MSPB’S MR. MAGOO MOMENT

While the Board’s core job is to make a decision based on the individual case facts before it, it is also expected to look a reasonable distance into the future when creating the precedents that will decide similar cases in the weeks, months and years ahead.  However, its recent decision on employee furlough appeal rights suggests that its ability to see beyond the documents in front is on par with that of the legendary Mr. Magoo.

An IRS employee, Debra Chandler, challenged the agency decision to furlough her due to a sequester-related funding shortage. She claimed that the agency could not prove by the preponderance of the evidence that it promoted the efficiency of the agency.  After all, it was proposing to shut the entire agency down for three days rather than stay open with a slight reduction in staffing on any single day. In other words, at the core of its decision was the assumption that IRS was more efficient when totally closed than when open but slightly understaffed—just like it is every other day of the year. Absolutely insane!

When the Board got Chandler’s appeal, two members announced that agencies did not have to prove a need to furlough, much less prove it by the preponderance of the evidence in the record. Nor did they demand that the agency prove that a furlough promoted the efficiency of the agency more than obvious alternatives. The two-person majority created the following precedential rules for examining furlough cases:

  • Law “… does not encompass agency spending decisions per se, including spending on personnel matters….Nor does it encompass an agency’s decision to allocate furlough days in a certain manner among employees who are not similarly situated.” [FEDSMILL Comment: In all likelihood this was their way of saying they do not have the staff to do that and as a result employees will just have to suffer.]
  • The agency need only show, “… in general, that the furlough was a reasonable management solution to the financial restrictions placed on it and that the agency applied its determination as to which employees to furlough in a ‘fair and even manner.’” [FEDSMILL Comment:  They never explain whether furlough has to be just one of several reasonable ways to deal with the funding shortfall or the most reasonable or even more reasonable than an option with obvious advantages.]
  • By “fair and even manner,” it meant “uniformly and consistently” which these two members then pronounced means, “…the agency is required to treat similar employees similarly and to justify any deviations with legitimate management reasons.” [FEDSMILL COMMENT: Uniform and consistent are synonyms for “even,” which means the Board has thrown “fair” over the side never to worry about again—despite the fact that fairness is mentioned twice as a merit system principle the Board should enforce in all personnel actions.]
  • Employees will be permitted to show, “…whether the agency used a furlough to target employees for personal reasons…or attempted to exempt certain employees from the furlough without legitimate management reasons.” [FEDSMILL COMMENT:  It will be near impossible to prove either if the employee cannot challenge the agency’s allegation that the furlough was a reasonable response to a financial restriction is pretext or false.]

A third Board member, Anne Wagner, dissented asserting that, “the majority effectively jettisons the statutory efficiency of the service standard, as well as the Board’s longstanding ‘reasonable management solution’ and ‘fair and even manner’ standards.”  She then called the majority’s appeal scheme an “empty process that effectively amounts to rubber stamping agency decisions.” Ms. Wagner made the following statements about the employee’s right to challenge the furlough decision:

  • “The agency bears the evidentiary burden to prove by preponderant evidence that it undertook the” furlough as a reasonable management response to a fiscal restriction and in a fair and even manner and “for legitimate management reasons.”
  • That the Board may not simply defer to an agency assertion that it met its burden because, “…, such deference would be inconsistent with the statutory preponderance of the evidence standard of review that the Board is obligated to apply….”
  • “Employees may rebut such a showing with evidence challenging the bona fides of the agency’s alleged reasons” and “also challenge the furlough by proving harmful error, prohibited personnel practices, or that it was not in accordance with law.”

If the majority’s approach is adopted once the Chandler and other cases have made their way through the courts, it appears to leave the door open to, if not aggressively invite, arbitrary and capricious furlough decisions in the future.  For example, consider what the majority’s rules would produce in the following examples:

 EXAMPLE 1– A manager wants to give performance awards to four of her 10 employees at the end of the year, but lacks the funds.  Can she furlough employees to generate the funds so that a few of them get extra compensation?

LIKELY ANSWER– The majority will not review, much less disturb, the manager’s spending decision to fund awards at the expense of employee’s expected annual compensation. So long as the manager furloughs the “similarly situated” employees in the group for the same number of days, the Board will allow this to happen. Fairness will not be considered.

 

EXAMPLE 2– An agency executive believes government is too big and decides that he wants to return to the Treasury millions of the Congressionally approved annual funding by furloughing employees several days throughout the year. Will MSPB allow this?

LIKELY ANSWER: It sure seems like it will.  It has denied itself the power to review the executive’s spending decision, and assuming that all employees get furloughed for an equal number of hours, there is not a thing employees can do.

 

EXAMPLE 3– A mid-level manager loses an arbitration case that costs him $500,000 in back pay for which she had not budgeted for.  Can she furlough the employees to generate the cash?

LIKELY ANSWER-The majority will not allow evidence showing that there were other sources of funding.  It will be interesting to see if the Board allows the manager to furlough only the employees covered by the grievance or getting back pay on the theory that they are similarly situated.

 

EXAMPLE 4– A private contractor bills for more than the agency expected.  Can the agency furlough employees so that the contractor gets paid timely?

LIKELY ANSWER: The Board’s majority opinion allows the agency to use its employee compensation funds as a piggy bank whenever it runs out of funding in other budget lines.  The Board will not look at whether there were other sources for paying the bill, whether the agency had the right to delay payment if it paid interest, or even whether paying the contractor timely promotes agency efficiency more than keeping employees working.

 

EXAMPLE 5– A manager, who supervises four GS-12 Claims Examiners and four GS-11 Claims Examiners, notices a temporary drop in GS-12 cases coming into the group while GS-11 cases are spiking.  Can she furlough the GS-12’s to generate overtime pay for the GS-11s?

LIKELY ANSWER– It will all come down to who is considered similarly situated. If the Board follows RIF principles, as Susan Grundman suggested it would in her Concurring Opinion, the manager will be able to furlough if the agency places employees in different competitive levels or areas.  Nothing in the Board’s decision will allow employees to argue the furlough was unfair because management could have merely assigned the GS-11 work to the GS-12 employees paid at their straight time pay rate rather than save it just for the GS-11 employees who will get paid an overtime rate to do it.  (By the way, the GS-11/1 overtime rate is about $18. more an hour than GS-12 straight time pay.)

 

EXAMPLE 6– A manager is upset with the group’s secretary for coming in late often. Rather than deal with the adverse action burdens of a 15 day suspension, he decides to furlough her every Friday for 15 weeks.  He claims he needs the money to fund unexpected overtime and travel costs for the accountants in the group.

LIKELY ANSWER– Given that it will nearly impossible for the employee to get inside the manager’s head to identify his improper motive, her only option is to show that the alleged fiscal reason is bogus. But the Board will not look at such things as whether the travel and overtime work is needed, there were other funding sources for them, the saved money was even spent on travel and overtime, or whether others are called on to do the secretary’s work in her absence.  In short, she has a right to assert that the furlough was for personal reasons, but no way to prove that absent a stiff dose of truth serum when the manager takes the witness stand.

 

“Oh, Magoo, you have done it again.”  Has MSPB already forgotten the Federal Circuit’s requirement that you articulate a reasonable standard for reviewing agency actions? (Doe v. U.S. Dept. of Justice, 565 F3d 1375 (2009)). Here is a short excerpt from the decision to help jog memories, “This court recognizes the difficulty in drawing a line between the types of conduct that can justify investigation, discipline, and the penalty of removal and those that cannot. Indeed, at oral argument neither party was able to define a meaningful standard. This conundrum does not justify the Board’s failure to articulate a meaningful standard.”   What MSPB has done in Chandler is avoid the burden of creating a meaningful standard by deciding it had no right to create any standard at all.  That may be just as insane as IRS claiming it is more efficient for it to totally shutdown for three days, denying taxpayers any service at all, than to remain open.

About AdminUN

FEDSMILL staff has over 40 years of federal sector labor relations experience on the union as well as management side of the table and even some time as a neutral.
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