UNITED STATES OF AMERICA

MERIT SYSTEMS PROTECTION BOARD

2016 MSPB 43

Docket No. SF-0752-16-0219-I-1

Michael R. Palafox,

Appellant,

v.

Department of the Navy,

Agency.

December 20, 2016

Elbridge W. Smith, Esquire, Honolulu, Hawaii, for the appellant.

Jason Zhao, Esquire, Pearl Harbor, Hawaii, for the agency.

BEFORE

Susan Tsui Grundmann, Chairman

Mark A. Robbins, Member

OPINION AND ORDER

¶1 The appellant has filed a petition for review of the initial decision that 

sustained his indefinite suspension. For the reasons set forth below, we DENY 

the petition and AFFIRM the initial decision. 

BACKGROUND

¶2 At all times relevant to this appeal, the appellant was employed as a 

Shipfitter Supervisor I, WS-3820-10, at the agency’s Pearl Harbor Naval 

Shipyard & Intermediate Maintenance Facility (PHNSY & IMF, or Shipyard) in 

Pearl Harbor, Hawaii. Initial Appeal File (IAF), Tab 4 at 13. The parties have 
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stipulated that the appellant’s position required access to classified information. 

IAF, Tab 22. 

¶3 On September 15, 2015, the Shipyard Commander issued a notice of intent 

to suspend the appellant’s access to classified information and the controlled 

industrial area (CIA) because of security concerns involving his “Personal 

Conduct and Drug Involvement.” IAF, Tab 4 at 134-45. The notice stated that 

the appellant had been interviewed by PHNSY & IMF investigators in connection 

with an investigation into illegal drug use by certain PHNSY & IMF employees, 

and that the investigation found that the appellant had falsely denied having used 

marijuana during his Shipyard employment. Id. at 134. According to the notice, 

the appellant’s illegal drug activity was corroborated by other Shipyard 

employees, as follows:

a. a Shipyard employee stated that during the time period beginning 

around 2005 until around 2010 or 2011, he smoked marijuana 

with [the appellant] two times. He stated that the two occasions 

on which he smoked marijuana with [the appellant] took place at 

[the appellant’s] home. He observed [the appellant] smoke 

marijuana in a joint and a pipe. He also stated that [the appellant 

is] a “stoner.”

b. the employee also stated that he has purchased marijuana from 

[the appellant] between six to eight times and that he paid $60.00 

for the marijuana. He also stated that other Shipyard employees 

have purchased marijuana from [the appellant] and that [the 

appellant is] a “dealer” and does not give away free marijuana. 

He stated that [the appellant has] transacted marijuana at the 

Shipyard. The employee stated that, when marijuana was 

purchased from [the appellant], [the appellant] brought the 

marijuana to the Shipyard and the transactions occurred in the 

shop at Intermediate Maintenance Facility.

c. a different Shipyard employee stated that he purchased marijuana 

from [the appellant] around three or four months ago. He stated 

he went to [the appellant’s] home and that he waited outside on 

the road, [the appellant] then came outside and sold him 

marijuana.
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Id. The appellant was provided an opportunity to respond in writing, and he 

availed himself of that opportunity. Id. at 133-34. On September 30, 2015, the 

Shipyard Commander notified the appellant of his decision to suspend the 

appellant’s access to classified information and the CIA effective that day 

pending a final determination by the Department of Defense Consolidated 

Adjudication Facility (DOD CAF) on his continued eligibility for a security 

clearance and assignment to sensitive duties. Id. at 133.

¶4 By notice dated October 5, 2015, the agency proposed to indefinitely 

suspend the appellant for failure to meet a condition of employment based on the 

suspension of his access to classified information. Id. at 127-30. The proposal 

reiterated the reasons the appellant’s access to classified information had been 

suspended, as set out in the September 15, 2015 notice of intent. Id. at 127-28. 

The proposing official explained that he also had considered the possibility of 

carrying the appellant on administrative leave or reassigning him to another 

position not requiring access to classified information, but had concluded that 

neither alternative was “viable.” Id. at 128. The appellant responded orally and 

in writing. Id. at 29-117. 

¶5 On December 10, 2015, the agency issued a decision indefinitely 

suspending the appellant effective December 12, 2015, pending a final decision 

by DOD CAF on the appellant’s security clearance and access to classified 

information, and any subsequent appeal of DOD CAF’s decision. Id. at 14-18. 

The deciding official stated that he concurred with the proposing official in his 

finding that administrative leave and reassignment were not “viable” alternatives. 

Id. at 15. 

¶6 The appellant filed a timely Board appeal. IAF, Tab 1. Following oral 

argument, the administrative judge issued an initial decision sustaining the 

indefinite suspension. IAF, Tab 24, Initial Decision (ID). Regarding the ch arge, 

the administrative judge found that the parties had stipulated that the appellant’s 

position required access to classified information, and that his access to classified 
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information had been suspended pending a final determination by DOD CAF 

regarding his security clearance. ID at 4; IAF, Tab 22. The administrative judge 

also found that the appellant failed to establish his affirmative defenses that the 

agency violated his due process rights and committed harmful procedural error. 

ID at 4-9. Finally, the administrative judge determined that the indefinite 

suspension had a condition subsequent that would bring it to an end. ID at 9 -10. 

¶7 On review, the appellant again argues that the agency denied him due 

process. Petition for Review (PFR) File, Tab 1. The agency has responded. 

PFR File, Tab 4.

ANALYSIS

¶8 An indefinite suspension lasting more than 14 days is an adverse action 

appealable to the Board under 5 U.S.C. § 7513(d). 5 U.S.C. § 7512(2); Rogers v. 

Department of Defense, 122 M.S.P.R. 671, ¶ 5 (2015). It is well settled that an 

agency may indefinitely suspend an appellant when his access to classified 

information has been suspended and he needs such access to perform his job. See 

Rogers, 122 M.S.P.R. 671, ¶ 5. In such a case, the Board lacks the authority to 

review the merits of the decision to suspend access. Id. However, the Board 

retains the authority to review whether: (1) the appellant’s position required 

access to classified information; (2) the appellant’s access to classified 

information was suspended; and (3) the appellant was provided with the 

procedural protections specified in 5 U.S.C. § 7513. See id., ¶ 5. In addition, the 

Board has the authority under 5 U.S.C. § 7701(c)(2)(A) to review whether the 

agency provided the procedural protections required under its own regulations. 

Id., ¶ 7.1 Finally, because a tenured Federal employee has a property interest in 

 

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In this regard, the Board has found that DOD procedures governing “personnel 

security determinations” do not apply to the suspension of access to classified 

information by local commands, such as the Shipyard in this case. Rogers, 

122 M.S.P.R. 671, ¶¶ 8-13. We discern no error in the administrative judge’s finding 
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continued employment, the Board also may consider whether the agency provided 

minimum due process in taking the indefinite suspension action. See Buelna v. 

Department of Homeland Security, 121 M.S.P.R. 262, ¶¶ 13-15 (2014) (holding 

that the Board has the authority to review whether the agency provided due 

process in taking an indefinite suspension action based on the suspension of a 

security clearance). Here, the only issue remaining in dispute is whether the 

agency provided the appellant due process. 

¶9 Due process requires, at a minimum, that an employee being deprived of 

his property interest be given “the opportunity to be heard ‘at a meaningful time 

and in a meaningful manner.'” Mathews v. Eldridge, 424 U.S. 319, 333 (1976) 

(quoting Armstrong v. Manzo, 380 U.S. 545, 552 (1965)).2 As the U.S. Supreme 

Court explained in Cleveland Board of Education v. Loudermill, 470 U.S. 532, 

542-46 (1985), the opportunity to respond to a proposed adverse action is 

important for two reasons. First, an adverse action will often involve factual 

disputes and consideration of the employee’s response may clarify such disputes. 

Id. at 543; see Stone v. Federal Deposit Insurance Corporation, 179 F.3d 1368, 

1376 (Fed. Cir. 1999). Second, “[e]ven where the facts are clear, the 

appropriateness or necessity of the [penalty] may not be,” and in such cases the 

employee must receive a “meaningful opportunity to invoke the discretion of the 

decision maker.” Loudermill, 470 U.S. at 543; see Stone, 179 F.3d at 1376. 

Thus, “the employee's response is essential not only to the issue of whether the 

allegations are true, but also with regard to whether the level of penalty to be 

 

that the local command acted within its authority in suspending the appellant’s access 

to classified information pending a final decision by DOD CAF on his security 

clearance. ID at 6-7 (citing Secretary of the Navy Manual 5510.30, ¶ 9-7); see Rogers, 

121 M.S.P.R. 671, ¶ 12 (citing DOD 5200.2-R, § C8.1.3).

2 Because the appellant was afforded an opportunity to respond to the proposed 

indefinite suspension prior to being suspended, it is clear that the hearing took place at 

a “meaningful time.” Buelna, 121 M.S.P.R. 262, ¶ 21. 
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imposed is appropriate.” Stone, 179 F.3d at 1376; see Buelna, 121 M.S.P.R. 262, 

¶ 22 (finding that the considerations described in Loudermill were present in 

determining whether an agency provided due process to an employee who was 

indefinitely suspended based on the suspension of his security clearance). 

¶10 As to the facts underlying the proposed action, the agency provided 

minimal due process by informing the appellant of the basis for the indefinite 

suspension, i.e., that his position required access to classified information and 

that his access had been suspended. See Buelna, 121 M.S.P.R. 262, ¶ 25. The 

agency further complied with the procedural requirements of 5 U.S.C. § 7513 by 

informing the appellant of the specific reasons for the suspension of his access to 

classified information. See King v. Alston, 75 F.3d 657, 662 (Fed. Cir. 1996) 

(finding that the agency provided the employee with sufficient information to 

make an informed reply when it notified him that his security clearance was being 

suspended because of a “potential medical condition” and then informed him that 

he was being indefinitely suspended from duty based on the suspension of his 

security clearance); cf. Cheney v. Department of Justice, 479 F.3d 1343, 1353 

(Fed. Cir. 2007) (finding that the employee was not provided with the opportunity 

to make a meaningful response to the notice of proposed suspension when he had 

to guess at the reasons for his security clearance suspension).

¶11 Regarding the penalty, the appellant argues that he was denied a 

meaningful opportunity to persuade the deciding official to reassign him instead 

of imposing the proposed indefinite suspension. PFR File, Tab 1 at 8-11. He 

contends that the deciding official did not have the authority to choose that 

alternative because, according to the proposal notice, reassignment would have 

been “inconsistent” with official agency policy. IAF, Tab 4 at 15, 128. The 

agency asserts that, notwithstanding the proposing official’s statement, there is in 

fact no agency policy prohibiting reassignment following a loss of access to 

classified information. PFR File, Tab 4 at 6. However, even if agency policy did 

prohibit reassigning the appellant, that restriction would not constitute a due 
7

process violation, because due process does not require that a deciding offi cial 

consider alternatives that are prohibited, impracticable, or outside management’s 

purview. Buelna, 121 M.S.P.R. 262, ¶ 27. 

¶12 Furthermore, to the extent administrative leave may have been a viable 

alternative to suspension without pay, the appellant was not denied his due 

process right to invoke the discretion of a deciding official with the authority to 

select that alternative. See id., ¶ 28. The appellant cites deposition testimony in 

which the deciding official indicated that he could not think of a scenario in 

which he would have considered keeping the appellant on administrative leave. 

PFR, Tab 1 at 17 (deposition transcript at 40-41). However, the deciding official 

went on to clarify that his statement did not mean that the appellant “couldn't 

come up with some evidence that [he] would consider.” Id. (deposition transcript 

at 41). In particular, he explained that he might carry an employee in the 

appellant’s position on administrative leave if he believed that the allegations 

underlying the suspension of the employee’s access to classified information were 

not well founded. Id. at 16-17 (deposition transcript at 37-40). Thus, we find 

that the deciding official did have discretion to select administrative leave as an 

alternative to suspension without pay. While the appellant did not succeed in 

persuading the deciding official to carry him on administrative leave, the re cord 

reflects that he was notified of the allegations underlying the suspension of his 

access to classified information, and received an opportunity to present rebuttal 

evidence before the final penalty determination was made. IAF, Tab 4 at 29-130. 

¶13 The appellant further contends that he was denied due process because his

access to classified information “was suspended through a process by which he 

was not afforded the right to review information relied upon and provide a 

meaningful response to the officials proposing and deciding suspension of access 

to classified information.” PFR File, Tab 1 at 12. However, it is well settled that 

employees “do not have a liberty or property interest in access to classified 

information, and the termination of that access therefore [does] not implicate any 
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due process concerns.” Gargiulo v. Department of Homeland Security, 727 F.3d 

1181, 1184-85 (Fed. Cir. 2013) (quoting Jones v. Department of the Navy, 

978 F.2d 1223, 1225 (Fed. Cir. 1992)); see Buelna, 121 M.S.P.R. 262, ¶ 24. 

¶14 In sum, we agree with the administrative judge’s determination that the 

agency did not deprive the appellant of due process. Accordingly, we deny the 

petition for review. The initial decision is affirmed.

ORDER

¶15 This is the final decision of the Merit Systems Protection Board in this 

appeal. Title 5 of the Code of Federal Regulations, section 1201.113(c) (5 C.F.R. 

§ 1201.113(c)).

NOTICE TO THE APPELLANT REGARDING

YOUR FURTHER REVIEW RIGHTS

You have the right to request review of this final decision by the 

U.S. Court of Appeals for the Federal Circuit. You must submit your request to 

the court at the following address:

United States Court of Appeals

for the Federal Circuit

717 Madison Place, N.W.

Washington, DC 20439

The court must receive your request for review no later than 60 calendar days 

after the date of this order. See 5 U.S.C. § 7703(b)(1)(A) (as rev. eff. 

Dec. 27, 2012). If you choose to file, be very careful to file on time. The court 

has held that normally it does not have the authority to waive this statutory 

deadline and that filings that do not comply with the deadline must be dismissed. 

See Pinat v. Office of Personnel Management, 931 F.2d 1544 (Fed. Cir. 1991).

If you need further information about your right to appeal this decision to 

court, you should refer to the Federal law that gives you this right. It is found in 

title 5 of the United States Code, section 7703 (5 U.S.C. § 7703) (as rev. eff. 

Dec. 27, 2012). You may read this law as well as other sections of the 
9

United States Code, at our website, http://www.mspb.gov/appeals/uscode/htm. 

Additional information is available at the court’s website, 

www.cafc.uscourts.gov. Of particular relevance is the court’s “Guide for Pro Se 

Petitioners and Appellants,” which is contained within the court’s Rules of 

Practice, and Forms 5, 6, and 11. 

If you are interested in securing pro bono representation for an appeal to 

the U.S. Court of Appeals for the Federal Circuit, you may visit our website at 

http://www.mspb.gov/probono for information regarding pro bono representation 

for Merit Systems Protection Board appellants before the Federal Circuit. The 

Merit Systems Protection Board neither endorses the services provided by any 

attorney nor warrants that any attorney will accept representation in a given case. 

FOR THE BOARD:

______________________________

Jennifer Everling

Acting Clerk of the Board

Washington, D.C.