Federal Circuit Disputes VA’s Interpretation of 2017 “Accountability” Law
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.
In two opinions issued on August 12, 2021, the United States Court of Appeals for the Federal Circuit found that the Department of Veterans Affairs erroneously interpreted the provisions of the Department of Veterans Affairs Accountability and Whistleblower Protection Act of 2017 when disciplining its employees. The purpose of the 2017 law, codified at 38 U.S.C. § 714, was to provide for expedited discipline of VA employees, strip MSPB of its authority to mitigate the VA’s chosen penalty, and to impose a less rigorous burden of proof on the agency at the appellate level than a traditional MSPB appeal.
The first case, Connor v. DVA, built on a series of very recent cases (Sayers v. DVA, Harrington v. DVA, and Brenner v. DVA) establishing that the 2017 law did not do away with the requirement for the MSPB to review whether the penalty imposed on an employee was reasonable. In Connor, the government argued that “because §714 does not allow the [MSPB] to mitigate penalties, the VA is no longer required to consider the Douglas factors when removing, demoting, or suspending a VA employee pursuant to §714,” and also that “the [MSPB] too is not required to consider the Douglas factors.”
The Douglas factors are twelve factors developed by the MSPB for use in determining the reasonableness of a penalty in the landmark case Douglas v. Veterans Administration, 5 M.S.P.B. 313 (1981). Each factor can either be mitigating, or aggravating, depending on the facts. The Federal Circuit has long endorsed the use of these factors in Title 5 adverse actions, and has required both agencies and the MSPB to consider the relevant Douglas factors in assessing whether a penalty was reasonable.
Although the employee’s removal was affirmed in Connor, the appeals court disagreed with VA’s contention that neither the agency deciding official nor the MSPB were required to consider the Douglas factors when determining whether the proposed penalty was appropriate. Indeed, the appeals court found that there was “no basis” for the argument at all. It directed both the VA and the Board to consider the relevant Douglas factors going forward, and provided MSPB with guidance on how to process the case if it found that VA’s chosen penalty was unreasonable.
The second case, Rodriguez v. DVA, likely has broader implications. After the passage of the DVA Accountability and Whistleblower Protection Act of 2017, VA promulgated internal policies interpreting the law. VA interpreted the law’s decrease of the agency’s appellate burden of proof from “preponderance of the evidence” to the lesser “substantial evidence” standard to apply not only at MSPB, but also at the agency level. Thus, since the law’s enactment, VA’s internal procedures have instructed VA Deciding Officials to use the substantial evidence burden of proof when deciding whether employees committed misconduct warranting discipline.
“Substantial evidence” was defined by VA in its internal guidance as “relevant evidence that a reasonable person, considering the record as a whole might accept as adequate to support a conclusion, even though other reasonable persons might disagree, or evidence that a reasonable mind would accept as adequate to support a conclusion.”
At the Federal Circuit, the government argued that “references” to substantial evidence in section 714 “are not limited to the standard of review to be employed by administrative judges and the Board in reviewing section 714 disciplinary decisions,” and instead contended that the substantial evidence standard “also defines the burden of proof for the agency to make those disciplinary decisions in the first instance.”
The appeals court disagreed, finding that the references to substantial evidence in §714 “are all explicitly directed to the standard of review to be applied by administrative judges and the Board,” rather than “the standard of proof to be applied by the DVA in making disciplinary determinations.” Thus, the appeals court found there to be “no force to the government’s reliance” on the text of the statute to support its internal policies and argument in litigation.
The appeals court held that the language of §714 actually supported the opposite conclusion: the proper standard to be used at the agency-level is preponderance of the evidence. The preponderance of the evidence standard, which is the standard used in disciplinary actions under Title 5 (and thus applies to the majority of career civil servant disciplinary actions), means “more likely true than not,” or greater than 50%.
According to the appeals Court, §714’s requirement for the Secretary (or his designee) to “determine[]” that the misconduct in question warrants disciplinary action “implies that the Secretary must find that it is likely, i.e. more likely than not, that the employee has engaged in the misconduct that justifies the proposed discipline,” and supports the holding that preponderance is the correct standard.
The appeals court also noted that use of the substantial evidence standard at the factfinder (i.e. agency) level misconceives the job that the factfinder is supposed to be doing. The appeals court warned the VA that it is “not the task of the factfinder” simply to determine whether their decision will be reversed by a reviewing court,” and that use of the substantial evidence standard reflected VA’s confusion of the concepts of a “burden of proof” and “standard of review.”
In addition, the appeals court noted that the preponderance of the evidence standard has long been recognized as the traditional burden of proof in civil administrative proceedings, and laid out “strong reasons” why substantial evidence should not be used. In one example, the appeals court noted that under the substantial evidence standard, “the deciding official could (indeed, would be required to) find against the employee with regard to the charged misconduct even though the deciding official did not personally agree with that conclusion.” That would violate the statute’s requirement for the Secretary (or his designee) to “determine” whether the employee engaged in misconduct.
For the above stated reasons, the United States Court of Appeals for the Federal Circuit reversed and remanded the case, finding that “using substantial evidence as the burden of proof would not only violate the terms of section 714, but would be contrary to the well-established principle that preponderance of the evidence is the minimal appropriate burden of proof in administrative proceedings.”
Read Connor v. DVA and Rodriguez v. DVA.
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.