John Malgeri v. Department of Housing and Urban Development ( 2024 )

UNITED STATES OF AMERICA
MERIT SYSTEMS PROTECTION BOARD
JOHN R. MALGERI, DOCKET NUMBER
Appellant, DC-1221-18-0468-W-1
v.
DEPARTMENT OF HOUSING AND DATE: June 27, 2024
URBAN DEVELOPMENT,
Agency.
THIS ORDER IS NONPRECEDENTIAL 1
Terrence O’Donnell , Esquire, Anne M. Rucker , Esquire, and Andrew
Guiang , Esquire, Washington, D.C., for the appellant.
Ryan Donaldson , Washington, D.C., for the agency.
BEFORE
Cathy A. Harris, Chairman
Raymond A. Limon, Vice Chairman
Henry J. Kerner, Member*
*Member Kerner did not participate in the adjudication of this appeal.
REMAND ORDER
The appellant has filed a petition for review of the initial decision, which
denied his request for corrective action in this individual right of action (IRA)
appeal. For the reasons discussed below, we GRANT the appellant’s petition for
1
A nonprecedential order is one that the Board has determined does not add
significantly to the body of MSPB case law. Parties may cite nonprecedential orders,
but such orders have no precedential value; the Board and administrative judges are not
required to follow or distinguish them in any future decisions. In contrast, a
precedential decision issued as an Opinion and Order has been identified by the Board
as significantly contributing to the Board’s case law. See 5 C.F.R. § 1201.117(c).
2
review. We AFFIRM the initial decision’s findings that the appellant made
protected disclosures under 5 U.S.C. § 2302(b)(8) and engaged in protected
activity under 5 U.S.C. § 2302(b)(9)(A)(i), and that his protected disclosures and/
or activity were a contributing factor in the contested personnel actions. We
REMAND this case to the Washington Regional Office for the administrative
judge to reassess whether the agency demonstrated by clear and convincing
evidence that it would have taken the same personnel actions in the absence of the
appellant’s whistleblowing.
BACKGROUND
This appeal has an extensive factual history, portions of which are not
material to the issues now before the Board and which we need not repeat herein.
The appellant served as a Senior Level Executive in the agency’s Office of the
Chief Human Capital Officer (OCHCO). Initial Appeal File (IAF), Tab 1 at 22,
36. In this role, the appellant worked as a senior advisor to the Chief Human
Capital Officer, provided technical guidance on OCHCO matters, and researched
and drafted a variety of the agency’s human resources-related policies and plans.
IAF, Tab 1 at 36, Tab 55, Initial Decision (ID) at 2-3; Hearing Compact Disc
(HCD) 1 (testimony of the appellant). Included within these human
resources-related functions was the reviewing of proposed agency reorganization
plans and providing a recommended concurrence or nonoccurrence on the
proposals. HCD 1 (testimony of the appellant); ID at 2-3; Petition for Review
(PFR) File, Tab 1 at 6. In order for the agency to proceed with reorganization, it
needed OCHCO, amongst other offices, to concur with the proposed plan. HCD 1
(testimony of the appellant); ID at 2-3.
In October 2014, the agency’s Office of Housing was working on a
reorganization plan for its Office of Operations. IAF, Tab 34 at 76-90; HCD 1
(testimony of the appellant); ID at 3. Two directors within the Office of Housing
submitted a memorandum to various agency offices, including the OCHCO,
3
outlining their nonconcurrence with the proposed reorganization, alleging that
such plan violated a host of statutes and policies. IAF, Tab 34 at 76-90. Within
this nonconcurrence memorandum, the directors also alleged that the agency had
already violated the law by taking steps to effectuate the reorganization before it
received proper approval from Congress. Id. at 87.
The appellant’s first-line supervisor directed him to review this
nonconcurrence and provide feedback. HCD 1 (testimony of the appellant);
ID at 2, 4. The appellant was told to work with the Deputy Chief Human Capital
Officer (DCHCO) involved in coordinating the proposed reorganization. IAF,
Tab 1 at 36; HCD 1 (testimony of the appellant). After reviewing the
nonconcurrence, the appellant emailed the DCHCO on October 27, 2014, attached
the nonconcurrence memorandum from the directors within the Office of
Housing, and stated that he believed the allegations of illegal conduct were
credible and that the agency should stop all actions associated with the
reorganization. IAF, Tab 1 at 37, 61. The appellant forwarded this email to his
first-line supervisor the following day. Id. at 61. The appellant made similar
statements to his supervisors in an email sent on November 2, 2014. Id. at 64.
Then, on November 3 and 13, 2014, the appellant met with his first-line
supervisor and the DCHO to reiterate his concerns with the proposed
reorganization, highlighting the alleged illegalities. Id. at 38, 64, 70. On
November 17, 2014, the appellant met with the agency’s Associate General
Counsel of Ethics, Appeals, and Personnel Law and another agency attorney to
further discuss his concerns with the legality of the proposal. Id. at 38, 74.
On February 1, 2017, the appellant filed a whistleblower complaint with
OSC alleging that, in reprisal for the above-mentioned disclosures that he made in
October and November 2014 to agency management regarding the proposed
reorganization plan within the Office of Housing, the agency took a variety of
personnel actions against him. Id. at 15-199. The appellant amended his OSC
complaint on July 19, 2017 and February 12, 2018, alleging that, in reprisal for
4
his February 2017 whistleblower complaint with OSC, the agency took additional
personnel actions against him. 2 IAF, Tab 1 at 200-16, Tab 7 at 36-70.
After OSC closed its investigation into the appellant’s whistleblower
complaint with no further action, he timely filed this IRA appeal with the Board.
IAF, Tab 1 at 1, 220. The administrative judge found that the appellant met his
burden of establishing Board jurisdiction over his IRA appeal and held a 3-day
hearing. 3 IAF, Tabs 25, 51-53; ID at 1. She issued an initial decision finding that
the appellant proved by preponderant evidence that his October and November
2014 emails and discussions regarding the reorganization proposal were
whistleblowing disclosures and that his filing of a whistleblower complaint with
OSC in February 2017 was protected activity. ID at 15-16. The administrative
judge then found that the appellant proved by preponderant evidence that such
whistleblowing disclosures were a contributing factor in the raised personnel
actions. ID at 16. She further found that the appellant’s protected activity was a
2
In sum, these personnel actions included: (1) from March to April 2015, the
appellant’s supervisor harassed him regarding his work on a succession-planning tool;
(2) in April 2015, the appellant’s supervisor reported to the Office of the Inspector
General that he breached employee data; (3) the agency denied the appellant an
executive pay increase in July 2015; (4) in May 2016, the agency proposed to suspend
the appellant for 3 days; (5) since June 2016, the appellant’s supervisors refused to
provide him guidance on assignments, excluded him from meetings, refused to assign
him significant work, and excluded him from advancement opportunities; (6) in June
2016, the agency suspended the appellant for 3 days; (7) in January 2017, the appellant
received an “Excellent” rating for Fiscal Year 2016; (8) in October 2016 and ongoing,
the appellant’s supervisors failed to provide him with performance standards; (9) in
February 2017, the appellant’s supervisory structure changed; and (10) the appellant’s
supervisors denied his Executive Development Plan request, which prevented him from
receiving rotational details and training. IAF, Tab 1 at 12-13, Tab 25 at 7-8.
3
In the Order Finding Jurisdiction, the administrative judge determined that the
appellant exhausted his administrative remedies with OSC and raised nonfrivolous
allegations that his whistleblowing disclosures and protected activity were contributing
factors in the agency’s decision to take the raised personnel actions. IAF, Tab 25. The
administrative judge found that the appellant did not meet his burden of establishing
Board jurisdiction over his claim that in July 2015 the agency denied him an executive
base pay increase. Id. at 5-6, 8. On review, neither party challenges any of the
jurisdictional findings in this appeal, and we find no reason to disturb them. PFR File,
Tabs 1, 3-4.
5
contributing factor in only one of the personnel actions—the denial of his
Executive Development Plan request in November 2017—as he failed to show
that his supervisors knew of his OSC complaint until August 2017. Id. 4 The
administrative judge denied the appellant’s request for corrective action, finding
that the agency proved by clear and convincing evidence that it would have taken
each of the personnel actions in the absence of the appellant’s whistleblowing
disclosures and protected activity. ID at 16-25.
The appellant filed a petition for review of the initial decision. PFR File,
Tab 1. The agency responded to the petition for review, to which the appellant
filed a reply. PFR File, Tabs 3, 4.
ANALYSIS
In order to prevail on the merits of an IRA appeal, an appellant must prove
by preponderant evidence that he made a whistleblowing disclosure as described
under 5 U.S.C. § 2302(b)(8) or engaged in protected activity as described under
5 U.S.C. § 2302(b)(9)(A)(i), (B), (C), or (D), and the disclosure or protected
activity was a contributing factor in the agency’s decision to take or fail to take a
personnel action outlined in 5 U.S.C. § 2302(a). 5 U.S.C. § 1221(e)(1); Salerno
v. Department of the Interior, 123 M.S.P.R. 230, ¶ 5 (2016). If an appellant
meets his burden, then the Board shall order corrective action unless the agency
shows by clear and convincing evidence that it would have taken the same
personnel action in the absence of the whistleblowing disclosure and/or protected
activity. 5 U.S.C § 1221(e)(2); Salerno, 123 M.S.P.R. 230, ¶ 5.
Upon review, we affirm the initial decision’s findings that the appellant
made protected disclosures under 5 U.S.C. § 2302(b)(8) and engaged in protected
activity under 5 U.S.C. § 2302(b)(9)(A)(i), and that his protected disclosures and/
or activity were a contributing factor in the contested personnel actions. ID at 16,
4
The record does not demonstrate that the appellant proved contributing factor through
another prescribed method. See Dorney v. Department of the Army, 117 M.S.P.R. 480,
¶ 15 (2012).
6
24-25. The administrative judge’s findings and analysis on these matters
contained in the initial decision, to include credibility determinations, are
detailed, precise, and corroborated throughout the record. Id. The Board must
give deference to an administrative judge’s credibility determinations when they
are based, explicitly or implicitly, on the observation of the demeanor of
witnesses testifying at a hearing; the Board may overturn such determinations
only when it has “sufficiently sound” reasons for doing so. Haebe v. Department
of Justice, 288 F.3d 1288, 1301 (Fed. Cir. 2002). The appellant here has not
presented such sufficiently sound reasons. PFR File, Tabs 1, 4. Therefore, these
portions of the initial decision are affirmed. See Clay v. Department of the Army,
123 M.S.P.R. 245, ¶ 6 (2016) (finding no reason to disturb the administrative
judge’s findings where she considered the evidence as a whole, drew appropriate
inferences, and made reasoned conclusions); Broughton v. Department of Health
& Human Services, 33 M.S.P.R. 357, 359 (1987) (same).
The remaining issue is whether the agency established by clear and
convincing evidence that it would have taken the personnel actions in the absence
of the appellant’s protected disclosures and/or activity. 5 U.S.C § 1221(e)(2);
Salerno, 123 M.S.P.R. 230, ¶ 5. In determining whether an agency has shown by
clear and convincing evidence that it would have taken the personnel action
absent the protected activity, the Board will consider all of the relevant factors,
including the following (known as the “Carr factors”): (1) the strength of the
agency’s evidence in support of its action; (2) the existence and strength of any
motive to retaliate on the part of the agency officials who were involved in the
decision; and (3) any evidence that the agency takes similar actions against
employees who did not engage in such protected activity, but who are otherwise
similarly situated. Soto v. Department of Veterans Affairs, 2022 MSPB 6, ¶ 11;
see also Carr v. Social Security Administration , 185 F.3d 1318, 1323 (Fed. Cir.
7
1999). 5 The Board does not view these factors as discrete elements; rather, they
are weighed together, along with all pertinent record evidence, to determine if the
evidence is clear and convincing as a whole. Elder v. Department of the Air
Force, 124 M.S.P.R. 12, ¶ 42 (2016). The Board considers all of the evidence,
including evidence that detracts from the conclusion that the agency met its
burden. Soto, 2022 MSPB 6, ¶ 11; see also Whitmore v. Department of Labor,
680 F.3d 1353, 1368 (Fed. Cir. 2012).
We find that the administrative judge’s analysis of the Carr factors was not
entirely consistent with the principles stated above. Regarding the second Carr
factor, the Board has held that “[t]hose responsible for the agency’s performance
overall may well be motivated to retaliate even if they are not directly implicated
by the disclosures . . . as the criticism reflects on them in their capacities as
managers and employees.” Wilson v. Department of Veterans Affairs,
2022 MSPB 7, ¶ 65 (quoting Whitmore, 680 F.3d at 1370); Smith v. Department
of the Army, 2022 MSPB 4, ¶¶ 28-29 (same). Here, the administrative judge
appears to have been too dismissive of possible evidence showing that the
appellant’s supervisors had a motive to retaliate against him. ID at 19-21; see
Whitmore, 680 F.3d at 1370 (“To find zero evidence suggesting any retaliatory
motive [on the part of management officials] on this record is to take an unduly
dismissive and restrictive view of Carr factor number two.”). Regarding Carr
factor three, the administrative judge incorrectly placed the burden on the
appellant to present evidence that the agency took similar actions against
employees who are not whistleblowers but who are otherwise similarly situated.
ID at 19. It is the agency’s burden to produce evidence on all Carr factors, and if
5
Historically, the Board has been bound by the precedent of the U.S. Court of Appeals
for the Federal Circuit on these types of whistleblower issues. However, pursuant to the
All Circuit Review Act (Pub. L. No. 115-195), appellants may file petitions for judicial
review of Board decisions in whistleblower reprisal cases with any circuit court of
appeals of competent jurisdiction. See 5 U.S.C. § 7703(b)(1)(B). Therefore, we must
consider these issues with the view that the appellant may seek review of this decision
before any appropriate court of appeal.
8
the first two factors alone do not support a finding that the agency would have
taken the same personnel action absent the protected disclosure or activity, the
agency’s failure to present evidence of the third Carr factor may prevent it
from carrying its overall burden. Smith, 2022 MSPB 4, ¶¶ 26-30; see also
Miller v. Department of Justice, 842 F.3d 1252, 1259-63 (Fed. Cir. 2016)
(holding that an agency’s failure to produce any evidence concerning the third
Carr factor “tends to cut slightly against [it]”). Additionally, in finding that the
employees identified by the appellant were not appropriate comparators, the
administrative judge appears to have adopted a restrictive view of the standard by
requiring that their situations be nearly identical to those of the appellant. ID
at 20. The Federal Circuit has stressed that the comparison under Carr factor
three to is not to be “highly restrictive” and only requires that the employees be
“similarly situated,” not identically situated. Whitmore, 680 F.3d at 1373.
Accordingly, we find it necessary to reassess whether the agency has
shown by clear and convincing evidence that it would have taken the same
personnel actions in the absence of the appellant’s protected disclosures and/or
activity. The administrative judge is in the best position to conduct the required
analysis, having heard the live testimony. See Shibuya v. Department of
Agriculture, 119 M.S.P.R. 537, ¶ 37 (2013). On remand, the administrative judge
should specifically address the arguments raised in the appellant’s petition for
review concerning the Carr factors. PFR File, Tab 1 at 10-33; see, e.g., Fox v.
U.S. Postal Service, 81 M.S.P.R. 522, ¶ 17 (1999) (directing the administrative
judge to address on remand the arguments raised by the appellant on review).
ORDER
We REMAND this case to the Washington Regional Office for further
adjudication consistent with this Opinion and Order. The administrative judge
9
has discretion to reopen the record to take additional argument and evidence on
the issues to be addressed on remand. 6
FOR THE BOARD: ______________________________
Gina K. Grippando
Clerk of the Board
Washington, D.C.
6
We need not address on review the appellant’s motion for leave to file additional
evidence. PFR File, Tab 8. The appellant may seek to enter this evidence into the
record on remand in accordance with instructions from the administrative judge and
Board regulations.