Court Opinion

ID: 4577107
Source: CourtListenerOpinion
Date Created: 2020-10-15 16:00:35.531721+00
Date Added: 2024-06-11T08:47:30.841625
License: Public Domain

Case: 20-1691   Document: 28     Page: 1    Filed: 10/15/2020

        NOTE: This disposition is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

                 THOMAS W. FOSTER,
                     Petitioner

                            v.

            DEPARTMENT OF THE ARMY,
                     Respondent
               ______________________

                       2020-1691
                 ______________________

    Petition for review of the Merit Systems Protection
 Board in No. SF-0752-18-0039-C-1.
                 ______________________

                Decided: October 15, 2020
                 ______________________

    THOMAS W. FOSTER, Lacey, WA, pro se.

     IGOR HELMAN, Commercial Litigation Branch, Civil Di-
 vision, United States Department of Justice, Washington,
 DC, for respondent. Also represented by JEFFREY B.
 CLARK, STEVEN JOHN GILLINGHAM, ROBERT EDWARD
 KIRSCHMAN, JR.
                  ______________________

 Before PROST, Chief Judge, BRYSON and WALLACH, Circuit
                         Judges.
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 2                                            FOSTER   v. ARMY

 PER CURIAM.
     Petitioner, Thomas Foster, seeks review of a final deci-
 sion of the Merit Systems Protection Board (“MSPB”) deny-
 ing Mr. Foster’s petition for enforcement (“PFE”) of a prior
 MSPB order requiring the Department of the Army
 (“Army”) to reinstate Mr. Foster and pay him appropriate
 backpay and benefits. See Foster v. Dep’t of the Army,
 No. SF-0752-18-0039-C-1, 2020 WL 231243 (M.S.P.B.
 Jan. 7, 2020) (P.A. 1–19) (Final Decision). 1 We have juris-
 diction pursuant to 28 U.S.C. § 1295(a)(9). We affirm-in-
 part, reverse-in-part, and remand.
                        BACKGROUND
     During the relevant time period, Mr. Foster was em-
 ployed by the Army in the position of Lead Firefighter, GS-
 0081-08, at Joint Base Lewis-McChord, Washington. Fos-
 ter v. Dep’t of the Army, No. SF-0752-18-0039-I-1, 2018
WL 2762189 (M.S.P.B. June 4, 2018) (Cancellation Or-
 der). 2 In September 2017, the Army decided to remove Mr.
 Foster, effective October 1, 2017, “based on a charge of con-
 duct unbecoming of a Federal employee[,]” specifically,
 “making an anti-Semitic comment[.]” Id. Mr. Foster re-
 tired in lieu of removal, and subsequently filed an appeal

     1    In keeping with the parties’ naming of the appen-
 dices, “P.A.” refers to the appendix attached to Mr. Foster’s
 informal brief; “S.A.” refers to the appendix attached to the
 Army’s informal response brief; and “S.P.A.” refers to the
 supplemental appendix attached to Mr. Foster’s informal
 reply brief.
     2    Neither Mr. Foster nor the Army included the
 MSPB’s Cancellation Order in their respective appendices.
 See generally P.A.; S.A.; S.P.A. Accordingly, we cite to the
 publicly available version, which is unpaginated.
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 FOSTER   v. ARMY                                               3

 with the MSPB. Id. 3 In June 2018, the MSPB administra-
 tive judge (“AJ”) issued the Cancellation Order reversing
 Mr. Foster’s removal based on a due process violation, and
 ordered the Army to: (1) cancel Mr. Foster’s removal and
 “retroactively restore [him] effective September 30, 2017”;
 (2) pay Mr. Foster “the appropriate amount of back[]pay,
 with interest[,] and to adjust benefits with appropriate
 credits and deductions in accordance with the Office of Per-
 sonnel Management’s regulations no later than [sixty] cal-
 endar days after the date [the Cancellation Order] becomes
 final”; and (3) “inform [Mr. Foster] in writing of all actions
 taken to comply with the [MSPB’s] [Cancellation] Order[.]”
Id. The Cancellation Order became final on July 9, 2018.
Id. 4
     After cancelling Mr. Foster’s removal, on Septem-
 ber 14, 2018, the Army removed Mr. Foster for a second
 time, and the MSPB subsequently sustained this removal.
 P.A. 2. In October 2018, Mr. Foster filed a PFE of the
 MSPB’s Cancellation Order reversing his first removal, ar-
 guing that the Army was not in compliance with the

     3    Though the record is unclear as to the effective date
 of his retirement, see P.A. 2 (stating only that Mr. Foster’s
 “October 1, 2017 retirement” “preceded the effective date of
 the retirement”), Mr. Foster does not challenge the MSPB’s
 treatment of October 1, 2017 as the effective date of his re-
 tirement. See generally Pet’r’s Informal Br.
      4   The Cancellation Order became final on July 9,
 2018, when neither Mr. Foster nor the Army filed a petition
 for review by that date. See 5 C.F.R. § 1201.113 (providing
 that “[t]he initial decision of the judge will become the
 [MSPB’s] final decision [thirty-five] days after issuance”
 unless, inter alia, “(a) . . . any party files a petition for re-
 view”); see also Foster, 2018 WL 2762189 (‘This initial de-
 cision will become final on July 9, 2018, unless a petition
 for review is filed by that date.”).
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 4                                            FOSTER   v. ARMY

 Cancellation Order because Mr. Foster was still “in a
 [Leave Without Pay] status” and had not been paid any
 backpay. S.A. 47; see S.A. 43–48 (Petition for Enforce-
 ment). In May 2019, the Army paid Mr. Foster $17,459.97,
 reflecting $43,336.65 in gross backpay, offset by $25,876.68
 in deductions for retirement, income tax, investment, and
 healthcare premiums. P.A. 53; S.A. 320. The parties sub-
 mitted briefs on the PFE and engaged in mediation, which
 ended unsuccessfully in July 2019. S.A. 75–76, 125–27,
 134–37. On August 23, 2019, the AJ ordered the Army “to
 file an updated written response” to Mr. Foster’s PFE,
 “show[ing] proof that [the Army] has complied with the
 [MSPB]’s [Cancellation Order], or that it has good cause for
 noncompliance[.]” S.A. 139. On October 2, 2019, the Army
 submitted an Agency Final Accounting and Supplemental
 to Agency PFE Response, S.P.A. 5–7, and the AJ closed the
 record on December 9, 2019, P.A. 3.
      In January 2020, the AJ issued an initial decision. See
 P.A. 1. The AJ found that “although the [Army] was not in
 compliance with the [Cancellation] Order when [Mr. Fos-
 ter] filed his PFE,” it had since “submitted satisfactory ev-
 idence of compliance with its obligations to cancel [Mr.
 Foster]’s removal and retroactively restore him to his posi-
 tion until he was subsequently removed; and pay [him] the
 correct amount of back pay, interest on back pay, and other
 benefits due.” P.A. 11. Accordingly, the AJ denied Mr. Fos-
 ter’s PFE, id., and the initial decision became final in Feb-
 ruary 2020. 5
                         DISCUSSION
     The MSPB concluded that the Army had submitted sat-
 isfactory evidence of compliance with its Cancellation

     5   The AJ’s initial decision became the final decision
 of the MSPB on February 11, 2020, when neither Mr. Fos-
 ter nor the Army filed a petition for review by that date.
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 FOSTER   v. ARMY                                               5

 Order as to the backpay paid to Mr. Foster, including the
 appropriateness of various deductions and recoupments for
 overpayments. P.A. 4–11. Mr. Foster challenges the
 MSPB’s findings as to: (1) owed gross backpay and over-
 time, and deductions for health insurance and retirement
 benefits; and (2) payment of the appropriate uniform allow-
 ance, as unsupported by substantial evidence. Pet’r’s In-
 formal Br. 4–8. We address each argument in turn.
          I. Standard of Review and Legal Standard
      We “hold unlawful and set aside” an MSPB decision
 that 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). “The MSPB abuses its discretion when[,]”
 inter alia, “the decision is based on . . . factual findings that
 are not supported by substantial evidence[.]” Tartaglia v.
 Dep’t of Veterans Affs., 858 F.3d 1405, 1407–08 (Fed.
 Cir. 2017) (internal quotation marks and citation omitted).
 “Substantial evidence is more than a mere scintilla of evi-
 dence, but less than the weight of the evidence[.]” Jones v.
 Dep’t of Health & Human Servs., 834 F.3d 1361, 1366
 (Fed. Cir. 2016) (internal quotation marks and citations
 omitted). “Under the substantial evidence standard, this
 court reverses the [MSPB]’s decision only if it is not sup-
 ported by such relevant evidence as a reasonable mind
 might accept as adequate to support a conclusion.”
 Shapiro v. Soc. Sec. Admin., 800 F.3d 1332, 1336 (Fed.
 Cir. 2015) (internal quotation marks and citations omit-
 ted). “The petitioner bears the burden of establishing error
 in the MSPB’s decision.” Jenkins v. Merit Sys. Prot.
 Bd., 911 F.3d 1370, 1372 (Fed. Cir. 2018) (alterations omit-
 ted).
     As is relevant here, “the purpose of . . . a cancellation
 order is to place the employee as nearly as possible in the
 status quo ante”—that is, the position the employee would
 have been in, but for the wrongful agency action. Kerr v.
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 6                                             FOSTER   v. ARMY

 Nat’l Endowment for the Arts, 726 F.2d 730, 733 (Fed.
 Cir. 1984); see Smith v. Dep’t of Army, 458 F.3d 1359, 1364
 (Fed. Cir. 2006) (“The [MSPB]’s enforcement power . . .
 functions to ensure that employees are returned to the sta-
 tus quo ante upon reversal of the agency’s action.”). This
 includes “compensation for any loss of wages or benefits
 that [the employee] suffered by reason of [the wrongful
 agency action].” Marshall v. Dep’t of Health & Human
 Servs., 587 F.3d 1310, 1317 (Fed. Cir. 2009). Compliance
 with a cancellation order is a question of fact, which we re-
 view for substantial evidence. See id.
     Regarding computation of owed backpay, OPM regula-
 tions provide, in relevant part, that an agency “must” offset
 a gross backpay award by “[a]ny erroneous payments re-
 ceived from the Government as a result of the unjusti-
 fied . . . personnel action,” including “[r]etirement annuity
 payments[.]” 5 C.F.R. § 550.805(e)(2). The agency must
 also deduct payments “of the type that would have been
 made from the employee’s pay[,]” including, inter alia,
 “Medicare taxes[,]” “Federal income tax withholdings[,]”
 “health benefits premiums,” and “[m]andatory employee
 retirement contributions towards a defined benefit plan[.]”
Id. § 550.805(e)(3).
        II. Substantial Evidence Supports the MSPB’s
 Finding that the Army Complied with the MSPB’s Cancel-
                lation Order as to Backpay
    The MSPB found that the Army had complied with the
 Cancellation Order by paying Mr. Foster the appropriate
 amount of backpay and interest, including deductions for
 health insurance and retirement benefits he had received.
 P.A. 5–6. 6 Mr. Foster argues that the Army failed to

     6   As Mr. Foster chose to retire in lieu of removal, Fos-
 ter, 2018 WL 2762189, he received retirement benefits.
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 FOSTER   v. ARMY                                          7

 provide a sufficient explanation for its gross backpay cal-
 culations and retirement deductions, improperly deducted
 health insurance premiums, and should have paid him
 overtime. Pet’r’s Informal Br. 4–8. We disagree with
 Mr. Foster.
      Substantial evidence supports the MSPB’s finding that
 the Army paid Mr. Foster the appropriate backpay for the
 period from October 1, 2017 to September 14, 2018, the
 dates of Mr. Foster’s first and second removals. First, the
 Defense Finance and Accounting Service (“DFAS”) calcu-
 lated the gross backpay Mr. Foster would have earned from
 October 1, 2017, to August 30, 2018. S.A. 322–24 (Back
 Pay Computation Summary Report); see S.A. 258–59 (de-
 tailing, inter alia, Mr. Foster’s “Pay Plan[,]”
 “Grade/Level[,]” “Step/Rate[,]” and “Total Salary” for the
 relevant period). Next, DFAS then added compensation for
 “[i]nterest on [b]ack [p]ay” and “[a]nnual [l]eave[.]”
 S.A. 320–21, 330–31. The record supports DFAS’s decision
 not to compensate Mr. Foster for “irregular overtime”
 hours he hypothetically could have worked during the
 backpay period, as he did not volunteer for any irregular
 overtime for the two-year period prior to his first removal.
 S.A. 3551 (providing that “Mr. Foster did not work . . . any
 irregular overtime hours” from October 1, 2015 to Septem-
 ber 30, 2017). Next, DFAS deducted retirement benefits
 the Office of Personnel Management (“OPM”) had paid Mr.
 Foster during the relevant period. S.A. 320–21; see S.A.
 282 (detailing the retirement benefits paid to Mr. Foster
 “from 10/01/2017 thru 08/30/2018”). Finally, DFAS de-
 ducted further retirement, income tax, insurance, and in-
 vestment contributions that Mr. Foster would have paid,
 had his first removal not occurred. S.A. 320 (detailing de-
 ductions for, inter alia, “Medicare[,]” “Federal Income

 P.A. 55–62 (detailing annuity payments paid to Mr. Fos-
 ter).
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 8                                             FOSTER   v. ARMY

 Tax[,]” “Dental Insurance[,]” and a Thrift Savings Plan).
 The above deductions are required by OPM regulations.
 See 5 C.F.R. § 550.805(e)(2)(i)–(3)(v). Accordingly, sub-
 stantial evidence supports the MSPB’s finding that the
 Army “demonstrated it properly paid [Mr. Foster] the
 amount of backpay due him as a result of” the MSPB’s Can-
 cellation Order. P.A. 4.
     Mr. Foster’s primary counterargument is unpersua-
 sive. Mr. Foster contends that the Army should not have
 deducted health insurance premiums from his backpay
 award because, subsequent to the MSPB’s Cancellation Or-
 der, he indicated to DFAS that he did not wish to have his
 health insurance reinstated during the backpay period.
 Pet’r’s Informal Br. 5; see P.A. 29–30 (Employee Statement
 Relative to Back Pay). Mr. Foster is incorrect. As noted,
 OPM regulations require that an agency offset a backpay
 award by “erroneous payments,” such as “[h]ealth benefits
 premiums, if coverage continued during a period of errone-
 ous retirement.” 5 C.F.R. § 550.805(e)(2), (3)(iii). Here, the
 record establishes that Mr. Foster received at least several
 months of health benefits during his “erroneous retire-
 ment.”      P.A. 57–62 (detailing deductions for “Blue
 Cross/Blue Shield Service Benefit Plan” premiums from
 February 2018 to July 2018). Thus, deduction of the health
 insurance premiums from the backpay award was con-
 sistent with OPM’s regulations, despite Mr. Foster’s later
 statement to DFAS that he did not wish to have health in-
 surance reinstated. Accordingly, substantial evidence sup-
 ports the MSPB’s finding that the Army paid Mr. Foster
 the proper amount of backpay. 7

     7  The Army argues that “the MSPB did not need to
 reach whether the [Army] could deduct health insurance
 premiums contrary to Mr. Foster’s election because the
 [Army] did not make such deductions.” Resp’s Informal Br.
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 FOSTER   v. ARMY                                           9

      II. Substantial Evidence Does Not Support the
    MSPB’s Finding that the Army Complied with the
   MSPB’s Cancellation Order as to Uniform Allowance
     The MSPB concluded that Mr. Foster was only entitled
 to a $400 semi-annual uniform allowance, and that the
 Army had “produced sufficient evidence to establish” that
 it had complied with the Cancellation Order by paying
 Mr. Foster this uniform allowance. P.A. 9. Mr. Foster chal-
 lenges these findings as unsupported by substantial evi-
 dence. See Pet’r’s Informal Br. 7. Specifically, Mr. Foster
 argues that he “should have been treated as a new hire
 with full initial uniform allowance benefits of $1,600.00”
 because the “record . . . does not refute or dispute” that he
 “was required by the Army to turn in his uniforms and
 safety equipment[.]” Id. (alterations omitted). We agree
 with Mr. Foster.
     The MSPB’s finding that the Army had paid Mr. Foster
 an appropriate uniform allowance is unsupported by sub-
 stantial evidence. Indeed, there is no evidence in the rec-
 ord to support the conclusion that the Army has paid
 Mr. Foster a uniform allowance. See generally S.A. 320–
 21, 322–24, 331–32. In fact, the Army concedes that it has
 never paid Mr. Foster a uniform allowance for the relevant

 16, n.4. The Army contends that, through a rather convo-
 luted process of payments and recoupments, it “honored
 Mr. Foster’s election” and ultimately did not deduct health
 insurance premiums from his backpay. See id. at 16–17.
 Because the Army does not appear to have raised this ar-
 gument before the MSPB, see generally P.A. 5–6, we will
 not consider it for the first time on appeal. Bosley v. Merit
 Sys. Prot. Bd., 162 F.3d 665, 668 (Fed. Cir. 1998) (“A party
 in an MSPB proceeding must raise an issue before the ad-
 ministrative judge” if the issue is “to be preserved for re-
 view in this court.”).
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 10                                           FOSTER   v. ARMY

 period. See Resp’s Informal Br. 19–20 (“The MSPB did,
 however, make a misstatement [concerning the uniform al-
 lowance] . . . because the payment was still underway at
 the time of the [Army’s] November 27, 2019[,] filing and no
 subsequent proof of payment was provided.”), 20–21 (ex-
 plaining that the Army has not paid Mr. Foster the uniform
 allowance “[b]ecause Mr. Foster never provided the neces-
 sary form”). Accordingly, the MSPB’s finding that the
 Army paid Mr. Foster the appropriate uniform allowance
 was unsupported by substantial evidence.
     The MSPB’s finding that Mr. Foster is only entitled to
 a $400 semi-annual uniform allowance is also unsupported
 by substantial evidence. The MSPB premised this finding
 on its reasoning that Mr. Foster was “entitled to that which
 he would have received if he had remained employed with
 the [Army] until” his second removal, which “would not in-
 clude an initial uniform allowance.” P.A. 9. However,
 Mr. Foster argued before the MSPB that he should have
 received the full initial uniform allowance because he “was
 required to turn in his uniforms and safety equipment
 upon his separation[.]” P.A. 120. It is unclear from the
 record whether the Army required Mr. Foster to return his
 uniforms and equipment, and, if so, whether such items be-
 long to the civilian employee or whether they are Army
 property and routinely returned at the end of employment.
 See generally P.A.; S.A.; S.P.A. The MSPB’s Final Decision
 contains no analysis or fact-finding concerning these ques-
 tions. See generally P.A. 9 (stating only that Mr. Foster
 sought the $1,600 initial uniform allowance “because he
 was subject to an unjustified and unwarranted personnel
 action”). Accordingly, the record as it stands now, does not
 contain substantial evidence supporting the MSPB’s find-
 ing that Mr. Foster was entitled only to a $400 semi-annual
 uniform allowance.
    The question of what uniform allowance would place
 Mr. Foster in the position he would have been in, prior to
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 FOSTER   v. ARMY                                         11

 his first removal, depends upon the results of additional
 fact-finding. We remand, so that the MSPB may allow the
 parties to submit evidence on whether the Army required
 Mr. Foster to return his uniforms and equipment, and if so,
 whether this is standard procedure in such situations or
 whether these items are regarded as the employee’s prop-
 erty, in order to determine the uniform allowance neces-
 sary to place Mr. Foster in status quo ante.
                          CONCLUSION
     We have considered the parties’ remaining arguments
 and find them unpersuasive. Accordingly, the MSPB’s Fi-
 nal Decision is affirmed-in-part and reversed-in-part. The
 case is remanded to the MSPB for further proceedings con-
 sistent with this opinion.
   AFFIRMED-IN-PART, REVERSED-IN-PART, AND
                 REMANDED
                             COSTS
     No costs.