Lovshin v. Department of Navy

• Citation: 767 F.2d 826
• Decision Date: 21 June 1985
• Docket Number: No. 84-1002,84-1002
• Parties: Albert J. LOVSHIN, Petitioner, v. DEPARTMENT OF the NAVY, Respondent. Appeal
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Page 826

767 F.2d 826

Albert J. LOVSHIN, Petitioner, v. DEPARTMENT OF the NAVY, Respondent.

Appeal No. 84-1002.

United States Court of Appeals, Federal Circuit.

June 21, 1985.

Douglas Stenzel, Ventura, Cal., argued for petitioner.

Charles Schlumberger, Commercial Litigation Branch, Dept. of Justice, Washington, D.C., argued for respondent. With him on brief were Richard K. Willard, Acting Asst. Atty. Gen., David M. Cohen, Director and M. Susan Burnett, Washington, D.C.; Dale Birdoff, Dept. of the Navy, Washington, D.C., of counsel.

Evangeline W. Swift, Gen. Counsel, Mary L. Jennings, Associate Gen. Counsel for Litigation and Marsha E. Mouyal, Office of the Gen. Counsel, Merit Systems Protection Bd., Washington, D.C., were on brief, for intervenor, Merit Systems Protection Board.

Before MARKEY, Chief Judge, FRIEDMAN, RICH and DAVIS, Circuit Judges, SKELTON, Senior Circuit Judge, BALDWIN, KASHIWA and BENNETT, Circuit Judges, MILLER, ^* Senior Circuit Judge, SMITH, NIES, NEWMAN and BISSELL, Circuit Judges. ^**

NIES, Circuit Judge.

I.

In this appeal, this court must consider the effect of amendments to Chapters 43 and 75 of Title 5 made by the Civil Service Reform Act of 1978, Pub.L. 95-454, 92 Stat. 1121 (CSRA). Petitioner, Albert Lovshin, was removed from his position as Electronics Engineer for the Department of the Navy (agency) at the Naval Ship Weapons Engineering Station, Port Hueneme, California, effective November 30, 1981. On appeal to the Merit Systems Protection Board (MSPB or board), the agency action was sustained as meeting the standards and procedures required by Chapter 75 of the CSRA. As originally briefed on appeal, petitioner asserted that (1) the agency charge of unsatisfactory performance in his work was not proved, (2) the removal action was in retaliation for petitioner's whistleblowing activities, (3) the agency committed harmful error in its removal procedures, (4) the presiding official of the MSPB violated procedural due process in the manner of conducting discovery and the hearing, and (5) the agency improperly removed him during the pendency of an agency-initiated disability retirement application. The agency argued that the presiding official's decision was correct in all respects and should be upheld.

Subsequently, the MSPB was allowed to intervene in this appeal. The MSPB asks that this case be remanded because it may have been improperly considered under Chapter 75. In Gende v. Department of Justice, 23 M.S.P.R. 604 (1984), a decision issued on October 22, 1984 during the pendency of this appeal, the board held that Chapter 43 was the exclusive procedure for performance-based actions effected after October 1, 1981, and that Chapter 75, with several exceptions, was no longer available after that date for effecting such actions. Because the action against petitioner Lovshin was performance-based and was effective on November 30, 1981, this action prima facie falls within the Gende ruling. If the case is remanded, the MSPB states that the agency would be allowed to show, if it could, that, in effect, it complied with Chapter 43 or that the action falls within one of the exceptions the MSPB has stated to the Gende rule.

Petitioner and the agency were allowed to file supplemental briefs on this issue. Petitioner endorses the MSPB statutory interpretation but argues against remand on the ground that the removal action is irretrievably defective because the agency's performance appraisal systems under Chapter 43 were not in place until after his removal. The agency argues that, under the precedent of this court set forth in Kochanny v. Bureau of Alcohol, Tobacco and Firearms, 694 F.2d 698 (Fed.Cir.1982) and in Turnage v. United States, 230 Ct.Cl. 799 (1982), Chapters 43 and 75 are alternative methods for removal of employees for performance-based reasons, and that the MSPB's interpretation of the statute in Gende is in error.

Having taken the case in banc because endorsement of Gende would require modifying the precedential analysis in Kochanny and Turnage, we reaffirm that Chapter 75 may be used to remove an employee for performance-based reasons, provided the agency meets all requirements for establishing "such cause as will promote the efficiency of the service."

In sum, we conclude that (1) the usual deference which a court must give the interpretation of a statute by the agency charged with its administration is not appropriate in this instance because the MSPB itself has not taken a consistent position; (2) the precedessor of Chapter 75 was long used for removals based on poor performance and the legislative history discloses no expressed intent by Congress to repeal such use; (3) Chapters 43 and 75 establish separate procedural mechanisms, both of which can be used to obtain the objectives Congress sought in enacting the CSRA; (4) there is no necessary conflict in utilizing both chapters for such actions; and (5) if Chapter 43 only were available for the disciplining of employees for poor On the merits of this case, we hold that the removal action against petitioner Lovshin must be sustained. However, an issue has been raised with respect to petitioner's entitlement to pay under 5 C.F.R. Sec. 831.1206 prior to OPM's decision on an involuntary disability claim. We find it appropriate to remand for determination of this issue in the first instance by the MSPB.

performance, there would be serious omissions and anomalies.

II. The Civil Service Reform Act

This case raises a question of statutory interpretation of the effect of the CSRA amendments to Chapter 43 on Chapter 75. As background to this analysis, we begin with a brief review of the history and purpose of these chapters.

Chapter 43, before and after enactment of the CSRA, is directed to the evaluation of a federal employee's work performance. Chapter 75, before and after enactment of the CSRA, is concerned with removals and other disciplinary action.

The substantive ground for taking an adverse action under Chapter 75 has been in the civil service law essentially unchanged since 1912 with enactment of the landmark Lloyd-LaFollette Act. A single basis for disciplinary action has been continuously provided therein: "only for such cause as will promote the efficiency of the service." 5 U.S.C. Sec. 7513(a). ¹ No limitation on the type of wrongful conduct by an employee which might lead to disciplinary action "for cause" is specified in Chapter 75. Poor performance of the duties of a position has been an accepted basis and, indeed, Chapter 75 provided the only framework for disciplinary action for performance reasons prior to the CSRA amendments to Chapter 43.

A formal system of periodic rating of a federal employee's work performance has long been part of civil service procedures. The pre-1978 provisions of Chapter 43 required an agency to rate the overall work performance of an employee as "satisfactory," "unsatisfactory," or "outstanding." 5 U.S.C. Sec. 4301 et seq. (1976). A performance rating of "unsatisfactory" was stated to be "a basis for removal." 5 U.S.C. Sec. 4304(b) (1976). Before rating an employee "unsatisfactory," an agency was required to give the employee 90 days warning and a reasonable opportunity to improve. An "unsatisfactory" rating was reviewable through review procedures in the agencies and the Civil Service Commission.

A provision relating to removal based on an "unsatisfactory" rating has been part of the evaluation chapter since the Performance Rating Act of 1950, codified at 5 U.S.C. Sec. 2001 et seq. (1952). ² The 1950 statute stated that an "unsatisfactory" performance rating "shall serve as a basis for removal." 5 U.S.C. Sec. 2005 (1952). The provision was interpreted by some agencies as providing an independent basis for removal. However, that presumption was short-lived. The U.S. Court of Claims, as well as other courts, held that it did not. After an "unsatisfactory" rating was upheld through review procedures, an agency could use the rating "as a basis for removal" only by thereafter taking action "for cause" under Chapter 75 (or Chapter 14 of the Veterans Preference Act, if applicable). ³

The courts were also confronted with a question similar to that presented in this appeal: Were the rating procedures in Chapter 43 superimposed on actions under The pre-1978 Chapter 43 performance rating system was glaringly ineffective for managers and employees alike. As Congress stated, S.Rep. No. 969, 95th Cong., 2d Sess. 3, 40, reprinted in 1978 U.S.Code Cong. & Ad.News 2723, 2725, 2762 (Senate Report):

                Chapter 75, where the basis for the adverse action was performance-based?    In a series of decisions, the courts held that the provisions for rating employees as part of the comprehensive system for promoting efficiency in the government service "did not directly or by implication modify or supersede the authority of the appropriate officials to demote [or remove] under procedures and regulations specifically applicable to personnel action of that character."   Jones v. Hobby, 223 F.2d 345 (D.C.Cir.1955). 4
                

Assaults on the merit system have taken place despite, and in some instances because of, the complicated rules and procedures that have developed over the last century. The welter of inflexible strictures that have developed over the years threatens to asphyxiate the merit principle itself.

The complex rules and procedures have, with their resultant delays and paperwork, undermined confidence in the merit system. Many managers and personnel officers complain that the existing procedures intended to assure merit and protect employees from arbitrary management actions have too often become the refuge of the incompetent employee. When incompetent and inefficient employees are allowed to stay on the work rolls, it is the dedicated and competent employee who must increase his workload so that the public may be benefitted. The morale of even the best motivated employee is bound to...