Daniel Bailey v. Department of the Treasury

UNITED STATES OF AMERICA

MERIT SYSTEMS PROTECTION BOARD

DANIEL BAILEY, DOCKET NUMBER

Appellant, NY-0752-17-0162-I-1

v.

DEPARTMENT OF THE TREASURY, DATE: January 3, 2024

Agency.

THIS ORDER IS NONPRECEDENTIAL 1

Daniel Bailey , Manlius, New York, pro se.

Gabriel A. Hindin , Washington, D.C., for the agency.

BEFORE

Cathy A. Harris, Vice Chairman

Raymond A. Limon, Member

REMAND ORDER

The appellant has filed a petition for review of the initial decision, which

sustained his removal for failure to accept a directed reassignment. For the

reasons discussed below, we GRANT the appellant’s petition for review,

VACATE the initial decision, and REMAND the case to the field office for

further adjudication consistent with this order.

1

A nonprecedential order is one that the Board has determined does not add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 Parties may cite nonprecedential orders,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).

2

BACKGROUND

The appellant was formerly employed by the Office of the Comptroller of

the Currency (OCC) as an Assistant Deputy Director (ADC), NB -0570-VII, in

Syracuse, New York. Initial Appeal File (IAF), Tab 1 at 1. The OCC is the

primary supervisor of national banks and Federal thrift institutions, and is

charged with “assuring the safety and soundness of, and compliance with laws

and regulations, fair access to financial services, and the fair treatment of

customers by, the institutions and other persons subject to its jurisdiction.”

12 U.S.C. § 1; IAF, Tab 5 at 100. Institutions under the supervision of the OCC

range from small community banks and thrift institutions to some of the largest

and most complex financial institutions in the world. IAF, Tab 5 at 100.

In 2013, the Comptroller of the Currency commissioned an international

peer review team to assess OCC’s policies relating to the agency’s large and

mid-size bank supervision programs. Id. at 91. The peer review team submitted

its recommendations on December 4, 2013. Id. at 91, 99-121. Among other

things, the peer review team recommended the establishment of a formal rotation

process for all bank examination staff, in order to provide a “richer and more

diverse set of experiences.” Id. at 115.

On November 9, 2015, the agency established a new policy, PPM 5000 -42,

Examiner Rotational Requirements, implementing rotational requirements for

certain OCC examiners. Id. at 80-89. The stated purpose of the policy was “to

strengthen supervisory processes and examiner expertise, provide staff with

a richer and more diverse set of experience, promote cross training,

enhance professional and leadership development, and support agency

succession planning.” Id. at 84. The policy imposed a 10-year term limit

for certain positions, including the appellant’s ADC position. Id. at 85. On

November 10, 2015, an email was sent to all OCC employees explaining the

scope and purpose of the new rotation policy. Id. at 80-82. The email indicated

that employees in positions subject to term limits would receive a letter within

3

30 days outlining the length of time in their position and the timing of the

transition. Id. at 80.

By letter dated December 9, 2015, the appellant was advised that his ADC

position had been designated as a position subject to a 10-year term limit, applied

retroactively. Id. at 68-69. The letter further explained that, because he was

within 1½ years of reaching the 10-year term limit, he would be granted a grace

period of up to 18 months from the issuance of PPM 5000-42 to allow for

sufficient time to transition to a new OCC position. Id. at 68.

On March 24, 2017, the Deputy Director of the Northeast District issued

the appellant a letter of directed reassignment, informing him that, effective

May 14, 2017, he would be reassigned to the position of Supervisory National

Bank Examiner, NB-0570-VII, in New York City. Id. at 57-58. The appellant

was instructed to notify the agency of his acceptance of the assignment, in

writing, within 10 days of the notice and that his failure to accept the

reassignment could result in separation. Id. The agency never received written

notification of his decision. Id. at 48.

On April 11, 2017, the Deputy Director issued the appellant a notice of

proposed removal. IAF, Tab 5 at 53-55. The appellant did not respond. By letter

dated May 11, 2017, the Senior Deputy Comptroller of the Currency notified the

appellant of his decision to remove him, effective May 13, 2017, based on his

failure to accept a directed geographic reassignment. 1 Id. at 48-51.

This appeal followed. IAF, Tab 1. In his pleadings, the appellant

identified numerous “affirmative defenses,” which included both affirmative

defenses for purposes of 5 U.S.C. § 7701(c)(2) and other challenges to the

1

The appellant retired on May 13, 2017. IAF, Tab 5 at 46. It is well established,

however, that the Board does not lose jurisdiction over a removal appeal when the

effective dates of the removal and the retirement are the same. 5 U.S.C. § 7701(j);

Mays v. Department of Transportation, 27 F.3d 1577, 1579-81 (Fed. Cir. 1994). On the

initial appeal form, the appellant checked the box indicating that he was contesting an

“involuntary retirement,” IAF, Tab 1 at 3, but he subsequently clarified that he intended

to appeal his removal, IAF, Tab 7 at 1.

4

legitimacy of the agency’s reasons for the reassignment. IAF, Tab 14 at 5 -100;

IAF, Tab 54 at 16-107. His affirmative defenses included (1) harmful procedural

error 2 and denial of due process; 3 (2) discrimination based on age, 4 race, color,

sex, and national origin; 5 (3) retaliation for equal employment opportunity (EEO)

activity, 6 protected disclosures under 5 U.S.C. § 2302(b)(8)(A), 7 and protected

activity under 5 U.S.C. § 2302(b)(9)(D); 8 and (4) various other prohibited

personnel practices, including violations of section 2302(b)(2), (4), (6), and (12). 9

The administrative judge advised the appellant of his burden of proof with respect

to his claims of harmful procedural error and discrimination based on age, race,

color, sex, religion, and national origin. IAF, Tabs 8, 46. However, the

administrative judge did not provide similar guidance concerning the remainder

of the affirmative defenses. The appellant declined a hearing. IAF, Tab 1 at 2.

Based on her review of the written record, the administrative judge

sustained the removal action. IAF, Tab 60, Initial Decision (ID). She first

determined that the agency established its prima facie case by setting forth

legitimate management reasons for the reassignment and showing that the

appellant received adequate notice of the reassignment and refused to accept it.

ID at 6-9. She further found that the appellant failed to rebut the agency’s case

by demonstrating that the reassignment had no solid or substantial basis in

personnel practice or principle. ID at 9-19. In the process, she also found that

the appellant failed to establish his affirmative defenses for purposes of 5 U.S.C.

2

IAF, Tab 54 at 42-72.

3

IAF, Tab 14 at 64-66.

4

IAF, Tab 54 at 47, 83-94, 106; IAF, Tab 14 at 37-51.

5

IAF, Tab 54 at 94-105; IAF, Tab 14 at 10-27.

6

IAF, Tab 54 at 53-54, 72-83, 106-07; IAF, Tab 14 at 28-37.

7

IAF, Tab 54 at 107-08.

8

IAF, Tab 54 at 106-07.

9

IAF, Tab 54 at 108-12.

5

§ 7701(c)(2). ID at 9 n.4. Finally, the administrative judge concluded that the

penalty of removal is reasonable and promotes the efficiency of the service. ID

at 19-20.

On petition for review, the appellant again argues that the agency

improperly imposed a retroactive term limit without a solid or substantial basis in

personnel practice or principle, and reiterates his claims that the agency

committed harmful procedural error; discriminated against him on the basis of

age, race, color, sex, and national origin; and committed additional prohibited

personnel practices. 10 Petition for Review (PFR) File, Tab 1. The agency has

filed a response, to which the appellant has replied. 11 PFR File, Tabs 3-4.

ANALYSIS

Federal agencies are authorized by regulation to reassign their employees.

5 C.F.R. § 335.102. It is well established that agencies have wide discretion in

exercising that authority. Frey v. Department of Labor, 359 F.3d 1355, 1360

(Fed. Cir. 2004). Federal employees who refuse a geographical assignment may

be removed. Id. The Board’s review of a directed assignment action is to assure

that this otherwise legitimate management tool is not used for illegitimate

10

The appellant further contends that the administrative judge erred in denying the

following motions: (1) his September 25, 2017 motion to compel production relating to

Document Requests No. 7 (benchmark data regarding elimination of enhanced

relocation benefits) and No. 10 (documents relating to management succession); and

(2) his July 6, 2018 motion for leave to file a response to what he asserted was new

evidence and argument contained in an agency pleading. PFR File, Tab 1 at 28-29; see

IAF, Tab 13 at 33-36, Tab 25 at 5, Tabs 55-57. We discern no abuse of discretion in the

administrative judge’s rulings in these matters. See Wagner v. Environmental

Protection Agency, 54 M.S.P.R. 447, 452 (1992) (holding that the Board will not

reverse an administrative judge’s rulings on discovery matters absent an abuse of

discretion), aff’d, 996 F.2d 1236 (Fed. Cir. 1993) (Table).

11

The appellant’s reply includes a motion for leave to submit new evidence and

argument. PFR File, Tab 4 at 4, 13-16. The motion is now moot, as the record will

reopen on remand. The appellant’s motion to amend his reply to correct a typographical

error is granted. PFR File, Tab 7.

6

reasons. Cooke v. U.S. Postal Service, 67 M.S.P.R. 401, 406 (1995), aff’d,

73 F.3d 380 (Fed. Cir. 1995) (Table).

The Board has adopted a two-step approach for deciding an appeal of a

removal action based on refusal to accept a directed reassignment. To prevail in

such a case, the agency must prove by a preponderance of the evidence that the

removal will promote the efficiency of the service, which requires a showing that

the agency’s decision was a bona fide determination based on legitimate

management considerations in the interest of the service. Ketterer v. Department

of Agriculture, 2 M.S.P.R. 294, 298 (1980). As part of its initial burden, the

agency must come forward with evidence showing a legitimate management

reason for the reassignment. Id. at 299. Together with evidence that the

appellant received adequate notice of the reassignment and refused to accept it,

this is ordinarily sufficient to establish a prima facie case. Id.

Once the agency has made a prima facie case, the burden of going forward

with rebuttal evidence shifts to the appellant, although the burden of persuasion

remains with the agency. Id.; see Umshler v. Department of the Interior,

44 M.S.P.R. 628, 630 (1990) (citing Ketterer). If the appellant can demonstrate

that the reassignment had no solid or substantial basis in personnel practice or

principle, the Board may conclude that it was not a valid discretionary

management determination, but was instead either an improper effort to pressure

the appellant to retire, or at least an arbitrary or capricious adverse action.

Umshler, 44 M.S.P.R. at 630; see Frey, 359 F.3d at 1360 (endorsing the

Ketterer/Umshler framework); see also Cobert v. Miller, 800 F.3d 1340, 1349

(Fed. Cir. 2015) (clarifying that the Board is bound by Frey and that the Ketterer/

Umshler framework remains the law of the circuit).

We agree with the administrative judge that the agency met its initial

burden of providing evidence showing a legitimate management reason for the

appellant’s reassignment, namely, the general rotation policy recommended by

the peer review team and implemented by PPM 5000-42. Moreover, it is

7

undisputed that the appellant received notice of his reassignment and refused to

accept it. Thus, the agency established its prima facie case, and we proceed to

the question of whether the appellant has produced rebuttal evidence

demonstrating that his reassignment had no solid or substantial basis in personnel

practice. See Umshler, 44 M.S.P.R. at 630.

The appellant argues, as he did below, that the reassignment had no solid or

substantial basis in personnel practice because the agency lacked the authority to

retroactively convert his permanent appointment to a term appointment.

However, there is nothing in the record to suggest that the appellant’s

appointment ceased to be permanent; rather, it was his rotational assignment that

was term-limited. Moreover, as the administrative judge observed, the absence of

a term limit agreement, mobility agreement, or rotational agreement does not

constrain the agency’s authority under 5 C.F.R. § 335.102 to reassign or transfer

employees. See Wieser v. Department of the Army, 280 F. App’x 959, 961 (Fed.

Cir. 2008) (stating that “the agency’s authority to reassign its employees is based

on regulations that do not make the agency’s power to transfer and employee

dependent on the employee’s execution of a mobility agreement”); see also id.

at 962 (stating that “the agency does not obtain its right to transfer from a

particular employee’s consent, nor it is it denied the right to transfer a particular

employee because that employee has not previously given such consent or been

specifically notified of the possibility of a transfer at some point in the future”). 12

Accordingly, we find no merit to the appellant’s contention that the agency acted

outside its authority when it reassigned him.

12

The Board may follow nonprecedential Federal Circuit decisions when it finds the

court’s reasoning persuasive, as we do here. See, e.g., Morris v. Department of the

Navy, 123 M.S.P.R. 662, ¶ 13 n.9 (2016). The appellant argues that Wieser is

distinguishable because the agency in that case was restructuring its operations due to a

reduced volume of work at the employee’s location, whereas the workload at the

Syracuse office had not decreased. This is a distinction without a difference, however,

as the agency’s reassignment authority under 5 C.F.R. § 335.102 is not contingent on

office workload.

8

Another way for an appellant to successfully rebut the agency’s prima facie

case is to establish that the reassignment constituted a prohibited personnel

practice, and was therefore not based on a legitimate management reason. See

Richard v. Department of Defense, 66 M.S.P.R. 146, 158-59 (1995) (remanding

for a determination of whether the appellant’s evidence regarding her allegation

of EEO retaliation was sufficient to cast doubts on the bona fides of the

reassignment action); Umshler, 44 M.S.P.R. at 634 (vacating and remanding an

initial decision sustaining a removal for failure to accept a directed reassignment

where, among other things, the administrative judge failed to address the

appellant’s assertions that his reassignment constituted a prohibited personnel

practice under 5 U.S.C. § 2302(b)(8)(A) and (b)(10)); Craighead v. Department

of Agriculture, 6 M.S.P.R. 159, 161-62 (1981) (considering the appellant’s claim

of marital status discrimination in violation of 5 U.S.C. § 2302(b)(1) in

determining whether the agency-directed reassignment was based on legitimate

management reasons). The administrative judge was thus correct in considering

the appellant’s prohibited personnel practice claims both as part of his rebuttal

and as affirmative defenses under 5 U.S.C. § 7701(c)(2). ID at 9 n.4; see

Craighead, 6 M.S.P.R. at 161-62.

Here, the administrative judge considered the appellant’s allegations of

discrimination and EEO reprisal, which fall within the scope of 5 U.S.C.

§ 2302(b)(1) and (b)(9)(A). However, she did not fully address the appellant’s

remaining prohibited personnel practice claims. While she stated in general terms

that the appellant “failed to establish that the agency violated merit principles and

committed prohibited personnel practices,” ID at 14-15, she did not identify,

much less analyze, the appellant’s specific allegations that the agency violated

5 U.S.C. § 2302(b)(2), (4), (6), (8)(A), (9)(D), and (12). 13

13

The administrative judge noted that the appellant “appeared to be raising a

whistleblower retaliation claim,” which could refer to his contention that the agency

violated section 2302(b)(8)(A) and/or (9)(D), but she summarily rejected the claim

without identifying his allegations or the statutory provisions at issue. ID at 14. She

9

An initial decision must identify all material issues of fact and law,

summarize the evidence, resolve issues of credibility, and include the

administrative judge’s conclusions of law and her legal reasoning, as well as the

authorities on which that reasoning rests. Spithaler v. Office of Personnel

Management, 1 M.S.P.R. 587, 589 (1980). Because the administrative judge did

not decide all of the prohibited personnel practice claims at issue, or notify the

appellant of what he had to do in order to establish those claims, we find further

proceedings are needed to determine whether the appellant has successfully

rebutted the agency’s prima facie case. 14 See Umshler, 44 M.S.P.R. at 634.

On remand, the administrative judge should advise the appellant of his

burden of proof regarding his prohibited personnel practice claims under 5 U.S.C.

§ 2302(b)(2), (4), (6), (8)(A), (9)(D), and (12), and, if necessary, provide an

opportunity for further development of the record as to those claims. In addition,

the administrative judge should reconsider the appellant’s claims of

discrimination and reprisal for EEO activity in light of the Board’s intervening

decision in Pridgen v. Office of Management and Budget , 2022 MSPB 31,

adopting her previous findings as appropriate. The administrative judge should

then issue a new initial decision, consistent with this Order, that includes findings

on all material issues raised by the appellant, as well as a finding as to whether all

of the circumstances identified by the appellant, considered together, rebut the

agency’s prima facie case. See Umshler, 44 M.S.P.R. at 635. The administrative

judge may adopt her original findings to the extent they are consistent with the

additional evidence and argument considered on remand.

observed in a footnote that the Board’s jurisdiction over individual right of action (IRA)

appeals does not extend to claims of reprisal for protected activity under

section 2302(b)(9)(A)(ii), see ID at 14 n.6, but, as the appellant’s removal is an

otherwise appealable action, the issue of IRA jurisdiction does not arise in this appeal.

14

We discern no error in the administrative judge’s findings regarding the appellant’s

claims of harmful error and denial of due process.

10

ORDER

For the reasons discussed above, we remand this case to the field office for

further adjudication in accordance with this remand order.

FOR THE BOARD: ______________________________

Jennifer Everling

Acting Clerk of the Board

Washington, D.C.