Coy v. Treasury

Case: 21-2098 Document: 37 Page: 1 Filed: 08/09/2022
United States Court of Appeals
for the Federal Circuit
______________________
WILLIAM COY,
Petitioner
v.
DEPARTMENT OF THE TREASURY,
Respondent
______________________
2021-2098
______________________
Petition for review of the Merit Systems Protection
Board in No. DC-0752-20-0325-I-1.
______________________
Decided: August 9, 2022
______________________
CHRISTOPHER HUGH BONK, Gilbert Employment Law,
P.C., Silver Spring, MD, argued for petitioner. Also repre-
sented by KEVIN OWEN, ALEXIS NICOLE TSOTAKOS.
NATHANAEL YALE, Commercial Litigation Branch, Civil
Division, United States Department of Justice, Washing-
ton, DC, argued for respondent. Also represented by BRIAN
M. BOYNTON, ELIZABETH MARIE HOSFORD, PATRICIA M.
MCCARTHY.
______________________
Before DYK, REYNA, and STOLL, Circuit Judges.
Case: 21-2098 Document: 37 Page: 2 Filed: 08/09/2022
2 COY v. TREASURY
DYK, Circuit Judge.
The Department of the Treasury (“Treasury”) initiated
a removal action against William Coy, charging Coy with
“Misuse of Government Property.” Treasury sustained the
charge and removed Coy, and Coy appealed the removal to
the Merit Systems Protection Board (“Board”). A Board
Administrative Judge (“AJ”) reversed Treasury’s removal
of Coy on the ground that Treasury violated his due process
rights by considering information concerning Coy’s work
performance not included in the Notice of Proposed Re-
moval. Treasury and Coy both petitioned the Board for re-
view of the AJ’s initial decision. While that petition for
review was still pending, Treasury initiated a second re-
moval action based on the same charge and specifications
and subsequently removed Coy. Coy does not contend that
the due process defect in the first removal action was pre-
sent in the second removal action. An AJ upheld Treas-
ury’s second removal action, and the AJ’s initial decision in
the second action became the decision of the Board when
no party petitioned the Board for review.
Coy petitions this court for review of the final decision
in his second removal action, arguing both that Treasury
was precluded from initiating the second action while the
first was still pending and that the Board erred by consid-
ering grounds not listed in the Notice of Proposed Removal.
We affirm.
BACKGROUND
I
On November 27, 2016, Coy began working at Treasury
as the Director of Compensation and Benefits in the Office
of the Comptroller of the Currency (“OCC”). Shortly there-
after, Coy filed an appeal with the Board requesting cor-
rective action against Treasury under the Uniformed
Services Employment and Reemployment Rights Act of
1994 (USERRA), see 38 U.S.C. §§ 4301–35, alleging
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COY v. TREASURY 3
discrimination in compensation. In connection with that
action, Coy downloaded confidential employee data from
two files within OCC electronic systems, which he accessed
based on his status as the Director of Compensation and
Benefits. The purpose apparently was to compare Coy’s
compensation with that of other employees. On March 16,
2017, Treasury took Coy’s deposition in which he testified
that he had accessed the two files and transferred them to
his home computer to use in his USERRA action against
Treasury. He produced the files to Treasury in response to
a discovery request in the USERRA proceeding.
On September 20, 2017, Coy’s supervisor proposed
Coy’s removal from federal service based on a single charge
of “Misuse of Government Property” with three supporting
specifications based on Coy’s accessing and downloading
the two files for personal use in his USERRA action in vio-
lation of various regulations. The Senior Deputy Comptrol-
ler for Management at Treasury sustained all three
specifications and terminated Coy, effective April 13, 2018.
On May 9, 2018, Coy appealed his removal to the Board.
On September 11, 2019, a Board AJ issued an Initial
Decision in Coy’s first appeal, reversing the removal. The
AJ found that Coy demonstrated harmful procedural error
and a due process violation because the deciding official at
Treasury considered factors not referenced in Coy’s Notice
of Proposed Removal. However, the AJ stated that
“[a]bsent the agency’s due process and harmful procedural
errors, [she] would have sustained the agency’s charge and
supporting specifications.” J.A. 203. The AJ ordered
Treasury to provide Coy with interim relief under 5 U.S.C.
§ 7701(b)(2)(A) if a petition for review was filed.
Both Treasury and Coy filed petitions for review with
the full Board, and pursuant to the AJ’s interim relief or-
der, Treasury restored Coy to a non-duty employed status,
effective September 11, 2019. Because the Board lacked a
quorum until March 4, 2022, the petitions for review in
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4 COY v. TREASURY
Coy’s first appeal remained pending before the Board as of
oral argument in this appeal.
II
On October 28, 2019, Treasury again proposed Coy’s
removal based on the same charge and specifications as the
previous removal. The charge and specifications were
stated as follows:
Charge: Misuse of Government Property
Specification 1: On March 16, 2017, during a sworn
deposition, you stated that you accessed and down-
loaded personnel data from an OCC system to in-
clude names, titles, band levels, series, salary
information, social security numbers, birth dates,
and service computation dates of approximately 94
employees in the OCC’s Office of Human Capital.
You accessed this information for your own per-
sonal use and without authorization.
Specification 2: On March 16, 2017, during a sworn
deposition, you stated that you accessed and down-
loaded 80 pages of OCC new hire salary justifica-
tion roll up information. You accessed this
information for your own personal use and without
authorization.
Specification 3: On March 16, 2017, during a sworn
deposition, you stated that you emailed the infor-
mation described in specifications 1 and 2 to your
personal email account and stored the information
on your personal computer at home. You were not
authorized to remove OCC personnel information
from the OCC, transmit the information outside
OCC’s networks, or store OCC personnel infor-
mation on your home computer.
J.A. 162.
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COY v. TREASURY 5
Treasury sustained the charge and terminated Coy a
second time, effective December 28, 2019, and Coy ap-
pealed this second removal action to the Board on January
21, 2020. In the second removal action, Coy raised no claim
of a due process violation related to consideration of mate-
rials outside the scope of the Notice of Proposed Removal,
as was the case in the first removal.
A different Board AJ issued an Initial Decision in Coy’s
second appeal, affirming the removal and confirming that
Treasury was permitted to initiate a second removal action
while a petition for review of the first removal action re-
mained pending. The AJ concluded “that the agency could
initiate and effect a second removal action against [Coy]
based on the same charges while a [petition for review] of
the first removal action was pending” before the Board.
J.A. 7. On the merits, the AJ sustained Specifications 1
and 2 in support of the misuse charge:
In this case, it is undisputed that [Coy] collected
sensitive electronic data containing personnel in-
formation concerning agency employees as well as
outside candidates from the agency’s websites to
use that information to support his personal litiga-
tion efforts and then provided that information to
agency attorneys during discovery. In addition to
being unauthorized activity, [Coy’s] actions consti-
tuted a serious violation of the agency’s right to
control and safeguard its property. Moreover,
[Coy’s] actions interfered with the agency’s respon-
sibility to ensure that such records are used only
for the official government purposes for which they
were created. In sum, [Coy’s] conduct clearly con-
stituted a misuse of government property.
J.A. 16–17. The AJ also sustained Specification 3 in sup-
port of the misuse charge.
The initial decision became final on May 20, 2021,
when neither Treasury nor Coy filed a petition for review
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6 COY v. TREASURY
with the Board. Coy petitions this court for review. We
have jurisdiction under 28 U.S.C. § 1295(a)(9).
At oral argument, Coy argued that the interim relief
statute, § 7701(b)(2), precluded the second removal action,
an issue neither party briefed. We ordered supplemental
briefing on May 5, 2022, to address the following question:
When the Board has issued an interim relief order
pursuant to 5 U.S.C. § 7701(b)(2) ordering that the
employee be restored to his position and paid back
pay, does the order preclude the Agency from initi-
ating a duplicate removal action and removing the
employee while the interim relief order is in effect?
Order 3, ECF No. 32. Both Coy and Treasury filed supple-
mental briefs.
DISCUSSION
By statute, we are permitted to set aside a Board deci-
sion only if 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). “An agency’s decision ‘to dismiss a fed-
eral employee must have a “rational basis supported by
substantial evidence from the record taken as a whole.”’”
O’Keefe v. U.S. Postal Serv., 318 F.3d 1310, 1313 (Fed. Cir.
2002) (quoting Mitchum v. Tenn. Valley Auth., 756 F.2d 82,
85 (Fed. Cir. 1985)).
I
Coy contends that the interim relief statute in
§ 7701(b)(2) and the interim relief order here bar duplicate
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COY v. TREASURY 7
removal actions while the first proceeding is still pending. 1
The interim relief statute provides,
If an employee or applicant for employment is the
prevailing party in an appeal under this subsec-
tion, the employee or applicant shall be granted the
relief provided in the decision effective upon the
making of the decision, and remaining in effect
pending the outcome of any petition for review un-
der subsection (e), unless—
(i) the deciding official determines that the grant-
ing of such relief is not appropriate; or
(ii)
(I) the relief granted in the decision provides
that such employee or applicant shall return or
be present at the place of employment during
the period pending the outcome of any petition
for review under subsection (e); and
(II) the employing agency . . . determines that
the return or presence of such employee or ap-
plicant is unduly disruptive to the work envi-
ronment.
§ 7701(b)(2)(A) (emphases added). The AJ’s interim relief
order stated, “The relief shall be effective as of the date of
this decision and will remain in effect until the decision of
the Board becomes final.” J.A. 206; see Pet’r Suppl. Br. 5.
Coy argues that, under the statute, interim relief “must re-
main in effect pending the outcome of any petition for re-
view,” and “[u]nless the agency proceeds with an adverse
action taken on grounds other than those on which the
1Coy admits that the second removal action would
be proper if the first removal action had been finally set
aside on procedural grounds. See generally Reynolds v.
United States, 454 F.2d 1368, 1374 (Ct. Cl. 1972).
Case: 21-2098 Document: 37 Page: 8 Filed: 08/09/2022
8 COY v. TREASURY
interim relief order was based, a repeat adverse action is
inconsistent with the interim relief order under 5 U.S.C.
§ 7701(b)(2).” Pet’r Suppl. Br. 1, 3. We think the interim
relief statute does not support Coy’s argument.
Our court has rejected an interpretation of the interim
relief statute that would bar all subsequent disciplinary ac-
tions until a decision is final. In Guillebeau v. Department
of the Navy, the Navy removed an employee for poor work
performance, and an AJ reversed the decision, ordering in-
terim relief. 362 F.3d 1329, 1331 (Fed. Cir. 2004). The
Navy petitioned the Board for review and returned the em-
ployee to pay status, but after a short period and while the
petition for review was still pending with the Board, the
Navy indefinitely suspended the employee because the em-
ployee’s security clearance was suspended. Id. In that
case, the initial removal action was based on work perfor-
mance, and the subsequent suspension was based on the
suspension of a security clearance. Id. at 1333. We held
that the interim relief order and statute did not constitute
an absolute bar on subsequent actions:
[T]he interim relief order can[not] insulate an ap-
pellant from a subsequent adverse action so long as
that action is not inconsistent with the initial deci-
sion.’’ Barcliff v. Dep’t of the Navy, 62 M.S.P.R. 428,
433 (1994) (emphasis added); see also Rothwell v.
United States Postal Serv., 68 M.S.P.R. 466, 468
(1995); Shumate v. Dep’t of the Navy, 62 M.S.P.R.
288, 290 (1994); Crespo v. United States Postal
Serv., 53 M.S.P.R. 125, 129 (1992). In these cases,
the Board held that the interim relief order only
protects the appellant from adverse actions based
on the events underlying the action in which the
interim relief order was granted, not events that
are unrelated to the interim relief order.
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COY v. TREASURY 9
Although Guillebeau involved a situation where the
underlying employee conduct was different in the two
cases, we think the principle of Guillebeau applies equally
to situations where the conduct is the same, but the
grounds of Board’s decisions are different, i.e., where the
Board’s decision in the second action “is not inconsistent
with the initial decision”—for example, where the first ac-
tion is set aside for a procedural deficiency not present in
the second proceeding. Id.The legislative history, though limited, confirms the
narrow scope of the provision and that it was designed to
prevent an employee from being denied the benefits of a
Board decision, pending appeal, by an agency’s interim ac-
tion inconsistent with a first decision. The interim relief
statute was added as part of the Whistleblower Protection
Act of 1989. Pub L. No. 101-12, § 6, 103 Stat. 16, 33–34
(1989). The Senate Report explained, “This section is a
change to current law in that under current law, employees
are not granted any relief ordered by a regional office of the
Board until they win at the full Board.” S. Rep. No. 100-
413, at 35 (1988). Senator Pryor provided some clarifica-
tion on this purpose: “[The Senate bill] provides interim re-
lief to those whistleblowers who receive a favorable
decision at the . . . MSPB, regional level. This ensures that
an employee will not suffer undue hardship waiting for a
final decision from the MSPB.” 134 Cong. Rec. 29,543
(1988) (statement of Sen. Pryor). Thus, the statute was de-
signed to preserve the consequence of a “favorable deci-
sion,” not to preserve the employee’s employment rights
regardless of the circumstances.
Board precedent, while not binding on this court, also
appears to allow duplicate removal actions that cure proce-
dural deficiencies in a first removal action even while the
final action is still pending before the Board. Although Coy
quotes language in Hanner v. Department of the Army, 62
M.S.P.R. 677, 687 (1994), that appears to support his argu-
ment that the first action must be final before the second
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10 COY v. TREASURY
action can be initiated, 2 Hanner did not directly address a
situation where the second action was initiated when the
first action suffered from a procedural error that could be
cured in the second action. 3 Other Board cases more di-
rectly on point support our conclusion that a second action
is not precluded even if it is initiated while a first action is
on appeal when the first action has been set aside for a pro-
cedural violation. Barcliff v. Dep’t of the Navy, 62 M.S.P.R.
428, 431–33 (1994); Shumate v. Dep’t of the Navy,
62 M.S.P.R. 288, 290 (1994).
In view of the statutory language, our decision in Guil-
lebeau, and the legislative history, the clear purpose of the
statute is to prevent the agency from taking action incon-
sistent with the first decision. That did not occur here. The
first removal suffered from a procedural deficiency that
was cured in a second removal action. Thus, Coy’s second
removal was permissible while the first removal was still
pending before the Board because the second removal
cured the procedural deficiency of the first removal and did
not evade the first decision.
2 See Hanner, 62 M.S.P.R. at 687 (“[I]n a case involv-
ing two consecutive removals, the second removal can have
no force or effect unless the agency rescinds or modifies the
first removal action, or a final decision of the Board or a
court reverses the first removal action.”).
3 Coy also relies on Parker v. U.S. Postal Service,
46 M.S.P.R. 214, 219–20 (1990). The Board in Parker ap-
pears to have held that an employee who has been removed
cannot be removed again until restored to his prior posi-
tion. Id. at 219–20. To the extent that language in Hanner
or Parker supports a view contrary to our holding here, it
is not binding on this court, and we disapprove of it.
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COY v. TREASURY 11
II
We next consider whether the Board abused its discre-
tion by considering Coy’s transmittal of the sensitive elec-
tronic data to non-OCC counsel while analyzing
Specifications 1 and 2 of the Notice of Proposed Removal
when those specifications mention “personal use” but not
transmittal. We have held it is an abuse of discretion to
exceed the scope of the charge and specifications listed in a
Notice of Proposed Removal. O’Keefe, 318 F.3d at 1315.
“Only the charge and specifications set out in the Notice
may be used to justify punishment because due process re-
quires that an employee be given notice of the charges
against him in sufficient detail to allow the employee to
make an informed reply.” Id.; see also Do v. Dep’t of Hous.
& Urb. Dev., 913 F.3d 1089, 1094 (Fed. Cir. 2019) (“[W]hen
an agency disciplines an employee, it may do so based only
on the charges in the notice of proposed action, and the
Board, in turn, can affirm the disciplinary action based
only on the charges actually noticed and relied on by the
agency.”).
Coy argues that Specifications 1 and 2 do not allege
transmittal of information and that the Board’s “review of
these specifications relies upon a finding that Mr. Coy im-
properly transmitted government data.” Pet’r Br. 24. We
reject Coy’s argument because the Board properly con-
cluded that the transmittal was part of Coy’s “access[ing]
th[e] information for [his] own personal use and without
authorization,” as recited in Specifications 1 and 2.
J.A. 162. The Board found that Coy “downloaded agency
information which he was authorized to obtain for perform-
ing his job duties but he utilized that information for his
own personal purposes in litigation including providing the
information to non-OCC agency counsel without authoriza-
tion.” J.A. 16 (emphasis added).
Coy argued that providing the relevant data to non-
OCC counsel in discovery was not for personal use, and
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12 COY v. TREASURY
now argues that the Board erred in concluding that trans-
mitting was part of Coy’s personal use. We see no error in
concluding that Coy’s use of confidential employee infor-
mation here, including the transmission to government
counsel, was a personal use. Coy could not have used the
data in the USERRA proceeding without providing it to
counsel in response to the discovery requests for “each and
every fact upon which you base your claim in this matter
that the OCC set your salary as a means to discriminate
against you,” J.A. 108, and “each and every document, elec-
tronic recording, or other tangible item, however described,
which in any way reflects, relates to, substantiates, or cor-
roborates the allegations of discrimination contained in
your appeal,” J.A. 108–09. Providing the documents in re-
sponse to those requests was therefore part of the personal
use.
CONCLUSION
The interim relief statute does not preclude a second
removal action while a first removal action is still pending
when the second action cures a procedural deficiency in the
first action. The Board properly considered how Coy used
the sensitive data that he accessed and downloaded in de-
termining if Coy’s use was an unauthorized personal use.
AFFIRMED
COSTS
No costs.