The Newest Federal Circuit Decision Offers a Surprising Interpretation of the VA Accountability Law

By Deborah Hopkins, May 7, 2019

Most readers of our newsletter know that when a new law is passed, all we have to go by is the plain language of the statute, any accompanying regulations, and legislative history. After that, the edges of the law are tested through the courts, and the case law that develops teaches us how to interpret the law.

Just under two years ago, Congress passed, and the President signed into law, the Department of Veterans Affairs Accountability and Whistleblower Protection Act of 2017 (the Act), 38 USC § 714. This law reduced the level of employment protections for federal employees. We have written about it before, but as a recap in how it differs from Title V Chapter 75 removals, here are some of the big takeaways:

• Shortened notice periods,
• A lower burden of proof (substantial evidence) for misconduct cases, and
• The Board has no mitigation authority over the agency’s penalty selection.

38 U.S.C. § 714(d)(2)(A)-(B).

Well, now that several months have passed, the edges of this new law are coming into focus. An interesting issue was raised in a Federal Circuit decision that came out last week: While there is no penalty mitigation, the Board might actually have authority to review the VA’s penalty for reasonableness. Mogil v. Dep’t of Veterans Affairs, No. 2018-1673 (Fed. Cir. May 1, 2019).

Before we get into that, though, let me set out the facts of the case for you. I think you’ll enjoy them.

The respondent, Allyn Mogil, was an engineering technician at a VA Medical Center in Minneapolis. He shared an office with a coworker, Tony Horacek. Mogil and Horacek had an ongoing dispute about the lighting in their office. Mogil wanted all three lights to remain on, and Horacek wanted one or two lights off because the lights caused a glare on his computer screen and bothered his eyes. Mogil placed tape over the light switch, and even welded a metal plate over the light switch so that the lights couldn’t be turned off. Each time the switch was covered, though, Horacek removed the barriers and turned the lights off when Mogil left the office. On several occasions, Mogil asked his supervisor to intervene, and his supervisor eventually told them to leave the lights on and to get along.

The day after the supervisor’s directive, Mogil left the office for a while, and when he got back he saw that Horacek had turned the lights off. According to the case he “snapped.” He took a hammer from the electrical shop, and smashed the office light switch. Not only did this break the light switch and permanently disable the office lights, he also damaged the lighting in nearby rooms.

[Our tax dollars, hard at work, everyone.]

Mogil was removed for damaging government property, under 38 USC § 714. The VA did not do a traditional Douglas factors analysis. After all, it appeared a Douglas analysis was not required under the Act. However, the decision stated the agency removed Mogil because:

• Mogil’s job “carrie[d] great responsibility,”
• The VA entrusted him “to manage millions of dollars of allocated taxpayer funds,”
• His actions showed he could no longer be trusted to carry out his responsibilities professionally,
• Destroying government property in response to an officemate turning the lights off “is never an acceptable response to an interpersonal disagreement.”

The VA considered the fact that Mogil was seeing a counselor and that he apologized and expressed remorse, but that did not outweigh the damage done.

[Does that list still look like Douglas factors to anyone else?]

After the AJ’s decision affirming the removal became the final Board decision, Mogil filed a PFR to the Federal Circuit. (We can assume that was because there was no quorum at the Board.)

As I mentioned earlier, the parties in this case introduced a new question to the Federal Circuit: they disputed the effect the Act has on the Board’s ability to review a penalty’s reasonableness.

Here’s the core of Mogil’s argument:

• Yes, the Act eliminated the Board’s ability to mitigate the penalty if the decision is supported by substantial evidence.
• But, the Act’s requirement that the Board determine whether “the decision of the Secretary to remove . . . an employee under subsection (a) is supported by substantial evidence,” includes whether substantial evidence supports the reasonableness of the penalty [bold and emphasis added by FELTG].
• So, not only does the agency have to prove by substantial evidence that the he committed the act of misconduct, but the agency also has to prove by substantial evidence that the penalty is reasonable.
• The fact that the Board can no longer mitigate the penalty does not excuse the agency from considering the Douglas factors before arriving at a decision.

And the VA’s argument:

• The Act was intended to make it quicker and easier to remove VA employees.
• The Board can only review whether substantial evidence supports the VA’s finding that the misconduct occurred.
• Because the Board can no longer mitigate the penalty and § 714 eliminated the efficiency-of-the-service requirement, the Board no longer reviews whether a penalty is reasonable and a Douglas factor analysis is irrelevant.
• Requiring a Douglas factor analysis before removing an employee would undermine the purpose of § 714, which was to simplify and expedite the removal process.

And, the Federal Circuit’s decision on these arguments:

• There is no dispute that Mogil intentionally destroyed government property.
• Under the Act, the Federal Circuit may actually have the authority to review the agency’s penalty for reasonableness: “Assuming, without deciding, that we may review the VA’s penalty selection as we can the penalties imposed on federal employees generally, our review ‘is highly deferential,’ and penalties are considered reasonable unless ‘grossly disproportionate to the offense charged.'” (Citations omitted); [bold and emphasis again added by FELTG].
• Mogil did not identify any Douglas factor that the agency did not consider and that would have been relevant in selecting a penalty, so the agency action was in accordance with law.
• And the real kicker: “We leave for another day the statutory interpretation issue with constitutional implications.”