Lissy Pentzke v. Department of the Treasury

UNITED STATES OF AMERICA

MERIT SYSTEMS PROTECTION BOARD

LISSY G. PENTZKE, DOCKET NUMBER

Appellant, AT-0432-18-0439-I-1

v.

DEPARTMENT OF THE TREASURY, DATE: March 14, 2024

Agency.

THIS ORDER IS NONPRECEDENTIAL 1

Stephanie Bernstein , Esquire, and Tyler Sroufe , Esquire, Dallas, Texas, for

the appellant.

Lisa Pyle , Esquire, Washington, D.C., for the agency.

BEFORE

Cathy A. Harris, Vice Chairman

Raymond A. Limon, Member

REMAND ORDER

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

affirmed her removal for unacceptable performance pursuant to 5 U.S.C.

chapter 43. For the reasons discussed below, we GRANT the appellant’s petition

for review, VACATE the initial decision, and REMAND the case to the regional

office for further adjudication in accordance with this Remand Order and

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A nonprecedential order is one that the Board has determined does not add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 Parties may cite nonprecedential orders,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

Santos v. National Aeronautics and Space Administration, 990 F.3d 1355 (Fed.

Cir. 2021).

DISCUSSION OF ARGUMENTS ON REVIEW

¶2 In Santos, 990 F.3d at 1360-63, the U.S. Court of Appeals for the Federal

Circuit held for the first time that, in addition to the elements of a chapter 43 case

set forth by the administrative judge and discussed below, an agency must also

show that the initiation of a performance improvement plan (PIP) was justified by

the appellant’s unacceptable performance before the PIP. Id. Prior to addressing

the remand, however, we address the appellant’s arguments on review concerning

the administrative judge’s findings on the elements of a chapter 43 appeal as they

existed at the time of the initial decision.

The administrative judge properly found that the agency proved its chapter 43

removal action under pre- Santos law.

¶3 At the time the initial decision was issued, the Board’s case law stated that,

in a performance-based action under 5 U.S.C. chapter 43, an agency must

establish the following by substantial evidence 2 : (1) the Office of Personnel

Management approved its performance appraisal system and any significant

changes thereto; (2) the agency communicated to the appellant the performance

standards and critical elements of her position at the beginning of the appraisal

period; (3) the appellant’s performance standards are valid under 5 U.S.C.

§ 4302(b)(1); (4) the agency warned the appellant of the inadequacies of her

performance during the appraisal period and gave her a reasonable opportunity to

demonstrate acceptable performance; and (5) the appellant’s performance

remained unacceptable in one or more of the critical elements for which she was

provided an opportunity to demonstrate acceptable performance. See 5 U.S.C.

2

The agency’s burden of proof in an action taken under chapter 43 is “substantial

evidence,” defined as the degree of relevant evidence that a reasonable person,

considering the record as a whole, might accept as adequate to support a conclusion,

even though other reasonable persons might disagree. 5 C.F.R. § 1201.4(p). This is a

lower burden than preponderant evidence.

3

§§ 4302(b), 7701(c)(1)(A); Lee v. Environmental Protection Agency,

115 M.S.P.R. 533, ¶ 5 (2010).

¶4 On petition for review, the appellant largely reargues her case without

identifying specific errors in the initial decision. For example, she repeatedly

contends that the administrative judge ignored evidence, including her oral reply,

affidavits, exhibits, deposition, close of record submission, rebuttal, and

pleadings. Petition for Review (PFR) File, Tab 1 at 8, 12, 17-19, 31. However,

she fails to cite to specific evidence and explain its relevance or how it would

alter the outcome of the appeal. To the extent the appellant does not identify

specific errors in the administrative judge’s analysis, the Board will not embark

upon a complete review of the record. See Baney v. Department of Justice,

109 M.S.P.R. 242, ¶ 7 (2008); Tines v. Department of the Air Force, 56 M.S.P.R.

90, 92 (1992); 5 C.F.R. § 1201.115(a)(2) (stating that a petitioner who alleges

that the administrative judge made erroneous findings of material fact must

explain why the challenged factual determination is incorrect and identify

specific evidence in the record that demonstrates the error); see also Keefer v.

Department of Agriculture, 92 M.S.P.R. 476, ¶ 18 n.2 (2002) (stating that it is not

the Board’s obligation to pore through the record to construe and make sense of

allegations set forth at various parts of a voluminous case file and the appellant is

required to articulate her claims with reasonable clarity and precision).

Nonetheless, we address those issues and findings regarding which the appellant

has presented specific arguments on review.

¶5 The appellant argues that the administrative judge erred in finding that the

agency’s performance standards were valid because she contends that they are

vague, ambiguous, and subjective. PFR File, Tab 1 at 9-10. However, the

administrative judge acknowledged that the agency’s performance standards were

somewhat subjective; but she found that they were not impermissibly vague in

light of the appellant’s position as an Investigator, which she determined could

not be assessed using a mechanical or quantitative formula but rather necessarily

4

involved a degree of subjective professional judgment. Initial Appeal File (IAF),

Tab 35, Initial Decision (ID) at 7. 3

¶6 Moreover, the administrative judge further found that the agency’s PIP

along with the feedback that the appellant’s supervisor provided to her during the

PIP meetings cured any deficiency by fleshing out the required standards. ID

at 8. We discern no error in the administrative judge’s analysis. See, e.g.,

Salmon v. Social Security Administration, 663 F.3d 1378, 1381-82 (Fed. Cir.

2011) (finding that the agency’s performance standards of demonstrates job

knowledge and achieves business results, as fleshed out by the appellant’s

supervisor’s direct and precise feedback regarding the deficiencies in the

appellant’s work and how to remedy such deficiencies, were sufficiently

objective); Greer v. Department of the Army, 79 M.S.P.R. 477, 484 (1998)

(finding that a reasonable person could find that the appellant’s performance

standards were valid considering the scientific expertise required and the

independence and discretion he had in carrying out his work and that any lack of

specificity was cured because the agency continually gave the appellant

3

The appellant also argues that her performance standards were invalid because, similar

to the standards in Van Prichard v. Department of Defense, 117 M.S.P.R. 88 (2011),

aff’d, 484 F. App’x 489 (Fed. Cir. 2012), they failed to define the minimum level of

performance required to avoid removal. PFR File, Tab 1 at 9. However, we find

Van Prichard distinguishable. In Van Prichard, the agency’s performance standards

failed to define the levels of performance for each critical element and only defined

Marginal performance in a general definitions section as performance that is “less than

Fully Successful and supervisory guidance and assistance is more than normally

required.” Van Prichard, 117 M.S.P.R. 88, ¶ 17. The Board found that the Marginal

performance standard was an invalid backwards standard because it described what the

appellant should not do instead of what was required to obtain an acceptable level of

performance. Id., ¶ 18. In contrast, here, the agency’s performance plan defines

minimally satisfactory performance as performance “between the levels described for

Fully Successful and Unacceptable” and also defines the levels of performance for each

critical element at the Outstanding, Fully Successful, and Unacceptable levels. IAF,

Tab 10 at 44, 47, 50. Thus, we find that the agency’s standard is not an invalid

backwards standard. Nor does the agency’s minimally satisfactory performance

standard improperly require extrapolation more than one level above and below which

there is a written standard. PFR File, Tab 1 at 9; see, e.g., Donaldson v. Department of

Labor, 27 M.S.P.R. 293, 297-98 (1985).

5

comments on his work assignments during the PIP); Melnick v. Department of

Housing and Urban Development, 42 M.S.P.R. 93, 99 (1989) (stating that the fact

that a performance standard may call for a certain amount of subjective judgment

on the part of the employee’s supervisor does not automatically invalidate it),

aff’d, 899 F.2d 1228 (Fed. Cir. 1990) (Table); Donaldson v. Department of Labor,

27 M.S.P.R. 293, 301-02 (1985) (finding that the work of a GS-12 coal mine

inspector who performed a wide range of independent investigations could not be

measured by mechanical standards, but rather required subjective judgment by the

appellant’s supervisor on the appropriateness of the appellant’s actions). Thus,

we find that the appellant’s arguments on review fail to establish any error in the

administrative judge’s findings.

The administrative judge properly found that the appellant failed to prove that she

made protected disclosures in August 2015.

¶7 Regarding her affirmative defense of whistleblower reprisal, the appellant

alleged that, in August 2015, she disclosed to her supervisor that (1) another

investigator told her that there was no need for two companies that she was

investigating to obtain wholesaler’s basic permits, a determination with which the

appellant disagreed, and (2) her supervisor denied her request for a cease and

desist letter to be issued to the two companies to instruct them not to sell alcohol

without a permit. IAF, Tab 27 at 32-34. On review, the appellant argues that the

administrative judge erred in finding that she failed to prove that she reasonably

believed that she was disclosing a violation of a law, rule, or regulation because

she identified a specific law, 27 U.S.C. § 203. PFR File, Tab 1 at 19-22.

However, the administrative judge did not find that the appellant failed to identify

a specific law. Rather, as set forth below, she found that the appellant failed to

prove that she reasonably believed she was disclosing a violation of a law, rule,

or regulation. ID at 14. On review, the appellant has not established any error in

the administrative judge’s finding.

6

¶8 The appellant’s description of the events surrounding the investigation of

the two companies as well as her alleged disclosures to her supervisor concerning

her disagreement with the other investigator regarding permitting requirements

lack sufficient detail and clarity. IAF, Tab 27 at 45-54. For example, the

appellant states that she called her supervisor regarding an email from the other

investigator, which the appellant considered to provide “partially false and

misleading information” about permit regulations. Id. at 48. However, she fails

to describe in any detail what she disclosed to her supervisor. Thus, she has not

established by preponderant evidence that she reasonably believed she was

disclosing one of the categories of wrongdoing set forth in 5 U.S.C. § 2302(b)(8).

¶9 Even assuming the appellant reasonably believed she was disclosing that the

two companies were operating without a permit in violation of 27 U.S.C. § 203(a)

and (c), such a disclosure does not amount to a protected disclosure because it

fails to implicate Government wrongdoing. See Aviles v. Merit Systems

Protection Board, 799 F.3d 457, 463-66 (5th Cir. 2015); Arauz v. Department of

Justice, 89 M.S.P.R. 529, ¶¶ 6-7 (2001); cf. Covington v. Department of the

Interior, 2023 MSPB 5, ¶¶ 20-31 (finding that the appellant’s disclosures

regarding the Navajo Nation’s activities implicated the Government’s interests

and good name based on the unique relationship between the agency and the

Navajo Nation in which the agency had fiduciary duty and statutory trust

responsibility to oversee Indian forest lands).

¶10 Additionally, to the extent the appellant alleges that she reasonably believed

that the other investigator and/or her supervisor were concealing potential

smuggling or other illegal activity because she faced “adamant opposition” during

the investigation that was “suspicious,” IAF, Tab 27 at 35, we find that she has

not alleged facts sufficient to show by preponderant evidence that she had a

reasonable belief that the Government was implicated in any wrongdoing, see,

e.g., Aviles, 799 F.3d at 466-67 (finding that the appellant’s vague and conclusory

allegations of a Government “cover up” of alleged tax fraud by Exxon alone were

7

insufficient to establish even a nonfrivolous allegation of a protected disclosure).

Rather, the appellant’s alleged disclosures amount to her disagreement concerning

the application of the permitting requirements to the facts of the two

investigations. See, e.g., 5 U.S.C. § 2302(a)(2)(D) (communications concerning

policy decisions that lawfully exercise discretionary authority are not protected

unless they separately constitute a protected disclosure of one of the categories of

wrongdoing listed in section 2302(b)(8)(A)); IAF, Tab 27 at 52 (affidavit of the

appellant) (stating that ultimately it was within her supervisor’s discretion

whether to issue the permits).

On remand, the administrative judge shall reconsider whether the appellant’s

protected activity was a contributing factor in her removal.

¶11 To establish her prima facie case of whistleblower reprisal, the appellant

must prove that a protected disclosure or activity was a contributing factor in a

personnel action taken against her. Skarada v. Department of Veterans Affairs ,

2022 MSPB 17, ¶ 6 (2022). One way to prove contributing factor is by the

knowledge/timing test under which an appellant may show that her protected

disclosure or activity was a contributing factor in a personnel action through

circumstantial evidence, such as evidence that (1) the official taking the personnel

action knew of the disclosure or activity; and (2) the personnel action occurred

within a period of time such that a reasonable person could conclude that the

disclosure or activity was a contributing factor in the personnel action. 5 U.S.C.

§ 1221(e)(1); Smith v. Department of the Army, 2022 MSPB 4, ¶ 19.

¶12 The appellant alleged that in May 2017, she reported to the agency’s Office

of the Inspector General (OIG) the issues described in disclosures 1 and 2 above. 4

IAF, Tab 27 at 35, 53. Although a disclosure to the OIG constitutes protected

activity under 5 U.S.C. § 2302(b)(9)(C), the administrative judge found that the

appellant failed to prove that her protected activity was a contributing factor in

4

The initial decision incorrectly states the appellant’s OIG report occurred in

May 2016, ID at 12, when the appellant alleged that it occurred in May 2017, IAF,

Tab 27 at 35, 53.

8

her removal because she failed to show that her supervisor, who was the

proposing official, was aware that she had filed an OIG complaint. ID at 14. On

review, the appellant asserts that the administrative judge erred because the

agency admitted that her supervisor was aware of three grievances she filed,

including a May 19, 2017 grievance. PFR file, Tab 1 at 23-24; IAF, Tab 30 at 27.

However, it is unclear whether this refers to the appellant’s disclosure to the OIG

in May 2017. In her sworn declaration, the appellant’s supervisor stated that she

was not aware of the appellant’s OIG complaint at the time she rated the appellant

unacceptable in her midyear performance review, which led to the appellant’s

placement on the PIP and ultimately her removal. IAF, Tab 26 at 16.

¶13 However, it is the agency, not its individual officials, from whom an

appellant seeks corrective action, and actual knowledge by a single official is not

dispositive. See Dorney v. Department of the Army, 117 M.S.P.R. 480, ¶ 14

(2012). In addition to the knowledge/timing test, there are other possible ways

for an appellant to satisfy the contributing factor standard. See id. Thus, the

Board has held that, if an administrative judge determines that an appellant has

failed to satisfy the knowledge/timing test, she shall consider other evidence,

such as evidence pertaining to the strength or weakness of the agency’s reasons

for taking the personnel action, whether the whistleblowing was personally

directed at the proposing or deciding officials, and whether they had a desire or

motive to retaliate against the appellant. Id., ¶ 15. Accordingly, on remand, the

administrative judge shall apply the factors set forth in Dorney as well as

consider any other evidence that may be relevant to a contributing factor

determination. If the administrative judge finds that the appellant met her burden

of proving contributing factor, she shall address whether the agency met its

burden of proving, by clear and convincing evidence, that it would have taken the

same personnel action in the absence of the appellant’s protected activity.

5 U.S.C. § 1221(e)(2); Karnes v. Department of Justice, 2023 MSPB 12, ¶ 23.

9

The administrative judge properly found that the appellant failed to prove her

affirmative defenses of due process violations and harmful procedural error.

¶14 On review, the appellant argues that the administrative judge erred in

finding that she failed to timely raise her affirmative defenses of due process

violations and harmful procedural error. PFR File, Tab 1 at 6. However, any

such error does not provide a basis for reversal because the administrative judge

also found that the appellant failed to prove her claims. See Panter v.

Department of the Air Force, 22 M.S.P.R. 281, 282 (1984) (finding that an

adjudicatory error that is not prejudicial to a party’s substantive rights provides

no basis for reversal of an initial decision). In particular, the administrative judge

found that the appellant was provided the materials relied upon by the agency and

she was allowed a reasonable opportunity to review such materials before

presenting her reply. ID at 12 n.11. We discern no error in the administrative

judge’s conclusion. The record reflects that the agency proposed the appellant’s

removal on January 9, 2018, and allowed her 21 days to respond to the proposal,

orally and in writing. IAF, Tab 10 at 307, 333. However, the deadline was

extended, and the appellant responded on March 8, 2018. Id. at 373. Moreover,

the appellant acknowledges in her affidavit that, once the agency resolved her

technical difficulties in accessing the materials relied upon, she had 7 days to

review the materials and prepare her oral and written reply. IAF, Tab 27 at 62;

see 5 U.S.C. § 7513(b)(2).

Remand is required under Santos .

¶15 Although the appellant has identified no basis for us to disturb the

administrative judge’s findings below that the agency proved its

performance-based action under pre-Santos law, we nonetheless must remand the

appeal. During the pendency of the petition for review in this case, the Federal

Circuit held in Santos, 990 F.3d at 1360-61, that, in addition to the five elements

of the agency’s case set forth in the initial decision, the agency must also justify

the institution of a PIP by proving by substantial evidence that the employee’s

10

performance was unacceptable prior to the PIP. The Federal Circuit’s decision in

Santos applies to all pending cases, including this one, regardless of when the

events took place. Lee v. Department of Veterans Affairs, 2022 MSPB 11, ¶ 16.

Although the record in this appeal already contains evidence suggesting that the

appellant’s performance leading up to the PIP was indeed unacceptable, we

remand the appeal to give the parties the opportunity to present argument and

additional evidence on whether the appellant’s performance during the period

leading up to the PIP was unacceptable in one or more critical elements. See Lee,

2022 MSPB 11, ¶¶ 15-17. On remand, the administrative judge shall accept

argument and evidence on this issue and shall hold a supplemental hearing if

appropriate. Id., ¶ 17.

¶16 The administrative judge shall then issue a new initial decision consistent

with Santos. See id. If the agency makes the additional showing required under

Santos on remand that the appellant’s performance in at least one critical element

was at an unacceptable level prior to her placement on the PIP, the administrative

judge may incorporate her prior findings and the Board’s findings here on the

other elements of the agency’s case and the appellant’s affirmative defenses in

the remand initial decision. See id. Regardless of whether the agency meets its

burden, if the argument or evidence on remand regarding the appellant’s pre-PIP

performance affects the administrative judge’s analysis of the appellant’s

affirmative defenses, she should address such argument or evidence in the remand

initial decision. See Spithaler v. Office of Personnel Management , 1 M.S.P.R.

587, 589 (1980) (explaining that 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 his legal reasoning, as

well as the authorities on which that reasoning rests).

11

ORDER

¶17 For the reasons discussed above, we grant the appellant’s petition for

review and remand this case to the regional office for further adjudication in

accordance with this Remand Order.

FOR THE BOARD: ______________________________

Gina K. Grippando

Clerk of the Board

Washington, D.C.