NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
PHILLIP J. STEFFEN, LARA E. BEASLEY, SAMIR
GEORGE ZAKHEM, A.K.A. SAM ZAKHEM,
Petitioners
v.
DEPARTMENT OF THE ARMY,
Respondent
______________________
2015-3205
______________________
Petition for review of the Merit Systems Protection
Board in Nos. DC-0752-14-0432-I-1, DC-0752-13-3391-I-1,
DC-0752-13-1004-I-1, DC-0752-13-1838-I-1.
______________________
Decided: February 22, 2016
______________________
PHILLIP J. STEFFEN, Washington, DC, pro se.
LARA E. BEASLEY, Silver Spring, MD, pro se.
SAMIR GEORGE ZAKHEM, Manassas, VA, pro se.
JOSHUA A. MANDLEBAUM, Commercial Litigation Branch,
Civil Division, United States Department of Justice, Washing-
ton, DC, for respondent. Also represented by BENJAMIN C.
2 STEFFEN v. DEP’T OF THE ARMY
MIZER, ROBERT E. KIRSCHMAN, JR., ELIZABETH M.
HOSFORD.
______________________
Before MOORE, O’MALLEY, and WALLACH, Circuit Judges.
PER CURIAM.
Pro se petitioners Phillip Steffen, Lara Beasley, and
Samir George Zakhem appeal the final decision of the
Merit Systems Protection Board (“MSPB”), which af-
firmed the decision of the United States Army Corps of
Engineers (“USACE”) to furlough each of them for six
days as a result of “sequestration” imposed by the Budget
Control Act of 2011. For the reasons set forth below, we
affirm.
BACKGROUND
The Budget Control Act of 2011 required approxi-
mately $1.2 trillion in across-the-board budget cuts,
known as “sequestration,” in the event Congress could not
enact legislation effecting more targeted spending reduc-
tions. See Pub. L. No. 112-25, § 302, 125 Stat. 240, 256–
59 (2011) (codified as amended at 2 U.S.C. § 901a). After
Congress failed to enact targeted reductions, the Depart-
ment of Defense (“DoD”) faced a deficit of more than $30
billion for its operations and maintenance accounts used
to pay the salary of DoD civilian employees. As a result,
the Secretary of Defense (“Secretary”) directed managers
within the DoD to implement a furlough 1 program de-
signed to address the more than $30 billion budget short-
fall resulting from sequestration.
1 See 5 U.S.C. § 7511(a)(5) (2012) (“‘[F]urlough’
means the placing of an employee in a temporary status
without duties and pay because of lack of work or funds or
other nondisciplinary reasons.”).
STEFFEN v. DEP’T OF THE ARMY 3
Under the furlough program, the DoD sought to fur-
lough most civilian employees for eleven days. However,
nine categories of civilian employees were excepted from
furloughs. Relevant to this appeal, “exception nine”
provided that civilian employees whose compensation did
not originate directly from accounts included in the DoD
military (subfunctional category 051) or national defense
(subfunctional category 050) budget would not be fur-
loughed.
USACE decided to categorize employees as eligible or
ineligible for exception nine by reference to each employ-
ee’s Unit Identification Code (“UIC”), which appears on
each employee’s Form SF-50 at block 44 and can be used
to “readily determine” the source funding the employee’s
position. Resp’t’s App. 14. Although the use of UIC’s was
straightforward, it was also imperfect, in part due to
complexity in how different types of employees are com-
pensated. To increase accuracy, USACE provided a
process by which an employee with a military UIC could
request an exception if, despite the military UIC, 100% of
that employee’s compensation originated from a non-
051/050 source. In addition, Army regulations allowed
USACE to annually review—and if necessary, correct—
each employee’s UIC. See id. at 16 (citing Army Regula-
tion 570-4). “Deciding officials” were designated to re-
ceive replies from individual employees proposed to be
furloughed, and were authorized to grant exceptions,
reduce the number of days or hours furloughed, and make
final decisions.
A military UIC appeared in block 44 of each petition-
er’s Form SF-50. Accordingly, each petitioner was fur-
loughed. The petitioners appealed to the MSPB which, in
an Initial Decision, affirmed the agency’s decision. On
petition for review of the Initial Decision, a two-member
panel could not “agree on the disposition of the petition
for review,” and the Initial Decision therefore became the
4 STEFFEN v. DEP’T OF THE ARMY
final decision of the MSPB. Id. at 26–27. Petitioners
appeal. This court has jurisdiction under 28 U.S.C.
§ 1295(a)(9) (2012).
DISCUSSION
I. Standard of Review and Legal Standard
When reviewing appeals from the MSPB, “th[is] court
shall review the record and hold unlawful and set aside
any agency action, findings, or conclusions” that are “(1)
arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law; (2) obtained without proce-
dures required by law, rule, or regulation having been
followed; or (3) unsupported by substantial evidence.” 5
U.S.C. § 7703(c). We review the MSPB’s legal determina-
tions de novo. Welshans v. U.S. Postal Serv., 550 F.3d
1100, 1102 (Fed. Cir. 2008).
An agency may furlough an employee due to a lack of
funds or for other non-disciplinary reasons. 5 U.S.C.
§§ 7511(a)(5), 7512(5). However, because furloughs of
thirty days or less constitute adverse actions, an agency’s
decision to furlough an employee may be set aside if it
does not “promote the efficiency of the service.” Id.
§ 7513(a).
Where furlough is the basis for suit, the “efficiency of
the service” standard is satisfied if the agency can demon-
strate “that the furlough was a reasonable management
solution to the financial restrictions placed on it and that
the agency applied its determination as to which employ-
ees to furlough in a fair and even manner.” Nat’l Fed’n of
Fed. Emps., Local 1442 v. Dep’t of the Army, Nos. 2014-
3175, 2014-3189, 2015 WL 6143247, at *4 (Fed. Cir. Oct.
20, 2015) (“NFFE”) (internal quotation marks and cita-
tions omitted). An agency may not use a furlough as a
pretext “to target employees for personal reasons.”
Chandler v. Dep’t of the Treasury, 2013 M.S.P.B. 74, ¶ 9
(2013).
STEFFEN v. DEP’T OF THE ARMY 5
II. The MSPB Did Not Err in Finding the Agency Fur-
lough Program Reflected a Reasonable Management
Solution and Was Applied in a Fair and Even Manner
Petitioners argue that using UICs “to determine fur-
lough exemption is arbitrary and inherently unfair”
because UICs “are in fact not representative of how
employees are actually funded.” Pet’r’s Br. 3. In support,
petitioners point to, among other evidence, a statement by
USACE employee Mark Wichman that he “charge[d]
100% of [his] labor hours to [Formerly Used Defense
Sites] labor codes for [fiscal year 2013]” but that he “was
not furloughed” because of his civil UIC. Id. at 2–3.
Petitioners assert the use of UICs thus “creat[es] an
unfair circumstance and allow[s] the agency to avoid
treating all similarly situated employees the same way.”
Id. at 3.
The MSPB determined that the petitioners, who were
each assigned a military UIC, were not similarly situated
to those assigned civil UICs, such as Mr. Wichman. See
Resp’t’s App. 21–22 (“The [MSPB] determines case by
case whether employees are similarly situated for purpos-
es of furloughs. Here there is no dispute that each of the
[petitioners] worked under a military UIC . . . and was
thus subjected to the furlough.” (citation omitted)). To the
extent Mr. Wichman should have been assigned a mili-
tary UIC and therefore furloughed, he is not similarly
situated to petitioners, who were assigned military UICs
and who challenge their furloughs. 2
UICs are “assign[ed] . . . to positions to reflect the
funding of those positions.” Id. at 34; see also id. at 35
2 The MSPB noted “no [petitioner] alleged or
showed that he or she was actually eligible for an exemp-
tion or sought one and was improperly denied.” Resp’t’s
App. 24. Petitioners do not contest this finding on appeal.
6 STEFFEN v. DEP’T OF THE ARMY
(Upon annual review, UICs may “be changed to be con-
sistent with the preponderance of the work the employee
performs or is planned to perform for the next [fiscal
year].”); id. at 79 (“[A] UIC . . . is supposed to be based on
the preponderance of the work the position supports or
how many positions exist in accordance with the funding
split.”). Colonel Louis B. Crespo, the Deputy Director of
Resource Management for USACE, testified that “[t]he
assignment of military or civil UICs to USACE positions
is important because . . . DoD appropriations are not to be
expended for civil works projects, nor are [c]ivil [w]orks
appropriations to be expended for [DoD] missions.” Id. at
30. Substantial evidence therefore supports the MSPB’s
determination that the use of UICs is “a reasonable
management solution to the problem of distinguishing
between employees funded by civil works projects, to
whom exception number [nine] applied, and those funded
by military subfunctions, to whom it did not.” Id. at 22.
Petitioners similarly argue UICs are not an “appro-
priate methodology to determine furlough status” because
they are “inaccurate.” Pet’r’s Br. 4–5. Although no tran-
script of hearing testimony appears in the record, Peti-
tioners assert “the man in charge of setting the UIC codes
for the Agency at the hearing stat[ed] that they are not
accurate.” Id. at 5. Indeed, Respondent concedes in its
brief that “USACE’s annual reviews may not have en-
sured 100-percent accuracy of UICs throughout USACE,”
Resp’t’s Br. 11, and that the “annual review process may
have failed to reclassify some civil-UIC positions filled by
employees doing entirely military work,” id. at 14.
Although UICs may not perfectly correspond to the
type of work the employee performs, the law does not
require perfect management solutions. Instead, the law
requires “that the furlough was a reasonable management
solution to the financial restrictions placed on it and that
the agency applied its determination as to which employ-
STEFFEN v. DEP’T OF THE ARMY 7
ees to furlough in a fair and even manner.” NFFE, 2015
WL 6143247, at *4 (emphasis added). Here, substantial
evidence suggests that UICs tended to correlate with the
source of an employee’s funding, making UICs a legiti-
mate basis on which to distinguish among employees for
the purposes of furlough. In light of the facts of record,
the MSPB did not err in determining USACE’s method of
determining furlough eligibility was a reasonable man-
agement solution that promoted the efficiency of the
service.
III. Substantial Evidence Supports the MSPB’s Determi-
nation that Mr. Zakhem Failed to Establish His Change
in UIC Was Improper
One petitioner, Mr. Zakhem, bases his claim not only
on the assertion that the furlough program as a whole
was not a reasonable management solution—a proposi-
tion we have rejected—but on the additional basis “that
he was singled out [for a UIC change] for speaking out
against fraud, waste and abuse.” Pet’r’s Br. 8. Mr. Zak-
hem explains he headed a two-person office in which he
served in a civil works position for seven years, while his
“deputy” was assigned a military UIC. Id. at 6–7. Ac-
cording to Mr. Zakhem, his UIC was “abruptly changed
from a [c]ivil [w]orks position” to a military UIC, making
him ineligible for exception nine, “without notification . . .
[or] current/planned change to his duties or any proper
rationale.” Id. At the same time, the agency “re-
classified his deputy from a [m]ilitary to a [c]ivil [w]orks
UIC (shielding him from the furlough).” Id. “The end
result,” Mr. Zakhem concludes, “yielded NO benefit to the
Agency because these two simultaneous UIC changes
cancelled each other out and did not constitute a reasona-
ble management action.” Id.
Mr. Zakhem’s claim is therefore not based on the
agency’s implementation of the furlough program per se,
but on the antecedent act of alleged improper reclassifica-
8 STEFFEN v. DEP’T OF THE ARMY
tion of his UIC. 3 Based on the reclassification, Mr. Zak-
hem “raised [before the MSPB] the affirmative defense of
whistleblowing.” Resp’t’s App. 24. The MSPB issued an
order on May 7, 2014, explaining the standards for a
whistleblower case and instructing Mr. Zakhem to provide
specific information to address those standards. After Mr.
Zakhem timely responded on May 30, 2014, and amended
his response in Final Arguments dated June 6, 2014, the
MSPB concluded he “did not establish a prima facie case”
and therefore “did not meet his burden of proving [his
whistleblower] claim.” Id. at 24–25. In so concluding, the
MSPB noted “[Mr.] Zakhem alleged . . . that his UIC was
improper, but he did not provide any evidence in support
of his bare assertion.” Id. at 23 n.3.
Mr. Zakhem interprets the MSPB’s statement that he
“did not provide any evidence” to mean the MSPB “ne-
glected to consider” his SF-50s and his June 6, 2014 Final
Arguments, and that in neglecting to do so, it erred.
Pet’r’s Br. 6. However, the MSPB stated that Mr. Zak-
hem “did not provide any evidence,” beyond “bare asser-
tion[s],” “that his UIC was improper.” Resp’t’s App. 23 n.3
(emphasis added). The statement does not mean the
MSPB did not consider the evidence, but that it found Mr.
Zakhem did not provide evidence, beyond his assertions,
3 The record indicates the action initiating the re-
classification of his position from a civil to a military UIC
occurred on February 1, 2013. The President did not
order a budget reduction until March 1, 2013, and the
Secretary did not issue the memorandum directing DoD
managers “to prepare to furlough” employees until May
14, 2013. Resp’t’s App. 42. Mr. Zakhem concedes his UIC
was changed “prior to the furlough,” Pet’r’s Br. 8, but
speculates “it is reasonable to assume that management
knew of its intent to exempt [c]ivil [w]orks [f]unded em-
ployees as early as Jan[uary] 2013.” Resp’t’s App. at 99.
STEFFEN v. DEP’T OF THE ARMY 9
that the change in UIC was improper. See Gonzales v.
West, 218 F.3d 1378, 1381 (Fed. Cir. 2000) (“[A]bsent
specific evidence indicating otherwise, all evidence con-
tained in the record . . . must be presumed to have been
reviewed by [the agency].”); Medtronic, Inc. v. Daig Corp.,
789 F.2d 903, 906 (Fed. Cir. 1986) (“We presume that a
fact finder reviews all the evidence presented unless [the
fact finder] explicitly expresses otherwise.”).
Mr. Zakhem has since “withdr[awn] his whistleblower
claim.” Pet’r’s Br. 8. He continues to assert, however,
that he was improperly “single[d] out,” id. at 8, under the
standard set forth in Chandler, which states that, with
respect to furlough, “the agency is required to treat simi-
lar employees similarly and to justify any deviations with
legitimate management reasons.” Chandler, 2013
M.S.P.B. at ¶ 8 (citing 5 C.F.R. § 752.404(b)(2)).
To the extent the pre-furlough change in Mr. Zak-
hem’s UIC can be viewed as part of the agency’s furlough
action, the MSPB determined he had not provided any
evidence that the change was improper. Substantial
evidence in the record supports this conclusion. Mr.
Zakhem’s Form SF-50 indicates the “Nature of Action” is
“Reassignment,” Resp’t’s App. 126, but Mr. Zakhem
points to nothing in the form itself suggesting the reas-
signment was improper, see Pet’r’s Br. 6–7. His June 6,
2014 Final Arguments assert the reassignment was made
with “specific intent to expose me to the furlough,” but
this assertion is based on the further speculation that “it
is reasonable to assume that management knew of its
intent to exempt [c]ivil [w]orks funded employees” before
the reassignment. Resp’t’s App. 99.
To the contrary, Mr. Zakhem’s supervisor explained
the change in UIC was implemented to “align the Pro-
gram and Project Management Community of Practice for
future restructuring.” Id. at 107; see also id. at 115.
Under the deferential standard of review applied to
10 STEFFEN v. DEP’T OF THE ARMY
MSPB fact finding, we conclude the MSPB did not err in
its determination.
CONCLUSION
We have considered Petitioners’ remaining arguments
and find them unpersuasive. The decision of the Merit
Systems Protection Board is
AFFIRMED
COSTS
No costs.