Ilan Fouks v. Department of Veterans Affairs , 2015 MSPB 37 ( 2015 )

UNITED STATES OF AMERICA
MERIT SYSTEMS PROTECTION BOARD
2015 MSPB 37Docket No. NY-3443-14-0380-I-1
Ilan Fouks,
Appellant,
v.
Department of Veterans Affairs,
Agency.
May 22, 2015
Ilan Fouks, Montclair, New Jersey, pro se.
Christopher P. Richins, Esquire, Brooklyn, New York, for the agency.
BEFORE
Susan Tsui Grundmann, Chairman
Mark A. Robbins, Member
OPINION AND ORDER
¶1 The appellant has filed a petition for review of the initial decision, which
dismissed the appeal of his reduction in pay and grade for lack of jurisdiction.
For the reasons set forth below, we GRANT the petition for review and
REMAND the appeal to the field office for further adjudication in accordance
with this Opinion and Order.
BACKGROUND
¶2 The agency selected the appellant for a Supervisory General Engineer
position with the Hudson Valley Healthcare System. Initial Appeal File (IAF),
Tab 6, Subtab 6 at 1. The appellant was a Supervisory General Engineer with the
2
New York Harbor Healthcare System when he applied for this position. IAF, Tab
9 at 10. The agency states that the appellant was a General Schedule (GS) 13,
step 6 at the time of his selection. Id. The appellant disagrees and states that he
actually was a GS-14, step 2 at the time of his selection. IAF, Tab 1 at 5. The
vacancy announcement stated that the position was at the GS-12 grade level with
pay ranging from $77,585 to $100,859. IAF, Tab 6, Subtab 4.
¶3 The agency appointed the appellant, effective September 22, 2013, at the
GS-13, step 8 level. Id., Subtab 8 at 1. On May 13, 2014, the agency notified the
appellant that an error had been made in setting his grade and pay and that he had
only been entitled to be paid at the GS-12, step 10 level beginning September 22,
2013. Id. The agency stated that it would make corrections effecting all
personnel actions retroactive to September 22, 2013, to reflect his proper grade
and step. Id. The appellant submitted a letter of resignation on May 14, 2014.
Id., Subtabs 9-10. The appellant transferred to the New York Harbor Healthcare
System effective May 17, 2014, at the GS-12, step 10 level. Id., Subtab 10. On
May 31, 2014, the Defense Finance and Accounting Service notified the appellant
that it would collect overpayments made to him between December 28, 2013, and
May 3, 2014. Id., Subtab 11. The appellant filed a petition for hearing,
challenging the validity of this debt collection. Id., Subtab 13. There is no
evidence in the record regarding the outcome of this proceeding.
¶4 On September 11, 2014, the appellant filed a Board appeal and requested a
hearing concerning the reduction in his pay and grade. IAF, Tab 1. After giving
both parties an opportunity to file evidence and arguments regarding jurisdiction,
the administrative judge issued an initial decision, without holding a hearing,
finding that the Board lacks jurisdiction over this appeal because the reduction in
the appellant’s grade and pay was to correct a rate of pay that was set contrary to
law or regulation. IAF, Tab 11, Initial Decision (ID) at 5-6.
3
¶5 The appellant has filed a petition for review. Petition for Review (PFR)
File, Tab 1. The agency has filed a response in opposition to the petition, to
which the appellant has replied. PFR File, Tabs 3-4.
ANALYSIS
The appellant’s reduction in grade claim is not excluded from the Board’s
jurisdiction under 5 C.F.R. § 752.401(b)(15).
¶6 The agency claims that it demoted the appellant from GS-13, step 8 to
GS-12, step 10 after it concluded that it had erred in setting his grade when he
began working in a new position effective September 22, 2013, following a
competitive selection process for a position that was advertised and graded at the
GS-12 level. IAF, Tab 6, Subtab 8. As relevant here, 5 U.S.C. chapter 75
establishes a process, including Board appeal rights, that generally applies when
qualified federal employees are subjected to certain actions, including a
“reduction in grade” or a “reduction in pay.” 5 U.S.C. §§ 7512, 7513(d). The
agency argues, and the administrative judge found, that the appellant’s demotion
cannot be reviewed by the Board based on 5 C.F.R. § 752.401(b)(15), which
provides that the adverse action appeal process under 5 U.S.C. chapter 75 does
not apply to the “[r]eduction of an employee’s rate of basic pay from a rate that is
contrary to law or regulation.” PFR File, Tab 3 at 8-9; ID at 5. For the following
reasons, we find that the agency’s action was more than just a correction to the
appellant’s rate of basic pay within the meanin g of 5 C.F.R. § 752.401(b)(15).
See Simmons v. Department of Housing & Urban Development, 120 M.S.P.R.
489, ¶ 5 (2014).
¶7 The agency argues that the appellant was “demoted” within the meaning of
5 C.F.R. § 531.203 when he accepted the GS-12 position. IAF, Tab 9 at 5; PFR
File, Tab 3 at 5. That regulation, contained in the part of the Office of Personnel
Management’s (OPM’s) regulations concerning pay under the GS scale, defines a
demotion as a change from one GS grade to a lower GS grade, while continuously
employed, with or without a reduction in pay. 5 C.F.R. § 531.203. Thus, that
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definition notes a distinction between “grade” and “pay” and recognizes that a
change in one does not necessarily require a change in the other. The adverse
action procedures established in 5 U.S.C. chapter 75 similarly differentiate
between a “reduction in pay” and a “reduction in grade.” 1 5 U.S.C. § 7512.
Under chapter 75, “grade” is defined as “a level of classification under a position
classification system.” 5 U.S.C. § 7511(a)(3). It is noteworthy that this
definition does not include any explicit reference to pay. The statute separately
defines “pay” as “the rate of basic pay fixed by law or administrative action for
the position held by an employee.” 5 U.S.C. § 7511(a)(4). We find that the
statutory language clearly provides that chapter 75 may apply when there has
been either a reduction in grade or a reduction in pay.
¶8 Here, the agency’s action was undeniably a reduction in grade for the
appellant. He was reduced from a GS-13 to a GS-12 because the agency
determined he could not retain the higher grade while appointed to the new GS-12
position. IAF, Tab 6, Subtab 8, Tab 9 at 10. Although he also received a
corresponding reduction in his pay, that reduction was consequential to the
reduction in grade. There is no general statutory or regulatory exclusion from the
chapter 75 process for reductions in grade intended to correct an “administrative
error,” as the agency characterizes its error in this case. See IAF, Tab 9 at 7; PFR
File, Tab 3 at 9. The exclusion contained in 5 C.F.R. § 752.401(b)(15) is specific
to a reduction in an employee’s “rate of basic pay” only, and we do not find a
valid basis for extending it to the circumstances of the appellant’s reduction in
grade, particularly given the statutory and regulatory distinctions between
“grade” and “pay” discussed above. 2 The Board has recognized an exception
1
The more general term, “demotion,” does not appear in 5 U.S.C. chapter 75,
subchapter II.
2
The exclusion might have applied had the agency reduced the appellant’s rate of basic
pay to a rate equivalent to the GS-12, step 10 level, without a reduction in grade, and it
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from chapter 75 for a reduction in grade resulting from the merits of a
classification decision. See, e.g., Quinlan v. Department of Homeland Security,
118 M.S.P.R. 362, ¶ 9 (2012). But, in this appeal, it appears that the appellant’s
position was at all times correctly classified at a GS-12 grade, and thus that
exception would not apply. See IAF, Tab 6, Subtab 5. Therefore, we conclude
that 5 C.F.R. § 752.401(b)(15) does not preclude the application of chapter 75 to
the appellant’s reduction in grade. 3 4
The appellant has made a nonfrivolous allegation that his demotion was
involuntary based on agency-supplied misinformation.
¶9 The facts of this appeal present another issue regarding whether the
appellant has been subjected to an appealable reduction in grade. Specifically,
the appellant applied for a position that was advertised as only a GS-12 position,
and there is evidence in the record suggesting that he may have voluntarily
was only the appellant’s rate of basic pay that was contrary to law or regulation.
According to OPM’s pay tables, GS-13, steps 1, 2, and 3 had salary rates lower than
GS-12, step 10 in the appellant’s locality pay area for fiscal year 2013. See IAF, Tab 9
at 13.
3
The administrative judge relied on Gessert v. Department of the Treasury,
113 M.S.P.R. 329 (2010), aff’d sub nom. Gessert v. Merit Systems Protection Board,
No. 2010-3115, 2011 WL 463094 (Fed. Cir. Feb. 10, 2011), in concluding that the
Board lacks jurisdiction over this appeal. ID at 5-6. Gessert, however, is
distingu ishable, and we decline to follow it in this circumstance. The appellant in
Gessert received notice and an opportunity to respond prior to the agency action.
Gessert, 113 M.S.P.R. 329, ¶ 4. There was little discussion in Gessert of the
jurisdictional aspects of the appeal. In contrast in this appeal, the agency did not afford
the appellant notice and an opportunity to respond prior to his demotion, and thus the
jurisdictional question is the central question. See Simmons, 120 M.S.P.R. 489, ¶ 7.
4
We have considered the appellant’s arguments on review that his appointment at the
GS-13 level was not an administrative error because the Standard Form 50 documenting
his demotion also documents his conversion to a career appointment, a number of
agency officials approved his grade, and the error came to management’s attention via
an equal employment opportunity complaint. PFR File, Tab 1 at 4-5. We have
considered these arguments but find that they are immaterial to the issue of the Board’s
jurisdiction.
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sought and would have accepted the position even if it had been offered to him at
the GS-12, step 10 level. IAF, Tab 6, Subtab 6. Generally, a reduction in grade
that an employee accepts voluntarily is not within the Board’s jurisdiction.
Harris v. Department of Veterans Affairs, 114 M.S.P.R. 239, ¶ 8 (2010); see
Elmore v. Department of Transportation, 421 F.3d 1339, 1344 (Fed. Cir. 2005).
However, a reduction in grade will be considered involuntary, and an appealable
adverse action, if the employee reasonably and materially relied on
agency-supplied misinformation to his detriment, based on an objective
evaluation of the surrounding circumstances. Herrin v. Department of the Air
Force, 95 M.S.P.R. 536, ¶ 10 (2004). This is true even though the agency, in
providing the misinformation, did not intend to mislead the employee. Id. Based
on the current record, it is unclear whether the appellant voluntarily accepted a
reduction in grade.
¶10 The agency admits that it supplied the appellant with misinformation
regarding the grade of the position, appointed him as a GS-13, step 8, and
subsequently reduced his grade to GS-12, step 10. See IAF, Tab 6, Subtab 8 at 1,
Tab 9 at 10. The appellant alleges that he was offered a higher grade after
negotiating with the agency and that he accepted this offer in “good faith.” IAF,
Tab 1 at 5. The record also contains the appellant’s statement that “the sole
reason [he] took the position was the offer of the grade 13-8.” IAF, Tab 6,
Subtab 13 at 7. We find that the appellant has made a nonfrivolous allegation
that his reduction in grade was involuntary because he relied to his detriment on
agency-supplied misinformation. See Paszek v. Department of Defense,
50 M.S.P.R. 534, 538-39 (1991) (finding that the appellant’s reduction in grade
was covered by 5 U.S.C. chapter 75 based on misinformation about the
corresponding rate of pay, even though the agency’s correction of the rate of pay
was not itself a covered action); see also Garcia v. Department of Homeland
Security, 437 F.3d 1322, 1344 (Fed. Cir. 2006) (once an appellant makes
nonfrivolous allegations that, if proven, would establish the Board’s jurisdiction,
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then the appellant has the right to a jurisdictional hearing); Ferdon v. U.S. Postal
Service, 60 M.S.P.R. 325, 329 (1994) (in determining whether the appellant has
made a nonfrivolous allegation of jurisdiction, the Board may not weigh evidence
and resolve conflicting assertions of the parties and the agency’s evidence may
not be dispositive). On remand, the administrative judge should provide notice to
the parties of the jurisdictional requirements for an involuntary reduction in grade
claim and an opportunity to present evidence and arguments concerning whether
the appellant reasonably relied on the misinformation provided by the agency to
his detriment. See, e.g., Herrin, 95 M.S.P.R. 536, ¶ 10. The appellant requested
a hearing, IAF, Tab 1 at 2, and is entitled to a jurisdictional hearing on remand
given his nonfrivolous allegation that, if proven, would establish the Board’s
jurisdiction.
The issues of timeliness and jurisdiction are inextricably intertwined.
¶11 The agency has argued that this appeal should be dismissed as untimely.
IAF, Tab 6, Subtab 1 at 2. Because of her finding regarding jurisdiction, the
administrative judge did not address the timeliness issue. ID at 1 n.1. The issues
of timeliness and jurisdiction are inextricably intertwined in this appeal; that is,
resolution of the timeliness issue depends on whether the appellant was subjected
to an appealable action. See Wright v. Department of Transportation,
99 M.S.P.R. 112, ¶ 13 (2005) (when the voluntariness of the personnel action is
in question, jurisdiction and timeliness are inextricably intertwined, and the issue
of timeliness cannot be resolved before deciding the jurisdictional issue); see also
Lomax v. Department of Defense, 78 M.S.P.R. 553, 560-61 (1998) (stating that, if
the agency subjected the appellant to an appealable reduction in pay then it
should have advised her of her appeal rights, and its failure to do so could
support a finding of good cause for filing her appeal late). If the administrative
judge determines that the Board has jurisdiction over this appeal, then she should
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adjudicate the timeliness issue, after providing the appellant with notice of his
burden of proof.
ORDER
¶12 For the reasons discusses above, we REMAND this appeal to the field
office for further adjudication in accordance with this Opinion and Order.
FOR THE BOARD:
______________________________
William D. Spencer
Clerk of the Board
Washington, D.C.