Welch v. Department of Veterans Affairs

NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2006-3206
GARY WELCH,
Petitioner,
v.
DEPARTMENT OF VETERANS AFFAIRS,
Respondent.
Daniel Minahan, Minahan and Shapiro, P.C., of Lakewood, Colorado, for
petitioner.
Gregory T. Jaeger, Attorney, Commercial Litigation Branch, Civil Division, United
States Department of Justice, of Washington, DC, for respondent. With him on the brief
were Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, and
Steven J. Gillingham, Assistant Director.
Appealed from: Arbitrator Decision
NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2006-3206
GARY WELCH,
Petitioner,
v.
DEPARTMENT OF VETERANS AFFAIRS,
Respondent.
__________________________
DECIDED: March 14, 2007
__________________________
Before SCHALL, GAJARSA, and PROST, Circuit Judges.
SCHALL, Circuit Judge.
DECISION
Gary Welch petitions for review of the decision of an arbitrator, which upheld Mr.
Welch’s permanent demotion by the Department of Veterans Affairs (“VA”). Dep’t of
Veterans Affairs v. Am. Fed’n of Gov’t Employees, FMCS No. 05-04679 (Watkins, Arb.)
(“Arbitration Decision”). We affirm-in-part, vacate-in-part, and remand.
DISCUSSION
I.
On March 14, 2005, the VA proposed the removal of Mr. Welch, a police officer
for the VA, based on five charges. At the time of the events in question, Mr. Welch was
suspended from his VA police officer position based upon two incidents not at issue
here. Mr. Welch previously had been employed as a police officer by the Department of
Defense (“DOD”) at Fitzsimons Army Medical Center. Important to this appeal are two
of the charges against Mr. Welch, Charges #4 and #5. These charges arose out of a
traffic accident in which Mr. Welch was involved. The accident, which was a “fender
bender,” occurred in Aurora, Colorado, on December 3, 2004. Charges #4 and #5 were
as follows:
Charge #4: Violation of VA Directive 0730, Paragraph 2c(6)(b), which
states, "VA police officers will promptly inform the supervisor if arrested for
any criminal offense except for traffic and parking citations .... "
Specification: Correspondence from the Aurora Police Department
advised that on December 3, 2004, you had been placed under arrest and
charged with driving a vehicle while under the influence of alcohol,
careless driving, and failing to give information in an accident (hit and run)
by an officer of the Aurora Police Department. You failed to advise any
Police Service supervisor of the arrest as required by the directive.
Charge #5: Providing False Information to Aurora Police Department.
Specification: On December 3, 2004, you were arrested by a Police
Officer of the Aurora Police Department. Correspondence from the Aurora
Police Department indicates that when you were stopped and asked for
identification, you presented a United States Department of Defense
(DOD) Police Badge and a DOD Police Identification Card. Those
documents and your action in presenting them falsely identify your
employment status.
The deciding official affirmed three of the charges (Charges #4 and #5 and Charge #1,
which is not relevant to this appeal), but reduced the punishment from removal to
2006-3206 2
permanent demotion to file clerk. Consequently, Mr. Welch, who had been employed
by the VA as a police officer, FS-083-7, step 7, was permanently demoted to file clerk,
GS-305-4, step 10. Mr. Welch appealed the deciding official’s determination, which the
parties agreed to present to an arbitrator for a decision on the merits.
For Charges #1 and #4, the arbitrator found that the agency had either failed to
carry its burden or had shown only a de minimis violation. Arbitration Decision at 17.
The arbitrator sustained the remaining charge, Charge #5. Id. The arbitrator’s decision
on Charge #5 involved credibility determinations. The arbitrator decided to credit the
testimony of the police officer to whom Mr. Welch presented the DOD Police Badge and
Identification Card over that of Mr. Welch. Id. at 13-16.
The arbitrator then reviewed the demotion penalty under the Douglas factors. Id.
at 19-20 (citing Douglas v. Veterans Admin., 5 M.S.P.R. 280 (1981)). The arbitrator
determined that the VA would have lost its trust in Mr. Welch and that the permanent
demotion to file clerk was appropriate. The arbitrator also explained:
In his current position, [Mr. Welch’s] wage has been “red circled” so
as to assure that he has no loss of pay; but his career has been in law
enforcement, he wishes it to continue there, and he feels he has been
unfairly deprived of it. Unfortunately, however, he has compromised that
position. The Agency has a very small police force and has determined,
without contravention, there is no position within it suitable for [Mr. Welch].
Arbitration Decision at 21-22.
Mr. Welch timely appealed. We have jurisdiction pursuant to 5 U.S.C. § 7703.
II.
In a dispute between a federal employer and employee, an arbitrator applies the
same legal standards as apply in an appeal to the Merit Systems Protection Board
(“Board”). Martin v. Dep’t of Veterans Affairs, 412 F.3d 1258, 1263-64 (Fed. Cir. 2005).
2006-3206 3
Similarly, this court reviews an arbitrator’s decision under the same standard that it
would employ in its review of a decision by the Board. Morrison v. Nat’l Sci. Found.,
423 F.3d 1366, 1368 (Fed. Cir. 2005). Our scope of review is limited. Specifically, we
must affirm the arbitrator’s decision unless we find it to be arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with law; obtained without
procedures required law, rule, or regulation having been followed; or unsupported by
substantial evidence. Id. (citing 5 U.S.C. § 7703(c)); see Kewley v. Dep’t of Health &
Human Servs., 153 F.3d 1357, 1361 (Fed. Cir. 1998).
On appeal, Mr. Welch makes essentially three main arguments. First, he argues
that substantial evidence does not support the arbitrator’s decision to sustain Charge
#5. He argues that the DOD police credentials he presented were not false or
fraudulent, given that the top half of the DOD badge, which denotes active duty, is gone
and “retired” is inscribed on the back. He additionally contends that the fact he gave the
Aurora police officer his current work number at the VA Medical Center negates any
inference that he was trying to deceive the officer into thinking he currently was a police
officer for the DOD at Fitzsimons Army Medical Center. Second, Mr. Welch asserts that
the arbitrator’s decision is contrary to law because both the arbitrator and the deciding
official sustained his demotion based on allegations not contained in the notice of
proposed removal. Specifically, he argues that because the charge of providing false
information was not in the notice of proposed removal, his demotion may not be
sustained on that basis. Third, Mr. Welch asserts at several points in his brief that the
arbitrator misunderstood the penalty that was imposed on him. Appellant’s Br. at 11-
12, 14, 19. Mr. Welch argues that the arbitrator was unaware that his demotion resulted
2006-3206 4
in a permanent loss of pay, given that the arbitrator explicitly stated that Mr. Welch’s
wage had been “‘red circled’ so as to assure that he has no loss of pay.” Appellant’s Br.
at 11 (citing Arbitration Decision at 21). Mr. Welch asserts that there is no evidence for
the arbitrator’s belief that his wage had been “red-circled.” Appellant’s Br. at 14.
The government argues on appeal that the arbitrator’s decision should be
affirmed because it is supported by substantial evidence. The government contends
that the arbitrator’s conclusion that Mr. Welsh offered his DOD police credentials for an
improper purpose is reasonable and based on credibility determinations made by the
arbitrator based upon the testimony at the hearing. The government also asserts that
the arbitrator’s decision is not contrary to law because the notice of proposed removal,
namely the specifications for Charges #4 and 5, does implicate the charge of false
information. The government does not address Mr. Welch’s contention that the
arbitrator misunderstood the nature of his penalty.
We agree with the arbitrator’s decision to sustain the charge of presenting
misleading credentials. It appears, however, that there is an unresolved question as to
the nature of Mr. Welch’s penalty. We therefore vacate the portion of the Arbitration
Decision sustaining the penalty and remand the case to the arbitrator for a finding as to
whether Mr. Welch’s penalty entailed a reduction in his wage and a new determination
as to the reasonableness of the penalty based upon that finding.
III.
With regard to the arbitrator’s decision to sustain the charge of presenting
misleading credentials, we hold that substantial evidence supports both the finding that
the DOD police credentials constituted false information and that Mr. Welch intended to
2006-3206 5
deceive the Aurora police officer. At the time of his arrest, Mr. Welch was employed by
the VA as a file clerk, having been suspended from his VA police officer position.
Although Mr. Welch alleges that his DOD badge did not contain the top half denoting
active duty and was inscribed with “retired,” Mr. Welch presented his DOD badge and
identification card to the Aurora police officer when asked to prove he was a police
officer and did not state that the credentials were “former” or “old.” Arbitration Decision
at 15. Moreover, Mr. Welch, in response to the police officer’s question of where he
worked, stated that he worked on “Fitz” (Fitzsimons Army Medical Center), even though
he had not worked there for more than five years. Id. at 15. In reviewing the
misrepresentation charge, the arbitrator decided to credit the police officer’s testimony
during the hearing over that of Mr. Welch. We decline to disturb this credibility
determination, which was within the arbitrator’s discretion. See Raney v. Federal
Bureau of Prisons, 222 F.3d 927, 939 (Fed. Cir. 2000) (“Credibility determinations are
within the discretion of the arbitrator and are virtually unreviewable on appeal.”).
Additionally, we hold that the arbitrator’s decision to sustain the charge of
presenting misleading credentials is not contrary to law, given that the notice of
proposed removal refers to Mr. Welch’s December 3, 2004 arrest and to the fact that
he presented a DOD Police Badge and a DOD Police Identification Card to the Aurora
police officer. The specificity of the notice of proposed removal therefore was sufficient
so as to provide Mr. Welch the opportunity to make an informed reply. See, e.g., Brook
v. Corrado, 999 F.2d 523, 526-27 (Fed. Cir. 1993) (“A notice of proposed removal is
sufficient . . . when it apprises the employee of the nature of the charges in sufficient
detail to allow the employee to make an informed reply.”) (internal citation omitted).
2006-3206 6
Because the arbitrator’s decision to sustain the charge of misleading credentials is
supported by substantial evidence and not contrary to law, we affirm this portion of the
decision.
IV.
As to the arbitrator’s understanding of Mr. Welch’s penalty, the arbitrator explicitly
noted in his decision that “[Mr. Welch’s] wage has been ‘red-circled’ so as to assure that
he has no loss of pay.” Arbitration Decision at 21. The record, however, contains no
indication that Mr. Welch’s wage was “red-circled,” and the government does not
dispute Mr. Welch’s assertion that, in actuality, his demotion resulted in an annual
salary decrease of $10,000, Appellant’s Br. at 14. The only indication in the record as
to what penalty Mr. Welch incurred is in the May 10, 2005 Decision on Proposed
Removal, stating that “a decision has been made to transfer you from your position as a
Police Officer, GS-083-7, step 7, in Police Service and assign you to the position of File
Clerk, GS-305-4, step 10, Patient Records File Section, Business Office.” In view of the
apparent discrepancy between the record and the arbitrator’s belief regarding Mr.
Welch’s wage, we conclude that the arbitrator’s finding that Mr. Welch’s wage was “red-
circled” is not supported by substantial evidence.
A correct understanding of the nature of a penalty is a prerequisite to a
determination of the reasonableness of the penalty. We therefore vacate the arbitrator’s
decision that the penalty imposed upon Mr. Welch was reasonable and remand the
case for (i) a factual finding as to whether Mr. Welch’s demotion entailed a reduction in
his pay and (ii) a determination as to the reasonableness of the penalty based upon that
finding.
2006-3206 7
For the foregoing reasons, the decision of the arbitrator is affirmed-in-part,
vacated-in-part, and remanded. ∗
∗
No transcript of the hearing was made, and following his decision, the
arbitrator destroyed the notes he took during the hearing. Likewise, following his
decision, the arbitrator destroyed the hearing exhibits. Clearly, the better course is for
the hearing record to be maintained intact until the appellate process is completed. Had
that course been followed in this case, it is possible that a remand for further
proceedings would not have been necessary.
2006-3206 8