Opinion

Constance Donovan v. Pension Benefit Guaranty Corporation

Court: Merit Systems Protection Board
Filed: May 10, 2024
Status: Unpublished
Cited by: 0 cases
Authority: More cited than 16.0%

finding that the administrative judge “justifiably refused to consider an issue that [the appellant] had not properly raised before [OSC]”

How later courts described this case

finding that the administrative judge “justifiably refused to consider an issue that [the appellant] had not properly raised before [OSC]”

Written by the judges who cited it.

The opinion

UNITED STATES OF AMERICA

MERIT SYSTEMS PROTECTION BOARD

CONSTANCE ANN DONOVAN, DOCKET NUMBER

Appellant, DC-1221-18-0551-W-1

PENSION BENEFIT GUARANTY DATE: May 10, 2024

CORPORATION,

Agency.

THIS FINAL ORDER IS NONPRECEDENTIAL 1

K. Scott Rocio , Esquire, Washington, D.C., for the appellant.

Michael W. Macomber , Esquire, Albany, New York, for the appellant.

Alexander Kopit , Esquire, and Sara Robinson , Esquire, Washington, D.C.,

for the agency.

BEFORE

Cathy A. Harris, Chairman

Raymond A. Limon, Vice Chairman

FINAL ORDER

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

dismissed her individual right of action (IRA) appeal for lack of jurisdiction.

Generally, we grant petitions such as this one only in the following

circumstances: the initial decision contains erroneous findings of material fact;

A nonprecedential order is one that the Board has determined does not add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 Parties may cite nonprecedential orders,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

the initial decision is based 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 during 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 available 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. We MODIFY the initial decision to

clarify that the appellant did not exhaust her specific disclosures with the Office

of Special Counsel (OSC), we VACATE as unnecessary any additional findings

as to disclosures that the appellant did not exhaust, and we otherwise AFFIRM

the initial decision.

BACKGROUND

The appellant has been the Participant and Plan Sponsor Advocate

(Advocate) at the agency since 2013. Initial Appeal File (IAF), Tab 1 at 5,

Tab 12 at 185. She was the first person appointed to this statutorily created

position. IAF, Tab 11 at 17-18; see 29 U.S.C. § 1304 (discussing the

appointment, duties, and other employment details regarding the position). The

statute sets forth the duties of the position, which include identifying participants

and plan sponsors’ persistent problems at the agency, proposing changes to

legislation and the practices of the agency to mitigate problems, and referring

instances of fraud, waste, abuse, and violations of law to the Office of the

Inspector General. IAF, Tab 12 at 136-37; see 29 U.S.C. § 1304(b). The

Advocate is required to submit an annual report to Congress, which summarizes

requests for assistance received, identifies significant problems, includes

legislative and regulatory proposals to address any identified problems, and

identifies actions taken to correct problems identified in prior reports. 29 U.S.C.

§ 1304(e).

On June 12, 2017, the appellant filed a complaint with OSC, in which she

alleged that she made protected disclosures in her annual reports to Congress

between 2014 and 2016. IAF, Tab 6 at 31-32. Specifically, she asserted that her

reports detailed violations of Title IV of the Employee Retirement Income

Security Act of 1974 (ERISA), mismanagement, and abuse of authority. Id. The

appellant asserted to OSC that, because of these disclosures, the agency refused

to issue performance standards for her position and awarded her lower

performance-based bonuses. Id. at 31-32, 44. OSC issued a close-out letter on

March 20, 2018. Id. at 44-46.

On May 23, 2018, the appellant filed an IRA appeal with the Board. IAF,

Tab 1. The administrative judge issued a jurisdictional order, IAF, Tab 3, to

which both parties responded. IAF, Tabs 6, 11, 13, 16.

The administrative judge dismissed the appeal for lack of jurisdiction.

IAF, Tab 17, Initial Decision (ID) at 1. Specifically, she found that the appellant

had exhausted some of her more general disclosures with OSC. ID at 5-11.

However, the administrative judge found that the appellant did not make a

nonfrivolous allegation that her disclosures were protected. ID at 13.

The appellant has timely filed a petition for review. Petition for Review

(PFR) File, Tab 6. The agency has filed a response to the petition. PFR File,

Tab 8.

DISCUSSION OF ARGUMENTS ON REVIEW

On review, the appellant challenges the administrative judge’s finding that

she did not nonfrivolously allege that she had a reasonable belief that her

disclosures evidenced any violation of law, rule, or regulation, gross

mismanagement, or an abuse of authority. PFR File, Tab 6 at 15, 19-22. We find

that this argument provides no basis for reversing the administrative judge’s

dismissal of the appeal for lack of jurisdiction.

We affirm the administrative judge’s findings regarding the appellant’s

exhaustion of her disclosures before OSC, except as modified to clarify that the

appellant did not exhaust her specific disclosures.

Under the Whistleblower Protection Enhancement Act of 2012 (WPEA),

the Board has jurisdiction over an IRA appeal if the appellant has exhausted her

administrative remedies before OSC and makes nonfrivolous allegations that

(1) she made a protected disclosure described under 5 U.S.C. § 2302(b)(8) or

engaged in protected activity described under 5 U.S.C. § 2302(b)(9)(A)(i), (B),

(C), or (D), and (2) the disclosure or protected activity was a contributing factor

in the agency’s decision to take or fail to take a personnel action as defined by

5 U.S.C. § 2302(a). 2 Salerno v. Department of the Interior, 123 M.S.P.R. 230,

¶ 5 (2016). The administrative judge properly found that the appellant exhausted

her general disclosures that the agency violated Title IV of ERISA and that plan

sponsors alleged that the agency committed a form of “extortion” in the way that

it enforced section 4062(e) of ERISA. ID at 10-11; IAF, Tab 6 at 31. She then

found that, even if the appellant had exhausted her specific disclosures, i.e., the

contents of the annual reports she submitted to Congress between 2014 and 2016,

they were not protected. ID at 13. The appellant does not dispute the

administrative judge’s findings as to exhaustion on review. PFR File, Tab 6

at 15. We modify the initial decision to clarify that the appellant did not prove

exhaustion over her specific disclosures. 3

The appellant has not alleged that she engaged in a protected activity, and thus we will

limit our discussion to whether she made a protected disclosure under 5 U.S.C.

§ 2302(b)(8).

On review, the appellant argues that whether her alleged that disclosures were made

during the normal course of her duties pursuant to 5 U.S.C. § 2302(f)(2) is irrelevant to

whether those disclosures are protected under 5 U.S.C. § 2302(b)(8). PFR File, Tab 6

at 15. However, the administrative judge did not find that any of the alleged

disclosures were not protected on this basis. ID at 12-22.

In Chambers v. Department of Homeland Security, 2022 MSPB 8, ¶¶ 10-11, the

Board clarified the substantive requirements of exhaustion. The requirements are

met when an appellant has provided OSC with a sufficient basis to pursue an

investigation. The Board’s jurisdiction is limited to those issues that were

previously raised with OSC. However, appellants may give a more detailed

account of their whistleblowing activities before the Board than they did to OSC.

Id. Appellants may demonstrate exhaustion through their initial OSC complaint;

evidence that they amended the original complaint, including but not limited to

OSC’s determination letter and other letters from OSC referencing any amended

allegations; and their written responses to OSC referencing the amended

allegations. Id. Appellants also may establish exhaustion through other

sufficiently reliable evidence, such as an affidavit or a declaration attesting that

they raised with OSC the substance of the facts in the Board appeal. Id. To

establish Board jurisdiction, the appellant must prove exhaustion with OSC by

preponderant evidence, not just present nonfrivolous allegations of exhaustion.

5 C.F.R. § 1201.57(c)(1).

Here, the appellant provided, in relevant part, her OSC complaint, OSC’s

preliminary determination letter, her response to the preliminary determination

letter, and OSC’s letter closing her complaint. IAF, Tab 6 at 31-32, 35-46. In her

OSC complaint, the appellant stated that she made protected disclosures in the

annual reports she submitted to Congress between 2014 and 2016. Id. at 31. She

indicated that her 2014 report “noted violations of certain provisions of Title IV

of ERISA . . . by [the agency] in their dealings with both participants and plan

sponsors subject to their regulatory authority.” Id. She indicated that her 2015

and 2016 annual reports included some of the “same violations of laws and

regulations and some additional ones.” Id. She also stated that plan sponsors

described the agency’s efforts to enforce section 4062(e) as a form of “extortion.”

Id. Further, she generally alleged that the agency’s actions constituted

mismanagement and an abuse of authority. Id. at 31. We agree with the

administrative judge’s finding that the appellant exhausted these general

allegations with OSC. ID at 11.

The appellant also asserted that the annual reports would be added to her

complaint and “highlighted for ease in identifying the violations of rules, laws

and regulations as the basis of this complaint.” IAF, Tab 6 at 31. However, there

is no indication that these highlighted annual reports were subsequently provided

to OSC. In OSC’s correspondence with the appellant, her disclosures are broadly

categorized as documenting violations of laws, rules, or regulations in her annual

reports to Congress, but OSC does not provide any specifics on the alleged

protected disclosures or reference the highlighted annual reports the appellant

previously stated that she would submit to supplement her complaint. Id. at 35,

37, 44. Additionally, in the appellant’s correspondence with OSC, she does not

provide additional clarifying information regarding her alleged protected

disclosures or reference the purportedly submitted highlighted annual reports. Id.

at 40-43. Moreover, while the appellant provided a sworn declaration in response

to the administrative judge’s order on jurisdiction below, IAF, Tab 11 at 17-26,

she did not provide further information as to what she told OSC regarding her

disclosures or claim she submitted her annual reports to OSC, see Chambers,

2022 MSPB 8, ¶¶ 10-11 (explaining that an appellant may establish exhaustion

through an affidavit or a declaration attesting that the appellant raised with OSC

the substance of the facts in the Board appeal). Thus, the appellant only proved

that she exhausted her general allegations that the agency violated Title IV of

ERISA and that plan sponsors alleged that the agency’s enforcement of section

4062(e) of ERISA was a form of extortion. IAF, Tab 6 at 31-32.

In the initial decision, the administrative judge observed that the

highlighted annual reports were not provided to the Board and implicitly found

that the appellant did not exhaust her more specific alleged disclosures. ID at 11.

The administrative judge then proceeded to analyze whether the appellant

nonfrivolously alleged that her more specific disclosures were protected. ID

at 13-22. However, because the appellant did not prove that she exhausted these

disclosures, we vacate these findings as to an alternative theory of why the

appellant did not meet her jurisdictional burden as unnecessary. Further, we

modify the initial decision to expressly find that the appellant did not prove by

preponderant evidence that she exhausted these specific disclosures. Id. Because

the appellant failed to establish by preponderant evidence that these specific

disclosures were exhausted, the Board lacks jurisdiction to consider them. See

Ward v. Merit Systems Protection Board, 981 F.2d 521, 526 (Fed. Cir. 1992)

(finding that the administrative judge “justifiably refused to consider an issue that

[the appellant] had not properly raised before [OSC]”); see also 5 C.F.R.

§ 1201.57(c)(1) (providing that an appellant must prove exhaustion with OSC by

preponderant evidence).

The appellant failed to nonfrivolously allege that she reasonably believed her

disclosures evidenced a violation of law, rule, or regulation, gross

mismanagement, or an abuse of authority.

The next jurisdictional inquiry is whether, as to the general disclosures the

appellant exhausted with OSC, she nonfrivolously alleged that they were

protected. See Salerno, 123 M.S.P.R. 230, ¶ 5. A nonfrivolous allegation of a

protected whistleblowing disclosure is an allegation of facts that, if proven,

would show that the appellant disclosed a matter that a reasonable person in her

position would believe evidenced one of the categories of wrongdoing specified

in 5 U.S.C. § 2302(b)(8). Id., ¶ 6. The test to determine whether a putative

whistleblower has a reasonable belief in the disclosure is an objective one:

whether a disinterested observer with knowledge of the essential facts known to

and readily ascertainable by the employee could reasonably conclude that the

actions of the agency evidenced a violation of law, rule, or regulation, gross

mismanagement, a gross waste of funds, an abuse of authority, or a substantial

and specific danger to public health or safety. Id. The disclosures must be

specific and detailed, not vague allegations of wrongdoing regarding broad or

imprecise matters. Id.; Rzucidlo v. Department of the Army, 101 M.S.P.R. 616,

¶ 13 (2006). To the extent the administrative judge found that the appellant failed

to nonfrivolously allege that her general disclosures were protected, we agree. ID

at 14-22.

The appellant failed to nonfrivolously allege that she reasonably

believed that her disclosure that the agency had violated “certain

provisions of Title IV of ERISA” evidenced a violation of law, rule,

or regulation.

The appellant only raised broad assertions of alleged violations of laws and

regulations to OSC, without describing what the alleged violations were. IAF,

Tab 6 at 31-32. The appellant stated to OSC that she disclosed that the agency

violated Title IV of ERISA “in their dealings with both participants and plan

sponsors subject to their regulatory authority.” Id. at 31. She did not explain

specifically what the purported violations of law and regulation were, and only

made conclusory allegations about the agency’s alleged wrongdoing. We find,

therefore, that the appellant has not made a nonfrivolous allegation that these

disclosures were protected. See Rzucidlo, 101 M.S.P.R. 616, ¶ 17 (finding that

the Board requires an appellant to provide more than vague and conclusory

allegations of wrongdoing by others); see also McCorcle v. Department of

Agriculture, 98 M.S.P.R. 363, ¶ 21 (2005) (finding that conclusory allegations

lacking in specificity do not constitute nonfrivolous allegations of IRA

jurisdiction).

The appellant failed to nonfrivolously allege that she reasonably

believed her disclosure that plan sponsors described the agency’s

efforts to enforce section 4062(e) as a form of extortion evidenced

gross mismanagement or an abuse of authority.

In her OSC complaint, the appellant also appeared to allege that the

agency’s actions constituted mismanagement and an abuse of authority because

plan sponsors described the agency’s efforts to enforce section 4062(e) of ERISA

as a form of “extortion.” IAF, Tab 6 at 31-32. Gross mismanagement is more

than de minimis wrongdoing or negligence; it means a management action or

inaction that creates a substantial risk of significant adverse impact on the

agency’s ability to accomplish its mission. Swanson v. General Services

Administration, 110 M.S.P.R. 278, ¶ 11 (2008). An abuse of authority is defined

as an arbitrary or capricious exercise of power by a Federal official or employee

that adversely affects the rights of any person or that results in personal gain or

advantage to himself or to preferred other persons. Chavez v. Department of

Veterans Affairs, 120 M.S.P.R. 285, ¶ 22 (2013). Even under the expanded

protections afforded to whistleblowers under the WPEA, general philosophical or

policy disagreements with agency decisions that “lawfully exercise discretionary

authority” are not protected unless the appellant has a reasonable belief that the

disclosed information separately evidences one of the categories of wrongdoing

listed in section 2302(b)(8)(A). 5 U.S.C. § 2302(a)(2)(D); Webb v. Department of

the Interior, 122 M.S.P.R. 248, ¶ 8 (2015).

In the instant case, the appellant disclosed that plan sponsors described the

agency’s efforts to enforce section 4062(e) of ERISA as a form of “extortion.”

IAF, Tab 6 at 31-32. Section 4062(e) is a provision of ERISA that provides a

formula by which the agency calculates the amount an employer who sponsors its

own pension plan must pay to protect pensions when it ceases operations at a

facility and workers lose their jobs. Employee Retirement Income Security Act

of 1974, Pub. L. No. 93-406, § 4062(e), 88 Stat. 823, 1030 (codified as amended

at 29 U.S.C. § 1362(e)); see 29 C.F.R. § 4062.8(a) (explaining that the formula

applies when “an employer ceases operations at a facility . . . and, as a

result . . . more than 20% of the total number of . . . employees who are

participants under a plan established and maintained by the employer are

separated from employment”). The appellant did not provide additional

information on how the agency’s actions created a substantial risk of significant

adverse impact upon the agency’s ability to accomplish its mission, nor does

she provide sufficient factual information for us to infer such a finding. As the

administrative judge observed, the agency’s mission is to protect the retirement

incomes of American workers in specified pension plans. ID at 14; see Pension

Benefit Guaranty Corporation Mission Statement,

https://www.pbgc.gov/about/who-we - are (last visited May 8, 2024). We agree

with the administrative judge that this allegation fails to identify any specific risk

to the agency’s ability to accomplish its mission of protecting retirement incomes,

and that the appellant did not provide any basis for finding that the agency’s

interpretation of its authority was unlawful or unreasonable. ID at 15, 17. Thus,

the appellant failed to nonfrivolously allege that her allegations evidenced a

reasonable belief that the agency’s enforcement of section 4062(e) constituted

gross mismanagement or an abuse of authority.

Accordingly, we deny the petition for review and affirm, as modified, the

initial decision dismissing the appellant’s IRA appeal for lack of jurisdiction. 4

NOTICE OF APPEAL RIGHTS 5

The initial decision, as supplemented by this Final Order, constitutes the

Board’s final decision in this matter. 5 C.F.R. § 1201.113. 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

Because the appellant failed to nonfrivolously allege that her exhausted disclosures

were protected, we decline to address her argument that these disclosures were

contributing factors in the alleged personnel action. PFR File, Tab 6 at 22.

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.

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

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. 6 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).

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.

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