Esparraguera v. Dep't of the Army

• Decision Date: 04 December 2020
• Docket Number: 2019-2293
• Citation: 981 F.3d 1328
• Parties: Maria ESPARRAGUERA, Petitioner v. DEPARTMENT OF THE ARMY, Respondent
• Court: U.S. Court of Appeals — Federal Circuit

981 F.3d 1328

Maria ESPARRAGUERA, Petitioner

v.DEPARTMENT OF THE ARMY, Respondent

2019-2293

United States Court of Appeals, Federal Circuit.

Decided: December 4, 2020

Lucas M. Walker, MoloLamken LLP, Washington, DC, argued for petitioner. Also represented by Jeffrey A. Lamken ; Matthew Jason Fisher, Chicago, IL; Conor Dirks, Debra Lynn Roth, Shaw, Bransford & Roth P.C., Washington, DC.

Mollie Lenore Finnan, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for respondent. Also represented by Jeffrey B. Clark, Claudia Burke, Robert Edward Kirschman, Jr.; Nadia K. Pluta, Office of General Counsel, United States Office of Personnel Management, Washington, DC; Jason R. Chester, United States Army Corps of Engineers, United States Department of the Army, Alexandria, VA.

Before Prost, Chief Judge, Lourie and Moore, Circuit Judges.

Prost, Chief Judge.

This is a case about jurisdiction. Maria Esparraguera was removed for performance reasons from her senior executive position as the top labor lawyer at the Department of the Army ("Army") and placed instead into another high-level position at the same agency but outside the Senior Executive Service ("SES"). On appeal, Ms. Esparraguera effectively seeks to obtain review of the Army's removal decision and insists that she was deprived of constitutionally protected property and liberty interests without due process. By statute, Ms. Esparraguera cannot avail herself of the ordinary appellate provisions of the Merit Systems Protection Board ("Board") for this kind of removal. But she petitions for review of a Board order made under 5 U.S.C. § 3592(a), a narrow provision permitting a career senior executive removed for performance reasons to instead "appear and present arguments" at an "informal hearing." The resulting order, however, simply forwarded Ms. Esparraguera's evidence and arguments to her employer, the Army, for consideration—as well as to the United States Office of Special Counsel ("OSC") and Office of Personnel Management ("OPM"). For the reasons below, the appealed order—styled an "Order Referring Record"—is not a "final order or decision" of the Board, as required for our appellate jurisdiction over her removal. And because we lack jurisdiction, we must dismiss this appeal.

I

A

The federal civil service is divided into three parts: the competitive service, the excepted service, and the Senior Executive Service ("SES"). 5 U.S.C. §§ 2101a, 2102, 2103 ; United States v. Fausto , 484 U.S. 439, 441 n.1, 108 S.Ct. 668, 98 L.Ed.2d 830 (1988). This case concerns whether the Board can review the performance-based removal of employees from the SES.

Because SES cases are rare, a brief background on the SES itself is useful.

The Civil Service Reform Act of 1978 ("CSRA") reformed the federal civil service and "established a comprehensive system for reviewing personnel action[s] taken against federal employees." Elgin v. Dep't of the Treasury , 567 U.S. 1, 5, 132 S.Ct. 2126, 183 L.Ed.2d 1 (2012) (quoting Fausto , 484 U.S. at 455, 108 S.Ct. 668 ); see also Pub. L. No. 95-454, 92 Stat. 1111. The SES was designed to "provide the flexibility needed by agencies to recruit and retain the highly competent and qualified executives needed to provide more effective management of agencies and their functions, and the more expeditious administration of the public business." CSRA, sec. 3(6), 92 Stat. at 1113. The statutory framework governing the SES is meant to "ensure that the executive management of the Government of the United States is responsive to the needs, policies, and goals of the Nation and otherwise is of the highest quality." 5 U.S.C. § 3131. And its administration is meant to "enable the head of an agency to reassign senior executives to best accomplish the agency's mission," to "maintain a merit personnel system free of prohibited personnel practices," and to "ensure accountability for honest, economical, and efficient Government." Id. § 3131(5), (9), (10).

Senior executives are high-level federal employees who do not require presidential appointment but who nonetheless exercise significant responsibility—including directing organizational units, supervising work, and determining policy—and who may be held accountable for their projects or programs. Id. § 3132(a)(2); Fausto , 484 U.S. at 441 n.1, 108 S.Ct. 668. Occupying significant positions of trust, senior executives are selected, in no small part, for their leadership abilities.¹ The SES is but a small arm of the federal civil service: about 8,000 federal employees are among the SES, whereas more than 1.8 million are not.²

There are two relevant mechanisms by which senior executives may be removed from the SES. First, senior executives may be removed—not only from the SES but from federal employment entirely—for "misconduct, neglect of duty, malfeasance, or failure to accept a directed reassignment or to accompany a position in a transfer of function." 5 U.S.C. § 7543(a). This pathway to removal includes procedural protections like those available for covered employees in the competitive and excepted services. Id. § 7543(b), (d) ; cf. id. §§ 7512, 7513. Second, senior executives may be removed from the SES under another set of procedures for "unsatisfactory" or "less than fully successful" performance. Id. §§ 3592(a), 4314(a)(3). Senior executives with "career" status who are removed in this way are guaranteed continued federal employment at the same pay grade. Id. § 3594. The loss of SES status, however, is accompanied by the loss of other benefits—and, of course, prestige. See, e.g. , id. §§ 3131(1), 5384, 6304(f).

To gauge performance, each agency is required to establish a performance appraisal system to rate senior executives from "outstanding" to "unsatisfactory" in one or more "critical elements." 5 U.S.C. §§ 4312, 4314(a) ; 5 C.F.R. § 430.305 ; see, e.g. , J.A. 13. Performance ratings are ultimately made by an agency's "appointing authority," see 5 U.S.C. § 4314(c)(3) ; for the Army, final performance rating authority has been delegated to the Under Secretary. J.A. 6, 177–78. To assist in making an ultimate performance determination, each agency is also required to establish one or more performance review boards ("PRBs"). 5 U.S.C. § 4314(c)(1). During performance appraisal, a senior executive's supervisor (or other rating official) provides the PRB with an "initial appraisal." Id. § 4314(c)(2). The senior executive is "provided a copy of the appraisal and rating ... and is given an opportunity to respond in writing and have the rating reviewed by an employee ... in a higher level in the agency." Id. § 4312(b)(3) ; see also 5 C.F.R. § 430.311(b)(1) ; J.A. 55. The PRB then reviews any "response by the senior executive to the initial appraisal" and may "conduct such further review as the [PRB] finds necessary." 5 U.S.C. § 4314(c)(2). The PRB then "make[s] recommendations to the appropriate appointing authority" as to the senior executive's performance. Id. § 4314(c)(1) (emphasis added). OPM is tasked with ensuring that each agency's performance appraisal system is adequate. See 5 U.S.C. § 4312(c)(1), (3) ; 5 C.F.R. § 430.314.

The final rating is significant: its consequences range from performance awards to removal. See 5 U.S.C. § 4314(b)(2)–(4). Nonetheless, a senior executive "may not appeal any appraisal and rating under any performance appraisal system." Id. § 4312(d).

B

As Chief Counsel of the Army's Communication-Electronics Command ("CECOM"), Ms. Esparraguera facilitated the selection of Rick Bechtel to replace a retiring division chief. The resulting chain of events led to her removal from the Senior Executive Service and, ultimately, to this appeal.

In 2014, a business-law division chief within CECOM announced his intent to retire. The resulting open position required a candidate to have had at least one year of experience at the GS-14 grade. The selection committee, chaired by Ms. Esparraguera, interviewed eleven candidates to fill the resulting vacancy. Mr. Bechtel was among Ms. Esparraguera's three favored finalists after the interview. But unlike the other ten candidates, Mr. Bechtel was a few months shy of the required time at GS-14, having been in his prior position for less than one year and at CECOM itself only since 2013. The other ten interviewed candidates were qualified.

No hiring decision, however, was made at that time. Rather, Ms. Esparraguera proposed an unorthodox—indeed, unprecedented—post-interview rotation plan for the final selection. See J.A. 273. Under the plan, each of the three finalists, including Mr. Bechtel, would act as the division chief for thirty days, and the decision would be made afterward. In three decades of service, Ms. Esparraguera had never used a post-interview rotation plan to hire anyone, nor was she aware of anyone in the Army ever using such a plan. J.A. 250–51.

Ms. Esparraguera consulted with human-resources specialists, who advised her both that the highly unusual trial rotation would unfairly advantage Mr. Bechtel (as he would then satisfy the time-in-grade requirement) and likely result in complaints, and that a time-in-grade waiver for Mr. Bechtel would not be approved (as there was no shortage of qualified candidates). J.A. 239–40, 245–48. Further, Ms. Esparraguera's deputy chief counsel advised that the selection of Mr. Bechtel, who lacked substantial CECOM experience, would "tear the division apart." J.A. 269. As OSC later explained after investigating, a rotation would "delay[ ] a permanent appointment in an important leadership position and force[ ] both employees and customers to adapt to three leadership changes in a three-month span." J.A. 252.

Nonetheless, the trial rotation went forward at Ms. Esparraguera's behest. This three-month delay in selection meant that, by early 2015, Mr. Bechtel finally satisfied the time-in-grade requirement. After evaluation under a rubric designed and applied by Ms....