Wallace v. Department of the Army , 686 F. App'x 882 ( 2017 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
MICHAEL A. WALLACE,
Petitioner
v.
DEPARTMENT OF THE ARMY,
Respondent
______________________
2016-2295
______________________
Petition for review of the Merit Systems Protection
Board in No. AT-0752-13-0984-I-1.
______________________
Decided: May 3, 2017
______________________
MICHAEL A. WALLACE, Daphne, AL, pro se.
DELISA SANCHEZ, Commercial Litigation Branch, Civil
Division, United States Department of Justice, Washing-
ton, DC, for respondent. Also represented by BENJAMIN C.
MIZER, ROBERT E. KIRSCHMAN, JR., DEBORAH A. BYNUM.
______________________
Before MOORE, O’MALLEY, and REYNA, Circuit Judges.
PER CURIAM.
2 WALLACE v. ARMY
Petitioner Michael A. Wallace (“Wallace”) appeals the
final decision of the Merit Systems Protection Board (“the
Board”) affirming the United States Army Corps of Engi-
neers’ (“USACE” or “the agency”) decision to furlough him
for six days in 2013, as part of the sequestration furloughs
that affected the entire Department of Defense (“DoD”).
Wallace v. Dep’t of the Navy (“Final Decision”), No. AT-
0752-13-0984-I-1, 2016 MSPB LEXIS 3016 (M.S.P.B. May
19, 2016). For the reasons explained below, we affirm.
BACKGROUND
Federal laws enacted in 2011 and 2012 required
across-the-board budget cuts, known as “sequestration,”
in the event that Congress could not enact deficit reduc-
tion legislation. 2 U.S.C. § 901a. Congress failed to pass
the necessary legislation, and on March 1, 2013, the
President issued a sequestration order. As a result, DoD
“faced a shortfall of more than $30 million for its opera-
tion and maintenance accounts, which fund the costs for
many DoD civilian employees.” In re Corps of Eng’rs v.
Dep’t of the Army (“Initial Decision”), No. AT-0752-14-
0106-I-1, 2015 MSPB LEXIS 8249, at *3 (M.S.P.B. Sept.
30, 2015).
In a May 2013 memorandum, the Secretary of De-
fense directed managers within DoD to implement a
furlough program and to prepare to furlough most civilian
employees for up to 11 days during fiscal year 2013. Id.
The memorandum identified specific categories of em-
ployees who would be excepted from the furlough. Id. at
*15. Relevant to this appeal, “exception nine” provided
that civilian employees whose compensation did not
originate directly from accounts included in the DoD
military or national defense budget would not be fur-
loughed. Id. This exception included “employees funded
by . . . DoD Civil Works . . . programs.” Id. at *16. The
Secretary of Defense exempted employees funded by “civil
works” because furloughing those employees “would not
WALLACE v. ARMY 3
reduce the expenditure of DoD budgetary resources and
so would not assist in meeting sequestration reductions.”
Id.
Determining how to comply with the furlough order
presented unique challenges for USACE because it exe-
cutes projects and programs funded by both DoD and non-
DoD sources. For payroll purposes, USACE has three
types of employees: (1) direct funded, who are funded with
civil works appropriations exclusively; (2) project funded,
who are paid with funds from reimbursable projects that
USACE performs for both DoD and non-DoD customers;
and (3) general and administrative/fee-for-service, who
are paid with funds from project revenues. Id. at *17.
Given the complex way in which USACE employees
are compensated, the agency categorized employees as
eligible or ineligible for exception nine using each employ-
ee’s Unit Identification Code (“UIC”), which appears on
each employee’s Form SF-50 at block 44, and can be used
to determine the source of funding for the employee’s
position. Id. at *17. Each USACE employee’s position is
assigned either a military or a civil works UIC based on
the workload of the particular office. Id. at *20-21 (“The
pro-rata allocation of UICs within the office or entity as a
whole mirrors the appropriate amounts of military and
civil works funding, which is typically split throughout
USACE in the ratio 60% civil works to 40% military.”).
Employees in positions with a military UIC are funded
with DoD funds, whereas employees in positions with a
civil works UIC are funded primarily with non-DoD, civil
works funds. Id. at *17. The assignment of UIC codes
within an office is important because “DoD military
appropriations cannot be expended for civil works pro-
jects, and vice versa.” Id. at *18.
USACE decided to furlough employees with military
UIC positions and exempt employees with civil works UIC
positions. Accordingly, if the UIC on an employee’s Form
4 WALLACE v. ARMY
SF-50 was a civil works code, the employee was not sub-
ject to the furlough pursuant to exception nine, but if the
UIC was a military code, the employee was subject to the
furlough because exception nine did not apply. Id. at *19.
As a precaution against any error in the assignment of
UIC codes, USACE provided a process through which an
employee in a position with a military UIC could request
an exception if, despite the code assigned, 100% of that
employee’s compensation originated from a non-DoD
source. Id. at *19-20. In addition, Army regulations
permitted USACE “to periodically review and if necessary
change” UIC allocations “based on changing needs.” Id. at
*21 (citing Army Regulation (AR) 570-4). USACE also
instructed its officers to review UICs annually to ensure
that they reflect “the preponderance of the work that [an]
employee performs or is due to perform in the next fiscal
year.” Id.
Prior to instituting the furlough, the agency
“scrubbed” the lists of employees with military UICs to
confirm that the individuals had billed work to military
projects during that fiscal year. Id. at *25. Consistent
with USACE policy, “[i]f an individual assigned a military
UIC had billed 100% to a civil UIC during the relevant
time period that individual was found to be exempt from
the furlough,” but all other individuals within the Mobile
District whose positions had a military UIC were fur-
loughed. Id.
Wallace works as an engineer for the USACE, Mobile
District, in Mobile, Alabama. 1 It is undisputed that
Wallace had a military UIC on his SF-50 during the
relevant fiscal years and that he billed time to military
1 While Wallace characterizes his position as “Elec-
tronics Engineer,” the agency identified his position as
that of an “Electrical Engineer.” This distinction is not at
issue on appeal, however.
WALLACE v. ARMY 5
projects. Accordingly, in May 2013, the agency sent
Wallace a Notice of Proposed Furlough. The Notice
informed Wallace of his right to submit an oral and/or
written response, which he did. Wallace was ultimately
furloughed for six days.
Wallace appealed to the Board, and the Board consol-
idated his appeal with those of other USACE Mobile
District employees challenging the agency’s decision to
furlough them. The administrative judge held a joint
hearing for those appellants, like Wallace, who requested
one. On September 30, 2015, the administrative judge
issued an initial decision affirming USACE’s decision to
furlough Wallace and all of the other members of the
consolidated appeal. Initial Decision, 2015 MSPB LEXIS
8249, at *40-41. The administrative judge found that the
agency proved by preponderant evidence that: (1) the
furloughs were a “reasonable management solution” to
the financial restrictions; and (2) “the furlough was im-
plemented in a fair and even manner.” Id. at *9-14. In
reaching these conclusions, the administrative judge
found that the agency’s use of UICs was a “reasonable
management solution to the problem of identifying which
employees should be subject to the furlough.” Id. at *29.
The administrative judge also found that the “furlough
was implemented in accordance with due process re-
quirements.” Id. at *32.
Wallace petitioned the full Board for review. Two
members of the Board determined that Wallace did not
establish any basis for the Board to grant his petition.
The Board therefore denied Wallace’s petition for review
and affirmed the initial decision, which became the final
decision of the Board. Final Decision, 2016 MSPB LEXIS
3016, at *2.
Wallace timely appealed to this court. We have juris-
diction pursuant to 28 U.S.C. § 1295(a)(9).
6 WALLACE v. ARMY
DISCUSSION
The scope of our review in an appeal from a decision
of the Board is limited. 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 procedures required by law, rule, or
regulation having been followed; or (3) unsupported by
substantial evidence.” 5 U.S.C. § 7703(c).
By statute, an agency may furlough an employee for
lack of work or funds or for other non-disciplinary rea-
sons. 5 U.S.C. §§ 7511(a)(5), 7512(5). Because furloughs
of thirty days or less are adverse actions, an agency can
only take such action if it “will promote the efficiency of
the service.” 5 U.S.C. § 7513(a). “We give wide berth to
agency decisions as to what type of adverse action is
necessary to ‘promote the efficiency of the service,’ provid-
ed that the agency’s decision bears some nexus to the
reason for the adverse action.” Einboden v. Dep’t of the
Navy, 802 F.3d 1321, 1325-26 (Fed. Cir. 2015).
An agency satisfies the “efficiency of the service”
standard by demonstrating that “the furlough was a
reasonable management solution to the financial re-
strictions placed on it and that the agency applied its
determination as to which employees to furlough in a ‘fair
and even manner.’” Nat’l Fed’n of Fed. Emps., Local 1442
v. Dep’t of the Army, 810 F.3d 1272, 1277 (Fed. Cir. 2015)
(“NFFE”) (quoting Chandler v. Dep’t of the Treasury, 120
M.S.P.R. 163, 171 (2013)). We recently held that the
USACE’s use of UICs to determine which employees to
furlough satisfies this standard. Steffen v. Dep’t of the
Army, 640 F. App’x 938, 941 (Fed. Cir. 2016).
In Steffen, we explained that, although UICs “may not
perfectly correspond to the type of work the employee
performs, the law does not require perfect management
solutions.” Id. Instead, the law requires “that the fur-
lough was a reasonable management solution.” Id.WALLACE v. ARMY 7
Because the evidence showed that UICs tended to corre-
late with the source of an employee’s funding, we found
that the UICs were “a legitimate basis on which to distin-
guish among employees for the purposes of furlough.” Id.We concluded, therefore, that the USACE’s method of
determining furlough eligibility was “a reasonable man-
agement solution that promoted the efficiency of the
service.” Id.The Board correctly concluded—consistent with our
analysis in Steffen—that the USACE satisfied the “effi-
ciency of the service” standard. Specifically, the Board
found that: (1) the agency’s use of an employee’s UIC was
a reasonable management solution to the problem of
identifying which employees to furlough; and (2) the
agency “implemented the furlough in a uniform and
consistent manner and treated similar employees similar-
ly.” Initial Decision, 2015 MSPB LEXIS 8249, at *14, *29.
On appeal, Wallace argues that the Board failed to
consider certain facts and applied the wrong law. As
explained below, we disagree.
With respect to the facts, Wallace alleges that he
should have been exempt from the furlough because,
although his position had a military UIC, the “preponder-
ance” of the work he performed in 2012 and 2013 was on
civil works projects. Specifically, Wallace states that he
billed 76% of his time in 2012 to civil works projects, and
that in 2013, that number increased to 83%. Pet’r Infor-
mal Br. 6. But Wallace was assigned to a position with a
military UIC, and it was undisputed that he billed time to
military projects during the relevant time period.
As noted, the agency implemented a procedure
whereby an employee assigned to a military UIC position
could apply for an exception if the employee billed 100% of
his time to civil works. The Board found that this proce-
dure was reasonable, and we find no reason to disturb
that finding on appeal. See Initial Decision, 2015 MSPB
8 WALLACE v. ARMY
LEXIS 8249, at *25, n.8 (noting that, given the agency’s
time constraints, it “was reasonable” to implement the
furlough based on the current UIC “and only except those
appellants with a military UIC if it was determined that
they billed 100% to civil works”). Because Wallace did not
present any evidence that he worked 100% of the time on
civil works projects, he did not qualify for this exception.
Wallace also suggests that the agency failed to follow
its procedures, which required that it review and update
UICs annually. But the agency had a policy requiring
that each office conduct an annual review of the assigned
codes, and it is presumed to have followed that policy. See
Miley v. Principi, 366 F.3d 1343, 1347 (Fed. Cir. 2004)
(“[I]n the absence of clear evidence to the contrary, the
court will presume that public officers have properly
discharged their official duties.”). Even if there were
military UIC positions that should have been reclassified
during the annual review process, however, that factor
alone does not mean that the agency’s use of the UICs
was arbitrary. As we recognized in Steffen, although
UICs “may not perfectly correspond to the type of work
the employee performs,” the law does not require perfec-
tion. 640 F. App’x at 941. Instead, the furlough must be
a reasonable management solution, and we have already
concluded that USACE’s use of UICs was reasonable. Id.In any event, substantial evidence suggests that the
nature of the agency’s workload required employees to
work on both civil works and military projects and that
there was some effort to match UICs to the preponderance
of the employees’ work. See id. at *21.
Next, Wallace argues that not all of the furloughed
employees who participated in the consolidated appeal
held military UIC positions during the furlough period.
In support of this argument, Wallace submits that Der-
rick D. Collier, another USACE employee who participat-
ed in the consolidated appeal, encumbered a civil UIC
position, but was furloughed. The government responds
WALLACE v. ARMY 9
by pointing to a page from a work report dated June 29,
2013, which was marked as “Agency Hearing Exhibit” and
was admitted into evidence at the hearing before the
administrative judge. The exhibit shows that, at the time
of the furlough, Collier served in a military UIC position.
Because both Wallace and Collier served in military UIC
positions and billed time to military projects during the
relevant time period, both were furloughed.
Wallace argues that the work report is “inaccurate”
because it is dated June 29, 2013, instead of on, or before,
June 1, 2013. Pet’r Informal Br. 14. He also suggests
that it erroneously lists Collier as occupying a military
UIC position. To the extent Wallace contends that the
Board erred in admitting the work report into evidence,
that argument is without merit. It is well established
that “[p]rocedural matters relative to discovery and
evidentiary issues fall within the sound discretion of the
board and its officials.” Curtin v. Office of Personnel
Mgmt., 846 F.2d 1373, 1378 (Fed. Cir. 1988). We “will not
overturn the board on such matters unless an abuse of
discretion is clear and is harmful.” Id.Wallace has not shown that admission of the work re-
port resulted in a clear and harmful abuse of discretion.
Even if Collier was assigned to a civil works UIC position
at the time of the furlough, that fact would have no bear-
ing on whether Wallace’s furlough was justified. It is
undisputed that Wallace worked on military projects
during the relevant time period and thus was not eligible
for an exception to the furlough. Accordingly, the Board
did not abuse its discretion by admitting the work report
into evidence.
Having concluded that Wallace’s challenges to the
Board’s factual findings are without merit, we turn to his
argument that the Board applied the wrong law. Specifi-
10 WALLACE v. ARMY
cally, Wallace contends that the Board applied Chandler
“improperly.” 2 Pet’r Informal Br. 21. According to Wal-
lace, proper application of Chandler demonstrates that
the agency should have reclassified his position to a civil
works UIC to reflect the “preponderance” of his work. Id.But nothing in Chandler requires the agency or the Board
to administer the furlough consistent with Wallace’s sense
of how his position should be classified. See Chandler,
120 M.S.P.R. at 171 (stating that the agency is not “re-
quired to apply the furlough in such a way as to satisfy
the Board’s sense of equity”). Instead, Chandler ex-
plained that “the agency is required to treat similar
employees similarly and to justify any deviations with
legitimate management reasons.” Id.
Applying Chandler, the Board found that UICs were a
legitimate basis for distinguishing among USACE em-
ployees for purposes of the furlough. Initial Decision,
2015 MSPB LEXIS 8249, at *29. We find no error in that
conclusion, which is consistent with our decision in Stef-
fen. 640 F. App’x at 941 (“[S]ubstantial evidence suggests
2 Wallace also submits that the Board erred by fail-
ing to apply Weaver v. Department of the Navy and Hou-
ston v. United States Postal Service. Pet’r Informal Br.
21. Wallace provides no citation for either case, however.
To the extent Wallace intended to cite Weaver v. Depart-
ment of the Navy, 2 M.S.P.B. 297 (1980), that case did not
involve a furlough decision, and Wallace provides no
explanation as to why it is relevant here. Likewise, to the
extent Wallace intended to cite the Fifth Circuit’s decision
in Houston v. United States Postal Service, 823 F.2d 896(5th Cir. 1987), which involved the Federal Tort Claims
Act, it is unclear how that case provides any support for
his position. Because Wallace fails to explain how these
cases relate to his appeal, we decline to address them
further.
WALLACE v. ARMY 11
that UICs tended to correlate with the source of an em-
ployee’s funding, making UICs a legitimate basis on
which to distinguish among employees for the purposes of
furlough.”). The Board therefore correctly found that the
use of UICs was a reasonable management solution and
that the agency implemented the furloughs in a uniform
and consistent manner.
Finally, Wallace alleges that both the agency and the
Board committed “harmful errors and due process viola-
tions.” Pet’r Informal Br. 22. In particular, Wallace
complains that the agency did not provide him with an
individualized response addressing the arguments he set
forth in his reply to the furlough notice. Wallace also
argues that the Board failed to assess facts specific to his
case. Id. at 23.
The Board considered and rejected Wallace’s due pro-
cess arguments. As noted, the agency gave appellants the
opportunity to present oral and/or written replies to the
proposed furloughs. The record also showed that a decid-
ing official “reviewed all of the replies and had the author-
ity to reverse the proposed furlough action for any
individual mistakenly excluded from an established
exception[], as well as to recommend an employee be
exempted in the event a unique circumstance supported a
new exception.” Initial Decision, 2015 MSPB LEXIS
8249, at *33-34. Because the deciding official reviewed
the individual responses and had the authority to indi-
vidually exempt employees from the furlough, the Board
found that the agency’s procedures satisfied due process
requirements. Id. at *34.
We agree with the Board that the agency implement-
ed the furlough in accordance with due process. In a
recent furlough decision we held that, “[w]hile a deciding
official must possess authority to take or recommend
action, due process does not require ‘unfettered discretion
to take any action he or she believes is appropriate’ or
12 WALLACE v. ARMY
require ‘consider[ation of] alternatives that are prohibit-
ed, impracticable, or outside of management’s purview.’”
Calhoun v. Dep’t of the Army, 845 F.3d 1176, 1179 (Fed.
Cir. 2017) (quoting Rodgers v. Dep’t of the Navy, 122
M.S.P.R. 559, 565 (2015)). Because the deciding official
here had the authority to reverse a proposed furlough or
recommend a new exception, we conclude that due process
requirements were satisfied. Accordingly, the Board did
not err in finding that there were no due process viola-
tions relating to the furlough. Initial Decision, 2015
MSPB LEXIS 8249, at *35.
CONCLUSION
For the foregoing reasons, and because we find Wal-
lace’s remaining arguments are without merit, we affirm
the Board’s final decision.
AFFIRMED
COSTS
No costs.