Can Ignorance Be Bliss?

What happens to an employee who obtains a new position in his agency, only to be dismissed during his new probationary period?  In Boudreault v. Homeland Security, 2013 MSPB 91 (December 2, 2013), the Merit Systems Protection Board has recently reaffirmed that an employee who accepts a new position within the same agency must be informed if he will lose his appeal rights; if he is not informed in advance, then he will be deemed to have declined the new position.  However, the Board’s reasoning is questionable and it’s not clear that the decision will survive if it is reviewed by the U.S. Court of Appeals for the Federal Circuit.

The employee in this case was appointed to a Security Assistant position by the TSA in 2006.  In 2009, the employee applied and was accepted for the position of Federal Air Marshal, which resulted in a new probation, and he was terminated during his probationary period.  By law, probationers are not “employees” who have the right to appeal to the Board. 5 U.S.C. § 7511(a)(1)(A)(i).  The employee appealed anyway, arguing both that he wasn’t a probationary employee and that he should have been given appeal rights.

The Administrative Judge held that the employee acquired appeal rights while he was a Security Assistant in 2006-07.  The Judge also held that the agency did not inform the employee that he would lose his appeal rights when he accepted the Air Marshal position.  Because the Judge found that the employee would not have accepted the position had he known he was losing his appeal rights, she held that the employee lacked sufficient knowledge to have accepted the Air Marshal position voluntarily, and as the result he retained the appeal rights he acquired in the former position.  The Judge also held that the employee was entitled to a hearing “on the merits”.

The Administrative Judge’s decision was based on two earlier Board decisions, Exum v. Veterans Affairs, 62 M.S.P.R. 344 (1994), and Yeressian v. Army, 112 M.S.P.R. 21 (2009).  In Exum, the Board held that an agency should inform employees obtaining a new position of the effect of the change on their appeal rights, and it remanded the appeal to the judge for a determination whether the employee would have taken the position had she known she was losing those rights.  In Yeressian, the Board held that “an employee who has not knowingly consented to the loss of appeal rights in accepting another appointment with the agency is deemed not to have accepted the new appointment and to have retained the rights incident to his former appointment.” 112 M.S.P.R. at ¶ 12.

Both the employee and the Agency sought review of the Administrative Judge’s decision in this case: the employee because he didn’t believe he should have to have a hearing “on the merits” (see Thomas v. HUD, 78 M.S.P.R. 25 (1998), reversing an agency action where the agency failed to give the employee written notice and an opportunity to reply), and the agency because of a recent decision by the Federal Circuit, Carrow v. MSPB, 626 F.3d 1348 (Fed.Cir. 2010).  In Carrow, while not expressing an opinion regarding the Board’s decisions in Exum and Yeressian, the court held that they didn’t apply to an employee who was moving from one agency to another.  The court held that the statute said nothing regarding exceptions to the rule that probationers lacked appeal rights, and it refused to find one in Carrow.  The agency in this case argued that the same statute said nothing about an exception for employees moving from one position to another in the same agency, and that principle should be applied to this case as well.

In a split decision, the Board reaffirmed Exum and Yeressian and held that Carrow didn’t apply.  Accordingly, the Board affirmed the Judge’s decision to hold a hearing on the merits and remanded the case to her for that purpose. 

There are, however, serious questions about the Board’s decision.  First, as the dissent observed, what does Yeressian mean when it said that an employee who wasn’t informed that he would lose his appeal rights was “deemed not to have accepted the new appointment and to have retained the rights incident to his former appointment”?  Did the employee now hold the old position or the new one?  Was the appeal aimed at retaining the new position or the old one?  Second, again as the dissent observed, even though the court specifically declined to express an opinion about the wisdom of Exum and Yeressian, didn’t the court’s statutory analysis in Carrow mean that those decisions were not likely to be sustained?  And finally, if it was clear that the agency had failed to give the employee his rights to notice and a reply, which the Board noted results in automatic reversal, why was the Board remanding the case for a hearing “on the merits”?

Interestingly, the Board’s decision doesn’t mention an earlier Federal Circuit decision, Scharf v. Air Force, 710 F.2d 1572 (Fed.Cir. 1983).  In Scharf, the court held that an employee’s decision cannot be considered “voluntary” if it is made 1) under duress brought about by the Government; 2) under time pressure imposed by the Government; 3) the employee fails to understand the circumstances because of mental incompetence; or 4) the decision is based on agency misrepresentation or deception.  In those instances, the decision is held involuntary and is withdrawn.  In this case, the Board appears to be adding another factor – agency withholding of a significant fact that may be material to the decision.  If that is the case, it might have been easier for the Board simply to have said that, rather than creating an analysis that may not last.

Written by George Chuzi