Malloy v. United States Postal Service

United States Court of Appeals for the Federal Circuit
2008-3117

KARLA M. MALLOY,

Petitioner,

v.

UNITED STATES POSTAL SERVICE,

Respondent.

Karla M. Malloy, of Tacoma, Washington, pro se.

Ray E. Donahue, Principal Counsel, Office of General Counsel, United States
Postal Service, of Washington, DC, for respondent. With him on the brief was Lori J.
Dym, Chief Counsel, Appellate Litigation Division. Of counsel was Ellen M. Lynch, Trial
Attorney, Commercial Litigation Branch, Civil Division, United States Department of
Justice, of Washington, DC.

Appealed from: Merit Systems Protection Board
 United States Court of Appeals for the Federal Circuit

2008-3117

KARLA M. MALLOY,

Petitioner,

v.

UNITED STATES POSTAL SERVICE,

Respondent.

Petition for review of the Merit Systems Protection Board in SF0752070100-I-1.
__________________________

DECIDED: August 25, 2009
__________________________

Before NEWMAN and MOORE, Circuit Judges, and GETTLEMAN, District Judge. *

NEWMAN, Circuit Judge.

Ms. Karla M. Malloy appeals the decision of the Merit Systems Protection Board

(Board) affirming her removal from employment by the United States Postal Service

(USPS). Malloy v. United States Postal Serv., No. SF0752070100-I-1 (M.S.P.B. Nov. 9,

*
Honorable Robert W. Gettleman, United States District Court for the
Northern District of Illinois, sitting by designation.
2007). We vacate the decision of the Board and remand for consideration of the

evidence relating to mental impairment.

BACKGROUND

Ms. Malloy entered employment with the USPS on October 18, 1980. At the time

of the events at issue she was in the position of data collection technician at the Seattle

Bulk Mail Center. In November 2005 Ms. June D. Hamilton became Ms. Malloy’s

immediate supervisor. Because Ms. Malloy and Ms. Hamilton usually worked on

different shifts, they communicated primarily by email. The email evidence and other

records before the Board show severe tensions and sharp exchanges, relating primarily

to Ms. Malloy’s requests for medical and dental leave, but also concerning the quality or

timeliness of Ms. Malloy’s work.

The record contains excerpts from Ms. Hamilton’s electronic work journal, emails,

and notes. For example, on February 2, 2006 (Thursday) Ms. Malloy submitted leave

slips requesting LWOP (leave-without-pay) for the following week, February 5 to

February 9. Ms. Hamilton denied the request on February 6, 2006 (Monday) and

charged Ms. Malloy with AWOL on each requested day. Ms. Hamilton’s journal entry on

February 6 states:

Karla left leaves slips for full week LWOP, No prior approval, I put her
down as AWOL. I was on leave on Friday, so I was not able to call her (I
also believe that she knew I was taking leave on Fridays until the end of
the month)

Ms. Hamilton did not contact Ms. Malloy during her absence to inform her of the denial

of the request and the AWOL designation.

On February 16, 2006 Ms. Malloy requested leave for various purposes and Ms.

Hamilton denied the request. Ms. Hamilton’s journal entry states:

2008-3117 2
 Karla left leave slips for taking 9 Feb [sic: 19 Feb] off because 20 was her
holiday. I denied for needs of the service — she also put leave in for 2-22
(Wed) dental prep & recovery, 3-1 for extractions and recovery, 3-2 dental
recovery. All of these I denied needing supporting documents. The 19th I
denied, by email stated, slips needed to be turned in before posting (1-25-
06, also no calls to my home). She went in to talk to Bill Lindsay saying I
was picking on her. He told her she had to come to work Sunday night.

In a February 22 journal entry, Ms. Hamilton referred to a voice mail from Ms. Malloy

and stated: “Just a thought I am wondering if Karla has mental issues, I know she has

anger problems.”

The AJ’s opinion does not contain Ms. Malloy’s responses to these events, but it

does contain several examples of ensuing responses, some extremely rude and

disrespectful. On March 8, 2006 (Wednesday), upon Ms. Malloy’s request for a

telephone code for work-related matters, Ms. Hamilton emailed Ms. Malloy stating:

“Karla, I left your [telephone] code on your desk, nothing else on it. Maybe it was

tossed out.” Ms. Malloy responded, in part:

So again — nice try June. You didn’t give me any code, but since Arlene
has indicated that I should have one — guess you had to make something
up didn’t you — CYA — again, nice try, but you aren’t fooling me one bit.
Too bad that’s taken off your list of ways to harass me.

Another email from Ms. Malloy dated March 8 relates to another leave request which

Ms. Hamilton denied:

Nice of you to let me know about my leave for Thursday — I guess this
gives you one more think [sic] to throw up in my face.

You ignore my leave slip — just waiting to see if I will take it even if you
haven’t said yes — think you’re sly, eh?

On May 7, 2006 Ms. Malloy challenged Ms. Hamilton as follows:

You do have a learning disability — don’t you? It’s either a learning
disability or you aren’t very bright — which do you prefer I consider it? Are
you REALLY this dumb or are you just acting like it . . . .

2008-3117 3
 The situation led to an Investigative Interview held on May 8, 2006, with Ms.

Hamilton, Mr. Carl Smith (Distribution Operations Supervisor), union steward Mr. Rob

Clark, and Ms. Malloy scheduled to be in attendance. Ms. Malloy left the interview

shortly after it began, citing stress. Another Investigative Interview was held on June 7,

2006 with Ms. Hamilton, Mr. Michael Merlino (Manager of Maintenance Operations), Mr.

Smith, Mr. Clark, and Ms. Malloy in attendance. Mr. Merlino’s “note to file” dated June

8, 2006, included the following summary:

At the outset of the interview Ms. Malloy demanded that other items be
addressed prior to the interview. Ms. Hamilton informed her that she (Ms.
Malloy) was directed to be here for an investigative interview, and not for
other issues which Ms. Malloy wanted to address. Ms. Malloy then “went
off” for approximately three minutes stating that she (Ms. Malloy) would
not participate in the interview. Ms. Malloy accused Ms. Hamilton of
“bullying” and “harassing” her. She stated that her doctor had told her she
suffered from stress and the attempted interview was stressing her out.
Ms. Malloy stated she thought it was a sham and that Ms. Hamilton should
go ahead and do whatever she wanted to her without the interview as she
was not going to participate. Ms. Malloy would not allow anyone to talk.
Rather, she was extremely loud, belligerent and would interrupt anyone
attempting to speak. Ms. Malloy then got up and departed the interview
room. While departing Ms. Malloy would yell “goodbye” at anything Ms.
Hamilton was attempting to say.

Ms. Malloy appeared to be extremely unstable and delusional in her
mannerisms. She appeared to purposefully show Ms. Hamilton nothing
but disrespect and contempt. She appeared to be extremely hyper with
her eye movement being rapid and unfocused. I feel Ms. Malloy is not
mentally well and requires extensive help above the supervisory laymen
level. I feel Ms. Malloy could very rapidly escalate to a more aggressive
demeanor and pose a threat to personnel around her.

On August 29, 2006 USPS issued Ms. Malloy a Notice of Proposed Removal,

charging her with disrespectful communication to a supervisor and failure to follow

instructions. The notice listed seven specifications for the charge of disrespectful

communication, all of which are emails or notes sent by Ms. Malloy to Ms. Hamilton,

2008-3117 4
including those quoted ante. The charge of failure to follow instructions listed two

specifications, including an April 3, 2006 email from Ms. Malloy refusing to follow Ms.

Hamilton’s instruction concerning PS Form 1767 (entitled “Report of Hazard, Unsafe

Condition or Practice”).

In response to the proposed removal, Ms. Malloy and her union representative

met with Plant Manager Mr. Vendetti, and then provided a twenty-nine-page written

response to Mr. Vendetti. The written response states, in part, that Ms. Malloy has

been under medical care and that she has supporting medical documentation. Mr.

Vendetti issued a letter of removal, stating that upon careful consideration of all the

evidence in the record, including the mitigating factors argued by Ms. Malloy, he

decided to remove Ms. Malloy for the following reasons: “your behavior at our meeting

and the tone and content of your written response to me further defines and delineates

the very problem that forms the basis of your removal — that being lack of common

courtesy and a blatant disrespect for others.” The letter mentions medical concerns:

You suggest that you are under medical care and are justified in walking
out of meetings that stress you out. You did not offer any definitive
medical evidence to me that would explain or mitigate your unacceptable
behavior toward your Supervisor. You offered no assurance that you
would not engage in this behavior in the future. Normally employees can
maintain postal employment while under medical treatment as long as the
treatment enables them to perform their duties at work in an appropriate
manner. Treatment or not, your behavior, as laid out in the notice of
proposed removal does not meet that criteria and warrants your removal.

Her removal from employment was effective on October 6, 2006.

Ms. Malloy appealed to the MSPB. She did not dispute that her communications

to Ms. Hamilton contain inappropriate language, but argued at the hearing that mental

impairment caused her to sometimes act inappropriately. At the hearing Ms. Malloy

2008-3117 5
provided extensive medical documentation. The record contains a report dated March

23, 2006 by “MS, LMFT Robert Herman” in the “TMA Mental Health Department,” who

diagnosed Ms. Malloy with “major depressive disorder, single episode, moderate.” Mr.

Herman repeated this diagnosis on March 30 and April 21, 2006. On June 19, 2006 Dr.

Sarah Nyland issued a Certification of Health Care Provider (form provided by the

United States Department of Labor) classifying Ms. Malloy’s condition as a “4,” which is

defined in the certificate as “chronic conditions requiring treatments.” 1 Dr. Nyland

diagnosed Ms. Malloy as follows:

Depression with Anxiety

Patient with severe symptoms causing disruption of concentration, sleep,
cognition requiring further evaluation and treatment.

Patient may miss up to 30 days per month due to illness

Not currently incapacitated as often as 30 days per month

Will need weekly treatment for up to 6 mo to 1 year

Due to patient illness she experiences symptoms . . . that at times make
her unable to perform any work. These symptoms wax & wain [sic] and
when able she can do all duties not limited by current back injury.

1
Defined as: a chronic condition which:

(1) Requires periodic visits for treatment by a health care
provider, or by a nurse or physician’s assistant under
direct supervision of a health care provider;
(2) Continues over an extended period of time (including
recurring episodes of a single underlying condition): and
(3) May cause episodic rather than a continuing period of
incapacity (e.g, asthma, diabetes, epilepsy, etc.).

Definition under the Family and Medical Leave Act in Certification of Health Care (form
provided by the United States Department of Labor), for Ms. Malloy by Dr. Sarah
Nyland, at 4.

2008-3117 6
Dr. Nyland prescribed “counselor, physician” as possible health service providers and

“prescription medications” as “a regimen of continuing treatment.” Id. Dr. Nyland stated

that Ms. Malloy’s mental condition commenced approximately on February 1, 2006 and

was expected to last for a year, and that Ms. Malloy “will be incapacitated episodically.”

Dr. Nyland also issued an “Employee Physical Capacities Appraisal” diagnosing

Ms. Malloy with “depression with anxiety (patient not at risk to self or others).” Dr.

Nyland also described Ms. Malloy’s physical limitations as: “when incapacitated unable

to interact with others & perform complex tasks.” These records appear to be co-

extensive with the time of the offending remarks, suggesting that Ms. Malloy was

seeking help.

The documentation submitted to the AJ showed that Ms. Malloy was also seen

by mental health professional “MLT D Hollander” and was treated for depression on July

3, August 3, and October 5, 2006 and on January 18, 2007. The record showed that

Ms. Malloy was also under the care of Dr. Frances Hogan for a condition described by

Dr. Hogan as “severe recurrent major depression without psychotic features,” from

approximately September 26, 2006 to December 16, 2006. On December 5, 2006, Dr.

Hogan wrote to the USPS summarizing Ms. Malloy’s condition:

From the history and in-person examination available to me or performed
by myself, it appears that Ms. Karla Malloy’s employment with U.S. Postal
Service more likely than not contributed to her current severe depression
and anxiety.

Ms. Malloy is suffering under severe stress which is causing her to have
severe anxiety and emotional symptoms. These severe emotional
symptoms occur even when she is subject to memories alone of her
recent employment. This makes her unable to function in a professional
manner, and unable to attend to tasks to meet her job requirements. The
stress has led to an over-activation of her sympathetic nervous system.

2008-3117 7
 This has resulted in severe irritability or outbursts of anger. These stress-
induced symptoms may result in inappropriate behavior.

Thus the record shows that Ms. Malloy was seen by mental health professionals

and physicians on multiple occasions from 2006 to 2007, before, during, and after her

removal. The record shows many patient visit notes and medical opinions. The record

also contains lay evidence that Ms. Malloy was perceived by colleagues as having

mental impairment, including Mr. Merlino’s Investigative Interview notes shown ante,

describing Ms. Malloy as “extremely hyper” and “not mentally well.”

The AJ found that Ms. Malloy’s written communications were disrespectful and

unprofessional, and sustained the removal. The AJ’s opinion states that Ms. Malloy

stated that “she was under stress, depressed, could not think straight, concentrate or

perform simple tasks.” Malloy v. United States Postal Serv., SF0752070100-I-1

(M.S.P.B. June 1, 2007) (“Initial Decision”) at 5. The AJ found “the appellant’s

assertions in this regard not credible and unsupported by the record.” Id. at 5-6. The

AJ did not mention any of the medical documents, although she stated that she had

“reviewed her submissions.” The AJ’s entire reference to this aspect is as follows:

I also find that the appellant has failed to establish any medical reason or
provide any medical documentation that could justify or excuse her
behavior. Although the appellant was repeatedly asked to provide medical
documentation, she did not do so until the day of the hearing. I have
reviewed these submissions and find no medical condition that would
have caused her to say the things she said.

Id. at 9. The full Board denied review, leading to this appeal.

ANALYSIS

A decision of the Board is reviewed to determine whether it is “(1) arbitrary,

capricious, an abuse of discretion, or otherwise not in accordance with law; (2) obtained

2008-3117 8
without procedures required by law, rule, or regulation having been followed; or (3)

unsupported by substantial evidence.” 5 U.S.C. §7703(c); see also Cheeseman v.

Office of Pers. Mgmt., 791 F.2d 138, 140 (Fed. Cir. 1986).

An employing agency must establish three criteria when taking an adverse action

against an employee. First, it must establish by preponderant evidence that the

charged conduct occurred. 5 U.S.C. §7701(c)(1)(B). Second, it must show a nexus

between that conduct and the efficiency of the service. Id. §7513(a). Third, it must

demonstrate that the penalty imposed was reasonable in light of the relevant factors set

forth in Douglas v. Veterans Admin., 5 M.S.P.R. 280, 307-08 (1981). The AJ found that

the USPS met all three criteria.

It is not disputed that the charged conduct occurred. The AJ found that it

“impacted the efficiency of the service due to the tremendous amount of time required to

deal with the events.” Initial Decision at 13-14. However, Ms. Malloy’s medical

evidence was not discussed, and the AJ’s statement that Ms. Malloy’s representations

about her medical condition were “not credible” is so totally at odds with the medical

records as to raise strong doubts as to the thoroughness of the AJ’s review.

The medical evidence is not disputed by the USPS on this appeal, although the

USPS argues that Ms. Malloy’s disrespectful statements and inadequate performance

warrant her removal from service. However, when mental impairment or illness is

reasonably substantiated, and is shown to be related to the ground of removal, this

must be taken into account when taking an adverse action against the employee. See

Hanna v. Dep’t of Army, 42 M.S.P.R. 233, 241 (1989) (the employee’s testimony that

“he was under severe emotional distress at the time he committed the acts in question”

2008-3117 9
must be considered in assessing the reasonableness of the penalty); see also Robb v.

Dep’t of Def., 77 M.S.P.R. 130, 133 (1997) (“An employee in an AWOL-based adverse

action may rely upon medical evidence of illness not previously submitted to the agency

as a defense to the action.”).

The decision of the MSPB contains no analysis of the medical evidence,

although the medical evidence in the record is voluminous and on its face may relate to

Ms. Malloy’s inappropriate behavior. Although the AJ stated that all of the Douglas

factors were considered, the eleventh Douglas factor, 5 M.S.P.R. at 305 (mitigating

circumstances such as “unusual job tensions, personality problems, mental impairment,

harassment, or bad faith, malice or provocation on the part of others involved in the

matter”), appears to be directly relevant, but is not mentioned and is not shown to have

been considered. 2

It is established that mental impairment, when present, warrants consideration

and weight in assessing the reasonableness of the action taken. See Roseman v. Dep’t

of Treasury, 76 M.S.P.R. 334, 345 (1997) (“The Board has held that evidence that an

2
This court has long held: “It is not reversible error if the Board fails
expressly to discuss all of the Douglas factors. The Board need only determine that the
agency considered the factors significant to the particular case.” Kumferman v. Dep’t of
Navy, 785 F.2d 286, 291 (Fed. Cir. 1986) (citations omitted); see also Connolly v. Dep’t
of Justice, 766 F.2d 507, 514 (Fed. Cir. 1985) (“[I]t is not per se reversible error for the
board not to address the Douglas factors specifically.”); Nagel v. Dep’t of Health &
Human Servs., 707 F.2d 1384, 1386-87 (Fed. Cir. 1983) (holding that the Board is not
required to articulate irrelevant factors when applying the Douglas analysis). In this
case, the decision of the MSPB contains no analysis of the medical evidence submitted
by Ms. Malloy—even though the medical evidence in the record is voluminous and on
its face may relate to Ms. Malloy’s inappropriate behavior. This lack of any analysis in
the face of such evidence, coupled with the Board’s statement that Ms. Malloy failed to
“provide any medical documentation that could justify or excuse her behavior,” leads us
to conclude that both the AJ and the full Board failed to consider the medical evidence
provided by Ms. Malloy.

2008-3117 10
employee’s medical condition or mental impairment played a part in the charged

conduct is ordinarily entitled to considerable weight as a mitigating factor.”). See

generally VanFossen v. Dep’t of Hous. & Urban Dev., 748 F.2d 1579, 1581 (Fed. Cir.

1984) (“[F]ailure to consider a significant mitigating circumstance constitutes an abuse

of discretion.”); Nagel v. Dep’t of Health & Human Servs., 707 F.2d 1384, 1386-87 (Fed.

Cir. 1983) (all relevant Douglas factors must be considered).

The record before us does not show what consideration or argument may have

been given to the medical evidence by the AJ, or on appeal to the full Board. The AJ

stated only that the evidence was not submitted until the day of the hearing, and had

been “reviewed.” Mental impairment is recognized as a mitigating factor, and even if

this submission were tardy (the AJ did not so state) Douglas and other precedent

counsel toleration of less than optimum responses by a petitioner who may be mentally

impaired. Cf. French v. Office of Pers. Mgmt., 810 F.2d 1118, 1119 (Fed. Cir. 1987)

(“We hold that it is patently unreasonable and fundamentally unfair to require or allow

an incompetent to act as advocate in such a setting where even a sane attorney would

be confronted with a difficult task.”).

Accordingly, we vacate the decision of the Board and remand for consideration of

Ms. Malloy’s evidence of mental impairment, and reapplication of the Douglas factors in

light of this evidence.

VACATED AND REMANDED

2008-3117 11