Lentz v. Merit Systems Protection Board

United States Court of Appeals

for the Federal Circuit

______________________

CHASE M. LENTZ,

Petitioner

v.

MERIT SYSTEMS PROTECTION BOARD,

Respondent

______________________

2017-1285

______________________

Petition for review of the Merit Systems Protection

Board in No. SF-4324-15-0364-I-1.

______________________

Decided: December 12, 2017

______________________

CHASE M. LENTZ, FRESNO, CA, pro se.

CALVIN M. MORROW, Office of the General Counsel,

Merit Systems Protection Board, Washington, DC, for

respondent. Also represented by BRYAN G. POLISUK,

KATHERINE M. SMITH.

______________________

Before NEWMAN, DYK, and HUGHES, Circuit Judges.

NEWMAN, Circuit Judge.

Chase M. Lentz appeals the decision of the Merit Sys-

tems Protection Board (MSPB or “Board”), holding that

2 LENTZ v. MSPB

his resignation from federal employment was a voluntary

act and not a constructive discharge. We vacate the

Board’s decision, as based on incorrect evidentiary proce-

dures including the inappropriate application of collateral

estoppel. We remand to the MSPB for redetermination of

the issue of constructive discharge.

BACKGROUND

Mr. Lentz entered federal service in 2002, and at the

times here relevant was employed as a botanist with the

Bureau of Land Management of the Department of the

Interior (the “Agency”) in California. Mr. Lentz had no

disciplinary record until May 15, 2014, when his supervi-

sor issued a letter of reprimand for “acting outside the

scope of his authority” and “conduct unbecoming.” MSPB

Appx 34. These charges were based on his authorization

to permit goat grazing on certain public lands, without

the prior approval of his supervisors. Id. On November

13, 2014 Mr. Lentz’s supervisor issued a letter proposing

a fourteen-day suspension for various infractions, citing

his management of interns, his behavior toward his

supervisors, and his interaction with outside entities. Id.

at 34–35. Soon after receiving this letter, Mr. Lentz went

on medical leave. The proposed fourteen-day suspension

was sustained on February 10, 2015, during his medical

leave, to commence on February 15, 2015.

Mr. Lentz resigned on February 13, 2015. His letter

of resignation cites harassment and a hostile work envi-

ronment that aggravated an illness and his veterans

disability, and made his work circumstances intolerable.

He states, “I had been pushed to the limits of what I could

endure and had to take significant amounts of sick leave

as a result.” Initial Appeal File (IAF), Tab 9 at 29. He

states that until the most recent two years (and new

supervisors) his performance had consistently been rated

“superior.” He states that he has filed complaints for

discrimination and harassment by his supervisors, includ-

LENTZ v. MSPB 3

ing complaints for violation of the Uniformed Services

Employment and Reemployment Rights Act (USERRA),

38 U.S.C. §§ 4301–4335, and that the letters of reprimand

are retaliatory.

On February 25, 2015, Mr. Lentz filed an appeal with

the MSPB, asserting constructive discharge. He stated

that the May 2014 letter of reprimand and the November

2014 letter and fourteen-day suspension were retaliatory

and discriminatory, leading to his constructive discharge.

IAF, Tab 1. He stated that his ensuing illness and medi-

cal leave should be viewed as a constructive suspension,

and that “the agency coerced my resignation by bringing

unjustifiable charges and creating unreasonably difficult

working conditions.” IAF, Tab 1 at 5. He also alleged

discrimination on the basis of his status as a disabled

veteran, and retaliation for having previously filed a

complaint for violation of USERRA. In separate appeals

to the MSPB, not here at issue, he alleged that the Agen-

cy actions were in retaliation for protected whistleblower

activity.

The MSPB’s Administrative Judge (AJ), at the West-

ern Regional Office, bifurcated the February 25, 2015

appeal into two separate cases. The first case (Lentz I) 1

designated the appeal as a claim for involuntary resigna-

tion under 5 U.S.C. Chapter 75. The second case (Lentz

II) 2 designated the appeal as a complaint under USERRA.

The AJ dismissed Lentz I for lack of jurisdiction, and the

AJ subsequently held that Mr. Lentz was collaterally

estopped from raising in Lentz II the evidence and issues

1 Lentz v. Dep’t of Interior, No. SF-0752-15-0363-I-1,

2016 WL 106602 (M.S.P.B. Jan. 11, 2016) (Lentz I). This

decision was not appealed to the Federal Circuit.

2 Lentz v. Dep’t of Interior, No. SF-4324-15-0364-I-1,

2016 WL 6069072 (M.S.P.B. Oct. 14, 2016) (Lentz II).

4 LENTZ v. MSPB

that the AJ had assigned to Lentz I. Mr. Lentz states that

by separating the several factual aspects and concerns

that contributed to his involuntary resignation, their

combined weight was never considered, distorting the

MSPB’s review.

The Lentz I proceeding

The first proceeding was designated by the AJ as a

dismissal action under Chapter 75, and was limited by

the AJ to the issue of constructive discharge based on Mr.

Lentz’s assertions that the Agency “brought unjustifiable

charges in support of its reprimand and 14-day suspen-

sion,” “committed prohibited personnel practices by using

his protected disclosures of information as a basis for

discipline,” and “misrepresented, exaggerated and omitted

evidence.” MSPB Appx 39–40.

The Agency moved to dismiss the Lentz I proceeding

for “lack of jurisdiction.” The AJ granted the motion

without the requested hearing, stating that “[Mr. Lentz]

has failed to nonfrivolously allege he was subjected to a

discriminatory/retaliatory hostile work environment so

coercive in nature that he had no choice but to resign.”

MSPB Appx 51. The full Board affirmed this decision,

and Mr. Lentz did not appeal to this court.

The Lentz II proceeding

The AJ commenced this proceeding shortly after the

full Board decided Lentz I, stating that it was “limited to

claims that an employer discriminated in employment or

took an adverse employment action because of protected

USERRA activity.” Lentz II at ¶12. The Agency again

moved to dismiss for lack of jurisdiction, and the AJ again

granted the motion, stating that “the appellant has failed

to make non-frivolous allegations that a reasonable

person in his position would have felt compelled to resign

due to USERRA-based discrimination or reprisal.” MSPB

Appx 7.

LENTZ v. MSPB 5

The AJ stated that collateral estoppel arose from

Lentz I, stating that “[t]o the extent the appellant is

seeking to relitigate the overall issue of whether his

resignation was involuntary, I find that he is collaterally

estopped from doing so.” Id. at 6. The AJ stated that “[t]o

the extent that the appellant is seeking to relitigate the

issue of whether the agency violated USERRA by denying

his request for accommodation, I find that he is collateral-

ly estopped from relitigating this matter as well.” Id. at 6

n.5. The AJ concluded that “the appellant has failed to

nonfrivolously allege that he was subjected to a USERRA

discriminatory/retaliatory hostile work environment so

coercive in nature that he had no choice but to resign,”

and dismissed the appeal. Id. at 8.

Mr. Lentz appealed to the full Board. The Board re-

ferred to the AJ’s refusal to consider whether the resigna-

tion was involuntary, because it would relitigate Lentz I,

as “[c]onfusing[].” Lentz II at ¶7. The Board observed

that the AJ separated the issues into Lentz I and Lentz II

“[f]or reasons that are unclear;” but the Board did not

discuss whether this separation was proper, or how it

might have affected the dismissal for “lack of jurisdic-

tion.” Id. at ¶5.

The full Board upheld the AJ’s application of collat-

eral estoppel, stating that “the identical issue of whether

the appellant’s resignation was voluntary previously was

litigated in Lentz I,” and that the requirements of collat-

eral estoppel had been met. Lentz II at ¶13. The Board

then limited its review in Lentz II to the USERRA issues,

stating that “jurisdiction under 38 U.S.C. § 4311(b) is

limited to claims that an employer discriminated in

employment or took an adverse employment action be-

cause of protected USERRA activity.” Lentz II at ¶12.

The full Board affirmed the AJ’s dismissal for lack of

jurisdiction of Mr. Lentz’s claim of constructive discharge.

This appeal followed.

6 LENTZ v. MSPB

DISCUSSION

This court is assigned jurisdiction under 5 U.S.C.

§ 7703 to review final decisions of the Board. The stand-

ard is whether a decision of the Board is (1) arbitrary,

capricious, an abuse of discretion, or otherwise not in

accordance with law; (2) obtained without procedures

required by law, rule, or regulation having been followed;

or (3) unsupported by substantial evidence. 5 U.S.C.

§ 7703(c).

The Board’s jurisdictional determinations receive ple-

nary review. McCormick v. Dep’t of the Air Force, 307

F.3d 1339, 1340 (Fed. Cir. 2002). When the Board has

made factual findings affecting the jurisdictional inquiry,

these findings are reviewed for support by substantial

evidence in the record. Parrott v. Merit Sys. Prot. Bd., 519

F.3d 1328, 1334 (Fed. Cir. 2008). The substantial evi-

dence standard requires “such relevant evidence as a

reasonable mind might accept as adequate to support a

conclusion.” Consol. Edison Co. of N.Y. v. NLRB, 305 U.S.

197, 229 (1938).

When determining whether a resignation was invol-

untary, the MSPB examines “the surrounding circum-

stances to test the ability of the employee to exercise free

choice.” Perlman v. United States, 490 F.2d 928, 933 (Ct.

Cl. 1974). See also Scharf v. Dep’t of the Air Force, 710

F.2d 1572, 1574 (Fed. Cir. 1983) (“[I]t has been held that

the element of voluntariness is vitiated when . . . an

employee resigns under duress brought on by government

action.” (citing McGucken v. United States, 407 F.2d 1349,

1351 (Ct. Cl. 1969))). Mr. Lentz states that the Board did

not reach this stage, based in part on the separation of his

case into two distinct proceedings, and placing some

evidence in one proceeding and some evidence in the other

proceeding. He states that the combined weight of the

evidence of coerced resignation was thereby diluted, and

that the fragmentation of the factors “compromised my

LENTZ v. MSPB 7

ability to present an integrated and coherent claim.”

Lentz Br. 2 (citing Whitmore v. Dep’t of Labor, 680 F.3d

1353, 1368 (Fed. Cir. 2012) (“Evidence only . . . supports a

conclusion when it does so in the aggregate considering all

the pertinent evidence in the record. . . .”)).

Mr. Lentz stresses that the Board’s dismissal of Lentz

II for lack of jurisdiction was done on the Agency’s motion,

before he had a chance to develop a full record. He states

that he provided thirty-six pieces of evidence, none of

which was directly addressed. 3 He states that the AJ

declined to consider any of the information that had been

segregated into Lentz I, the AJ stating that “the appel-

lant’s general claim that he was constructively discharged

was fully litigated in Lentz [I].” MSPB Appx 6. The AJ

ruled that Mr. Lentz “had a full and fair opportunity to

litigate his constructive discharge claim in his prior

appeal.” Id. Mr. Lentz points out that the issue was not

litigated at all, but was dismissed for lack of jurisdiction.

The full Board confirmed the application of collateral

estoppel, stating that “the identical issue of whether the

appellant’s resignation was voluntary previously was

litigated in Lentz I,” and that “the appellant was a party,

and he had a full and fair opportunity to litigate his

claims.” Lentz II at ¶13. The full Board noted, “[I]t is

unclear to what extent the appellant’s constructive sus-

pension claim rests on the allegedly improper denial of

reasonable accommodation.” Lentz II at 5 n.3. However,

Mr. Lentz’s petition for Board review clearly stated that

consideration of the denial of reasonable accommodation

3 The AJ reported that Mr. Lentz did not request a

hearing in Lentz II. IAF, Tab 12 at 2 (citing IAF, Tab 9 at

5 (“I do not request a hearing, but I am entitled to and

request the opportunity to further develop the written

record on my USERRA claim”)).

8 LENTZ v. MSPB

“is essential in the determination of whether or not I was

subject to a constructive suspension.” Petition for Review

File, Tab 1, at 9.

The MSPB now concedes that it erred in the applica-

tion of collateral estoppel, stating that “the respondent

has determined that the Board’s modification of the

administrative judge’s decision by substituting collateral

estoppel as the basis for finding lack of jurisdiction with

respect to whether the petitioner nonfrivolously alleged a

USERRA-related involuntary removal was in error,” and

referring to the Board’s legal reasoning as “clear legal

error.” MSPB Br. 12, 16. However, neither the MSPB nor

the Agency has acted to remedy this admitted error,

according to the record before us, the MSPB stating that

the judgment is correct despite the acknowledgment of

improper procedure. See Lawrence v. Chater, 516 U.S.

163, 172 (1996) (“If it appears reasonably probable that a

confession of error reveals a genuine and potentially

determinative error by the court below, [an order to

vacate and remand] may be appropriate.”).

The Board must set aside a decision where the appel-

lant “shows harmful error in the application of the agen-

cy’s procedures in arriving at such decision,” or where it is

shown “that the decision was not in accordance with law.”

5 U.S.C. § 7701(c)(2); see also 5 C.F.R. § 1201.56(c).

Harmful error occurs where “[e]rror by the agency in the

application of its procedures that is likely to have caused

the agency to reach a conclusion different from the one it

would have reached in the absence or cure of the error.” 5

C.F.R. § 1201.4(r). The court must set aside agency

findings that are “obtained without procedures required

by law, rule, or regulation having been followed.” 5

U.S.C. § 7703(c)(2).

The Board recognized that the separation of Mr.

Lentz’s claim into multiple cases was confusing and

LENTZ v. MSPB 9

unclear, but did not determine whether the separation

resulted in harmful error. The Court has stated:

The Administrative Procedure Act, which governs

the proceedings of administrative agencies and re-

lated judicial review, establishes a scheme of rea-

soned decisionmaking. Not only must an agency's

decreed result be within the scope of its lawful au-

thority, but the process by which it reaches that

result must be logical and rational.

Allentown Mack Sales and Serv., Inc. v. NLRB., 522 U.S.

359, 374 (1998) (internal citation and quotation marks

omitted); see also In re Sang Su Lee, 277 F.3d 1338, 1342

(Fed. Cir. 2002) (“For judicial review to be meaningfully

achieved within these strictures, the agency tribunal

must present a full and reasoned explanation of its deci-

sion.”). The record provided by the parties does not

explain why the Board divided Mr. Lentz’s appeal into

separate cases and limited the evidence presented in each

case.

Mr. Lentz asserts procedural and legal error, and con-

tends that it prejudiced the result. See Petition for Review

File, Tab 1 at 14 (“[T]he application of collateral estoppel

to my appeal is in error.”). The MSPB states that even if

it erred and collateral estoppel does not apply, this court

should “affirm the MSPB’s decision dismissing the peti-

tioner’s appeal for lack of jurisdiction on the basis of the

MSPB administrative judge’s finding that the petitioner

failed to make nonfrivolous allegations of an involuntary

resignation caused by violations of USERRA.” MSPB Br.

16. The MSPB does not criticize the AJ’s “unclear” sepa-

ration of the appeal and evidence into two separate cases,

decided separately as Lentz I and Lentz II. Instead, the

MSPB proposes that our review is limited to USERRA

issues, ignoring the assertions of discrimination, hostile

environment, and retaliation that had been segregated

into Lentz I and removed from consideration in Lentz II.

10 LENTZ v. MSPB

Because the issue improperly separated into Lentz I—

that Mr. Lentz failed to make nonfrivolous allegations of

involuntary resignation based on alleged coercive agency

actions other than violations of USERRA—is not the same

issue that is presented in Lentz II, it has no preclusive

effect here. As a result of the bifurcation, neither the

Board’s decision in Lentz I nor in Lentz II addressed the

proper question of whether the totality of the evidence,

including both the evidence of alleged USSERA violations

and the evidence of other coercive agency actions, ren-

dered Mr. Lentz’s resignation involuntary. Therefore,

collateral estoppel cannot apply to the constructive dis-

charge claim. Likewise, the propriety of the bifurcation

was not litigated in the first Board proceeding and is not

collaterally estopped here.

We hold that the MSPB committed two errors. First,

the MSPB erred by improperly bifurcating the two pro-

ceedings. Second, it erred by failing to consider the

totality of the evidence in determining the question of

voluntariness in Lentz II.

The cause of action in the Lentz II appeal is construc-

tive discharge, not the USERRA violation alone. All of

the evidence relevant to constructive discharge must be

considered, not simply Mr. Lentz’s allegations of

USERRA-violating retaliation, as the MSPB argues.

MSPB Br. 16. The appropriate standard is whether the

totality of events, on all of the evidence, produced a work-

ing environment sufficiently hostile as to lead to involun-

tary resignation. See Kline v. Dep’t of Transp., FAA, 808

F.2d 43, 46 (Fed. Cir. 1986) (vacating and remanding to

the Board where “the record does not demonstrate that

the presiding official identified, balanced and then consid-

ered” the relevant evidence); DeLaughter v. U.S. Postal

Serv., 3 F.3d 1522, 1524 (Fed. Cir. 1993) (remanding to

the Board where “it is abundantly clear that the Postal

Service failed to follow the appellate review procedure”

LENTZ v. MSPB 11

before the Board), abrogated on other grounds by Guil-

lebeau v. Dep't of Navy, 362 F.3d 1329 (Fed. Cir. 2004).

The Board’s decision must be vacated and the case

remanded to address these questions. In ordering a

remand we do not decide the question of whether Mr.

Lentz’s allegations are non-frivolous based on the totality

of the evidence.

CONCLUSION

The procedures followed by the MSPB did not permit

full and fair consideration of all of the circumstances that

Mr. Lentz states combined to produce constructive dis-

charge. The Board’s dismissal is vacated, and the case is

remanded for determination of the merits of Mr. Lentz’s

appeal, on consideration of all of the circumstances.

VACATED AND REMANDED

Costs to Mr. Lentz.