Opinion

Mary Pearce v. Department of Veterans Affairs

Court: Merit Systems Protection Board
Filed: Aug 11, 2023
Status: Unpublished
Cited by: 0 cases
Authority: More cited than 5.5%

The opinion

UNITED STATES OF AMERICA

MERIT SYSTEMS PROTECTION BOARD

MARY PEARCE, DOCKET NUMBER

Appellant, DE-0714-19-0443-I-1

DEPARTMENT OF VETERANS DATE: August 11, 2023

AFFAIRS,

Agency.

THIS FINAL ORDER IS NONPRECEDENTIAL 1

Thomas F. Muther, Jr., Esquire, Denver, Colorado, for the appellant.

Chau Phan, Lakewood, Colorado, for the agency.

BEFORE

Cathy A. Harris, Vice Chairman

Raymond A. Limon, Member

FINAL ORDER

¶1 The agency has filed a petition for review of the initial decision, which

reversed the appellant’s removal taken under 38 U.S.C. § 714. Generally, we

grant petitions such as this one only in the following circumstances: th e initial

decision contains erroneous findings of material fact; the initial decision is based

A nonprecedential order is one that the Board has determined does not add

significantly to the body of MSPB case law. Parties may cite nonprecedential orders,

but such orders have no precedential value; the Board and administrative judges are not

required to follow or distinguish them in any future decisions. In contrast, a

precedential decision issued as an Opinion and Order has been identified by the Board

as significantly contributing to the Board’s case law. See 5 C.F.R. § 1201.117(c).

on an erroneous interpretation of statute or regulation or the erroneous application

of the law to the facts of the case; the administrative judge’s rulings duri ng either

the course of the appeal or the initial decision were not consistent with required

procedures or involved an abuse of discretion, and the resulting error affected the

outcome of the case; or new and material evidence or legal argument is availabl e

that, despite the petitioner’s due diligence, was not available when the record

closed. Title 5 of the Code of Federal Regulations, section 1201.115 ( 5 C.F.R.

§ 1201.115). After fully considering the filings in this appeal, we conclude that

the petitioner has not established any basis under section 1201.115 for granting

the petition for review. Therefore, we DENY the petition for review and

AFFIRM the initial decision, which is now the Board’s final decision. 5 C.F.R.

§ 1201.113(b).

BACKGROUND

¶2 The following facts are undisputed. The appellant was a GS -14 Supervisory

Social Worker, employed as the Social Work Service Chief for the agency’s

Eastern Colorado Healthcare System. Initial Appeal File (IAF), Tab 6 at 13, 81.

Central to this appeal is the agency’s Contract Nursing Home program, a system

through which the agency contracts with privately-owned nursing homes to

provide care for eligible veterans. Hearing Recording, Day 1 (HR 1) at 2:05

(testimony of the Acting Contract Nursing Home Supervisor). In order to pay

contract nursing homes for services rendered, the agency receives invoices from

the nursing homes, reconciles the invoices, and submits them to the Department

of the Treasury for payment. HR 1 at 3:50 (testimony of the Acting Contract

Nursing Home Supervisor); Hearing Recording, Day 2 (HR 2), Track 1 at 8:00

(testimony of the appellant).

¶3 On November 1, 2018, the Social Work Service became responsible for

reconciliations, a responsibility which was previously held by the agency’s

Network Authorization Office. IAF, Tab 32 at 45. While the Network

Authorization Office held the reconciliation function, the average total processing

time for an invoice was approximately 100 days. IAF, Tab 32 at 45. Soon after

the Social Work Service assumed this function, the average processing time was

reduced to about 80 days. Id.

¶4 On April 17, 2019, however, a U.S. Senator made an informal inquiry on

behalf of one contract nursing home into payment delays that were jeopardizing

the institution’s ability to make payroll. IAF, Tab 6 at 149. This was followed

on May 22, 2019, with a formal inquiry from another U.S. Senator to the

Secretary of Veterans Affairs concerning contract nursing home payment delays

in the Eastern Colorado Healthcare System in general. Id. at 84. Meanwhile, on

April 19, 2019, the agency launched an investigation into the matt er, which

concluded on May 3, 2019, with findings on the scope, nature, and causes of the

problem, as well as recommendations to improve payment processing. Id.

at 85-87. In the wake of these events, the appellant took steps to reduce

reconciliation processing times to an average of 23 days by June 5, 2019, and an

average of less than 10 days by June 26. IAF, Tab 32 at 41-45.

¶5 Nevertheless, on August 30, 2019, the agency proposed the appellant’s

removal under 38 U.S.C. § 714, based on one charge of “Failure to Ensure Proper

Oversight.” IAF, Tab 6 at 81-83. The agency specified as follows:

From approximately November 6, 2018-May 29, 2019, you failed to

provide proper supervision and oversight for your employees in

processing of room and board invoices to Nursing Homes affiliated

with the Contract Nursing Home Program. This failure resulted in

delayed payment of approximately 613 invoices for a total of

approximately $5,050,305.37, violating 5 CFR 1315, the Prompt

Payment Act. [2]

The legal citation provided by the agency is not actually, as suggested by the language

of the proposal notice, to the Prompt Payment Act, Pub. L. 97-452, § 1(18)(A), 96 Stat.

2467 (1983) (codified as amended at 31 U.S.C. chapter 39). Rather it is to the

implementing regulations, issued by the Office of Management and Budget and found at

5 C.F.R. part 1315. Those regulations provide in relevant part that an agency must

Id. at 81. After the appellant responded, the agency issued a decision removing

her effective September 13, 2019. Id. at 13-24.

¶6 The appellant filed a Board appeal, challenging the merits of the removal

action and raising affirmative defenses of sex discrimination and retaliation for

equal employment opportunity activity. IAF, Tab 1 at 4, Tab 36 at 2. After a

hearing, the administrative judge issued an initial decision reversing the

appellant’s removal on the merits. IAF, Tab 53, Initial Decision (ID). He

construed the agency’s charge as one of negligence in the performance of duties

and found that the agency failed to prove the charge by substantial evidence. ID

at 8-14. Having reversed the removal on that basis, the administrative judge

declined to reach the appellant’s affirmative defenses. ID at 14.

¶7 The agency has filed a petition for review, contesting several of the

administrative judge’s findings of fact. Petition for Review (PFR) File, Tab 1.

The appellant has filed a response. PFR File, Tab 3.

ANALYSIS

¶8 In an appeal of an adverse action taken under 38 U.S.C. § 714(a), the

agency bears the burden of proving its charges by substantial evidence.

38 U.S.C. § 714(d)(2)(a). If the agency meets this standard, the Board may not

mitigate the agency’s chosen penalty, but it is nevertheless required to review the

penalty as part of the agency’s overall decision. 38 U.S.C. § 714(d)(2)(B),

(3)(C); Sayers v. Department of Veterans Affairs, 954 F.3d 1370, 1375-79 (Fed.

Cir. 2020). Further, the agency’s decision may not be sustained if the appellant

shows that the decision was based on a prohibited personnel practice described in

5 U.S.C. § 2302(b). 5 U.S.C. § 7701(c)(2)(B).

generally make contracted payments within 30 days of recei ving a proper invoice.

5 C.F.R. § 1315.4(f)-(g).

¶9 It appears that the parties agree with the administrative judge’s

interpretation of the charge as concerning negligent performance of duties. IAF,

Tab 29 at 1-2; ID at 8. To prove its charge, the agency must show by substantial

evidence that the appellant failed to exercise the degree of care that a person of

ordinary prudence with the same experience would exercise in the same situation.

Robinson v. Department of Veterans Affairs, 923 F.3d 1004, 1011 (Fed. Cir.

2019); Mendez v. Department of the Treasury, 88 M.S.P.R. 596, ¶ 26 (2001). The

administrative judge found that the agency failed to meet this standard because

the appellant, through no fault of her own, was unaware of the 30 -day payment

deadline until March 2019, at which point she immediately took action, bringing

the reconciliation process into compliance by May 2019. ID at 6, 8-14.

¶10 Besides the undisputed fact that the agency failed to inform the appellant of

a 30-day payment deadline, the administrative judge also found that the appellant

was not negligent in failing to discover the deadline on her own. He found that

the appellant’s duties were primarily clinical and did not involve contract review.

ID at 13. He also found that the contracts were long and complicated, so even if

Social Work Service staff had reviewed them, the contracts’ single reference to

the Prompt Payment Act may not have been sufficient to alert them to the

deadline. ID at 1-13 & n.26. The administrative judge further found that even if

the appellant had known about the 30-day deadline, compliance was outside her

control because the third step of the payment process was still held by the

Network Authorization Office and could itself take upwards of 30 days. ID at 14.

¶11 The agency disputes these findings on review. First, it argues that, as

evidenced by the Chief of Social Work functional statement, the appellant’s

duties were not primarily clinical. Rather, the position is mostly administrative in

nature. PFR File, Tab 1 at 7; IAF, Tab 19 at 4-11. However, far from providing

a sufficiently sound basis to overturn the demeanor-based credibility

determination underlying the administrative judge’s finding, our review of the

functional statement leaves us with an even firmer conviction that the finding was

correct. ID at 2 & n.3; see Haebe v. Department of Justice, 288 F.3d 1288, 1301

(Fed. Cir. 2002). Although the appellant’s primary job duties might technically

be characterized as administrative, they pertain to administe ring the Social Work

Service’s clinical practice. IAF, Tab 19 at 4-11. There is nothing in the

functional statement to suggest that the Social Work Service Chief spends a

significant amount of time administering contracts or that contract work is part of

the requisite knowledge skills and abilities for the position. 3 IAF, Tab 19 at 9-10;

Veterans’ Administration Handbook 5005, Part II, Appendix G39(3),

(4)(o) (Sept. 10, 2019), https://www.va.gov/vapubs/viewPublication.asp?

Pub_ID=1061&FType=2.

¶12 Second, the agency disputes the administrative judge’s finding that the

Social Work Service’s preexisting function of reconciling pharmacy invoices was

not comparable to its new function of reconciling contract nursing home invoices.

PFR File, Tab 1 at 8; ID at 13 n.25. However, we find that this issue is

immaterial to the outcome of the appeal, which essentially hinges on whether the

appellant knew or should have known that there was a 30-day deadline for

making the contract nursing home payments. The agency argues that the

appellant should have already been familiar with the requirements of the Prompt

Payment Act because they apply to the pharmacy invoices that the Social Work

Service was already reconciling. PFR File, Tab 1 at 8-9. However, particularly

absent evidence that the agency informed the appellant about the application of

this law to this particular program, we see no reason to assume that the appellant

should necessarily be familiar with every law affecting every program under her

management.

The functional statement provides that the incumbent reviews contracts to ensure that

resources are being utilized efficiently. IAF, Tab 19 at 47. However, this appears to us

to be something different from the reconciliation of invoices, and besides, it is just one

among scores of duties described in this lengthy functional statement.

¶13 Third, the agency argues that compliance with the Prompt Payment Act was

not outside the appellant’s control. PFR File, Tab 1 at 10. The agency’s

argument is well taken to the extent that a reconciliation time of more than

30 days would prevent timely payment no matter how quickly the Network

Authorization Office might complete its part of the operation. However, the

reverse is also true; even a prompt reconciliation by the Social Work Service

could not prevent an untimely payment caused by delays at the Network

Authorization Office. Therefore, although the Social Work Service has a part to

play in complying with the Prompt Payment Act, the matter is not entirely w ithin

its control. In any event, we do not perceive this matter as material to the key

issue in this appeal, which is whether the appellant was negligent in failing to

learn of the 30-day deadline under the Prompt Payment Act.

¶14 Fourth, conceding that it did not specifically inform the appellant of the

30-day deadline, the agency argues that she was nevertheless negligent in failing

to review the nursing home contracts and discover the deadline for herself. 4 PFR

File, Tab 1 at 9. The administrative judge thoroughly addressed this issue by

reference to a representative contract, and we agree with his analysis. ID at 13-14

& n.26. Our only disagreement is with his characterization of the contract as

“somewhat difficult to decipher,” which we believe to be an understatement under

the circumstances. ID at 14; IAF, Tab 15 at 84-118. In any event, we seriously

doubt that the agency actually expected the appellant to discover the 30 -day

deadline through contract review because such an expectation would have be en

completely unreasonable. The agency would have us believe that the appellant

was supposed to have found this reference to the Prompt Payment Act, buried

The contracts do not set forth a 30-day payment deadline on their face. They provide

only that “[t]he Government will make payment in accordance with the Prompt Payment

Act (31 U.S.C. 3903) and prompt payment regulations at 5 CFR part 1315.”

amidst hundreds of other legal citations in the boilerplate of a 43 -page contract, 5

read the cited sections of the code, and deduced that a 30-day payment deadline

applied in her situation. 6 And this despite the fact that she inherited the

reconciliation program from an office that was routinely taking much longer to

reconcile invoices, without any indication that this was a problem, and despite the

fact that the Social Work Service was performing reconciliation duties rather than

general contract administration. The agency points out that the appellant’s

predecessor as Social Work Service Chief learned of the Prompt Payment Act by

reading work-related materials on her own. PFR File, Tab 1 at 9. However, we

cannot find that the appellant was negligent in failing to happen upon the Prompt

Payment Act previously during the course of her duties.

¶15 The agency argues that “[t]he Administrative Judge erred when he

concluded [the Network Authorization Office] or someone in the Appellant’s

chain-of-command needed to set clear expectations regarding invoice

reconciliation timing.” Id. We disagree. Setting clear expectations for

By our count, the contract contains no fewer than 240 citations to various statutes,

regulations, and executive orders. IAF, Tab 15 at 84 -118. The agency has not

explained whether it expected the appellant to familiarize herself with each and every

one of these statutes, regulations, and executive orders, or only the most important

ones, and if only the most important ones, how she was supposed to tell them apart.

To say that the Prompt Payment Act requires the Government to make payments

within 30 days of the date the invoice is received is an oversimplification. The statute

and regulations provide four different ways of determining a payment due date, of

which the 30-day provision applies only when none of the others do. 31 U.S.C.

§ 3903(a)(1); 5 C.F.R. § 1315.4(g). The appellant, who is neither an attorney nor a

contract administrator, was apparently expected to figure out on her own which of these

deadlines applied to the invoices at issue. But even this does not capture the difficulty

of the puzzle that the agency presented to her because the contract only refers to the

statutory and regulatory provisions generically and contains no hint that their

significance might have anything to do with a deadline that the appellant was

responsible for meeting. Therefore, even if the appellant had, for some reason, decided

to read the code provisions mentioned in the contract, she would have had to find the

specific operative provisions among hundreds of non-operative ones, without even

knowing what she was looking for. IAF, Tab 15 at 100.

Government employees is important, particularly when the health and welfare of

vulnerable veterans is at stake, or when a failure to meet those expectations might

precipitate a congressional inquiry or result in employee discipline. 7 See Harriss

v. Department of the Navy, 68 M.S.P.R. 427, 434 (1995) (finding that an

employee “may not be disciplined for failing to perform a duty that the agency

did not make her aware she had”). A responsible agency official could have

clearly notified the appellant that reconciliations must be completed promptly so

that the entire payment process takes no more than 30 days. For some reason,

this never happened. It may perhaps be inferred that the payments were delayed

because somebody at the agency was negligent, but the agency has not provided

substantial evidence to show that the appellant was negligent under the

circumstances of this case.

¶16 As stated above, the administrative judge did not reach the appellant’s

affirmative defenses of sex discrimination and retaliation for equal employment

opportunity activity. ID at 14. However, these claims, if proven, could

potentially have garnered the appellant further relief in the form of compensatory

damages. See 42 U.S.C. § 1981a(a)(1); see also Hodge v. Department of Veterans

Affairs, 72 M.S.P.R. 470, 472 (1996) (finding that, when an employee has

outstanding, viable claims of compensatory damages, the agency’s complete

rescission of the action appealed does not afford her all of the relief available

before the Board). Nevertheless, the appellant, who is represented by an attorney,

did not make a request for damages as specified in 5 C.F.R. § 1201.204(a), and

she has not raised the issue on review. See 5 C.F.R. § 1201.115 (“The Board

normally will consider only issues raised in a timely filed petition or cross

The agency asserts that, “[t]he Chief of Social Work position is a high graded, GS -14,

position that should function independently.” PFR File, Tab 1 at 9. Although this may

be true, IAF, Tab 19 at 4, the agency is still responsible for informing the Soci al Work

Service Chief of the goals that it expects her organization to accomplish.

petition for review.”). We therefore decline to disturb the administrative judge’s

ruling on this matter.

ORDER

¶17 We ORDER the agency to cancel the appellant’s removal and to restore her

effective September 13, 2019. See Kerr v. National Endowment for the Arts,

726 F.2d 730 (Fed. Cir. 1984). The agency must complete this action no later

than 20 days after the date of this decision.

¶18 We also ORDER the agency to pay the appellant the correct amount of back

pay, interest on back pay, and other benefits under the Office of Personnel

Management’s regulations, no later than 60 calendar days after the date of this

decision. We ORDER the appellant to cooperate in good faith in the agency’s

efforts to calculate the amount of back pay, interest, and benefits due, and to

provide all necessary information the agency requests to help it carry out the

Board’s Order. If there is a dispute about the amount of back pay, interest due,

and/or other benefits, we ORDER the agency to pay the appellant the undisputed

amount no later than 60 calendar days after the date of this decision.

¶19 We further ORDER the agency to tell the appellant promptly in writing

when it believes it has fully carried out the Board’ s Order and of the actions it has

taken to carry out the Board’s Order. The appellant, if not notified, should ask

the agency about its progress. See 5 C.F.R. § 1201.181(b).

¶20 No later than 30 days after the agency tells the appellant that it has fully

carried out the Board’s Order, the appellant may file a petition for enforcement

with the office that issued the initial decision on this appeal if the appellant

believes that the agency did not fully carry out the Board’s Order. The petition

should contain specific reasons why the appellant believes that the agency has not

fully carried out the Board’s Order, and should include the dates and results of

any communications with the agency. 5 C.F.R. § 1201.182(a).

¶21 For agencies whose payroll is administered by either the National Finance

Center of the Department of Agriculture (NFC) or the Defense Finance and

Accounting Service (DFAS), two lists of the information and documentation

necessary to process payments and adjustments resulting from a Board decision

are attached. The agency is ORDERED to timely provide DFAS or NFC with all

documentation necessary to process payments and adjustments resulting from the

Board’s decision in accordance with the attached lists so that payment can be

made within the 60-day period set forth above.

NOTICE TO THE APPELLANT REGARDING

YOUR RIGHT TO REQUEST

ATTORNEY FEES AND COSTS

You may be entitled to be paid by the agency for your reasonable attorney

fees and costs. To be paid, you must meet the requirements set forth at title 5 of

the United States Code (5 U.S.C.), sections 7701(g), 1221(g), or 1214(g). The

regulations may be found at 5 C.F.R. §§ 1201.201, 1201.202, and 1201.203. If

you believe you meet these requirements, you must file a motion for attorney fees

and costs WITHIN 60 CALENDAR DAYS OF THE DATE OF THIS DECISION.

You must file your motion for attorney fees and costs with the office that issued

the initial decision on your appeal.

NOTICE OF APPEAL RIGHTS 8

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

Since the issuance of the initial decision in this matter, the Board may have updated

the notice of review rights included in final decisions. As indicated in the notice, the

Board cannot advise which option is most appropriate in any matter.

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

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 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.

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. 420 (2017). If you have a representative in this case,

and your representative receives this decision before 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

(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 s ection

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. 9 The court of appeals must receive your petition for

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.

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