Court Opinion

ID: 208534
Source: CourtListenerOpinion
Date Created: 2011-03-13 07:14:42+00
Date Added: 2024-06-11T17:27:54.392317
License: Public Domain

NOTE: This disposition is nonprecedential.

   United States Court of Appeals for the Federal Circuit
                                         2008-3335

                                   JOSEPH F. MCLEOD,

                                                             Petitioner,

                                             v.

                           DEPARTMENT OF THE TREASURY,

                                                             Respondent.

      Dennis L. Friedman, of Philadelphia, Pennsylvania, for petitioner.

       Scott D. Austin, Senior Trial Counsel, Commercial Litigation Branch, Civil Division,
United States Department of Justice, of Washington, DC, for respondent. With him on the
brief were Michael F. Hertz, Acting Assistant Attorney General, Jeanne E. Davidson, Director,
and Todd M. Hughes, Deputy Director.

Appealed from: Merit Systems Protection Board
                         NOTE: This disposition is nonprecedential.

 United States Court of Appeals for the Federal Circuit

                                        2008-3335

                                   JOSEPH F. MCLEOD,

                                                        Petitioner,

                                             v.

                           DEPARTMENT OF THE TREASURY,

                                                        Respondent.

Petition for review of the Merit Systems Protection Board in PH0752070640-I-1.

                             ___________________________

                             DECIDED: June 17, 2009
                             ___________________________

Before BRYSON, GAJARSA, and PROST, Circuit Judges.

PER CURIAM.

       This case concerns whether the Internal Revenue Service (“IRS”) appropriately

removed an employee who accessed confidential taxpayer information without

authorization or business purpose. Joseph McLeod petitions for review of the final

decision of the Merit Systems Protection Board (“Board”), which affirmed the IRS’s

removal decision. McLeod v. Dep’t of the Treasury, No. PH0752070640-I-1 (M.S.P.B.

Mar. 13, 2008), review denied, 109 M.S.P.R. 603 (2008) (table). Because the Board’s

findings are supported by substantial evidence, and its decision is not arbitrary or

capricious, we affirm.
                                    BACKGROUND

      Mr. McLeod began working at the IRS in 1994.          He was removed from his

position as a Tax Examining Technician, GS-07, on September 6, 2007, because he had

accessed taxpayer data without authorization or business purpose through the

Integrated Data Retrieval System (“IDRS”) on fifteen occasions from 1997 to 2000. Mr.

McLeod did not dispute the charges, and the Board found that the taxpayers whose files

were accessed had not consented to that access. Mr. McLeod had no prior disciplinary

record with the IRS, and his work received an “exceeds, fully successful” evaluation.

      Unauthorized access and inspection of taxpayer records (“UNAX”) is treated very

seriously by the IRS.    Mr. McLeod attended annual training sessions outlining the

relevant access policies and the potential penalties if those policies were violated.

Additionally, at the beginning of every session the IDRS program admonishes its users

that unauthorized access is prohibited. The table of penalties used by the IRS indicates

that removal is the appropriate penalty for a first UNAX offense in the absence of

consent from the taxpayer whose records were accessed.

      The deciding official, Cheryl Cordero, Director, Philadelphia Compliance

Services, testified that she had considered the relevant Douglas factors, and signed a

form listing each factor. Although Ms. Cordero viewed several factors (including his

length of service and previously clean disciplinary record) as weighing in Mr. McLeod’s

favor, she nevertheless concluded that removal was the appropriate penalty.

      Mr. McLeod appealed the severity of the penalty to the Board, and an

Administrative Judge issued an initial decision upholding the removal. The full Board

denied Mr. McLeod’s petition for review, and the initial decision became final. The

2008-3335                                  2
Board had jurisdiction pursuant to 5 U.S.C. § 7701 (2006). We have jurisdiction over

this appeal pursuant to 28 U.S.C. § 1295(a)(9) (2006).

                                       DISCUSSION

       We will set aside a decision of the Board if it was “(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) (2006). The Board should set aside an

agency’s selected penalty “[o]nly if the Board finds that the agency failed to weigh the

relevant factors, or that the agency’s judgment clearly exceeded the limits of

reasonableness.” Douglas v. Veterans Admin., 5 M.S.P.R. 280, 306 (1981); see also

U.S. Postal Serv. v. Gregory, 534 U.S. 1, 5 (2001) (citing application of the Douglas

factors as “the Board’s settled procedures”); Lachance v. Devall, 178 F.3d 1246, 1251

(Fed. Cir. 1999) (“the abuse of discretion standard . . . pertains to review of agency

penalty determinations, [and] we will not disturb a choice of penalty within the agency’s

discretion unless the severity of the agency’s action appears totally unwarranted in light

of all factors” (internal quotation marks omitted)).

       Mr. McLeod first challenges his removal as inappropriately harsh, and the result

of a failure to fully consider the Douglas factors.    In particular, he argues that Ms.

Cordero improperly imposed the penalty of removal as an automatic response to his

UNAX violation, based on her testimony that she could not think of any circumstances in

which she would not impose the penalty of removal if a UNAX violation occurred without

taxpayer consent. 1    This argument is unavailing. There is no requirement that the

       1
              UNAX violations can occur either because the employee browses files for

2008-3335                                     3
deciding official be able to imagine circumstances under which mitigation would be

appropriate.   Nor is it improper for there to be offenses for which such mitigating

circumstances would have to be extraordinary, and therefore hard to imagine.

       In this case, there is more than substantial evidence to support the Board’s

determination that Ms. Cordero properly considered the relevant Douglas factors rather

than applying a per se rule. Ms. Cordero specifically testified that she had considered

the Douglas factors before removing Mr. McLeod.          That testimony explains which

factors weighed for or against Mr. McLeod, indicating that each factor was properly

considered.    Ms. Cordero testified that certain factors, such as his lack of a prior

disciplinary record, “weighed quite well in his favor.” J.A. 38. She further testified that

she considered the mitigating factors Mr. McLeod put forth—taxpayer consent and

diabetes—and found them to be untrue and irrelevant, respectively. On the other hand,

Mr. McLeod told investigators that the reason he had not committed a UNAX violation

since 2000 was that there had been no need to do so. Ms. Cordero relied on that

statement in concluding that Mr. McLeod’s supervisor would have less confidence in Mr.

McLeod, and in concluding that “his ability to be rehabilitated was left open for

question.” J.A. 39. On balance, she determined that removal was the appropriate

penalty.   Thus, it is clear that the agency did seriously consider the factors, and

concluded that removal was the appropriate penalty. The decision to remove someone

who is entrusted with access to confidential information based on a misuse of that

access does not clearly exceed the limits of reasonableness.

his or her own purposes (e.g., curiosity about a friend), or because the employee is
giving favored treatment to friends by helping them access their tax records. Neither is
permitted, but in the second case, the taxpayer has authorized the employee to access
the file.

2008-3335                                   4
       Mr. McLeod next argues that he was treated unfairly because Ms. Cordero only

suspended a similarly-situated co-worker who had committed a UNAX violation. The

Board views disparate treatment as an affirmative defense, which Mr. McLeod must

prove by preponderant evidence. See, e.g., Wentz v. U.S. Postal Serv., 91 M.S.P.R.

176, 187 (2002); see also Facer v. Dep’t of Air Force, 836 F.2d 535, 539 (Fed. Cir. 1988)

(indicating an exception to the general rule that one employee has no interest in how

another was penalized applicable when the employee was treated “differently in a way

not justified by the facts, and intentionally for reasons other than the efficiency of the

service”).   Under the Board’s rule, Mr. McLeod must establish that the comparator

employee was in the same work unit, had the same supervisors, and engaged in

substantially similar misconduct. Wentz, 91 M.S.P.R. at 187.

       Here, Mr. McLeod directs our attention to an employee who had been contacted

by two taxpayers (A and C), requesting that he access their files. A third taxpayer (B)

had not consented to access, but as he was the ex-spouse of A and had filed jointly with

A, his social security number had been given to the employee by taxpayer A and

taxpayer B’s records had been accessed as well. The comparator employee’s UNAX

violation thus did not violate the privacy of A and C, but rather gave A and C preferential

treatment—they received enhanced access to IRS records as compared to a taxpayer

who did not know an IRS employee. Ms. Cordero specifically found that with respect to

taxpayer B, who did not consent to the access, the comparator employee had “not

knowingly and willfully violate[d] his right to the privacy and confidentiality of his return

information.” J.A. 27. The employee was suspended without pay for 30 days.

       Comparing the facts in that case to those in Mr. McLeod’s, the Administrative

2008-3335                                    5
Judge found that Mr. McLeod had failed to prove disparate treatment by preponderant

evidence.    Because the comparator employee had (or believed he had) taxpayer

consent to his access and substantial evidence supports the finding that Mr. McLeod did

not, the Board appropriately found that the two employees’ misconduct was not

substantially similar, and thus there was no disparate treatment when Mr. McLeod

received a more severe penalty. The primary problem with unauthorized access is that

taxpayers cannot feel secure that their records will not be misused by tax officials.

When a taxpayer has consented to access, this concern is mitigated, and the problem

instead is that the tax official is misusing access to assist friends or family. It was not

arbitrary or capricious to use taxpayer consent as a distinguishing fact. The Board’s

decision is affirmed.

       No costs.

2008-3335                                   6