Berlin v. Dep't of Labor
| Decision Date | 20 November 2014 |
| Docket Number | No. 2014–3031.,2014–3031. |
| Parties | Steven B. BERLIN, Jonathan C. Calianos, Linda S. Chapman, Richard M. Clark, William R. Dorsey, Jennifer Gee, Colleen A. Geraghty, Christine L. Kirby, Pamela J. Lakes, Timothy J. McGrath, Richard A. Morgan, Russell Pulver, Stephen M. Reilly, Patrick M. Rosenow, Daniel F. Solomon, Daniel F. Sutton, Drew A. Swank, and Theresa C. Timlin, Petitioners, v. DEPARTMENT OF LABOR, Respondent. |
| Court | U.S. Court of Appeals — Federal Circuit |
OPINION TEXT STARTS HERE
Paul A. Mapes, of Walnut Creek, California, argued for petitioners.
Allison Kidd–Miller, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for respondent. With her on the brief were Stuart F. Delery, Assistant Attorney General, Robert E. Kirschman, Jr., Director, and Reginald T. Blades, Jr., Assistant Director. Of counsel on the brief were James V. Blair, Counsel for Employment Law and Katherine Brewer, Trial Attorney, Office of the Solicitor, United States Department of Labor, of Washington, DC.
Martin R. Cohen, Assistant General Counsel for Litigation, American Federation of Government Employees, of Elkins Park, PA, for amicus curiae The American Federation of Government Employees.
Gregory O'Duden, General Counsel, National Treasury Employees Union, of Washington, DC, for amicus curiae National Treasury Employees Union. With him on the brief were Larry J. Adkins, Deputy General Counsel, and Matthew D. Ross, Assistant Counsel.
John P. Mahoney, Tully Rinckey, PLLC, of Washington, DC, for amicus curiae The Federal Administrative Law Judges Conference.
Before DYK, TARANTO, and HUGHES, Circuit Judges.
Under 5 U.S.C. § 7521, an agency may furlough an administrative law judge (ALJ) for 30 days or less “only for good cause established and determined by the Merit Systems Protection Board” in a formal adjudication. In this case, the Board determined that the Department of Labor had good cause for its decision to furlough its ALJs for a particular length of time in 2013. We affirm. The challenged furlough of ALJs, which was part of a program of furloughs throughout the Department and indeed throughout the federal government, was the result of a neutral, reasonable, statute-based determination about how to implement a government-wide budget sequester. The Board could therefore find good cause.
The Budget Control Act of 2011, Pub.L. No. 112–25, §§ 101–103, 125 Stat. 240, 241–46, and the American Taxpayer Relief Act of 2012, Pub.L. No. 112–240, § 901, 126 Stat. 2313, 2370, made amendments to the Balanced Budget and Emergency Deficit Control Act of 1985, Pub.L. No. 99–177, title II, 99 Stat. 1038, codified in pertinent part at 2 U.S.C. § 901 et seq. The amendments established spending limits for agencies of the federal government and required automatic reduction of spending (“sequestration” or “sequester”) under certain statutory conditions, implemented under certain directives of the Office of Management and Budget (OMB). The 2012 Taxpayer Relief Act (§ 901(e)) specifically required the President to issue a sequestration order on March 1, 2013, near the middle of fiscal year 2013. 126 Stat. at 2370.
On that date, President Obama issued a sequestration order requiring reductions in spending from most federal budget accounts for fiscal year 2013. 78 Fed.Reg. 14,633. The order states that each agency must administer the spending cuts, for “each non-exempt budget account,” “in strict accordance with the requirements” of 2 U.S.C. § 901a “and the specifications of [OMB's] report of March 1, 2013, prepared pursuant to” § 901a(9). 78 Fed.Reg. 14,633. Section 901a mandates compliance with another statutory provision, 2 U.S.C. § 906(k), which provides that “the same percentage sequestration shall apply to all programs, projects, and activities within a budget account.” 2 U.S.C. §§ 901a(8), 906(k)(2).
OMB, performing its statutory role, calculated that the Department of Labor had to reduce spending by five percent in a budget account called the Departmental Management Salaries and Expenses account. Office of Mgmt. & Budget, Exec. Office of the President, OMB Report to the Congress on the Joint Committee Sequestration for Fiscal Year 2013 app. 41 (2013). The Department, with OMB's approval for sequester purposes (J.A. 520), broke down that budget account into nine subaccounts (known as “programs, projects, and activities,” 2 U.S.C. § 906(k)(2)), one of which is “Adjudication.” Based on 2 U.S.C. § 906(k)(2), the Department applied “the same percentage” cut to all subaccounts within the account. It then chose to apply the five-percent cut equally to the four offices within the Adjudication subaccount, one of which is the Office of Administrative Law Judges.1
Those determinations led directly to the furlough result challenged here. The Office spends more than half of its budget on salaries and a majority of the remainder on nondiscretionary costs, such as rent. Thus, to make the required cuts, the Office calculated that it had to furlough all of its employees, including its ALJs, for 5.5 days. The same methodology produced longer furloughs for many employees in other offices covered by the Adjudication subaccount, and the ALJs before us therefore do not challenge their furloughs based on a comparison to other Adjudication employees. But the methodology produced shorter furloughs for employees covered by less salary-or-rent-heavy subaccounts outside the Adjudication subaccount (or outside the Management and Salaries Expenses account), J.A. 40, and it is those comparatively short furloughs that the ALJs here invoke in complaining of their furloughs.
To furlough its ALJs, the Department first filed a complaint with the Board on March 18, 2013. J.A. 116–24; see5 U.S.C. § 7521; 5 C.F.R. § 1201.137. The Board assigned Administrative Law Judge Jordan (from the United States Coast Guard) to conduct a hearing and make the initial decision whether to authorize the furloughs. See5 C.F.R. § 1201.140. After discovery and a two-day hearing in late July 2013, Judge Jordan concluded that the Department had good cause to furlough its ALJs. Dep't of Labor v. Avery, No. CB–7521–13–0070–T–1, slip op. at 2–3, 39 (M.S.P.B. Aug. 20, 2013). When it came to the length of furloughs throughout the Department, however, Judge Jordan concluded that the Department had to consider the “special status” of ALJs and that doing so would require the Department to shift funds from one subaccount to another, or otherwise reallocate funds, so that ALJs did not receive a longer furlough than other employees paid from the same account. Id. at 35–38 (). On that basis, Judge Jordan determined that the Department had good cause to furlough the ALJs for only four days, the average furlough length for other furloughed employees within the Management Salaries and Expenses account. Id. at 39–40.
The Department petitioned the full Board for review of the initial decision under 5 C.F.R. § 1201.114, and the ALJs cross-petitioned for review of Judge Jordan's decisions denying their motion to compel discovery and excluding certain witness testimony. The Board vacated the initial decision, found that the Department had good cause to furlough the ALJs for the full 5.5–day period, and denied the ALJs' cross-petition. Dep't of Labor v. Avery, 2013 MSPB 75, ¶ 1, 120 M.S.P.R. 150 ( Board Decision ). The Board noted its “flexible approach in which good cause is defined according to the individual circumstances of each case.” Id. ¶ 5. Applying that flexible approach, the Board found that, because of the sequester-induced budget shortfall, the Department “had sound business reasons behind its decision to furlough” the ALJs for the full 5.5 days. Id. ¶ 13. It also found “no evidence that the decision was made for an improper reason or to interfere with the ALJs' qualified judicial independence.” Id. Vice Chairman Wagner dissented in part, agreeing with Judge Jordan's reduction of the furlough length to four days.
The ALJs timely petitioned for judicial review of the Board's final decision. See5 U.S.C. § 7703(b)(1)(A). We have jurisdiction under 28 U.S.C. § 1295(a)(9).
The substantive issue presented is whether the Board erred in concluding that the Department had “good cause” for the challenged furloughs of the ALJs. 5 U.S.C. § 7521. We review the Board's decision to determine if it is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; was arrived at without following procedures required by law; or is unsupported by substantial evidence. 5 U.S.C. § 7703(c). Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Abrams v. Soc. Sec. Admin., 703 F.3d 538, 542 (Fed.Cir.2012) (internal quotation marks and citation omitted).
We have observed that “Congress intentionally failed to define ‘good cause,’ ” leaving it “to be given meaning through judicial interpretation.” Brennan v. Dep't of Health & Human Servs., 787 F.2d 1559, 1561–62 (Fed.Cir.1986). The Supreme Court has explained that an agency can have “good cause” for an action against an ALJ even if the ALJ did not depart from the “good behavior” standard applicable to federal judges appointed under Article III of the Constitution. Ramspeck v. Fed. Trial Exam'rs Conference, 345 U.S. 128, 141–43, 73 S.Ct. 570, 97 L.Ed. 872 (1953). We have also explained that an agency lacks “good cause” to the extent it acts based “on reasons which constitute an improper interference with the ALJ's performance of his quasi-judicial functions.” Brennan, 787 F.2d at 1563. And we have made clear that, as a general matter, we defer to the Board's reasonable interpretation of “good cause” because “the Board has...
To continue reading
Request your trial