MSPB: Agencies Terminate Probationary Employees for Political Reasons At Their Own Peril

This case law update was written by Emily A. Shandruk, an Associate Attorney at the law firm of Shaw Bransford & Roth, where she joined in January 2024. Ms. Shandruk contributes her extensive experience in state and federal litigation to the firm, showcasing her prowess in authoring dispositive motions and coordinating discovery in complex federal litigation.

Last month, the Merit Systems Protection Board (“MSPB” or “Board”) affirmed the reversal of a probationary employee’s termination, finding that the individual’s termination was based on “partisan political reasons.” In reaching its decision, the Board determined that the termination was “unusual and unjustified,” and concurred with the administrative judge’s findings that witness testimony stating the termination was not motivated by political reasons was not credible.

In July 2017, Appellant was hired as a Manufactured Housing Specialist, a career position within the Office of Manufactured Housing Program of the Department of Housing and Urban Development (“HUD”). Before Appellant joined HUD, she worked in various political positions with the Democratic Party, including as a legislative assistant and campaign manager. Appellant shared her personal and professional ties to the Democratic Party during an office-wide introduction on her first day and included that experience on her resume.

The month before Appellant’s appointment, the Trump administration named a political appointee as the new General Deputy Assistant Secretary for Housing (“GDASH”). However, Appellant’s first, second, and third-level supervisors held career positions with HUD. Notably, Appellant’s second-level supervisor also had prior political ties, most recently running for office as a Democrat. Days after Appellant began her appointment, HUD received complaints from industry group MHARR about Appellant’s and Appellant’s second-level supervisor’s ties to the Democratic Party, stating that such hiring was “amazingly ill-considered, offensive and arguably scandalous” because both individuals would “defy and resist” the administration’s policies.

Approximately one month after Appellant’s appointment, she was tasked by her second-level supervisor with resolving a dispute with the Oregon State Administrative Agency. That supervisor directed her to contact the Oregon Manufactured Housing Association, which was not well received. The Oregon State Administrative Agency sent a letter to the HUD Secretary, threatening to withdraw from their partnership due to Appellant’s sharing of confidential information with outside parties. Upon receipt of this complaint, Appellant’s second-level supervisor issued an internal memorandum defending the action and assuring leadership that Appellant had not shared confidential information.

Despite support from her supervisor, and “outstanding” performance ratings, Appellant’s third-level supervisor terminated her for her “alleged release of sensitive information to stakeholders in Oregon.” The day before Appellant was terminated, her second-level supervisor was detailed to a position comparable to an administrative assistant.

Appellant appealed her termination, and the administrative judge reversed her termination, finding that it was based on partisan political reasons. HUD petitioned for review, and this decision followed.

The Board first addressed Appellant’s appeal rights as a probationary employee. Although probationary employees who have not completed one year of continuous service have no statutory right to a full appeal to the Board, 5 C.F.R. § 315.806(b) provides a limited appeal right to probationary employees who allege that their termination “was based on partisan political reasons or marital status.” The Board then applied Title VII case law to determine whether Appellant’s political affiliation was the but-for cause of her removal.

The administrative judge found, and the Board agreed, that Appellant met her burden. The Board found that HUD’s decision to terminate Appellant was “unusual and unjustified” in light of the fact that Appellant acted in accordance with agency policy and past practice, and acted pursuant to instructions of her second-level supervisor, when she communicated with the Oregon Manufactured Housing Association. This finding was supported by the administrative judge’s findings that Appellant and her first and second-level supervisors were credible witnesses.

In contrast, the administrative judge and Board found the witnesses involved in Appellant’s termination decision, including Appellant’s third-level supervisor and the GDASH and her staff, were not credible witnesses. Central to this credibility finding was the GDASH’s testimony that she did not know of Appellant’s political affiliation, despite MHARR’s complaint about Appellant’s hiring due to her political affiliation.  The Board was not persuaded by the GDASH’s argument, finding that “it is improbable that the GDASH was unaware of appellant’s political affiliation.”

Moreover, the Board found Appellant’s second-level supervisor’s reassignment to be relevant. The day before Appellant’s termination, the GDASH reassigned Appellant’s second-level supervisor to an administrative position. The Board concluded that “both the appellant and her second-level supervisor were targets of MHARR’s partisan political complaints, the official who decided to reassign the second-level supervisor was the same official who decided to terminate the appellant’s appointment, [and] these personnel actions were taken almost simultaneously” concluding that “the agency’s justification for the reassignment was weak at best.”

The Board ultimately ordered HUD to cancel Appellant’s termination, and concluded that the evidence does not support a finding that Appellant’s termination was justified. Instead, the record “indicates that, more likely than not, the termination was impermissibly based on partisan political reasons.”

Read the full opinion here: Starkey v. HUD