U.S. Office of Personnel Management - Ensuring the Federal Government has an effective civilian workforce

Litzenberger v. Office of Personnel Management, DC0831990279-M-1, May 16, 2001

Where there has been no review of the substantive validity of the removal action, OPM may not deny a request for discontinued service annuity on the basis that the employee's removal was for misconduct or delinquency.

The appellant was removed by the Metropolitan Washington Airports Authority (MWAA) on 2 charges: loss of confidence and trust and violating conduct and discipline directives. The stipulations supporting the charges stemmed from the appellant's testimony in an employment-related lawsuit that he had filed in Virginia State court against MWAA. Specifically, the agency charged that the appellant "displayed great antipathy towards the Authority and its management, and recklessly and without regard for the truth thereof accused Authority employees, attorneys, and contractors of improper and/or illegal and/or unethical conduct." After his removal, the appellant applied to OPM for his annuity under 5 USC § 8336(d)(1), which allows a Federal employee, "who is separated from service, except by removal for cause on charges of misconduct or delinquency" and has attained either (1) 20 years of service and is 50 years old or (2) 25 years of service, to be entitled to immediate retirement.

OPM denied both the appellant's initial application and reconsideration request. OPM found the appellant met the length of service requirement under 5 USC § 8336(d)(1). But OPM determined the appellant ineligible for an annuity because the appellant's involuntary separation was for cause and based on charges of misconduct or delinquency. The appellant filed an appeal with the Merit Systems Protection Board (MSPB). He alleged that the Supreme Court of Virginia's "rule of absolute privilege" protected the illustrative stipulations used by the agency to support its removal charges.

The administrative judge (AJ) affirmed OPM's reconsideration decision, holding that OPM had no authority to review the merits of the appellant's removal when determining annuity qualifications. The AJ also held that MSPB review of OPM's reconsideration decision was a "separate determination" from an appeal of the merits of the removal action. The full Board denied review. It should be noted that the removal of the employee from the Authority was not appealable to the Board.

The appellant continued his appeal to the Federal Circuit, which reversed and remanded the case to the MSPB. The appellant and OPM did not dispute that Virginia Law governed the appellant's employment but argued that Federal law governed his retirement rights. The court held that OPM could not deny an annuity for misconduct or delinquency without verifying the misconduct or delinquency including the Virginia "absolute privilege" defense asserted by the appellant. The court held that OPM and/or the MSPB should have reviewed the substantive validity of the stipulations used in the appellant's removal, whether the statements actually established misconduct or delinquency, and whether the absolute privilege protected the appellant because of the litigation context.

Upon remand from the court, the Board proceeded to remand the case to OPM for reconsideration. The Board stated it had no jurisdiction over the case until OPM had completely resolved the issues enumerated by the court. See Cooper v. OPM, 43 MSPR 485 (1990) and Hyde v. OPM, 40 MSPR 240 (1989). See also Edwards v. OPM, 11 MSPR 562(1982). OPM is currently in the process of gathering information and researching the issues presented by the Federal Circuit.

The Federal Circuit's decision raises a number of questions. On the one hand, this decision would seem to imply that if an employee fails to challenge the merits of his or her removal before the Board or some other third party, he or she can still obtain review of that action in the course of an application for disability retirement. However, since the issue in the case is not whether the removal was justified but whether it was for cause, if the removal action is found to be invalid, would the employee be entitled to reinstatement with backpay, even though the Board has no direct authority to review his removal? And if his removal is found to be invalid, would he not still be ineligible for discontinued service retirement? Finally, would the court have reached the same conclusion if the employee was able to challenge his removal?