De Santis v. Merit Systems Protection Board ( 2016 )

United States Court of Appeals
for the Federal Circuit
______________________
FRANK C. DE SANTIS,
Petitioner
v.
MERIT SYSTEMS PROTECTION BOARD,
Respondent
______________________
2015-3134
______________________
Petition for review of the Merit Systems Protection
Board in No. NY-0752-14-0074-I-1.
______________________
Decided: June 22, 2016
______________________
FRANK C. DE SANTIS, Newton, CT, pro se.
KATRINA LEDERER, Office of the General Counsel,
Merit Systems Protection Board, Washington, DC, argued
for respondent. Also represented by BRYAN G. POLISUK.
JEREMY PETERMAN, Orrick, Herrington & Sutcliffe
LLP, Washington, DC, argued for court-appointed amicus
curiae ERIC SHUMSKY. Also represented by ERIC
SHUMSKY; HALEY ELIZABETH JANKOWSKI, San Francisco,
CA.
______________________
2 DE SANTIS v. MSPB
Before NEWMAN, DYK, and TARANTO, Circuit Judges.
TARANTO, Circuit Judge.
The Federal Aviation Administration hired Frank De
Santis in 2013. The FAA fired him less than one month
later, while he was still in his probationary period. As
now relevant, he appealed to the Merit Systems Protec-
tion Board under regulations, 5 C.F.R. §§ 210.101,
315.805, and 315.806, that have at all times relevant to
this case applied only to employees in the competitive
service. The Board dismissed the appeal for lack of juris-
diction because Mr. De Santis was in the excepted service,
not in the competitive service. De Santis v. Dep’t of
Transp., 2014 WL 5422590, *2 (MSPB Oct. 10, 2014).
Whether the Board has jurisdiction to hear Mr. De
Santis’s appeal turns on the meaning of 49 U.S.C.
§ 40122(g)(3), which authorizes FAA employees to appeal
certain actions to the Board. In 1996, Congress had
stripped FAA employees of all Board appeal rights, effec-
tive April 1, 1996, but in 2000 Congress enacted section
40122(g)(3) to restore Board appeal rights. Specifically,
section 40122(g)(3) allows an FAA employee to appeal
“any action that was appealable to the Board under any
law, rule, or regulation as of March 31, 1996.”
Under that provision, we conclude, Board jurisdiction
over an appeal brought by an FAA employee depends on
whether, taking as a given the employee’s status in the
excepted service at the time of the challenged action, that
employee comes within the grants of appeal rights that
existed on March 31, 1996. Thus, pre–April 1996 law is
applied to actual current facts. We reject the alternative
reading under which the Board would disregard the
actual current status of the employee and ask what status
a person in that position, or a similar position, would have
had on March 31, 1996, then would use that counterfac-
tual status in applying the grants of appeals that existed
on March 31, 1996.
DE SANTIS v. MSPB 3
Under section 40122(g)(3) as we read it, the Board in
this case was correct. Mr. De Santis, hired and fired in
2013, was undisputedly an excepted-service employee,
and the regulatory appeal rights at issue, unchanged
since March 31, 1996, do not apply to excepted-service
employees. We therefore affirm the Board’s dismissal. 1
BACKGROUND
A
In 1978, Congress enacted the Civil Service Reform
Act, a comprehensive system for managing the federal
work force. Pub. L. No. 95-454, 92 Stat. 1111 (codified at
5 U.S.C. § 1101 et seq.). The Civil Service Reform Act
created two general classes of positions: those in the
“competitive service,” which are subject to the extensive
provisions of Title 5, and those in the “excepted service,”
which are exempt from portions, but not all, of Title 5.
See 5 U.S.C. §§ 2102, 2103. Putting aside Senior Execu-
tive Service positions and positions involving Senate
confirmation, the “competitive service” broadly includes
all federal executive-branch civil-service positions other
than those “specifically excepted from the competitive
service by or under statute.” Id. § 2102(a)(1). “[T]he
‘excepted service’ consists of those civil service positions
which are not in the competitive service or the Senior
Executive Service.” Id. § 2103(a).
Before April 1996, nearly (but not) all FAA employees
were within the competitive service. See Oral Arg. at
1:56–2:04. That changed under the 1996 Department of
Transportation and Related Agencies Appropriations Act
1 We appointed Eric Shumsky as amicus curiae to
support Mr. De Santis’s position. The court thanks him,
as well as his colleagues Jeremy Peterman and Haley
Elizabeth Jankowski, for commendably developing the
position in briefs and at oral argument.
4 DE SANTIS v. MSPB
(DOT Act), which established an FAA Personnel Man-
agement System to “provide for greater flexibility in the
hiring, training, compensation, and location” of FAA
employees. Pub. L. No. 104-50, § 347(a), 109 Stat. 436,
460 (1995) (codified at 49 U.S.C. § 40122, see Federal
Aviation Reauthorization Act of 1996, Pub. L. No. 104-
264, § 253, 110 Stat. 3213, 3237). The DOT Act, which
took effect on April 1, 1996, moved FAA employees from
the competitive service to the excepted service and also
exempted the FAA from all but certain provisions of Title
5 that it enumerated in 49 U.S.C. § 40122(g)(2). Because
the basic Board jurisdictional provision, 5 U.S.C.
§ 7701(a), was not among the enumerated exceptions to
the default Title 5 exemption, this court soon held that
FAA employees could no longer appeal to the Board. See
Allen v. MSPB, 127 F.3d 1074, 1076 (Fed. Cir. 1997).
Congress restored the Board’s jurisdiction to hear ap-
peals from FAA employees in 2000 by enacting the Wen-
dell H. Ford Aviation Investment and Reform Act for the
21st Century (Ford Act). Pub. L. No. 106-181, §§ 307(a),
308(b), 114 Stat. 61, 124–26 (2000) (codified at 49 U.S.C.
§ 40122(g)(2)–(3)). The Senate Report stated an aim to
“reinstate the statutory requirement for the FAA to
adhere to merit system principles and restore the right of
FAA employees to submit appeals to the [Board].” S. Rep.
No. 106-9, at 36 (1999). To do so, the Ford Act added a
new category to the list of exceptions (to the FAA’s gen-
eral Title 5 exemption) in 49 U.S.C. § 40122(g)(2): “sec-
tions 1204, 1211–1218, 1221, and 7701–7703, relating to
the Merit Systems Protection Board.” 49 U.S.C.
§ 40122(g)(2)(H). That addition reestablished the Board’s
jurisdiction over FAA employee appeals. A further provi-
sion added by the Ford Act then defined what appeal
rights FAA employees may invoke:
an employee of the [FAA] may submit an appeal
to the Merit Systems Protection Board and may
seek judicial review of any resulting final orders
DE SANTIS v. MSPB 5
or decisions of the Board from any action that was
appealable to the Board under any law, rule, or
regulation as of March 31, 1996.
Id. § 40122(g)(3). The specified date, March 31, 1996, was
the day before the DOT Act took effect.
In 2012, Congress added a sentence to section
40122(g)(3), which states: “Notwithstanding any other
provision of law, retroactive to April 1, 1996, the Board
shall have the same remedial authority over such employ-
ee appeals that it had as of March 31, 1996.” 49 U.S.C.
§ 40122(g)(3), added by FAA Modernization and Reform
Act of 2012, Pub. L. No. 112-95, § 611, 126 Stat. 11, 117.
That language restored the Board’s authority to award
back pay to FAA employees under the Back Pay Act, 5
U.S.C. § 5596. Compare Gallo v. Dep’t of Transp., 689
F.3d 1294, 1302 (Fed. Cir. 2012); Hankins v. Dep’t of
Transp., No. DE-0752-10-0078-C-1, 2012 WL 3963384,
¶¶ 9–10 (MSPB Sept. 11, 2012), with Gonzalez v. Dep’t of
Transp., 551 F.3d 1372, 1375–77 (Fed. Cir. 2009).
B
Mr. De Santis joined the Federal Aviation Admin-
istration on September 29, 2013, years after Congress
withdrew and then restored Board appeal rights to FAA
employees. His position as an Aviation Safety Inspector
was an excepted-service position, and he was not “prefer-
ence eligible.” See 5 U.S.C. § 2108(3). Mr. De Santis
began his service in the position with a one-year proba-
tionary period.
The FAA removed Mr. De Santis from his position
less than one month later, effective October 25, 2013, on
the ground that he violated the agency’s rules regarding
outside employment and holding a financial interest from
a prohibited source. Mr. De Santis appealed to the Board,
arguing that his termination was the result of procedural
error, whistleblower reprisal, and age discrimination.
6 DE SANTIS v. MSPB
The administrative judge assigned to the case decided
that the Board lacks jurisdiction to hear Mr. De Santis’s
claims. The administrative judge first concluded that Mr.
De Santis could not appeal to the Board under 5 U.S.C.
§ 7513(d) because, as a non-preference-eligible excepted-
service individual one month into his probationary period,
he was outside the statutory definition of “employee,” id.§ 7511(a)(1)(C)(i), (ii). That issue is not before us.
The Board may exercise jurisdiction pursuant to regu-
lation, 5 U.S.C. § 7701(a), and Mr. De Santis invokes two
related regulations, 5 C.F.R. §§ 315.805 and 315.806(c),
which are in turn subject to 5 C.F.R. § 210.101(b). The
regulations have been the same in respects relevant here
since before April 1996, so we may refer to them in the
present tense. Those regulations grant to a terminated
probationary employee, but only one in the competitive
service, certain procedural rights and a right of appeal to
the Board where the employee makes a non-frivolous
allegation that the termination rested wholly or partly on
conditions arising before appointment. Although Mr. De
Santis is in the excepted service, he invoked those regula-
tions on the ground that 49 U.S.C. § 40122(g)(3) requires
that he be treated as a competitive-service employee
because his position (not him personally) and the posi-
tions of most FAA employees were in the competitive
service on March 31, 1996. The administrative judge
rejected Mr. De Santis’s contention and therefore held the
regulations inapplicable.
Mr. De Santis filed a petition with the full Board,
which affirmed the administrative judge’s determination
that the Board lacks jurisdiction. The Board agreed with
the administrative judge that the regulations Mr. De
Santis invoked are inapplicable because he was in the
excepted service, not the competitive service, and that 49
U.S.C. § 40122(g)(3) does not make them applicable to
him by requiring that he be treated as if he were a com-
DE SANTIS v. MSPB 7
petitive-service employee when hired and fired in 2013.
De Santis, 2014 WL 5422590 at *2. 2
Mr. De Santis appeals, and we have jurisdiction under
28 U.S.C. § 1295(a)(9).
DISCUSSION
We must affirm the Board’s decision unless it is “(1)
arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law; (2) obtained without proce-
dures required by law, rule, or regulation having been
followed; or (3) unsupported by substantial evidence.” 5
U.S.C. § 7703(c); see Terban v. Dep’t of Energy, 216 F.3d
1021, 1024 (Fed. Cir. 2000). We review whether the
Board has jurisdiction de novo. See Roche v. Merit Sys.
Prot. Bd., 596 F.3d 1375, 1378 (Fed. Cir. 2010).
The Board concluded that Mr. De Santis may not in-
voke 5 C.F.R. §§ 315.805 and 315.806(c) to give it jurisdic-
tion because those provisions apply only to employees in
the competitive service. The only question before us is a
legal one: whether, as Mr. De Santis and the court-
appointed amicus contend, 49 U.S.C. § 40122(g)(3) re-
2 Mr. De Santis also made a claim of age discrimi-
nation and a whistleblower claim. Neither claim is before
us. Mr. De Santis no longer has a discrimination claim:
he did not pursue his discrimination claim with the
Board, De Santis, 2014 WL 5422590 at *1 n.3, and he
informed this court, in his Form 10 filing, that no claim of
age discrimination “has been or will be made in this case.”
As to the whistleblower claim, the administrative judge
rejected it for non-exhaustion of the remedies available
from the Office of Special Counsel, see 5 U.S.C.
§ 1214(a)(3), and when Mr. De Santis then exhausted his
remedies, the Board forwarded the claim to the Board’s
regional office for docketing as a new appeal under 5
U.S.C. §§ 1221, 2302. De Santis, 2014 WL 5422590 at *3.
8 DE SANTIS v. MSPB
quires that Mr. De Santis be treated as a competitive-
service employee for purposes of Board appeal rights
because the position he occupied for a brief time in 2013
was (like most FAA positions) in the competitive service
on March 31, 1996. We reject that interpretation of
section 40122(g)(3), which we interpret instead to require
application of pre–April 1996 appeal rights to an FAA
employee based on the actual status of the employee’s
position at the time of the challenged action (which we
will call the “current” status), not based on the status of
the same position, or of some similar position, before April
1996.
Section 40122(g)(3) authorizes “an employee of the
[FAA]” to appeal to the Board “any action that was ap-
pealable to the Board under any law, rule, or regulation
as of March 31, 1996.” 49 U.S.C. § 40122(g)(3) (emphases
added). In interpreting that language for purposes of
resolving the issue presented to us, we begin by noting
what it cannot sensibly mean.
Thus, although the words alone might bear the mean-
ing that an FAA employee can now appeal an action
whenever that action “was appealable” by some FAA
employee on March 31, 1996, that interpretation makes
no sense. Congress was not providing that a person
employed by the FAA on March 31, 1996, who could not
have appealed a particular action at that time, could
suddenly take an appeal afterwards as long as any other
FAA employee, even in a different position, could have
done so on March 31, 1996. That would expand Board
appeal rights beyond what they were on March 31, 1996,
which we have already held Congress was not doing in
enacting section 40122(g)(3). See Roche, 596 F.3d at 1383.
Mr. De Santis and amicus do not argue for such an inter-
pretation.
Similarly, they do not, and could not sensibly, argue
that the appealability right of section 40122(g)(3) is
DE SANTIS v. MSPB 9
personal to the individual bringing an appeal. Congress
was not giving appeal rights to only individuals who
themselves had appeal rights on March 31, 1996. The
statute is written to apply to all FAA employees, not just
those who actually were employed by the FAA on March
31, 1996. Mr. De Santis himself was not employed by the
FAA at that time. By now, twenty years after 1996, a
large number of the FAA’s current employees must have
joined the agency after March 31, 1996, and before long,
that will be so for all FAA employees.
The only sensible interpretation of section 40122(g)(3)
is that the appeal rights are tied to the position of the
claimant. That is so even if the “any action” language,
taken by itself, may refer to the agency conduct, not
aspects of the position held by the claimant. See 5 U.S.C.
§ 7512 (“Actions covered” include removal, suspension for
more than 14 days, reduction in grade, reduction in pay,
and furlough of 30 days or less); id. § 4303(a) (“Actions
based on unacceptable performance”; “an agency may
reduce in grade or remove an employee for unacceptable
performance”); id. § 2302(a)(2)(A) (defining “personnel
action”). Section 40122(g)(3) does not say that any FAA
employee can now appeal any action. It says that an FAA
employee can appeal “any action that was appealable to
the Board,” and that language necessarily invokes the full
set of preconditions to appeal, which commonly includes
the status of the position involved in the employment
action at issue. See 5 C.F.R. § 1201.3 (Board catalog of
appeal rights); 5 U.S.C. § 7511(a)(1) (defining “employee,”
applicable to 5 U.S.C. § 7513(d)); 5 C.F.R. § 210.101(b)
(specifying that parts 315 through 339 of the chapter
apply to all competitive-service positions but not except-
ed-service positions).
The critical issue, then, is whether it is the actual ap-
pealability-relevant status of the claimant’s position at
the time of the challenged action—excepted v. competitive
service, duration, etc.—that is to be used in determining
10 DE SANTIS v. MSPB
whether the action was “appealable” on March 31, 1996.
The answer, we conclude, is yes. It is a straightforward
and sensible reading of the statute to take the legal
standards for appealability in force on March 31, 1996,
and apply those standards to the claimant’s actual status
whenever the claim happens to arise, whether in mid-
1996, mid-2016, or mid-2036. The alternative interpreta-
tion urged by Mr. De Santis and amicus—in broadly
treating excepted-service employees as competitive-
service employees and requiring problematic job compari-
sons—is less sensible.
The major practical difference in application between
the two interpretations of section 40122(g)(3) involves
recent hires. The basic adverse-action appeal rights of 5
U.S.C. § 7513(d) apply to an “employee,” and that term is
defined by reference to how recently the individual was
hired. 3 Significantly for current purposes, full appeal
rights attach sooner for competitive-service employees
(one year) than for (non-preference-eligible) excepted-
service employees (two years). See note 3, supra.
The longer probationary period for most excepted-
service employees gives the agency a longer period for
evaluation and possible firing without adverse-action
review. That greater agency discretion regarding dismis-
sal has a natural logical connection to the looser stand-
3 In general, i.e., except for some additional details
that do not detract from the point being made here,
section 7511 defines “employee” as: (1) an individual in
the competitive service who has completed one year of
service, 5 U.S.C. § 7511(a)(1)(A); (2) a preference-eligible
individual in the excepted service who has completed one
year of service in the same or similar position, id.§ 7511(a)(1)(B); or (3) an individual in the excepted ser-
vice who has completed two years of service in the same
or similar position, id. § 7511(a)(1)(C).
DE SANTIS v. MSPB 11
ards for hiring excepted-service employees. Hiring into
the excepted services is not subject to the stricter re-
quirements applicable to competitive-service employees.
See, e.g., 5 U.S.C. § 3304(b) (requiring an individual to
pass an examination to enter the competitive service); id.§ 3361 (promotions of competitive-service employees
generally depend on passing an examination). Laxer
hiring standards are tied to greater firing discretion.
Our reading of section 40122(g)(3) respects that logi-
cal connection implicit in Title 5. Mr. De Santis’s alterna-
tive reading does not. Mr. De Santis’s position would give
the greater firing protection of adverse-action appeal
rights to those hired under the laxer standards, by treat-
ing all or virtually all FAA employees as competitive-
service employees for appeal purposes. Such enhanced
competitive-service protections would apply to all FAA
employees hired after March 31, 1996—all hired as ex-
cepted-service employees. That result would run counter
to a structural Title 5 policy tying hiring standards and
firing discretion. And we see no basis for inferring that
Congress so intended when it enacted section 40122(g)(3)
on April 5, 2000. Indeed, it is hardly clear that, by then,
the probationary-period difference between competitive-
and excepted-service employees (one versus two years)
mattered for any FAA employee who had been hired into
the competitive service, since such hiring had stopped
four years earlier, on April 1, 1996.
The FAA’s expectations with respect to hiring and fir-
ing its employees, and of such employees’ excepted-service
status determining their appeal rights, likely have settled
since 2000. The Ford Act has been in place for 16 years,
and the FAA and Board have treated its employees as
excepted-service employees for Board-appeal purposes
during that time. See Roche, 596 F.3d at 1377. Indeed, in
the only case we have been pointed to in which the claim-
ant initially pressed the position Mr. De Santis now
presses, the Board rejected the argument that the claim-
12 DE SANTIS v. MSPB
ant qualified as a competitive-service employee due to
section 40122(g)(3), and the claimant did not raise that
argument on appeal—even though it appears that the
argument, if successful, would have been result changing.
See Roche, 596 F.3d at 1377. The FAA’s years of treating
its employees as in the excepted service has likely gener-
ated expectations, concerning hiring and firing, that
deserve weight in the resolution of the statutory issue.
Mr. De Santis’s interpretation suffers from another
difficulty: the need for problematic inquiries. Under that
interpretation, appeal rights would be determined not
based on a straightforward identification of the current
actual status of the claimant’s position in the excepted- or
competitive-service but based on an inquiry into what
status the position would have had on March 31, 1996.
That might not be a problem for a position that has not
changed since 1996, but a current position within the
FAA might not have existed on March 31, 1996, and in
any event the duties associated with a position may
change over time. The creation of new positions and
changes in positions presumably will increase over time.
Moreover, in 2001, Congress created a wholly new agency,
the Transportation Security Administration, and declared
that “section 40122 shall apply to employees of the” new
agency. 49 U.S.C. § 114(n). The TSA did not exist on
March 31, 1996, making it even more problematic for
section 40122 to require an inquiry into the status that a
person in the same status-relevant circumstances would
have had on that date. Our reading of section 40122(g)(3)
avoids those problems.
Our reading gives a simple role to the language “as of
March 31, 1996” in the provision. 49 U.S.C. § 40122(g)(3).
Immediately preceding that language is “under any law,
rule, or regulation.” What the date does is to identify the
precise body of law—the body of law in force on March 31,
1996—that determines current FAA employees’ appeal
DE SANTIS v. MSPB 13
rights. That frozen-in-time body of law then gets applied
to an FAA employee based on current actual status.
Our reading also is consistent with Congress’s general
aim of “restoring” Board appeal rights. That restoration
surely was focused on the great mass of Board appeal
rights generally shared by competitive- and excepted-
service employees alike—including the adverse-action
appeal rights that typically become available after a year
or two, as well as appeal rights involving prohibited
personnel practices, 5 U.S.C. § 1221(a). The 1996 DOT
Act had taken away all such rights from all FAA employ-
ees, and the 2000 Ford Act gave them back. The choice
we must make on the narrow issue before us does not
materially change the fulfillment of that purpose. We are
aware of no specific legislative history suggesting a focus
on circumstances where appeal rights differ for competi-
tive- and excepted-service employees.
For those reasons, we think that current status is
what matters for purposes of applying the March 1996
appeal-rights law. Here, Mr. De Santis was hired into an
excepted-service position. His status as an excepted-
service employee means that he cannot invoke 5 C.F.R.
§§ 315.805 and 315.806(c) to appeal his termination
because those regulations apply only to competitive-
service employees. As he does not identify any laws,
rules, or regulations that apply to him as a probationary
excepted-service employee, the Board correctly concluded
that it lacks jurisdiction to hear his appeal.
CONCLUSION
For the foregoing reasons, we affirm the Board’s
dismissal for want of jurisdiction.
AFFIRMED