The opinion of the court was delivered by: P. Kevin Castel, District Judge
Petitioners Leatrice Hamilton and Mildred P. Smith bring this action against respondent United States Department of Labor ("DOL"), their former employer, seeking review of a final decision of the Merit Systems Protection Board ("MSPB" or the "Board"), affirming their removal from federal service for refusing to accept a geographical reassignment from Albany, New York, to Hartford, Connecticut. For the reasons outlined below, the petition for review is granted and the matter is remanded to the MSPB to determine an adequate remedy.
Prior to their removal, petitioners were employed by the DOL's Office of Federal Contract Compliance Programs ("OFCCP") in Albany, New York as Equal Opportunity Specialists. The OFCCP is a part of the DOL that monitors and enforces compliance with anti-discrimination laws and affirmative action policies on the part of private companies that contract with the federal government. Hamilton had worked in the Albany OFCCP office for twelve years and Smith for thirteen years. The terms of petitioners' employment were governed by a national collective bargaining agreement (and agreements supplemental thereto) between their union, the National Council of Field Labor Locals ("NCFLL" or the "Union"), and the DOL. (A1070--1269.)
In September 1993, President Clinton directed all federal agencies to develop plans to streamline services provided to the public. (A87, 258.) In 1994, the OFCCP responded by formulating a plan to reduce its number of supervisors by 50 percent and make a larger portion of its staff front-line employees who interface directly with the public. (A258.) In addition, the total number of OFCCP employees would be reduced by 12 percent by fiscal year 1999. (Id.) The plan called for the merger of certain OFCCP regional offices including OFCCP "Region I" (New York) and "Region II" (Boston) which would result in the closure of, among other locations, the Albany District Office. (A61, 80.) No dates for office closures were set because of an "attrition-only" policy promulgated by the OFCCP, directing that no employees would be forced to transfer or retire and the selected offices would close only after all employees had left voluntarily. (A1732, 1749-50, 1787, 1792, 1841-42, 1844-46, 1918-79, 2033-34, 2043.) The OFCCP plan stated that "[i]f employees remain after a supervisor has attritted from the designated office, the office would remain in existence as a field station until all employees have attritted." (A259.)
Subsequent to 1994, the planned closure of the Albany office was noted in several OFCCP documents. For example, a 1996 streamlining plan submitted by OFCCP Northeast Region Director James R. Turner, Jr., proposed merging the Boston and New York regional offices which would result in closure of the Albany office and reassignment of its employees to the Hartford office. (A251-55.) The proposal argued that the merger would increase efficiency and reduce both staff and administrative costs. (A25.) Two additional merger plans were prepared by Turner in 1996, each of them also calling for the closure of the Albany office and each claiming that such action would, inter alia, result in staff reductions and administrative cost savings. (A435-39, 441-51.)
In the spring of 1998, the OFCCP and the Union began negotiating the merger of OFCCP Regions I and II. An impasse was declared because, among other reasons, the OFCCP would not agree to refrain from forcing the transfers of employees beyond 1999. (A473.)
Petitioners were aware of the desire within OFCCP to close the Albany office and expressed concern about such a plan as early as November 10, 1998 in a letter to the DOL. (A616-20.) DOL Deputy Assistant Secretary Shirley J. Wilder responded to petitioners in writing by stating that they would be given an opportunity to comment upon any plans to close the Albany office. (A621-22.) At some point in either 1998 or 1999, petitioners found themselves to be the only remaining employees in the Albany office, their former colleagues having all retired, quit or voluntarily transferred to other locations. (A244, 343.) From that time until they were removed from federal service, petitioners were required to do much of their own clerical work. (A167.) In addition, they were required to travel to Hartford for frequent staff meetings, and were supervised remotely by the Hartford office. (Id.)
In or around August 2000, the DOL decided to pursue a plan to move the Albany office from leased space within a privately-owned building to a federally-owned building within Albany. (A480-81.) It was noted by Northeast Region Director James R. Turner, Jr. that the OFCCP "would need space for only two (2) Compliance Officers, unless they decide to move to Hartford, CT, as a result of the merger discussions." (Id.) Correspondence regarding moving petitioners, to the "Federal Building" in Albany continued up until the fall of 2001. (A68, 1051-68, 549-612, 1950-55, 2028-32, 1809-12, 1899-2000.)
In January 2001, petitioners' Union and the DOL restarted negotiations regarding the merger of OFCCP's regional offices. (A1802-03.) According to a February 2, 2001 e-mail from Union negotiator Frederick DeWald to petitioners and others, the negotiations "concluded at approximately 11 pm" on February 1, 2001 (A749) and resulted in a written agreement entitled "Memorandum of Understanding Between The U.S. Department of Labor (DOL) and the National Council of Field Labor Locals (NCFLL) AFGE, AFL-CIO" (hereinafter the "MOU").*fn1 The MOU constituted an agreement between "the DOL . . . and the NCFLL [that] was developed and accepted by both parties in accordance with the provision of the Master Agreement." (A71 (MOU § I.).) Under the heading "Subject," the MOU stated that "[t]he terms and conditions of the MOU are directly caused by the merger of OFCCP Regions IX and X [the San Francisco Region and the Seattle Region] and Regions I and II [the New York Region and the Boston Region]." (A72 (MOU at § II).) Under the heading, "Terms of the Agreement," the MOU provided in relevant part:
The Albany District Office will be redesignated as a Hartford District Office Field Station located in Albany. The two employees currently assigned to the Albany District Office will be assigned to the Field Station. The two employees will not involuntarily lose pay or grade or be transferred as a result of this merger action.
(A72 (MOU § III(F).) The MOU further stated that it would become effective on February 2, 2001 and that "[i]t is understood that nothing in this MOU implies a waiver by Management of its rights." (A73 (MOU § IV(C).) The agreement provided that it was to be distributed to all affected employees and because petitioners were "[t]he two employees currently assigned to the Albany District Office," they were both provided with a copy of the executed agreement. (A73, 749.) The MOU was executed on behalf of the DOL by five DOL directors and officers including Michelle Ouellet, the national Director, Division of Management and Administrative Programs and James R. Turner, Jr., the Northeast Region Director. (Id.) Signers for the union included both national and regional union officers and members. (Id.)
In April 2001, a memorandum was issued to all DOL agency heads by Acting Assistant Secretary for Administration and Management of DOL Edward C. Hugler. (A230-31.) The memo stated, among other things, that, "in light of [President Bush's] intention to reduce management layers within the Federal government and to redistribute resources from higher-level managerial positions to service delivery positions, you should consider ways and opportunities to flatten your organizations." (A230.) Although the memo was silent as to whether the attrition-only policy would remain in effect, Regional Director Turner testified that he interpreted the memo to mean that OFCCP could discontinue the attrition-only policy and move forward with closing the Albany office. (A1795.) After consulting with Harold Bush, Acting Deputy Director of OFCCP, Turner told Michelle Oulett that "we were prepared to move forward" with the 1994 streamlining plan which included closing the Albany office (A1795-96.)
On October 3, 2001, eight months after the effective date of the MOU, petitioners received a call from Turner informing them that the Albany Field Station was slated to close on November 1, 2001. (A1956-59.) Almost two weeks later, the Union again met with OFCCP management to negotiate the impact of the announced closure. (A1804.) Those negotiations resulted in a second memorandum of understanding which provided that the Albany office would be closed on December 31, 2001 and that petitioners would be directed to report to the Hartford office. (A34-35.) That second agreement, however, never became effective because it was not ratified by either the DOL or the Union at the national level as required by both its own terms and the terms of the underlying collective bargaining agreement between the DOL and the union.*fn2 (A34-35, 1741-43, 1830-31, 1904-07, 2060-61.) Although the record is not clear as to why the second agreement ...