case law update

MSPB Holds Performance Based Removal Action by Government Corporation Appealable to Board

A Program Administrator for the Inter-American Foundation was removed from her position on September 9, 2014, for “failing to meet performance standards.” The employee filed an appeal of her removal to the Merit Systems Protection Board. After the Foundation challenged whether the MSPB had jurisdiction over the matter, an MSPB administrative judge directed the employee to show that jurisdiction was proper.

After reviewing responses from both the employee and the Foundation, the administrative judge dismissed the appeal for lack of jurisdiction, concluding that the Foundation is a Government corporation, and therefore statutorily excluded from Chapter 43 of Title 5. The administrative judge also held that the Foundation had removed the employee via removal power granted under 22 U.S.C. § 290f(e), and that the employee failed to make a nonfrivolous allegation that she had Board appeal rights under chapter 75 of Title 5. The employee filed a petition for review by the full Board. On July 24, 2015, the Merit Systems Protection Board reversed the administrative judge’s findings of no jurisdiction and remanded the case for further adjudication consistent with the Board’s holding.

The full Board agreed with the administrative judge that since the Foundation is a Government corporation, an entity not within the definition of “agency” in chapter 43 of Title 5 (which gives “agencies” the authority to remove employees for unacceptable performance), there was no jurisdiction over the appeal pursuant to chapter 43. A “Government corporation,” the Board explained, is defined as “a corporation owned or controlled by the Government of the United States.”

However, the Board disagreed with the administrative judge’s finding that the employee’s removal did not fall within the Board’s jurisdiction under chapter 75 of Title 5, which gives agencies the authority to impose adverse actions for unacceptable performance. Unlike Chapter 43, the Board stated, chapter 75 does not exclude Government corporations like the Inter-American Foundation from the definition of “agency” used in the statute. The Board cited to a previous case, Patermaster v. Inter-American Foundation, in which it had adjudicated “the performance-based adverse action of a Foundation employee under chapter 75.”

While the Foundation argued that it removed the employee via its authority in 22 U.S.C. § 290f, the statute that established the Foundation, the Board observed that the subsection of the “powers and functions” section cited by the Foundation’s Chief Executive Officer in a sworn declaration only referred to the broad grant of authority for “such other powers as may be necessary and incident to carrying out its powers and duties under this section” and not one of the otherwise specific authorities granted elsewhere.

The Board, citing the famous Supreme Court case Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), stated that “[i]f the statute is silent or ambiguous concerning the specific issue, the inquiry proceeds to the question of whether an agency’s interpretation is based on a permissible construction of the statute. Finding that there was nothing in 22 U.S.C. § 290f that indicated that Congress had any specific intention to grant the authority to effectuate a performance-based removal outside the normal scope of Title 5, the Board also noted that the Civil Rights Service Reform Act (“CSRA”) was enacted by Congress to replace what was previously a “patchwork system” of Federal employment laws with one integrated scheme of administrative and judicial review.

In the past, the Court stated, the United States Supreme Court has found that due to the CSRA’s comprehensiveness, Congressional exclusions of certain employees from the protections of chapter 75 of Title 5 had been deliberate. In this case, the Board held, the power to effect performance-based removals did not fall under the catch-all “necessary and incident” clause in the statute’s “powers and functions” section, there was no deliberate or specific exclusion of Foundation employees by Congress in the statute, and therefore the Foundation was capable of “effectuating a performance-based removal under chapter 75, despite being unable to do so under chapter 43.”

For the above stated reasons, the Board held that the CSRA made Board jurisdiction over the employee dependent only on the nature of the employee and the employment action at issue, and since the employee met the definition of “employee” under chapter 75 and her type of removal action was covered by chapter 75, the removal action fell within the Board’s jurisdiction.

Read the full case: Epley v. Inter-American Foundation


This case law update was written by Conor D. Dirks, associate attorney, Shaw Bransford & Roth, PC.

For thirty years, Shaw Bransford & Roth P.C. has provided superior representation on a wide range of federal employment law issues, from representing federal employees nationwide in administrative investigations, disciplinary and performance actions, and Bivens lawsuits, to handling security clearance adjudications and employment discrimination cases.

Posted in Case Law Update

Tags: MSPB, case law update

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