STATEMENT FOR THE HEARING RECORD

SUBMITTED BY

SUSAN TSUI GRUNDMANN 

CHAIRMAN

U.S. MERIT SYSTEMS PROTECTION BOARD

TO THE

U. S. SENATE COMMITTEE ON VETERANS’ AFFAIRS

COMMITTEE HEARING TO CONSIDER 

PENDING HEALTH CARE AND BENEFITS LEGISLATION

WEDNESDAY, JUNE 24, 2015
2

Chairman Isakson, Ranking Member Blumenthal and distinguished 

Members of the United States Senate Veterans’ Affairs Committee 

(“Committee”). Thank you for the opportunity to present written testimony for the 

hearing record on behalf of the United States Merit Systems Protection Board 

(“MSPB”), an independent, quasi-judicial agency in the executive branch of the 

federal government. As the Chairman of MSPB, I am pleased to present written 

testimony for the record for this hearing on health care and benefits legislation 

pending before the Committee. You have asked that MSPB present written 

testimony for the hearing record on each agenda item for which MSPB has a 

position or an interest. I have identified two bills on the agenda in which MSPB 

has an interest: 

• S. 1082, The “Department of Veterans Affairs Accountability 

Act of 2015,” introduced by Senator Rubio and cosponsored by 

Senators Vitter and Barrasso; and 

• S. 1117, The “Ensuring Veterans Safety Through Accountability 

Act of 2015,” introduced by Senator Johnson and cosponsored by 

Senators Perdue, Lee, Inhofe, Daines, Flake, Crapo, Cassidy, Cruz, 

Toomey, Collins, Vitter, McCain, Risch, Hatch, Cochran, and 

Ayotte.

As an initial matter, I would like to note that under statute, MSPB is 

prohibited from providing advisory opinions on any hypothetical or future 

personnel action in the executive branch of the federal government. 5 U.S.C. 

§ 1204(h) (“The Board shall not issue advisory opinions.”). Accordingly, this 

testimony should not be construed as an indication of how I, any other 

presidentially appointed, Senate-confirmed Member of the three-Member Board at 

MSPB Headquarters in Washington, D.C. (“Board”), or an MSPB administrative 

judge would rule in any pending or future matter before MSPB. Moreover, during 

my time as Chairman, MSPB has not taken policy positions on legislation pending 

before Congress. Generally, I view MSPB’s role in the federal civil service as an 
3

independent adjudicator of appeals in accordance with legislation passed by 

Congress and signed into law by the president. Accordingly, I would respectfully 

request that the Committee consider my testimony technical in nature. 

A. MSPB’s Interest in the Committee Agenda Items 

MSPB’s interest in S. 1082 and S. 1117 derives primarily from its statutory 

responsibility to adjudicate appeals filed by federal employees in connection with 

certain adverse employment actions. Generally, after a federal agency imposes an 

adverse personnel action upon a federal employee, such as removal or demotion, 

and the federal employee chooses to exercise his or her statutory right to file an 

appeal with MSPB, MSPB will begin the adjudication process. In the case of a 

federal employee who is removed from his or her position, that individual is no 

longer employed by the federal government, and is not receiving pay, at the time 

he or she files an appeal with MSPB or at any point during the subsequent MSPB 

adjudication process.

Once an appeal is filed, an MSPB administrative judge 1 in one of MSPB’s 

regional or field offices will first determine whether MSPB jurisdiction exists over 

the appeal. If jurisdiction does exist, the MSPB administrative judge may conduct 

a hearing on the merits and then issue an initial decision addressing the federal 

agency’s case and the appellant’s defenses and claims. Thereafter, either the 

appellant or the named federal agency may file a petition for review of the MSPB 

administrative judge’s initial decision with the Board, which will review the initial 

decision and then issue a final decision of the MSPB. Both the Board and MSPB 

administrative judges adjudicate appeals in accordance with statutory law, federal 

 1

MSPB administrative judges are federal employees under the General Schedule 

System employed by MSPB. MSPB administrative judges are not “administrative 

law judges” appointed under 5 U.S.C. § 3105 nor Article III federal judges. 

MSPB currently employs 67 administrative judges nationwide. 
4

regulations, precedent from United States federal courts, including the Supreme 

Court of the United States and the United States Court of Appeals for the Federal 

Circuit, and MSPB precedent. 

B. S. 1082 – The “Department of Veterans Affairs Accountability Act of 

2015”

1. Authority of the Secretary of the Department of Veterans Affairs to 

Remove or Demote Employees Under S. 1082

In pertinent part, S. 1082 would allow the Secretary of the Department of 

Veterans Affairs (“Secretary” and “Department”) to remove or demote an 

individual who is an employee of the Department if the Secretary determines the 

performance or misconduct of the employee warrants such removal or demotion. 

If the Secretary removes or demotes such an employee, the Secretary may: 

• Remove the employee from the civil service (as defined in section 2101 of 

title 5); or 

• Demote the employee by means of: 

o A reduction in grade for which the employee is qualified and that the 

Secretary determines is appropriate; or 

o A reduction in annual rate of pay that the Secretary determines is 

appropriate.

Section 2(a) of the bill provides that the procedures listed in 5 U.S.C. 

§ 7513(b) (“Cause and Procedure”) and chapter 43 of title 5 (“Performance 

Appraisal”) “shall not apply” to a removal or demotion referred to in that section. 

Under 5 U.S.C. § 7513(b)(1)-(4) and (d), a federal employee against whom 

certain adverse actions are proposed (including removal and demotion) is 

generally entitled to: 1) at least 30 days advance written notice stating the specific 

reasons for the federal agency’s proposed action; 2) not less than 7 days to respond 

to the proposed adverse action; 3) be represented by an attorney or other 

representative before the federal agency; 4) a written decision and the specific 
5

reasons therefor by the federal agency; and 5) file an appeal to MSPB under 5 

U.S.C. § 7701. 

Under 5 U.S.C. § 4303(b)(1), a federal employee who is subject to removal 

or a reduction in grade for unacceptable performance is generally entitled to: 1) at 

least 30 days advance written notice of the federal agency’s proposed action 

identifying certain information; 2) be represented by an attorney or other 

representative before the federal agency; 3) a reasonable time to answer orally and 

in writing to the proposed adverse action; 4) a written decision by the federal 

agency specifying the instances of unacceptable performance which has been 

concurred in by an employee who is in a higher position that proposes the removal 

or reduction in grade; and 5) appeal to MSPB under 5 U.S.C. § 7701. 

2. Expedited MSPB Appeal Rights Under S. 1082

Section 2(a) of S. 1082 permits employees who are either removed or 

demoted by the Secretary to appeal that personnel action to MSPB “under section 

7701 of title 5.” Any such appeal must be filed with MSPB “not later than seven 

days after the date of such removal or demotion”2 and the MSPB will be required 

to refer the appeal to an MSPB administrative judge for adjudication. An MSPB 

administrative judge would be required to issue a decision “not later than 45 days 

after the date of the appeal,” and that decision “shall be final” and not subject to 

further review, either by the Board or a United States federal court. In the event 

that an MSPB administrative judge does not issue a final decision within 45 days, 

the decision of the Secretary to remove or demote the employee becomes final and 

the employee has no further right to appeal. 

 2 Generally, under current law, an appeal must be filed at MSPB no later than 30 

days after the effective date, if any, of the action being appealed, or 30 days after 

the date of the appellant's receipt of the agency's decision, whichever is later. 5 

C.F.R. §1201.22(b). 
6

C. S. 1117 – The “Ensuring Veteran Safety Through Accountability Act of 

2015” 

S. 1117 would expand the existing authority of the Secretary to remove or 

demote senior executive employees at the Department – granted in Section 707 of 

the Veterans Access, Choice, and Accountability Act of 2014 ("2014 Act") - to 

positions at the Department listed in 38 U.S.C. § 7401 "that [are] not ... senior 

executive position[s]." Thus, in order to provide technical views on S. 1117, a 

brief discussion of Section 707 of the 2014 Act is first necessary. 

The pertinent provisions of Section 707 of the 2014 Act are similar, 

however not identical, to the provisions of S. 1082 addressed above. Under 

Section 707 of the 2014 Act: 

• The Secretary may remove an individual employed in a senior 

executive positon at the Department of Veterans Affairs from the 

senior executive position if the Secretary determines the 

performance or misconduct of the individual warrants removal; and

• If the Secretary so removes such an individual, the Secretary may: 

A) remove the individual from the civil service (as defined in section 

2101 of title 5); or B) ... transfer the individual from the senior 

executive position to a General Schedule position at any grade of the 

General Schedule for which the individual is qualified and that the 

Secretary determines is appropriate. 

38 U.S.C. § 713(a)(1)(A)-(B). 

Section 707 of the 2014 Act also provides that “the procedures under 

section 7543 of title 5 shall not apply” to removals and transfers under that section. 

38 U.S.C. § (c)(1). Under 5 U.S.C. § 7543(b), senior executive service employees 

employed by agencies other than the Department who are subject to a charge of 

misconduct, neglect of duty, malfeasance, or failure to accept a directed 

reassignment or to accompany a position in a transfer of a function are generally 

entitled to the following rights: 1) at least 30 days advance written notice stating 

the specific reasons for the federal agency’s proposed action; 2) not less than 7 
7

days to respond to the proposed adverse action; 3) to be represented by an attorney 

or other representative before the federal agency; 4) a written decision and the 

specific reasons therefor by the federal agency; and 5) to file an appeal to MSPB 

under 5 U.S.C. § 7701. 

Similar to S. 1082, upon either removal or transfer, a senior executive 

service employee of the Department may appeal to the MSPB “under section 7701 

of title 5” not later than seven days after the date of such removal or transfer. Also 

similar to S. 1082, an MSPB administrative judge must “expedite” these appeals 

and issue a decision “not later than 21 days after the date of the appeal.” If an 

MSPB administrative judge fails to issue a decision within 21 days, the Secretary’s 

decision to either remove or transfer the senior executive service employee 

becomes final. Finally, a senior executive service employee of the Department has 

no right to appeal the MSPB administrative judge’s decision to the Board or a 

United States federal court. 

D.Views on S. 1082 and S. 1117 

1. Possible Constitutional Defects With S. 1082 and S. 1117

As stated above, both S. 1082 and S. 1117 would eliminate a covered 

employee’s right to notice and any opportunity to respond prior to the imposition 

of an adverse personnel action. In May 2015, MSPB released a study3 entitled 

 3 In addition to adjudicating appeals filed by federal employees, MSPB is required 

under statute to:

Conduct, from time to time, special studies relating to the civil 

service and to the other merit systems in the executive branch, and 

report to the President and to Congress as to whether the public 

interest in a civil service free of prohibited personnel practices is 

being adequately protected. 5 U.S.C. § 1204(a)(3).
8

What is Due Process in Federal Civil Service Employment? The report provides 

an overview of current civil service laws for adverse actions and, perhaps more 

importantly, the history and considerations behind the formation of those laws. It 

also explains why, according to the Supreme Court of the United States, the 

Constitution requires that any system which provides that a public employee may 

only be removed for specified causes must also include an opportunity for the 

employee – prior to his or her termination –to be made aware of the charges the 

employer will make, present a defense to those charges, and appeal the removal 

decision to an impartial adjudicator. We encourage Members of the Committee 

and their staffs who have interest in these issues to read this report4

. 

In the landmark decision Cleveland Board of Education v. Loudermill, 470 

U.S. 532 (1985), the Supreme Court held that while Congress (through statutes) or 

the president (through executive orders) may decide whether to grant protections

to employees, they lack the authority to decide whether they will grant due process

rights once those protections are granted. Stated differently, when Congress 

establishes the circumstances under which employees may be removed from 

positions (such as for misconduct or poor performance), employees have a 

property interest in those positions. Loudermill, 470 U.S. at 538-395

. 

Specifically, the Loudermill Court stated: 

Property cannot be defined by the procedures provided for its 

deprivation any more than can life or liberty. The right to due 

 4 This report can be found at: 

http://www.mspb.gov/netsearch/viewdocs.aspx?docnumber=1166935&version=11

71499&application=ACROBAT

5 The Loudermill case involved a state employee, not a federal employee. 

Nevertheless, while the Federal Government is covered by the Fifth Amendment 

and the states by the Fourteenth Amendment, the effect is the same. See Lachance 

v. Erickson, 522 U.S. 262, 266 (1998); Stone v. Federal Deposit Insurance Corp., 

179 F.3d 1368, 1375-76 (Fed. Cir. 1999). 
9

process is conferred, not by legislative grace, but by constitutional 

guarantee. While the legislature may elect not to confer a property 

interest in public employment, it may not constitutionally authorize 

the deprivation of such an interest, once conferred, without the 

appropriate procedural safeguards. 

Id. at 541. 

The Court explained that the “root requirement” of the Due Process Clause 

is that “an individual be given an opportunity for a hearing before he is deprived 

of any significant property interest,” and that “this principle requires some kind of 

a hearing prior to the discharge of an employee who has a constitutionally 

protected property interest in his employment.” Id. at 542. 

According to the Court, one reason for this due process right is the 

possibility that “[e]ven where the facts are clear, the appropriateness or necessity 

of the discharge may not be; in such cases, the only meaningful opportunity to 

invoke the discretion of the decisionmaker is likely to be before the termination 

takes effect.” Id. at 542. The Court further held that “the right to a hearing does 

not depend on a demonstration of certain success.” Id. at 544. 

I further note that the requirements of the Constitution have shaped the 

rules under which federal agencies may take adverse actions against federal 

employees, as explained by the Supreme Court of the United States, United States 

Courts of Appeal, and United States District Courts. Accordingly, should 

Congress consider modifications to federal civil service laws, many of which have 

been in place for more than one hundred years, MSPB respectfully submits that 

the discussion be an informed one, and that all constitutional requirements be 

considered.

Finally, I note that the constitutionality of Section 707 of the 2014 Act is 

currently the subject of litigation at the United States Court of Appeals for the 

Federal Circuit. Helman v. Dep't. of Veterans Affairs, Case No. 15-3086 (Fed. Cir. 

2015). The plaintiff in that litigation is alleging that Section 707 is 

unconstitutional primarily on two grounds: 
10

• By permitting the Department to remove a tenured federal employee 

without any pre-removal notice or an opportunity to respond, and by 

severely limiting post-removal appeal rights, Section 707 violates an 

employee's right to constitutional due process as articulated by the Supreme 

Court; and 

• By removing the Board from the MSPB appellate review process and 

permitting MSPB administrative judges (General Schedule employees) to 

make a final decision binding an executive branch agency which is not 

reviewable by a presidential appointee, Section 707 violates the 

Appointments Clause contained in Article II, Section 2 of the United States 

Constitution. 

As noted above, similar to Section 707 of the 2014 Act, Section 2(a) of S. 

1082 would allow the Secretary to eliminate the requirement that the Department 

provide the pre-adverse action rights found in 5 U.S.C. § 7513(b) and 5 U.S.C. 

§ 4303(b)(1). Section 1(a) of S. 1117 would also allow the Secretary to eliminate

the requirement that the Department provide those rights, along with the rights 

provided in 5 U.S.C. § 7503 (pre-adverse action rights for employees in 

connection with suspensions of 14 days or less), 38 U.S.C. § 7461(b) (pre-adverse 

action rights for Department employees in positions listed in 5 U.S.C. § 7401 in 

connection with adverse actions), and 38 U.S.C. § 7462 (pre-adverse action rights 

for Department employees in positions listed in 5 U.S.C. § 7401 in connection 

with professional conduct or competence). It is my understanding the Federal 

Circuit is currently considering whether it has jurisdiction over the lawsuit 

concerning Section 707 of the 2014 Act. If it determines that jurisdiction exists, a 

panel of federal appellate judges will proceed to consider the merits of the claims 

alleged. 
11

2. S. 1117 Could Provide MSPB Appeal Rights to Department Employees 

Who Currently Do Not Possess Such Rights

S. 1117 covers positions listed in 38 U.S.C. § 7401 that are “not a senior 

executive position.” Generally, these positions involve employees who provide 

health care services at the Department. It is my understanding that the Department 

employs nearly 190,000 health care professionals. Under existing law, these

employees do not possess the right to appeal adverse personnel actions to MSPB. 

Instead, they are subject to a separate internal disciplinary procedure provided for 

at 38 U.S.C. § 7461, et seq. Under that procedure, Department health care 

professionals may appeal adverse personnel actions to internal disciplinary appeal 

boards at the Department and thereafter to a United States federal court. Thus, if 

S. 1117 were enacted into law, it would provide the Secretary with the discretion 

to invoke a disciplinary process that would provide MSPB appeal rights to nearly 

190,000 federal employees who currently do not possess that right. 

3. Permitting Appeals to MSPB “Under 5 U.S.C. § 7701” 

S. 1082 and S. 1117 would allow covered employees to appeal to MSPB 

“under 5 U.S.C. § 7701.” Section 7701 of title 5, United States Code, provides in 

pertinent part that “the decision of an agency shall be sustained ... only if the 

agency’s decision ... is supported by a preponderance of the evidence.” 5 U.S.C. § 

7701(c)(1)(B). The term “preponderance of the evidence” is defined as “the 

degree of relevant evidence that a reasonable person, considering the record as a 

whole, would accept as sufficient to find that a contested fact is more likely to be 

true than untrue.” 5 C.F.R. § 1201.4(q). 

Additionally, 5 U.S.C. § 7701(c)(2)(B) provides that “an agency’s decision 

may not be sustained ... if the employee or applicant for employment shows that 

the decision was based on any prohibited personnel practice described in section 
12

2302(b) [of title 5, United States Code].” Among the “prohibited personnel 

practices” described in section 2302(b) are illegal discrimination, 5 U.S.C. § 

2302(b)(1)(A)-(E), coercion of political activity or reprisal for refusal to engage in 

political activity, 5 U.S.C. § 2302(b)(3), and reprisal for lawful “whistleblowing,” 

5 U.S.C. § 2302(b)(8). Thus, if such issues are raised by appellants as defenses in 

appeals filed pursuant to the language contained in S. 1082 or S. 1117, MSPB 

administrative judges would be required under law to consider those defenses 

prior to issuing a final decision within either 21 days or 45 days. 

4. S. 1082’s and S. 1117’s Impact on MSPB’s Workload

Finally, if enacted into law, S. 1082 and/or S. 1117 could have a dramatic 

impact on MSPB’s workload and in particular, the workload of MSPB 

administrative judges. As stated above, under both bills, the Board is prohibited 

from playing any role in the appellate process. Thus, under the current language, 

all adjudicatory responsibility resulting from enactment of both pieces of 

legislation would necessarily fall on MSPB’s administrative judges. 

MSPB understands that, for some time now, all federal agencies have been

asked to do more with less as a result of the fiscal climate. As the independent 

federal agency that receives appeals filed by federal employees, MSPB is in a

unique position to observe how agencies, managers, and employees have been, 

and continue to be, impacted by decreasing federal budgets. 

While practically all federal agencies have been negatively impacted by 

budget decreases, I believe MSPB has been especially hard hit. During Fiscal 

Year 2013, MSPB administrative judges adjudicated 6,340 appeals, with an 

average case processing time of 93 days per appeal. During Fiscal Year 2014, 

MSPB administrative judges adjudicated 16,354 appeals, with an average case 

processing time of 262 days per appeal. These increases between Fiscal Years 

2013 and 2014 were due directly to the massive influx of appeals filed at MSPB as 
13

a result of federal agency-imposed employee furloughs, resulting from 

government-wide “sequestration” during Fiscal Year 2013, as mandated by the 

Budget Control Act of 2011. A “furlough of 30 days or less” is an adverse action 

which a federal employee has a statutory right to appeal to MSPB. 5 U.S.C. 

§ 7512(5). Additionally, MSPB is required under statute to process and adjudicate 

every appeal filed by a federal employee. During a three-month period in Fiscal 

Year 2013, federal employees filed more than 32,000 appeals as a result of 

sequestration-related furloughs. MSPB continues to process and adjudicate these 

appeals. 

As stated above, if S. 1117 were enacted into law, nearly 190,000 federal 

employees who currently do not possess MSPB appeal rights could be provided 

with right such rights. If the Secretary were to remove or demote even 2% 

covered employees under the expanded authority, MSPB could be required to 

adjudicate nearly 4,000 additional appeals6 within an expedited time frame of 21 

days. With existing resources and staffing, it is difficult to imagine how MSPB 

administrative judges could process and adjudicate these appeals in the time frame

provided without placing most other appeals filed by non-Department employees 

on hold. 

Moreover, the time frames provided in S. 1117 (21 days) and S. 1082 (45 

days) to adjudicate appeals will make proper adjudication extremely difficult for 

MSPB administrative judges. In our limited experience adjudicating appeals filed 

under Section 707 of the 2014 Act, MSPB has observed that these appeals tend to 

be high profile in nature, involve complicated issues, and generally include a 

variety of disciplinary charges by the federal agency and defenses by the 

employee. An MSPB administrative judge could be required to address numerous 

discovery issues, hold a hearing, and issue a written decision, all within 21 days. 

 6 4,000 appeals would represent more than half of the total appeals filed by 

appellants government-wide in most fiscal years prior to Fiscal Year 2013. 
14

Because there is no review by either the Board or a United States federal court, 

and because the Secretary’s decision becomes final in the absence of an MSPB 

decision, MSPB administrative judges understandably will feel pressured to 

address each and every aspect of the appeal in as thorough a manner as possible, 

especially given that these appeals involve federal employees who have been 

removed from the civil service. For instance, in a recent appeal involving a 

Department senior executive service employee in Phoenix, Arizona, the MSPB 

administrative judge’s written decision totaled 61 pages. Application of this 

degree of effort in a large number of cases would be extremely difficult given 

MSPB’s current staffing and resources. 

Accordingly, I would respectfully request that this Committee give serious 

consideration to providing MSPB administrative judges more time to adjudicate 

appeals filed pursuant to the current language of either S. 1082 or S. 1117. As 

noted above, individuals who have been removed from their positions are not 

employed by the federal government – and thus receive no pay – during the 

entirety of the MSPB adjudication process. Thus, federal taxpayers are in no way 

burdened by the length of time it takes MSPB to adjudicate appeals involving

removals. 

This concludes my written testimony for the hearing record. I am happy to 

address any questions for the record that Members of the Committee may have.