Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-15-03117/USCOURTS-ca13-15-03117-0/pdf.json

Parties Involved:
Department of the Navy
Respondent
Gregory Einboden
Petitioner

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________ 

GREGORY EINBODEN,

Petitioner

v.

DEPARTMENT OF THE NAVY,

Respondent

______________________ 

2015-3117

______________________ 

Petition for review of the Merit Systems Protection 

Board in No. DC-0752-13-0959-I-1.

______________________ 

Decided: October 1, 2015

______________________ 

 GREGORY EINBODEN, King George, VA, pro se.

 AMANDA TANTUM, Commercial Litigation Branch, 

Civil Division, United States Department of Justice, 

Washington, DC, for respondent. Also represented by

BENJAMIN C. MIZER, ROBERT E. KIRSCHMAN, JR., ALLISON 

KIDD-MILLER. 

______________________ 

Before PROST, Chief Judge, DYK, and HUGHES, Circuit 

Judges.

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DYK, Circuit Judge. 

Gregory Einboden appeals a decision of the Merit Systems Protection Board (“the Board” or “MSPB”) denying 

his petition for review and affirming the decision of the 

Department of the Navy (“Navy”) to furlough him for six 

days in July and August of 2013 pursuant to sequestration legislation. We find no reversible error in the Board’s 

decision. Accordingly, we affirm. 

BACKGROUND

This case arises as a result of sequestration legislation adopted by Congress. In August of 2011, Congress 

passed the Balanced Budget and Emergency Deficit 

Control Act of 2011 (“BBEDCA”), which called for automatic across-the-board spending cuts if certain deficit 

reduction legislation was not enacted by January 15, 

2012. Congress failed to pass the necessary deficit reduction legislation, which triggered the required automatic 

budget cuts starting March 1, 2013. Pursuant to the 

BBEDCA, the Office of Management and Budget (“OMB”)

prepared a report for the Joint Committee Sequestration 

for Fiscal Year 2013, which outlined OMB’s calculations 

as to how the automatic budget cuts were to be made. See 

2 U.S.C. § 901a. The reduction in spending authority for 

the Department of Defense amounted to approximately 

$37 billion and required the furlough of approximately 

650,000 civilian employees. 

Mr. Einboden is a civilian employee of the Navy, serving as counsel for the command group of the Naval Surface Warfare Center Dahlgren Division (“Dahlgren”). 

Dahlgren is a Navy working capital fund activity, which 

means that it functions “entirely from the fees charged for 

the services [provided] consistent with [its] statutory 

authority.” U.S. GOV’T ACCOUNTABILITY OFF., GAO-05-

734SP, A GLOSSARY OF TERMS USED IN THE FEDERAL 

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BUDGET PROCESS 101 (2005). When another government 

agency asks Dahlgren for support, that agency transfers 

money from its appropriation to the Dahlgren working 

capital fund to compensate Dahlgren for its work on 

behalf of the agency. See 10 U.S.C. § 2208 (authorizing 

the creation of working capital funds). According to the 

OMB report, sequestration is applied to the paying account and generally not to accounts like the Navy working 

capital fund to the extent that its funds were received 

from other agencies so that “the same dollars are not 

sequestered twice.” 1 OFF. OF MGMT. AND BUDGET, OMB

REPORT TO THE CONGRESS ON THE JOINT COMMITTEE 

SEQUESTRATION FOR FISCAL YEAR 2013 70 (2013).

On May 28, 2013, Mr. Einboden received a “Notice of 

Proposed Furlough” advising him that the Navy intended 

to furlough him for up to eleven days because of “the 

extraordinary and serious budgetary challenges . . . , the 

most serious of which is the sequester.” S.A. 158. On 

June 3, Mr. Einboden responded to the notice, asserting 

that Dahlgren was not subject to sequestration. The 

Navy replied on June 24, finding that “the reasons for the 

proposed furlough, as stated in the notice of the proposal, 

remain valid.” S.A. 151. The furlough period for Mr. 

Einboden, as for other civilian Navy employees, began on 

July 8, 2015, though the furlough days were not consecutive. 

Because of other cost-cutting measures and reprogramming requests approved by Congress, the Department of Defense was able to close the budget gaps more 

easily than it had initially anticipated. On August 6, the 

1 The Navy working capital fund had $24 million 

from disaster funding, which was subject to sequestration 

as a direct appropriation. 

 

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Secretary of Defense announced that the furlough of 

civilian defense employees would be reduced from 11 days 

to six days. Though money saved by the six-day furlough 

could have been transferred from the Navy working 

capital fund to other activities with appropriate notice to 

the congressional defense committees, see 10 U.S.C. § 

2208(r)(1), no funds were transferred from Dahlgren’s 

working capital fund as a result of the furloughs. 

Mr. Einboden turned to the MSPB, asserting that the 

Navy had improperly furloughed him. An administrative 

judge (“AJ”) heard a consolidated appeal from all civilian 

employees of Dahlgren. The AJ upheld the appeal from 

the decision furloughing Mr. Einboden, finding (among 

other things) that the furlough was a “reasonable management solution to the financial issues facing the agency” and that the notice of proposed furlough was not 

procedurally deficient. S.A. 32, 47.

Mr. Einboden then petitioned the full Board for review. The Board denied review and affirmed the decision 

of the AJ upholding the furlough. The majority of the 

Board noted that “although [Dahlgren] may have had 

adequate funding to avoid a furlough . . . , it was reasonable for DOD to consider its budget holistically, rather 

than isolating the situation of each individual Navy.” 

S.A. 9. Accordingly, “the agency was not required to show 

that any of the funds saved from the appellant’s furlough 

actually left [Dahlgren] to be used for other DOD purpose.” S.A. 11. One member dissented on this point, 

contending that “there must be at least some indication 

that it was reasonably foreseeable that the savings from 

the furlough would address the budgetary challenges.” 

S.A. 15. Mr. Einboden now petitions for review of the 

Board’s decision. 

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We have jurisdiction pursuant to 28 U.S.C. §

1295(a)(9). This court’s authority to review a decision of 

the Board is prescribed by statute. Specifically, we must 

affirm unless the Board’s decision is “(1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (2) obtained without procedures required 

by law, rule, or regulation having been followed; or (3) 

unsupported by substantial evidence.” 5 U.S.C. § 7703(c). 

DISCUSSION

Among the statutory protections with respect to adverse employment actions for government employees is 

section 7513 of title 5 of the United States Code, which

states that “[u]nder regulations prescribed by the Office of 

Personnel Management, an agency may take an [adverse 

action] against an employee only for such cause as will 

promote the efficiency of the service.” 5 U.S.C. § 7513(a). 

Further, an employee must be provided written notice 

that must “stat[e] the specific reasons for the proposed 

[adverse] action,” an opportunity “to answer” and provide 

“documentary evidence in support of the answer”, and a 

“written decision.” 5 U.S.C. § 7513(b). A furlough of less 

than thirty days is an adverse action. 5 C.F.R. 

§ 752.401(a)(5). The six-day furlough of Mr. Einboden 

was thus an adverse action. The Navy was required to 

establish that that the action “will promote the efficiency 

of the service.” 5 U.S.C. § 7513(a).

Mr. Einboden contends that the Navy working capital 

fund was not subject to sequestration pursuant to the 

OMB report. Because Dahlgren’s funds were not sequestered, Dahlgren never was facing a budgetary shortfall, 

and therefore the Navy cannot demonstrate that his 

furlough promoted the efficiency of the service. 

We reject Mr. Einboden’s contention that Dahlgren 

could not have reasonably anticipated a shortage of 

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funding at the time the decision to furlough was made

and that Dahlgren’s budget is unaffected by agency-wide 

cuts. While working capital funds were treated as being

exempt from sequestration,2 sequestration was applied to 

agencies that would be paying working capital fund 

entities (like Dahlgren). When agencies ordering services 

from Dahlgren had their budgets sequestered, those 

agencies could and would prioritize their spending, and 

Dahlgren could have anticipated receiving less funding 

from those agencies and thus suffering a funding shortfall. The flexibility from the furlough of working capital 

fund employees allowed the Navy to potentially “address 

other higher-priority budgetary needs,” S.A. 11-12, by 

transferring money from the working capital fund pursuant to 10 U.S.C. § 2208(r)(1). 

Mr. Einboden contends that the Navy failed to show 

that his unpaid salary was used to meet a budgetary 

shortfall and thus failed to demonstrate that the furlough 

would “promote the efficiency of the service.” We reject 

Mr. Einboden’s contention that the Navy be required to 

show actual re-programming of the funds saved by his 

furlough. It is not our role to second guess agency decisions as to how to prioritize funding when faced with a 

budget shortfall. See Berlin v. Dep’t of Labor, 772 F.3d 

890, 894–95 (Fed. Cir. 2014). The Board interpreted the 

statute’s requirement that the furlough “will promote the 

efficiency of the service” as requiring that the decision be 

a reasonable management solution to the financial restrictions placed on the agency and that the agency determine which employees to furlough in a fair and even 

2 We accept, without deciding, the position that the 

Navy working capital fund was not subject to sequestration as the OMB report suggests.

 

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manner. S.A. 32. This interpretation is correct. It is 

immaterial whether subsequent events ameliorated these 

concerns. These management decisions are inherently 

prospective. See Cross v. Dep’t of Transp., 127 F.3d 1443, 

1447 (Fed. Cir. 1997). 

We give wide berth to agency decisions as to what 

type of adverse action is necessary to “promote the efficiency of the service,” provided that the agency’s decision 

bears some nexus to the reason for the adverse action. 

See Doe v. Dep’t of Justice, 565 F.3d 1375, 1379 (Fed. Cir. 

2009) (an agency meets the “efficiency of the service” 

standard when it demonstrates the existence of a nexus 

between the reason for adverse action and the work of an 

agency); Webster v. Dep’t of Army, 911 F.2d 679, 685 (Fed. 

Cir. 1990) (when deciding what penalty for misconduct 

promotes the efficiency of the service “deference is given 

to the agency’s judgment . . . unless . . . it amounts to an 

abuse of discretion” (alterations, citations, and internal 

quotation marks omitted)). We have also accepted the 

very standard utilized by the Board here under similar 

circumstances. See Berlin, 772 F.3d at 894–95. The 

Navy’s decision has not been shown to be unreasonable. 

We also reject Mr. Einboden’s argument that the Navy implemented the furloughs unfairly because he was 

treated differently than other civilian employees. Mr. 

Einboden makes no claim that he was treated differently 

than other employees in the Navy, but instead alleges 

that he was treated differently than other civilians in the 

Air Force—contrary to the requirement that the furlough 

be implemented in a “fair and even manner.” See Chandler v. Dep’t of the Treasury, 120 M.S.P.R. 163, ¶8 (2013). 

When the DOD made the decision to perform furloughs in 

response to the budget shortfall, it mandated a furlough 

of all civilian employees except certain categories—

leaving it to the various sub-agencies to make decisions as 

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to which employees were exempt from sequestration. The 

specific decision to furlough Mr. Einboden was made by 

the Navy. The Navy was not obligated to implement the 

DOD directive in the same way as the Air Force, assuming the Navy’s decision was consistent with DOD guidance (and here there is no contention that it is not). 

Management decisions as to which individual employees 

to furlough in the face of budget shortfalls are within the 

sound discretion of agency officials, see, e.g., Berlin, 772 

F.3d at 896, and the Navy did not act arbitrarily nor 

capriciously in making a different decision than the Air 

Force in implementing the DOD guidance. 

Finally, we find Mr. Einboden’s contentions alleging 

procedural deficiencies in the notice to furlough to be 

without merit.

AFFIRMED

COSTS

No costs.

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