Appealed from: Merit Systems Protection Board.
Rich and Bennett, Circuit Judges, and Miller, Senior Circuit Judge.
Petitioner appeals the final decision of the Merit Systems Protection Board (MSPB or board), 23 M.S.P.R. 633 (1984), which reversed the initial decision of the presiding official, issued May 29, 1984, and sustained the action of the Federal Home Loan Bank Board (agency) in removing petitioner for unacceptable performance. We affirm.
This case presents a narrow but vitally important issue of statutory construction of first impression in this court, namely, whether the MSPB has the authority to review and mitigate the severity of reduction-in-grade (demotion) or removal sanctions imposed by an employing agency in an action taken for unacceptable performance under 5 U.S.C. § 4303 (1982).*fn1 The board answered the question in the negative in this case arising from facts summarized as follows.
Petitioner Lisiecki became a career employee with his agency in 1972. Eventually, he became a savings and loan examiner, GS-11, and held that position until he was removed on January 7, 1984. His duty station was in Cleveland, Ohio.
Lisiecki's supervisor evaluated his performance in 1983 and found him deficient in "critical element 6. " This element required examiners to develop final reports and documents in compliance with an agency manual to facilitate supervisory action. Mr. Lisiecki was then placed on a corrective work plan for 180 days. At the end of that period he was still considered unsatisfactory on element 6 and was given a warning notice of removal in accordance with 5 U.S.C. § 4303, based on unacceptable performance.*fn2 He was thereafter separated.
An appeal to the MSPB followed and a hearing was held before a presiding official who found that substantial evidence supported the rating of Mr. Lisiecki as unacceptable in critical job element 6. The presiding officer, however, citing Douglas v. Veterans Administration, 5 M.S.P.B. 313, 5 M.S.P.R. 280 (1981) held that the agency exceeded the tolerable limits of reasonableness in removing rather than demoting*fn3 Lisiecki, in view of certain circumstances he considered as mitigating. His decision was that Lisiecki should have been demoted to GS-09 and he so ordered in reversing the agency removal action.
The agency filed a petition for review of the presiding official's decision alleging that the MSPB lacked the authority to review and mitigate penalties in actions taken under 5 U.S.C. § 4303 and that the board's decision in Douglas was no authority to the contrary. The board, by a 2-1 vote on October 22, 1984, agreed with the agency that it lacked this power, and on that basis, reversed its presiding official and sustained the agency's removal action. This appeal to the court seeks to overturn the final decision of the board and to obtain petitioner's reinstatement or reassignment to a GS-09 position as an examiner with his agency. In the alternative, it is requested that the case be remanded to the MSPB on the issue of whether the penalty approved by the board was too harsh in light of the presiding official's findings.
Whether the petitioner's performance was unacceptable in the position he held at the time of his removal is not now in issue. The presiding official found the performance was unacceptable and, on review, the board agreed. We do not disturb that finding. Petitioner had the right under sections 1205 and 7701 of title 5 to appeal the agency action. On review, as an integral part of the appeal process, did MSPB have the right to mitigate the penalty imposed by the agency for the established unacceptable performance? In deciding this issue, it is not necessary to determine what standards would be applicable if the board had mitigation authority or whether, if it did have such authority, it could modify a removal in the manner petitioner seeks or mitigate by substituting a suspension or some other sanction. Finally, it is unnecessary to address any issues concerning whether petitioner should have been removed under title 5, chapter 75, for performance-based reasons because the provisions of that chapter were not invoked in this case. See Lovshin v. Department of the Navy, 767 F.2d 826 (Fed. Cir. 1985) (in banc).
The issue before the board on mitigation authority was not a simple one and it invited, by notice in the Federal Register, the filing of amici curiae briefs. Seventeen such briefs were filed by government agencies and departments and three unions of government employees. They also addressed other issues with which we are not concerned. The briefs of the Office of Personnel Management and most federal agencies contended that the board had no authority to mitigate penalties imposed pursuant to chapter 43, 5 U.S.C. § 4303, because to do so would frustrate congressional intent in the enactment of the Civil Service Reform Act, Pub. L. No. 95-454, 92 Stat. 1111 (1978) (codified in scattered sections of 5 U.S.C.). Further, it was argued that the board's opinion in Douglas, wherein it held that it had the authority to mitigate penalties imposed by agencies in chapter 75 actions for misconduct, does not extend to chapter 43 actions for performance appraisal. The three unions and two agencies contended just the opposite. With all of this help and after its own study of the matter, the board concluded, as noted, that its authority did not extend to mitigation under chapter 43.
The MSPB's concern with the difficulty and importance of the issue to be decided is understandable because the Reform Act is silent on it, and the legislative history does not address the issue explicitly. Nevertheless, the legislative history is highly instructive, sufficiently so as to support the board's result, which affirm.
The Senate and House committee reports, the conference reports,*fn4 and the floor discussions demonstrate that the Reform Act was the most comprehensive overhaul of the civil service since the (Pendleton) Civil Service Act in 1883. The Reform Act was the result of in-depth studies over many months.*fn5 This effort was necessitated by the fact that no systematic congressional review of the system had been attempted in almost a century and, with the great growth in the number of federal employees, many new problems had developed which demanded serious attention. We address here only one of those problems -- the difficult, almost impossible, problem of discharging employees for poor performance. The patchwork of statutes, regulations, rules, and judicial restrictions built up over time had conspired, in effect, to tie the hands of the personnel managers. The "inordinate procedural requirements and unreasonable standards" were condemned. S. Rep. No. 969, 95th Cong., 2d Sess. 40, reprinted in 1978 U.S. Code Cong. & Ad. News 2762. The temptation was to keep an unsatisfactory worker on the payroll rather than go through the protracted hassle of discharging him, with no guarantee that the effort would be successful. This happened too often, and the public suffered. Id. at 1-4, U.S. Code Cong. & Ad. News at 2723-26; see also Remarks of Senator Abraham A. Ribicoff and Senator James R. Sasser, 124 Cong. Rec. 14,267, 14,281 (1978).
One of the devices in the Reform Act to accommodate the problem described was a new chapter 43 in title 5, entitled Performance Appraisal. New standards were authorized for evaluating performance with sanctions of removal or demotion for unacceptable performance. 5 U.S.C. §§ 4301-4308. While the authority of managers was strengthened, the Reform Act was careful to protect the employees by due process procedures for notice, charges, opportunity to respond orally and in writing, representation by counsel or other representative, and a written appealable decision, among other things. Id. at § 4303. Any tension between the rights of employees and managers was resolved from the standpoint of the public's right to have competent, dedicated workers on its payroll for the promotion of "efficient and effective Government." S. Rep. No. 969 at 4, U.S. Code Cong. & Ad. News at 2726; 5 U.S.C. § 7101(b). Congress sought and achieved a balance between an agency's ability to take prompt action on the substance of an employee's performance on the one hand, and an employee's procedural protections on the other. Id. at 40, U.S. Code Cong. & Ad. News at 2762.
The House and Senate committee reports on the Reform Act are very similar in most of the respects material to the present case. The Senate bill, however, is the one that passed. For convenience, reference is made to some of the language in the Senate committee report to illustrate the concepts important here. The conference reports do not change the thrust of the Senate committee discussion of chapter 43 which follows. In its discussion of section 203, codified in 5 U.S.C. § 4303, the Senate report observed that entirely new procedures were being established for handling employees whose job performance failed to meet acceptable standards.
One of the chief differences between the procedures currently applicable at the agency level and the proposed procedures concerns the standard governing the agency's action. Under current law, an employee may be dismissed for unacceptable performance only if dismissal would improve efficiency of the service. As a practical matter, agencies have found it very difficult to prove this to the degree required by courts through a series of judicial decisions. Section 4303(a) imposes a new standard. It is "performance which fails to meet established requirements in one or more critical elements of the job." The Committee intends that this new standard should not be governed by the existing case law defining the present standard, "such cause as will promote the efficiency of the service."*fn6
S. Rep. No. 969 at 43, U.S. Code Cong. & Ad. News at 2765.
The agency action cannot be ultimately upheld under any circumstances unless the agency first makes a prima facie case justifying its action. Once the agency meets this initial burden, the employee will be expected to introduce his own evidence, discredit the record made by the agency, or present whatever arguments he wishes. Following the submissions by both the employee and the agency, the Board will decide the case. At such point, the burden of persuasion, or the risk of nonpersuasion, will be on the employee.
Id. at 44, U.S. Code Cong. & Ad. News at 2766.
Under this standard the Board must find that there is reasonable basis for the agency's decision whenever it concludes that a reasonable man could -- on the basis of the record -- have acted as the agency did, even if it is also possible to conclude that another course of action would also have been reasonable. In reviewing agency action taken under this section, both the Board and the courts should give deference to the judgment by each agency of the employee's performance in light of the agency's assessment of its own personnel needs and standards.
Id. at 45, U.S. Code Cong. & Ad. News at 2767.
In the discussion of appellate review, the report says that while due process procedures are intended by the Reform Act --
at the same time, they are intended to give agencies greater ability to remove or discipline expeditiously employees who engage in misconduct, or whose work performance is unacceptable. Henceforth, the Board and the courts should only reverse agency actions under the new procedures where ...