Young v. Dep't of Hous. & Urban Dev.

• Decision Date: 12 February 2013
• Docket Number: No. 2011–3232.,2011–3232.
• Parties: Rayland YOUNG, Petitioner, v. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, Respondent.
• Court: U.S. Court of Appeals — Federal Circuit

706 F.3d 1372

Rayland YOUNG, Petitioner,

v.DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, Respondent.

No. 2011–3232.

United States Court of Appeals, Federal Circuit.

Feb. 12, 2013.

Matthew H. Solomson, Sidley Austin, LLP, of Washington, DC, argued for petitioner. With him on the brief was Kyle J. Fiet. Of counsel on the brief was Jacob Y. Statman, Snider & Associates, LLC, of Baltimore, Maryland.

Hillary A. Stern, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for respondent. With her on the brief were Stuart F. Delery, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Brian M. Simkin, Assistant Director.

Before PROST, O'MALLEY, and REYNA, Circuit Judges.

Opinion for the court filed by Circuit Judge REYNA. Dissenting opinion filed by Circuit Judge PROST.

REYNA, Circuit Judge.

Rayland Young seeks review of the arbitrator's opinion and award, dated August 31, 2011, denying his grievance that challenged his termination. For the reasons set forth below, we reverse the arbitrator's decision and remand for further proceedings consistent with this opinion.

I. Background

Mr. Young served as a Public Housing Revitalization Specialist in the Office of Public Housing in the Cleveland, Ohio office of the Department of Housing and Urban Development (HUD). He had been employed by HUD for more than ten years. On August 31, 2010, Mr. Young was representing himself at an arbitration hearing, appealing his five-day suspension for disruptive behavior, misrepresentation of authority, and use of insulting language to and about other employees. One of the witnesses testifying against him was Gregory Darr, the Executive Director of the Coschocton Metropolitan Housing Authority and a HUD client.

Following Mr. Darr's testimony, there was a recess in the proceeding. According to Mr. Darr, while he was walking down the hallway, about 25–30 feet away from Mr. Young, Mr. Young shouted from immediately outside the door of the hearing room, “[y]ou are a racist. You are a member of the KKK, and you should be shot.” Mr. Darr reported that he was shaken by the alleged incident, and he immediately relayed the events to an administrative officer, Reishmemah Haggins, and to the office manager, Doug Shelby. Mr. Darr also insisted on filing a statement with the Federal Protective Service. Mr. Darr did not identify any person who directly witnessed the alleged confrontation. In the days that followed the incident, distress within the office grew as word of the supposed confrontation spread. On September 3, 2010, Mr. Young was placed on administrative leave.

Shawn Sweet, Director of the Cleveland Hub Office of Public Housing prepared a proposal for disciplinary action to be taken against Mr. Young. Ms. Sweet determined that Mr. Young's conduct was similar to Offense Five from the HUD Handbook No. 0752, “[r]ude boisterous, or disruptive conduct; use of insulting, abusive or offensive language to or about other employees,” but bordered on Offense Six, “[t]hreatening behavior.” His threatening behavior was her key concern in recommending Mr. Young's termination. But the reason Ms. Sweet gave for the punishment she recommended was that he “[made] an aggressive or intimidating statement to an Agency witness at an arbitration hearing.” Joint App'x 17.

Once Ms. Sweet issued her notice of proposed removal, Unabyrd Wadhams, Regional Public Housing Director, became the deciding official. Ms. Wadhams reviewed the proposal as well as the notes and supporting documents. She also interviewed several relevant witnesses, including Mr. Darr, Mr. Shelby, Ms. Haggins, and Jimmy Davis. Notably, Ms. Wadhams conducted all of her interviews after Mr. Young submitted his oral and written statements. This meant that Mr. Young was unaware of the content and substance of the interviews and was unable to respond to anything unearthed during those interviews.

Ms. Wadhams found Mr. Darr's account of the incident credible, but its only support came from other individuals who relied on what Mr. Darr had told them about the incident. No witnesses testified that they either saw or heard Mr. Young yell or shout at Mr. Darr. In contrast, Mr. Davis, a HUD employee assisting Mr. Young in the arbitration, submitted an affidavit on behalf of Mr. Young in which he stated, “I was with Mr. Young the entire time during this break. He never approached Mr. Darr and did not make any intimidating or aggressive statements to him. As a matter of fact he never said anything to Mr. Darr.” Joint App'x 35. During an interview held after Mr. Young made his submissions, Mr. Davis also testified that Mr. Young was in his view the entire break and that he did not witness Mr. Young scream, threaten, or otherwise interact with Mr. Darr. During the arbitration, HUD stipulated that Thomas Massouras, counsel for HUD at the hearing outside which the incident allegedly occurred, stayed in the hearing room during the entire recess and heard no confrontation or yelling. Consistent with these clear statements, Mr. Young and Mr. Davis maintained that they spent the entire recess outside the hearing room, while Mr. Davis later acknowledged in his interview that the two went to his cubicle during the recess and that he checked email and attended to other matters. Ms. Wadhams determined that this discrepancy wholly undermined Mr. Davis' credibility as a witness and, as a result, Ms. Wadhams determined that Mr. Young engaged in the conduct described in Ms. Sweet's proposal for removal. Mr. Young was never apprised of these supposed inconsistencies, nor did he have a chance to respond to them because the interview only occurred after Mr. Young had fully been heard.

In sustaining the recommendation to remove Mr. Young, Ms. Wadhams explained that she considered this as his second offense (the first being the conduct that gave rise to the five-day suspension). She viewed Mr. Young's conduct as a very serious threat, and one that was particularly egregious because he directed it at a HUD client. She also explained that the language Mr. Young allegedly used was similar to language he allegedly used on other occasions, including the incident that gave rise to the prior appeal, so she treated those past incidents as evidence of a pattern of misconduct. On the basis of these considerations, Ms. Wadhams concluded that removal was the appropriate measure.

Following Ms. Wadhams' decision, Mr. Young arbitrated his grievance before Marvin J. Feldman. The arbitrator found Mr. Darr's testimony credible while Mr. Davis' testimony was inconsistent and lacking in candor. As for the proposed penalty, the arbitrator also noted that this was Mr. Young's second offense. But when discussing the first incident, the arbitrator described it as “nothing more than the predecessor of the activity involving the instant matter.” Joint App'x 12. Finally, regarding Mr. Young's due process arguments, the arbitrator found them unfounded because he had been given adequate time at the end of his arbitration hearing to address them. The arbitrator found the charge against Mr. Young supported by preponderant evidence and denied the grievance. Following the arbitrator's decision, Mr. Young appealed to this court. We have jurisdiction pursuant to 5 U.S.C. §§ 7121(f) and 7703.

II. Standard of Review

This court reviews an arbitrator's decision, issued pursuant to a negotiated grievance procedure, under the same standard that applies to appeals from the Merit Systems Protection Board. 5 U.S.C. § 7121(f) (2006); Dixon v. Dep't of Transp., 8 F.3d 798, 803 (Fed.Cir.1993). Under that standard, we must affirm the arbitrator's decision unless it is (1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (2) obtained without procedures required by law, rule, or regulation having been followed; or (3) unsupported by substantial evidence. 5 U.S.C. § 7703(c); Dixon, 8 F.3d at 803. In addition, we must reverse an arbitrator's decision if it is not in accordance with the requirements of the Due Process Clause of the Fifth Amendment or any other constitutional provision. Cf. Ward v. U.S. Postal Serv., 634 F.3d 1274, 1278 (Fed.Cir.2011).

III. Discussion

The proceedings leading to Mr. Young's removal present serious concerns related to constitutional due process and observance of agency procedures, both of which the arbitrator failed to adequately address. In that order, we explain why each concern amounts to a violation and requires reversal.

A. Due Process

Procedural due process requires that certain substantive rights—including the property interest established by certain kinds of federal employment—cannot be deprived unless constitutionally adequate procedures are followed. Stone v. Fed. Deposit Ins. Corp., 179 F.3d 1368, 1375 (Fed.Cir.1999) (quoting Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 541, 105 S.Ct. 1487, 84 L.Ed.2d 494 (1985)). Applicable to this case are “[t]he essential requirements of due process, ... notice and an opportunity to respond.” Id. at 1375–76 (quoting Loudermill, 470 U.S. at 546, 105 S.Ct. 1487). As such, an employee is entitled to notice of the charges against him, an explanation of the employer's evidence, and an opportunity to present his side of the story before termination. Id. at 1376 (quoting Loudermill, 470 U.S. at 546, 105 S.Ct. 1487);see also Douglas v. Veterans Admin., 5 MSPB 313, 5 M.S.P.R. 280, 304 (1981).

When an employer obtains new and material information through ex parte communications, an “employee's constitutional due process guarantee of notice (both of the charges and of the employer's evidence) and the opportunity to respond” are undermined. Stone, 179 F.3d at 1376. Where an employee has notice only of certain charges or portions of the evidence and the deciding official considers new and material information, procedural due process guarantees are not met because the...