Thursday, August 17, 2017

Perry saves the “mixed case”

When Anthony Perry began working for the U.S. Census Bureau in Suitland, Maryland, in 1982, he never could have imagined that it would lead to a landmark victory for federal employees in the U.S. Supreme Court.

After thirty years of faithful service to the Bureau, Perry developed osteoarthritis. While his supervisor allowed him to take breaks during the day and make up the missed time after hours, Perry filed a series of Equal Employment Opportunity (EEO) complaints alleging discrimination based on race and age.

On June 7, 2011, Bureau managers gave Perry a Notice of Proposed Removal. The Notice alleged that Perry had been absent during regular working hours and paid for hours he had not worked. Perry contested the charges and pointed to the informal accommodation that his supervisor had provided and to his unblemished disciplinary record.

In August 2011, Perry and the Bureau entered into a settlement agreement that required him to serve a 30-day suspension, retire no later than September 4, 2012, and forfeit his discrimination claims against the agency.

After Perry served his 30-day suspension and his retirement took effect, he filed a pro se appeal with the Merit Systems Protection Board (MSPB). An administrative judge (AJ) ordered him to show cause why the challenge should not be dismissed for “lack of jurisdiction.” “Specifically, resignations and retirements are presumed to be voluntary, and voluntary actions are not appealable to the Board,” and “the Board cannot review the same claims over which you entered into a settlement agreement with the agency[.]” Perry responded that the settlement agreement had been coerced; therefore, the subsequent major adverse employment actions were involuntary and he could appeal them under the Civil Service Reform Act (CSRA).

Without holding a hearing, the AJ dismissed Perry’s appeal for “lack of jurisdiction.” In particular, the AJ decided that both the 30-day suspension and retirement were voluntary because they resulted from a voluntary settlement agreement. Perry petitioned the full MSPB for review.

The Board granted Perry’s petition and remanded the case back to the AJ. The Board concluded that Perry had “made a nonfrivolous allegation of involuntariness sufficient to warrant a jurisdictional hearing.”

On remand, the AJ held the required hearing and concluded that Perry “failed to prove that he was coerced or detrimentally relied on misinformation when he agreed to settle his appeals.” Accordingly, the AJ once again dismissed the appeal for “lack of jurisdiction.” This time the Board affirmed the dismissal.

The Board’s decision included a notice that stated in part: “You have the right to request review of this final decision by the United States Court of Appeals for the Federal Circuit.” Perry, still without legal representation, filed a petition for review in the U.S. Court of Appeals for the D.C. Circuit. That court promptly issued an order directing Perry to “show cause why this petition should not be dismissed for lack of jurisdiction or transferred to the United States Court of Appeals for the Federal Circuit.” The court also appointed a law firm to submit a brief as amicus curiae.

After receiving briefs, the D.C. Circuit decided in 2015 that since the MSPB found it lacked jurisdiction, and it never reached the merits of the discrimination claims, it would transfer the case to the Federal Circuit. Perry, now represented by an attorney, appealed to the Supreme Court.

In 2012, the Supreme Court held in Kloeckner v. Solis that when the MSPB dismissed a mixed case on procedural grounds, the employee could bring her case to the federal district court for both the discrimination and the civil service issues. In 2016, the Supreme Court agreed to hear Perry’s case to decide if the same rule should apply to “jurisdictional” dismissals by the MSPB.

The oral argument at the Supreme Court was notable in part because it was the first case heard by Justice Neil Gorsuch. He questioned Perry’s attorney about how unfair it was that employees could get “de novo” review of the civil service claims in district court, but not in the Federal Circuit. He asked Perry’s attorney to put “aside Kloeckner” suggesting that, following precedent would “just … continue to make it up.” He asked if Perry’s claims could be bifurcated so that the Federal Circuit could hear at least the civil service claim. Even the government’s attorney had to agree that the mixed case statute is “not elegantly drafted.”

Justice Alito provoked laughter by asking, “who wrote this statute? Somebody who … takes pleasure out of pulling the wings off flies?”

In June 2017, the Supreme Court issued its decision. Writing for the majority of seven justices, Justice Ginsberg explained that, “we are mindful that review rights should be read not to protract proceedings, increase costs, and stymie employees, but to secure expeditious resolution of the claims employees present.” She noted how most federal employees make their appeals to the MSPB without representation by a lawyer.

“An appeal to the MSPB, however, may also complain of adverse action taken, in whole or in part, because of discrimination prohibited by another federal statute[.]” The Court cited the mixed case statute, but missed citing 5 USC § 7701(c)(2)(C) which says, “the agency’s decision may not be sustained ... if the employee … — (C) shows that the decision was not in accordance with law.” If an employee is fired (or suffers another adverse action directly appealable to the MSPB), that employee can prevail by showing that the action violates any law at all.

The Court recalled, as it did in the Kloeckner case, that, “the CSRA provides diverse procedural routes for an employee’s pursuit of a mixed case.” The employee “may first file a discrimination complaint with the agency itself,” in the agency’s equal employment opportunity (EEO) office. Indeed, this is one of the oft misunderstood aspects of the mixed case. If an employee chooses to raise a discrimination claim in a mixed case using any administrative route, that employee preserves all the available civil service and discrimination claims for de novo consideration by a district court.

In the end, the majority held that Congress made no distinction between MSPB dismissals on procedural grounds and those on the merits. The actual legal authorization to decide a case arises from the employee’s allegations, not from the MSPB’s finding of “jurisdiction.” Thus, the Supreme Court directed the D.C. Circuit to transfer Perry’s case to district court so that all of his claims could be considered together.

Justices Gorsuch and Thomas dissented. Writing his first Supreme Court dissent, Justice Gorsuch said that Perry must appeal his civil service claims to the Federal Circuit, and pursue his discrimination claims through the normal agency process and to district court if Perry so chooses. In essence, Perry’s claims would no longer be “mixed.” If the statute needs fixing, Justice Gorsuch says, only Congress can do that.

The majority opinion correctly responded that the statute does not provide for such claim splitting. To the contrary, Congress specifically directed that mixed cases can go to the district court. The district court’s jurisdiction arises from the allegations made to the MSPB, and the statute places no conditions on the employee’s ability to bring discrimination claims to district court.

The Supreme Court’s decision in Perry helpfully clarifies the law and simplifies the procedure for federal employees. It makes clear that the MSPB’s jurisdiction arises from the employee’s allegations and not from any findings by the AJ. The MSPB will need to re-write its boilerplate language for jurisdictional orders to reflect this law of the land.

However, the Perry decision does not resolve all the outstanding issues about mixed cases. Does a discrimination claim create a “mixed case” – appealable directly to district court – when the Civil Service Reform Act claim arises under the Whistleblower Protection Act (which is part of the CSRA)? The Tenth Circuit said yes in Wells v. Shalala. The Ninth Circuit thereafter said no in Kerr v. Jewell. Kerr appealed to the Supreme Court which earlier this year declined to hear her appeal.


By Richard Renner



This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Friday, August 11, 2017

If the Clearance Level of My Job Changes, Do I Have Any Rights?

You’re in a job that doesn’t require a clearance and, all of a sudden, you’re notified that your job has been reclassified and now you must either apply for a clearance or move to a non-sensitive position. You’re given a few weeks to finish the application. Do you have any rights?

Two years ago, the federal Office of Personnel Management issued new regulations to systematize the sensitivity designation of all positions in the federal government. These regulations fulfill presidential directions issued through Executive Order 10450.

Every new position in the federal government must have a sensitivity designation established by the “position designation” protocol set forth in these regulations and implemented by the Office of the Director of National Intelligence (ODNI) and the Office of Personnel Management (OPM). Significantly, the 2015 regulations also required that agencies reassess all current positions by July 6, 2017. Because a position’s sensitivity designation affects what sort of clearance the person holding the position must have, this reassessment has forced some federal employees to qualify for clearances or be removed from positions they have held for years.

Each federal agency decides whether a clearance is required for every position, whether the position is newly-created or has been on the books for decades. They do this by assigning a “sensitivity designation” to a position, using standards set forth in 5 C.F.R. § 1400 and implemented by OPM through a Position Designation Automated Tool.

Under E.O. 10450, Security Requirements for Government Employment, a national security position is defined as, “any position in a department or agency, the occupant of which could bring about, by virtue of the nature of the position, a material adverse effect on the national security.” The mandated “position sensitivity designation” must reflect “the responsibilities and assignments of the position as they relate to the impact on the national security, including but not limited to eligibility for access to classified information.” 5 C.F.R. § 1400.101(b).

National security positions must be designated, based on the degree of potential damage to the national security, as either Noncritical Sensitive, Critical Sensitive, or Special Sensitive. 5 C.F.R. § 1400.201. The 2015 regulations set a consistent standard to be applied across the government for the way national security positions are designated.

To hold a Noncritical Sensitive position a person must be eligible for access to Secret, Confidential or “L” classified information or, alternatively, the position must simply have “the potential to cause significant or serious damage to the national security.” 5 C.F.R. § 1400.201(a)(1).

A Critical Sensitive position, most often requiring a Top Secret or “Q” clearance, is one that has “the potential to cause exceptionally grave damage to the national security.” 5 C.F.R. § 1400.201(a)(2) The regulations detail twenty types of positions that might qualify as Critical Sensitive, including those “involving development of war plans . . . military operations, or critical . . . items of war” (§ 1400.201(a)(2)(iii)), those “in which the occupants have unlimited access to or control of access to designated restricted areas” (xix), and those who investigate other Critical Sensitive positions (xxi).

Special Sensitive positions are positions that require eligibility for access to Sensitive Compartmented Information (SCI), or other intelligence-related Special Sensitive information, as in Top Secret Special Access Programs (SAP). 5 C.F.R. § 1400.201(a)(3).

Whether a position is designated as Noncritical Sensitive, Critical Sensitive, or Special Sensitive determines the clearance level required for a person to hold that position. If an existing national security position is now determined to require a higher level clearance, the agency is given only 14 days to initiate the new investigation of the incumbent to determine whether he or she may be granted the higher level access newly required for the position. The regulations make clear that the agency may require the incumbent to submit to the new investigation, providing updated information and releases. It is up to the agency to decide whether the incumbent may continue to hold the sensitive position pending the new investigation. An incumbent who is denied the higher-level access that is newly determined to be necessary is entitled to all of the procedural rights available to anyone denied a clearance, including notice of the specific reasons for the decision and an opportunity to respond. 5 C.F.R. § 1400.301(c)(1).

Nothing in these regulations, however, provides for the incumbent to challenge the re-designation of a national security position as requiring a higher (or lower) clearance. Indeed, the Federal Circuit in Kaplan v. Conyers, relying on the Supreme Court’s decision in Navy v. Egan, held that, “absent congressional action, judicial review of national security matters is generally prohibited.” In Kaplan, the court concluded that this prohibition extended to a challenge to the security designation of a position.

Nevertheless, an affected employee who believes that the security designation of a position has been changed in order to discriminate or retaliate for prior EEO activity may challenge the change through the Agency’s own internal EEO process. Alternatively, if the affected employee claims that a security designation is a reprisal for the employee’s protected disclosure, that employee could use the whistleblower protections established by the Intelligence Authorization Act. The time limit to initiate the federal-sector EEO complaint is 45 days. The Intelligence Authorization Act allows 90 days for a whistleblower complaint.



By Mary Kuntz


This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Wednesday, July 12, 2017

Per Se Violations Do Not Require Any Showing Of Causation

On June 13, 2017, the DC Bar’s Labor and Employment Section presented a panel discussion on Causation Standards in Employment Law. As one of the panelists, I prepared a paper and presented recent developments in per se violations, whistleblower laws, and state statutes and tort claims.

Causation standards matter. These standards determine how easy or difficult it will be for a party to prove its case. In the typical employment discrimination case, the person claiming discrimination has to prove that their protected characteristic (race, color, gender, national origin, religion or disability, for example), was what caused, or motivated, their adverse treatment.

Some claims, however, require no proof of causation whatsoever. These are called “per se” violations because the conduct itself is unlawful – regardless of the true motivation. In federal sector discrimination cases, the EEOC has held that any statements or conduct that discourage employees from reporting discrimination per se violate the law.

For example, in Williams v. Department of the Army, a supervisor told his subordinate “that it would not be in Complainant's best interest to file an EEO complaint.” Even if the supervisor was saying this to provide a helpful warning to the employee, it is still unlawful because it could discourage participation in the EEO complaint process. EEOC has called such comments, “a flagrant attempt to dissuade Complainant from engaging in the EEO process by suggesting or threatening that he [or she] could suffer unpleasant consequences if he [or she] pursued his EEO claims.” The Commission has found that even if a complainant successfully initiates the EEO process in spite of such threats or suggestions, the complainant is still aggrieved.

The National Labor Relations Act (NLRA), 29 U.S.C. § 157, guarantees an employee’s right to share information with co-workers. It does this by saying, “Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection . . ..” These are called the “Section 7” rights and employees who exercise these rights are engaging in Section 7 activity.

The NLRA’s prohibited practices are in 29 U.S.C. § 158(a):
It shall be an unfair labor practice for an employer

(1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 of this title; [...]

(3) by discrimination . . . to encourage or discourage membership in any labor organization[.]
The National Labor Relations Board (NLRB) investigates and adjudicates claims of violations of this law. On March 18, 2015, the NLRB General Counsel issued a memo explaining how the Board may find that employment policies, typically those found in employee handbooks, can be per se violations of the law.

The most obvious way such a policy would violate Section 8(a)(1) is by explicitly restricting protected concerted activity; by banning union activity, for example. Even if a policy does not explicitly prohibit Section 7 activity, however, it will still be found unlawful if:
  1. employees would reasonably construe the employer’s rule to prohibit Section 7 activity;
  2. the rule was promulgated in response to union or other Section 7 activity; or
  3. the rule was actually applied to restrict the exercise of Section 7 rights.
Employees have a “Section 7” right to discuss wages, hours, and other terms and conditions of employment with fellow employees, as well as with nonemployees, such as union representatives. Thus, an employer's confidentiality policy that either specifically prohibits employee discussions of the terms and conditions of employment—such as wages, hours, or workplace complaints—or that employees would reasonably understand to prohibit such discussions, violates the Act. Similarly, a confidentiality rule that broadly encompasses "employee" or "personnel" information, without further clarification, could reasonably be construed by employees to restrict Section 7-protected communications. Examples of unlawful policies include:
  • Do not discuss “customer or employee information” outside of work, including “phone numbers [and] addresses.”
  • “You must not disclose proprietary or confidential information about [the Employer, or] other associates (if the proprietary or confidential information relating to [the Employer's] associates was obtained in violation of law or lawful Company policy).”
  • “Never publish or disclose [the Employer's] or another's confidential or other proprietary information.”
  • “Never publish or report on conversations that are meant to be private or internal to [the Employer].”
  • Prohibiting employees from “[d]isclosing ... details about the [Employer].”
  • “Sharing of [overheard conversations at the work site] with your coworkers, the public, or anyone outside is strictly prohibited.”
  • “[I]f something is not public information, you must not share it.”
Similarly, if a whistleblower law protects employees who copy documents they are permitted to access, who disclose them to law enforcement authorities, or who otherwise raise concerns about compliance with the law or public safety, then employer policies cannot restrict or discourage these activities. The Department of Labor has held that copying and disclosing employer documents about illegal activities are protected even if these actions violate an employer’s confidentiality policy. Courts have protected employees' collection and submission of documents for use in evidence, as well as employees' investigations of suspicions of illegality, even “before they have put all the pieces of the puzzle together.

The Securities and Exchange Commission (SEC) has started imposing fines on companies that use confidentiality policies or agreements to deter employees or former employees from making disclosures to the SEC, or even from making whistleblower award claims.
  • SEC v. KBR, April 1, 2015 (KBR paid $130,000 for its violation of Rule 21F-17, which was enacted under the Dodd-Frank Act. KBR had “required witnesses in certain internal investigations interviews to sign confidentiality statements with language warning that they could face discipline and even be fired if they discussed the matters with outside parties without the prior approval of KBR’s legal department.”)
  • SEC v. HealthNet, August 2016 (HealthNet paid $340,000 for including in a settlement agreement a provision that the employee waived any SEC whistleblower award).
On August 23, 2016, OSHA issued a policy against approving settlements that restrain protected activities or discourage employees from collecting lawful awards.

Employers must be mindful of these legal boundaries when they prepare their policy manuals or draft settlement or severance agreements. Employees can exercise their rights more freely when they realize what is protected “per se.”




By Richard Renner.


This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Friday, July 7, 2017

New Guidelines for Security Clearance Decisions

On June 8, 2017, Security Executive Agent Directive 4 (SEAD 4), National Security Adjudicative Guidelines, went into effect. These are the standards used across the federal government to decide whether a person – federal employee, member of the military, or government contractor – may be granted or retain his or her security clearance. These same Guidelines are extended here to serve as standards to determine eligibility for a person to hold a sensitive position, whether or not the occupant of the position has access to classified information. (On its second page, SEAD 4 defines a sensitive position as, “[a]ny position within or in support of an agency in which the occupant could bring about, by virtue of the nature of the position, a material adverse effect on the national security regardless of whether the occupant has access to classified information, and regardless of whether the occupant is an employee, military service member, or contractor.”)

SEAD 4, which updates Adjudicative Guidelines from October 2006, has four parts: the Directive itself and three appendices. The Directive, little more than three pages in length, contains sparse language defining terms, explaining the three appendices, and outlining responsibility for making and recording security clearance decisions. The substance of the document lies in its appendices. Appendix A contains the 13 actual Guidelines, which cover:
  • A: Allegiance to the United States
  • B: Foreign Influence
  • C: Foreign Preference
  • D: Sexual Behavior
  • E: Personal Conduct
  • F: Financial Considerations
  • G: Alcohol Consumption
  • H: Drug Involvement and Substance Misuse
  • I: Psychological Conditions
  • J: Criminal Conduct
  • K: Handling Protected Information
  • L: Outside Activities
  • M: Use of Information Technology
They are the “common criteria” used by all executive agencies to make a security eligibility determination for any covered individual. Changes are evident in most of the thirteen guidelines, but for the most part the changes are minor.

For example, under Guideline D, “sexual behavior” now includes “conduct occurring in person or via audio, visual, electronic, or written transmission,” in recognition of the possibilities afforded by social media and other electronic capabilities. Significant changes include, under Guideline C, a willingness to allow holders of dual citizenship to maintain a clearance given the right predicates. Under Guideline F, concerns raised by a failure to pay taxes may now be mitigated if “the individual has made arrangements with the appropriate tax authority to file or pay the amount owed and is in compliance with those arrangements.” Guideline I has added a specific list of behaviors that might cast doubt on a person’s judgment, stability, reliability, or trustworthiness and added two other sections as well. The first makes “voluntary or involuntary inpatient hospitalization” a condition that could raise a security concern. The second addition lists “pathological gambling or associated behaviors” as raising concerns. Guideline J appears to be much altered, but the changes are largely the result of removing Bond Amendment guidance to Appendix B, which is discussed below. However, the new Guideline J now goes beyond the Bond Amendment to make not just “discharge under dishonorable conditions” concerning, but any discharge other than “Honorable.” Guideline M now allows in mitigation evidence that the violation “was inadvertent, promptly reported, there is no evidence of compromise, and it does not suggest a pattern.”

Appendix B contains the Bond Amendment Guidance, gathered here in one place and gaining clarity thereby. The Bond Amendment came into effect in 2008 and prohibits all Federal Government Agencies from granting or renewing a security clearance for any covered person who is an unlawful user of a controlled substance or is an addict. For special access programs specifically, SAP’s, Restricted Data, and SCI, the Bond Amendment makes disqualifying (1) conviction of a felony; (2) dishonorable discharge from the military; (3) determination of mental incompetence. These three disqualifying factors may, however, be waived, in a meritorious case.

Finally, for the first time, authorized exceptions to the Guidelines are outlined in Appendix C. Four categories are provided that allow a security clearance to be granted despite concerning information under the Adjudicative Guidelines or discrepancies in the investigation. The addition of appendices B (Bond Amendment Guidance) and C (exceptions) adds significant clarity to the processing of security clearances. Changes within the Appendices will be discussed in future blogs.


Written by Mary Kuntz.



This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Tuesday, June 27, 2017

MSPB Recognizes Authority to Reimburse Tax Consequences of Back Pay Award

It is no secret that EEOC complaints filed by federal employees can take years before they reach a final decision. In such cases, it is not unusual for an award of back pay to encompass five, six, or even more years. In a recent blog, we observed that the EEOC has required agencies to reimburse an employee the difference between the taxes paid in the year the back pay award was received and the total taxes that would have been paid had the pay been received in the earlier years. This difference is called the tax consequence. The EEOC holds that to require the employee to pay the excess taxes detracts from “make whole relief,” and it has recently held that to avoid leaving the employee responsible for taxes on the tax consequence, agencies must “gross up” the payment of the tax consequence to account for future taxes.

The Merit Systems Protection Board, however, has not adopted the EEOC’s approach to these situations. Rather, starting in Wilson v. U. S. Postal Service, the Board has consistently held that it lacks authority to order a remedy for the tax consequences of a back pay award. Until now.

On June 13, 2017, MSPB Administrative Judge Pamela Jackson issued a decision granting the request for the reimbursement of the tax consequences resulting from a back pay award. In Smith v. Dep’t of Transportation, the Appellant, who was represented by KCNF Partner Elaine Fitch, had been suspended for 30 days in 2005 (and was denied a promotion the next year because of the suspension) and he filed a mixed case appeal. (A mixed case appeal includes an allegation of discrimination and/or reprisal.) The Board’s decision adopting the EEOC’s finding of reprisal was in 2012, and the parties finally agreed that the back pay (plus interest) amounted to $93,115, which was paid in 2016. Smith retained an accountant, who concluded that the lump sum resulted in an additional tax liability to Smith of $10,941. Smith requested that amount, plus the $3,700 fee charged by the accountant. The Agency opposed the request, arguing that the Administrative Judge lacked the authority to overrule the Board’s decision in Wilson.

Judge Jackson, however, held that the award of tax consequences was appropriate. First, Judge Jackson noted that the Board’s Wilson decision was issued three years before Congress authorized compensatory damages in Title VII discrimination cases. Thus, in 1988, there was no authority to award tax consequences. Second, the EEOC held in 2001 that an award of tax consequences was consistent with the purpose of compensatory damages, i.e., to compensate the prevailing employee for the injuries caused by the discrimination. And finally, because the Board defers to the EEOC’s interpretation of the discrimination laws, the Board would defer to the EEOC’s decisions requiring reimbursement of tax consequences given the opportunity to do so.

The decision in Smith opens the door to eliminating the anomalous situation in which an employee prevails on a mixed case but part of an ensuing back pay award is erased by the tax consequence of a lump sum payment. If the full Board adopts Judge Jackson’s reasoning, the gap between the relief available from the Board and the EEOC will be closed.


By George Chuzi.


This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Wednesday, June 21, 2017

“Follow the Rules Act” Becomes Law

On June 15, 2017, President Trump signed the “Follow the Rules Act,” H.R. 657 ("the Act"), after it passed both the House and Senate unanimously. The Act amends the Whistleblower Protect Act ("WPA"), 5 U.S.C. § 2302(b)(9)(D), to protect federal employees when they are, “refusing to obey an order that would require the individual to violate a law, rule, or regulation[.]” The Act added the last three words: “rule or regulation.”

Through this law, Congress makes clear that it has always intended that federal employees would be protected from retaliation when they refuse to violate a rule or regulation. The House Committee Report No. 115-67 stated, “the provision was an explicit rejection of the general policy for federal employees to ‘obey first, grieve later.’”

The new Act was necessary because the Federal Circuit in Rainey v. Merit Sys. Protection Bd. focused on the word “law” and held that § 2302(b)(9)(D) only protects federal employees when they are refusing to violate a law passed by Congress.

To justify this limited view of the WPA’s protections, the Federal Circuit relied on the Supreme Court’s 2015 decision in Department of Homeland Security v. MacLean, 135 S. Ct. 913 (2015). There, the Supreme Court was considering the provision in § 2302(b)(8)(A), which protects a disclosure about a violation of a law, rule or regulation, fraud, waste, abuse, or a danger to public health and safety:
if such disclosure is not specifically prohibited by law and if such information is not specifically required by Executive order to be kept secret in the interest of national defense or the conduct of foreign affairs[.]
Federal Air Marshal Robert “Bob” MacLean had disclosed a 2003 plan by TSA to shut down travel by the air marshals to save money. MacLean leaked the plan to MSNBC, and TSA found the money to restore air marshal travel within 24 hours. Two years later, TSA figured out that MacLean had been the whistleblower and fired him for it. MacLean argued that because he only violated a TSA regulation prohibiting disclosures, and not any law passed by Congress, his disclosure was protected.

Notably, Sections 2302(b)(8)(B) and (b)(9)(C) of the WPA protect disclosures to the Office of Special Counsel and any Inspector General, regardless of whether the information disclosed is classified or not.

The Supreme Court agreed with MacLean, and explained its reasoning in part as follows:
a broad interpretation of the word “law” could defeat the purpose of the whistleblower statute. If “law” included agency rules and regulations, then an agency could insulate itself from the scope of Section 2302(b)(8)(A) merely by promulgating a regulation that “specifically prohibited” whistleblowing. But Congress passed the whistleblower statute precisely because it did not trust agencies to regulate whistleblowers within their ranks. Thus, it is unlikely that Congress meant to include rules and regulations within the word “law.”
If the Federal Circuit in Rainey had focused on this text of the Supreme Court’s decision in MacLean, then it would quickly see that the term “law” in Section 2302(b)(9)(D) has a broader meaning than it does in Section 2302(b)(8)(A) because the two uses of the word serve different purposes. In Section 2302(b)(9)(D), Congress used the word “law” to protect federal employees when they take a stand against an illegal order. As it is improper for agency officials to order staff to violate regulations, those regulations should be considered “law” for purposes of protecting the employees under Section 2302(b)(9)(D).

Instead, the Federal Circuit focused on the distinction between “law” and “law, rule or regulation” as those terms are used in Section (b)(8)(A) to decide on the meaning of “law” in Section (b)(9)(D). Because they are different words, the court reasoned, they must have different meanings. The outcome today shows that courts should be more focused on the remedial purpose of the law, rather than the particular words used.

Dr. Timothy Rainey was a Supervisory Foreign Affairs Officer in the State Department’s Bureau of African Affairs. In 2013, he was serving as a contracting officer representative (“COR”) for the Africa Contingency Operations Training and Assistance program. He had refused to follow his supervisor’s order to tell a contractor to rehire a terminated subcontractor. Dr. Rainey argued that carrying out the order would have required him to violate Federal Acquisition Regulation (“FAR”) section 1.602-2(d), 48 C.F.R. § 1.602-2(d), by improperly interfering with personnel decisions of a prime contractor and requiring the prime contractor to operate in conflict with the terms of the contract. On October 13, 2013, Dr. Rainey’s supervisor relieved him of his duties as the COR.

Dr. Rainey originally convinced the MSPB’s Administrative Judge ("AJ") that he had a valid claim under the WPA. However, after the AJ conducted a hearing in the case, the Supreme Court issued its decision in MacLean. The AJ relied on MacLean and dismissed the case. The MSPB and Federal Circuit affirmed. Last December, the Supreme Court denied Dr. Rainey’s request to hear the case.

Significantly, because Congress intended today’s new law to be a clarification of what it always meant in 5 U.S.C. § 2302(b)(9)(D), the MSPB is likely to hold that it has retroactive effect, and should be applied to all pending cases. The House Committee Report helpfully declares the purpose of H.R. 657 as follows:
H.R. 657, the Follow the Rules Act, clarifies that the prohibition against certain personnel actions includes personnel actions taken against any employee or applicant for employment for refusing to obey an order that would violate a rule or regulation.
The MSPB previously held in Day v. Department of Homeland Security that the 2012 Whistleblower Protection Enhancement Act amendments to the scope of protection were clarifying, and therefore have retroactive effect. I co-wrote an amicus brief in Day.

The bottom line is that the Federal Circuit’s holding in Rainey is now legislatively overruled. Indeed, Congress has made clear that § 2302(b)(9)(D) has always protected refusals to violate rules or regulations. Whistleblowers who have cases pending now on this issue need to inform their judges about this new law, and the application of the MSPB’s holding on retroactivity in Day. Together, these points should make clear that such whistleblowers have always had protection under the WPA. 

By Richard R. Renner.


This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.


Monday, June 12, 2017

Senate Passes Bill Limiting Civil Service Protections at VA

On June 6, 2017, the U.S. Senate passed a bill by voice vote (which means there was no roll call taken and no record of who supported the legislation). While the bill purports to protect war veterans, instead it actually limits the rights of dedicated federal civil servants without ensuring better treatment for the vets. On its face, the Department of Veterans Affairs Accountability and Whistleblower Protection Act of 2017 looks like a progressive piece of legislation. For example, it creates a central office, the Office of Accountability and Whistleblower Protection, to which whistleblowers within the Department of Veterans Affairs (“VA”) may make protected disclosures about waste and mismanagement without fear of retribution. But, upon a closer look, this bill actually shaves away civil service protections that are an integral part of federal employment.

Currently, under 5 U.S.C. § 7513, the VA (together with most other federal agencies) has to provide most of its employees with 30-days’ notice and a chance to respond if it proposes to remove, demote, or suspend them for more than 14 days. The new bill cuts in half the time in which the employee may consult with an attorney and prepare a well-reasoned response from 15 to 7 days. If an employee is removed under current laws, he or she usually has 30 days to file an appeal with Merit Systems Protection Board (“MSPB”). This bill limits the appeal deadline to 10 days for most VA employees. Further, the MSPB Administrative Judge (“AJ”) assigned to the appeal is required to issue a decision within 180 days – regardless of any stalling tactics used by the agency’s attorneys. If the AJ fails to do so, the MSPB must submit a report on the matter to Congressional committees.

Within this expedited review period, the agency’s burden of proof drops from the current preponderance of the evidence standard to the substantial evidence standard, which is much easier for an agency to prove. (In brief, the difference is between “the employee probably did it” – preponderance – and “the employee may have done it” – substantial evidence.) Under current law, if the AJ determines that the agency has met this standard, but he or she believes that the discipline was too harsh given the facts of the case, he or she may mitigate the penalty by imposing a less severe form of discipline (i.e., demotion instead of removal); under the new bill, the AJ would not have that discretion – if he or she finds that the agency has met its burden, he or she may not mitigate the penalty. Additionally, if the VA wishes to remove an employee for performance issues, as opposed to misconduct, under this bill the agency would no longer be required to first put that employee on a Performance Improvement Plan in order to give him a chance to better his job performance.

Reports indicate that the House is likely to pass this legislation and the President is eager to sign it. Some commentators have argued that mismanagement and waste within the VA puts the country’s veterans at risk and radical changes are needed to set the agency right. However, others are concerned that this legislation is not about protecting the veterans but rather a way for small-government politicians to eventually push through wide-sweeping civil service reforms and drastically reduce the size of the federal government.

If you are an employee of the VA or any other federal agency and are facing proposed discipline, you may contact our firm to set up a consultation to discuss your legal rights.


Written by Sarah Martin.

This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.