Rodney Cowan v. Office of Special Counsel

UNITED STATES OF AMERICA

MERIT SYSTEMS PROTECTION BOARD

2022 MSPB 2

Docket No. CB-1216-16-0018-T-1

Special Counsel,

Petitioner,

v.

Rodney Cowan,

Respondent.

March 29, 2022

Erica S. Hamrick, Esquire, Washington, D.C., for the petitioner.

Bryan Delius, Esquire, Sevierville, Tennessee, for the respondent.

BEFORE

Raymond A. Limon, Vice Chair

Tristian L. Leavitt, Member

OPINION AND ORDER

¶1 This case is before the Board on interlocutory appeal from the

administrative law judge’s order staying the proceedings and certifying his ruling

that the parties’ Modified Settlement Agreement cannot be approved because it is

inconsistent with Board precedent and prohibitions in the Hatch Act set forth at

5 U.S.C. § 7323(a). For the following reasons, we REVERSE the administrative

law judge’s ruling, GRANT the parties’ joint motion to approve the agreement,

FIND, based on stipulations in the agreement, that the respondent violated the

Hatch Act by being a candidate for election to a partisan political office while he

was a full-time employee of the U.S. Postal Service (USPS), ORDER USPS to

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suspend the respondent without pay for 180 days consistent with the terms of the

agreement, and DISMISS this matter as settled.

BACKGROUND

¶2 The Office of Special Counsel (OSC) initiated this proceeding by filing a

complaint for disciplinary action against the respondent for violating the Hatch

Act, which generally restricts the political activity of Federal employees.

Complaint File (CF), Tab 1 at 4. Specifically, OSC alleged that the respondent

violated 5 U.S.C. § 7323(a)(3) and 5 C.F.R. § 734.304 by being a candidate for

the partisan political office of County Commissioner of Sevier County,

Tennessee, in the 2014 general election while he was a full-time USPS employee

at the Seymour Post Office located in Sevier County, Tennessee. CF, Tab 1 at 5.

¶3 After the matter was assigned to an administrative law judge for

adjudication, the parties filed a joint motion for approval and enforceme nt of their

settlement agreement. CF, Tab 3. Under the terms of the agreement, the

respondent admitted that he violated the Hatch Act’s prohibition against being a

candidate for partisan political office while being a full-time USPS employee

during the 2014 general election, and he agreed and accepted that, as a penalty for

his action, he would be suspended without pay from his USPS position for

180 days. Id. at 7-8. OSC agreed not to reinstitute this Hatch Act c omplaint

absent a material breach of the terms of the settlement agreement. Id. at 8. The

parties requested that the administrative law judge approve the agreement, order

USPS to suspend the respondent without pay for 180 days, enter the agreement

into the record so that the Board will retain jurisdiction to ensure compliance with

the agreement, and dismiss the complaint with prejudice as settled. Id. at 5-6.

¶4 The administrative law judge raised concerns with the parties about the

validity of the agreement because the respondent had been elected to and

continued to hold the state office. CF, Tab 5. The administrative law judge

ordered the parties to file written submissions addressing whether the Hatch Act

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and Board precedent permit a settlement agreement allowing a respondent to

maintain both a Federal and state-elected position, “which generated a Hatch Act

complaint before the Board.” Id. at 3. The administrative law judge further

ordered that, if the parties maintained that such a settlement is permitted, then

they must modify the proposed settlement agreement to include language

specifying whether the respondent may retain both positions. Id.

¶5 OSC responded that the Hatch Act permits a settlement agreement allowing

a respondent to maintain his Federal position and an elected office that was won

in violation of the Hatch Act. 1 CF, Tab 6. OSC explained that the Hatch Act

does not prohibit a Federal employee from holding an elected office but rather

prohibits a Federal employee from running for the nomination or as a candidate

for the election to a partisan political office. Id. at 4-5 (citing 5 U.S.C.

§ 7323(a)(3); 39 U.S.C. § 410(b)(1)). OSC argued that Board precedent did not

require a Federal employee to vacate an elected office as a condition of a

settlement agreement and that, to the extent language in prior Board decisions

may have suggested otherwise, such language was not controlling after the Hatch

Act Modernization Act of 2012 (Modernization Act), Pub. L. No. 112-230,

126 Stat. 1616 (2012), which increased the Board’s discretion in imposing

appropriate penalties for Hatch Act violations. CF, Tab 6 at 5-6. OSC asserted

that the 180-day suspension is a substantial penalty within the range of

permissible penalties under the Modernization Act. Id. at 7. OSC submitted a

Modified Settlement Agreement, executed by OSC and counsel for the

respondent, which included provisions that, “because the Hatch Act does not

prohibit [the respondent] from holding the elective County Commissioner office,

[OSC] will not pursue additional disciplinary action against him for continuing to

hold the office” and that, “should [the respondent] again become a candidate for

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The respondent did not file any separate response.

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partisan political office while employed in a Hatch Act-covered position, such

action would constitute an additional violation of the Hatch Act for which OSC

would pursue disciplinary action against him.” Id. at 10-11.

¶6 The administrative law judge found that the Modified Settlement Agreement

is inconsistent with the Hatch Act and Board precedent indicating that holding an

elected office is an aggravating factor in determining the penalty for a Hatch Act

violation. CF, Tab 7 at 2, 4-7 (citing Special Counsel v. Bradford, 62 M.S.P.R.

239 (1994), as modified on recons., 69 M.S.P.R. 247 (1995)). The administrative

law judge further found that the Modernization Act does not support allowing an

individual who knowingly violates the Hatch Act to retain both his Federal

employment and elected position obtained by the violation. Id. at 7-11. The

administrative law judge disapproved the settlement agreement and certified his

ruling for interlocutory review by the Board. Id. at 11.

ANALYSIS

The administrative law judge properly certified an interlocutory appeal.

¶7 An interlocutory appeal is an appeal to the Board of a ruling made by a

judge during a Board proceeding. 5 C.F.R. § 1201.91. The Board’s regulations

permit a judge, on his own motion, to certify an interlocutory appeal if the issue

presented is of such importance to the proceeding that it requires the Board’s

immediate attention. Id. The ruling must involve an important question of law or

policy about which there is substantial ground for difference of opinion . 5 C.F.R.

§ 1201.92. Further, the circumstances must be such that either an immediate

ruling will materially advance the completion of the proceeding or the denial of

an immediate ruling will cause undue harm to a party or the public. Id. We find

these requirements are satisfied here. The Board has not addressed the issue

presented since the enactment of the Modernization Act, and an immediate ruling

avoids the potential for the unnecessary expenditure of the parties’ and the

Board’s resources in litigating matters that, in the interest of justice and judicial

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economy, can be appropriately resolved on the existing record pursuant to the

parties’ settlement agreement.

The parties’ Modified Settlement Agreement is valid.

¶8 Under 5 U.S.C. § 7323(a)(3), a Federal employee may not “run for the

nomination or as a candidate for election to a partisan political office.” It is not

the holding of the office that violates the Hatch Act but rather partisan candidacy

for that office. E.g., Special Counsel v. Bradford, 69 M.S.P.R. 247, 249 (1995).

The prohibition against such a candidacy applies to USPS employees such as the

respondent. See 39 U.S.C. § 410(b)(1); Special Counsel v. Lewis, 121 M.S.P.R.

109, ¶ 2, aff’d, 594 F. App’x 974 (Fed. Cir. 2014).

¶9 OSC investigates allegations of such prohibited political activity and may

seek disciplinary action by filing a complaint with the Board. 5 U.S.C.

§§ 1215(a)(1)(B), 1216. If the Board finds the employee has engaged in

prohibited political activity, current law provides that the Board “may impose”

the following penalties: (1) “disciplinary action consisting of removal, reduction

in grade, debarment from Federal employment for a period not to exceed 5 years,

suspension, or reprimand”; (2) “an assessment of a civil penalty not to exceed

$1,000”; or (3) any combination of such disciplinary actions and civil penalty.

5 U.S.C. §§ 1215(a)(3)(A), 7326.

¶10 The Board favors the use of settlements to avoid the unnecessary

expenditure of resources and litigation. Special Counsel v. Giles, 56 M.S.P.R.

465, 467 (1993). A settlement must be freely entered and lawful on its face

before the Board will give it any effect. See id.; Special Counsel v. Reckard,

69 M.S.P.R. 130, 132 (1995). There are additional considerations when, as here,

the settled Board proceeding is based on a disciplinary action complaint brought

by OSC and the employing agency is not a party to the settlement agreement. See

Special Counsel v. Evans-Hamilton, 29 M.S.P.R. 516, 517 n.1 (1984). In such a

situation, the Board must exercise its statutory penalty authority to direct the

nonparty, employing agency to effect any agreed upon and approved discipline.

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Id. The Board may reject a settlement of a disciplinary action complaint if it

provides for a penalty outside the scope of permissible penalties for a Hatch Act

violation. Reckard, 69 M.S.P.R. at 132.

¶11 Here, the parties have asked the Board to accept their settlement agreement

under which the respondent would be suspended from his USPS position without

pay for 180 days. A suspension is within the scope of permissible penalties the

Board may impose under current law for a Hatch Act violation. 5 U.S.C.

§ 1215(a)(3)(A). We find nothing in the statute that requires an employee to

relinquish the elected position before the Board may impose an authorized

penalty less than removal. See 5 U.S.C. §§ 1215, 7323.

¶12 Prior to the enactment of the Modernization Act, the Board’s penalty

authority for Hatch Act violations was more restricted. Prior law required that an

individual found to have violated the Hatch Act would be removed from his

Federal position unless the Board found by unanimous vote that the violation did

not warrant removal. Lewis, 121 M.S.P.R. 109, ¶ 20. If that unanimous finding

was made, the Board could direct the Federal employing agency to impose a

suspension of not less than 30 days. Id.; e.g., Special Counsel v. Zanjani,

21 M.S.P.R. 67, 69 (1984). A respondent found to have violated the Hatch Act

bore the burden of presenting evidence showing that the presumptive penalty of

removal should not be imposed. Lewis, 121 M.S.P.R. 109, ¶ 20.

¶13 Given these prior restrictions, the Board generally would not accept a

settlement of a Hatch Act complaint that would result in a penalty less than

removal of the Federal employee unless the record contained stipulations or

admissions as to the circumstances of the violation or to relevant mitigating or

aggravating factors. See Special Counsel v. Baker, 69 M.S.P.R. 36, 39 (1995);

Zanjani, 21 M.S.P.R. at 69. In that context, the Board would, as in the Bradford

case cited by the administrative law judge, take into account an employee’s

refusal to relinquish his elected position as an aggravating fact or in determining

the appropriate penalty for a Hatch Act violation. Bradford, 69 M.S.P.R. at 250.

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Conversely, an employee’s decision to forgo the elected position could be

considered a mitigating factor. See Special Counsel v. DeWitt, 113 M.S.P.R. 458,

¶¶ 3, 6-7 (2010); Special Counsel v. Pierce, 85 M.S.P.R. 281, ¶¶ 2-5 (2000). To

the extent, however, that such pre-Modernization Act cases could be read as

imposing a requirement that a Federal employee relinquish an elected office as a

condition of accepting a settlement providing for the suspension, rather than

removal, of the employee from Federal service, we find that such a requirement

would not apply under current law.

¶14 Under current law, removal is no longer the presumptive penalty for a

Hatch Act violation, and a unanimous vote of the Board is no longer required to

impose a penalty of less than removal. Lewis, 121 M.S.P.R. 109, ¶¶ 20-21.

Further, the range of appropriate penalties has been expanded to encompass a

broader array of lesser disciplinary actions, identical to the range of penalties

available when OSC brings a complaint for disciplinary action based on a

prohibited personnel practice. 5 U.S.C. § 1215(a)(3)(A); Lewis, 121 M.S.P.R.

109, ¶ 21; see S. Rep. No. 112-211, as reprinted in 2012 U.S.C.A.A.N. 750,

754-55. When adjudicating a complaint under the Modernization Act, the Board

will apply the factors set forth in Douglas v. Veterans Administration, 5 M.S.P.R.

280, 305-06 (1981), in determining the proper penalty for a Federal employee’s

violation of the Hatch Act. Lewis, 121 M.S.P.R. 109, ¶ 23.

¶15 We find, however, that a Douglas factors analysis is not required under the

Modernization Act before the Board may accept and approve a settlement

agreement that would result in a disciplinary action short of removal for a

violation of 5 U.S.C. § 7323. The Board has not required such an analysis before

accepting settlements in another analogous situation within its original

jurisdiction: disciplinary actions against administrative law judges. By statute,

certain disciplinary actions against administrative law judges may be taken “only

for good cause established and determined by the [Board] on the record after

opportunity for hearing.” 5 U.S.C. § 7521. In such matters, the choice of penalty

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is for the Board, which will look to the relevant Douglas factors as guidance in

making its decision. E.g., Social Security Administration v. Steverson,

111 M.S.P.R. 649, ¶ 18 (2009), aff’d, 383 F. App’x 939 (Fed. Cir. 2010). The

Board has relied on stipulations in a settlement agree ment to find good cause for

disciplining an administrative law judge and has authorized agreed -upon penalties

that are lawful on their face without engaging in an independent analysis of the

Douglas factors. See Social Security Administration v. Liebling, 71 M.S.P.R.

465, 466-67 (1996); Social Security Administration, Department of Health &

Human Services v. Givens, 27 M.S.P.R. 360, 361-62 & n.2 (1985).

¶16 We find that the Modified Settlement Agreement has been freely entered

into by the parties and is lawful on its face. The parties’ stipulations are

sufficient to establish that the respondent violated the Hatch Act, 5 U.S.C.

§ 7323(a)(3), and the discipline to which the respondent has agreed (a 180-day

suspension without pay), is within the range of statutorily authorized penalties for

such a violation, see 5 U.S.C. §§ 1215(a)(3)(A), 7326. We find no basis for

concluding that settlement of the complaint on the agreed terms would be against

the interest of justice or prejudicial to the respondent or any other interested

party.

ORDER

¶17 Accordingly, we APPROVE the parties’ Modified Settlement Agreement,

ENTER it into the record for enforcement purposes, and DISMISS this matter

with prejudice as settled.

¶18 We ORDER the USPS to suspend the respondent without pay for 180 days.

We ORDER the Office of Special Counsel to notify the Board within 30 days of

this Opinion and Order whether the respondent has been suspended as ordered.

This is the final decision of the Merit Systems Protection Board in this matter.

5 C.F.R. § 1201.126.

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NOTICE TO THE PARTIES

OF THEIR ENFORCEMENT RIGHTS

If the petitioner or the respondent has not fully carried out the terms of the

agreement, either party may ask the Board to enforce the settlement agreement by

promptly filing a petition for enforcement with the Office of the Clerk of th e

Board. The petition should contain specific reasons why the petitioning party

believes that the terms of the settlement agreement have not been fully carried

out, and should include the dates and results of any communications between the

parties. 5 C.F.R. § 1201.182; see 5 C.F.R. § 1201.121(b)(2).

NOTICE OF APPEAL RIGHTS

You may obtain review of this final decision. 5 U.S.C. § 7703(a)(1). By

statute, the nature of your claims determines the time limit for seeking such

review and the appropriate forum with which to file. 5 U.S.C. § 7703(b).

Although we offer the following summary of available appeal rights, the Merit

Systems Protection Board does not provide legal advice on which option is most

appropriate for your situation and the rights described below do not represent a

statement of how courts will rule regarding which cases fall within their

jurisdiction. If you wish to seek review of this final decision, you should

immediately review the law applicable to your claims and carefully follow all

filing time limits and requirements. Failure to file within the applicable time

limit may result in the dismissal of your case by your chosen forum.

Please read carefully each of the three main possible choices of review

below to decide which one applies to your particular case. If you have questions

about whether a particular forum is the appropriate one to review your case, you

should contact that forum for more information.

(1) Judicial review in general. As a general rule, an appellant seeking

judicial review of a final Board order must file a petition for review with the U.S.

Court of Appeals for the Federal Circuit, which must be received by the court

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within 60 calendar days of the date of issuance of this decision. 5 U.S.C.

§ 7703(b)(1)(A).

If you submit a petition for review to the U.S. Court of Appeals for the

Federal Circuit, you must submit your petition to the court at the

following address:

U.S. Court of Appeals

for the Federal Circuit

717 Madison Place, N.W.

Washington, D.C. 20439

Additional information about the U.S. Court of Appeals for the Federal

Circuit is available at the court’s website, www.cafc.uscourts.gov. Of partic ular

relevance is the court’s “Guide for Pro Se Petitioners and Appellants,” which is

contained within the court’s Rules of Practice, and Forms 5, 6, 10, and 11.

If you are interested in securing pro bono representation for an appeal to

the U.S. Court of Appeals for the Federal Circuit, you may visit our website at

http://www.mspb.gov/probono for information regarding pro bono representation

for Merit Systems Protection Board appellants before the Federal Circuit. The

Board neither endorses the services provided by any attorney nor warrants that

any attorney will accept representation in a given case.

(2) Judicial or EEOC review of cases involving a claim of

discrimination. This option applies to you only if you have claimed that you

were affected by an action that is appealable to the Board and that such action

was based, in whole or in part, on unlawful discrimination. If so, you may obtain

judicial review of this decision—including a disposition of your discrimination

claims—by filing a civil action with an appropriate U.S. district court (not the

U.S. Court of Appeals for the Federal Circuit), within 30 calendar days after you

receive this decision. 5 U.S.C. § 7703(b)(2); see Perry v. Merit Systems

Protection Board, 582 U.S. ____ , 137 S. Ct. 1975 (2017). If you have a

representative in this case, and your representative receives this decision before

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you do, then you must file with the district court no later than 30 calendar days

after your representative receives this decision. If the action involves a claim of

discrimination based on race, color, religion, sex, national origin, or a disabling

condition, you may be entitled to representation by a court‑appointed lawyer and

to waiver of any requirement of prepayment of fees, costs, or other security. See

42 U.S.C. § 2000e-5(f) and 29 U.S.C. § 794a.

Contact information for U.S. district courts can be found at their respective

websites, which can be accessed through the link below:

http://www.uscourts.gov/Court_Locator/CourtWebsites.aspx.

Alternatively, you may request review by the Equal Employment

Opportunity Commission (EEOC) of your discrimination claims only, excluding

all other issues. 5 U.S.C. § 7702(b)(1). You must file any such request with the

EEOC’s Office of Federal Operations within 30 calendar days after you receive

this decision. 5 U.S.C. § 7702(b)(1). If you have a representative in this case,

and your representative receives this decision before you do, then you must file

with the EEOC no later than 30 calendar days after your representative receives

this decision.

If you submit a request for review to the EEOC by regular U.S. mail, the

address of the EEOC is:

Office of Federal Operations

Equal Employment Opportunity Commission

P.O. Box 77960

Washington, D.C. 20013

If you submit a request for review to the EEOC via commercial delivery or

by a method requiring a signature, it must be addressed to:

Office of Federal Operations

Equal Employment Opportunity Commission

131 M Street, N.E.

Suite 5SW12G

Washington, D.C. 20507

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(3) Judicial review pursuant to the Whistleblower Protection

Enhancement Act of 2012. This option applies to you only if you have raised

claims of reprisal for whistleblowing disclosures under 5 U.S.C. § 2302(b)(8) or

other protected activities listed in 5 U.S.C. § 2302(b)(9)(A)(i), (B), (C), or (D).

If so, and your judicial petition for review “raises no challenge to the Board's

disposition of allegations of a prohibited personnel practice described in section

2302(b) other than practices described in section 2302(b)(8), or 2302(b)(9)(A)(i),

(B), (C), or (D),” then you may file a petition for judicial review either with the

U.S. Court of Appeals for the Federal Circuit or any court of appeals of

competent jurisdiction. 2 The court of appeals must receive your petition for

review within 60 days of the date of issuance of this decision. 5 U.S.C.

§ 7703(b)(1)(B).

If you submit a petition for judicial review to the U.S. Court of Appeals for

the Federal Circuit, you must submit your petition to the court at the

following address:

U.S. Court of Appeals

for the Federal Circuit

717 Madison Place, N.W.

Washington, D.C. 20439

Additional information about the U.S. Court of Appeals for the Federal

Circuit is available at the court’s website, www.cafc.uscourts.gov. Of particular

relevance is the court’s “Guide for Pro Se Petitioners and Appellants,” which is

contained within the court’s Rules of Practice, and Forms 5, 6, 10, and 11.

2

The original statutory provision that provided for judicial review of certain

whistleblower claims by any court of appeals of competent jurisdiction expired on

December 27, 2017. The All Circuit Review Act, signed into law by the President on

July 7, 2018, permanently allows appellants to file petitions for judicial review of

MSPB decisions in certain whistleblower reprisal cases with the U.S. Court of Appeals

for the Federal Circuit or any other circuit court of appeals of competent jurisdiction.

The All Circuit Review Act is retroactive to November 26, 2017. Pub. L. No. 115 -195,

132 Stat. 1510.

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If you are interested in securing pro bono representation for an appeal to

the U.S. Court of Appeals for the Federal Circuit, you may visit our website at

http://www.mspb.gov/probono for information regarding pro bono representation

for Merit Systems Protection Board appellants before the Federal Circuit. The

Board neither endorses the services provided by any attorney nor warrants that

any attorney will accept representation in a given case.

Contact information for the courts of appeals can be found at their

respective websites, which can be accessed through the link below:

http://www.uscourts.gov/Court_Locator/CourtWebsites.aspx.

FOR THE BOARD:

/s/

Jennifer Everling

Acting Clerk of the Board

Washington, D.C.