decision taken by the VA, including the Secretary’s choice of penalty. According to the Act, the MSPB is required to sustain the Secretary’s adverse action decision “if the decision is supported by substantial evidence.” 38 U.S.C. § 714(d)(1)-(2)(A). And “if the decision of the Secretary is supported by substantial evidence, the administrative judge shall not mitigate the penalty prescribed by the Secretary.” 38 U.S.C. § 714(d)(2)(B). In Sayers, the VA argued that this provision means that the Board’s review is limited to reviewing the facts underlying the adverse action. Sayers, 954 F.3d at 1375. The Federal Circuit in Sayers explained that “the decision” referred to in § 714 includes both the choice to sustain the charges of insufficient performance or misconduct against the employee and the decision to remove, demote, or suspend the employee. Id. The court explained that, to meaningfully review the VA’s decision, the MSPB cannot “blind itself” to the VA’s choice of penalty. Id. The MSPB must “review whether the VA had substantial evidence for its decision that an employee’s actions warranted the adverse action,” because a review of a decision inherently includes both the facts and the “decision to impose a certain penalty” based on those facts. Id. So, while the Act prohibits the MSPB from mitigating a penalty, it does not prohibit “all review of the penalty to ensure its legality.” Sayers, 954 F.3d at 1375.
The MSPB must review the entirety of the VA’s removal decision for substantial evidence, including whether the record contains substantial evidence that the alleged conduct leading to the adverse action actually occurred and that the choice of disciplinary action is supported by substantial evidence. Id. at 1379. To hold otherwise would lead to absurd results: if the VA’s decision to remove, demote, or suspend was shielded from review on appeal, the VA could remove an employee for “the tiniest incident of misconduct so long as the agency could present substantial evidence that the trifling misconduct occurred.” Id. at 1377. As the Court noted, “an agency could remove an employee for an extremely trivial offense . . . theft of a paper clip . . . so long as substantial evidence supports that the employee actually stole the paperclip.” Sayers, 954 F.3d at 1378.
What Can the MSPB Do if It Cannot Mitigate?
Of course, the Sayers decision begs the question — if MSPB cannot mitigate an unreasonable penalty, yet it must review the VA’s selected penalty, what is the MSPB’s authority? Brenner answered that question. If the MSPB finds alleged misconduct and the penalty to be supported by substantial evidence, then the VA’s entire action will be sustained. However, if the MSPB concludes that the VA’s choice of penalty (e.g., the removal decision) is unsupported by substantial evidence, then it should remand to the VA for further proceedings. Put another way, if the MSPB finds the VA’s penalty to not be supported by substantial evidence, the VA will need mitigate its own penalty.
James M. Eisenmann is an Adjunct Professorial Lecturer in the Department of Public Administration and Policy at American University and a Partner at Alden Law Group, PLLC. From 2010 to 2018, he served first as General Counsel and then as Executive Director of the MSPB. He now specializes in advising federal and private sector employees and employers on a variety of complex employment issues including investigations, discrimination and retaliation, and whistleblower retaliation claims.
Notably, the Act removed most due process protections for senior executives by, among other things, eliminating the right to appeal a removal from employment to the MSPB. See 38 U.S.C. § 713. ↑
The VA is not limited to using § 714 to discipline or fire its employees. As discussed infra, the VA may still employ Chapters 75 and 43 of the CSRA to terminate, demote, or suspend an employee. ↑