Sayers v. DVA ( 2020 )

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.