Court Opinion

ID: 2833034
Source: CourtListenerOpinion
Date Created: 2015-09-02 15:01:28.780234+00
Date Added: 2024-06-11T12:11:39.512497
License: Public Domain

United States Court of Appeals
      for the Federal Circuit
               ______________________

 BETH F. COBERT, ACTING DIRECTOR, OFFICE
       OF PERSONNEL MANAGEMENT,
                  Petitioner

                          v.

MARY A. MILLER, MERIT SYSTEMS PROTECTION
                   BOARD,
                 Respondents
            ______________________

                     2014-3101
               ______________________

   Petition for review of the Merit Systems Protection
Board in No. SF-0752-11-0766-R-2.
                ______________________

              Decided: September 2, 2015
               ______________________

    REGINALD T. BLADES, JR., Commercial Litigation
Branch, Civil Division, United States Department of
Justice, Washington, DC, argued for petitioner. Also
represented by STUART F. DELERY, ROBERT E. KIRSCHMAN,
JR., TARA K. HOGAN; KAMALA VASAGAM, ROBERT JAMES
GIROUARD, STEVEN E. ABOW, Office of General Counsel,
Office of Personnel Management, Washington, DC.

    EDWARD H. PASSMAN, Passman & Kaplan, PC, Wash-
ington, DC, argued for respondent Mary A. Miller.
2                                         COBERT   v. MILLER

    JEFFREY GAUGER, Office of the General Counsel, Merit
Systems Protection Board, Washington, DC, argued for
respondent Merit Systems Protection Board. Also repre-
sented by BRYAN G. POLISUK.

   STEFAN P. SUTICH, National Federation of Federal
Employees, Washington, DC, for amicus curiae National
Federation of Federal Employees.

   HAMPTON H. STENNIS, American Federation of Gov-
ernment Employees, Washington, DC, for amicus curiae
American Federation of Government Employees.
               ______________________

      Before PROST, Chief Judge, SCHALL and WALLACH,
                     Circuit Judges.
    Opinion for the court filed by Circuit Judge SCHALL.
    Concurring opinion filed by Circuit Judge WALLACH.
SCHALL, Circuit Judge.
     This appeal arises out of the action of the Department
of the Interior, National Park Service (“agency”), that
removed Mary A. Miller from her position as Park Super-
intendent of the Sitka National Historical Park (“SNHP”
or “Park”) in Sitka, Alaska. Ms. Miller was removed from
her position after she refused a management-directed
reassignment to a different position at the same grade
and pay in Anchorage, Alaska. Ms. Miller appealed her
removal to the Merit Systems Protection Board (“MSPB”
or “Board”). Following a hearing, the administrative
judge (“AJ”) to whom the appeal was assigned issued an
initial decision sustaining the removal action. Miller v.
Dep’t of the Interior, No. SF-0752-11-0766-I-1, 2012 WL
359828 (M.S.P.B. Jan. 6, 2012) (“Initial Decision”). On
May 13, 2013, however, the Board issued a decision in
which it vacated the Initial Decision, reversed Ms. Miller’s
removal, and ordered the agency to reinstate Ms. Miller to
COBERT   v. MILLER                                        3

her position as Park Superintendent. 119 M.S.P.R. 438
(2013) (“Miller I”). Subsequently, in a reconsideration
decision dated December 6, 2013, the Board affirmed, as
modified, its May 13 decision. 120 M.S.P.R. 426 (2013)
(“Miller II”).
    Pursuant to 5 U.S.C. § 7703(d), the Director of the Of-
fice of Personnel Management (“OPM”) petitioned for
review of the Board’s decision. 1 In an order dated April
23, 2014, we granted the petition. Archuleta v. Miller,
562 F. App’x 978 (Fed. Cir. 2014) (unpublished). We now
reverse the Board’s decision. The case is remanded to the
Board, which is instructed to instate the Initial Decision
as the final decision of the Board.
                       BACKGROUND
                             I.
    Ms. Miller began her career with the agency in March
of 2008. At that time, she was appointed Park Superin-
tendent, GS-13, for SNHP. Initial Decision at 2. As Park
Superintendent, Ms. Miller oversaw all operations at the
Park, including supervising employees and managing a
$2.5 million budget. Joint Appendix (“J.A.”) 84.
    On April 27, 2010, Ms. Miller met with Victor Knox,
the agency’s Deputy Regional Director and her immediate
supervisor. At the meeting, they discussed the newly-
created GS-13 position of Alaska Native Affairs Liaison in
Anchorage, Alaska. 2 After explaining the significance of

   1    OPM may petition this court for review of a Board
decision when it believes that “the Board erred in inter-
preting a civil service law, rule, or regulation” and that
the Board’s decision will have a “substantial impact” on
the administration of the civil service. 5 U.S.C. § 7703(d).
    2   The Alaska Native Affairs Liaison serves as the
principal point of contact and the consultation lead for the
4                                         COBERT   v. MILLER

the position and stating that “she was the right person for
the job,” Mr. Knox offered Ms. Miller the liaison position
as a voluntary reassignment. Id. 207 at 27:21–29:18.
During a second meeting later that day, Ms. Miller re-
sponded to Mr. Knox’s offer. She stated that, for family,
health, and financial reasons, she could not accept the
reassignment. Id. 267 at 266:2–267:19. Mr. Knox then
presented Ms. Miller with a memorandum ordering her
reassignment to the liaison position. Id. 267 at 268:20–
269:3. In his memorandum, Mr. Knox set forth the rea-
sons why he believed Ms. Miller to be “qualified and
uniquely positioned” for the liaison role, and he gave her
ten calendar days to consider the reassignment. Id. 94–
95. Mr. Knox informed Ms. Miller that “removal proce-
dures” would be taken if the management-directed reas-
signment was not accepted. Id. 95.
    By letter dated May 5, 2010, to David Voluck, Ms.
Miller’s attorney, Mr. Knox extended the deadline to
accept the reassignment to May 14, 2010. Id. 92. On May
12, Mr. Voluck wrote Mr. Knox asking for a further exten-
sion of time. After receiving no response, Mr. Voluck
emailed Mr. Knox on May 14, declining Ms. Miller’s
directed reassignment. His email stated that the liaison
position created a “geographic hardship” that allowed “no
other viable option for Ms. Miller other than to decline the
Anchorage-based position.” Initial Decision at 3.
    On May 19, 2010, Mr. Knox presented Ms. Miller with
an official notice of proposed removal. J.A. 88–91. The
notice outlined the reasons Mr. Knox believed Ms. Miller
to be “uniquely qualified to fill the newly created position
of Alaska Native Affairs Liaison.” Id. 88. It also ex-
plained that removal was necessary because Ms. Miller’s
refusal to accept the position, among other things, “un-

agency in its dealings with all Alaska Indian Tribes. J.A.
167.
COBERT   v. MILLER                                       5

dermine[d] the agency’s ability to assign and manage
work and efficiently manage its workforce.” Id. 89.
     On July 26, 2010, Regional Director Susan Masica is-
sued a decision sustaining Ms. Miller’s removal for failure
to accept the management-directed reassignment. Id. 80–
87. Ms. Masica found unpersuasive Ms. Miller’s prefer-
ence “to remain in Sitka because of family, financial and
medical reasons.” Id. 81. She also found that “removal
[was] the appropriate penalty and w[ould] promote the
efficiency of the service.” Id. 80. Ms. Miller’s removal
became effective August 6, 2010.
                            II.
    Ms. Miller timely appealed her removal to the Board.
Before the Board, she contended that the agency’s deci-
sion to direct her reassignment to the Alaska Native
Affairs Liaison position was not bona fide because the
position was created for the sole purpose of reassigning
her from her superintendent position without triggering
an adverse action. She also contended that she was not
qualified for the position. Initial Decision at 13. Ms.
Miller also asserted several affirmative defenses. First,
she argued that Ms. Masica should not have been the
deciding official because she was one of her immediate
supervisors. Id. at 22. Second, she contended that the
removal action involved discrimination based on her
gender, race, and physical disability. Id. at 23–28. And
third, she asserted that the removal was reprisal for equal
employment opportunity complaints she had filed with
the agency. Id. at 28–29.
    The AJ held an evidentiary hearing on November 8–9,
2011. See J.A. 200, 329. Mr. Knox testified as to the
agency’s need for an Alaska Region liaison, the process of
creating the position starting in the fall of 2009, the
requirements for the new position, Ms. Miller’s qualifica-
tions, and his reasons for ordering her reassignment.
According to Mr. Knox, Ms. Miller “was doing great work
6                                            COBERT   v. MILLER

at Sitka.” Id. 220 at 78:17–79:6; see also id. 206 at 23:15–
25:21. From his perspective, she “was the only person
[he] could think of that . . . fully met all [the liaison posi-
tion’s] needs, and that had shown success in working
through difficult issues and building relationships
with . . . tribes in a demonstrable way.” Id. 208 at 30:8–
31:4. Ms. Masica testified similarly. She lauded Ms.
Miller’s work at SNHP and stated that the “reassignment
was based on [the agency’s] need to fill the Native liaison
position, and [the agency’s] belief that Ms. Miller had the
strong set of qualifications and skills that were needed in
that position.” Id. 230 at 120:12–18.
    For her part, Ms. Miller testified that she was not
qualified for the Alaska Native Affairs Liaison position,
claiming that she had no knowledge of Alaskan native
law. Initial Decision at 13. Ms. Miller also testified that
she did not consider herself an expert in terms of being
able to liaise with native tribes. Additionally, Ms. Miller
stated that she did not share Mr. Knox’s view that ac-
ceptance of the reassignment would enhance her career.
In that regard, she testified that, if she accepted the
reassignment, she would be moving from a decision-
making position to a staff position. Id. at 14. She did
state, though, that she had inquired as to whether the
position could be based in Sitka and at the GS-14 level.
Id. Ms. Miller also testified that she had informed Mr.
Knox that she had family concerns, as her parents were in
their seventies, and that she herself had both health and
financial concerns. Id.
    Ms. Miller also presented the testimony of Stephen
Perloff, a personnel management consultant. Id. at 15–
16. Mr. Perloff testified regarding Ms. Miller’s claim that
she was not qualified for the liaison position. He opined
that the individuals involved in creating the position were
committed to it grading out to GS-13, and he found it
curious that the position was circulated between the
agency’s Regional Office and Human Resources several
COBERT   v. MILLER                                         7

times as a GS-12 position until it included duties suffi-
cient to support a GS-13 grade. According to Mr. Perloff,
Ms. Miller had neither the work experience nor the educa-
tional background necessary to meet the minimum quali-
fications for the liaison position. As additional support for
her contention that she was not qualified for the Alaska
Native Affairs Liaison position, Ms. Miller presented
documentation showing that she had applied for a GS-12
liaison position with the Department of the Army in
Walla Walla, Washington, and she testified that she had
been rejected for the position as not being minimally
qualified. Id. at 18.
    Apparently anticipating Ms. Miller’s argument as to
qualifications, during its case-in-chief, the agency pre-
sented the testimony of Helen Stewart. Id. at 17–18. Ms.
Stewart is a Supervisory Human Resource Specialist with
the U.S. Fish and Wildlife Service. Ms. Stewart testified,
contrary to Mr. Perloff, that Ms. Miller was qualified for
the liaison position and that, if she was not qualified for
the position, she would not have been qualified for her
prior Park Superintendent position at SNHP. Id. at 17.
Ms. Stewart also testified that iterative development and
classification of new positions is common. She explained
that managers often work with classifiers over a period of
time to make adjustments to a position description in
order to obtain the desired workforce results.
    In deciding Ms. Miller’s appeal, the AJ employed the
analytical framework set forth in Ketterer v. Department
of Agriculture, 2 M.S.P.R. 294 (1980). See Initial Decision
at 5–6 (citing Frey v. Dep’t of Labor, 359 F.3d 1355, 1360
(Fed. Cir. 2004)). In Ketterer, the Board established a
two-step approach for deciding an appeal of a removal
action based upon refusal to accept a reassignment. “In a
removal for cause following a refusal to accept a reas-
signment,” the Board stated, “the agency must prove by a
preponderance of the evidence that the removal will
promote the efficiency of the service. This necessarily
8                                          COBERT   v. MILLER

includes a demonstration that the agency’s decision to
reassign the employee was a bona fide determination
based on legitimate management considerations in the
interests of the service.” Ketterer, 2 M.S.P.R. at 298. The
Board continued: “As part of its initial burden, the agency
must come forward with evidence showing a legitimate
management reason for the reassignment.” Id. at 299.
The Board explained that “[t]ogether with evidence that
the employee had adequate notice of the decision to
transfer and that he refused to accept the reassignment,
this would ordinarily be sufficient to establish a prima
facie case.” Id. The Board stated that, “[o]nce the agency
makes out a prima facie case, the burden of going forward
with rebuttal evidence shifts to the employee but the
burden of persuasion . . . never shifts from the agency.”
Id. (quoting Losure v. Interstate Commerce Comm’n, 2
M.S.P.R. 195, 201–02 (1980)). Subsequently, in Umshler
v. Department of the Interior, the Board reiterated that,
once the agency establishes a prima facie case, the burden
of going forward with rebuttal evidence shifts to the
employee, even though the ultimate burden of proof never
shifts from the agency. 44 M.S.P.R. 628, 630 (1990)
(citing Ketterer, 2 M.S.P.R. at 298–99). And the Board
elaborated:
      If the employee can demonstrate that the reas-
      signment had no solid or substantial basis in per-
      sonnel practice or principle, the Board may
      conclude that it was not a valid discretionary
      management determination, but was instead ei-
      ther an improper effort to pressure the appellant
      to retire, or was at least an arbitrary and capri-
      cious adverse action.
Id.
   The AJ found that, through the testimony of Mr. Knox
and Ms. Masica, the agency had met its initial burden of
showing, by a preponderance of the evidence, that it had
COBERT   v. MILLER                                          9

legitimate management reasons for Ms. Miller’s reas-
signment. Initial Decision at 6–13. The AJ also found
that Ms. Miller had failed to rebut the agency’s prima
facie case for reassignment. Id. at 13–21. The AJ deter-
mined that the Alaska Native Affairs Liaison position was
created based on valid agency concerns. The AJ credited
Mr. Knox’s testimony, finding that the position was not
created merely for purposes of reassigning Ms. Miller, but
had been discussed months in advance of the reassign-
ment order as a result of an undisputed need for a liaison
position in the Alaska Region. Id. at 20. With respect to
qualifications, the AJ found that Ms. Miller “was qualified
to perform the duties . . . of the new position.” Id. at 21.
At the same time, she found that Ms. Miller’s testimony
regarding her application for the liaison position within
the Department of the Army to be “not credible” and
“unpersuasive.” Id. at 18, 19, 21. The AJ determined
that it was “highly improbable” that Ms. Miller would
have accepted the Department of the Army position, even
if it had been offered. Id. at 19. Based on her factual
findings and credibility determinations, the AJ sustained
the agency’s directed reassignment as being “bona fide.”
Id. at 21, 30. The AJ stated:
    I find that the management directed reassign-
    ment was lawful, that it was based on legitimate
    management considerations and that the appel-
    lant was given adequate notice of the reassign-
    ment. I also find no merit in the appellant’s
    assertion that she is not qualified for the position.
    Lastly, there is no dispute that the appellant de-
    clined the management directed reassignment.
    The record contains her written election.
Id. at 19–20 (citation omitted).
    Ruling on Ms. Miller’s affirmative defenses, the AJ
held that Ms. Miller had failed to establish any error
associated with Ms. Masica serving as the deciding offi-
10                                         COBERT   v. MILLER

cial; in the AJ’s view, the decision was properly made by
an official superior to the proposing official, Mr. Knox. Id.
at 23. The AJ also determined that Ms. Miller had failed
to establish her several claims of discrimination. Id. at
23–28. The AJ rejected Ms. Miller’s claim of retaliation,
finding that there was no nexus between any of her equal
employment opportunity complaints and the removal. Id.
at 28–29. Finally, the AJ held that the agency’s action
removing Ms. Miller for failure to accept the directed
reassignment was reasonable and promoted the efficiency
of the service. Citing Doe v. Department of Justice, 565
F.3d 1375, 1379 (Fed. Cir. 2009), and Brown v. Depart-
ment of the Navy, 229 F.3d 1356, 1358 (Fed. Cir. 2000),
the AJ found that Ms. Miller’s refusal to accept the di-
rected reassignment provided the necessary nexus to the
efficiency of the service. Initial Decision at 30. As far as
reasonableness of the penalty was concerned, citing Frey,
359 F.3d at 1357, the AJ stated: “It is well established
that removal is not an unreasonably harsh penalty for
refusing to accept a directed reassignment.” Id. (relying
further on Wieser v. Dep’t of the Army, 280 F. App’x 959,
962 (Fed. Cir. 2008)). The AJ accordingly affirmed Ms.
Miller’s removal for declining a legitimate reassignment
order.
                            III.
     Ms. Miller petitioned the Board for review of the AJ’s
decision. In her petition, she made two main arguments:
(1) that the AJ erred because the agency lacked legitimate
management reasons for reassigning her to the Alaska
Native Affairs Liaison position; and (2) that she did not
meet the minimum qualifications for the position.
     On April 3, 2013, the Board issued an Opinion and
Order vacating the AJ’s decision and reversing Ms. Mil-
ler’s removal. In its decision, the Board revisited and
abandoned Ketterer’s two-step analytical framework for
reviewing adverse actions based on refusal to accept a
COBERT   v. MILLER                                         11

directed reassignment. Miller v. Dep’t of the Interior, No.
SF-0752-11-0766-I-1 (M.S.P.B. Apr. 3, 2013) (vacated). In
its place, the Board adopted a single efficiency of the
service standard for analyzing together both the reas-
signment and the adverse action. Having done so, it ruled
that Ms. Miller’s reassignment and removal did not
promote the efficiency of the service. Several weeks later,
however, on May 13, 2013, the Board reopened the case
on its own pursuant to 5 C.F.R. § 1201.118. After doing
so, it vacated its April 3 opinion and issued a substitute
opinion, still reversing Ms. Miller’s removal. Miller I, 119
M.S.P.R. at 440.
     In its substitute opinion, the Board again stated that
it was abandoning the two-step framework of Ketterer. In
the Board’s view, “the burden-shifting apparatus outlined
in Ketterer does not meaningfully add to the Board’s
adjudication of an adverse action based on a refusal to
accept a directed geographic reassignment.” Id. at 441–
42. The Board stated that, in “abandoning the cumber-
some and unnecessary burden-shifting approach,” it was
not departing “from any of the jurisprudential principles
otherwise governing [the] review of an adverse action
based on a refusal to accept a geographic reassignment.”
Id. at 442. The Board stated that henceforth it would
“simply weigh all the evidence and make a finding on the
ultimate issue of whether the agency proved . . . that the
misconduct occurred and that its action promotes the
efficiency of the service.” Id.
    Having rejected Ketterer’s burden-shifting framework,
the Board ruled that the evidence did not support a
finding that Ms. Miller’s reassignment was due to bona
fide management considerations or that her removal
promoted the efficiency of the service. Id. at 443. It
instead found that Ms. Miller submitted “credible evi-
dence to cast doubt on the agency’s motivations in effect-
ing her removal” and that the reassignment was merely a
“veil” to effect her separation. Id. at 444. Specifically, the
12                                         COBERT   v. MILLER

Board concluded that the agency, while having a legiti-
mate basis for creating the Alaska Native Affairs Liaison
position, failed to establish a rational basis for requiring
Ms. Miller to accept the reassignment. Id. at 443. In
reaching that conclusion, the Board pointed out that the
agency had not shown that the reassignment was “neces-
sary” due to the park superintendent position being
eliminated or due to a reduction-in-force program. Id.
Accordingly, the Board ruled that the “agency . . . failed to
provide any evidence that the appellant’s geographic
reassignment was necessary” or any evidence that her
removal was “rationally related to the efficiency of the
service.” Id. at 444. Thus, the Board reversed the agen-
cy’s removal and ordered Ms. Miller’s reinstatement as
Park Superintendent of SNHP. 3 Id.
     OPM petitioned the Board to reconsider Miller I. On
December 6, 2013, the Board issued a third opinion,
denying OPM’s petition and affirming, with modifications,
its decision in Miller I. Miller II, 120 M.S.P.R. at 428. In
Miller II, the Board addressed OPM’s contention that the
Board was obligated to follow Ketterer’s two-step approach
because it was adopted by this court in Frey, 359 F.3d
1355, as the law of the circuit. Even though we stated in
Frey that we “endorse the Board’s approach in [Ketterer
and Umshler] . . . and adopt it as the law of the circuit,”
id. at 1360, the Board disagreed that it was bound by the
Ketterer framework. Miller II, 120 M.S.P.R. at 434. It
stated that, in its view, in Frey, this court had merely
“endorsed” the Ketterer approach. Id. The Board viewed

     3   As far as Ms. Miller’s affirmative defenses were
concerned, the Board stated: “[W]e discern no error in the
[AJ]’s findings, which the appellant does not challenge on
review, that the appellant failed to prove her affirmative
defenses of discrimination, retaliation, and harmful
procedural error.” Miller I, 119 M.S.P.R. at 441 n.2.
COBERT   v. MILLER                                       13

our decision in Frey as premised on deference to the
MSPB. Id. at 436. It therefore reasoned that Frey could
not be precedential and binding because it could be modi-
fied by later panels of this court, without en banc review.
Id. at 436–37 (citing Tunik v. Merit Sys. Prot. Bd., 407
F.3d 1326, 1336–38 (Fed. Cir. 2005)).
    The Board also addressed OPM’s argument that it
had improperly imposed a new requirement that an
agency prove that a reassignment was “necessary” and
not based on just a legitimate reason. The Board rejected
OPM’s claim that it had added a new requirement in
reassignment cases. It explained that, despite its focus on
whether Ms. Miller’s position had been eliminated, its
overall “emphasis” was on the agency’s failure to show a
bona fide reason for reassignment. Id. at 431–32. Accord-
ingly, the Board modified Miller I by stating that “an
agency need not prove that a geographic reassignment is
‘necessary.’” Id. at 433. It further modified Miller I by
stating that the agency had failed to show any “rational
basis” for requiring Ms. Miller to accept the reassignment
because it did not show, for example, that “the Superin-
tendent position had been eliminated” or that there was
“no need for [Ms. Miller’s] continued performance.” Id.
    Finally, the Board reiterated that it had found that
“the agency did not show that its reasons for the directed
geographic reassignment were bona fide and that the
agency instead invoked its discretion to reassign the
appellant as a ‘veil’ to effect her separation.” Id. at 438.
The Board accordingly affirmed, as modified, its decision
in Miller I, making it the final decision of the Board. Id.
    As noted, pursuant to 5 U.S.C. § 7703(d), OPM peti-
tioned us to review the Board’s final decision, and we
granted the petition. Miller, 562 F. App’x 978. We have
jurisdiction over this appeal pursuant to 28 U.S.C.
§ 1295(a)(9).
14                                         COBERT   v. MILLER

                        DISCUSSION
    The scope of our review in an appeal from a decision
of the Board is limited. We must affirm the decision of
the Board unless it is (1) arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law; (2)
obtained without procedures required by law, rule, or
regulation having been followed; or (3) unsupported by
substantial evidence. 5 U.S.C. § 7703(c); Kewley v. Dep’t
of Health & Human Servs., 153 F.3d 1357, 1361 (Fed. Cir.
1998).
                             I.
    OPM asks us to reverse the Board’s decision reinstat-
ing Ms. Miller to her position as Park Superintendent of
SNHP. It first argues that the Board committed reversi-
ble error because it effectively engaged in a review of the
merits of the agency’s reassignment order. It contends
that agencies have, and require, broad discretion in the
management of their workforces, which includes the
reassignment of employees. It points out that reassign-
ment, by itself, is not an “adverse action” subject to the
Board’s plenary review. It argues the Board’s review is
limited under our precedent in Frey to determining only
whether the reassignment had “no solid or substantial
basis in personnel practice.” Frey, 359 F.3d at 1360.
    OPM further contends that the Board’s decision is
contrary to the AJ’s undisturbed findings of fact. It points
to the AJ’s finding that the agency demonstrated a legiti-
mate need for the liaison position in the Alaska region, as
well as her finding that the agency also demonstrated a
need for the position to be in Anchorage. See Initial
Decision at 20 (“The evidence . . . shows that the agency
had decided to create the new position . . . for valid agency
concerns” and that there was a “need for a full time
Alaska Native Affairs Liaison position to be based in
Anchorage.”). OPM also points to the AJ’s crediting of the
testimony of Mr. Knox that Ms. Miller was considered the
COBERT   v. MILLER                                        15

best qualified employee in the Alaska region. See, e.g., id.
(“Mr. Knox credibly testified that he decided to reassign
[Ms. Miller] when he was working on creating the new
position in the spring of 2010 and discussed her abilities
for the new position with Ms. Masica because she had
exhibited the very skills they wanted in the position while
working as the Superintendent in Sitka.”). OPM further
points to the testimony of Ms. Masica that “the appellant
was doing a great job of building relationships and had
good ideas for solving problems and how to tackle them.”
Id. OPM therefore argues that the Board’s conclusion
that the agency’s decision was not bona fide is incon-
sistent with the AJ’s undisturbed findings of fact.
    For her part, Ms. Miller argues that the Board cor-
rectly determined that the agency failed to meet its bur-
den of showing a bona fide reassignment. She contends
that, in reaching its decision, the Board did not exceed the
scope of its authority by reviewing whether managerial
discretion had been properly invoked by the agency. Ms.
Miller urges that the Board properly found that she
showed that her reassignment had no basis in personnel
practice. While conceding that there is no direct evidence
that the agency desired her separation or resignation, she
nevertheless insists that the Board was within its author-
ity to infer from the agency’s actions that she was not
reassigned in good faith. Significantly, on appeal, Ms.
Miller does not challenge the AJ’s credibility determina-
tions, her findings of fact, or her rejection of Ms. Miller’s
several affirmative defenses. Neither does Ms. Miller
argue any grounds for reversing the AJ’s decision sustain-
ing her removal, other than those upon which the Board
relied.
     The MSPB on appeal agrees with Ms. Miller that the
Board reached the correct result in this case. In addition,
it contends that, as a part of the Board’s statutory author-
ization to conduct a de novo review of adverse removal
actions, it may look at the merits of an agency’s underly-
16                                        COBERT   v. MILLER

ing reassignment order. It urges that the Board must
review the agency’s action in its entirety, including the
agency’s management considerations in ordering a reas-
signment. 4
                            II.
    Turning to our analysis, we first hold that the Board
erred as a matter of law in abandoning the Ketterer two-
step burden-shifting approach described above. 5 In Frey,
we examined Ketterer and Umshler, and we set forth the
burden-shifting approach that they articulate. 359 F.3d
at 1360. Then, referring to Ketterer and Umshler, we
stated: “We endorse the Board’s approach in these cases,
as set forth above, and adopt it as the law of the circuit.”
Id. (emphasis added). Thus, contrary to what the Board

     4  Amici, the National Federation of Federal Em-
ployees and the American Federation of Government
Employees, argue in support of Ms. Miller that the
Board’s decision turned on a finding that the agency’s
reassignment decision was not based on bona fide man-
agement considerations. They contend that the reas-
signment was used “solely as pretext for leveraging
removal” based on “personal animosity.” Amici Br. at 5.
They also argue that reversing the Board’s decision would
result in eliminating the requirement that assignments
be based on bona fide management considerations.
    5   In its Opening Brief, OPM stated: “[W]e do not
challenge the board’s right to abandon the ‘burden-
shifting’ approach to considering evidence outlined in
Ketterer.” Pet’r’s Opening Br. at 14. During oral argu-
ment, however, counsel for OPM retracted that state-
ment. Specifically, OPM was asked: “You agree that the
Board was wrong here to jettison the burden-shifting
approach?” Counsel answered in the affirmative, stating:
“Yes. I believe Frey actually controls.” Oral Arg. at 3:40–
3:52; see also id. at 4:30–4:49.
COBERT   v. MILLER                                        17

said in Miller II, we did not merely “endorse” the Ketterer
framework. Rather, in clear and certain terms, we made
it the “law of the circuit.” Ketterer’s approach thereby
became law that must be followed by the Board and
panels of this court until overruled by either the Supreme
Court or by this court en banc. E.g., Tex. Am. Oil Corp. v.
Dep’t of Energy, 44 F.3d 1557, 1561 (Fed. Cir. 1995) (“This
court applies the rule that earlier decisions prevail unless
overruled by the court en banc, or by other controlling
authority such as intervening statutory change or Su-
preme Court decision.”); Nat’l Org. of Veterans’ Advocates,
Inc. v. Sec’y of Veterans Affairs, 260 F.3d 1365, 1373 (Fed.
Cir. 2001) (citing Mendenhall v. Cedarapids, Inc., 5 F.3d
1557, 1570 (Fed. Cir. 1993)) (stating that “stare decisis is
a doctrine that binds courts to follow their own earlier
decisions or the decisions of a superior tribunal”); see also
Soc. Sec. Admin. v. Mills, 73 M.S.P.R. 463, 470 (1996)
(decisional law “adopted” by the Federal Circuit is “bind-
ing on the Board”), aff’d, 124 F.3d 228 (Fed. Cir. 1997)
(table). The Board here was not empowered to reject
controlling law. In short, Ketterer was, and continues to
be, the law of the circuit. It therefore must be followed.
                            III.
    With Ketterer the proper starting point, our task is
straightforward: to determine whether substantial evi-
dence supports the AJ’s holdings (1) that the agency
established, by a preponderance of the evidence, that it
had legitimate management reasons for Ms. Miller’s
reassignment; and (2) that Ms. Miller failed to rebut the
agency’s prima facie case.
     As discussed, the AJ found that the agency, through
the testimony of Mr. Knox and Ms. Masica, had met its
initial burden of showing, by a preponderance of the
evidence, that it had legitimate management reasons for
Ms. Miller’s reassignment. The AJ credited Mr. Knox’s
testimony that the decision to create the liaison position
18                                         COBERT   v. MILLER

was made in the fall of 2009 based on a recognized need
for the position. Initial Decision at 6, 20. In addition, the
AJ found that Anchorage was “credibly” identified as the
duty station for the position. Id. Further, the AJ accept-
ed the testimony of Mr. Knox and Ms. Masica that the
liaison position was not created to effect Ms. Miller’s
reassignment. Id. at 8, 9–10, 20. With respect to Ms.
Miller’s qualifications, the AJ credited the testimony of
Mr. Knox and Ms. Masica. As seen, they testified that, as
Ms. Miller’s supervisors, they believed she had the unique
strengths to fill the Alaska Native Affairs Liaison posi-
tion. The AJ, in fact, found it noteworthy that Ms. Miller
told Mr. Knox she would consider the position if it was
graded higher, at a GS-14 level. Id. at 10. Thus, the AJ
found that the agency had acted to reassign Ms. Miller
based on legitimate management considerations. Id. at
12, 20. Substantial evidence supports that finding.
    The AJ further determined that Ms. Miller did not re-
but the agency’s prima facie case for reassignment. The
AJ explained in detail that Ms. Miller’s conflicting testi-
mony “put the appellant’s credibility in question.” Id. at
19. She found “unpersuasive” Ms. Miller’s testimony
about applying for the Department of the Army liaison
position in Washington State and found “no merit in the
appellant’s assertion that she is not qualified for the
[Alaska Native Affairs Liaison] position.” Id. at 20; see
also id. at 17–18 (explaining that Supervisory Human
Resource Specialist, Helen Stewart, testified that Ms.
Miller was qualified for the liaison position). While the
AJ was sympathetic to Ms. Miller’s reservations about
leaving Sitka for Anchorage, she found that no evidence
presented by Ms. Miller undermined the agency’s basis for
reassignment, especially in view of the agency’s broad
discretion to reassign employees. Id. at 21; see also Gava
v. United States, 699 F.2d 1367, 1370 (Fed. Cir. 1983)
(“[T]he government has broad discretion to reassign its
employees to different locations, and to discharge them for
COBERT   v. MILLER                                      19

refusal to accept a new assignment.”). The AJ thus found
that Ms. Miller did not rebut the agency’s legitimate
management decision. Substantial evidence supports
that finding.
    The Board’s statement that “the agency failed to pre-
sent any evidence showing that its reasons for directing
[Ms. Miller’s] reassignment to Anchorage were bona fide
such as to support a finding that her removal for refusing
to take the reassignment promoted the efficiency of the
service,” Miller I, 119 M.S.P.R. at 443–444, is not sup-
ported by the record and is contrary to the AJ’s unchal-
lenged findings of fact discussed above.
     Contrary to the Board’s reasoning, the fact that the
agency lost a skilled employee in Ms. Miller and had two
position vacancies after her removal does not demonstrate
that the efficiency of the service was not served by her
removal, or suggest an improper effort to force her sepa-
ration. See Miller II, 120 M.S.P.R. at 437; Miller I, 119
M.S.P.R. at 444. It is the case in every legitimate removal
of an employee for failure to accept a directed reassign-
ment that the agency will be confronted with the loss of
an employee with expertise that the agency considered
valuable and that the agency will have two vacancies to
fill. Quite simply, no evidence cited by the Board sup-
ports either its conclusion that credible evidence “cast
doubt on the agency’s motivations” or its conclusion that
Ms. Miller’s reassignment was a “veil” to effect her re-
moval. Indeed, the AJ’s undisturbed and unchallenged
findings of facts are squarely to the contrary.
    Ms. Miller and the MSPB argue that the Board’s ul-
timate decisions in Ketterer and Umshler support affir-
mance in this case. We disagree. In both Ketterer and
Umshler, the Board set aside removal actions that fol-
lowed an employee’s refusal to accept a reassignment.
This case is unlike Ketterer and Umshler, however. In
Ketterer, credible evidence was presented that the basis
20                                        COBERT   v. MILLER

for the appellant’s reassignment was mistaken, that his
removal was based on an effort to promote another em-
ployee, and that the reassignment location was used “as a
place to send employees in order to encourage them to
leave the agency by retirement or resignation.”          2
M.S.P.R. at 299–300. Accordingly, the Board ordered the
agency to cancel the appellant’s reassignment and remov-
al. In Umshler, the Board found that the agency had
established a prima facie case supporting the validity of
the appellant’s reassignment. 44 M.S.P.R. at 630–31. It
also found, however, that the AJ had erred by improperly
limiting the appellant’s attempt to rebut that case by
casting doubt upon the existence of a legitimate manage-
ment reason for his reassignment. Id. at 631–32 (“[T]he
administrative judge erred by denying both of the wit-
nesses the appellant requested to establish that the
agency engaged in a pattern and practice of using directed
reassignments for improper purposes.”).        The Board
therefore remanded the case for further proceedings. In
short, the ultimate decisions in Ketterer and Umshler are
inapposite here.
    Finally, it is beyond dispute that “[f]ailure to follow
instructions or abide by requirements affects the agency’s
ability to carry out its mission.” Blevins v. Dep’t of the
Army, 26 M.S.P.R. 101, 104 (1985), aff’d, 790 F.2d 95
(Fed. Cir. 1986) (table). Ms. Miller’s refusal to accept
reassignment thus bore directly on the efficiency of the
service. In addition, “[t]o say that an agency must select a
penalty other than removal when an employee unjustifi-
ably refuses a reassignment is in effect to say that the
agency cannot insist on compliance with a lawful reas-
signment order.” Wieser, 280 F. App’x at 962; see also
Frey, 359 F.3d at 1360 (“Our predecessor court consistent-
ly upheld the discretion of an agency to terminate an
employee who refused a geographical reassignment.”). It
was not improper for the agency to remove Ms. Miller
after she refused to accept reassignment.
COBERT   v. MILLER                                     21

                      CONCLUSION
     In her Initial Decision, the AJ properly utilized the
Ketterer two-step, burden-shifting framework adopted by
this court in Frey as law of the circuit. The AJ deter-
mined—based on credibility determinations and findings
of fact undisturbed by the Board and unchallenged on
appeal—that the agency had made out a prima facie case
that the decision to reassign Ms. Miller was supported by
legitimate management reasons and that Ms. Miller had
failed to rebut that prima facie case. We, accordingly,
reverse the decision of the Board vacating the Initial
Decision and reversing Ms. Miller’s removal. The case is
remanded to the Board, which is instructed to instate the
Initial Decision as the final decision of the Board.
              REVERSED and REMANDED
                         COSTS
   Each party shall bear its own costs.
  United States Court of Appeals
      for the Federal Circuit
                 ______________________

 BETH F. COBERT, ACTING DIRECTOR, OFFICE
       OF PERSONNEL MANAGEMENT,
                  Petitioner

                            v.

MARY A. MILLER, MERIT SYSTEMS PROTECTION
                   BOARD,
                 Respondents
            ______________________

                       2014-3101
                 ______________________

   Petition for review of the Merit Systems Protection
Board in No. SF-0752-11-0766-R-2.
                ______________________
WALLACH, Circuit Judge, concurring.
    The Board improperly ignored Ketterer. Therefore, I
concur with the Panel’s judgment to reverse the Board’s
decision and remand this case to the Board to instate the
Initial Decision as its final decision. However, I write
separately because I believe that the agency’s bad faith
taints the AJ’s factual findings.
    In Miller I, the Board stated “the agency failed to pre-
sent any evidence showing that its reasons for directing
[Ms. Miller’s] geographic reassignment to Anchorage were
bona fide such as to support a finding that her removal for
refusing to take the reassignment promoted the efficiency
of the service.” Miller I, 119 M.S.P.R. at 443–44. The
2                                         COBERT   v. MILLER

Majority holds the statement was not supported by the
record and was contrary to the AJ’s uncontested factual
findings.
     I disagree with the Majority. The AJ made factual
findings within the Initial Decision after assessing evi-
dence presented by the parties and weighing the credibil-
ity of the witnesses’ testimonies. These factual findings
and credibility determinations remain uncontested on
appeal, and we are bound by the failure to challenge
them. However, it appears obvious to me that the agen-
cy’s actions were entirely pretextual and in bad faith.
    The AJ credited the testimony of Mr. Knox, Ms. Masi-
ca, and Ms. Stewart when making her findings. Mr.
Knox, Ms. Miller’s supervisor, testified that he was “fa-
miliar with [Ms. Miller’s] background because he partici-
pated in her selection for the position of Superintendent
for the [Park], called her references and supervised her
for over two years.” Initial Decision at 9. Mr. Knox
stated, “he made the decision to fill the [Alaska Native
Affairs Liaison] position several weeks prior to making
the offer to [Ms. Miller].” Id. at 8. Further, Mr. Knox
noted that Ms. Miller “was modeling exactly what they
wanted to accomplish” in the position. Id.
    Ms. Masica, the Regional Director for the agency in
Alaska and the deciding official, stated that she requested
the position be created. When filling the position, Ms.
Masica testified, “she looked at a pool of candidates
among the staff and [Ms. Miller] was the best for the
position based on Mr. Knox’s assessment that she had the
strongest skills[,] so the focus was on her to fill the new
position.” Id. at 11 (emphases added).
    Additionally, Ms. Stewart, a Supervisory Human Re-
source Specialist with the U.S. Fish and Wildlife Service,
testified as a rebuttal witness to Ms. Miller’s personnel
management consultant. Ms. Stewart testified, “it is a
manager/supervisor who decides there is a need in the
COBERT   v. MILLER                                        3

organization and gives a general description of the duties
for the position to help the classifier develop the position
description.” Id. at 18. Ms. Stewart further explained
that “[t]he classifier captures what is required for the
position and works with the manager or supervisor to
make adjustments for the position to obtain the desired
result.” Id. (emphasis added). Ms. Stewart “considered
[Ms. Miller] qualified for the position and if [Ms. Miller]
was not qualified for the Alaska Native Liaison position
she does not see how [Ms. Miller] would have been quali-
fied for the Superintendent position she held the previous
two years.” Id. at 17.
    The AJ’s credibility determinations for these testimo-
nies are uncontested on appeal. In fact, however, the
evidence demonstrates the dishonest manner in which
Ms. Miller was selected for the Alaska Native Liaison
position. Mr. Knox was familiar with Ms. Miller’s back-
ground and her current capabilities. Mr. Knox directed
Ms. Masica to focus on Ms. Miller when making her
selection for the position. The description duties were
adjusted to obtain the desired result. It is obvious to me
that the agency modified the standards and qualifications
to make Ms. Miller the only person uniquely qualified,
within the pool of employees that were considered for the
position; that the agency’s actions were entirely pretextu-
al; and that they were intended solely to present Ms.
Miller with an improperly motivated Hobson’s choice.
Such conduct by an agency of the United States is repre-
hensible.