Banks v. Merit Systems Protection Board

United States Court of Appeals

for the Federal Circuit

______________________

PHYLLIS E. BANKS,

Petitioner

v.

MERIT SYSTEMS PROTECTION BOARD,

Respondent

______________________

2017-1242

______________________

Petition for review of the Merit Systems Protection

Board in No. SF-0752-16-0381-I-1.

______________________

Decided: April 18, 2017

______________________

PHYLLIS E. BANKS, Inglewood, CA, pro se.

KATRINA LEDERER, Office of the General Counsel,

Merit Systems Protection Board, Washington, DC, for

respondent. Also represented by BRYAN G. POLISUK,

KATHERINE M. SMITH.

______________________

Before PROST, Chief Judge, NEWMAN, and DYK, Circuit

Judges.

2 BANKS v. MSPB

DYK, Circuit Judge.

Phyllis E. Banks petitions for review of a decision by

the Merit Systems Protection Board (“Board”) dismissing

her appeal for lack of jurisdiction. We affirm.

BACKGROUND

Banks was hired by the Department of Veterans Af-

fairs (“VA”) on July 26, 2015, as a Medical Support Assis-

tant. Her appointment was in the excepted service and

was subject to a one-year probationary period. On March

2, 2016, within the one-year period, the VA notified Banks

that the agency planned to terminate her due to perfor-

mance issues. Rather than wait for the agency to termi-

nate her, Banks chose to resign her position, effective

March 15, 2016.

Banks appealed to the Board, asserting that her res-

ignation was involuntary and therefore constituted a

constructive removal. See, e.g., Cruz v. Dep’t of Navy, 934

F.2d 1240, 1244 (Fed. Cir. 1991) (en banc). In an initial

decision dismissing Banks’s appeal for lack of jurisdiction,

the administrative judge (“AJ”) found that Banks was not

preference eligible and that the record contained no

evidence of prior federal service. Given these facts and

that Banks was still within her probationary period at the

time of her alleged removal, the AJ concluded that Banks

was not an “employee” under 5 U.S.C. § 7511(a)(1) with

the right to appeal adverse actions to the Board. The

Board therefore lacked jurisdiction. The AJ further noted

Banks’s allegations of a hostile work environment and

retaliation, but concluded that these claims did not pro-

vide the Board with jurisdiction under 5 U.S.C. § 7702(a)

in the absence of non-frivolous allegations of an agency

action independently appealable to the Board. See Garcia

v. Dep’t of Homeland Sec., 437 F.3d 1322, 1335 (Fed. Cir.

2006) (en banc). Banks petitioned the Board for review.

BANKS v. MSPB 3

The Board upheld the AJ’s dismissal of Banks’s ap-

peal for lack of jurisdiction. In doing so, the Board ad-

dressed evidence not considered by the AJ indicating that,

prior to being hired by the VA, Banks had been currently

and continuously employed by the U.S. Postal Service for

approximately three years as a Mail Handler. The Board

concluded that this prior federal service did not give

Banks a right to appeal because the Postal Service is not

an “Executive agency” under 5 U.S.C. § 7511(a)(1)(C)(ii).

The Board issued a final order dismissing Banks’s appeal

for lack of jurisdiction.

Banks petitioned for review of the Board’s final order.

We have jurisdiction under 28 U.S.C. § 1295(a)(9).

DISCUSSION

We review the Board’s jurisdictional determinations

de novo and its factual findings for substantial evidence.

See Bolton v. Merit Sys. Prot. Bd., 154 F.3d 1313, 1316

(Fed. Cir. 1998). “The Board’s statutory interpretations

are reviewed for correctness as a matter of law.” Ellison v.

Merit Sys. Prot. Bd., 7 F.3d 1031, 1034 (Fed. Cir. 1993).

The Board’s jurisdiction is limited and extends only to

actions “appealable to the Board under any law, rule, or

regulation.” 5 U.S.C. § 7701(a). As relevant here, 5 U.S.C.

§ 7513(d) permits an “employee” to appeal certain adverse

actions to the Board, including involuntary resignations

that are deemed constructive removals. See, e.g., Cruz,

934 F.2d at 1244. For the purpose of § 7513(d), however,

the term “employee” is defined—in relevant part—as “an

individual in the excepted service (other than a preference

eligible)” who is either “not serving a probationary or trial

period,” 5 U.S.C. § 7511(a)(1)(C)(i), or “has completed 2

years of current continuous service . . . in an Executive

agency,” id. § 7511(a)(1)(C)(ii). An individual may qualify

as an “employee” under either § 7511(a)(1)(C)(i) or (ii).

See, e.g., Van Wersch v. Dep’t of Health & Human Servs.,

197 F.3d 1144, 1151 (Fed. Cir. 1999).

4 BANKS v. MSPB

Because Banks was still serving her one-year proba-

tionary period with the VA when she resigned, her only

claim to the status of an “employee” turns on whether her

three years with the Postal Service qualify as “current

continuous service . . . in an Executive agency” under

§ 7511(a)(1)(C)(ii). 1 In this regard, 5 U.S.C. § 105 provides

that “[f]or the purpose of [Title 5], ‘Executive agency’

means an Executive department, a Government corpora-

tion, and an independent establishment.” The Postal

Service is not an “Executive department” or a “Govern-

ment corporation” as defined in relevant part under 5

U.S.C. §§ 101 and 103. Instead the Postal Service is an

“independent establishment of the executive branch of the

Government of the United States.” 39 U.S.C. § 201; U.S.

Postal Serv. v. Flamingo Indus. (USA) Ltd., 540 U.S. 736,

746 (2004) (“Congress, however, declined to create the

Postal Service as a Government corporation, opting

instead for an independent establishment.”).

Despite 39 U.S.C. § 201, 5 U.S.C. § 104 provides that

the Postal Service is not an “independent establish-

ment”—and therefore not an “Executive agency”—for the

purpose of Title 5. Section 104 states that “[f]or the pur-

1 The Office of Personnel Management has exer-

cised its authority under 5 U.S.C. § 7514 to promulgate

regulations implementing § 7511. Under these regula-

tions, “current continuous employment” is defined as “a

period of employment or service immediately preceding an

adverse action without a break in Federal civilian em-

ployment of a workday.” 5 C.F.R. § 752.402. We have held

that this regulation governs the interpretation of the term

“current continuous service” under § 7511, see Wilder v.

Merit Systems Protection Board, 675 F.3d 1319, 1322–23

(Fed. Cir. 2012), and there is no contention that Banks’s

employment with the Postal Service does not qualify as

“current continuous service” under the statute.

BANKS v. MSPB 5

pose of this title, ‘independent establishment’ means . . .

an establishment in the executive branch (other than the

United States Postal Service . . . ).” (emphasis added).

Both the designation of the Postal Service as an “in-

dependent establishment” in § 201 and the parenthetical

exclusion of the Postal Service as an “independent estab-

lishment” in § 104 were enacted by Congress in the Postal

Reorganization Act (“PRA”). See Pub. L. No. 91-375 § 2, 84

Stat. 719, 720 (1970); id. § 6(c)(2), 84 Stat. at 775. In the

PRA, Congress sought to recast “the operation of the

[P]ostal [S]ervice in ‘a business-like way,’” i.e., “to make

the delivery of the mail a self-supporting enterprise.”

Standard Oil Div., Am. Oil Co. v. Starks, 528 F.2d 201,

202 (7th Cir. 1975). In addition to insulating the Postal

Service “from the political arena,” the PRA furthered this

goal by broadly exempting the Postal Service from federal

laws “dealing with the public or [f]ederal contracts, prop-

erty, works, officers, employees, budgets or funds,” subject

to certain enumerated exceptions. Id. (quoting 39 U.S.C.

§ 410(a)); see also, e.g., Beneficial Fin. Co. of N.Y. v. Dal-

las, 571 F.2d 125, 128 (2d Cir. 1978).

The legislative history of the PRA makes clear that

civil service provisions governing personnel at other

federal agencies would not apply wholesale to employees

of the reorganized Postal Service. See S. Rep. No. 91-912,

at 5–7 (1970) (“Senate Report”) (“Employees who have

competitive status under the Civil Service Act of 1883

shall automatically achieve career tenure under the

postal career system, but thereafter the provisions of title

5 . . . shall not apply to officers and employees of the

Postal Service.”). In keeping with this goal, the PRA as

amended omits the provisions governing adverse-action

appeals to the Board from the listing of Title 5 provisions

that remain applicable to the Postal Service. See 39

U.S.C. § 410(b)(1). This omission accords with, inter alia,

39 U.S.C. § 1005(a)(1)(A), which makes the adverse-action

provisions applicable only to the extent that they are

6 BANKS v. MSPB

consistent with collective-bargaining agreements that the

Postal Service may make with its employees. See id.

(referring to “the provisions of chapter 75 of title 5”); see

also Senate Report at 5–7 (recommending the “enact-

ment” of collective bargaining agreements).

The exclusion of the Postal Service as an “independ-

ent establishment” in § 104 is consistent with the statuto-

ry framework of the PRA that makes Title 5 applicable to

the Postal Service only in piecemeal fashion. Relying in

part on § 104’s exclusion, we have held that preference-

eligible Postal Service employees may not seek attorneys’

fees under the fee-shifting provision of the Back Pay Act,

5 U.S.C. § 5596(b)(1)(A)(ii). See Erickson v. U.S. Postal

Serv., 759 F.3d 1341, 1347 (Fed. Cir. 2014). In Erickson,

we held that the Back Pay Act does not apply to the

Postal Service “by its own terms . . . because the Postal

Service is not an ‘executive agency,’ the term . . . used to

define the scope of the [Back Pay] Act’s coverage.” Id. We

reasoned that although § 105 defines an “executive agen-

cy” as encompassing independent establishments, that

term “is further defined to mean ‘an establishment in the

executive branch (other than the United States Postal

Service . . . ).’” Id. at 1348 (quoting 5 U.S.C. § 104). We

therefore concluded that “[t]he Postal Service is . . . not an

‘executive agency’ within the meaning of title 5 in general

and the Back Pay Act in particular.” Id.

We see no reason to depart from our conclusion in Er-

ickson, which held that the provisions of § 104 displace,

for the purpose of Title 5, the general characterization of

the Postal Service as an “independent establishment” set

forth in § 201. Id.; see also, e.g., RadLAX Gateway Hotel,

LLC v. Amalgamated Bank, 132 S. Ct. 2065, 2070–71

(2012). Accordingly, the Postal Service does not fall into

any of the categories that define an “Executive agency”

under Title 5, which renders Banks’s service as a Mail

Handler not “service . . . in an Executive agency” under

§ 7511(a)(1)(C)(ii). As a consequence, Banks does not

BANKS v. MSPB 7

qualify as an “employee” with a right to appeal adverse

actions to the Board. See Van Wersh, 197 F.3d at 1151.

There being no action appealable to the Board under

§ 7701, the remaining issues raised in Banks’s appeal—

her claims of retaliation and a hostile work environ-

ment—lie outside the Board’s jurisdiction. See Garcia, 437

F.3d at 1335. The Board’s final order dismissing Banks’s

appeal for lack of jurisdiction is

AFFIRMED

COSTS

No costs.