In considering internal agency rules, the Supreme Court also has distinguished between
cases where internal agency rules are designed primarily to benefit the agency, which are
generally unreviewable, and internal agency rules that primarily confer important procedural
benefits upon individuals, which are reviewable. Lopez v. Federal Aviation Admin. , 318 F.3d
242, 247 (D.C. Cir. 2003) citing, inter alia, Service, 354 USS. at 373-76, and Vitarelli, 359 U.S.
at 538-39. In Lopez, the Circuit concluded that the procedures at issue were “aimed at protecting
the [employee in the dispute) from the Administrator's otherwise unlimited discretion,” and thus
was reviewable by the court. Lopez, 318 F.3d at 248. The D.C. Circuit also noted that other
“circuits have similarly required agencies to follow procedural rules ‘designed to benefit
aggrieved parties during [employment] proceedings,’” Jd. at 247 citing Bates v. Sponberg, 547
F.2d 325, 330 nn 6-7 (6" Cir. 1976) and Gaballah v. Johnson, 629 F.2d 1191, 1202-3 (7" Cir,
1980).

Although, absent an OPM regulation conferring jurisdiction on the Board, the precedents
cited above confer no rights in the comprehensive scheme created by the Civil Service Reform
Act, see generally, Fausto v, United States, 484 U.S. 439 (1988), OPM finds their reasoning
instructive in interpreting its own regulations. Accordingly, OPM interprets its regulation at 5
CFR § 353.301(d) to require compliance with an agency’s own rules as well as the provisions of
OPM regulation, at least where they confer additional protections or benefits on the employee.
Section 353.301 (d) states that “[a]gencies must make every effort to restore in the local
comynuting area, according to the circumstances of each case,” and that “fajt a minimum, this
would mean treating these employees substantially the same as other handicapped individuals . .
--” (Emphasis supplied). The use of the phrase, “at a minimum” appears to anticipate that more
might be required if an agency adopts agency-specific regulations that provide additional
protections. And, in any event, an agency’s failure to follow additional safeguards for
employees that it chose to adopt, while applying OPM’s substantive regulation would constitute
conduct that is arbitrary and capricious within the ordinary meaning of those terms. OPM’s
interpretation of its own rules is entitled to substantial deference. Thomas Jefferson University v.
Shalala, 512 U.S. 504, 512 (1994).

Conclusion

The issue in this appeal is whether the Postal Service properly applied the Employee and .

Labor Relations Manual (ELM) § 546.142(a), which appears to provide greater restoration rights

_ to the Postal Service employees than provided in 5 CFR § 353.301(d). This is a procedure that -
benefits the partially recovered employees. It is OPM’s opinion that if the Postal Service
established a rule that provided the partially recovered employees with greater restoration tights
than the “minimum” described in the OPM regulations, the Postal Service is required to
meticulously follow that rule. To do otherwise would be arbitrary and capricious within the
meaning of OPM’s regulation conferring jurisdiction on the Board at section 353.304(c),

Elaine Kaplan
General Counsel


provision specifically notes that the appeal rights apply to any employee of an agency in the
executive branch, including the U. S. Postal Service and the Postal Rate Commission. 5 CFR

§ 353.304(a). Thus, although there are no OPM standards or requirements for Postal Service
positions, see Manescalchi, supra, the Postal Service’s own authority has made 5 U.S.C. § 8151
and its related regulations in 5 CFR § 353, Subpart C, applicable to the Postal Service staff.

As noted in the Board’s letter, the “Postal Service may have established an agency-
specific rule providing partially recovered employees with greater restoration rights that the
‘minimum’ rights described in 5 C.F.R. § 353.301(d).” July 25, 2011 Letter at 2. As the Board
also noted, however, the MSPB generally does not intercede in matters related to an agency’s
violation of its own internal rules, July 25, 2011 Letter at 3.

Analysis

In a different context, the Supreme Court has recognized that an agency can use its
discretion to adopt procedures and standards to govern the exercise of an underlying legal
authority, including adopting more rigorous substantive and procedural standards than required
by the authority. Service v. Dulles, 354 U.S. 363, 373-76 and 388 (1957); Vitarelli v. Seaton,
359 U.S. 535, 539 (1959). The Court also stated that once an agency implements such
procedures, however, they are binding and must be followed. Service, 354 U.S. at 388; Vitarelli,
359 U.S, at 540,

Specifically, in Service, supra, the Department of State implemented regulations related
to “loyalty and security” that applied to certain types of employee discharge actions. Those
regulations imposed limits on the Secretary’s discretion to discharge certain employees without
stating grounds for the dismissal. The district and appeals courts held that the Secretary could
not bind his authority under the regulations, but the Supreme Court disagreed. The Court
concluded that, because the dismissal from employment was based on a defined procedure, and
even though the procedures in the regulations placed limits on the Secretary’s discretion and
were generous beyond the original requirements binding the agency, that procedure had to be
carefully observed. Service, 354 U.S. at 380.7

In Vitarelli, supra, the Department of the Interior discharged a Schedule A employee for

national security reasons. The Secretary had the power to summarily discharge the Schedule A
employee without stating any reason. Once the Secretary decided to give a reason and that
reason was national security, however, the procedures for dismissal of employees on security
grounds were triggered. Consequently, the Secretary “was bound by the regulations which he
himself had promulgated for dealing with such cases... .” 359 U.S. at 539-40. As the Court
also noted, “ “sorupulous observance of departmental procedural safeguards is clearly of particular
importance.” /d. at 540.

2 In Service, after determining the discharge was not consistent with the procedures in

place, the Court reversed the court of appeals and remanded the case to the district court. 354

US. at 389.


cc:

James C. Latham

James A. Penna
3212 Villa Place
Amarillo, TX 79106

Theresa M. Gegen, Esq.
P.O, Box 227078
Dallas, TX 75222

- N. Turner

Geraldine Manzo
7700 Edgewater Drive, Suite 656
Oakland, CA 94621

Joshua T. Klipp, Esq.
P.O. Box 883790
San Francisco, CA 94188

Arleather Reaves

JR. Pritchett, Esq.
86 East Merrill Road
McCammon, ID 83250

Andrew C, Friedman, Esq.
222 South Riverside Plaza, Suite 1200
Chicago, IL 60606

Cynthia E. ae

Earl L. Cotton, Sr., Esq.
3980 Dekalb Technology Pkwy., Suite 840
Atlanta, GA 30340

Marcella = :

Thomas William Albright

Ayoka Campbell, Esq.
2901 Scott Futrell Drive
Charlotte, NC 28228


09/02/2011 16:43 FAX @ 001/008

Office of Personnel Management
Office of General Counsel
1900 E St N.W.
- Washington, 0.C, 20415
Voice: (202) 606-1700
Facsimile: (Check one)
Q (202) 606-2609
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{ans @ Laan ve USPSce:

QC For Ratew C) Please Comment Cl Please Repty O Please Recycte

© Comments:

“| hanks |



UNITED STATES OFFICE OF PERSONNEL MANAGEMENT
Washington, DC 20415

Office of the
General Counsel

SEP 2 2011

Mr. William Spencer

Clerk of the Board

Office of the Clerk

1615 M Street, NW
Washington, DC 20410-0002

Re: " Advisory Opinion regarding:

James C. Latham v. U.S. Postal Service,
MSPB Docket No. DA-0353-10-0408-I-1
Ruby N. Turner v. U.S. Postal Service,
MSPB Docket No. SF-0353-10-0329-I-1
Arleather Reaves v. U.S. Postal Service,
MSPB Docket No. CH-0353-10-0823-I-1
Cynthia E. Lundy v. U.S. Postal Service,
MSPB Docket No. AT-0353-11-0369-I-1
Marcella Albright v. U.S. Postal Service,
MSPB Docket No. DC-0752-11-0196-I-1

Dear Mr. Spencer:

This letter is in response to the Merit System Protection Board's (Board or MSPB) letter,
dated July 25, 2011, to Director John Berry, United States Office of Personnel Management
(OPM) requesting an advisory opinion. Your letter was forwarded to my office for a response.
OPM was asked:

Does an agency act arbitrarily and capriciously under 5 C.F.R. § 353.301(d) in
denying restoration to a partially recovered individual when such denial violates
the agency’s internal rules, such as the [U.S. Postal Service’s Employee and
Labor Relations Manual}?

For the reasons explained in detail below, it is OPM’s opinion that an agency would act
arbitrarily and capriciously under 5 C.F.R. § 353.301(d) if it failed to comply with the agency’s
own internal rules in connection with denying restoration to a partially recovered individual.

Bacl und

The MSPB’s jurisdiction is not plenary, but is limited to those matters over which it has
been given jurisdiction by statute, rule or regulation. Meeker v. Merit Systems Protection Board,

wwe opm.gov Recruit, Retain and Honor a World-Class Workforce to Serve the American People ‘wowwcusajabs. gov



319 F.3d 1368, 1374 (Fed. Cir. 2003), cert, denied, 540 U.S. 1218 (2004); Prewitt v. Merit Sys.
Prot, Bd., 133 F.3d 885, 886 (Fed. Cir: 1998), citing 5 U.S.C. § 7701(a); Reddit v. Department
of the Army, 88 M.S.P.R. 41, 44 (2001). Pursuant to its statutory authority under 5 U.S.C. §
1103(a)(5) to execute, administer, and enforce civil service rules and regulations, OPM has the
authority to create a right of appeal to the Board by regulation and to limit the scope of such a
tight. Maule v. OPM, 40 M.S.P.R. 388, 392-93 (1989).

Chapter 81 of title 5 of the United States Code addresses matters related to compensation
for work injuries. Subchapter I contains the general statutory provisions, including restoration to
duty. Specifically, 5 U.S.C. § 8151 establishes the civil service retention rights for employees
who resume employment with the Federal government. The statute directs OPM to issue
regulations related to resuming work following a compensable injury. 5 U.S.C. § 8151(b).
Those regulations are published at 5 CFR § 353, Subpart C, “Restoration to Duty from
Compensable Injury.”

As the MSPB noted in its letter to OPM, the Postal Service is “not a typical title 5
agency.” July 25, 2011 Letter at 3. In fact, under the Postal Employees Appeal Rights Act of
1987, the Postal Service “has autonomy over its personnel management” and only a few of the
provisions of title 5 apply to the Postal Service. 39 U.S.C. $1005; Manescalchi v. U.S. Postal
Service, 74 M.S.P.R. 479, 487 n.2 (1997) (there are no OPM standards or requirements for the
Postal Service positions), One of the few title 5 provisions that remain applicable to the Postal
Service, however, includes the provision related to compensation for work injuries. That is, 39
U.S.C. § 1005 specifically recognizes that “[o]fficers and employees of the Postal Service shall
be covered by subchapter I of chapter 81 of title 5,” which relates to compensation for work
injuries. 39 U.S.C. § 1005(c).

The specific regulation at issue in the above-captioned matters is 5 CFR § 353,301(d),
which states, in relevant part:

(d) Partially recovered. Agencies must make every effort to restore in the local
commuting area, according to the circumstances in each case, an individual who has
partially recovered from a compensable injury and who is able to return to limited duty.
Ata minimum, this would mean treating these employees substantially the same as other
[disabled]' individuals under the Rehabilitation Act of 1973, as amended. ... A partially
recovered employee is expected to seek reemployment as soon as he or she is able.

OPM has exercised its authority to create appeal rights for allegations of improper
restoration under 5 CFR § 353.301(d) by promulgating 5 CFR § 353.304, which permits appeals
to the Board for, among other things, “‘a determination of whether the agency is acting arbitrarily
or capriciously in denying restoration” to an individual who is partially recovered from a
compensable injury. 5 CFR § 353.304(c); see also USAJOBS FAQ - 40 (Attachment 1). This

' In 1998, the Rehabilitation Act of 1973 was amended and changed the term
“handicapped” to “disabled.”