Parrish v. Merit Systems Protection Board

United States Court of Appeals for the Federal Circuit

2006-3054

DAVID M. PARRISH,

Petitioner,

v.

MERIT SYSTEMS PROTECTION BOARD,

Respondent,

and

DEPARTMENT OF THE INTERIOR,

Intervenor.

Jeffrey A. Dahl, Jeffrey A. Dahl, P.C., of Albuquerque, New Mexico, argued for
petitioner.

Jeffrey A. Gauger, Attorney, Office of the General Counsel, United States Merit
Systems Protection Board, of Washington, DC, argued for respondent. With him on the
brief were Martha B. Schneider, General Counsel, and Rosa M. Koppel, Deputy
General Counsel.

John S. Groat, Attorney, David M. Cohen, Director, and Donald E. Kinner,
Assistant Director, Commercial Litigation Branch, Civil Division, United States
Department of Justice, of Washington, DC, for intervenor.

Appealed from: United States Merit Systems Protection Board
 United States Court of Appeals for the Federal Circuit
2006-3054

DAVID M. PARRISH,

Petitioner,

v.

MERIT SYSTEMS PROTECTION BOARD,

Respondent,

and

DEPARTMENT OF THE INTERIOR,

Intervenor.

______________________________

DECIDED: February 7, 2007
______________________________

Before LINN, Circuit Judge, FRIEDMAN and PLAGER, Senior Circuit Judges.

FRIEDMAN, Senior Circuit Judge.

The petitioner, David M. Parrish, sought to challenge before the Merit Systems

Protection Board (“Board”) his removal from government employment in a Reduction in

Force (“RIF”). The Board dismissed the appeal for lack of jurisdiction, on the ground

that, pursuant to authorizing legislation, the employing agency had adopted a personnel

system that eliminated its employees’ right to appeal RIFs to the Board. We conclude

that in so ruling the Board did not adequately consider Parrish’s challenge to the

procedures the Agency followed in eliminating RIF appeals to the Board. We therefore
vacate the Board’s dismissal of Parrish’s appeal, and remand the case to the Board to

reconsider its jurisdiction under the standards set forth in this opinion.

I

In 1998, Congress enacted the Haskell Indian Nations University and

Southwestern Indian Polytechnic Institute Administrative Act of 1998, Pub. L. No. 105-

337, 112 Stat. 3171 (codified at 25 U.S.C. § 3731 note) (“Act”). The two named

institutions are federally-owned, -funded, and -operated colleges for Native Americans.

Parrish was the Dean of Administration at the Polytechnic Institute (the “Institute”).

The Act authorized the two institutions to conduct demonstration projects “to

determine whether specified changes in personnel management policies or procedures

would result in improved personnel management.” Id. §§ 3-4. The Act stated that “the

methods of reducing overall staff and grade levels” implemented by the demonstration

project would not be limited by any “inconsistent . . . provision of law, rule, or regulation”

relating to that subject. Id. § 4(a)(8). The Act required that “[b]efore commencing a

demonstration project,” the Institute must “develop a plan for such project” and “publish

the plan in the Federal Register.” Id. § 4(b)(1)-(2). It also required that the plan must

“identif[y] . . . a specific citation to any provision of law, rule, or regulation which, if not

waived, would prohibit the conducting of the project, or any part of the project as

proposed.” Id. § 4(b)(1)(J).

The Institute developed a plan under which its employees would no longer be

covered by Title 5 of the Code of Federal Regulations, but instead would be covered by

Title 25, part 38 (specifically 25 C.F.R. § 38.15), which states that the Institute has an

independent personnel system established under the Act. Id. The Institute drafted a

2006-3054 2
Personnel Manual, which included the procedures to be followed in a RIF. These

included a negotiated-grievance procedure for administratively challenging RIFs and,

according to the Board, the elimination of RIF appeals to the Board. See Parrish v.

Dep’t of Interior, 99 M.S.P.R. 670, 672 (2005). Parrish apparently had a significant role

in formulating and drafting the Personnel Manual.

The Institute did not publish the Personnel Manual (which it apparently viewed as

the statutory “plan” for its demonstration project) in the Federal Register. Id. at 673. It

did, however, publish two statements in the Federal Register that referred to the

Personnel Manual but did not state that the new procedures would eliminate Board RIF

appeals. The first was a notice of proposed rulemaking; the second was a rule adopting

an amended regulation that described the demonstration project. See 65 Fed. Reg.

26,728 (May 8, 2000); 65 Fed. Reg. 58,182 (Sept. 27, 2000). The final rule contained

the following statements, now codified at 25 C.F.R. § 38.15:

(a) The Southwestern Indian Polytechnic Institute has
an independent personnel system established under Public
Law 105-337, the Administrative Systems Act of 1998, 112
Stat. 3171. The details of this system are in the Indian
Affairs Manual (IAM) at Part 20. This manual system may
be found in the Bureau of Indian Affairs Regional and
Agency Offices, Education Line Offices, and the Central
Office in Washington, DC.

(b) The personnel system is in the excepted service
and addresses the areas of classification, staffing, pay,
performance, discipline, and separation. Other areas of
personnel such as leave, retirement, life insurance, health
benefits, thrift savings, etc., remain under the jurisdiction of
Office of Personnel Management.

The Institute then conducted a RIF, in which it eliminated Parrish’s position and

removed him. Parrish did not challenge the RIF and his removal by invoking the

2006-3054 3
Institute’s administrative grievance procedure. Instead, he appealed his removal to the

Board.

The Institute moved to dismiss the appeal for lack of jurisdiction, on the ground

that its plan had terminated the Board’s jurisdiction over appeals from the Institute’s RIF

removals. The Board’s administrative judge denied the motion. He held that the

Institute’s purported elimination in its plan of appeals to the Board in RIF cases was

ineffective because the Institute had not published its plan in the Federal Register, as

the Act required, and that Parrish, therefore, retained his right to appeal to the Board.

Parrish v. Dep’t of the Interior, DE-0351-05-0293-I-1, 3-4 (M.S.P.B. July 8, 2005).

On interlocutory appeal, the Board reversed. It held that it lacked jurisdiction

over Parrish’s appeal and dismissed it.

The Board found that the Act “affords the agency discretion to develop its own

personnel system without regard to title 5 of the United States Code or the OPM

regulations” and that “the agency exercised that discretion when it developed and made

effective its Personnel Manual. The agency’s personnel system does not provide

employees separated by RIF with a right to appeal that action to the Board.” Parrish, 99

M.S.P.R. at 673.

The Board recognized that “[i]t may well be that the agency did not comply with

the Federal Register publication requirement of section 4(b)(2) of [the Act].” Id. at 673.

It ruled, however, that the Act “does not provide the Board with authority to enforce the

procedural requirements of that statute or to nullify actions taken pursuant to that

statutory authority. Nothing in the statute or its legislative history indicates that

Congress intended that the Board should have a role in overseeing the agency’s

2006-3054 4
exercise of its statutory authority to waive provisions of title 5 and OPM [Office of

Personnel Management] regulations.” Id. (citation omitted). The Board found

that the agency exercised its authority to develop a
personnel system without regard to title 5 and that its system
does not provide for a right to appeal a separation through
its RIF procedures to the Board. Thus, the Board lacks
jurisdiction over this appeal and it must be dismissed.

Id.

II

The Board’s jurisdiction here covers “any action which is appealable to the Board

under any law, rule, or regulation.” Raising v. Dep’t of Navy, 444 F.3d 1349, 1354 (Fed.

Cir. 2006) (quoting 5 U.S.C. § 7701 (2000)). An OPM regulation, 5 C.F.R. § 351.901,

provides that “[a]n employee who has been . . . separated . . . by a reduction in force

action may appeal to the Merit Systems Protection Board.” The Board has the

authority, indeed the obligation, to determine its own jurisdiction over a particular

appeal. See Cruz v. Dep’t of Navy, 934 F.2d 1240, 1244 (Fed. Cir. 1991) (“The Board

has . . . jurisdiction to determine its jurisdiction.”).

In the Act, Congress authorized the Institute to conduct demonstration projects to

determine whether particular changes in personnel practices and policies would

improve personnel management, and provided that such projects may be implemented

despite any “inconsistent . . . provisions of law, rule, or regulation.” It is conceded that

such a plan may make significant changes in previously existing personnel practices,

including the elimination of the Board’s jurisdiction over appeals in particular kinds of

cases. Here, the Institute substituted an internal agency grievance procedure for the

existing appeal to the Board to challenge removals effected through RIFs.

2006-3054 5
 Congress specified in considerable detail the procedures and limitations the

Institute must follow and apply in taking such action. One of those conditions is that

before implementing such a plan, the Institute must publish it in the Federal Register. It

is conceded that the Institute did not so publish its proposed Personnel Manual, which

apparently it views as its statutory “plan,” in the Federal Register before implementing it.

Parrish contends that this failure to publish, and the failure to specify that the

plan would eliminate the right to appeal RIFs to the Board, vitiated the Institute’s

implementation of its plan and therefore that the plan did not supersede the Board’s

existing jurisdiction to review RIFs. The Institute responds that the statement about the

Manual that it published in the Federal Register satisfied its statutory publication

obligation. The Board did not resolve this issue, because it ruled that the Institute

exercised its “discretion to develop its own personnel system without regard to title 5 of

the United States Code or the OPM regulations . . . when it developed and made

effective its Personnel Manual [which] does not provide employees separated by RIF

with a right to appeal that action to the Board.” Parrish, 99 M.S.P.R. at 672.

The right to appeal to the Board is a settled part of the procedures and standards

governing RIFs generally. One would expect that, before concluding that an agency

had ended Board jurisdiction over a particular category of RIFs, the Board would fully

and carefully analyze the agency’s action to ensure that the agency had complied with

the requirements Congress had imposed as a condition for limiting the Board’s

jurisdiction. Such an analysis and evaluation would be a necessary and an appropriate

part of the Board’s determination of its own jurisdiction. It would not be, as the Board

2006-3054 6
apparently viewed it, an unwarranted attempt “to enforce the procedural requirements of

that statute [the Act] or to nullify actions taken pursuant to that statutory authority,”

nor would it give the Board an inappropriate “role in overseeing the agency’s exercise of

its statutory authority to waive provisions of title 5 and OPM regulations.” See id. at

673. The fact that the Institute “develop[ed] its own personnel system,” which did not

provide for RIF appeals to the Board and which the Board in turn deemed dispositive of

its own jurisdiction, does not address or answer the question whether in taking that

action the Institute complied with the requirements Congress imposed as conditions for

such action.

Indeed, in its earlier decision in Kohfield v. Department of Navy, 75 M.S.P.R. 1

(1997), the Board recognized its obligation to determine whether in connection with a

demonstration project OPM “specifically waived the RIF regulations” providing for Board

review. Id. at 6. There, a removed employee argued that OPM, in approving an agency

demonstration project under a similar statute, had not properly waived the application of

OPM’s regulation providing for Board review in RIF proceedings. In rejecting that

contention, the Board conducted a detailed analysis of whether OPM had taken the

necessary steps and followed the necessary procedures in terminating Board

jurisdiction. Id. at 5-6. The Board has not given any convincing reason why it did not

follow the same course in the present case.

Neither of the two cases upon which the Board primarily relied in its opinion

support its decision. In Thompson v. Office of Personnel Management, 87 M.S.P.R.

184 (2000), which involved a dispute over hours of work, the Board held that it had no

jurisdiction to “review . . . ‘the Director of Personnel Management’s decision to

2006-3054 7
implement’” certain OPM regulations because “determining whether OPM followed the

proper procedures in issuing its regulations is not enumerated among the powers and

functions of the Board.” Id. at 187-88. In American Federation of Government

Employees v. Federal Labor Relations Authority, 794 F.2d 1013 (5th Cir. 1986), the

Fifth Circuit held that the Federal Labor Relations Authority had no jurisdiction to decide

whether a union proposal conflicted with a government-wide OPM regulation and

therefore, the dispute was not a matter over which a federal agency was required to

bargain collectively because the Labor Relations Authority “has no authority to

adjudicate the validity of a government-wide regulation promulgated by another federal

administrative agency.” Id. at 1014.

Although both cases dealt with the jurisdiction of an administrative agency, they

involved quite different issues from the question here, which is whether the agency

conducting the personnel demonstration project satisfied the conditions Congress

imposed for eliminating Board jurisdiction over appeals in a particular category of cases.

In sum, on remand, the Board should first determine whether the Institute’s

elimination of Board jurisdiction over its RIF appeals satisfied the statutory requirements

for effecting such action, including publication of its plan in the Federal Register and

identifying the statutory and regulatory provisions that, if not waived, would have

prohibited the proposed personnel-practices changes. If the Board holds that the

Institute did not comply with the statutory requirements, it would then face the question

whether such non-compliance vitiated the Institute’s supersession of the Board’s

jurisdiction over RIF actions.

2006-3054 8
 CONCLUSION

The decision of the Board dismissing Parrish’s appeal for lack of jurisdiction is

vacated, and the case is remanded to the Board to reconsider its jurisdiction in

accordance with the principles set forth in this opinion.

VACATED AND REMANDED

2006-3054 9