Frey v. Department of Labor, No. 03-3329 (Fed. Cir. March 3, 2004)

The Federal Circuit affirmed MSPB's method for reviewing management's discretion to reassign employees: The agency must prove by a preponderance of the evidence that: (1) the employee received adequate notice of the reassignment, (2) the reassignment decision was bona fide and based upon legitimate management considerations in the interest of the service, (3) the employee refused to accept the reassignment, and (4) the removal will promote the efficiency of the service. If, on the other hand, the appellant can show that the reassignment had no solid or substantial basis in personnel practice or principle, a third-party may conclude that the reassignment was not a valid exercise of managerial discretion, but was instead either an improper effort to pressure the appellant to retire, or was at least an arbitrary and capricious action. The court endorsed this approach and adopted it as the law of the circuit for reassignment cases.

The Department of Labor removed Frey from his position as a supervisory coal mine inspector at the Delta Field Office, for refusing to accept a geographical reassignment that was based on performance deficiencies.

In its initial decision, the administrative judge sustained the removal, finding that: the agency had established legitimate reasons for the reassignment, discipline was warranted, and there was no vacant inspector position in the Delta Field Office to which Frey could have been demoted and reassigned. According to agency testimony, the principal concern involved recent fires and accidents at three mines inspected by the Delta Field Office. The agency did not consider Frey to be the strongest inspector to best resolve the problems at the field office and replaced him with an employee determined to be better suited for the task. The agency further testified that Frey's replacement had extensive experience and a reputation for issuing frequent citations to bring problem mines into compliance. Furthermore, the agency successfully argued that the new site would be a better fit for Frey because there would be less complicated enforcement problems there. The initial decision became the final decision of the MSPB.

The Federal Circuit affirmed MSPB's conclusion that the agency established a bona fide, legitimate management reason for the geographical reassignment and therefore the removal was not an unreasonably harsh penalty. Frey argued, in part, that the agency did not prove its case because the agency presented no written report or notes regarding the reassignment. The court viewed Frey's argument as challenging the administrative judge's credibility determination, and rejected the challenge based on its holding that the evaluation of witness credibility is a matter within the discretion of the administrative judge and is "virtually unreviewable." The court also reiterated the wide discretion agencies have in exercising their authority (5 C.F.R. § 335.102) to reassign employees.