Court Opinion

ID: 4520974
Source: CourtListenerOpinion
Date Created: 2020-03-31 15:02:51.828745+00
Date Added: 2024-06-11T09:24:00.716171
License: Public Domain

Case: 18-2195    Document: 74     Page: 1   Filed: 03/31/2020

   United States Court of Appeals
       for the Federal Circuit
                  ______________________

                 JEFFREY F. SAYERS,
                      Petitioner

                             v.

      DEPARTMENT OF VETERANS AFFAIRS,
                   Respondent
             ______________________

                        2018-2195
                  ______________________

    Petition for review of the Merit Systems Protection
 Board in No. SF-0714-18-0067-I-1.
                 ______________________

                 Decided: March 31, 2020
                 ______________________

    DAVID L. SCHER, Hoyer Law Group, PLLC, Tampa, FL,
 argued for petitioner. Also represented by NATALIE
 KHAWAM, Whistleblower Law Firm, PA, Tampa, FL.

     BRINTON LUCAS, Appellate Staff, Civil Division, United
 States Department of Justice, Washington, DC, argued for
 respondent.   Also represented by ELIZABETH MARIE
 HOSFORD, JOSEPH H. HUNT, ROBERT EDWARD KIRSCHMAN,
 JR., Commercial Litigation Branch, Civil Division, United
 States Department of Justice, Washington, DC.

    RUSHAB SANGHVI, Office of General Counsel, American
 Federation of Government Employees, Washington, DC,
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 2                                              SAYERS v. DVA

 argued for amicus curiae American Federation of Govern-
 ment Employees, AFL-CIO.
                 ______________________

 Before PROST, Chief Judge, WALLACH and HUGHES, Circuit
                         Judges.
 HUGHES, Circuit Judge.
      In 2017, Congress enacted the Department of Veterans
 Affairs Accountability and Whistleblower Protection Act,
 which gave the Department of Veterans Affairs a new,
 streamlined authority for disciplining employees for mis-
 conduct or poor performance, and placed certain limita-
 tions on the review of those actions by the Merit Systems
 Protection Board. Later in 2017, the Department applied
 38 U.S.C. § 714, 1 which codifies the Act, to remove Dr. Jef-
 frey Sayers from his position as a chief pharmacist. Dr.
 Sayers appealed to the Board and an administrative judge
 affirmed his removal. 2 He subsequently appealed to this
 Court.

     1   More specifically, the Act, as codified in § 714, al-
 lows the Secretary of Veterans Affairs to remove an em-
 ployee for inadequate performance or misconduct.
 § 714(a). Compared to pre-existing removal authority, par-
 ticularly the authority provided under title 5, chapter 75,
 § 714 speeds up the removal process, § 714(c), lessens the
 VA’s burden of proof at the Board from the preponderance
 of the evidence to substantial evidence, § 714(d)(2)(A),
 (d)(3)(B), and strips the Board of its authority to mitigate
 the VA’s imposed penalty. § 714(d)(2)(B), (d)(3)(C).
     2   Because Dr. Sayers did not appeal the Administra-
 tive Judge’s initial decision to the full Merit Systems Pro-
 tection Board, it became the final decision of the Board. See
 5 U.S.C. § 7701(e)(1).
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 SAYERS v. DVA                                               3

     Our primary issue on appeal is whether § 714 can ap-
 ply retroactively to conduct that took place before its enact-
 ment. To decide that issue, we must also decide the proper
 interpretation of the statutory limitation on the Board’s re-
 view authority in § 714(d)(2)(B) and (d)(3)(C). We ulti-
 mately hold that § 714, properly construed, has
 impermissible retroactive effect, and that Congress did not
 authorize the statute’s retroactive application. Because we
 conclude that § 714 cannot be applied retroactively—and
 Dr. Sayers’s conduct underlying his removal took place be-
 fore its enactment—we vacate his removal and remand to
 the Board for further proceedings.
                                 I
     The Department of Veterans Affairs (VA) promoted Dr.
 Sayers to his position as the Chief of Pharmacy Services for
 the Greater Los Angeles (GLA) Health Care System in
 2003. In that role, Dr. Sayers managed about 175 full-time
 employees across five pharmacies and three opioid-treat-
 ment facilities. In June 2016, a VA site-visit team investi-
 gating GLA Health Care System practices discovered
 violations of VA policy in the pharmacies under Dr. Say-
 ers’s supervision. When Dr. Sayers failed to follow orders
 to immediately correct these violations, the VA detailed
 him from the Chief of Pharmacy Services position pending
 further review.
      Nine months later, while Dr. Sayers remained detailed
 from the Chief position, the VA sent another site-visit team
 to review GLA pharmacy internal control systems. [J.A.
 5.] The review team visited four of the five GLA pharma-
 cies, discovering violations of VA policy so numerous and
 concerning that the team did not even review the internal
 control systems. Because compliance with these policies
 fell within Dr. Sayers’s purview as the Chief of Pharmacy
 Services, the GLA Chief of Staff proposed Dr. Sayers’s re-
 moval under § 714 in September 2017. The GLA Health
 Care Director acted as the deciding official and sustained
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 4                                                SAYERS v. DVA

 the charges; the VA removed Dr. Sayers effective Novem-
 ber 7, 2017.
                                II
      Dr. Sayers appealed to the Merit Systems Protection
 Board, and the Administrative Judge affirmed his removal
 under § 714. The Administrative Judge found that sub-
 stantial evidence supported eight of the nine factual speci-
 fications underlying the VA’s charge that Dr. Sayers had
 failed to perform assigned duties. Sayers v. Dep’t of Veter-
 ans Affairs, No. SF-0714-18-0067-I-1, slip op. at 11
 (M.S.P.B. Apr. 18, 2018) (“Board Decision”). She also found
 that substantial evidence supported the single specifica-
 tion underlying the VA’s charge that Dr. Sayers had failed
 to follow instructions. Board Decision at 28. The Admin-
 istrative Judge rejected Dr. Sayers’s arguments that he
 had suffered harmful procedural error and that the re-
 moval had violated his due process rights. Finally, she de-
 clined to consider Dr. Sayers’s argument that his removal
 constituted an unreasonable penalty under the circum-
 stances because it was inconsistent with the VA’s table of
 penalties and violated the VA’s policy of progressive disci-
 pline. The Administrative Judge explained that under
 38 U.S.C. § 714(d)(2)(B), the Board “does not have the au-
 thority to mitigate the penalty prescribed by the agency.”
Id. at 41. She interpreted this lack of mitigation authority
 to foreclose the Board from “assess[ing] the factors consid-
 ered or the weight accorded any particular factor in select-
 ing a penalty.” Id.
     Dr. Sayers timely petitioned for review. We have juris-
 diction to review final Board decisions under 28 U.S.C.
 § 1295(a)(9). See also 38 U.S.C. § 714(d)(5)(A).
                                III
     We review a final decision of the Board to determine
 whether it is “(1) arbitrary, capricious, an abuse of discre-
 tion, or otherwise not in accordance with law; (2) obtained
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 SAYERS v. DVA                                               5

 without procedures required by law, rule or regulation hav-
 ing been followed; or (3) unsupported by substantial evi-
 dence.” Purifoy v. Dep’t of Veterans Affairs, 838 F.3d 1367,
 1371 (Fed. Cir. 2016) (quoting 5 U.S.C. § 7703(c)); see
 also 38 U.S.C. § 714(d)(5)(A) (applying 5 U.S.C. § 7703 to
 Federal Circuit review of Board decisions about § 714 ad-
 verse actions). “We review the Board’s determinations of
 law for correctness without deference to the Board’s deci-
 sion.” McEntee v. Merit Sys. Prot. Bd., 404 F.3d 1320, 1325
 (Fed. Cir. 2005).
     On appeal, Dr. Sayers primarily argues that the Board
 erred in upholding his removal under § 714 because his al-
 leged misconduct took place before its enactment. 3 He ar-
 gues that the statute is silent on retroactivity, and the
 presumption against retroactivity should thus apply since
 the statute’s standard of proof and limitations on penalty
 mitigation detrimentally affect his property right to agency
 employment. We agree with Dr. Sayers, and accordingly
 vacate the Board’s decision.

     3    The VA argues that Mr. Sayers waived this argu-
 ment by not raising it before the Board. Even if Mr. Sayers
 failed to preserve this argument, we believe that this issue
 merits exercising our discretion to resolve it on appeal. See
 Singleton v. Wulff, 428 U.S. 106, 121 (1976). Because the
 retroactivity of § 714 raises a pure issue of law that affects
 many VA employees, the Board lacks a quorum to defini-
 tively decide the issue, and different administrative judges
 have come to different non-binding interpretations of the
 statute, see, e.g., McDonald v. Dep’t of Veterans Affairs, No.
 DE-0714-17-0409-I-1, 2018 WL 494983 (M.S.P.B. Jan. 16,
 2018), the interests of justice are best served by reaching
 this issue. See L.E.A. Dynatech, Inc. v. Allina, 49 F.3d
1527, 1531 (Fed. Cir. 1995).
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 6                                              SAYERS v. DVA

                                A
     Before proceeding to the retroactivity analysis, we first
 must resolve the differences between the parties regarding
 § 714’s meaning and effect. 4
     Congress enacted the Department of Veterans Affairs
 Accountability and Whistleblower Protection Act of 2017
 on June 23, 2017. Pub. L. No. 115-41, 131 Stat. 862. The
 Act was introduced to give the VA “the tools . . . to swiftly
 and effectively discipline employees who don’t meet the
 standards our veterans deserve or who fail in their sacred
 mission to provide world-class health care and benefits to
 the men and women who have served” and to “provide a
 singular expedited procedure for all VA employees to re-
 spond and appeal to proposed removals, demotions, and
 suspensions for performance or misconduct.” 163 Cong.
 Rec. H2114 (daily ed. Mar. 16, 2017) (statement of Con-
 gressman Roe). Among other provisions, the Act estab-
 lished 38 U.S.C. § 714, see Pub. L. No. 115-41, § 202, 131
 Stat. at 869, which provides the VA with a process for re-
 moving, demoting, or suspending its employees for inade-
 quate performance or misconduct. Section 714’s process
 presents the VA with an expedited, less rigorous alterna-
 tive to traditional civil service adverse action appeals un-
 der title 5 chapter 75 (misconduct and performance) and

     4   Dr. Sayers, misreading 38 U.S.C. § 714(a)(1), also
 contends that the VA impermissibly applied a “substantial
 evidence” standard to review the sufficiency of the charges
 underpinning his proposed removal. Pet. Br. 13–17. Alt-
 hough we agree with Dr. Sayers that nothing in the statute
 compels the VA to apply a substantial evidence standard
 for removal rather than a preponderance standard, we also
 agree with the government that nothing prevents the VA
 from doing so. See Resp. Br. 34–35. Because the statute
 leaves the proper standard to the VA’s discretion, the VA
 did not err by choosing substantial evidence review.
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 SAYERS v. DVA                                               7

 title 5 chapter 43 (performance). Cf. Lovshin v. Dep’t of
 Navy, 767 F.2d 826, 842–43 (Fed. Cir. 1985) (holding that
 the passage of chapter 43 did not foreclose removal for in-
 adequate performance under chapter 75).
      Under § 714(a)(1), “[t]he Secretary may remove, de-
 mote, or suspend [an employee] if the Secretary determines
 the performance or misconduct of the [employee] warrants
 such removal, demotion, or suspension.” “The aggregate
 period for notice, response, and final decision . . . may not
 exceed 15 business days[,]” and the employee must appeal
 the adverse action to the Board within ten business days.
 § 714(c)(1)(A), (4)(B). The appeal is subject to expedited re-
 view, and “the administrative judge shall uphold the deci-
 sion of the Secretary . . . if the decision is supported by
 substantial evidence.” § 714(d)(1)–(2)(A). “[I]f the decision
 of the Secretary is supported by substantial evidence, the
 administrative judge shall not mitigate the penalty pre-
 scribed by the Secretary.” § 714(d)(2)(B). 5 The VA argues
 that this provision limits the Board’s review to only the
 facts underlying an adverse action. See Resp. Br. 29; Oral
 Arg. at 28:15–30:00, available at http://www.cafc.uscourts.
 gov/oral-argument-recording. We disagree. Section 714 re-
 quires the Board to review the adverse action decision in
 full.
     The ordinary meaning of “the decision” reviewed by the
 Board refers to the entire decision—including the VA’s
 choice of penalty. The “decision” referred to in § 714 is not
 merely the choice to sustain the charges against the em-
 ployee. It is the decision “to remove, demote, or suspend
 [the] employee under subsection (a).” § 714(d)(2)(A) (“[T]he
 administrative judge shall uphold the decision of the

     5   The same standards apply to the Board’s review of
 the Secretary’s decision if the employee appeals the admin-
 istrative judge’s decision to the full Board.           See
 § 714(d)(3)(B)–(C).
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 8                                              SAYERS v. DVA

 Secretary to remove, demote, or suspend an employee under
 subsection (a) if the decision is supported by substantial
 evidence.” (emphasis added)). Subsection (a)—§ 714(a)(1),
 specifically—distills the Secretary’s decision to “deter-
 min[ing] [if] the performance or misconduct of the [em-
 ployee] warrants such removal, demotion, or suspension.”
 § 714(a)(1) (emphasis added). When correctly interpreted,
 § 714 requires the Board to review whether the Secretary
 had substantial evidence for his decision that an em-
 ployee’s actions warranted the adverse action. The Board
 cannot meaningfully review that decision if it blinds itself
 to the VA’s choice of action. Deciding that an employee
 stole a paper clip is not the same as deciding that the theft
 of a paper clip warranted the employee’s removal.
     An adverse action “decision” based on misconduct has
 meant a decision to impose a certain penalty since long be-
 fore the enactment of § 714. See Douglas v. Veterans Ad-
 min., 5 M.S.P.R. 280, 297 (M.S.P.B. 1981) (“[A]n agency’s
 adverse action ‘decision’ necessarily includes selection of
 the particular penalty as well as the determination that
 some sanction was warranted.”). We must presume that
 Congress was aware of this history when drafting the stat-
 ute. Cf. Lindahl v. Office of Pers. Mgmt., 470 U.S. 768,
 779–83, 791, 799 (1985) (interpreting 5 U.S.C. § 8347(c),
 which declares that “the decisions of the Office [of Person-
 nel Management] concerning [retiree disability and de-
 pendency] are final and conclusive and are not subject to
 review,” and reversing this Court’s en banc ruling that
 § 8347 “plainly” precluded any judicial review; reasoning
 that Congress’s failure to explicitly repeal Court of Claims
 precedent predating § 8347(c) only barring review of the
 factual underpinnings of such decisions gives rise to a pre-
 sumption that Congress intended § 8347 to embody that
 precedent). Further, Congress could have chosen other
 phrasing had it wanted to narrow the aspects of the ad-
 verse action decision to be reviewed: Congress has ex-
 pressly contoured the nature of review in other statutes.
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 SAYERS v. DVA                                                 9

 See, e.g., 38 U.S.C. § 7292(d)(2) (“Except to the extent that
 an appeal [from the Court of Appeals for Veterans Claims]
 under this chapter presents a constitutional issue, the
 Court of Appeals [for the Federal Circuit] may not review
 (A) a challenge to a factual determination, or (B) a chal-
 lenge to a law or regulation as applied to the facts of a par-
 ticular case.”); Bernklau v. Principi, 291 F.3d 795, 800
 (Fed. Cir. 2002) (“Unless there is a constitutional issue pre-
 sented [by the decision of the Court of Appeals for Veterans
 Claims], however, we may not review factual determina-
 tions [made by that court].” (citing § 7292(d)(2))).
      In the absence of a clearer statement than
 § 714(d)(2)(B), which prohibits the administrative judge
 from mitigating a penalty supported by substantial evi-
 dence, we should not presume the prohibition of all review
 of the penalty to ensure its legality. In fact, § 714’s inte-
 gration with title 5 shows that the Board must still ensure
 that the VA’s decision accords with the law. Section
 714(d)(2)(A) explicitly declares that the § 714 “substantial
 evidence” requirement for Board review overrides the “pre-
 ponderance of the evidence” standard used to review ad-
 verse actions under title 5 chapter 75. See § 714(d)(2)(A)
 (requiring that, “[n]otwithstanding section 7701(c)(1)(B) of
 title 5,” the administrative judge must uphold the Secre-
 tary’s decision if it is supported by substantial evidence);
 5 U.S.C § 7701(c)(1)(B) (“Subject to paragraph (2) of this
 subsection, the decision of the agency shall be sustained
 under subsection (b) only if the agency’s decision . . . is sup-
 ported by a preponderance of the evidence.”). But § 714 no-
 tably does not override § 7701(c)(2)(C), which requires the
 decision to accord with the law, even if it is supported by
 the evidence. See 5 U.S.C § 7701(c)(2) (“Notwithstanding
 paragraph (1), the agency’s decision may not be sustained
 under subsection (b) of this section if the employee or ap-
 plicant for employment . . . shows that the decision was not
 in accordance with law.”). This requirement, ensuring that
 an adverse action accords with law, has traditionally
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 10                                              SAYERS v. DVA

 meant reviewing the adverse action decision in its entirety,
 not just the factual basis for the alleged conduct. Cf. Doug-
 las, 5 M.S.P.R. at 297 (“[A]n adverse action may be ade-
 quately supported by evidence of record but still be
 arbitrary and capricious, for instance if there is no rational
 connection between the grounds charged and the interest
 assertedly served by the sanction.”).
     And although § 714 overrides “title 5 or any other pro-
 vision of law” when barring mitigation of the penalty,
 § 714(d)(2)(B), (3)(C), reviewing the totality of the adverse
 action decision stands apart from mitigating an unreason-
 able penalty. Cf. Douglas, 5 M.S.P.R. at 306 (“Only if the
 Board finds . . . that the agency’s judgment clearly ex-
 ceeded the limits of reasonableness, is it appropriate for the
 Board then to specify how the agency’s decision should be
 corrected to bring the penalty within the parameters of rea-
 sonableness.”). The plain meaning of § 714, when consid-
 ered in its entirety, conveys that when determining
 whether “the decision” is supported by substantial evi-
 dence, the Board (or administrative judge) must neces-
 sarily consider the agency’s penalty choice as part of that
 review.
     The legislative history of the VA Accountability and
 Whistleblower Protection Act supplies meager discussion
 of penalty mitigation, never directly addressing whether
 the Board can review the agency’s penalty decision. The
 Senate debates show that the overall intent of the Act was
 to make it easier and faster for the VA to penalize employ-
 ees for misconduct. See 163 Cong. Rec. S3280 (daily ed.
 June 6, 2017) (remarks of Sen. Rubio) (“[W]hile the em-
 ployee is getting due notice and the opportunity to defend
 themselves, it doesn’t drag on forever.”). Yet those debates
 reinforce Congress’s intent to maintain due process protec-
 tions for employees, including the opportunity to appeal
 the Secretary’s removal decision. See id. (“This bill will
 also ensure that VA employees’ due process rights are re-
 spected and not infringed upon.”); see also id. at S3276
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 SAYERS v. DVA                                              11

 (remarks of Sen. Nelson) (“I also believe that it is important
 to protect the rights of the employees who may have been
 wrongly terminated, especially at the lower levels, by giv-
 ing them the opportunity to appeal a supervisor’s decision
 to fire them. This bill we are going [to] pass does that.”);
id. at S3268 (remarks of Sen. Tester) (“It does not gut due
 process protections. It keeps all the existing due process
 protections under current law. Unlike the House bill, it
 doesn’t shorten or eliminate the appeals process for em-
 ployees who are fired.”). The government’s reading—allow-
 ing the agency to remove an employee for the tiniest
 incident of misconduct so long as the agency could present
 substantial evidence that the trifling misconduct oc-
 curred—could “gut due process protections” in a way Con-
 gress did not intend.
      Further persuasive evidence of congressional intent
 arises from the interaction between Congress and the
 Board leading up to the enactment of § 714. Before § 714’s
 passage in 2017, Congress passed a similar provision re-
 lated to the removal of Senior Executive Service officials,
 38 U.S.C. § 713. See Veterans Access, Choice, and Account-
 ability Act of 2014, Pub. L. No. 113-146, 128 Stat. 1754.
 The Board considered the 2014 Act to require it “to develop
 and to put into effect expedited procedures for processing
 appeals filed pursuant to 38 U.S.C. [§] 713,” so the Board
 promulgated a regulation that eased the requirements im-
 posed by Douglas. Practices and Procedures; Appeal of Re-
 moval or Transfer of Senior Executive Service Employees
 of the Department of Veterans Affairs, 79 Fed. Reg. 48,941,
 48,941 (Aug. 19, 2014). Even so, the regulation still al-
 lowed for review of the entire adverse action decision, in-
 cluding the penalty—just without penalty mitigation. See
 5 C.F.R. § 1210.18(d) (2014) (allowing an employee to “es-
 tablish[] that the imposed penalty was unreasonable under
 the circumstances of the case, in which case the action is
 reversed” but clarifying that “the administrative judge may
 not mitigate the Secretary’s decision”).
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 12                                             SAYERS v. DVA

      Besides the text itself and the legislative history, our
 reading also accords with basic precepts of administrative
 law and judicial review. Even if we adopted the govern-
 ment’s construction of § 714, in which the Board has to
 treat the penalty imposed as an irrelevant distraction from
 its factual audit of the Board’s evidence, this Court would
 still review the Board’s decision under the familiar stand-
 ard that it must “hold unlawful and set aside any agency
 action, findings, or conclusions found to be--(1) arbitrary,
 capricious, an abuse of discretion, or otherwise not in ac-
 cordance with law; (2) obtained without procedures re-
 quired by law, rule, or regulation having been followed; or
 (3) unsupported by substantial evidence . . . .” 5 U.S.C.
 § 7703(c). It would then fall to this Court to examine
 whether the VA had imposed a penalty unsupported by
 substantial evidence or not in accordance with the law.
 Douglas, in formalizing the Board’s review of adverse ac-
 tion penalty decisions, recognized the importance of this
 Court not performing such review for the first time. Doug-
 las, 5 M.S.P.R. at 301–02 (“To assure that its decisions
 meet that standard under Section 7703(c), the Board must,
 in addition to determining that procedural requirements
 have been observed, review the agency’s penalty selec-
 tion . . . . Therefore, in reviewing an agency-imposed pen-
 alty, the Board must[,] at a minimum[,] assure that the
 Overton Park criteria for measuring arbitrariness or capri-
 ciousness have been satisfied.”).
     Our interpretation also fits with the historical practice
 of reviewing the penalty in adverse action decisions. Cf.
 Douglas, 5 M.S.P.R. at 290 (“It cannot be doubted, and no
 one disputes, that the Civil Service Commission was vested
 with and exercised authority to mitigate penalties imposed
 by employing agencies.” (footnote omitted)).             The
 longstanding acceptance of penalty review, with or without
 mitigation authority, comes with good reason: it avoids ab-
 surd, unconstitutional results. Under the government’s
 reading, an agency could remove an employee for an
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 SAYERS v. DVA                                              13

 extremely trivial offense—theft of a paperclip being the ex-
 ample given at oral argument—so long as substantial evi-
 dence supports that the employee actually stole a
 paperclip. This implausible scenario becomes far more
 likely if the government alleges several specifications sup-
 porting a charge that merits removal, but only meets its
 burden of showing substantial evidence for the most minor
 specifications. Cf. Douglas, 5 M.S.P.R. at 308 (“Whenever
 the agency’s action is based on multiple charges[,] some of
 which are not sustained, the presiding official should con-
 sider carefully whether the sustained charges merited the
 penalty imposed by the agency.”). Our interpretation of
 § 714 gives meaningful effect to the statutory language but
 avoids this absurd result where an employee with an oth-
 erwise sterling record could be removed over a trivial inci-
 dent.
     For its contrary interpretation, the government relies
 largely on this Court’s decision in Lisiecki v. Merit Sys.
 Prot. Bd., 769 F.2d 1558 (Fed. Cir. 1985). Lisiecki dealt
 with the portion of the Civil Service Reform Act of 1978
 (CSRA) codified at 5 U.S.C. § 4303, known as chapter 43,
 which created new procedures to discipline employees for
 unacceptable performance. The chapter 43 adverse actions
 established by the CSRA differ from chapter 75 adverse
 actions in several ways. See generally U.S. Merit Sys. Prot.
 Bd., Performance-Based Actions under Chapters 43 and 75
 of Title 5 – Similarities and Differences, in Adverse Actions:
 A Compilation of Articles 9–13 (Dec. 2016),
 https://www.mspb.gov/mspbsearch/viewdocs.aspx?docnum
 ber=1361510&version=1366861 (reporting to Congress
 and the President on the procedural differences between
 chapter 43 and chapter 75 adverse actions). Under
 chapter 43, the agency need not show that an adverse
 action stems from conduct that harms the efficiency of the
 service. Lisiecki, 769 F.2d at 1565. And under chapter 43,
 the MSPB may only review the agency’s decision for
 substantial evidence, in contrast to chapter 75’s
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 14                                            SAYERS v. DVA

 requirement that the MSPB review the agency’s decision
 for preponderant evidence. See id.; see also 5 U.S.C.
 § 7701(c)(1)(A)–(B). We held that those two differences
 between chapter 75 and chapter 43 adverse action
 procedures provided “a clear indication of congressional
 intent to restrict the [B]oard’s authority in reviewing
 chapter 43 actions” and thus concluded that the Board
 lacks authority “to review and, where deemed appropriate,
 to mitigate penalties in chapter 43 cases.” Lisiecki, 769
F.2d at 1565, 1568. The government argues that if the
 Board has no authority to review a penalty under chapter
 43, which is silent on the Board’s mitigation powers, then
 the Board must also lack authority to review a penalty
 under § 714, which expressly removes its mitigation
 authority.
     Different concerns governed Lisiecki, however, and the
 reasoning behind Lisiecki cannot apply given the different
 procedural protections in § 714 removals. Chapter 43 pro-
 cedures expressly do not apply to § 714 removals. See
 § 714(c)(3). More importantly, the reasoning undergirding
 Lisiecki arises from the specific circumstances of chap-
 ter 43 adverse actions, which have a narrow focus not ap-
 plicable to § 714. Chapter 43 deals exclusively with
 removals for inadequate performance. 5 U.S.C. § 4303(a)
 (“Subject to the provisions of this section, an agency may
 reduce in grade or remove an employee for unacceptable
 performance.”). Section 714 allows removal for perfor-
 mance or misconduct, traditionally governed by chapter 75.
 Performance adverse actions and misconduct adverse ac-
 tions have rather distinct considerations. Lisiecki, 769
F.2d at 1566 (“The conclusion in Douglas that the MSPB
 could mitigate penalties assessed under chapter 75 was
 based on considerations not anywhere present under chap-
 ter 43.”). Overriding the agency’s choice of penalty has a
 very different effect on the agency when the penalty is im-
 posed for incompetence rather than misconduct. Id. (“To
 permit the MSPB to mitigate demotion or removal
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 SAYERS v. DVA                                              15

 would . . . . permit the [B]oard to require an agency to re-
 tain an incompetent worker in situations where it proposed
 removal.”). In addition, the agency has a unique view on
 how its employees’ incompetence impacts the agency, com-
 pared to the more generalized impact that misconduct has
 on an agency. See id. (“Management best knows its needs
 and the potential of its employees to further an agency’s
 statutory mission.”). These considerations provide a key
 distinction from misconduct removals: if the facts support-
 ing an employee’s incompetence exist, the choice of penalty
 is based not on the employee’s conduct, but on the agency’s
 work requirements; Board review or mitigation of that
 choice does not make sense. Cf. id. at 1566–67 (providing
 Mr. Lisiecki’s removal as a concrete example of how miti-
 gation disrupts agency function in chapter 43 removals).
     Beyond these pragmatic considerations lurk constitu-
 tional concerns. Employees enjoy much greater pre-termi-
 nation due process protections under chapter 43 than
 under § 714. Lisiecki itself highlights the factors that dis-
 tinguish chapter 43 actions from chapter 75 actions, which
 also provide more pre-termination due process than § 714
 actions. Id. at 1566 (“It is important not to ignore the vital
 distinctions between the relevant chapters of title 5.”); see
 supra note 1. Chapter 43 actions may be taken only after
 the employee is given notice and an opportunity to im-
 prove. Lisiecki, 769 F.2d at 1561, 1566. The agency may
 only choose from two penalties: demotion or removal. Id.
 at 1564, 1566. And chapter 43 actions are remedial rather
 than punitive. Id. at 1566. These distinctions between
 chapter 43 performance removals and chapter 75 miscon-
 duct removals were critical to Lisiecki’s holding. Sec-
 tion 714’s inclusion of misconduct removals prevents
 Lisiecki’s rationale from being meaningfully extended to
 § 714.
    For these reasons, we hold that § 714 requires the
 Board to review for substantial evidence the entirety of the
 VA’s removal decision—including the penalty—rather
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 16                                               SAYERS v. DVA

 than merely confirming that the record contains substan-
 tial evidence that the alleged conduct leading to the ad-
 verse action actually occurred. 6
                                 B
       Having addressed the disputed interpretation of § 714,
 we conclude that it cannot be applied to remove Dr. Sayers
 for the alleged misconduct without giving the statute im-
 permissible retroactive effect. Generally, statutes apply
 only prospectively unless Congress expresses a “clear in-
 tent” that a provision should apply retroactively. Landgraf
 v. USI Film Prods., 511 U.S. 244, 272–73 (1994). This de-
 fault rule has certain exceptions, for example, if a statute
 amends only procedural rules. Id. at 275. “The first step
 in the impermissible-retroactive-effect determination is to
 ascertain whether Congress has directed with the requisite
 clarity that the law be applied retrospectively.” I.N.S. v.
 St. Cyr, 533 U.S. 289, 291 (2001). Section 714 itself is silent
 on retroactivity. The VA Accountability and Whistleblower
 Protection Act does not reveal any intent that § 714 apply
 retroactively. In fact, the Act’s only references to when any
 of its provisions become effective relate to clawing back dis-
 ciplined employees’ bonuses or relocation expenses; these
 provisions become effective only prospectively. See Pub. L.
 No. 115-41, §§ 204–205, 131 Stat. 862, 875–77. The statute
 plainly lacks an “‘unambiguous directive’ or ‘express com-
 mand’ that the statute is to be applied retroactively.”

      6   Since we hold that § 714 does not apply to Dr. Say-
 ers because of its impermissible retroactive effect, we do
 not opine on the appropriate remedy in a hypothetical fu-
 ture case in which the Board finds a penalty unsupported
 by substantial evidence. It should be obvious, however,
 that the Board cannot revise the agency’s choice of penalty
 to its own preferred alternative. E.g., § 714(d)(3)(C).
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 SAYERS v. DVA                                              17
Mart. v. Hadix, 527 U.S. 343, 354 (1999) (quoting Land-
 graf, 511 U.S. at 263, 280).
     “If there is no congressional directive on the temporal
 reach of a statute, we determine whether the application of
 the statute to the conduct at issue would result in a retro-
 active effect.” Id. at 352. “If so, then . . . we presume that
 the statute does not apply to that conduct.” Id. The Su-
 preme Court describes “retroactive effect” as “whether [a
 statute] would impair rights a party possessed when he
 acted, increase a party’s liability for past conduct, or im-
 pose new duties with respect to transactions already com-
 pleted.” Landgraf, 511 U.S. at 280. In other words, we
 make a “commonsense, functional judgment about
 ‘whether the new [statute] attaches new legal conse-
 quences to events completed before its enactment,’” making
 this judgment “informed and guided by ‘familiar consider-
 ations of fair notice, reasonable reliance, and settled expec-
 tations.’” Martin, 527 U.S. at 357–58 (quoting Landgraf,
511 U.S. at 270). If the statute attaches new legal conse-
 quences to events before its enactment (and is otherwise
 silent about its retroactivity), the statute must not apply to
 those prior events.
     Landgraf recognized that “[t]he largest category of
 cases in which we have applied the presumption against
 statutory retroactivity has involved new provisions affect-
 ing contractual or property rights.” 511 U.S. at 271. Dr.
 Sayers had a property right in his continued employment,
 see Stone v. F.D.I.C., 179 F.3d 1368, 1374–75 (Fed. Cir.
 1999), so § 714 falls within that category. By requiring the
 Board to apply the substantial evidence standard in re-
 viewing the removal decision, instead of the preponderance
 standard normally required for misconduct removals under
 5 U.S.C. § 7701(c), and by preventing any mitigation of a
 penalty that substantial evidence supports, § 714 affects
 employees’ substantive rights to relief from improper re-
 moval. Compare 5 U.S.C. § 7701(c)(1)(B) (setting forth the
 evidentiary standard for Board appeals of adverse actions
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 18                                              SAYERS v. DVA

 not under chapter 43 to require “support[] by a preponder-
 ance of the evidence”), with § 714(d)(2)(A)–(B) (applying
 the substantial evidence standard for Board appeals of
 § 714 adverse actions).
     When a statute “change[s] standards of proof and per-
 suasion in a way favorable to a State, the statute goes be-
 yond ‘mere’ procedure to affect substantive entitlement to
 relief.” Lindh v. Murphy, 521 U.S. 320, 327 (1997); see also
 United States v. $814,254.76 in U.S. Currency, Contents of
 Valley Nat. Bank Account No. 1500-8339, 51 F.3d 207, 212
 (9th Cir. 1995) (holding a statute that “effectively permits
 the Government to achieve the identical results available
 under the criminal forfeiture statute, but with a lower
 standard of proof” to have impermissible retroactive effect
 if applied retrospectively). And the Supreme Court has
 held the loss of “reasonable reliance on the continued avail-
 ability of discretionary relief” akin to penalty mitigation to
 have an impermissible retroactive effect. St. Cyr, 533 U.S.
 at 324–25 (“There is a clear difference, for the purposes of
 retroactivity analysis, between facing possible [removal]
 and facing certain [removal].”). The imposition of a penalty
 supported only by substantial evidence, instead of prepon-
 derant evidence, with no possibility of mitigation for an er-
 ror in judgment by the VA, rises to the level of substantive
 impact. Under § 714, Dr. Sayers can be held responsible
 for alleged misconduct even if his culpability for that mis-
 conduct goes against the weight of the evidence. He can be
 divested of his property right in continued employment
 even if that consequence goes against the weight of the ev-
 idence. He then loses any possibility of the Board giving
 him discretionary relief from the penalty imposed for that
 adverse action, even if he presents compelling reasons for
 such mitigation. Those changes in proof, persuasion, and
 the availability of discretionary penalty mitigation from
 the prior chapter 75 standard to the current § 714 proce-
 dure unquestionably diminish Dr. Sayers’s property right
 in continued employment.
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 SAYERS v. DVA                                               19

     This retroactive effect occurs despite the VA’s protesta-
 tion that it did not propose Dr. Sayers’s removal until after
 the passage of § 714. See Resp. Br. 18. Section 714’s im-
 permissible retroactive effect on Dr. Sayers’s substantive
 employment right is not eliminated by the prospective ap-
 plication of § 714’s procedures. Dr. Sayers had a right to
 the substantive civil service protections from improper or
 unjustified removal in effect at the time of his alleged mis-
 conduct. These protections were a condition of his employ-
 ment, and they remained terms of his employment until
 Congress altered those conditions with the passage of
 § 714—at which point, Dr. Sayers had the chance to recon-
 sider whether he would accept those terms to govern his
 employment going forward.
     Nor can we agree with the VA’s assertion that finding
 § 714 impermissibly retroactive gives Dr. Sayers “a vested
 right to engage in poor performance and misconduct yet re-
 tain his job.” Resp. Br. 22. Such an argument overlooks
 that the VA always had the ability to remove Dr. Sayers for
 misconduct or poor performance. Likewise, the VA’s argu-
 ments ignore that allegations of defective performance or
 misconduct may sometimes be incorrect or pretextual, and
 that the system of civil service protections exists in part to
 prevent the loss of employment due to such faulty allega-
 tions. Dr. Sayers is entitled to the legal protections in place
 during the period in which the alleged misconduct occurred
 because Congress did not provide a clear statement that it
 intended to modify retroactively VA employees’ rights to
 those protections.
                                 IV
      Because the Department of Veterans Affairs cannot re-
 move Dr. Sayers under § 714 without the statute having
 impermissible retroactive effect, we vacate Dr. Sayers’s re-
 moval and remand to the Merit Systems Protection Board
 for further proceedings consistent with this opinion.
                 VACATED and REMANDED
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 20                                          SAYERS v. DVA

      No costs.