Court Opinion

ID: 9491661
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:19:53.858082+00
Date Added: 2024-06-11T17:54:52.205939
License: Public Domain

PLAGER, Circuit Judge,
concurring.
Though I agree with where we have got to in this case, I dislike the way in which we did it. The thoughtful reader of the majority opinion may note a creative ‘twist’ by the court in its analysis regarding the allocation of the burden of persuasion in ‘last chance’ agreements. This twist was thought necessary because of the manner in which we describe the Board’s “jurisdiction” in these cases, and thus the way in which we allocate the burden of persuasion.
A last chance agreement typically arises when an agency threatens or takes an adverse action (often discharge — statutorily referred to as “removal”) against an employee for some misconduct. The employee has the right to appeal an adverse action to the Merit Systems Protection Board (“MSPB” or “Board”); the claimed grounds justifying an appeal may be simply a denial of the misconduct, or they may involve some other defenses such as retaliation for whistle-blowing.
Sometimes before the employee is discharged, sometimes after the discharge and in the course of an appeal to the Board, the parties settle their differences by entering the last chance agreement. If the case is one in which the agreement is entered into prior to an actual discharge, such as the case here, the agency will agree to hold in abeyance the discharge on the grounds alleged, on the condition that the employee straightens up and flies right (often for a limited period of time). The employee agrees to do so, and agrees that, if the employee fails (ie., again misbehaves), the employee may be immediately terminated with no appeal rights (¿a, waives any right to appeal). If the agree*728ment arises during the appeal process, the agency agrees to reinstate the employee (on the same condition of good behavior), and the employee similarly agrees to accept termination without appeal rights in the event of a lapse of behavior.
There appears to be no standard form or text for these last chance agreements — each agency deals with its problems on an ad hoc basis — though the language in which the waiver provision is cast tends to be a simple, broad statement to the effect that the employee waives any right of appeal. There are several ways such waiver provisions could be understood.
One way is that, if the agency determines in its discretion that the employee has engaged in a subsequent act of misconduct (as defined by the agreement), and thus breached the agreement, the employee is out, and there is no review of the agency decision by the MSPB. This result could be rationalized by treating the eventual discharge as exclusively the consequence of a breach of an agreement, in essence a breach of the last chance employment contract, and thus not an adverse action over which the MSPB has jurisdiction, see 5 U.S.C. §§ 7701(a), 7513(d), 7512 (1994). (Whether the employee could obtain direct review, in a court of competent jurisdiction, of the discharge on the ground that the alleged breach of the contract did not occur, and thus the discharge is a breach of contract by the Government, is a question which to my knowledge has not been addressed.)
A variant, on this analysis is to treat the eventual discharge as an adverse action as well as a breach of the last chance agreement, and treat the employee’s waiver as applying to both aspects of the case, that is, as a waiver of MSPB review as to both the initial charges and the subsequent alleged breach of the employment contract. Under this variant the employee would be conclusively barred from challenging the Government’s action before the MSPB. In effect, the employee is unable to state a claim for which the MSPB could grant relief. See Link v. Department of the Treasury, 51 F.3d 1577, 1584 (Plager, J., concurring).
Neither the Board nor this court has understood last chance agreements in either of these ways. Instead, the waiver is deemed to apply “only to the facts underlying and the legal validity of the original [threatened or carried out] removal.” Stewart v. United States Postal Serv., 926 F.2d 1146, 1149 n. * (Fed.Cir.1991). Despite the generally-unqualified language in these last chance agreements that the employee waives appeal rights to the MSPB, the question of whether there has been an actual breach of the last chance agreement by the employee through a subsequent act of misconduct is deemed a question that the employee may take to the MSPB for review; that is, the employee is deemed “not [to have] waivefd] his right to contest the breach of the agreement itself.” Id. Stated another way, the employee’s breach of the agreement is said to be a condition precedent to the waiver: “The last chance agreement predicates the .... waiver of appeal rights on breach of one or more of the other stipulations the agreement contains.” Id. at 1148; see also Briscoe v. Department of Veterans Affairs, 55 F.3d 1571, 1573 (Fed.Cir.1995) (same).
This understanding does not make the employee’s “waiver” promise under the last chance agreement meaningless. To the contrary, the employee gives up something significant in exchange for the agency’s forbearance from pursuing (or sustaining) the discharge. What the employee gives up is the case that the Government otherwise must prove under the law to justify removal of an employee.
When an employee challenges an adverse action (e.g., discharge) in the ordinary course by initiating MSPB review, the Government, to have the action upheld, must establish, one, that the charged conduct occurred, two, that there is a nexus between that conduct and the efficiency of the service, and, three, that the penalty imposed is reasonable. See Pope v. United States Postal Serv., 114 F.3d 1144, 1147 (Fed.Cir.1997). The Government bears the burden of proving its charges by a preponderance of the evidence. See Jackson v. Veterans Administration, 768 F.2d 1325, 1329 (Fed.Cir.1985); Hale v. Department of Transp., 772 F.2d 882, 885 (Fed.Cir.1985).
*729In contrast, when discharge under a last chance agreement is the case, the sole issue raised on appeal to the MSPB is whether the employee in fact violated the agreement by an act of ‘misconduct’ as defined under the agreement. Nexus with the efficiency of the service is not at issue, nor is the reasonableness of the penalty (typically the discharge). Furthermore, the universe of actionable misconduct often is defined quite broadly by the agreement; for example, under the agreement in this case “[a]ny infraction of VA policies or regulations ... will result in immediate termination....”
The outstanding question posed by this understanding of the last chance agreement .is, which party bears the burden of persuasion on the one matter at issue — i.e., whether the employee in fact breached the agreement. In the ordinary MSPB appeal from an adverse action, the Government, as previously noted, bears the burden of establishing the offense. And under ordinary contract law, a party alleging breach — here the Government — bears the burden of proving the breach. See Technical Assistance Int’l, Inc. v. United States, 150 F.3d 1369, 1373 (Fed.Cir.1998).
In my view, this should be the starting point in last chance agreement cases as well. That is, absent an explicit contrary provision in the agreement, the Government bears the burden of justifying its action (typically removal) by proving that the employee in fact violated the terms of the agreement. Thus, the way in which the burden is allocated under these last chance agreements is a matter of contract interpretation. If the parties in the last chance agreement assign the burden of persuasion otherwise — as they certainly could — that controls. If the agreement is silent on the matter, as it is in this ease, the default position should be the ‘ordinary5 allocation of the burden of persuasion— the Government alleges breach, the Government should pi’ove its case.
The case that the Government must prove is only that the employee violated the behavioral requirements of the last chance agreement. The Government need not establish a nexus between the misconduct and the efficiency of the service, or that the penalty is appropriate to the misconduct. This is because, as recognized in Stewart, 926 F.2d at 1149 n. *, the employee is deemed to have waived his right to refute the original alleged misconduct, as well as the questions of whether that misconduct has a nexus with the efficiency of the service and whether the penalty (discharge) is appropriate.
In effect, the discharge that flows from the misconduct that constitutes breach of a last chance agreement stands on both the original alleged misconduct and the subsequent misconduct constituting breach. The resulting termination is not merely a reinstatement of the original proposed or carried out removal. Nor is the termination based entirely on the subsequent misconduct, as the otherwise prerequisite nexus may be lacking, or, more likely, the penalty (termination) may be considered disproportionate. It is the combination of breach of the employment contract— the last chance agreement — coupled with the initial adverse action that justifies the termination; and it is the latter aspect — the adverse action aspect — of the transaction that gives the MSPB undoubted jurisdiction to hear the employee’s appeal of whether a breach in fact occurred.
Unfortunately, the analysis used by the Board in these last chance agreement cases, largely left uncorrected by this court, begins with a misunderstanding of the Board’s “jurisdiction,” and as a result allocates the burden of persuasion in a perverse way. See, e.g., Briscoe, 55 F.3d at 1573, McCall v. United States Postal Serv., 839 F.2d 664, 668-69 (Fed.Cir.1988); but see Link, 51 F.3d at 1584 (Plager, J., concurring). Under this “jurisdiction” view of the case, the Board accepts an employee’s appeal from the agency’s decision that there has been a breach of the last chance agreement. The Board reviews the case to decide whether there has been a breach. See Briscoe, 55 F.3d at 1573 (“It is the board’s responsibility to determine whether ... [a breach of the agreement has occurred].”).
If the Board agrees with the employee that there has been no breach (that is, that the agency does not have cause to discharge), the Board concludes that there has been no waiver of appeal rights and that it therefore has *730jurisdiction, and it then overturns the agency decision. If, however, the Board on the merits agrees with the agency that a subsequent act of misconduct occurred, breaching the last chance agreement, the Board allows the discharge to stand. But the Board explains this by saying it never had “jurisdiction” to hear the appeal, ie., it dismisses for “lack of jurisdiction.” And our cases generally parrot this reasoning. But see Stokes v. Federal Aviation Admin., 761 F.2d 682, 687 (Fed.Cir.1985) (Board dismissal of a probationary employee’s appeal for “ ‘lack of jurisdiction’ ... when ... the Board goes on to determine the entire case ... is ... inappropriate. It is at best incongruous to speak as though the jurisdictional issue is all that has been decided when it is the entire case that has been decided.”).
There is an explanation (or motivation, on the Government’s part) for this Aliee-in-Wonderland view of jurisdiction. By saying that the question is one of “jurisdiction,” the Board can invoke the familiar rule that an employee who appeals an agency action to the Board has the burden of establishing that the Board has jurisdiction over the ease. See 5 C.F.R. § 1201.56(a)(2)(i) (1997); Link, 51 F.3d at 1581. The employee therefore must establish that the employee’s complaint falls within the limited review authority that Congress assigned to the Board. In this way, the Board explains — attempts to justify— why the employee on appeal to the Board in a last chance agreement case has the burden of proving that the breach, alleged by the Government, did not occur. But see Stokes, 761 F.2d at 687 (“[B]y treating the entire case as one directed solely to the issue of jurisdiction, the Board allocates to the probationary employee the entire burden of proof on all issues throughout the ease. That allocation is contrary to that set forth in our cases.”).
In the case before us, the employee was assigned the duty of proving that his misconduct — his violation of the agreement to behave — did not occur. He attempted to do that by arguing that there was no policy, regulation or rule controlling an employee’s access to the hospital ward, and thus his entering there was not a breach. Under the “jurisdiction” rule, the employee should have had to prove the non-existence of the policy, regulation, or rule. The majority here properly dismisses that idea, noting that to put on the employee the burden of proving that something does not exist is a bad idea, particularly when the other party is the possessor of the proof. See Brush v. Office of Personnel Management, 982 F.2d 1554, 1561 (Fed.Cir.1992). Instead, the court shifts the burden of persuasion on that question to the Government (the Government on these facts being found to have carried the burden). A perfectly sensible, but, under the “jurisdiction” theory, incorrect twist on the burden allocation.
The flaw of course is with the notion that the problem is one of the Board’s “jurisdiction.” In terms of subject matter jurisdiction as it is properly understood, if the issue before the Board is viewed as one purely of contract rights, the Board has no jurisdiction over the cause at all, regardless of whether the Government or the employee is right, since the Board does not hear contract eases. If the issue is whether an adverse action— e.g., “a removal” — was properly taken against an employee, the Board has unquestioned jurisdiction, and that is true whether on the merits the Government is shown to have been right or wrong in its decision that a breach of the last chance agreement occurred. 5 U.S.C. §§ 7701(a), 7513(d), 7512.
The “jurisdiction” explanation is a red herring. The analysis should be straightforward: when the Government terminates an employee for violation of a last chance agreement, the Government bears the burden of justifying the termination by proving the alleged breach — unless the agreement allocates the burden differently. Thus, this is a matter of construction of the employment contract (the last chance agreement). Though the issue before the Board, arises from the agreement, the question is whether the Government has properly taken an adverse action (discharge of the employee on the basis of the alleged breach), and there is no doubt that the Board has jurisdiction to decide that question. This is abundantly clear when we remember the invariable rule that a party to litigation cannot by agree*731ment create jurisdiction in a forum when it would not otherwise exist, nor can it take away jurisdiction that Congress has granted. See 15 Charles A. Wright et al., Federal Practice and Procedure § 3801, at 7 (2d ed.1986) (“[Jurisdiction over the person ... can be waived, ... unlike jurisdiction of the subject matter, which cannot be waived by the parties.”); Industrial Addition Ass’n v. Commissioner of Internal Revenue, 323 U.S. 310, 313, 65 S.Ct. 289, 89 L.Ed. 260 (1945) (“Want of jurisdiction ... may not be cured by consent of the parties; but when the court has jurisdiction, it has power to decide the case brought before it....”).
In the end, I agree with the result in this case. The agency discharged Mr. Gibson for misconduct which amounted to a breach of the last chance agreement. When Mr. Gibson challenged that determination before the Board, as our cases entitle him to do, the Board agreed with the agency, finding that there was a visitor policy understood to apply to employees as well as visitors and that Mr. Gibson violated the policy. Though the Board stated that Mr. Gibson had the burden of proving non-breach, I do not read the Board’s decision as relying on that isolated statement. To the contrary, I read the decision as stating on the whole that the preponderance of evidence established each of these findings.
On appeal here, I cannot conclude that there is an absence of substantial evidence in the record to support the findings by the Board, or that the Board otherwise erred. See 5 U.S.C. § 7703(c) (1994). I only regret that the Board, and this court, continues potentially to confuse litigants, many of whom are pro se, and sometimes ourselves, by describing these cases in terms of “jurisdiction,” rather than in straightforward terms displaying a clear understanding of these last chance agreements.