Sinha v. Veterans Admin.

Citation768 F.2d 330
Decision Date25 July 1985
Docket NumberNo. 84-1733,84-1733
PartiesAkhouri A. SINHA, Petitioner, v. VETERANS ADMINISTRATION, Respondent. Appeal
CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Phillip L. Powell, LeVander, Zimpfer, Zotaley & Vander Linden, Minneapolis, Minn., argued for petitioner.

Denise Butler Harty, Commercial Litigation Branch, Dept. of Justice, Washington, D.C., argued for respondent. With her on brief were Richard K. Willard, Acting Asst. Atty. Gen., David M. Cohen, Director, Robert A. Reutershan, Asst. Director, and Lynn J. Bush, Washington, D.C. Also on brief was C. Charles Caruso, Veterans Admin., St. Paul, Minn., of counsel.

Before FRIEDMAN, NIES and NEWMAN, Circuit Judges.

FRIEDMAN, Circuit Judge.

This petition for review challenges the decision of the Merit Systems Protection Board, affirming the petitioner's removal from his position as a Research Physiologist

with the Veterans Administration (VA) through a reduction in force, 21 M.S.P.R. 681. We affirm.

I

The petitioner was employed by the VA Medical Center in Minneapolis, Minnesota (Medical Center), as a GS-14 Research Physiologist. He functioned both as Chief of the Research Electron Microscopy and Radioautography Laboratory, and as an independent researcher. The Central Office of the VA supplied funds to the Medical Center to pay both his salary and the expenses of his independent research. To obtain the research funds, the petitioner had to obtain the approval of his research proposals by a Merit Review Board of the VA. The Merit Review Boards customarily disapprove--and thus deny funding for--approximately 20 to 40 percent of the projects submitted.

In 1979 the VA Central Office distributed to the regional offices a circular which stated that the Central Office would continue to pay a researcher's salary "as long as the facility receives medical research support in his/her behalf or he/she has significant research support from extramural sources." This policy was not explicitly incorporated in the critical elements of the performance standards the VA had established for petitioner's position pursuant to 5 U.S.C. Sec. 4301, et seq. (1982).

The petitioner's field of research was prostatic cancer. Prior to 1977, the Merit Review Board had approved two of his research projects. In 1979, however, the Board rejected the petitioner's latest research proposal as "too broad, too ambitious, and too diffused." In 1980, the petitioner submitted another research proposal to the Merit Review Board. This proposal attempted to meet the Board's criticism of his 1979 proposal. The Board also disapproved the 1980 proposal. The petitioner submitted that proposal to the VA's Central Office Appeals Committee, which upheld the Merit Review Board's action.

Following the petitioner's failure to obtain Merit Review Board approval of his 1980 research project, with its resultant termination of funds for this research, the VA Central Office advised the Medical Center that it no longer would provide the funds to pay the petitioner's salary. Upon receiving this information, the Medical Center's Research Service (of which the petitioner was a part) decided to abolish the petitioner's position through a reduction in force rather than to finance the position with funds from other portions of the Medical Center's budget or to eliminate other positions. By letter dated July 20, 1981, the Medical Center informed the petitioner of the reduction in force, and offered him, in lieu of separation, a GS-9 position (in which he would retain his GS-14 grade and pay for two years). Petitioner accepted this demotion under protest and appealed the VA's action to the Merit Systems Protection Board (Board).

After a hearing, the presiding official, in what the Board described as "a thorough, careful and extensive initial decision," upheld the reduction in force. He held that the reduction in force was made for one of the reasons for which the governing regulation (5 C.F.R. Sec. 351.201(a) (1983)) permits a reduction in force, namely, a "shortage of funds." Alternatively, the presiding official held that the reduction in force was taken for another permissible reason, namely, a reorganization. He found that "the agency has established by a preponderance of the evidence that it properly initiated the reduction-in-force action at issue for reasons specified in 5 C.F.R. 351.201(a) and that it processed the action in accordance with relevant regulations."

The Board granted review, affirmed the presiding official's decision, and sustained the demotion. The Board stated

that while the decision of the Research Service to invoke the RIF regulations was initially triggered by the withdrawal of research support money by the agency's Central Office, the record reveals that the agency had the option to retain [the petitioner's] position under alternative funding, but instead made the independently supportable discretionary decision to eliminate the position.... This

decision clearly fell within the agency's management discretion regarding the planning of work and organization of the work force to accomplish agency objectives within available resources, see FPM chapter 351, subch. 1-5(a), and constituted a proper reorganization as defined in 5 C.F.R. Sec. 351.203(f).

II

The petitioner does not here challenge the decision of the VA to stop furnishing the Medical Center with funds to pay his salary after he had lost VA Central Office funding for his research activities as a result of the Merit Review Board's rejection of his 1980 research proposal. That decision involved the essence of agency management discretion. As the presiding official pointed out:

Subchapter 1-5(a) of Chapter 351 of the Federal Personnel Manual indicates that an agency retains the responsibility and authority for planning the work and organizing the workforce to accomplish agency objectives within available resources; and that only the agency can decide which positions are required, where they are to be located, and when they are to be filled, abolished, or vacated. If an agency is the repository for such authority, then the agency's determinations of how it will allocate its resources are subject to deference.

The VA acted well within its discretion in deciding that it would no longer provide funding for the salary of a researcher whose projects were no longer being funded. The Board upheld the following conclusion of the presiding official:

There is no impropriety in the agency's development of a funding policy which is consistent with the purpose of the Research Service and which is entirely within the agency's authority and responsibility: the pursuit of the most promising and...

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