Agencies Must Prove Pre-PIP Unacceptable Performance in Federal Circuit Decision
Disclosure: On July 7, 2020, the United States Court of Appeals for the Federal Circuit appointed Debra L. Roth as amicus curiae counsel to brief a statutory interpretation question from the position of employee-petitioner Fernando Santos. Ms. Roth, Conor D. Dirks, and James P. Garay Heelan, attorneys of Shaw Bransford & Roth P.C., briefed the issue from the employee’s position for the court. The court adopted that position in its opinion. Mr. Dirks is also the author of this case law update.
This case law update was written by Conor D. Dirks, an attorney at the law firm of Shaw Bransford & Roth, where since 2013 he has represented federal officials and employees in all aspects of federal personnel employment law. In addition to his work on behalf of government employees, Mr. Dirks has successfully defended small and medium-sized government agencies against EEO complaints and MSPB appeals of agency disciplinary actions.
Before a federal employee can be terminated for unacceptable performance, the employing agency must provide the employee with an opportunity to demonstrate acceptable performance. That required “opportunity,” codified in 5 U.S.C. § 4302(c)(6), most often takes the form of a Performance Improvement Plan, or “PIP.” Since the passage of the Civil Service Reform Act in 1978, agencies have been required to prove that employees failed a PIP in order to terminate their employment. But agencies have never been required to prove that the employee deserved to be on a PIP in the first place. On March 11, 2021, that changed.
In a landmark opinion on March 11, 2021, a panel for the United States Court of Appeals for the Federal Circuit held that when an employee challenges a performance-based termination under Chapter 43 of Title 5, 5 U.S.C. § 4302(c)(6) requires that federal agencies prove the employee had unacceptable performance prior to the PIP. Thus, this holding will affect the agency’s burden of proof in all performance-based terminations under Chapter 43 of Title 5, across the federal government.
The employee here was a mechanical engineer at NASA and a top performer at the agency for 18 years. As the appeals court noted, he was the “lead engineer on various projects, including the OV105 Endeavor, OV-104 Atlantis, and OV-103 Discovery.” According to the appeals court, he was the recipient of “many accolades for his service.” He was also a Commander in the United States Navy Reserve with over 20 years of service as an engineering duty officer. Because of his position in the military reserve, the employee was required to take mandatory military leave from time to time.
In 2017, he joined a new division and was assigned a new supervisor. The employee alleged that following this transfer, his new supervisor punished him for his military leave, and held him accountable for missed meetings and time away from his position due to his reserve service. The employee alleged that his new supervisor told him that it was his responsibility to figure out how to accomplish tasks that coincided with reserve service. Then, the supervisor put him on a PIP for 45 days, and at the conclusion of that period, failed him on the PIP and fired him for unacceptable performance.
The employee appealed his termination to the Merit Systems Protection Board, but the MSPB affirmed his termination. At MSPB, the employee argued that he never should have been on a PIP in the first place because his pre-PIP performance was not unacceptable. The MSPB administrative judge, relying on Board precedent tracing back to 1984, held that the agency was not required to prove that the employee’s pre-PIP performance was unacceptable. The employee also argued that his placement on the PIP was motivated by anti-military discrimination prohibited by the Uniformed Services Employment and Reemployment Act (USERRA). But the administrative judge held that he failed to prove that claim, in part because his supervisor had thanked the employee for his military service.
After losing at MSPB, the employee petitioned the United States Court of Appeals for the Federal Circuit for review of the MSPB’s decision. On July 1, 2020, the court identified a legal question it wished to resolve, and issued a supplemental briefing order. That question was “whether, pursuant to 5 U.S.C. § 4302(c)(6), an agency must establish that an employee had “unacceptable performance” prior to the implementation of a Performance Improvement Plan.” Because the employee was pro se, the court appointed amicus curiae counsel to brief that question of law from the employee’s position, while the government argued against it.
5 U.S.C. § 4302(c)(6) reads: “Under regulations which the Office of Personnel Management shall prescribe, each performance appraisal system shall provide for…reassigning, reducing in grade, or removing employees who continue to have unacceptable performance but only after an opportunity to demonstrate acceptable performance.”
In its March 11, 2021, opinion, the panel noted that in Wilson v. Dep’t of Navy, 24 M.S.P.R. 583, 586 (1984), the MSPB held that there was “no statutory or regulatory basis” to require an agency to establish appellant’s unsatisfactory performance prior to the PIP. Since then, “the [MSPB] has consistently applied this interpretation to PIP removals,” including the employee’s removal in this case. The panel recognized that the Federal Circuit has “not directly addressed the question of whether, when an agency predicates removal on an employee’s failure to satisfy obligations imposed by a PIP and that removal is challenged, the agency must justify imposition of a PIP in the first instance.”
To resolve the question, the appeals court turned to the language of the statute itself. According to the appeals court, “[S]ection 4302(c)(6) makes clear that an agency is only allowed to “reassign[], reduc[e] in grade, or remov[e] employees who continue to have unacceptable performance” during a PIP.” The appeals court found that to “continue to have unacceptable performance” during the PIP, “an employee must have displayed unacceptable performance prior to the PIP.”
Thus, the appeals court held that “[u]nder the plain meaning of the statute,” federal agencies “must defend a challenged removal by establishing that the employee had unacceptable performance before the PIP and ‘continue[d] to’ do so during the PIP.”
In addition to its legal analysis, the appeals court also described the practical application of its holding. It noted that this new burden would keep agencies honest in “situations resembling [the employee’s], where an employee alleges that both the PIP and the removal based on the PIP were in retaliation for protected conduct.” Otherwise, the appeals court noted, “an agency could establish a PIP in direct retaliation for protected conduct and set up unreasonable expectations in the PIP in the hopes of predicating removal on them without ever being held accountable for the original retaliatory conduct.”
Because the Board’s decision to not consider Santos’s allegation that he should never have been placed on a PIP was based on a misinterpretation of Section 4302(c)(6), the appeals court found that the Board abused its discretion, and therefore vacated and remanded this issue for the Board to decide whether NASA established that the employee performed unacceptably prior to being placed on the PIP.
In addition to the statutory interpretation question, the appeals court held that the MSPB failed to properly address the employee’s claim, under USERRA, that his military service was a primary motivating factor in his termination. Because this question was closely linked with the question of whether his pre-PIP performance was actually unacceptable, the appeals court vacated and remanded the MSPB’s determination on the USERRA issue as well.
According to the appeals court, in its decision, “the Board simply concluded that [the employee] failed to show his military service was a substantial or motivating factor in his removal because [the supervisor] “thanked [the employee] for his service” and was “very patriotic.”” The appeals court held that “[t]hose minimal factual findings do not suffice under” Sheehan v. Department of Navy, 240 F.3d 1009 (Fed. Cir. 2001). The appeals court therefore instructed the Board to apply the Sheehan factors to all the facts concerning the employee’s performance and the supervisor’s supervision of the employee, both pre- and post-PIP.
For the above stated reasons, on March 11, 2021, the United States Court of Appeals for the Federal Circuit vacated the MSPB’s decision and remanded the case back to the MSPB.
Read the full panel opinion: Santos v. NASA.
For over 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.