Court Opinion

ID: 7799158
Source: CourtListenerOpinion
Date Created: 2022-08-09 15:00:56.117035+00
Date Added: 2024-06-11T16:28:54.950828
License: Public Domain

Case: 21-2098    Document: 37     Page: 1   Filed: 08/09/2022

   United States Court of Appeals
       for the Federal Circuit
                  ______________________

                     WILLIAM COY,
                       Petitioner

                             v.

         DEPARTMENT OF THE TREASURY,
                    Respondent
              ______________________

                        2021-2098
                  ______________________

    Petition for review of the Merit Systems Protection
 Board in No. DC-0752-20-0325-I-1.
                 ______________________

                 Decided: August 9, 2022
                 ______________________

     CHRISTOPHER HUGH BONK, Gilbert Employment Law,
 P.C., Silver Spring, MD, argued for petitioner. Also repre-
 sented by KEVIN OWEN, ALEXIS NICOLE TSOTAKOS.

     NATHANAEL YALE, Commercial Litigation Branch, Civil
 Division, United States Department of Justice, Washing-
 ton, DC, argued for respondent. Also represented by BRIAN
 M. BOYNTON, ELIZABETH MARIE HOSFORD, PATRICIA M.
 MCCARTHY.
                  ______________________

      Before DYK, REYNA, and STOLL, Circuit Judges.
Case: 21-2098     Document: 37     Page: 2    Filed: 08/09/2022

 2                                            COY   v. TREASURY

 DYK, Circuit Judge.
     The Department of the Treasury (“Treasury”) initiated
 a removal action against William Coy, charging Coy with
 “Misuse of Government Property.” Treasury sustained the
 charge and removed Coy, and Coy appealed the removal to
 the Merit Systems Protection Board (“Board”). A Board
 Administrative Judge (“AJ”) reversed Treasury’s removal
 of Coy on the ground that Treasury violated his due process
 rights by considering information concerning Coy’s work
 performance not included in the Notice of Proposed Re-
 moval. Treasury and Coy both petitioned the Board for re-
 view of the AJ’s initial decision. While that petition for
 review was still pending, Treasury initiated a second re-
 moval action based on the same charge and specifications
 and subsequently removed Coy. Coy does not contend that
 the due process defect in the first removal action was pre-
 sent in the second removal action. An AJ upheld Treas-
 ury’s second removal action, and the AJ’s initial decision in
 the second action became the decision of the Board when
 no party petitioned the Board for review.
      Coy petitions this court for review of the final decision
 in his second removal action, arguing both that Treasury
 was precluded from initiating the second action while the
 first was still pending and that the Board erred by consid-
 ering grounds not listed in the Notice of Proposed Removal.
 We affirm.
                        BACKGROUND
                               I
      On November 27, 2016, Coy began working at Treasury
 as the Director of Compensation and Benefits in the Office
 of the Comptroller of the Currency (“OCC”). Shortly there-
 after, Coy filed an appeal with the Board requesting cor-
 rective action against Treasury under the Uniformed
 Services Employment and Reemployment Rights Act of
 1994 (USERRA), see 38 U.S.C. §§ 4301–35, alleging
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 COY   v. TREASURY                                          3

 discrimination in compensation. In connection with that
 action, Coy downloaded confidential employee data from
 two files within OCC electronic systems, which he accessed
 based on his status as the Director of Compensation and
 Benefits. The purpose apparently was to compare Coy’s
 compensation with that of other employees. On March 16,
 2017, Treasury took Coy’s deposition in which he testified
 that he had accessed the two files and transferred them to
 his home computer to use in his USERRA action against
 Treasury. He produced the files to Treasury in response to
 a discovery request in the USERRA proceeding.
     On September 20, 2017, Coy’s supervisor proposed
 Coy’s removal from federal service based on a single charge
 of “Misuse of Government Property” with three supporting
 specifications based on Coy’s accessing and downloading
 the two files for personal use in his USERRA action in vio-
 lation of various regulations. The Senior Deputy Comptrol-
 ler for Management at Treasury sustained all three
 specifications and terminated Coy, effective April 13, 2018.
 On May 9, 2018, Coy appealed his removal to the Board.
     On September 11, 2019, a Board AJ issued an Initial
 Decision in Coy’s first appeal, reversing the removal. The
 AJ found that Coy demonstrated harmful procedural error
 and a due process violation because the deciding official at
 Treasury considered factors not referenced in Coy’s Notice
 of Proposed Removal. However, the AJ stated that
 “[a]bsent the agency’s due process and harmful procedural
 errors, [she] would have sustained the agency’s charge and
 supporting specifications.” J.A. 203. The AJ ordered
 Treasury to provide Coy with interim relief under 5 U.S.C.
 § 7701(b)(2)(A) if a petition for review was filed.
     Both Treasury and Coy filed petitions for review with
 the full Board, and pursuant to the AJ’s interim relief or-
 der, Treasury restored Coy to a non-duty employed status,
 effective September 11, 2019. Because the Board lacked a
 quorum until March 4, 2022, the petitions for review in
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 4                                          COY   v. TREASURY

 Coy’s first appeal remained pending before the Board as of
 oral argument in this appeal.
                             II
     On October 28, 2019, Treasury again proposed Coy’s
 removal based on the same charge and specifications as the
 previous removal. The charge and specifications were
 stated as follows:
     Charge: Misuse of Government Property
     Specification 1: On March 16, 2017, during a sworn
     deposition, you stated that you accessed and down-
     loaded personnel data from an OCC system to in-
     clude names, titles, band levels, series, salary
     information, social security numbers, birth dates,
     and service computation dates of approximately 94
     employees in the OCC’s Office of Human Capital.
     You accessed this information for your own per-
     sonal use and without authorization.
     Specification 2: On March 16, 2017, during a sworn
     deposition, you stated that you accessed and down-
     loaded 80 pages of OCC new hire salary justifica-
     tion roll up information.      You accessed this
     information for your own personal use and without
     authorization.
     Specification 3: On March 16, 2017, during a sworn
     deposition, you stated that you emailed the infor-
     mation described in specifications 1 and 2 to your
     personal email account and stored the information
     on your personal computer at home. You were not
     authorized to remove OCC personnel information
     from the OCC, transmit the information outside
     OCC’s networks, or store OCC personnel infor-
     mation on your home computer.
 J.A. 162.
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 COY   v. TREASURY                                            5

     Treasury sustained the charge and terminated Coy a
 second time, effective December 28, 2019, and Coy ap-
 pealed this second removal action to the Board on January
 21, 2020. In the second removal action, Coy raised no claim
 of a due process violation related to consideration of mate-
 rials outside the scope of the Notice of Proposed Removal,
 as was the case in the first removal.
      A different Board AJ issued an Initial Decision in Coy’s
 second appeal, affirming the removal and confirming that
 Treasury was permitted to initiate a second removal action
 while a petition for review of the first removal action re-
 mained pending. The AJ concluded “that the agency could
 initiate and effect a second removal action against [Coy]
 based on the same charges while a [petition for review] of
 the first removal action was pending” before the Board.
 J.A. 7. On the merits, the AJ sustained Specifications 1
 and 2 in support of the misuse charge:
       In this case, it is undisputed that [Coy] collected
       sensitive electronic data containing personnel in-
       formation concerning agency employees as well as
       outside candidates from the agency’s websites to
       use that information to support his personal litiga-
       tion efforts and then provided that information to
       agency attorneys during discovery. In addition to
       being unauthorized activity, [Coy’s] actions consti-
       tuted a serious violation of the agency’s right to
       control and safeguard its property. Moreover,
       [Coy’s] actions interfered with the agency’s respon-
       sibility to ensure that such records are used only
       for the official government purposes for which they
       were created. In sum, [Coy’s] conduct clearly con-
       stituted a misuse of government property.
 J.A. 16–17. The AJ also sustained Specification 3 in sup-
 port of the misuse charge.
    The initial decision became final on May 20, 2021,
 when neither Treasury nor Coy filed a petition for review
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 6                                           COY   v. TREASURY

 with the Board. Coy petitions this court for review. We
 have jurisdiction under 28 U.S.C. § 1295(a)(9).
     At oral argument, Coy argued that the interim relief
 statute, § 7701(b)(2), precluded the second removal action,
 an issue neither party briefed. We ordered supplemental
 briefing on May 5, 2022, to address the following question:
     When the Board has issued an interim relief order
     pursuant to 5 U.S.C. § 7701(b)(2) ordering that the
     employee be restored to his position and paid back
     pay, does the order preclude the Agency from initi-
     ating a duplicate removal action and removing the
     employee while the interim relief order is in effect?
 Order 3, ECF No. 32. Both Coy and Treasury filed supple-
 mental briefs.
                         DISCUSSION
     By statute, we are permitted to set aside a Board deci-
 sion only if 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). “An agency’s decision ‘to dismiss a fed-
 eral employee must have a “rational basis supported by
 substantial evidence from the record taken as a whole.”’”
 O’Keefe v. U.S. Postal Serv., 318 F.3d 1310, 1313 (Fed. Cir.
 2002) (quoting Mitchum v. Tenn. Valley Auth., 756 F.2d 82,
 85 (Fed. Cir. 1985)).
                               I
     Coy contends that the interim relief statute in
 § 7701(b)(2) and the interim relief order here bar duplicate
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 COY   v. TREASURY                                              7

 removal actions while the first proceeding is still pending. 1
 The interim relief statute provides,
       If an employee or applicant for employment is the
       prevailing party in an appeal under this subsec-
       tion, the employee or applicant shall be granted the
       relief provided in the decision effective upon the
       making of the decision, and remaining in effect
       pending the outcome of any petition for review un-
       der subsection (e), unless—
       (i) the deciding official determines that the grant-
       ing of such relief is not appropriate; or
       (ii)
              (I) the relief granted in the decision provides
              that such employee or applicant shall return or
              be present at the place of employment during
              the period pending the outcome of any petition
              for review under subsection (e); and
              (II) the employing agency . . . determines that
              the return or presence of such employee or ap-
              plicant is unduly disruptive to the work envi-
              ronment.
 § 7701(b)(2)(A) (emphases added). The AJ’s interim relief
 order stated, “The relief shall be effective as of the date of
 this decision and will remain in effect until the decision of
 the Board becomes final.” J.A. 206; see Pet’r Suppl. Br. 5.
 Coy argues that, under the statute, interim relief “must re-
 main in effect pending the outcome of any petition for re-
 view,” and “[u]nless the agency proceeds with an adverse
 action taken on grounds other than those on which the

       1Coy admits that the second removal action would
 be proper if the first removal action had been finally set
 aside on procedural grounds. See generally Reynolds v.
 United States, 454 F.2d 1368, 1374 (Ct. Cl. 1972).
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 8                                               COY   v. TREASURY

 interim relief order was based, a repeat adverse action is
 inconsistent with the interim relief order under 5 U.S.C.
 § 7701(b)(2).” Pet’r Suppl. Br. 1, 3. We think the interim
 relief statute does not support Coy’s argument.
      Our court has rejected an interpretation of the interim
 relief statute that would bar all subsequent disciplinary ac-
 tions until a decision is final. In Guillebeau v. Department
 of the Navy, the Navy removed an employee for poor work
 performance, and an AJ reversed the decision, ordering in-
 terim relief. 362 F.3d 1329, 1331 (Fed. Cir. 2004). The
 Navy petitioned the Board for review and returned the em-
 ployee to pay status, but after a short period and while the
 petition for review was still pending with the Board, the
 Navy indefinitely suspended the employee because the em-
 ployee’s security clearance was suspended. Id. In that
 case, the initial removal action was based on work perfor-
 mance, and the subsequent suspension was based on the
 suspension of a security clearance. Id. at 1333. We held
 that the interim relief order and statute did not constitute
 an absolute bar on subsequent actions:
       [T]he interim relief order can[not] insulate an ap-
       pellant from a subsequent adverse action so long as
       that action is not inconsistent with the initial deci-
       sion.’’ Barcliff v. Dep’t of the Navy, 62 M.S.P.R. 428,
       433 (1994) (emphasis added); see also Rothwell v.
       United States Postal Serv., 68 M.S.P.R. 466, 468
       (1995); Shumate v. Dep’t of the Navy, 62 M.S.P.R.
       288, 290 (1994); Crespo v. United States Postal
       Serv., 53 M.S.P.R. 125, 129 (1992). In these cases,
       the Board held that the interim relief order only
       protects the appellant from adverse actions based
       on the events underlying the action in which the
       interim relief order was granted, not events that
       are unrelated to the interim relief order.
 Id.
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 COY   v. TREASURY                                           9

     Although Guillebeau involved a situation where the
 underlying employee conduct was different in the two
 cases, we think the principle of Guillebeau applies equally
 to situations where the conduct is the same, but the
 grounds of Board’s decisions are different, i.e., where the
 Board’s decision in the second action “is not inconsistent
 with the initial decision”—for example, where the first ac-
 tion is set aside for a procedural deficiency not present in
 the second proceeding. Id.
     The legislative history, though limited, confirms the
 narrow scope of the provision and that it was designed to
 prevent an employee from being denied the benefits of a
 Board decision, pending appeal, by an agency’s interim ac-
 tion inconsistent with a first decision. The interim relief
 statute was added as part of the Whistleblower Protection
 Act of 1989. Pub L. No. 101-12, § 6, 103 Stat. 16, 33–34
 (1989). The Senate Report explained, “This section is a
 change to current law in that under current law, employees
 are not granted any relief ordered by a regional office of the
 Board until they win at the full Board.” S. Rep. No. 100-
 413, at 35 (1988). Senator Pryor provided some clarifica-
 tion on this purpose: “[The Senate bill] provides interim re-
 lief to those whistleblowers who receive a favorable
 decision at the . . . MSPB, regional level. This ensures that
 an employee will not suffer undue hardship waiting for a
 final decision from the MSPB.” 134 Cong. Rec. 29,543
 (1988) (statement of Sen. Pryor). Thus, the statute was de-
 signed to preserve the consequence of a “favorable deci-
 sion,” not to preserve the employee’s employment rights
 regardless of the circumstances.
     Board precedent, while not binding on this court, also
 appears to allow duplicate removal actions that cure proce-
 dural deficiencies in a first removal action even while the
 final action is still pending before the Board. Although Coy
 quotes language in Hanner v. Department of the Army, 62
 M.S.P.R. 677, 687 (1994), that appears to support his argu-
 ment that the first action must be final before the second
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 10                                            COY   v. TREASURY

 action can be initiated, 2 Hanner did not directly address a
 situation where the second action was initiated when the
 first action suffered from a procedural error that could be
 cured in the second action. 3 Other Board cases more di-
 rectly on point support our conclusion that a second action
 is not precluded even if it is initiated while a first action is
 on appeal when the first action has been set aside for a pro-
 cedural violation. Barcliff v. Dep’t of the Navy, 62 M.S.P.R.
 428, 431–33 (1994); Shumate v. Dep’t of the Navy,
 62 M.S.P.R. 288, 290 (1994).
      In view of the statutory language, our decision in Guil-
 lebeau, and the legislative history, the clear purpose of the
 statute is to prevent the agency from taking action incon-
 sistent with the first decision. That did not occur here. The
 first removal suffered from a procedural deficiency that
 was cured in a second removal action. Thus, Coy’s second
 removal was permissible while the first removal was still
 pending before the Board because the second removal
 cured the procedural deficiency of the first removal and did
 not evade the first decision.

      2   See Hanner, 62 M.S.P.R. at 687 (“[I]n a case involv-
 ing two consecutive removals, the second removal can have
 no force or effect unless the agency rescinds or modifies the
 first removal action, or a final decision of the Board or a
 court reverses the first removal action.”).
      3   Coy also relies on Parker v. U.S. Postal Service,
 46 M.S.P.R. 214, 219–20 (1990). The Board in Parker ap-
 pears to have held that an employee who has been removed
 cannot be removed again until restored to his prior posi-
 tion. Id. at 219–20. To the extent that language in Hanner
 or Parker supports a view contrary to our holding here, it
 is not binding on this court, and we disapprove of it.
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 COY   v. TREASURY                                          11

                                II
     We next consider whether the Board abused its discre-
 tion by considering Coy’s transmittal of the sensitive elec-
 tronic data to non-OCC counsel while analyzing
 Specifications 1 and 2 of the Notice of Proposed Removal
 when those specifications mention “personal use” but not
 transmittal. We have held it is an abuse of discretion to
 exceed the scope of the charge and specifications listed in a
 Notice of Proposed Removal. O’Keefe, 318 F.3d at 1315.
 “Only the charge and specifications set out in the Notice
 may be used to justify punishment because due process re-
 quires that an employee be given notice of the charges
 against him in sufficient detail to allow the employee to
 make an informed reply.” Id.; see also Do v. Dep’t of Hous.
 & Urb. Dev., 913 F.3d 1089, 1094 (Fed. Cir. 2019) (“[W]hen
 an agency disciplines an employee, it may do so based only
 on the charges in the notice of proposed action, and the
 Board, in turn, can affirm the disciplinary action based
 only on the charges actually noticed and relied on by the
 agency.”).
     Coy argues that Specifications 1 and 2 do not allege
 transmittal of information and that the Board’s “review of
 these specifications relies upon a finding that Mr. Coy im-
 properly transmitted government data.” Pet’r Br. 24. We
 reject Coy’s argument because the Board properly con-
 cluded that the transmittal was part of Coy’s “access[ing]
 th[e] information for [his] own personal use and without
 authorization,” as recited in Specifications 1 and 2.
 J.A. 162. The Board found that Coy “downloaded agency
 information which he was authorized to obtain for perform-
 ing his job duties but he utilized that information for his
 own personal purposes in litigation including providing the
 information to non-OCC agency counsel without authoriza-
 tion.” J.A. 16 (emphasis added).
   Coy argued that providing the relevant data to non-
 OCC counsel in discovery was not for personal use, and
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 12                                          COY   v. TREASURY

 now argues that the Board erred in concluding that trans-
 mitting was part of Coy’s personal use. We see no error in
 concluding that Coy’s use of confidential employee infor-
 mation here, including the transmission to government
 counsel, was a personal use. Coy could not have used the
 data in the USERRA proceeding without providing it to
 counsel in response to the discovery requests for “each and
 every fact upon which you base your claim in this matter
 that the OCC set your salary as a means to discriminate
 against you,” J.A. 108, and “each and every document, elec-
 tronic recording, or other tangible item, however described,
 which in any way reflects, relates to, substantiates, or cor-
 roborates the allegations of discrimination contained in
 your appeal,” J.A. 108–09. Providing the documents in re-
 sponse to those requests was therefore part of the personal
 use.
                        CONCLUSION
      The interim relief statute does not preclude a second
 removal action while a first removal action is still pending
 when the second action cures a procedural deficiency in the
 first action. The Board properly considered how Coy used
 the sensitive data that he accessed and downloaded in de-
 termining if Coy’s use was an unauthorized personal use.
                        AFFIRMED
                            COSTS
 No costs.