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Graham v. Department of Treasury

U.S. Court of Appeals, Federal Circuit

January 28, 1999


Before Newman, Lourie, and Schall, Circuit Judges.

The opinion of the court was delivered by: Schall, Circuit Judge.


Reginald Graham petitions for review of the final decision of the Merit Systems Protection Board (Board) dismissing for lack of jurisdiction his appeal of the decision by the Department of the Treasury (agency) to remove him from his position. Graham v. Department of the Treasury, 79 M.S.P.R. 256 (M.S.P.B. Mar. 12, 1998) (Table, No. DC-0752-97-0473-I-1). We affirm.



Mr. Graham worked as an Employee Development Specialist, GS-0235- 12, with the agency's Bureau of Engraving and Printing. By notice dated February 7, 1997, he was informed that the agency proposed his removal for improper conduct. Specifically, the agency charged that he had violated standards of conduct and regulations by failing to timely file federal and state income tax returns and by failing to timely pay federal and state income taxes between 1981 and 1991. On March 21, 1997, Mr. Graham was told that the decision had been made to remove him and that the removal would be effective on March 28th. On March 28th, Mr. Graham completed a Standard Form 50 requesting "Early Out Retirement" effective that day. As stated on the form, the reason for the request was "to obtain retirement benefits." In due course, the Office of Personnel Management (OPM) approved the request, and Mr. Graham currently is in retirement status. On April 3, 1997, he appealed the agency's decision to remove him to the Board.

Mr. Graham had the burden of establishing the Board's jurisdiction by a preponderance of the evidence. See 5 C.F.R. § 1201.56(a)(2)(i) (1997). In asserting Board jurisdiction, he advanced two alternate arguments: first, that his appeal of the agency's removal decision was not rendered moot by his retirement; and second, that his retirement was involuntary and therefore a constructive removal. In a July 30, 1997 initial decision, the administrative Judge (AJ) rejected both arguments, concluding that Mr. Graham's retirement did moot his appeal and that the retirement was not involuntary. Accordingly, he dismissed the appeal for lack of jurisdiction. The AJ's initial decision became the final decision of the Board on March 12, 1998, when the Board denied Mr. Graham's petition for review for failure to meet the criteria for review set forth in 5 C.F.R. § 1201.115. This appeal followed. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(9).


Our review of the Board's decision is limited. Specifically, we must affirm the decision unless 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. See 5 U.S.C. § 7703(c); Rosete v. Office of Personnel Management, 48 F.3d 514, 516 (Fed. Cir. 1995).


Mr. Graham's first argument on appeal is that the Board erred in determining that his retirement mooted his appeal. Pursuant to 5 U.S.C. §§ 7512 and 7513(d), the Board has authority to hear appeals of agency removal actions and of four other specified types of adverse actions. However, if an agency cancels or rescinds an otherwise appealable action, the Board is without jurisdiction to hear an appeal from the action. Cooper v. Department of the Navy, 108 F.3d 324, 326 (Fed. Cir. 1997).

In holding that Mr. Graham's appeal was rendered moot by his retirement, the AJ relied on our decision in Cooper. In that case, the Navy removed Larry L. Cooper from his position as a warehouse worker foreman because of his inability to perform the duties of his position. Cooper timely appealed his removal to the Board. Subsequently, while the appeal was pending before the Board, Cooper applied for disability retirement benefits and the application was approved. Thereafter, the Navy rescinded the removal, eliminated all references to it from Cooper's official personnel file, and substituted for it a separation based on disability retirement. See Cooper, 108 F.3d at 325. In view of the Navy's action, the Board dismissed Cooper's appeal for lack of jurisdiction, on the ground that it was moot. See id. On appeal, we upheld the Board's ruling. In so doing, we stated, "The Navy's cancellation of the removal action and the removal of all references to that action from Cooper's official personnel file eliminated all the consequences of that action and thus rendered Cooper's appeal moot." Id. at 326.

Mr. Graham advances two arguments as to why Cooper does not control his case. First, he points out that he has not received any communication from the agency formally stating that his removal was rescinded. Accordingly, he argues, the record does not establish that, in fact, the removal has been rescinded, as was the case in Cooper. In response, the government acknowledges that the agency failed to provide Mr. Graham with a written statement memorializing the rescission of the decision to remove him. It states, however, that the removal was "effectively canceled." It notes that as soon as Mr. Graham requested Early Out Retirement, the agency took no further action on the removal. It also notes that OPM could not have approved Mr. Graham's request for early retirement if the agency had removed him. See 5 U.S.C. § 8336(d) (1994) (stating that an employee who is separated from government service involuntarily "by removal for cause on charges of misconduct or delinquency" is prohibited from receiving retirement benefits).

The record establishes that the agency has in fact canceled the decision to remove Mr. Graham, even though it has not expressly informed Mr. Graham of the cancellation, either orally or in writing. We thus view the sequence of events in this case as resulting in circumstances tantamount to the cancellation of the removal action in Cooper. Having said that, we think that the better course plainly would have been for the agency to have provided Mr. Graham with a statement in writing formally canceling his removal. We believe that the agency would be well-advised to follow such a course in the future.

Mr. Graham's second argument against the application of Cooper is that, even if the agency has in fact canceled his removal, it still has failed to eliminate "all the consequences" of the action it took against him. See Cooper, 108 F.3d at 326. According to Mr. Graham, the agency did not expunge "all its records" of references to the adverse action proposal or the decision to remove him that was made in response to the proposal. In short, Mr. Graham argues that his case differs from Cooper because "stigmatizing information" about him remains in the agency's files.

Mr. Graham acknowledges that the agency has removed all references to the removal decision from his official personnel file. He contends, however, that references to the decision -- and to the proposal that led to the decision -- remain in what he refers to as the agency's "investigation" or "security" file. The record reflects that there are documents in the possession of the agency that refer to Mr. Graham's violations of federal and state tax laws, for example the report relating to an inspector general investigation of Mr. Graham. The government maintains, however, that all Cooper requires is the purging of an individual's official personnel file. It therefore argues that, as required by that case, it has "eliminated all the consequences of [the removal decision] and thus rendered [the] appeal moot." Id.

We agree with the government. Cooper refers to the purging of all references to a removal action from an employee's "official personnel file." See id. Significantly, it is undisputed that Mr. Graham's official personnel file has been cleansed of all references to the agency's removal decision. Moreover, we are confident that, in the event it is discovered that an agency personnel file contains a reference to the decision to remove Mr. Graham, prompt steps will be taken to remove the reference. Security or investigative files, however, are another matter. We do not believe that the agency should be required to rewrite history by eliminating the record of its investigation of Mr. Graham. Moreover, we would be imposing an undue burden on the agency to require it to search for all miscellaneous files that may contain any references to the circumstances leading to the removal decision. In short, Mr. Graham is entitled to a clean personnel file; he is not entitled to have all references to the conduct that led to the decision to remove him deleted from the agency's records.

For the foregoing reasons, we see no error in the decision of the Board that Mr. Graham's retirement rendered his appeal moot. We turn now to the second issue that Mr. Graham raises on appeal.


We pointed out in Cooper that "[t]he Board has jurisdiction over an involuntary retirement, which is treated as if it were a removal." 108 F.3d at 326. As noted above, before the Board, Mr. Graham argued that his retirement was involuntary. Thus, he contended that even if the Board ruled against him on the mootness issue, it still was authorized to hear his appeal.

An employee has the burden of establishing that his retirement was involuntary. See Mueller v. United States Postal Serv., 76 F.3d 1198, 1201 (Fed. Cir. 1996). Typically, he will seek to carry that burden by establishing that the retirement was the product of misinformation, deception, or coercion by the agency. See Staats v. United States Postal Serv., 99 F.3d 1120, 1124 (Fed. Cir. 1996). Before the Board, Mr. Graham argued that his retirement was involuntary because it was the product of coercion. Specifically, he contended that his retirement was coerced because it was the result of an improper disciplinary action. See id. (stating that "[a]n example of an involuntary resignation based on coercion is a resignation that is induced by a threat to take disciplinary action that the agency knows could not be substantiated"). The Board rejected this argument, however. The AJ stated:

"I find no merit to appellant's contention that a legal basis for the agency's action does not exist and I also find that his factual allegations bearing on the reasonableness of the penalty of removal, if proven, are insufficient to show that there was no arguable or reasonable basis for his discharge. As to appellant's nexus argument, the Board has directly addressed and rejected the assertion that there is no nexus between tax-related misconduct and the efficiency of the service where the employee does not occupy a tax-related position." Graham v. Department of the Treasury, No. DC-0752-97-0473-I-1, at 12 (M.S.P.B. July 30, 1997) (citations omitted).

On appeal, Mr. Graham argues that he should have been afforded a hearing before the AJ in order to establish his claim of involuntariness. He contends that whether there was a nexus between his tax problems and his job so as to support a determination that his removal would be for such cause as would promote the efficiency of the service presented an issue of fact. In addition, he makes the same argument with respect to the issue of whether the penalty of removal in his case was unreasonable because it was disproportionate to actions taken by the agency against other employees with tax problems.

We do not believe that the AJ erred in ruling against Mr. Graham on the voluntariness issue without a hearing. An appellant must make threshold non-frivolous allegations of involuntariness in order to be entitled to a hearing on the jurisdictional issue. See Staats, 99 F.3d at 1125. A non-frivolous allegation is an allegation of facts which, if proven, would make out a prima facie case of involuntariness. Dumas v. Merit Sys. Protection Bd., 789 F.2d 892, 894 (Fed. Cir. 1986). We are not prepared to say that Mr. Graham made a non-frivolous allegation that the agency knew that it could not establish a nexus between his failure to file tax returns and his failure to pay taxes and his job. See Crawford v. Department of the Treasury, 56 M.S.P.R. 224, 237 (1993) (nexus existed between the appellant's tax-related misconduct and the efficiency of the service even though the responsibilities of the appellant, who was employed by a division of the Department of the Treasury as a law enforcement officer, did not involve tax-related matters). Neither are we prepared to say that the AJ erred in rejecting without a hearing Mr. Graham's argument that the penalty of removal was unreasonable because it was disproportionate to the penalties imposed on other agency employees for tax offenses. As the AJ pointed out, the chart of actions taken by the agency with respect to tax offenses by other employees that Mr. Graham presented did not reveal any employee who failed to file federal and state income tax returns and to pay federal and state taxes over a period of eleven years. In sum, we see no error in the Board's rejection of Mr. Graham's claim that his retirement was involuntary.

For the foregoing reasons, we affirm the Board's dismissal of Mr. Graham's appeal for lack of jurisdiction.

Each party shall bear its own costs.


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