Villareal v. Bureau of Prisons , 901 F.3d 1361 ( 2018 )

United States Court of Appeals
for the Federal Circuit
______________________
LEONARDO VILLAREAL,
Petitioner
v.
BUREAU OF PRISONS,
Respondent
______________________
2017-2275
______________________
Petition for review of an arbitrator’s decision in No.
16-56932-3 by Noel B. Berman.
______________________
Decided: August 24, 2018
______________________
LILLIAM MENDOZA, Rockville, MD, argued for petition-
er.
DOMENIQUE GRACE KIRCHNER, Commercial Litigation
Branch, Civil Division, United States Department of
Justice, Washington, DC, argued for respondent. Also
represented by A. BONDURANT ELEY, ROBERT EDWARD
KIRSCHMAN, JR., PATRICIA M. MCCARTHY, CHAD A.
READLER.
______________________
Before O’MALLEY, CLEVENGER, and REYNA, Circuit
Judges.
2 VILLAREAL v. BUREAU OF PRISONS
REYNA, Circuit Judge.
Petitioner Leonardo Villareal seeks review of an arbi-
trator’s decision sustaining his removal from employment
as a corrections officer with the Bureau of Prisons, claim-
ing that his termination was unjustified and that his due
process rights were violated. Because Villareal made no
claim of prejudice resulting from the delay between the
date he first received notice of the employment infractions
and the date of termination, and because his other argu-
ments are unpersuasive, we affirm.
BACKGROUND
Villareal was employed by the Bureau of Prisons (the
“Bureau”) from 2007 until his termination on May 23,
2016. Prior to his termination, Villareal had no discipli-
nary record and all of his supervisory evaluations were
rated satisfactory or higher. In December 2012, while
Villareal was a Senior Corrections Officer at the Federal
Detention Center Houston (“FDC Houston”), the Office of
the Inspector General (“OIG”) initiated an investigation
focusing on Villareal’s relationship with two female
inmates, Claudia Solis and Andee Santana, improper
contact with Solis’s family, preferential treatment to-
wards inmates, breach of computer security, and inatten-
tion to duty. In January 2013, while OIG’s investigation
was pending, Villareal was reassigned to a phone monitor
position outside the facility’s secure perimeter. In his new
position, Villareal was not allowed to interact with the
inmates or to work overtime.
After a seven-month investigation, OIG issued a re-
port concluding that Villareal violated several Bureau
policies. The most significant finding in the report was
that Villareal placed and failed to report several calls on
his cellular phone to Solis’s family members. The report
further concluded that Villareal had engaged in an inap-
propriate relationship with Solis and showed preferential
treatment towards Solis and Santana by offering them
VILLAREAL v. BUREAU OF PRISONS 3
leftover cookies, allowing them to take an early shower,
and allowing them to distribute toiletries. Finally, the
report stated that Villareal misused his work computer,
failed to properly monitor inmates around computers,
failed to properly secure his office, and made derogatory
remarks to inmates.
In July 2014, Villareal’s supervisor, Captain Fauver,
drafted a proposal letter suggesting a thirty-day suspen-
sion for Villareal. See App’x 93–97. This draft proposal
letter, dated “July XX, 2014,” was never signed nor sent.
At this time, Michael Babcock was the warden of FDC
Houston. In August 2014, then-Warden Babcock stated to
Villareal’s union representative that Villareal would be
given a thirty-day suspension. Michael Pearce succeeded
Babcock as warden and testified that during their transi-
tion meeting in November 2014, Babcock referred to
Villareal’s case as a “potential termination case.” Supp.
App’x 42–43.
On June 18, 2015, nearly two years after the conclu-
sion of the OIG investigation, Captain Fauver submitted
a letter proposing Villareal’s removal, identifying six
charges based on several specifications: inappropriate
contact with an inmate, inmate’s family members, and
associates; preferential treatment of inmates; misuse of a
government computer; unprofessional conduct; inatten-
tion to duty; and failure to exercise sound correctional
judgment. Charge I, inappropriate contact with an in-
mate, inmate’s family members, and associates, was the
only charge serious enough by itself to support termina-
tion and was based on several phone calls made from
Villareal’s phone to inmates’ family members.
When evaluating Villareal’s charges, Warden Pearce
conducted an informal experiment, timing how long it
would take to relay sensitive information over the phone.
Id. at 33. Based on the experiment, Warden Pearce
determined that sensitive messages could be relayed in
4 VILLAREAL v. BUREAU OF PRISONS
only a few seconds, and therefore “the duration of a call
doesn’t necessarily mitigate the seriousness of the com-
munication.” App’x 76.
On May 23, 2016, eleven months after Captain
Fauver’s proposed removal letter, Warden Pearce issued a
letter determining that Villareal should be terminated.
The decision letter emphasized that Villareal committed
an “extremely serious [offense], especially given [Vil-
lareal’s] position as a law enforcement officer.” App’x 47.
In the decision letter, Warden Pearce recognized that
Villareal’s past work record had been satisfactory, but did
not “shield [his] serious infraction.” Id. Warden Pearce
further wrote that Villareal’s “misconduct has destroyed
my confidence in [Villareal’s] ability to carry out the
responsibilities of [his] position,” and that Villareal had
“betrayed the trust placed in [him] by this Agency.” Id.
Warden Pearce noted in the letter that removal was
consistent with the Bureau’s table of penalties, which
Villareal, as an employee, was “fully aware of,” and given
Villareal’s lack of remorse, he had no potential for rehabil-
itation, and alternative sanctions would not have “suffi-
cient corrective effect.” Id. The letter concluded with
“[y]our removal is in the interest of the efficiency of the
service.” Id.
Villareal’s union, AFGE Local 1030, promptly filed a
formal grievance, claiming that the discipline was un-
timely, there was no just and sufficient cause for the
discipline imposed, the accuracy of the alleged facts were
questionable, Villareal was subject to double jeopardy,
and the discipline was excessively harsh and dispropor-
tionate. The union emphasized that 1,265 days, nearly
three and a half years, had passed between the start of
the OIG investigation and Villareal’s ultimate removal.
The Bureau denied the grievance, and the union invoked
its right to arbitration.
VILLAREAL v. BUREAU OF PRISONS 5
Following a two-day hearing, the arbitrator found
that Villareal’s removal from service was justified. Based
on Warden Pearce’s testimony, the arbitrator decided that
the phone call infractions were serious enough to support
removal, and that Warden Pearce properly considered the
relevant factors in reaching his decision to remove Vil-
lareal from service. The arbitrator also considered and
rejected Villareal’s claims of due process violations.
Villareal timely filed a petition for review. We have
jurisdiction under 5 U.S.C. §§ 7121(f) and 7703(b)(1).
DISCUSSION
Under 5 U.S.C. § 7121(f), we review arbitrators’ deci-
sions in the same manner as if they were decisions by the
Merit Systems Protection Board. Johnson v. Dep’t of
Veterans Affairs, 625 F.3d 1373, 1377 (Fed. Cir. 2010).
We set aside Board actions, findings, or conclusions that
are (1) arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law; (2) obtained with-
out procedures required by law, rule, or regulation having
been followed; or (3) unsupported by substantial evidence.
5 U.S.C. § 7703(c). Additionally, under Cornelius v. Nutt,
“[n]either the Board nor the arbitrator may sustain the
agency’s decision if the employee ‘shows harmful error in
the application of the agency’s procedures in arriving at
such decision.’” 472 U.S. 648, 650 (1985); see 5 U.S.C.
§ 7701(c)(2)(A). An error is harmful when it “is likely to
have caused the agency to reach a conclusion different
from the one it would have reached in the absence or cure
of the error.” 5 C.F.R. § 1201.4(r). The appellant or
petitioner has the burden of showing that an error was
harmful. Id.On appeal, Villareal argues that his removal was not
justified, that he was subjected to double punishment for
the same infractions, and that his due process rights were
violated because the deciding official changed from War-
den Babcock to Warden Pearce, Warden Pearce conducted
6 VILLAREAL v. BUREAU OF PRISONS
experiments regarding the length of Villareal’s phone
calls to inmates’ families, and 1,265 days elapsed before
Villareal’s removal.
The decision to remove Villareal, and the arbitrator’s
decision upholding it, is supported by substantial evi-
dence. Warden Pearce’s decision letter removing Villareal
reveals that he considered the twelve factors an agency
should weigh when determining an appropriate penalty
for an employee, as required by Douglas v. Veterans
Administration, 5 M.S.P.R. 280, 305–06 (1981). See App’x
46–50. Before the arbitrator, Pearce testified at length
regarding the Douglas factors and his analysis of the
seriousness of the charges against Villareal. Supp. App’x
32–62. In his decision letter and before the arbitrator,
Pearce maintained that Charge I, relating to the phone
calls, was serious enough to alone warrant removal. Id.
at 37. The arbitrator also weighed the Douglas factors
and agreed with Warden Pearce’s conclusions. App’x 32–
33. Based on the decision letter, Pearce’s testimony, and
the arbitrator’s decision, there is substantial evidence of
Warden Pearce’s and the arbitrator’s consideration of the
Douglas factors to support Villareal’s removal.
Villareal’s claim that he was subjected to double pun-
ishment—first, by his reassignment to the phone monitor
position, where he lost overtime opportunities, and sec-
ond, by his removal from the Bureau—lacks merit. Agen-
cies often take steps, including reassignment, to solve
problems created by employees. Jinks v. Dep’t of Veterans
Affairs, 106 M.S.P.R. 627, 633 (2007). Reassignment in
response to an alleged offense is consistent with the
Master Agreement between the Bureau and Villareal’s
union. Supp. App’x 15. Moreover, while a reduction in
pay is punitive, reassignment without a reduction in
grade or pay is not. Jinks, 106 M.S.P.R. at 633. Villareal
does not allege that he was demoted or that his basic pay
rate was reduced, only that he was denied the opportunity
for overtime. Appellant’s Br. 33. However, premium pay,
VILLAREAL v. BUREAU OF PRISONS 7
such as overtime, is not considered part of an employee’s
“pay” for purposes of disciplinary actions under 5 U.S.C.
§ 7511(a)(4). Wilson v. Merit Sys. Prot. Bd., 807 F.2d
1577, 1581 (Fed. Cir. 1986).
Villareal’s complaints of due process violations like-
wise do not justify reversal. Villareal first complains that
the change in deciding official from Warden Babcock to
Warden Pearce violated due process. Citing Cheney v.
Department of Justice, 720 F.2d 1280, 1284–85 (Fed. Cir.
1983), Villareal asserts that it is error to replace a decid-
ing official who has already decided on a penalty with a
new deciding official who imposes harsher discipline. In
support, Villareal points to the draft letter before Warden
Babcock which described a thirty-day suspension as
punishment for Villareal’s actions, rather than termina-
tion. Substantial evidence supports the arbitrator’s
determination that the original deciding official, Warden
Babcock, never came to a decision regarding Villareal’s
penalty, however. The draft letter was written sometime
in July 2014, and Babcock did not retire until December
31, 2014. Indeed, Babcock continued working for several
months without signing or acting on the letter by institut-
ing the suspension. Warden Pearce, on entering the
office, considered Villareal’s case on his own, concluded
removal was appropriate, and justified the increased
penalty through his analysis of the Douglas factors.
Villareal further contends that Warden Pearce, by
failing to disclose his use of a timing experiment to specu-
late as to the capacity to do harm by the phone calls,
withheld an aggravating factor in the removal decision, in
violation of the due process guarantee of notice. The ex
parte introduction of new and material information to a
deciding official, which the official relies on, can violate
due process. Stone v. FDIC, 179 F.3d 1368, 1377 (Fed.
Cir. 1999). Here, however, substantial evidence supports
the arbitrator’s finding that Warden Pearce’s inquiry into
the content and length of the phone calls is not “new and
8 VILLAREAL v. BUREAU OF PRISONS
material information” under Stone, and that Warden
Pearce did not actually rely on his timing experiment to
remove Villareal. See App’x 38–39. Before the arbitrator,
Warden Pearce testified that the phone calls constituted
an “extremely serious” offense regardless of their content
or length, and removal was independently appropriate
under his consideration of the Douglas factors. Supp.
App’x 32–35.
Finally, Villareal contends that the length of time it
took for the Bureau to decide to remove him—1,265
days—violates due process. For delay to vitiate an agency
decision, the employee must show that the delay was
harmful to his or her defense. Shaw v. U.S. Postal Serv.,
697 F.2d 1078, 1080 (Fed. Cir. 1983). The harm must
“substantially impair the employee’s rights,” such that it
likely caused the agency to reach a different decision than
it would have otherwise. Id; see 5 C.F.R. § 1201.4(r).
We are concerned by the untimeliness of the Bureau’s
decision. The investigation was referred on December 6,
2012, and Villareal was not removed until May 23, 2016;
nearly three and a half years elapsed before discipline
was imposed. At oral argument, the Bureau attempted to
justify the delay by breaking it down into components,
citing the one month it took for the original complaint
from the inmate to be referred from the Bureau’s internal
affairs office to OIG, and the seven months required for
OIG to complete its investigation. Oral Arg. 19:23–26:05
(July 13, 2018), available at http://oralarguments.cafc
.uscourts.gov/default.aspx?fl=2017-2275.mp3. But, while
the Bureau can reasonably explain roughly eight months
of time, the Bureau provides no legitimate justification for
the remaining delay of over a year. The Bureau points to
a lengthy internal review procedure during which the
overseeing captain must decide which charges to bring,
which was exacerbated by warden turnover and inter-
change between the captain and the Bureau’s regional
and national human resources management. While
VILLAREAL v. BUREAU OF PRISONS 9
difficulties associated with personnel changes may in
certain circumstances result in delay, they do not explain
why it took over three years to identify charges and issue
a decision in Villareal’s case. The Bureau’s explanation
for the delay is not satisfactory, and the 1,265 day delay
in removing Villareal was patently unreasonable.
Delay of this sort could vitiate an agency decision if it
was prejudicial. However, no such claim of prejudice was
made here. Villareal neither argued nor established
prejudice before the arbitrator. Villareal’s formal griev-
ance form and invocation of arbitration only allege that
the discipline imposed was untimely and that the Bureau
failed to follow proper procedures. App’x 51, 60. The
union’s closing brief to the arbitrator claims that the
Bureau’s untimeliness was “reckless,” unreasonable, and
in violation of the parties’ collective bargaining Master
Agreement. Id. at 88. The arbitrator found that Villareal
made “no such claim” of prejudice. Id. at 35. Villareal
only raised a claim of prejudice on appeal to this court,
claiming that due to the delay, he was unable to subpoena
Warden Babcock because Bureau practices preclude
retired officials from testifying. Appellant’s Br. 20. While
the extreme delay in this case may certainly have been
harmful to Villareal, it is too little, too late; arguments
raised for the first time on appeal are generally waived.
See, e.g., Charles v. Shinseki, 587 F.3d 1318, 1322 (Fed.
Cir. 2009). Accordingly, although we condemn the delay
and find the Bureau’s explanation unavailing, because
Villareal made no claim of prejudice below, we will not
disturb the arbitrator’s decision.
In light of the foregoing, the decision of the arbitrator
upholding the Bureau’s decision to remove Villareal from
FDC Houston is affirmed.
AFFIRMED
COSTS
10 VILLAREAL v. BUREAU OF PRISONS
No costs.