Merit Systems Protection Board

Annual Report

FY 2004

 

 

March 2005 

Foreword

In accordance with section 1206 of Title 5 United States Code, 

the Merit Systems Protection Board (MSPB, or the Board) 

provides the annual report on the significant actions of the Board. 

This report includes summaries of the most significant Board and 

court decisions issued during the year, case processing statistics, 

summaries of the Board’s merit systems studies, summaries of 

the significant actions of the Office of Personnel Management 

(OPM) and a summary of financial results. In addition, where 

there have been significant activities in recent months, we will 

provide updated information as a service to the reader. 

Additional information about FY 2004 performance results and 

financial audit information is included in our separate 

Performance and Accountability Report (PAR). This Annual Report 

and the PAR as well as other information about the MSPB can be 

found on our website: www.mspb.gov.
Table of Contents

 

 

 

 Page 

 

Fiscal Year 2004 in Review

The Board’s role in protecting the merit systems and the increasing 

flexibility

 necessary to manage the Federal workforce in the 21st century

Board and senior staff changes

Adjudication

Merit systems studies

Legislative activity

Significant Actions of the Office of Personnel Management

Board Members and Board Organization

Significant Board Decisions issued in FY 2004 and significant opinions issued 

by the 

 United states court of appeals for the federal circuit

FY 2004 Case Processing Statistics

Summaries of Merit Systems Studies

Significant Actions of the Office of Personnel Management

Financial Summary

 
Merit Systems Protection Board

FY 2004 Annual Report

Fiscal Year 2004 in Review 

The Board’s role in protecting the merit systems and the increasing 

flexibility necessary to manage the Federal workforce in the 21st

century 

The most significant trend affecting the civil service and the merit systems 

continues to be the proliferation of agency-specific human resources 

management systems designed to provide the increased flexibility necessary 

to manage human capital in the 21st century workforce. These flexibilities 

have usually come as exceptions to or exemptions from traditional 

procedures contained in Title 5, United States Code and 5 C.F.R. (Code of 

Federal Regulations). In FY 2004, the Department of Homeland Security 

(DHS) published proposed regulations to implement the management 

authorities granted them in FY 2003. In addition, the Department of Defense 

(DoD) made considerable progress in preparing their proposed regulations 

related to the authorities granted them in the preceding year. . In addition 

to DHS and DoD, the National Aeronautics and Space Administration also 

obtained legislative flexibilities in FY 2004 for managing their workforce and 

we continue to anticipate that other agencies will do the same. When these 

systems are fully implemented, almost 1 million Federal employees -- well 

over half of the Federal civilian workforce – will be managed under 

alternative systems that could differ significantly from the traditional system 

contained in Title 5. 

 

Unlike most past flexibilities granted to Federal agencies, the DHS and DoD 

laws include provisions to alter their appeals procedures and the rights of 

their employees to file appeals with the Board. These agencies are 

concerned with timeliness and with ensuring that their disciplinary and 

appeals procedures appropriately reflect their mission environments. MSPB 

worked diligently with both DHS and DoD as required in their legislation to 

assist them in developing their new appeals procedures and related 

processes. As the fiscal year ended, DHS had yet to publish their final 

regulations and DoD’s plans were still being developed. However, it is useful 

to note that early in calendar year 2005, DHS published its final regulations 

which specify that its employees’ initial and secondary appeals will be 

handled by MSPB. A few days later, DoD published its proposed regulations 

specifying that its employees’ initial and secondary appeals will also be 
handled by MSPB. MSPB is reviewing its regulations to account for the DHS 

procedures. 

The increase in flexibilities, especially those regarding appeals, presents a 

challenge for the Board’s adjudication and studies functions. The case law 

upon which case decisions will be made could change significantly. In 

addition, the case workload could go up or down or remain fairly stable over 

time depending on DHS and DoD changes, as well as changes in personnel 

authorities at other agencies or Governmentwide. As the number and variety 

of agency-specific laws and accompanying personnel management 

procedures increases, so does the complexity of our adjudicatory work. 

 

The increase in alternative agency-based systems will also impact our merit 

systems studies function. Change rightly increases the need for oversight 

and evaluation of new procedures. In addition, the DHS and DoD personnel 

authorities, like the flexibilities granted to other agencies in recent years 

provide that the Title 5 provisions governing merit system principles and 

prohibited personnel practices may not be waived, modified or otherwise 

affected. Therefore, there will be an even greater need for studies of the 

operation of these new personnel systems to ensure they continue to 

 operate in accordance with merit principles and remain free of prohibited 

personnel practices. 

 

The challenge for the Board is to preserve its role as chief protector of the 

Federal merit systems as these new, more modern and flexible systems are 

developed and implemented. We believe that our unique identity as an 

independent agency ensures both the fact and appearance of impartiality 

necessary to protect merit. In addition, the Board is the most experienced 

organization for merit systems appeals in the Federal Government. 

Maintaining the Board’s role is therefore the most efficient and effective way 

to assure the public of the Government’s commitment to merit-based 

management. 

 

 

Board and senior staff changes 

On December 10, 2003, Neil A. G. McPhie became Acting Chairman of the 

MSPB when President Bush designated him to be Vice Chairman. (Under the 

Board's governing statute, the Vice Chairman serves as Acting Chairman 

when the position of Chairman is vacant.) Susanne Marshall was Chairman 

for the first portion of FY 2004 and became a member of the Board when Mr. 

McPhie became Chairman. Ms Marshall’s term expired on March 1, 2004, and 

she remained in her position throughout the rest of the fiscal year. (Under 

the Board’s governing statute, a member may remain on the Board for a 

period of one year past the expiration date unless a successor is confirmed, 
whichever comes first.) We would like to note that on November 21, 2004, 

Mr. McPhie was confirmed as Chairman of the U.S. Merit Systems Protection 

Board. Also, while the position of the third member of the Board remained 

vacant throughout FY 2004, Barbara Sapin was confirmed as member on 

November 21, 2004. Biographical information about Ms. Sapin is included in 

this report. 

 

The Director of the Office of Information Resources Management retired in 

FY 2004. At the end of FY 2004, an Acting Director was managing that office. 

In early FY 2005, a Director of Information Resources and Chief Information 

Officer was selected. The Acting Director of the Office of Financial and 

Administrative Management was selected as the permanent Director for that 

Office. 

 

 

Adjudication 

The Board continued to decide appeals and petitions for review (PFRs) in 

accord with the law and regulations governing such appeals. The section on 

case processing later in this report gives considerable information regarding 

the adjudication of cases filed with the Board. The section on significant 

judicial and Board decisions for FY 2004 provides brief summaries of the 

decisions made in FY 2004. Some of the more significant decisions 

addressed issues such as: the Board’s jurisdiction to review whistleblowing 

reprisal allegations of Transportation Security Agency employees; 

appropriate pay-setting in demotions; the Board’s jurisdiction over a 

constructive removal appeal (and therefore over discrimination claims and 

other issues raised in the appeal) when the employee ultimately fails to 

prove that the separation was involuntary; the definition of “position” for 

retirement purposes and the requirement for a hearing when an appeal 

presents only matters of law. 

The significant court opinions covered issues ranging from entitlement of an 

employee to a higher graded position as an accommodation under the 

Americans with Disabilities Act (ADA), when an agency can establish an 

absolute performance standard and imposing a probationary period as a 

condition of employment. The Board also surveyed a sample of agency 

representatives, gathering valuable information for ensuring we continue to 

meet the needs of these stakeholders. 

 

The Board continued its efforts to provide a full menu of dispute resolution 

options to its customers and improved its capacity for electronic case filing 

and processing. The Board decided to make the Meditation Appeals Program 

(MAP) permanent and to expand the program nationwide. Because the MAP 
is a supplement to the Board’s already successful settlement program, the 

MAP expands the Board’s ability to assist the parties in resolving disputes 

short of full adjudication on the merits. The Board’s new electronic case 

management system was fully implemented in FY 2004 making the internal 

processing and tracking of appeals more efficient. The Board also 

implemented e-Appeal phase II, thus establishing a web-based system for 

filing appeals and other legal documents and enabling electronic 

communication of official case notices and decisions. 

 

Merit systems studies 

The Board completed six studies and issued reports on merit systems and 

human capital management issues ranging from automated hiring, to 

recruitment, to a summary of the human capital issues that are on the 

minds of our stakeholders. We also conducted a customer survey of our 

merit systems studies customers and prepared a summary of findings to 

assist in better meeting the needs of our customers. The Board issued four 

editions of the Issues of Merit newsletter. Newsletter topics included 

advocacy of merit systems and human capital management reform efforts, 

practical advice for human resources professionals and specific analyses of 

ongoing studies. 

 

Legislative activity 

The legislative activity for the Board involved confirmation hearings for our 

Chairman and member and passage of our appropriations for FY 2004. 

President Bush nominated Neil A.G. McPhie as Chairman and Barbara J. 

Sapin as member of the MSPB. The Senate held a confirmation hearing to 

consider both nominations on July 19, 2004. The nominations were 

confirmed early in FY 2005. Chairman McPhie's appointment will expire on 

March 1, 2009, and Ms. Sapin’s appointment will expire on March 1, 2007. 

The FY 2004 appropriation for the Board ($32,877,000 plus up to 

$2,626,000 transferred from the Civil Service Retirement and Disability 

Fund) was enacted on January 23, 2004, in H.R. 2673, the Consolidated 

Appropriations Act, 2004, (P.L. 108-199). 

 

The most significant legislation affecting the merit systems was the National 

Defense Authorization Act for FY 2004 (P.L. 108-136). Title XI of the Act 

authorizes DoD to develop the National Security Personnel System (NSPS) 

for its civilian employees. This authority includes flexibilities in pay, 

performance management, classification, hiring, labor relations and appeals. 

DoD was granted many of the same authorities for appeals as was DHS, 

however DoD must afford their employees the right to petition the full MSPB 

Board for review of any decisions made by an internal appeals system that 
DoD may establish. MSPB established a formal working group comprised of 

managers and senior attorneys to work with DoD on their proposed 

regulations. This work continued throughout FY 2004. At the end of FY 2004 

the DoD proposed regulations were not yet published so we do not know the 

final intent of DoD regarding its appeals system, in particular the rights of its 

employees to go to MSPB for initial appeals. 

 

In addition, because of the significant impact the Homeland Security Act 

(P.L. 107-296) may have on our adjudicatory function, we will summarize 

our FY 2004 activities regarding this law. The Board continued to work with 

DHS on its regulations during the early part of FY 2004. The DHS proposed 

regulations were published in Volume 69, No. 34 of the Federal Register on 

February 20, 2004 and may be found in 5 C.F.R. Part 9701. The employee 

appeal systems established in these regulations retained MSPB appeal rights 

for DHS employees for both initial appeals and second-level review for most 

adverse actions taken by the agency against its employees. Some of the 

significant changes affecting the Board included reduced time frames for 

MSPB to process DHS appeals and changes to the Board’s authority to 

mitigate penalties. We submitted comments on the proposed regulations and 

DHS continued to finalize their regulations during the remainder of FY 2004. 

At the end of FY 2004, the final regulations had not been published, so we 

did not know what the impact of the DHS personnel system on MSPB may 

be. We will continue to update the progress of DHS, DoD and any additional 

new systems in future annual reports. 

 

 

Significant Actions of the Office of Personnel Management 

We reviewed significant policy actions of OPM ranging from DHS proposed 

regulations and creating a framework for civil service reform to SES pay and 

performance regulations and interim regulations for the NO FEAR Act. OPM 

also completed its internal reorganization to better enable it to serve 

agencies. OPM and DoD also began discussions to effect the combination of 

military and civilian background investigations including the transfer of DoD 

investigators to OPM. OPM also continued to provide valuable leadership and 

oversight regarding the human capital portions of the President’s 

Management Agenda (PMA). Finally, OPM made progress on other 

governmentwide initiatives including e-Government programs and employee 

benefits.
Board Members and Board Organization

The bipartisan Board consists of a Chairman, a Vice Chairman, and a 

Member, with no more than two of its three members from the same 

political party. Board members are appointed by the President, and 

confirmed by the Senate, and serve overlapping, non-renewable 7-year 

terms. 

 

Chairman

NEIL A.G. McPHIE was confirmed as Chairman of the U.S. Merit Systems 

Protection Board on November 21, 2004. Mr. McPhie had served as Acting 

Chairman since December 10, 2003, when President Bush designated him to 

be Vice Chairman. He was sworn in as a member of the Board on April 23, 

2003, following his recess appointment by President Bush. Prior to joining 

the Board, he was Senior Assistant Attorney General in the Office of the 

Attorney General of Virginia. Among other responsibilities, he defended 

employment discrimination claims brought under Federal law and wrongful 

discharge claims brought under state law. Previously, he was Executive 

Director of the Virginia Department of Employment Dispute Resolution 

(EDR). In that position, he directed implementation of EDR’s statewide 

grievance, mediation, training and consultation programs. He was an 

Assistant Attorney General in the Office of the Attorney General of Virginia 

from 1982 to 1988. From 1976 until he joined the Attorney General’s Office, 
he was a Trial and Appellate Attorney in the Office of the General Counsel at 

the U.S. Equal Employment Opportunity Commission. He received his J.D. 

degree from Georgetown University Law Center in 1976. He received a B.A. 

in Economics from Howard University in 1973, graduating magna cum laude. 

He is a member of Phi Beta Kappa. He is admitted to the bars of the District 

of Columbia, Virginia, New York and Iowa, the United States Supreme Court, 

the United States District Court for the District of Columbia, several of the 

United States circuit courts of appeals, and district courts in Virginia. 
 

Member 

SUSANNE T. MARSHALL was Chairman of the Board for the first 

portion of FY 2004. She was nominated by President Bush on August 6, 2002 

to serve as Chairman of the Merit Systems Protection Board. She had served 

as Chairman of the Board since February 7, 2002, when President Bush 

designated her Vice Chairman. Ms Marshall’s term expired on March 1, 2004, 

and she remained in her position throughout the rest of the fiscal year. 

(Under the Board’s governing statute, a member may remain on the Board 

for a period of one year past the expiration date unless a successor is 

confirmed, whichever comes first.) She has been a member of the Board 

since November 17, 1997, following her nomination by President Clinton and 

confirmation by the Senate. From December 1985 until her appointment to 

the Board, she served on the Republican staff of the Committee on 

Governmental Affairs of the United States Senate as both Professional Staff 

and Deputy Staff Director. While on the committee staff, she was 

responsible for a variety of legislative issues under the committee’s 

jurisdiction, including Federal workforce policies, civil service matters, and 

postal issues. From 1983 to 1985, she was Republican Staff Assistant to the 

House Government Operations Committee. She was Legislative Assistant to 

a Member from Georgia from 1981 to 1982. Ms. Marshall attended the 

University of Maryland branch campus in Munich, Germany, and the 

American University. 
Member

The third position on the Board was vacant throughout FY 2004. Ms. Barbara 

Sapin was confirmed for this position on November 21, 2004. Information 

about Ms. Sapin will be included in the FY 2005 Annual Report and is 

available now on our website. 
Board Offices and Structure

The Board is divided into several functional offices organized according to its 

statutory missions to adjudicate appeals and conduct studies and the 

functions required to support these missions. In addition to its three 

appointed Board members, the Board has approximately 225 employees 

assigned to headquarters and other locations throughout the United States. 

 

The Board Members adjudicate the cases brought to the Board. The 

Chairman, by statute, is the chief executive and administrative officer of 

the Board. Office heads report to the Chairman through the Chief of Staff. 

 

The Office of the Administrative Law Judge (ALJ) adjudicates and 

issues initial decisions in corrective and disciplinary action complaints 

(including Hatch Act complaints) brought by the Special Counsel, proposed 

agency actions against administrative law judges, MSPB employee appeals, 

and other cases assigned by the Board. (The functions of this office are 

currently performed by administrative law judges at the National Labor 

Relations Board under an interagency agreement.) 

 

The Office of Appeals Counsel (OAC) conducts legal research and 

prepares proposed decisions for the Board in cases where a party petitions 

for review of a judge’s initial decision and in most other cases decided by the 

Board. The office conducts the Board’s petition for review settlement 

program, prepares proposed decisions on interlocutory appeals of rulings 

made by judges, makes recommendations on reopening cases on the 

Board’s own motion, and provides research and policy memoranda to the 

Board on legal issues 

 

The Office of the Clerk of the Board (OCB) receives and processes cases 

filed at Board headquarters, rules on certain procedural matters, and issues 

the Board’s decisions and orders. The office serves as the Board’s public 

information center, coordinates media relations, produces public information 

publications, operates the Board’s library and on-line information services, 

and administers the Freedom of Information Act and Privacy Act programs. 

The office also certifies official records to the courts and Federal 

administrative agencies, and manages the Board’s records and directives 

systems, legal research programs, and the Government in the Sunshine Act 

program. 

 

The Office of Equal Employment Opportunity (EEO) plans, implements, 

and evaluates the Board’s equal employment opportunity programs. It 

processes complaints of alleged discrimination and furnishes advice and 
assistance on affirmative action initiatives to the Board’s managers and 

supervisors 

 

The Office of Financial and Administrative Management (FAM) 

administers the budget, accounting, travel, time and attendance, 

procurement, property management, physical security, and general services 

functions of the Board. It develops and coordinates internal management 

programs and projects, including review of internal controls agency-wide. It 

also administers the agency’s cross-servicing agreements with the USDA’s 

National Finance Center for payroll services and the Department of the 

Treasury’s Bureau of the Public Debt for accounting services. 

 

The Office of the General Counsel (OGC), as legal counsel to the Board, 

provides advice to the Board and MSPB offices on matters of law arising in 

day-to-day operations. The office represents the Board in litigation, prepares 

proposed decisions for the Board on assigned cases, and coordinates the 

Board’s legislative policy and congressional relations functions. The office 

also drafts regulations, conducts the Board’s ethics program, and plans and 

directs audits and investigations. 

 

The Office of Information Resources Management (IRM) develops, 

implements, and maintains the Board’s automated information systems to 

help the Board manage its caseload efficiently and carry out its 

administrative and research responsibilities. 

 

The Office of Policy and Evaluation (OPE) carries out the Board’s 

statutory responsibility to conduct special studies of the civil service and 

other merit systems. Reports of these studies are directed to the President 

and the Congress and are distributed to a national audience. The office 

responds to requests from Federal agencies for information, advice, and 

assistance on issues that have been the subject of Board studies. OPE also 

conducts special projects for the Board and has responsibility for preparing 

the Board’s reports required by the Government Performance and Results 

Act (GPRA). The office also provides oversight of the agency’s human 

resources management function and administers the cross-servicing 

agreement with the U.S. Department of Agriculture’s APHIS Business 

Services for human resources management services. 

 

The Office of Regional Operations (ORO) oversees the six MSPB regional 

and two field offices, which receive and process initial appeals and related 

cases. Administrative judges in the regional and field offices are responsible 

for adjudicating assigned cases and for issuing fair and well-reasoned initial 

decisions. 

 
Organization Chart
Significant Board Decisions issued in FY 2004 and 

significant opinions issued by the United States Court of 

Appeals for the Federal Circuit 

 

Significant Board decisions issued in FY 2004

The Board issued a substantial number of noteworthy decisions in fiscal year 

2004, several of which are summarized here. 

 

The Board reopened the whistleblower appeals in Schott, et al. v. 

Department of Homeland Security, 97 M.S.P.R. 35 (August 12, 2004), 

to discuss its jurisdiction over Screeners who work for the Transportation 

Security Agency (TSA). Its analysis focused on the words of the relevant 

statutes and on the legislative history of the laws. It noted that a provision 

of the Wendell H. Ford Aviation Investment and Reform Act makes it appear 

that TSA Screeners have individual right of action (IRA) appeal rights; 

however, the Aviation and Transportation Security Act (ATSA) contains very 

specific personnel authority, applicable only to Screeners, that authorizes 

the TSA to hire, discipline, and terminate Screeners “[n]otwithstanding any 

other provision of law.” Noting the fundamental principle of statutory 

construction that the specific governs over the general, the Board found that 

the ATSA does not provide for Screeners to file IRA appeals. Moreover, 

while a provision of the Homeland Security Act also refers to whistleblower 

rights, the Board concluded that it too was ineffective to give TSA Screeners 

whistleblower appeal rights. Although providing Screeners with 

“whistleblower protections” was consistent with the laws, the legislative 

history, and certain actions taken within the agency, the Board found that 

such rights would be under the NO FEAR Act, not the IRA provisions of the 

Whistleblower Protection Act. 

 

The Board also reopened the appeal in Lloyd v. Small Business 

Administration, 96 M.S.P.R. 518 (July 15, 2004), here to address 

divergent lines of cases on the question of when Board jurisdiction over a 

constructive removal appeal attaches. This case involved an alleged 

involuntary resignation. The U.S. Court of Appeals for the Federal Circuit 

ruled in its 1991 en banc decision in Cruz v. Department of the Navy that 

Board jurisdiction over a constructive removal appeal is established only 

upon proof of a constructive removal, and not merely by the assertion of a 

non-frivolous constructive removal claim. The Board found that such an en 

banc decision is the controlling law of the circuit until it is overruled by the 

court sitting en banc, and the Board must follow the law of the Federal 

Circuit. In his concurring opinion, then-Acting Chairman McPhie agreed that 
binding precedent requires this decision, but he wrote separately “to explain 

why this approach is ripe for revision.” 

 

In Brooks v. Department of Homeland Security, 95 M.S.P.R. 464 

(February 12, 2004), another TSA Screener case, the Board noted that 

section 111(d) of the ATSA provides that, “[n]otwithstanding any other 

provision of law, the Under Secretary of Transportation for Security may 

employ, appoint, discipline, terminate, and fix the compensation, terms, and 

conditions of employment of Federal service for such a number of individuals 

as the Under Secretary determines to be necessary to carry out the 

screening functions of the Under Secretary ....” The Board concluded that, 

although other employees of the TSA generally may file appeals, a Screener 

employed by the TSA may be disciplined notwithstanding the requirements 

of 5 U.S.C. chapter 75 and so the Board lacks adverse action jurisdiction 

over TSA Screener appeals. 

 

In another jurisdiction case, after setting out the definition of “employee” in 

the excepted service under 5 U.S.C. § 7511(a)(1)(B), the Board found in 

Bell v. Department of Homeland Security, 95 M.S.P.R. 580 (March 4, 

2004), that the appellant’s service in the Coast Guard was military service 

and that military service cannot be added to civilian service to give the 

appellant the year of current continuous service necessary to have standing 

to appeal an adverse action under 5 U.S.C. chapter 75. Accordingly, the 

appeal was dismissed for lack of jurisdiction. 

 

In Chen v. U.S. Postal Service, 97 M.S.P.R. 527 (September 30, 2004), 

the Board held that to establish Board jurisdiction over a restoration claim as 

a partially recovered employee, the appellant must allege facts that would 

show, if proven, that: (1) She was absent from her position due to a 

compensable injury; (2) she recovered sufficiently to return to duty on a 

part-time basis, or to return to work in a position with less demanding 

physical requirements than those previously required of her; (3) the agency 

denied her request for restoration; and (4) the denial was “arbitrary and 

capricious.” To the extent that earlier decisions were inconsistent with this 

test, the Board overruled them. It also stated that, where the Department of 

Labor’s Office of Workers Compensation Programs (OWCP) issues a 

retroactive decision, as happened in this case, the Board has given 

retroactive effect to that decision when considering restoration rights. Thus, 

the fact that the agency denied the appellant’s requests for restoration prior 

to the point at which OWCP rendered its decision in favor of the appellant 

does not necessarily preclude the Board from exercising jurisdiction over her 

restoration appeal. 

 
The Board, in Fischer v. Department of the Treasury, 97 M.S.P.R. 546 

(September 30, 2004), took a new look at the pay-setting rule that it has 

applied when it mitigates a removal action to a demotion. Past practice 

required the imposition of a demotion with the least loss of pay, including 

consideration of the step level at which pay was set, unless the agency’s 

own pay-setting regulations required otherwise. The Board noted that the 

long-standing ultimate criterion for evaluating the penalty is whether the 

penalty exceeds the tolerable limits of reasonableness. The Board reasoned 

that it has no business imposing a one-size-fits-all rule that, unless the 

agency’s pay-setting regulations require a different result, a Board-ordered 

demotion must always result in the smallest-possible reduction in pay. The 

Board held instead that an agency has the discretion to choose the step of 

the grade to which an employee is demoted pursuant to a Board order. In 

so holding, the Board vacated its earlier decisions in this appeal and other 

cases to the contrary. 

 

In Ivery v. Department of Transportation, 96 M.S.P.R. 119 (May 10, 

2004), the Board found that, under the Department of Transportation’s 

regulations concerning drug testing, a “split-specimen” procedure must be 

used both when the first portion of the specimen tests positive for drugs and 

also when adulteration is suspected. This procedure allows the employee to 

have the second portion of the specimen tested independently. The agency 

in this case did not employ the requisite procedure before it removed the 

appellant for adulteration of a specimen he was required to give during a 

random drug test. The Board concluded that this was harmful error requiring 

reversal of the removal. Although the appellant failed to prove that the 

result of testing the second specimen would have differed from that of the 

first, an agency’s procedural error may constitute harmful error when it 

effectively destroys, or precludes an appellant from acquiring, the only 

available evidence by which he can show that the agency likely would have 

reached a different conclusion in the absence of its error. 

 

In Adams, et al. v. Department of Defense, 96 M.S.P.R. 325 (June 16, 

2004), the agency had informed the appellants that, as a result of budget 

reductions at the Commissary where they work, their full-time positions 

were being abolished and they would be placed in part-time positions at the 

same grade and rate of pay. Each accepted the agency’s offer and appealed 

that action as a reduction in force (RIF). The Board reversed the 

administrative judge’s finding of jurisdiction over the actions as RIFs. It 

found that, to be entitled to appeal a RIF under the OPM’s regulations, the 

appellants must show that they were subject to a separation or a demotion 

by RIF action or to a furlough for more than 30 days Since they remained 

employed at the same grade and rate of pay, the Board noted, they were 

neither separated nor demoted. The Board found further that, since they 
were permanently -- not temporarily -- assigned to part-time positions, they 

were not furloughed for more than 30 days either. Moreover, the Board 

concluded that the appellants could not appeal the actions under 5 U.S.C. 

chapter 75 because an agency's RIF-based actions are excluded from the 

Board's adverse action jurisdiction. 

 

With regard to the affirmative defense of disability discrimination, the Board 

noted in Burgess v. Department of the Interior, 95 M.S.P.R. 134 

(October 24, 2003), that the 2002 Supreme Court decision in Toyota Motor 

Mfg., Kentucky, Inc. v. Williams addresses solely the proper standard for 

resolving whether an individual is substantially limited in the “major life 

activity” of performing manual tasks. The Board found that the Supreme 

Court decision nonetheless provides appropriate guidance as to other 

affected life activities. Similarly, the Court’s determination that the statutory 

terms must be strictly interpreted to create “a demanding standard for 

qualifying as disabled” also warrants application to claims based on other 

major life activities. The Board concluded that the appellant failed to show 

he was “disabled” under the law because the evidence indicated that he had 

impairments, but not how they substantially limited a major life activity. 

 

Regarding entitlement to disability retirement, the Board ruled in Ancheta 

v. Office of Personnel Management, 95 M.S.P.R. 343 (December 22, 

2003), that the Postal Service’s obligation to accommodate disabled 

employees supports a “similar proposition” to the court’s holding in Bracey v. 

Office of Personnel Management, 236 F.3d 1356 (Fed. Cir. 2001), “that 

individual tasks that do not constitute the core functions of an existing 

position, identified and combined to develop a modified assignment 

consistent with an injured employee’s medical restriction, do not constitute a 

‘position’ as that term is used within the Postal Service.” Thus, an 

employee’s declination of an offer to perform such tasks does not disqualify 

him from eligibility for disability retirement. The Board held further that, 

where the OPM considered the appellant’s entitlement to disability 

retirement from the wrong position, the Board may examine the record de 

novo and determine his entitlement as to the correct job without remanding 

to OPM. 

 

In King, et al. v. Office of Personnel Management, 97 M.S.P.R. 307 

(July 20, 2004), the Board considered OPM’s regulatory requirement that a 

deposit for post-1956 military service, which entitles the retiree to avoid a 

reduction in his annuity upon reaching age 62 and qualifying for social 

security benefits, must be made before retirement begins. It found that the 

regulatory exception -- when the failure to make such a deposit was "due to 

administrative error” -- should not be given an expansive scope. The Board 

held that it will no longer follow cases that allowed a late deposit simply 
because of a retirement processing irregularity, unaccompanied by a 

showing that the irregularity caused the failure to make a timely deposit. 

There is no administrative error when the employee completes the 1990 

version of OPM Form 2801 and elects not to make such a deposit, even 

where the retirement application package does not include a completed SF1515. 

 

The Board refined the law governing constructive suspensions in Alston v. 

Social Security Administration, 95 M.S.P.R. 252 (December 4, 2003). 

Where the appellant’s absence began with her not reporting for duty 

because of her claimed inability to do so, and it was extended by her failure 

to timely produce updated proof of her medical status, she was not 

constructively suspended. The further extension of the absence after the 

appellant’s request for accommodation also was not a suspension where the 

evidence she eventually provided showed that she could not return and the 

accommodation suggested by her doctor was not reasonable given the 

nature of her job. 

 

Finally, in Jezouit v. Office of Personnel Management, 97 M.S.P.R. 48 

(August 12, 2004), the Board clarified that an administrative judge is not 

required to hold an evidentiary hearing where an appeal presents issues of 

law only. In that case, the administrative judge changed what had been set 

as a status conference into a hearing, without advance notice to the parties. 

The Board found on review that any abuse of discretion on the 

administrative judge’s part was not prejudicial because, under the 

circumstances of this case, the appellant did not have a right to an 

evidentiary hearing in the first place. The case involved only an issue of law, 

as to which OPM was correct, so that any conceivable evidence the appellant 

was prevented from presenting below could not have been relevant and 

could not have affected the outcome. 

 

 

Significant Opinions issued by the United States Court of Appeals for 

the Federal Circuit

As a service to our customers, we also include significant court decisions 

regarding Federal cases. 

Kindall v. Office of Personnel Management, 347 F.3d 930 (Fed. Cir. Oct. 

21, 2003) 

An annuitant whose survivor annuity has been reinstated due to the 

dissolution of her remarriage is not entitled to intervening cost-of-living 

adjustments for the period from the termination of the annuity to the 

reinstatement. 
 

Simpson v. Office of Personnel Management, 347 F.3d 1361 (Fed. Cir. 

Oct. 30, 2003) 

OPM must notify an annuitant that, even if he had previously elected a 

survivor annuity for his spouse when married, he must make a new election 

after his divorce if he wishes for the spouse to remain entitled to a survivor 

annuity. 

 

Licausi v. Office of Personnel Management, 350 F.3d 1359 (Fed. Cir. 

Dec. 2, 2003) 

In order to continue to be eligible for a disability retirement annuity, a 

retiree must show that the medical condition is disabling, i.e., that it 

prevents her from rendering useful and efficient service in the position from 

which she retired. It is not enough to show that she continues to suffer from 

the medical condition that led to the initial finding of eligibility for disability 

retirement. Because the Board is obligated to make an independent 

determination as to the applicant’s eligibility for benefits, its decisions fall 

outside the Chenery rule that a reviewing court, in dealing with a 

determination or judgment which an administrative agency alone is 

authorized to make, must judge the propriety of such action solely on the 

grounds invoked by the agency. 

 

McLaughlin v. Office of Personnel Management, 353 F.3d 1363 (Fed. 

Cir. Jan. 6, 2004) 

The Federal Circuit will apply a substantial evidence standard when 

reviewing a Board determination that a separated employee is not entitled to 

a waiver of the statutory deadline for filing an application for disability 

retirement because she has not shown that she was mentally incompetent 

during the filing period. 

 

 

James v. Dale, 355 F.3d 1375 (Fed. Cir. Jan. 26, 2004) 

The objective standard for determining whether an agency has proved the 

charge of “associating with a known or suspected law violator” is whether a 

disinterested observer with knowledge of the essential facts known to or 

readily ascertainable by the employee would reasonably conclude that the 

associate of the employee was a known or suspected law violator. 

 

Ainslie v. United States, 355 F.3d 1371 (Fed. Cir. Jan. 23, 2004) 

An individual is not entitled to back pay for the period between the date his 

revised service appointment became effective pursuant to district court 

order and the date his appointment actually began because he did not meet 

the statutory definition of an “employee” during that period. 

 
Office of the Architect of the Capitol v. Office of Compliance, 361 F.3d 

633 (Fed. Cir. March 11, 2004) 

Under the Americans with Disabilities Act, an employee may be entitled to a 

higher-graded position as an accommodation if the employing agency has a 

routine and fluid practice of temporarily placing employees in disparate pay 

grade positions. 

 

Clark v. Merit Systems Protection Board, 361 F.3d 647 (Fed. Cir. March 

17, 2004) 

Non-appropriated fund employees are not entitled to file individual right of 

action appeals with the Board. 

 

Poett v. Merit Systems Protection Board, 360 F.3d 1377 (Fed. Cir. March 

18, 2004) 

A party has a reasonable amount of time to file a petition for enforcement 

once he has actual knowledge (not merely a suspicion) of a specific act that 

constitutes a breach of a settlement agreement. 

 

Guillebeau v. Department of the Navy, 362 F.3d 1329 (Fed. Cir. March 

24, 2004) 

An employing agency may set absolute performance standards so long as 

those standards are applied in a reasonable manner. 

 

James v. Tablerion, 363 F.3d 1352 (Fed. Cir. April 13, 2004) 

An Internal Revenue Service employee violates the statutory prohibition 

against threatening to audit a taxpayer for the purpose of extracting 

personal gain or benefit when the employee’s words would be understood by 

a reasonable person to be a threat to audit unless something is done for the 

employee. 

 

Kiszka v. Office of Personnel Management, 372 F.3d 1301 (Fed. Cir. 

June 22, 2004) 

To show that active duty service interrupted creditable civilian service, a 

National Guard technician must show that he requested a leave of absence 

from his civilian position before entering on active duty. 

 

James v. Office of Personnel Management, 372 F.3d 1365 (Fed. Cir. 

June 23, 2004) 

A retiree’s post-retirement election of a survivor annuity for his spouse 

becomes irrevocable once the applicable form is received by OPM. 

 

Crawford v. Department of Transportation, 373 F.3d 1155 (Fed. Cir. 

June 29, 2004)
Military service as a cadet in the U.S. Coast Guard Academy is not creditable 

for the purpose of calculating accrued leave time in the civil service. 

Killeen v. Office of Personnel Management, 382 F.3d 1316 (Fed. Cir. 

Aug. 31, 2004) 

Air traffic controllers’ annuities, when based in part on part-time service, are 

calculated using the deemed full-time rate of pay, and the resulting annuity 

benefits are prorated to account for the part-time service. 

 

Shelton v. Department of the Air Force, 382 F.3d 1335 (Fed. Cir. Sept. 

1, 2004) 

Under certain circumstances, an agency may impose a probationary period 

as a condition of employment. 

 

Hathaway v. Department of Justice, 384 F.3d 1342 (Fed. Cir. Sept. 16, 

2004) 

The charge of “conduct prejudicial to the DEA” could not be upheld because 

it was premised on allegedly inconsistent statements made by Mr. Hathaway 

about his past illegal drug use that were not, in fact, inconsistent. 

 

 
FY 2004 Case Processing Statistics

SUMMARY OF CASES DECIDED BY MSPB IN FY 2004

Cases Decided in MSPB Regional/Field Offices RO/FOs:

 Appeals 6,266

 Addendum Cases1 498

 Stay Requests2 95 

TOTAL Cases Decided in RO/FOs 6,859

Cases Decided by Administrative Law Judges (ALJs) – 

Original Jurisdiction3 15

Cases Decided by the Board:

 Appellate Jurisdiction:

 Petitions for Review (PFRs) – Appeals 1,306

 Petitions for Review (PFRs) – Addendum Cases 114

 Reviews of Stay Request Rulings 0

 Requests for Stay of Board Order 1

 Reopenings4 3

 Court Remands 9

 Compliance Referrals 34

 EEOC Non-concurrence Cases 0

 Arbitration Cases 0 

 Subtotal – Appellate Jurisdiction 1,467

 Original Jurisdiction5 9

TOTAL Cases Decided by the Board6 1,476

GRAND TOTAL Cases Decided (Board, ALJs, RO/FOs) 8,350

See next page for footnotes.

FOOTNOTES TO TABLE

1 Includes 101 requests for attorney fees, 6 requests for compensatory 

damages (discrimination cases only), 3 requests for consequential 

damages (whistleblower cases only), 272 petitions for enforcement, 96 

Board remand cases, and 20 court remand cases. 

2 Includes 54 stay requests in whistleblower cases and 41 in nonwhistleblower cases. 

3 Initial Decisions issued by ALJ. Case type breakdown: 2 Office of Special 

Counsel (OSC) corrective actions, 4 Hatch Act cases, 1 petition for 
enforcement in a Hatch Act case, 1 OSC disciplinary action (non-Hatch 

Act), 3 actions against ALJs, 1 adverse action against a Board employee, 

and 3 informal hearings in a proposed SES removal (in SES removal 

cases, a report is issued, but there is no decision by an ALJ or the Board). 

4 All of these cases were reopened by the Board on its own motion. There 

were no cases where OPM requested reconsideration. 

5 Final Board decisions. Case type breakdown: 2 OSC initial stay requests, 

2 OSC requests for extension of a stay, 3 PFRs in an action against an 

ALJ, and 2 requests for regulation review. 

6 In addition to the 1,476 cases closed by the Board with a final decision, 

there was 1 interlocutory appeal decided by the Board in FY 2004. 

Interlocutory appeals typically raise difficult issues or issues not 

previously addressed by the Board. 
REGIONAL CASE PROCESSING – FY 2004
DISPOSITION OF INITIAL APPEALS DECIDED IN FY 2004 BY TYPE OF CASE

Type of Case Decided Dismissed Not 

Dismissed Settled Adjudicated

Adverse Action by

 Agency 2969 1379 46% 1590 54% 1021 64% 569 36%

Termination of

 Probationers 367 332 90% 35 10% 27 77% 8 23%

Reduction in Force 135 81 60% 54 40% 17 31% 37 69%

Performance 158 49 31% 109 69% 79 72% 30 28%

Acceptable Level of

 Competence 

(WIGI)

32 19 59% 13 41% 10 77% 3 23%

Suitability 235 78 33% 157 67% 118 75% 39 25%

CSRS Retirement:

 Legal 565 217 38% 348 62% 21 6% 327 94%

CSRS Retirement:

 Disability 125 62 50% 63 50% 0 0% 63 100%

CSRS Retirement:

 Overpayment 138 47 34% 91 66% 63 69% 28 31%

FERS Retirement 551 210 38% 341 62% 118 35% 223 65%

FERCCA 37 23 62% 14 38% 0 0 14 100%

Individual Right of

 Action 228 175 77% 53 23% 29 55% 24 45%

Other 726 614 85% 112 15% 66 59% 46 41%

Total 6266 3286 52% 2980 48% 1569 53% 1411 47%
Dismissed and Not Dismissed columns are percentages of Decided

column. 

Settled and Adjudicated columns are percentages of Not Dismissed

column. 
REGIONAL CASE PROCESSING – FY 2004

TYPES OF INITIAL APPEALS DECIDED IN FY 2004

Total Number of Appeals: 6,266

(Numbers in parentheses are numbers of appeals. Percentages do not total 100 because of rounding)
REGIONAL CASE PROCESSING – FY 2004

DISPOSITION OF INITIAL APPEALS IN FY 2004 THAT WERE NOT DISMISSED

Total Number of Appeals that were Not Dismissed: 2,980

DISPOSITION OF INITIAL APPEALS ADJUDICATED ON THE MERITS
(i.e., Not Dismissed or Settled) IN FY 2004

Based on 1,411 appeals adjudicated on the merits

REGIONAL CASE PROCESSING – FY 2004

INITIAL APPEALS DECIDED IN FY 2004 BY AGENCY

Decided Dismissed1

Not

Dismissed1 Settled2 Adjudicated2

OPM* 1380 530 38.4% 850 61.6% 218 25.6% 632 74.4%

US Postal Service 1144 665 58.1% 479 41.9% 316 66.0% 163 34.0%

Homeland Security 545 344 63.1% 201 36.9% 142 70.6% 59 29.4%

Veterans Affairs 526 299 56.8% 227 43.2% 160 70.5% 67 29.5%

Army 358 205 57.3% 153 42.7% 100 65.4% 53 34.6%

Navy 357 190 53.2% 167 46.8% 96 57.5% 71 42.5%

Air Force 271 149 55.0% 122 45.0% 56 45.9% 66 54.1%

Treasury 253 128 50.6% 125 49.4% 80 64.0% 45 36.0%

Justice 246 115 46.7% 131 53.3% 90 68.7% 41 31.3%

Defense 230 118 51.3% 112 48.7% 56 50.0% 56 50.0%

Agriculture 180 100 55.6% 80 44.4% 66 82.5% 14 17.5%

Interior 177 87 49.2% 90 50.8% 45 50.0% 45 50.0%

Transportation 92 54 58.7% 38 41.3% 22 57.9% 16 42.1%

Health & Human 

Services

71 33 46.5% 38 53.5% 30 78.9% 8 21.1%

Social Security Adm. 60 32 53.3% 28 46.7% 12 42.9% 16 57.1%

Labor 53 33 62.3% 20 37.7% 14 70.0% 6 30.0%

Commerce 40 19 47.5% 21 52.5% 13 61.9% 8 38.1%

General Service Adm. 40 27 67.5% 13 32.5% 9 69.2% 4 30.8%

Housing & Urban Dev. 31 25 80.6% 6 19.4% 2 33.3% 4 66.7%

Energy 22 9 40.9% 13 59.1% 8 61.5% 5 38.5%

SBA 20 12 60.0% 8 40.0% 2 25.0% 6 75.0%

EEOC 17 11 64.7% 6 35.3% 3 50.0% 3 50.0%

NASA 15 12 80.0% 3 20.0% 2 66.7% 1 33.3%

State 14 10 71.4% 4 28.6% 3 75.0% 1 25.0%

FDIC 13 8 61.5% 5 38.5% 1 20.0% 4 80.0%

Smithsonian Institution 12 7 58.3% 5 41.7% 4 80.0% 1 20.0%

EPA 11 5 45.5% 6 54.5% 2 33.3% 4 66.7%

Adm. Office of US 

Courts

8 8 100.0% 0 0.0% 0 0.0% 0 0.0%

Armed Forces 

Retirement Home

8 5 62.5% 3 37.5% 2 66.7% 1 33.3%

TVA 8 7 87.5% 1 12.5% 0 0.0% 1 100.0%

NARA 7 3 42.9% 4 57.1% 3 75.0% 1 25.0%

Agency for Int’l Dev. 6 2 33.3% 4 66.7% 1 25.0% 3 75.0%

GPO 6 5 83.3% 1 16.7% 1 100.0% 0 0.0%

FEMA 5 3 60.0% 2 40.0% 1 50.0% 1 50.0%

Education 3 2 66.7% 1 33.3% 0 0.0% 1 100.0%

Fed Mediation & 3 3 100.0% 0 0.0% 0 0.0% 0 0.0%
Conciliation Service

Int’l Boundary & Water 

Commission

3 2 66.7% 1 33.3% 1 100.0% 0 0.0%

REGIONAL CASE PROCESSING – FY 2004

INITIAL APPEALS DECIDED IN FY 2004 BY AGENCY (continued)

Decided Dismissed1

Not

Dismissed1 Settled2 Adjudicated2

NLRB 3 2 66.7% 1 33.3% 0 0.0% 1 100.0%

Soldier’s & Airman’s 

Home

3 3 100.0% 0 0.0% 0 0.0% 0 0.0%

African Dev. 

Foundation

2 1 50.0% 1 50.0% 1 100.0% 0 0.0%

Fed Retirement Thrift 

Investment Board

2 1 50.0% 1 50.0% 1 100.0% 0 0.0%

Gov of the District of 

Columbia

2 2 100.0% 0 0.0% 0 0.0% 0 0.0%

Other 2 2 100.0% 0 0.0% 0 0.0% 0 0.0%

Securities & Exchange 

Com 

2 1 50.0% 1 50.0% 1 100.0% 0 0.0%

American Battle 

Monuments Com

1 1 100.0% 0 0.0% 0 0.0% 0 0.0%

CIA 1 0 0.0% 1 100.0% 0 0.0% 1 100.0%

Commodity Futures 

Trading Com

1 1 100.0% 0 0.0% 0 0.0% 0 0.0%

Congress 1 0 0.0% 1 100.0% 0 0.0% 1 100.0%

Consumer Product 

Safety Com

1 1 100.0% 0 0.0% 0 0.0% 0 0.0%

Court Services & 

Offender Supervision

1 1 100.0% 0 0.0% 0 0.0% 0 0.0%

FCC 1 0 0.0% 1 100.0% 1 100.0% 0 0.0%

Library of Congress 1 1 100.0% 0 0.0% 0 0.0% 0 0.0%

MSPB 1 0 0.0% 1 100.0% 1 100.0% 0 0.0%

Nat’l Capital Planning 

Com

1 0 0.0% 1 100.0% 1 100.0% 0 0.0%

Nat’l Credit Union Adm. 1 1 100.0% 0 0.0% 0 0.0% 0 0.0%

Nat’l Transportation 

Safety Board

1 1 100.0% 0 0.0% 0 0.0% 0 0.0%

Nuclear Regulatory 

Com

1 0 0.0% 1 100.0% 1 100.0% 0 0.0%

Office of Administration 1 0 0.0% 1 100.0% 1 100.0% 0 0.0%

Railroad Retirement 

Board

1 0 0.0% 1 100.0% 0 0.0% 1 100.0%

TOTAL 6266 3286 52.4% 2980 47.6% 1569 52.7% 1411 47.3%
* Most appeals in which OPM is the agency are retirement cases involving decisions made 

by OPM as the administrator of the Civil Service Retirement System and the Federal 

Employees Retirement System.

1

 Percentages in columns "Dismissed" and "Not Dismissed" are of "Decided."

2

 Percentages in columns "Settled" and "Adjudicated" are of "Not Dismissed."

REGIONAL CASE PROCESSING – FY 2004

DISPOSTIONS OF INITIAL APPEALS ADJUDICATED IN FY 2004 BY AGENCY

Adjudicated Affirmed Reversed

Mitigated

Modified Other

OPM 632 461 72.9% 150 23.7% 4 0.6% 17 2.7%

US Postal Service 163 144 88.3% 11 6.7% 8 4.9% 0 0.0%

Homeland Security 59 51 86.4% 4 6.8% 0 0.0% 4 6.8%

Veterans Affairs 67 59 88.1% 6 9.0% 2 3.0% 0 0.0%

Army 53 48 90.6% 2 3.8% 3 5.7% 0 0.0%

Navy 71 60 84.5% 8 11.3% 3 4.2% 0 0.0%

Air Force 66 60 90.9% 3 4.5% 3 4.5% 0 0.0%

Treasury 45 39 86.7% 5 11.1% 1 2.2% 0 0.0%

Justice 41 32 78.0% 6 14.6% 2 4.9% 1 2.4%

Defense 56 50 89.3% 6 10.7% 0 0.0% 0 0.0%

Agriculture 14 12 85.7% 1 7.1% 1 7.1% 0 0.0%

Interior 45 36 80.0% 8 17.8% 1 2.2% 0 0.0%

Transportation 16 15 93.8% 1 6.3% 0 0.0% 0 0.0%

Health & Human 

Service

8 5 62.5% 2 25.0% 1 12.5% 0 0.0%

Social Security Adm. 16 14 87.5% 2 12.5% 0 0.0% 0 0.0%

Labor 6 5 83.3% 1 16.7% 0 0.0% 0 0.0%

Commerce 8 8 100.0% 0 0.0% 0 0.0% 0 0.0%

General Service Adm. 4 4 100.0% 0 0.0% 0 0.0% 0 0.0%

Housing & Urban Dev. 4 4 100.0% 0 0.0% 0 0.0% 0 0.0%

Energy 5 4 80.0% 0 0.0% 1 20.0% 0 0.0%

SBA 6 6 100.0% 0 0.0% 0 0.0% 0 0.0%

EEOC 3 3 100.0% 0 0.0% 0 0.0% 0 0.0%

NASA 1 1 100.0% 0 0.0% 0 0.0% 0 0.0%

State 1 1 100.0% 0 0.0% 0 0.0% 0 0.0%

FDIC 4 4 100.0% 0 0.0% 0 0.0% 0 0.0%

Smithsonian Institution 1 1 100.0% 0 0.0% 0 0.0% 0 0.0%

EPA 4 3 75.0% 0 0.0% 1 25.0% 0 0.0%

Armed Forces 

Retirement Home

1 1 100.0% 0 0.0% 0 0.0% 0 0.0%

TVA 1 1 100.0% 0 0.0% 0 0.0% 0 0.0%

NARA 1 1 100.0% 0 0.0% 0 0.0% 0 0.0%

Agency International 

Dev

3 2 66.7% 1 33.3% 0 0.0% 0 0.0%

FEMA 1 1 100.0% 0 0.0% 0 0.0% 0 0.0%

Education 1 1 100.0% 0 0.0% 0 0.0% 0 0.0%

NLRB 1 0 0.0% 1 100.0% 0 0.0% 0 0.0%
CIA 1 1 100.0% 0 0.0% 0 0.0% 0 0.0%

Congress 1 1 100.0% 0 0.0% 0 0.0% 0 0.0%

Railroad Retirement 

Board

1 0 0.0% 1 100.0% 0 0.0% 0 0.0%

TOTAL 1411 1139 80.7% 219 15.5% 31 2.2% 22 1.6%

Note: ADJUDICATED means adjudicated on the merits, i.e., not dismissed or settled. 

Percentages may not total 100 because of rounding.

HEADQUARTERS CASE PROCESSING – FY 2004

DISPOSITION OF PETITIONS FOR REVIEW DECIDED IN FY 2004 BY TYPE OF CASE

Type of Case Decided Dismissed Settled Denied

Denied 

But

Reopened

Granted

Adverse Action by

 Agency

550 54 9.8% 6 1.1% 444 80.7% 11 2.0% 35 6.4%

Termination of

 Probationers

55 6 10.9% 3 5.5% 44 80.0% 1 1.8% 1 1.8%

Reduction in 

Force

79 3 3.8% 0 0.0% 58 73.4% 17 21.5% 1 1.3%

Performance 25 2 8.0% 1 4.0% 18 72.0% 2 8.0% 2 8.0%

Acceptable Level 

of

 Competence 

(WIGI)

4 0 0.0% 0 0.0% 4 100.0% 0 0.0% 0 0.0%

Suitability 17 1 5.9% 0 0.0% 15 88.2% 1 5.9% 0 0.0%

CSRS Retirement:

 Legal

125 9 7.2% 9 7.2% 96 76.8% 6 4.8% 5 4.0%

CSRS Retirement:

 Disability

35 1 2.9% 0 0.0% 25 71.4% 4 11.4% 5 14.3%

CSRS Retirement:

 Overpayment

20 0 0.0% 1 5.0% 13 65.0% 1 5.0% 5 25.0%

FERS Retirement 96 9 9.4% 4 4.2% 71 74.0% 2 2.1% 10 10.4%

FERCCA 11 1 9.1% 0 0.0% 9 81.8% 1 9.1% 0 0.0%

Individual Right 

of

 Action

97 8 8.3% 0 0.0% 71 73.2% 9 9.3% 9 9.3%

Other 192 9 4.7% 2 1.0% 168 87.5% 8 4.2% 5 2.6%

Total 1306 103 7.9% 26 2.0% 1036 79.3% 63 4.8% 78 6.0%
DISPOSITION OF PETITIONS FOR REVIEW DECIDED IN FY 2004

Total Number of Petitions for Review: 1,306

HEADQUARTERS CASE PROCESSING – FY 2004

DISPOSITION OF PETITIONS FOR REVIEW OF GRANTED IN FY 2004

Based on 78 Petitions for Review that were Granted
DISPOSITION OF PETITIONS FOR REVIEW OF INITIAL DECISIONS 

ON APPEALS DENIED BUT REOPENED IN FY 2004

Initial Decision Reversed (26)

Based on 63 Petitions for Review that were Denied But Reopened

HEADQUARTERS CASE PROCESSING – FY 2004

PETITIONS FOR REVIEW DECIDED IN FY 2004 BY AGENCY

Decided Dismissed Settled Denied

Denied But

Reopened Granted

OPM* 288 22 7.6% 14 4.9% 214 74.3% 14 4.9% 24 8.3%

US Postal 

Service

254 24 9.5% 3 1.2% 209 82.3% 6 2.4% 12 4.7%

Veterans Affairs 78 8 10.3% 1 1.3% 60 76.9% 5 6.4% 4 5.1%

Army 76 4 5.3% 2 2.6% 66 86.8% 1 1.3% 3 4.0%

Navy 75 7 9.3% 0 0.0% 65 86.7% 1 1.3% 2 2.7%

Homeland 

Security

74 3 4.1% 0 0.0% 64 86.5% 6 8.1% 1 1.4%

Defense 71 4 5.6% 0 0.0% 46 64.8% 19 26.8% 2 2.8%

Treasury 65 5 7.7% 1 1.5% 53 81.5% 1 1.5% 5 7.7%

Justice 56 4 7.1% 0 0.0% 47 83.9% 0 0.0% 5 8.9%

Air Force 51 4 7.8% 1 2.0% 39 76.5% 2 3.9% 5 9.8%

Agriculture 37 3 8.1% 0 0.0% 30 81.1% 1 2.7% 3 8.1%

Transportation 31 0 0.0% 0 0.0% 28 90.3% 0 0.0% 3 9.7%

Interior 28 0 0.0% 0 0.0% 22 78.6% 4 14.3% 2 7.1%

General Service 16 0 0.0% 1 6.3% 13 81.3% 1 6.3% 1 6.3%
Adm.

Social Security 

Adm.

15 0 0.0% 1 6.7% 13 86.7% 0 0.0% 1 6.7%

Labor 11 4 36.4% 0 0.0% 7 63.6% 0 0.0% 0 0.0%

Commerce 9 1 11.1% 1 11.1% 7 77.8% 0 0.0% 0 0.0%

Health & Human 

Services

9 1 11.1% 0 0.0% 8 88.9% 0 0.0% 0 0.0%

Energy 7 1 14.3% 1 14.3% 5 71.4% 0 0.0% 0 0.0%

Housing & 

Urban Dev

6 1 16.7% 0 0.0% 2 33.3% 0 0.0% 3 50.0%

FDIC 5 0 0.0% 0 0.0% 5 100.0% 0 0.0% 0 0.0%

Smithsonian 

Inst

5 1 20.0% 0 0.0% 4 80.0% 0 0.0% 0 0.0%

Education 4 1 25.0% 0 0.0% 3 75.0% 0 0.0% 0 0.0%

NASA 4 0 0.0% 0 0.0% 4 100.0% 0 0.0% 0 0.0%

Adm. Office of 

US Courts

3 1 33.3% 0 0.0% 2 66.7% 0 0.0% 0 0.0%

HEADQUARTERS CASE PROCESSING – FY 2004

PETITIONS FOR REVIEW DECIDED IN FY 2004 BY AGENCY (continued)

Decided Dismissed Settled Denied

Denied But

Reopened Granted

EPA 3 0 0.0% 0 0.0% 3 100% 0 0.0% 0 0.0%

TVA 3 0 0.0% 0 0.0% 2 66.7% 0 0.0% 1 33.3%

EEOC 2 0 0.0% 0 0.0% 2 100% 0 0.0% 0 0.0%

FEMA 2 0 0.0% 0 0.0% 2 100% 0 0.0% 0 0.0%

National Credit 

Union Adm.

2 2 100% 0 0.0% 0 0.0% 0 0.0% 0 0.0%

SBA 2 0 0.0% 0 0.0% 0 0.0% 1 50.0% 1 50.0%

Armed Forces 

Retirement 

Home

1 1 100% 0 0.0% 0 0.0% 0 0.0% 0 0.0%

Broadcasting 

Board of 

Governors

1 1 100% 0 0.0% 0 0.0% 0 0.0% 0 0.0%

Corp for National 

& Community 

Service

1 0 0.0% 0 0.0% 1 100% 0 0.0% 0 0.0%

Court Services & 

Offender Superv.

1 0 0.0% 0 0.0% 1 100% 0 0.0% 0 0.0%

State 1 0 0.0% 0 0.0% 1 100% 0 0.0% 0 0.0%

Fed Housing 

Finance Board

1 0 0.0% 0 0.0% 1 100% 0 0.0% 0 0.0%

Fed Mediation & 

Conciliation 

Service

1 0 0.0% 0 0.0% 1 100% 0 0.0% 0 0.0%

GPO 1 0 0.0% 0 0.0% 1 100% 0 0.0% 0 0.0%

International 1 0 0.0% 0 0.0% 1 100% 0 0.0% 0 0.0%
Boundary & 

Water

NARA 1 0 0.0% 0 0.0% 1 100% 0 0.0% 0 0.0%

NLRB 1 0 0.0% 0 0.0% 1 100% 0 0.0% 0 0.0%

Other 1 0 0.0% 0 0.0% 1 100% 0 0.0% 0 0.0%

Peace Corps 1 0 0.0% 0 0.0% 1 100% 0 0.0% 0 0.0%

SEC 1 0 0.0% 0 0.0% 0 0.0% 1 100% 0 0.0%

TOTAL 1306 103 7.9% 26 2.0% 1036 79.3% 63 4.8% 78 6.0%

Most appeals in which OPM is the agency are retirement cases involving decisions made by 

OPM as the administrator of the Civil Service Retirement System and the Federal Employees 

Retirement System. Percentages may not total 100 because of rounding.
Summaries of Merit Systems Studies 

 

What’s on the Minds of Federal Human Capital Stakeholders?

 

With the many changes sweeping through the Federal civil service in recent 

years, the Board, more than ever, is concerned about how these changes 

are affecting Federal merit systems. To ensure that our research and studies 

are relevant and timely to the issues of the day, the Board embarked on 

devising a new research agenda. To make certain we consider a full range of 

potential topics, the Board asked all its stakeholders groups what issues they 

believe most needed our attention and examination. We solicited input in 

various ways: by mail, electronically, and personal interviews. We issued a 

report in 2004 that summarized the information from our stakeholders with 

the expectation that it would be useful to others who are involved in the 

Federal human resource management field. 

 

Comments we received ranged from specific complaints about narrowly 

defined topics to wide-ranging discussions about broad human resources 

management issues. The suggested research topics covered many different 

aspects of human resource management, such as competitive sourcing and 

contracting out, hiring, managing performance, labor relations, leadership 

and management, and employee protections and due process. 

 

Our review of the stakeholder comments indicated significant concerns and 

questions about competitive sourcing and contracting out. They also raised 

concerns about recruitment, assessment and selection, and wanted to know 

whether the Federal Government has greater difficulties than private sector 

companies in hiring and retaining employees, and would expanded use of 

pay flexibilities improve its competitive edge? The issue of performance 

management—how to fairly reward outstanding employees and effectively 

handle poor performers—generated many of the suggested research issues, 

such as, what are the limitations of the current performance appraisal 

systems, and what options exist for improvement? Do awards really 

motivate employees and how can perceived favoritism be addressed? In the 

area of leadership and management, our stakeholders would like to know: 

do managers have the talents and skills needed to both lead and manage? 

How can managers be held accountable, and for what? And in the area of 

employee protections and due process, our stakeholders believe that the 

current process in addressing a break down in supervisor-employee relations 

leaves much to be desired. They also wondered whether numerous avenues 

of seeking relief expose the grievance and appeal systems to abuse. 

 
Hearing from our stakeholders—many of whom are in the Federal workplace 

daily—helped us understand the issues that promote or inhibit the effective 

management of the Federal workforce. Over the next several years, the 

Board will conduct studies addressing a number of the issues raised by our 

stakeholders, however, the range of topics is so great that the Board—and 

indeed any single institution—would not be able to study them all. 

Accordingly, we provided this report to assist others interested in the study 

of human resource management in developing their research agendas. 

 

Identifying Talent through Technology: Automated Hiring Systems in 

Federal Agencies

 

Technology plays an increasing role in Federal hiring. Many Federal agencies 

are now using automated hiring systems to advertise vacancies, receive 

applications, and assess applicants’ qualifications. MSPB studied the how 

agencies are using these systems to better understand how these systems 

affect the application and selection process and to identify steps that 

agencies should take to use these systems more effectively. 

 

We found that automated systems have great potential to improve Federal 

hiring: they can make it easier for applicants to apply for a Federal job, 

reduce time to hire, and support rigorous, merit-based hiring decisions. 

However, such benefits are not automatic: agencies report that the quality 

of results depends directly on how the systems are used and on the 

soundness of the underlying hiring method(s) used. MSPB also found that 

technology creates challenges as well as benefits. For example, current 

systems’ use of applicant self-assessments reduces the amount of time and 

work needed to screen and sort applicants – but the accuracy of those selfassessments cannot be taken for granted. 

 

For these reasons, the report recommends that agencies: (1) acknowledge 

the strengths and limitations of technology when designing their hiring 

processes, (2) invest the time and resources needed to assess applicants 

thoroughly, and (3) recognize the continuing role of managers and human 

resources professionals in hiring. 

 

Managing Federal Recruitment: Issues, Insights, and Illustrations

 

This report identifies current recruitment trends and challenges in the 

Federal Government. Additionally, it provides recommendations about how 

to improve Federal recruitment and highlights examples of how individual 

agencies have begun to address their recruitment challenges. The Federal 

Government could be facing major human capital challenges over the next 

several years as the result of an increasing number of employees eligible to 
retire, changing workforce demographics and evolving mission needs. To 

meet these challenges and continue seamless service to the American 

public, the Government must be able to continuously recruit a high quality 

and diverse workforce that has a variety of knowledge and skills. 

 

The most prominent report finding is the degree of variability among 

agencies. They differ greatly in terms of support, resources, planning, 

implementation, and evaluation of their recruitment efforts. What remains 

consistent, conversely, is the increased attention recruitment has received 

over the past several years. Agencies are concerned about their ability to 

recruit the employees they need to accomplish their mission and have 

started acting on these concerns, as described in the agency illustrations 

included in the report. 

 

Even with stepped up recruitment efforts, many Federal agencies still face a 

number of recruitment challenges. Among them, the Federal hiring process 

is long and complicated, many view Federal jobs as less rewarding than 

private and non-profit sector jobs and budget constraints can limit 

recruitment activities. Further, labor market shortages, non-competitive 

salaries and loss of human resources (HR) expertise also negatively affect 

agency recruitment efforts. Though these factors pose great challenges to 

agency recruitment efforts, there are a number of steps agencies can take to 

build strong recruitment programs. These steps are laid out in the report. 

The most important key to success is gaining the support and involvement of 

agency leaders – particularly in distinguishing recruitment as a critical 

management function rather than solely an HR office responsibility. 

 

 

Customer Satisfaction Survey Results: The Readers’ Voice

 

In 2004, MSPB conducted a customer satisfaction survey regarding merit 

systems studies, newsletters, and the web site produced by the Office of 

Policy and Evaluation (OPE) and issued a report concerning the results of the 

survey. The specific goals of this study were to measure the usefulness of 

the publications and web site and identify ways to improve them to better 

meet readers’ needs. MSPB has periodically conducted customer satisfaction 

surveys since 1994 to measure readers’ satisfaction with OPE publications. 

 

The study found that readers continue to hold OPE’s products in high regard. 

As in previous years, readers found that the topics of the publications are 

timely and relevant to the issues they face in their jobs and that they are 

well written and well analyzed. While the overall satisfaction with the 

publications was positive, readers suggested a few opportunities for 

improvement. They would like OPE to publish more reports on a wider 
variety of topics. They would also like OPE to shorten the time between data 

collection and publication. Further, they suggested making publications more 

widely available on-line. In response to these and other suggestions, OPE 

has identified a number of potential improvements that can be considered 

for implementation. 

 
Significant Actions of the Office of Personnel Management 

 

As required by statute, MSPB reports on the significant actions of the OPM. 

This is the second year in which the Board is presenting a summary of the 

significant actions by OPM with the greatest long-term implications on the 

merit systems in the Annual Report. 

 

The past year has seen great changes in Federal human capital management 

–the most significant since the Civil Service Reform Act of 1978. OPM has 

undertaken many actions, both in response to legislative action and as the 

President’s agent for Federal human resources management. Below, we list 

and briefly discuss the OPM actions with the greatest long-term implications 

for the Federal civil service. This list is not, by any means, an exhaustive list 

of all of OPM’s initiatives and actions. 

 

OPM Policy Initiatives

 

Proposed regulations for DHS

 

OPM and the Department of Homeland Security (DHS) issued proposed 

regulations for the DHS personnel system. OPM is currently working with the 

Department of Defense (DOD) on a National Security Personnel System. 

OPM and DOD plan to jointly issue proposed regulations for that system 

early in 2005. 

 

Significance:

 

The proposed DHS personnel system includes substantial changes to pay, 

performance management, appeal rights and procedures, and collective 

bargaining. These or similar changes may appear, in whole or in part, in the 

Department of Defense personnel system, other alternative personnel 

systems, or Governmentwide reforms. 

 

Framework for civil service reform

 

OPM published “OPM’s Guiding Principles for Civil Service Transformation,” a 

framework for civil service reforms in the Federal Government. 

 

Significance

 

Agency-level personnel reforms, including those at DHS and DOD, have 

given selected agencies flexibilities unavailable to Federal agencies operating 
under traditional provisions of title 5. That has raised concerns about 

“fragmentation” of the civil service – counterproductive divergence in 

Federal agency HR policies and practices. OPM’s framework preserves core 

values (i.e., merit principles), while ensuring coordination of policies across 

agencies and maximum advantage of economies of scale to help minimize 

the possible effects of fragmentation. 

 

Regulations for Senior Executive Service (SES) pay and performance 

management

 

OPM issued regulations on compensation for members of the Senior 

Executive Service (SES) and other senior-level positions. The regulations 

give agencies increased flexibility in setting the pay of Senior Executives, 

while requiring agencies to obtain OPM certification of their SES performance 

management systems (i.e., assure that the systems make credible 

performance-based distinctions among executives) to set SES pay at the 

higher levels permitted by law. 

 

Significance

 

These regulations may set the stage for future changes in Federal pay policy 

aimed at linking pay to performance governmentwide. The regulations also 

reflect increased and necessary attention to agency performance 

measurement and decision-making processes, which are critical to the 

integrity and effectiveness of pay for performance systems. 

 

Interim regulations for NO FEAR Act

 

As mandated by the Notification and Federal Employee Antidiscrimination 

and Retaliation (NO FEAR) Act of 2002, OPM issued interim regulations 

concerning agency reimbursement of the Judgment Fund for payments 

related to actual or alleged violations of antidiscrimination, whistleblower 

protection, and similar laws. OPM has not yet issued rules for a required 

study of best practices related to disciplinary actions taken against Federal 

employees who engage in illegal discrimination or similar improper activities. 

 

Significance

 

The NO FEAR Act is intended to reduce illegal discrimination by 

strengthening Congressional oversight, increasing agency accountability, and 

improving agency compliance with the law. As the President has delegated 

to OPM responsibility for developing many of the rules and guidelines 

required by this law, OPM leadership is essential to its full implementation. 
Actions Related to OPM Organization and Oversight

 

OPM internal reorganization

 

OPM completed a major restructuring that organizes OPM along broad 

business lines: HR policy, HR products and services, and human capital 

leadership. 

 

Significance

 

The intent of this restructuring is to align OPM’s organizational structure with 

the functions outlined in its strategic plan and promote a holistic (as opposed 

to narrowly functional) approach to Federal HR issues and policies. OPM 

provides technical assistance to agencies in its policy and human capital 

leadership roles and provides some training. However, even with this 

restructuring, there exists a continuing tension between OPM’s leadership 

and oversight roles and its role as a provider of products and services. OPM 

is mandated by law to recover the costs of providing services in the areas of 

recruitment, assessment, staffing, training and management assistance. 

Consequently, OPM is not in a position to independently develop costly 

products (such as entry-level examinations) that provide limited benefits to 

individual agencies, but that could benefit the Federal Government as a 

whole. Also, the cost recovery goal creates an incentive for OPM to seek 

customers for its products and services – an incentive that does not in all 

ways fit well with OPM’s responsibility for overseeing agencies’ adherence to 

merit principles and compliance with law and regulation. 

 

Combining military and civilian background investigation functions

 

OPM and the DOD discussed the possible transfer of the personnel 

background investigation function, including employees, from DOD to OPM. 

(Note: In November 2004, OPM and DOD announced that the transfer 

would take place in February 2005.) 

 

Significance

 

The transfer will greatly increase the size of OPM and the scope of its 

reimbursable activities. In the short term, the transfer will require a great 

deal of attention from OPM leadership. In the long term, it is hoped that the 

transfer and other improvements in the investigation and clearance process 

(such as the e-Clearance electronic government) will make background 

investigations and clearances more timely and more “portable.” Delays in 
investigations and clearances are frequently cited as a cause of delays in 

filling critical security-related jobs. 

 

Leading efforts for the human capital component of the PMA

 

As the lead agency for the human capital component of the President’s 

Management Agenda (PMA), OPM worked with agencies on the development 

of human capital plans and established “standards for success” for agency 

human capital management. OPM also evaluated agency performance on the 

human capital element of the PMA scorecard. 

 

Significance

 

OPM oversight of agency human resource management continues to evolve, 

with OPM exercising increasing influence in high-level agency human capital 

planning and policy development. The long-term effects of this influence 

remain unknown. Nevertheless, the Administration’s emphasis on managing 

human capital, actively supported by OPM, has clearly increased Federal 

agency attention to this area. 

 

Oversight of human capital management

 

OPM maintained its agency oversight program, while continuing to modify 

the program in response to Administration initiatives and environmental 

changes. The modifications include an accelerated audit schedule for major 

agencies, selective review of outsourced HR processes, and review of agency 

workforce security practices. OPM plans to develop audit guidelines modeled 

on standards used by the Government Accountability Office, and to develop 

methods to better evaluate how agency human capital programs and 

practices affect organizational outcomes. 

 

 

Significance

 

OPM clearly acknowledges the continuing importance of oversight of agency 

management of human resources, including compliance with law and 

regulation. The broadening of the program is logical in light of the new 

emphasis on security issues and the increased role of contractors in carrying 

out HR functions. 

 

 

OPM Actions Related to Other Governmentwide Programs

 

e-Government Initiatives
 

OPM led several electronic government (“e-gov”) initiatives. These include 

but may not be limited to: 

 E-Clearance, an initiative to simplify and speed the processing, 

tracking, and adjudication of background investigations and security 

clearances; 

 Recruitment One-Stop (ROS), an initiative to improve the job search 

and application processes, for both agencies and job seekers; 

 Enterprise HR Integration (EHRI), an initiative to develop standards, a 

repository, and analytical tools for data on the Federal workforce; and 

 E-Training, an initiative to provide employee development tools and 

on-line training to Federal employees and Federal agencies; and 

 E-Payroll, an initiative to standardize and consolidate Federal agency 

payroll operations. 

 

Significance

 

Progress on these initiatives varies, but all are important to improving 

Federal human capital management. For example, ROS and E-Clearance 

may produce material improvements in the timeliness and quality of Federal 

hiring processes. The other, more internally-focused initiatives may 

contribute to improved management of human capital directly (e.g., through 

better decision-making or better training of employees) or indirectly (e.g., 

by reducing operating costs). 

 

Employee benefits

 

OPM took on a more active role in managing Federal employee benefits 

programs. For example, in the area of health benefits OPM has implemented 

premium conversion, increased the use of health plan quality and 

satisfaction data, introduced high-deductible health plan options, and 

explored the possibility of offering insurance for dental and vision care. 

 

Significance

 

Employee benefit programs do not have immediate implications for public 

trust and merit system integrity . Nevertheless, these programs are critical 

to Federal agencies’ ability to recruit, manage, and retain a high-quality 

workforce. Active OPM management of these programs is essential if they 

are to remain responsive to employee’s needs, competitive, cost-effective, 

and fiscally sustainable. 

 
Financial Summary 

 

Fiscal Year 2004 Financial Summary

(dollars in thousands) 

 

Financial Sources

Appropriations 

$32,683 

Civil Service Retirement and Disability Trust 

Fund 2,611 

Total 

Revenue 

 $35,294

 

Obligations Incurred

Personnel Compensation 

 $21,802 

Personnel 

Benefits 4,681 

Benefits to Former Employees 

 110 

Travel of Persons 

 525 

Transportation of 

Things 210 

Rental 

Payments 

3,063 

Communications, Utilities, and 

Miscellaneous 317 

Printing and 

Reproduction 87 

Other 

Services 

2,521 

Supplies and 

Materials 300 

Equipment 

 1,361 

Total Obligations Incurred 

 $34,977

 
Obligated Balance 

$317