Krizman v. Merit Systems Protection Bd.

• Decision Date: 20 February 1996
• Docket Number: No. 95-3288,95-3288
• Citation: 77 F.3d 434
• Parties: Daniel R. KRIZMAN, Petitioner, v. MERIT SYSTEMS PROTECTION BOARD, Respondent, and United States Postal Service, Intervenor.
• Court: U.S. Court of Appeals — Federal Circuit

Page 434

77 F.3d 434

Daniel R. KRIZMAN, Petitioner, v. MERIT SYSTEMS PROTECTION BOARD, Respondent, and United States Postal Service, Intervenor.

No. 95-3288.

United States Court of Appeals, Federal Circuit.

Feb. 20, 1996.

Stuart A. Abramson, Sea Cliff, New Jersey, argued in support of petitioner. C.B. Weiser, Germantown, Tennessee, was on the brief for petitioner.

Eric D. Flores, Office of General Counsel, Merit Systems Protection Board, Washington, DC, argued for respondent. With him on the brief were Mary L. Jennings, Acting General Counsel and Martha B. Schneider, Assistant General Counsel.

Luis M. Matos, Commercial Litigation Branch, Civil Division, Department of Justice, of Washington, DC, was on the brief for intervenor. With him on the brief were Frank W. Hunger, Assistant Attorney General and David M. Cohen, Director. Of counsel were R. Andrew German, Chief Counsel and Bruce M. Reimer, Appellate Division, United States Postal Service, Washington, DC.

Before NEWMAN, RADER, and BRYSON, Circuit Judges.

BRYSON, Circuit Judge.

Petitioner Daniel R. Krizman seeks review of a decision of the Merit Systems Protection Board dismissing his appeal on the ground that it was untimely filed. Krizman v. United States Postal Serv., 66 M.S.P.R. 233 (1995). We conclude that the Board did not abuse its discretion in finding that Krizman failed to establish good cause to excuse his untimely filing, and we therefore affirm.

I

This case stems from a restructuring of the United States Postal Service implemented in 1992 and 1993. In an attempt to reduce layers of management and redundant positions, the Postmaster General in 1992 proposed to restructure the Postal Service in a manner that would eliminate approximately 30,000 jobs. The Postmaster General advised Postal Service employees that the method by which the restructuring would be effected was uncertain, but that the steps to be taken could include "inducements to those eligible to retire, early-out scenarios, severance pay, reductions in force and layoffs." He added that it was "likely that some of these options will be chosen."

Before demoting or laying off any employees, the Postal Service offered a special early retirement incentive program to its senior managers and administrators. Under the incentive program, those retiring before October 3, 1992 (later extended to November 20), would receive a lump-sum bonus equal to six months' salary. Krizman, a Postal Service employee who was eligible for the program, accepted the incentive offer, retired on November 20, 1992, and received the bonus.

The early retirement program resulted in a significant reduction in the number of employees who would be affected by the restructuring, but it did not obviate the need to take other steps to reduce and reallocate the workforce. The Postal Service ultimately assigned approximately 48,000 employees to new positions within the restructured agency. Most of those employees were assigned to higher-graded positions, and some were assigned to positions of the same grade. The remainder, about 15 percent, were assigned to positions carrying lower grades. Those employees who were assigned to lower-graded positions were nonetheless guaranteed indefinite retention of the grades and pay they had previously enjoyed.

The Office of Personnel Management (OPM) has promulgated regulations governing agency reductions in force (RIFs). See 5 C.F.R. part 351. The regulations define a RIF action to include the demotion of an employee during the course of an agency reorganization. 5 C.F.R. § 351.201(a)(2). Pursuant to the RIF regulations, an employee in the competitive civil service who is demoted during a reorganization enjoys certain "RIF rights," including the right to appeal to the Merit Systems Protection Board to challenge the manner in which the agency has conducted the RIF action. See 5 C.F.R. §§ 351.401-.807, 351.901.

Ordinarily, employees of the Postal Service do not enjoy the protections of the RIF regulations. See Marcoux v. United States Postal Service, 63 M.S.P.R. 373 (1994). By statute, however, preference-eligible employees, i.e., certain veterans and relatives of veterans, see 5 U.S.C. § 2108, enjoy special rights under the RIF regulations, including the right to appeal RIF actions to the Board. 39 U.S.C. § 1005(a)(2); 5 U.S.C. § 3501(b); 5 C.F.R. §§ 351.501, 351.901. Krizman, a veteran, was a preference-eligible employee and thus was entitled to the rights conferred by the OPM reduction-in-force regulations upon being subjected to a RIF action.

Although acknowledging that preference-eligible employees in the Postal Service have RIF rights, the Postal Service took the position during the restructuring that if employees assigned to lower-graded positions were allowed to retain their prior grades and pay, the reassignments would not be considered "demotions," see 5 C.F.R. § 210.102(b)(4), and therefore would not constitute RIF actions to which RIF rights would apply, see 5 C.F.R. § 351.201(a)(2). Thus, none of the reassigned employees were accorded the rights they would have enjoyed under the regulations in the event of a RIF.

Some preference-eligible employees who were assigned to lower-graded positions challenged their reassignments, contending that assigning an employee to a lower-graded position during a reorganization, even when the employee is guaranteed indefinite retention of grade and pay, constitutes a "demotion" for purposes of the RIF regulations. In July 1993, the Merit Systems Protection Board agreed with the employees, holding that the assignment of preference-eligible employees to lower-graded positions constituted demotions, and that preference-eligible employees who were demoted in that fashion were entitled to the rights provided by the RIF regulations, including the right to appeal their demotions to the Board. See Brown v. United States Postal Serv., 58 M.S.P.R. 345 (1993).

Following the Brown decision, a number of former Postal Service employees who had retired pursuant to the early retirement incentive program filed appeals with the Merit Systems Protection Board seeking reinstatement. Krizman was one of those who filed such an appeal. His appeal was filed on September 10, 1993, approximately 10 months after his retirement.

In his appeal, Krizman alleged that his retirement was involuntary, and thus in effect constituted a removal action, because he would not have retired if he had known that his status as a preference-eligible employee would give him enhanced rights in the assignment process. He therefore sought to have his retirement set aside, and he asked to be awarded back pay and accorded "RIF rights" in determining his future employment status with the agency.

The administrative judge noted, but did not decide, the question whether Krizman's appeal was timely. Instead, the administrative judge found that the Board lacked jurisdiction over Krizman's appeal because Krizman had failed to establish that his retirement was involuntary. Following a hearing, the administrative judge found that Krizman had retired because of his wife's illness, not because of "any lack of information about positions or concern about obtaining a job in the new organization." The administrative judge further found that the agency did not "misrepresent[ ] or deceive[ ]" Krizman "about any facts material to his decision to retire." By the time Krizman retired, the administrative judge noted, "it was common knowledge ... that there would be no layoffs and everyone would receive indefinite saved grade and pay." Krizman therefore "knew that he would have a job should he decide not to retire," and he "also knew that he had to retire by November 20, if he wanted to receive the cash bonus."

The full Board agreed with the administrative judge that Krizman's appeal should be dismissed, but it based its decision on a different ground. Rather than addressing the merits of Krizman's claim that his retirement was involuntary, the Board ruled that his appeal was untimely and that he had not shown good cause to excuse the untimeliness of the appeal.

In finding an absence of good cause, the Board first held that Krizman was not entitled to notice of his right to appeal to the Board at the time of his retirement. When an employee elects to retire, the Board explained, the agency is not required to give the employee notice of his right to appeal to the Board unless the employee makes it known to his agency that he regards his retirement as involuntary. Because there was no evidence that Krizman "took any steps ... to put the agency on notice of a belief that he had retired involuntarily," the Board held that the agency was not required to advise Krizman of the right to appeal an involuntary retirement.

The Board further noted that there was no evidence in Krizman's case or any other similar case that had come before the Board to suggest that the Postal Service "knew that its action could only have been a RIF." Accordingly, the Board concluded, the agency's "preliminary information to [Krizman] before his retirement, that did not include notification of any RIF appeal rights, has not been shown to have been in bad faith, contrary to the clear facts, or aimed at misleading him."

The Board acknowledged that for purposes of determining whether an agency misrepresentation has rendered a retirement or resignation involuntary, "the fact that the agency's misrepresentation may have been innocently made is of no consequence." See Covington v. Department of Health & Human Servs., 750 F.2d 937, 944 (Fed.Cir.1984). With respect to the timeliness determination, however, the Board concluded that the agency's good faith was an important factor, particularly because no RIF action was taken against Krizman before he retired. Because Krizman failed either to put the agency on notice that he regarded his retirement as involuntary, or to exercise diligence in discovering and pursuing his right of...