Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-15-03205/USCOURTS-ca13-15-03205-0/pdf.json

Parties Involved:
Lara E. Beasley
Petitioner
Department of the Army
Respondent
Phillip J. Steffen
Petitioner
Samir George Zakhem
Petitioner

Document Text:

NOTE: This disposition is nonprecedential.

United States Court of Appeals 

for the Federal Circuit ______________________ 

PHILLIP J. STEFFEN, LARA E. BEASLEY, SAMIR 

GEORGE ZAKHEM, A.K.A. SAM ZAKHEM,

Petitioners

v.

DEPARTMENT OF THE ARMY,

Respondent

______________________ 

2015-3205

______________________ 

Petition for review of the Merit Systems Protection 

Board in Nos. DC-0752-14-0432-I-1, DC-0752-13-3391-I-1, 

DC-0752-13-1004-I-1, DC-0752-13-1838-I-1. 

______________________ 

Decided: February 22, 2016 

______________________ 

PHILLIP J. STEFFEN, Washington, DC, pro se. 

LARA E. BEASLEY, Silver Spring, MD, pro se. 

SAMIR GEORGE ZAKHEM, Manassas, VA, pro se. 

JOSHUA A. MANDLEBAUM, Commercial Litigation Branch, 

Civil Division, United States Department of Justice, Washington, DC, for respondent. Also represented by BENJAMIN C.

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2 STEFFEN v. DEP’T OF THE ARMY

MIZER, ROBERT E. KIRSCHMAN, JR., ELIZABETH M.

HOSFORD. 

______________________ 

Before MOORE, O’MALLEY, and WALLACH, Circuit Judges.

PER CURIAM. 

Pro se petitioners Phillip Steffen, Lara Beasley, and 

Samir George Zakhem appeal the final decision of the 

Merit Systems Protection Board (“MSPB”), which affirmed the decision of the United States Army Corps of 

Engineers (“USACE”) to furlough each of them for six

days as a result of “sequestration” imposed by the Budget 

Control Act of 2011. For the reasons set forth below, we 

affirm. 

BACKGROUND

The Budget Control Act of 2011 required approximately $1.2 trillion in across-the-board budget cuts, 

known as “sequestration,” in the event Congress could not 

enact legislation effecting more targeted spending reductions. See Pub. L. No. 112-25, § 302, 125 Stat. 240, 256–

59 (2011) (codified as amended at 2 U.S.C. § 901a). After 

Congress failed to enact targeted reductions, the Department of Defense (“DoD”) faced a deficit of more than $30 

billion for its operations and maintenance accounts used 

to pay the salary of DoD civilian employees. As a result, 

the Secretary of Defense (“Secretary”) directed managers 

within the DoD to implement a furlough1 program designed to address the more than $30 billion budget shortfall resulting from sequestration. 

 

1 See 5 U.S.C. § 7511(a)(5) (2012) (“‘[F]urlough’ 

means the placing of an employee in a temporary status 

without duties and pay because of lack of work or funds or 

other nondisciplinary reasons.”). 

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STEFFEN v. DEP’T OF THE ARMY 3

Under the furlough program, the DoD sought to furlough most civilian employees for eleven days. However, 

nine categories of civilian employees were excepted from 

furloughs. Relevant to this appeal, “exception nine” 

provided that civilian employees whose compensation did 

not originate directly from accounts included in the DoD 

military (subfunctional category 051) or national defense 

(subfunctional category 050) budget would not be furloughed. 

USACE decided to categorize employees as eligible or 

ineligible for exception nine by reference to each employee’s Unit Identification Code (“UIC”), which appears on 

each employee’s Form SF-50 at block 44 and can be used 

to “readily determine” the source funding the employee’s 

position. Resp’t’s App. 14. Although the use of UIC’s was 

straightforward, it was also imperfect, in part due to 

complexity in how different types of employees are compensated. To increase accuracy, USACE provided a 

process by which an employee with a military UIC could 

request an exception if, despite the military UIC, 100% of 

that employee’s compensation originated from a non051/050 source. In addition, Army regulations allowed 

USACE to annually review—and if necessary, correct—

each employee’s UIC. See id. at 16 (citing Army Regulation 570-4). “Deciding officials” were designated to receive replies from individual employees proposed to be 

furloughed, and were authorized to grant exceptions, 

reduce the number of days or hours furloughed, and make 

final decisions. 

A military UIC appeared in block 44 of each petitioner’s Form SF-50. Accordingly, each petitioner was furloughed. The petitioners appealed to the MSPB which, in 

an Initial Decision, affirmed the agency’s decision. On

petition for review of the Initial Decision, a two-member 

panel could not “agree on the disposition of the petition 

for review,” and the Initial Decision therefore became the 

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4 STEFFEN v. DEP’T OF THE ARMY

final decision of the MSPB. Id. at 26–27. Petitioners 

appeal. This court has jurisdiction under 28 U.S.C. 

§ 1295(a)(9) (2012).

DISCUSSION

I. Standard of Review and Legal Standard

When reviewing appeals from the MSPB, “th[is] court 

shall review the record and hold unlawful and set aside 

any agency action, findings, or conclusions” that are “(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). We review the MSPB’s legal determinations de novo. Welshans v. U.S. Postal Serv., 550 F.3d 

1100, 1102 (Fed. Cir. 2008).

An agency may furlough an employee due to a lack of 

funds or for other non-disciplinary reasons. 5 U.S.C. 

§§ 7511(a)(5), 7512(5). However, because furloughs of 

thirty days or less constitute adverse actions, an agency’s 

decision to furlough an employee may be set aside if it 

does not “promote the efficiency of the service.” Id. 

§ 7513(a). 

Where furlough is the basis for suit, the “efficiency of 

the service” standard is satisfied if the agency can demonstrate “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.” Nat’l Fed’n of 

Fed. Emps., Local 1442 v. Dep’t of the Army, Nos. 2014-

3175, 2014-3189, 2015 WL 6143247, at *4 (Fed. Cir. Oct. 

20, 2015) (“NFFE”) (internal quotation marks and citations omitted). An agency may not use a furlough as a 

pretext “to target employees for personal reasons.” 

Chandler v. Dep’t of the Treasury, 2013 M.S.P.B. 74, ¶ 9 

(2013).

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STEFFEN v. DEP’T OF THE ARMY 5

II. The MSPB Did Not Err in Finding the Agency Furlough Program Reflected a Reasonable Management 

Solution and Was Applied in a Fair and Even Manner

Petitioners argue that using UICs “to determine furlough exemption is arbitrary and inherently unfair” 

because UICs “are in fact not representative of how 

employees are actually funded.” Pet’r’s Br. 3. In support, 

petitioners point to, among other evidence, a statement by 

USACE employee Mark Wichman that he “charge[d] 

100% of [his] labor hours to [Formerly Used Defense 

Sites] labor codes for [fiscal year 2013]” but that he “was 

not furloughed” because of his civil UIC. Id. at 2–3. 

Petitioners assert the use of UICs thus “creat[es] an 

unfair circumstance and allow[s] the agency to avoid 

treating all similarly situated employees the same way.” 

Id. at 3.

The MSPB determined that the petitioners, who were 

each assigned a military UIC, were not similarly situated 

to those assigned civil UICs, such as Mr. Wichman. See 

Resp’t’s App. 21–22 (“The [MSPB] determines case by 

case whether employees are similarly situated for purposes of furloughs. Here there is no dispute that each of the 

[petitioners] worked under a military UIC . . . and was 

thus subjected to the furlough.” (citation omitted)). To the 

extent Mr. Wichman should have been assigned a military UIC and therefore furloughed, he is not similarly 

situated to petitioners, who were assigned military UICs 

and who challenge their furloughs.2 

UICs are “assign[ed] . . . to positions to reflect the 

funding of those positions.” Id. at 34; see also id. at 35 

 

2 The MSPB noted “no [petitioner] alleged or 

showed that he or she was actually eligible for an exemption or sought one and was improperly denied.” Resp’t’s 

App. 24. Petitioners do not contest this finding on appeal. 

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6 STEFFEN v. DEP’T OF THE ARMY

(Upon annual review, UICs may “be changed to be consistent with the preponderance of the work the employee 

performs or is planned to perform for the next [fiscal 

year].”); id. at 79 (“[A] UIC . . . is supposed to be based on 

the preponderance of the work the position supports or 

how many positions exist in accordance with the funding 

split.”). Colonel Louis B. Crespo, the Deputy Director of 

Resource Management for USACE, testified that “[t]he 

assignment of military or civil UICs to USACE positions 

is important because . . . DoD appropriations are not to be 

expended for civil works projects, nor are [c]ivil [w]orks 

appropriations to be expended for [DoD] missions.” Id. at 

30. Substantial evidence therefore supports the MSPB’s 

determination that the use of UICs is “a reasonable 

management solution to the problem of distinguishing 

between employees funded by civil works projects, to 

whom exception number [nine] applied, and those funded 

by military subfunctions, to whom it did not.” Id. at 22. 

Petitioners similarly argue UICs are not an “appropriate methodology to determine furlough status” because 

they are “inaccurate.” Pet’r’s Br. 4–5. Although no transcript of hearing testimony appears in the record, Petitioners assert “the man in charge of setting the UIC codes 

for the Agency at the hearing stat[ed] that they are not 

accurate.” Id. at 5. Indeed, Respondent concedes in its 

brief that “USACE’s annual reviews may not have ensured 100-percent accuracy of UICs throughout USACE,” 

Resp’t’s Br. 11, and that the “annual review process may 

have failed to reclassify some civil-UIC positions filled by 

employees doing entirely military work,” id. at 14. 

Although UICs may not perfectly correspond to the 

type of work the employee performs, the law does not 

require perfect management solutions. Instead, the law 

requires “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 employCase: 15-3205 Document: 20-2 Page: 6 Filed: 02/22/2016
STEFFEN v. DEP’T OF THE ARMY 7

ees to furlough in a fair and even manner.” NFFE, 2015 

WL 6143247, at *4 (emphasis added). Here, substantial 

evidence suggests that UICs tended to correlate with the 

source of an employee’s funding, making UICs a legitimate basis on which to distinguish among employees for 

the purposes of furlough. In light of the facts of record,

the MSPB did not err in determining USACE’s method of 

determining furlough eligibility was a reasonable management solution that promoted the efficiency of the 

service. 

III. Substantial Evidence Supports the MSPB’s Determination that Mr. Zakhem Failed to Establish His Change 

in UIC Was Improper

One petitioner, Mr. Zakhem, bases his claim not only 

on the assertion that the furlough program as a whole 

was not a reasonable management solution—a proposition we have rejected—but on the additional basis “that 

he was singled out [for a UIC change] for speaking out 

against fraud, waste and abuse.” Pet’r’s Br. 8. Mr. Zakhem explains he headed a two-person office in which he 

served in a civil works position for seven years, while his 

“deputy” was assigned a military UIC. Id. at 6–7. According to Mr. Zakhem, his UIC was “abruptly changed

from a [c]ivil [w]orks position” to a military UIC, making 

him ineligible for exception nine, “without notification . . . 

[or] current/planned change to his duties or any proper 

rationale.” Id. At the same time, the agency “reclassified his deputy from a [m]ilitary to a [c]ivil [w]orks 

UIC (shielding him from the furlough).” Id. “The end 

result,” Mr. Zakhem concludes, “yielded NO benefit to the 

Agency because these two simultaneous UIC changes 

cancelled each other out and did not constitute a reasonable management action.” Id. 

Mr. Zakhem’s claim is therefore not based on the 

agency’s implementation of the furlough program per se, 

but on the antecedent act of alleged improper reclassificaCase: 15-3205 Document: 20-2 Page: 7 Filed: 02/22/2016
8 STEFFEN v. DEP’T OF THE ARMY

tion of his UIC.3 Based on the reclassification, Mr. Zakhem “raised [before the MSPB] the affirmative defense of 

whistleblowing.” Resp’t’s App. 24. The MSPB issued an 

order on May 7, 2014, explaining the standards for a 

whistleblower case and instructing Mr. Zakhem to provide 

specific information to address those standards. After Mr. 

Zakhem timely responded on May 30, 2014, and amended 

his response in Final Arguments dated June 6, 2014, the 

MSPB concluded he “did not establish a prima facie case” 

and therefore “did not meet his burden of proving [his 

whistleblower] claim.” Id. at 24–25. In so concluding, the 

MSPB noted “[Mr.] Zakhem alleged . . . that his UIC was 

improper, but he did not provide any evidence in support 

of his bare assertion.” Id. at 23 n.3. 

Mr. Zakhem interprets the MSPB’s statement that he 

“did not provide any evidence” to mean the MSPB “neglected to consider” his SF-50s and his June 6, 2014 Final 

Arguments, and that in neglecting to do so, it erred. 

Pet’r’s Br. 6. However, the MSPB stated that Mr. Zakhem “did not provide any evidence,” beyond “bare assertion[s],” “that his UIC was improper.” Resp’t’s App. 23 n.3 

(emphasis added). The statement does not mean the 

MSPB did not consider the evidence, but that it found Mr. 

Zakhem did not provide evidence, beyond his assertions, 

 

3 The record indicates the action initiating the reclassification of his position from a civil to a military UIC 

occurred on February 1, 2013. The President did not 

order a budget reduction until March 1, 2013, and the 

Secretary did not issue the memorandum directing DoD 

managers “to prepare to furlough” employees until May 

14, 2013. Resp’t’s App. 42. Mr. Zakhem concedes his UIC 

was changed “prior to the furlough,” Pet’r’s Br. 8, but 

speculates “it is reasonable to assume that management 

knew of its intent to exempt [c]ivil [w]orks [f]unded employees as early as Jan[uary] 2013.” Resp’t’s App. at 99. 

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STEFFEN v. DEP’T OF THE ARMY 9

that the change in UIC was improper. See Gonzales v. 

West, 218 F.3d 1378, 1381 (Fed. Cir. 2000) (“[A]bsent 

specific evidence indicating otherwise, all evidence contained in the record . . . must be presumed to have been 

reviewed by [the agency].”); Medtronic, Inc. v. Daig Corp., 

789 F.2d 903, 906 (Fed. Cir. 1986) (“We presume that a 

fact finder reviews all the evidence presented unless [the 

fact finder] explicitly expresses otherwise.”). 

Mr. Zakhem has since “withdr[awn] his whistleblower 

claim.” Pet’r’s Br. 8. He continues to assert, however, 

that he was improperly “single[d] out,” id. at 8, under the 

standard set forth in Chandler, which states that, with 

respect to furlough, “the agency is required to treat similar employees similarly and to justify any deviations with 

legitimate management reasons.” Chandler, 2013 

M.S.P.B. at ¶ 8 (citing 5 C.F.R. § 752.404(b)(2)). 

To the extent the pre-furlough change in Mr. Zakhem’s UIC can be viewed as part of the agency’s furlough 

action, the MSPB determined he had not provided any 

evidence that the change was improper. Substantial 

evidence in the record supports this conclusion. Mr. 

Zakhem’s Form SF-50 indicates the “Nature of Action” is 

“Reassignment,” Resp’t’s App. 126, but Mr. Zakhem 

points to nothing in the form itself suggesting the reassignment was improper, see Pet’r’s Br. 6–7. His June 6, 

2014 Final Arguments assert the reassignment was made 

with “specific intent to expose me to the furlough,” but 

this assertion is based on the further speculation that “it 

is reasonable to assume that management knew of its 

intent to exempt [c]ivil [w]orks funded employees” before 

the reassignment. Resp’t’s App. 99. 

To the contrary, Mr. Zakhem’s supervisor explained 

the change in UIC was implemented to “align the Program and Project Management Community of Practice for 

future restructuring.” Id. at 107; see also id. at 115. 

Under the deferential standard of review applied to 

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10 STEFFEN v. DEP’T OF THE ARMY

MSPB fact finding, we conclude the MSPB did not err in 

its determination. 

CONCLUSION

We have considered Petitioners’ remaining arguments 

and find them unpersuasive. The decision of the Merit 

Systems Protection Board is

AFFIRMED

COSTS

No costs.

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