Brenner v. Dep't of Veterans Affairs

• Decision Date: 09 March 2021
• Docket Number: 2019-2032
• Citation: 990 F.3d 1313
• Parties: Lawrence BRENNER, Petitioner v. DEPARTMENT OF VETERANS AFFAIRS, Respondent
• Court: U.S. Court of Appeals — Federal Circuit

990 F.3d 1313

Lawrence BRENNER, Petitioner

v.DEPARTMENT OF VETERANS AFFAIRS, Respondent

2019-2032

United States Court of Appeals, Federal Circuit.

Decided: March 9, 2021

Alan Edward Wolin, Wolin & Wolin, Jericho, NY, argued for petitioner.

Elizabeth Anne Speck, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for respondent. Also represented by Jeffrey B. Clark, Allison Kidd-miller, Robert Edward Kirschman, Jr. ; Aaron Robison, Office of General Counsel, United States Department of Veterans Affairs, Sacramento, CA.

Before Newman, O'malley, and Wallach, Circuit Judges.

Wallach, Circuit Judge.

Petitioner, Lawrence Brenner, seeks review of a final decision of the Merit Systems Protection Board ("MSPB") affirming the U.S. Department of Veterans Affairs’ ("VA") decision to remove Mr. Brenner from his position as General Attorney, GS-14, with the VA's Collections National Practice Group ("CNPG") pursuant to 38 U.S.C. § 714, enacted as part of the Department of Veterans Affairs Accountability and Whistleblower Protection Act of 2017 ("the Act"), Pub. L. No. 115–41, 131 Stat. 862. See Brenner v. Dep't of Veterans Affairs , No. NY-0714-19-0007-I-1, 2019 WL 1315751 (M.S.P.B. Mar. 18, 2019) (J.A. 7–54).¹

We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(9). We vacate and remand.

BACKGROUND

I. Statutory Framework

Generally, federal agencies "have two procedural routes available to them" to remove an employee: 5 U.S.C. Chapter 75 (for misconduct and poor performance) and 5 U.S.C. Chapter 43 (for poor performance). Harris v. Sec. & Exch. Comm'n , 972 F.3d 1307, 1315 (Fed. Cir. 2020) ; see Sayers v. Dep't of Veterans Affairs , 954 F.3d 1370, 1378–79 (Fed. Cir. 2020). Further, as of 2017, the VA has a third procedural route available to it: the Act, as codified at 38 U.S.C. § 714. Each route entails different procedures and, therefore, different protections for federal employees. See Sayers , 954 F.3d at 1377–79.

First, "Chapter 75 ... is concerned with removals and other disciplinary action." See Lovshin v. Dep't of Navy , 767 F.2d 826, 830 (Fed. Cir. 1985) (en banc); see 5 U.S.C. § 7512 (listing "[a]ctions covered" by Chapter 75). It has "been in the civil service law essentially unchanged since 1912[.]" Lovshin , 767 F.2d at 830. It provides for removal "only for such cause as will promote the efficiency of the service." 5 U.S.C. § 7513(a). "This ‘nexus’ limitation requires the agency to show by a preponderance of the evidence that the employee's misconduct is likely to have an adverse effect upon the agency's functioning." Mings v. Dep't of Justice , 813 F.2d 384, 389–90 (Fed. Cir. 1987) (citation omitted). "An employee against whom an action is proposed is entitled to" advanced notice of the action, an opportunity to respond, representation by an attorney or other representative, and a timely "written decision" with "the specific reasons" for the agency action. 5 U.S.C. § 7513(b). The MSPB may mitigate the penalty imposed by the agency through a multifactor balancing test, the Douglas factors, to determine whether the agency struck "a responsible balance within tolerable limits of reasonableness." Douglas v. Veterans Admin. , 5 M.S.P.R. 280, 306 (1981) ; see id. at 305–06 (enumerating the Douglas factors, including: "the nature and seriousness of the offense," the employee's "past disciplinary" and "past work" records, any "mitigating circumstances," and "potential for the employee's rehabilitation"); see also DeWitt v. Dep't of Navy , 747 F.2d 1442, 1445 (Fed. Cir. 1984) (affirming the MSPB's penalty determination as "based on a responsible balancing of the factors outlined in Douglas "). We "will not disturb a choice of penalty within the agency's discretion unless the severity of the agency's action appears totally unwarranted in light of all the factors." Mings , 813 F.2d at 390. We review actions under Chapter 75 for support by a "preponderance of the evidence," as well as for "harmful error in the application of the agency's procedures," for "prohibited personnel practice[s]," and "accordance with law." 5 U.S.C. § 7701(c)(1)(B), (c)(2).

Second, "Chapter 43 ... is directed to the evaluation of a federal employee's work performance." Lovshin , 767 F.2d at 830 (emphasis omitted). Under Chapter 43, "an agency may reduce in grade or remove an employee for unacceptable performance." 5 U.S.C. § 4303(a). "[U]nacceptable performance" occurs when "an employee" has "fail[ed] to meet established performance standards in one or more critical elements of such employee's position." Id. § 4301(3). In order to demote or remove an employee pursuant to Chapter 43, the agency must: (1) "set up [a] performance appraisal system" that is approved by the Office of Personnel Management ("OPM"); (2) "communicate the written performance standards and ‘critical elements’ of an employee's position to the employee at the beginning of the appraisal period"; (3) "warn of inadequacies in ‘critical elements’ during the appraisal period"; and (4) "counsel and afford an opportunity for improvement after proper notice." Martin v. Fed. Aviation Admin. , 795 F.2d 995, 997 (Fed. Cir. 1986) (citing Lovshin , 767 F.2d at 834 ). Because of these procedural requirements and safeguards, Chapter 43 gives the agency "great[er] flexibility" in its adverse action than Chapter 75. Lovshin , 767 F.2d at 842 ; see Lisiecki v. Merit Sys. Prot. Bd. , 769 F.2d 1558, 1565 (Fed. Cir. 1985) (declining to extend "additional procedural standards not identified ... by judicial interpretation or by regulation or imposed by prior law" to Chapter 43 proceedings because "Chapter 43 has procedural and substantive safeguards to protect employees from unfair or illegal treatment"). In particular, "the agency need not show that [its] adverse action stems from conduct that harms the efficiency of the service." Sayers , 954 F.3d at 1378 ; see Lisiecki , 769 F.2d at 1562 (noting that Congress omitted this requirement from Chapter 43 because "[a]s a practical matter, agencies have found it very difficult to prove [this requirement] to the degree required by courts" (quoting S. REP. No. 95-969, at 43 (1978))); see also S. REP. No. 95-969, at 43 (stating that Congress "intends that [Chapter 43] should not be governed by the existing case law" on the "efficiency of the service" requirement). Further, the MSPB may not mitigate an agency's Chapter 43 action using the Douglas factors. See Lisiecki , 769 F.2d at 1565 (explaining that "Congress did not include [MSPB] authority to mitigate a penalty chosen by the agency" under Chapter 43). We review an agency action under Chapter 43 for support by substantial evidence, as well as for "harmful error in the application of the agency's procedures," for certain "prohibited personnel practice[s]," and "accordance with law." 5 U.S.C. § 7701(c)(1)(A), (c)(2).

In addition to Chapters 43 and 75, the VA has a third procedural mechanism: In 2017, Congress enacted the Department of Veterans Affairs Accountability and Whistleblower Protection Act of 2017, Pub. L. No. 115–41, 131 Stat. 862. The Act became effective on June 23, 2017. 131 Stat. at 862. The Act's purpose is to "provide a singular expedited procedure for all VA employees to respond and appeal to proposed removals, demotions, and suspensions for performance or misconduct." Sayers , 954 F.3d at 1374 (quotation marks and citation omitted). It is codified, in part, at 38 U.S.C. § 714 and provides less rigorous standards and expedited procedures under which the Secretary of the VA ("the Secretary") "may remove, demote, or suspend" VA employees "if the Secretary determines the performance or misconduct of the covered individual warrants such removal, demotion, or suspension." 38 U.S.C. § 714(a)(1) ; see Sayers , 954 F.3d at 1374 (explaining that 38 U.S.C. § 714 "presents the VA with an expedited, less rigorous alternative to traditional civil service adverse action appeals"); see also 38 U.S.C. § 714(c)(3) (providing that "[t]he procedures [of 5 U.S.C. Chapter 43] shall not apply to a removal [under 38 U.S.C. § 714 ]"). The administrative judge and MSPB "shall uphold the decision of the Secretary ... if the decision is supported by substantial evidence," 38 U.S.C § 714(d)(2)(A), (3)(B), and otherwise "in accordance with law," 5 U.S.C. § 7701(c)(2)(C) ; see Sayers , 954 F.3d at 1376 (explaining that " § 714 notably does not override § 7701(c)(2)(C), which requires the decision to accord with the law, even if it is supported by the evidence"). "[I]f the decision of the Secretary is supported by substantial evidence, the administrative judge [and the MSPB] shall not mitigate the penalty prescribed by the Secretary." 38 U.S.C § 714(d)(2)(B), (3)(C). On appeal from the MSPB, we will "set aside any agency action, findings, or conclusions" that is, inter alia, "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law" or "unsupported by substantial evidence." 5 U.S.C. § 7703(c)(1)–(3) ; see 38 U.S.C. § 714(d)(5)(A) (providing for appeal of the "decision of the [MSPB] under [ § 714(d)(3) ] to the ... Federal Circuit pursuant to [ 5 U.S.C. §] 7703").

II. Procedural History²

In March 1992, Mr. Brenner joined the VA as an attorney in the Office of the General Counsel ("OGC") in Brooklyn, New York. J.A. 8. In April 2015, he suffered an accident that resulted in the amputation of his lower right leg. J.A. 8. The injury had significant impact on Mr. Brenner's health and daily life and, as a result, he missed approximately six months of work. J.A. 1352–53. Upon returning to work in October 2015, Mr. Brenner was reassigned to the CNPG. J.A. 9; see J.A. 9 n.4 (noting that Mr. Brenner's re-assignment was part of a broader reorganization "to improve the [VA's] efficiency"). The CNPG is a small practice group of GS-13 and GS-14 attorneys that provide legal counsel and representation in "recoupment of funds matters,...