Schmidt v. Department of Interior

• Decision Date: 20 August 1998
• Docket Number: No. 97-3379,97-3379
• Citation: 153 F.3d 1348
• Parties: William B. SCHMIDT, Petitioner, v. DEPARTMENT OF INTERIOR, Respondent.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1348

153 F.3d 1348

William B. SCHMIDT, Petitioner, v. DEPARTMENT OF INTERIOR, Respondent.

No. 97-3379.

United States Court of Appeals Federal Circuit.

Aug. 20, 1998.

William L. Bransford, Shaw, Bransford & O'Rourke, Washington, DC, argued for petitioner. With him on the brief was Alicia A. Simolunas.

Jonathan M. Coleman, Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, Washington, DC, argued for respondent. With him on the brief were Frank W. Hunger, Assistant Attorney General, David M. Cohen, Director, and Jeanne E. Davidson, Assistant Director.

Before NEWMAN, PLAGER, and SCHALL, Circuit Judges.

SCHALL, Circuit Judge.

William B. Schmidt petitions for review of the final decision of the Merit Systems Protection Board (Board) sustaining the action of the Department of the Interior (Interior or agency) removing him from the Senior Executive Service (SES) and assigning him to a GS-15 position pursuant to a reduction-in-force (RIF). See Schmidt v. Department of the Interior, No. DC-0351-96-0878-I-1 (Oct. 31, 1996). ¹ Because the Board correctly held that Interior did not abuse its discretion in using a bureau-wide competitive area for purposes of its SES RIF plan and because the Board also correctly held that it lacked jurisdiction to consider Mr. Schmidt's challenge to Interior's efforts to place him in a vacant SES position, we affirm.

BACKGROUND

In July of 1990, Mr. Schmidt, who was a member of the SES, was appointed Chief of the Division of Environmental Technology in Interior's U.S. Bureau of Mines (BOM). He served in that position at the ES-05 level until June 4, 1996, when he was removed from the SES as part of a RIF that was occasioned by the closing of BOM.

I.

The events leading up to the RIF began in 1995. In late February of that year, Rhea Graham, then-Director of BOM, testified at hearings before the House Interior Appropriations Subcommittee and the House Subcommittee on Energy and Mineral Resources. The purpose of the hearings was to consider BOM's budget and mission. A month later, the Subcommittee on Energy and Mineral Resources recommended that BOM continue operating at a spending level lower than that recommended by the President.

On June 30, 1995, the House Committee on Appropriations recommended that BOM be closed and that $87 million be appropriated for that purpose. At that time, based upon conversations with members of the Senate, however, Ms. Graham believed that the Senate would recommend continued funding for BOM. Indeed, on July 28, the Senate's Committee on Appropriations issued a report Nevertheless, following the August recess, the House-Senate Conference Committee amended Interior's appropriation bill for fiscal year 1996 so as to identify BOM for elimination. See H.R. Conf. Rep. No. 104-259, at 6 (1995). The Conference Committee's report was issued on September 21, 1995. By memorandum dated December 15, 1995, Ms. Graham requested approval from Bonnie Cohen, Assistant Secretary of the Interior for Policy, Management, and Budget, to conduct a RIF of BOM's SES members. Ms. Cohen gave her approval the same day.

voicing strong support for BOM. The Committee recommended that Congress appropriate the President's full budget request for BOM.

II.

While the above-described events were taking place, Interior was in the process of revising and updating its SES RIF procedures. The effort was undertaken because there had been no significant revision of the procedures since at least 1982. In addition, Interior wanted to bring its procedures into compliance with final regulations issued by the Office of Personnel Management (OPM) on February 2, 1995. See 60 Fed.Reg. 6383 (1995) (codified at 5 C.F.R. part 359). Those regulations revised then-existing rules for conducting an SES RIF.

Interior's existing SES RIF procedures employed a department-wide competitive area. In the course of the revision effort, officials at Interior determined that it would be preferable to provide for bureau-wide competitive areas instead. Terry Steele, who was coordinator of executive and senior level programs within Interior's Office of Personnel and who drafted the revised SES RIF plan, testified at the Board hearing that the department-wide competitive area was perceived as unmanageable:

The old plan required that we would have a single area of competition, that if a RIF were required in any particular bureau for any reason or any place in the department for any reason--whether it was because of lack of funding or because of mission or program changes that suddenly an established and filled SES position was no longer necessary and needed to be abolished--it would throw the entire department SES cadre into a RIF situation.

The Office of Personnel or Office of Personnel Policy, as it has just been recently renamed, would have been responsible for establishing both competitive levels and then the retention registers within each competitive level for the whole department.

This would have required all the bureaus to provide us with the executives' official personnel folders. I assume--to me, a special staff would have had to have been established on a short-term to manage the project.

But it was the fact that you would be establishing competitive levels that would go completely across the department.

When you determine which positions within a particular competitive level were to be abolished, there was a great possibility of requiring geographic reassignments against the executive's will whose position had been abolished to take a position, you know, at another location.

To me, to reduce the area of competition was going to reduce the disruption that would be caused by a RIF and also reduce the cost incurred by the RIF.

At some point in the spring of 1995, Interior's Office of Personnel recommended establishing competitive areas at either the bureau or assistant secretary level. Subsequently, the two competitive area options (bureau-wide or assistant secretary level) were discussed by Interior's Policy Group, a body made up of the agency's upper-level political appointees. Eventually, the Policy Group recommended the adoption of bureau-wide competitive areas. On July 11, 1995, Interior issued its final revised SES RIF procedures.

The procedures established competitive areas comprised of bureaus and organizational components equivalent to bureaus. In addition, under the procedures, only SES members with the highest performance appraisals in the last four years and performance recognition awards received the most retention credit.

III.

As noted above, Ms. Graham's request for approval to conduct an SES RIF at BOM was approved on December 15, 1995. Thereafter, by means of a RIF notice dated March 29, 1996, Mr. Schmidt was informed that his position had been abolished and that he was subject to removal from the SES. The notice also informed Mr. Schmidt that there was no vacant SES position within Interior for which he was qualified and that no SES positions remained within his competitive area, BOM. The RIF took effect on June 4, 1996. At that time, Mr. Schmidt was removed from the SES and, pursuant to an offer from Interior which he had accepted, was placed in a GS-15 position with the National Park Service.

Mr. Schmidt appealed his removal from the SES to the Board, pursuant to 5 U.S.C. § 3595(c) (1994). In so doing, he advanced several arguments. First, he contended that, by revising its SES RIF plan so that competitive areas were limited to the individual bureaus, Interior failed to comply with the "competitive procedures" for SES RIFs required by 5 U.S.C § 3595(a) (1994) and 5 C.F.R. § 359.602(a) (1998). ² Mr. Schmidt contended as well that the 1995 SES RIF plan, pursuant to which he was removed, constituted a prohibited personnel practice, in violation of 5 U.S.C. § 2302(b)(6) and (b)(11). He also alleged that agency officials did not follow proper procedures when they failed to place him in another SES position within Interior.

The Board rejected all of Mr. Schmidt's arguments. First, in prehearing rulings, the AJ determined that Mr. Schmidt's challenge to the efforts of the agency to place him and other employees of the Bureau did not concern the "competitive procedures" required by 5 U.S.C. § 3595(a) and therefore was not within the jurisdiction of the Board under 5 U.S.C. § 3595(c). Following a hearing, the AJ rejected Mr. Schmidt's remaining arguments. The AJ concluded that Interior had complied with the revised SES RIF procedures and that the revised procedures were consistent with the requirements of § 3595(a) and the pertinent regulations. He also concluded that Interior had not violated 5 U.S.C § 2302(b)(6) by developing an SES RIF plan that narrowed the scope of competition to the individual bureaus within the agency and that the revised SES RIF plan did not run afoul of 5 U.S.C § 2302(b)(11) by retaining individuals based on their location in the agency rather than upon performance. Accordingly, the AJ sustained the action of Interior removing Mr. Schmidt from the SES. As noted above, the Board denied Mr. Schmidt's petition for review. This appeal followed.

DISCUSSION

Our review of Board decisions is strictly limited by statute. We may not reverse a decision of the Board unless it is (1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (2) obtained without adherence to procedures required by law, rule, or regulation; or (3) unsupported by substantial evidence. See 5 U.S.C. § 7703(c); Wright v. Department of Transp., 900 F.2d 1541, 1544 (Fed.Cir.1990). On appeal, Mr. Schmidt asserts the same arguments that he raised before the Board.

I.

Mr. Schmidt's first argument is that, when it conducted the SES RIF, Interior violated 5 U.S.C. § 3595(a) and 5 C.F.R. § 359.602(a)(2). Section 3595(a) provides as follows:

An agency shall establish competitive procedures for determining who shall be removed from...