Link v. Department of Treasury

Decision Date31 March 1995
Docket NumberNo. 93-3354,93-3354
Citation51 F.3d 1577
PartiesLawrence E. LINK, Petitioner, v. DEPARTMENT OF the TREASURY, Respondent.
CourtU.S. Court of Appeals — Federal Circuit

Joyce F. Glucksman, Atlanta, GA, argued, for petitioner.

Donna C. Maizel, Atty., Commercial Litigation Branch, Dept. of Justice, Washington, DC, argued, for respondent. With her on the brief were Frank W. Hunger, Asst. Atty. Gen., David M. Cohen, Director and Bryant G. Snee, Asst. Director.

Before PLAGER, CLEVENGER, and SCHALL, Circuit Judges.

Opinion for the court filed by Circuit Judge SCHALL.

Concurring opinion filed by Circuit Judge PLAGER.

SCHALL, Circuit Judge.

Lawrence E. Link petitions for review of the final decision of the Merit Systems Protection Board (Board) in Link v. Department of the Treasury, Docket Nos. AT-0432-92-0645-I-1 and AT531D920646-I-1. The March 10, 1993 initial decision of the administrative judge (AJ) became the final decision of the Board on April 14, 1993, when Link failed to file a petition for review. In its decision, the Board dismissed Link's appeal of his removal from the United States Customs Service (Customs or agency) 1 for lack of jurisdiction, because it found that Link had waived his appeal rights in a "last-chance" settlement agreement. Link sought to prevent enforcement of the waiver by attempting to establish that Customs had breached the last-chance agreement. Although the Board concluded that Customs had failed to comply with some of the requirements of the agreement, it held that Link had failed to establish breach because he had not proved that the agency had acted in bad faith. Because we hold that the Board erred as a matter of law in requiring Link to prove bad faith on the part of Customs and because we hold that Customs

breached the last-chance agreement, we reverse and remand and instruct the Board to reinstate Link's appeal.

BACKGROUND
I

Link was employed as an auditor by Customs in its Southeast Region in Charlotte, North Carolina. In November of 1990, the agency removed him for unacceptable performance, pursuant to 5 U.S.C. Sec. 4303. After Link appealed the removal to the Board, he and the agency settled the case by entering into a last-chance agreement.

The last-chance agreement provided that Link be reinstated to his position as an auditor and then be evaluated over an eight-month period. During this evaluation period, Link first would undergo two months of training and then would be given six months during which to demonstrate acceptable job performance. If, at the end of the eight-month evaluation period, Link's performance was deemed acceptable, he would be returned to his position on a permanent basis. If, on the other hand, his performance was deemed unacceptable, the removal would be reinstated and he would be permanently separated from the agency.

Five provisions of the last-chance agreement are relevant to this appeal. In Article 4, Customs agreed that it would not scrutinize Link's performance any more or any less strictly than that of any other employee. Article 6 of the agreement provided that, if at the end of the eight-month evaluation period Link's performance was deemed unacceptable by his supervisors, his work would be reviewed "by the Regional Director of another region outside the Southeast Region." Article 6 further provided that "[a]ny memorandums concerning Mr. Link's performance written by Agency employees or Mr. Link will ... be provided to the reviewing Regional Director." Article 7 of the agreement provided that if the reviewing Regional Director agreed that Link's work was unacceptable, the removal action would be reinstated and Link would be removed for unacceptable performance. However, Article 9 provided that if the reviewing Regional Director did not agree that Link's work was unacceptable, Link would be allowed to keep his job. Finally, in Article 8 of the agreement, Link agreed that if he was removed for unacceptable performance, he would waive his right to appeal to the Board.

II

Link returned to work under the last-chance agreement in June of 1991. In due course, after successfully completing two months of training, he was assigned to perform a customs audit of certain "Pic N Pay" stores. In early October, after he had begun work on the Pic N Pay audit, Link was visited by a co-worker who examined his work papers and determined that the audit was progressing satisfactorily. Thereafter, co-workers visited Link on a monthly basis to discuss the audit with him.

On January 15, 1992, John Jasman, Link's immediate supervisor, directed Link to submit all of his audit work papers on January 24 for a performance review, as required by the last-chance agreement. Upon receiving the work papers, Mr. Jasman instructed Chad Nesbit and Larry Goodman, two of Link's co-workers, to conduct a peer review of the Pic N Pay audit. After reviewing the work papers from the audit, Messrs. Nesbit and Goodman concluded that Link's work was unacceptable because he had failed to substantiate a number of his conclusions and findings.

In reviewing the work papers, Mr. Nesbit and Mr. Goodman used audit review sheets. Each of these sheets contained four columns. The first column identified by number the work paper being reviewed; the second column was for the reviewer's comments concerning the work paper; the third column was for Link's responses to those comments; and the fourth column was for the reviewer's clearance. If a reviewer made an entry in the fourth column, it meant that, for the indicated work paper, Link's response in column 3 satisfactorily responded to the reviewer's comment in column 2. It appears that Link prepared his column 3 responses to Mr. Nesbit's and Mr. Goodman's comments after the audit work papers and audit review After Mr. Nesbit and Mr. Goodman had completed their peer review, Link's audit work papers and the audit review sheets were reviewed by Mr. Jasman and by Patricia Goldman, the Southeast Region's Regional Director for Regulatory Audits. Mr. Jasman and Ms. Goldman agreed with Mr. Nesbit and Mr. Goodman that Link's work on the audit was unsatisfactory. 2

sheets were forwarded to Link's supervisors for review.

On February 4, Mr. Jasman notified Link in writing that his performance had been found to be unsatisfactory because, in five instances over the previous six months, he had failed "to obtain sufficient, competent, and relevant evidence to support judgments, conclusions, recommendations, or elements of audit findings." In so doing, Mr. Jasman wrote, Link had failed to meet one of the performance standards under which he had been evaluated. This standard allowed no more than four such failures over a six-month period. Link responded to Mr. Jasman's notice of deficiencies on February 14. In his response, Link argued that Customs had violated Article 4 of the last-chance agreement because it had reviewed his work more rigorously than that of other employees.

On March 27, Mr. Nesbit cleared 30 of the approximately 70 comments which had been made in the course of the January review of Link's work papers. Shortly thereafter, on April 2, in accordance with Article 6 of the last-chance agreement, Ms. Goldman sent a memorandum to H. Tim Whitworth, her counterpart in the agency's South Central Region. In her memorandum, Ms. Goldman asked Mr. Whitworth to review Link's "work papers and work" against the applicable performance standards and to then determine whether Link's work was unacceptable. Ms. Goldman wrote that she was sending Mr. Whitworth "the notice of deficiencies issued to Mr. Link by ... Mr. Jasman, as well as the work paper review notes upon which the notice of deficiencies was based and other memorandums related to ... performance of the audit." Ms. Goldman also wrote that she was enclosing a copy of Link's response to the notice of deficiencies, as well as two letters from Link's attorney to Mr. Jasman. The "work paper review notes" to which Ms. Goldman referred were the comments of Messrs. Nesbit and Goodman on the four-column audit review sheets discussed above. However, the 17 pages of audit review sheets which were sent to Mr. Whitworth did not contain either Link's responses to the reviewers' comments or Mr. Nesbit's notations reflecting the 30 clearances. Nor was Mr. Whitworth provided with certain memoranda regarding Link's two months of training and the monthly visits of his co-workers during the time that he was conducting the Pic N Pay audit.

After reviewing the material which Ms. Goldman had sent to him, Mr. Whitworth also concluded that Link's work on the Pic N Pay audit was unacceptable because Link had failed to sufficiently document and support his findings and conclusions. Mr. Whitworth reported his conclusions back to Ms. Goldman in a memorandum dated April 10. On April 14, Customs informed Link that, in accordance with the last-chance agreement, it was reinstating his November 1990 removal.

III

After Link appealed his reinstated removal to the Board, Treasury moved to dismiss, arguing that the Board lacked jurisdiction because Link had waived his appeal rights in the last-chance agreement. Link responded that Customs was not entitled to have the waiver enforced.

As noted above, on March 10, 1993, the AJ dismissed Link's appeal for lack of jurisdiction. The AJ started from the premise that, in order to establish jurisdiction, Link had to prove 1) that he had complied with the last-chance agreement, 2) that Customs had breached the agreement by acting in bad faith or arbitrarily and capriciously, or 3) that he had not entered into the agreement knowingly and voluntarily. Link contended that he had complied with the agreement because he had performed satisfactorily and that, in any event, Customs had breached the agreement. As far as breach was concerned, Link claimed that Customs had violated Article After a hearing, the AJ concluded that Link had failed to prove that he had complied with...

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