The Top Federal Employment Cases of 2023
Summary
This episode of FEDtalk explores the top federal employment cases of 2023. The conversation covers a range of topics, including religious accommodations in the workplace, the correct legal standards for discrimination claims, and the proper application of Bivens litigation. The hosts and guests discuss these cases' impact on federal employees and agencies and the broader implications for trust and accountability in the federal government. This episode of FEDtalk explores various aspects of employee removal processes, the consequences of incorrect legal standards, the importance of upholding individual rights, transparency and accountability in federal agencies, limitations on agency authority, and challenges to unconstitutional agency structures.
Takeaways
· The Supreme Court clarified the legal standard for religious accommodations in the workplace in the case of Groff v. DeJoy, emphasizing the need for a substantial burden on the employer to deny accommodation.
· An Inspector General report revealed that the Department of Interior's Office of Diversity, Inclusion, and Civil Rights had been applying an incorrectly low burden of proof in discrimination cases, highlighting the importance of applying the correct legal standards.
· The Federal Circuit ruled in Williams v. BOP that when an agency fails to prove all charges on appeal, the adjudicator must independently assess the penalty, rather than deferring to the agency's evaluation.
· The discussion also touched on the ongoing debate over Bivens litigation and the limitations on bringing lawsuits against federal employees for constitutional violations.
· Congress's experiments with VA accountability reform have resulted in changes to the removal process for senior executives and other employees, aiming to address concerns about performance and misconduct in the VA workforce. There are different processes for removing employees based on misconduct or performance.
To read the full case law updates, visit here: https://www.shawbransford.com/case-law-update
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Natalia Castro (02:35.683)
Hello and welcome to Fed Talk. My name is Natalia Castro from the law firm of Shaw, Bransford and Roth.
Jason Briefel (02:46.343)
My name is Jason Breifel, your co-host.
Natalia Castro (02:50.014)
This season on Fed Talk, we are exploring the federal government influx, looking at big issues affecting the three branches of government at a dynamic time in our nation's history. This week, we are talking about the top federal employment cases of 2023. Jason, why don't you kick off the discussion by introducing our guests?
Jason Briefel (03:12.167)
Yeah, thanks, Natalia. And I'm really excited for this conversation and to invite our colleagues, James Heelan and Michael Sgarlat back onto the program. They joined us last year to talk about the top cases and they're here again. This is a constantly shifting landscape and it's really important for agencies and employees alike to understand what's going on. I think the public to also understand what's going on when there's concerns and discussion about performance and accountability.
of the federal workforce and how agencies and the courts are deciding cases where, you know, maybe someone did something wrong or maybe they didn't and where that clarity is provided on, you know, what is the law? What rules matter? What standards matter? And that's what we're going to be talking about today with our colleagues. So James and Michael, welcome back to Fed Talk. And you know, before we dive into our discussion.
If you could each just briefly tell folks about your practice at Shaw, Bransford and Roth and the issues you focus on and also I think, you know, why do you like this work? You know what? What? What keeps you going on this stuff before we dive into our conversations so our listeners can understand who you are? James, over to you first.
James (04:30.608)
Hi Jason, thanks for having us back. Do appreciate being here with you and your guests. Well, I'm an attorney here at the law firm and I've been doing this for about 12 years now and representing federal employees individually, federal agencies in some instances and federal employee associations has been really fulfilling work, advocating for the apolitical nature of the federal civil service. The apolitical.
neutral implementation of the nation's laws is incredibly important for the integrity of the system. So that's, you know, pinnacle of why I do the work in addition to, of course, enjoying the actual technical substance of the work and the clients that we have here at the law firm.
Jason Briefel (05:13.268)
Thanks so much James and Michael.
Michael Sgarlat (05:16.318)
Yeah, so, you know, I've been doing this work since, well, December 2015. So, you know, I've been here for quite a bit too. And, you know, one of the things I really love about our work is, you know, I love working with the federal employees. I love working with federal agencies when we get to do that work too. You know, I find that the type of work we do, it's, it's frequently diving into new legal issues and territory. And, you know, some things that make.
political attention. And the fact patterns in what we do are different every single day. And I think that's a very interesting thing that we do. And some of the cases that we highlight this year, that we highlighted the last two years, really touch on the evolving nature of the legal landscape, as well as the factual patterns that relate to them.
Natalia Castro (06:10.874)
Those issues about the intersection between politics and the law and federal employment, that's very much been a constant theme so far this season. And I'm really excited to explore how this impacts the judiciary when we really traditionally talk about it in the context of Congress and the executive branch. Looking at the judiciary and the cases that you guys have dealt with this year, would you say anything groundbreaking happened in 2023?
Michael Sgarlat (06:42.214)
I wouldn't say anything completely groundbreaking, not groundbreaking. I would say that what we've been seeing this year is more of a clarification from the courts of what the legal standards are that agencies are supposed to abide by. But the last two years, there were a lot of more groundbreaking, earth-shattering cases that really affected federal employees. This year is more of a clarification, I see it.
James (07:10.8)
Yeah, I agree with Michael. This is more a theme in cases about shifting focus or increasing clarity with which how existing case law has been viewed.
Jason Briefel (07:25.415)
Awesome, so let's dive into what that has looked like. I know you guys have, you know, scrubbed the cases, looked at what you've written up and for case law updates in our Fed manager and Fed agent publications. He's also looked at decisions that have otherwise come out of both the Supreme Court and lower level courts where they merited mentioning. And I know that there was a big case that.
Came out of the postal service Dealing with religious accommodations, so maybe you could start there because I think that that's a an issue that I imagine We're going to continue seeing tug and pull around
James (08:09.32)
Of course, this is the case of Groff v. DeJoy, the postmaster general. It came out in June of this year and made quite a big splash when it came out. It really shifted the way that employers have to address employee requests for religious accommodations. This is something the Supreme Court, as far as I can tell, hasn't visited with great substance since the late 1960s. And in this case, it's actually pretty interesting. It's very topical of this time. We had a postmaster, or rather a...
postal employee who took a mail delivery job that did not require much, if any, work on Sundays. He was an evangelical Christian. He didn't want to work on Sundays. And then his post office began Sunday delivery service for Amazon. He then shifted and went to a different post office to avoid working Sundays. But then Amazon came to the new post office, and he found it very difficult to dodge Sunday work. Because of his reluctance or refusal to work Sunday work,
Michael Sgarlat (08:48.974)
That's it.
James (09:06.64)
The Postal Service began disciplining him, issuing progressively more severe disciplinary actions for his refused work Sundays, and eventually he quit. And he sued the Postal Service for violation of his civil rights for religious accommodation denial. The Supreme Court looked at the case, it went back to its 1967 precedent. In that 1960s case, the court had previously held that the test for a religious accommodation
was that an employer needed to provide one unless it required more than a de minimis cost to the employer. Meaning, if it was basically free to the employer, the employer had to provide it. If it cost them nothing, if it was respecting an employee's religious garb, for example, that cost the employer nothing to do in most instances. And so accommodations like that would have to be provided. But where it required shifting.
employee schedules where it required altering the hours or the services that the agency employer provided, then that was more than de minimis cost and was grounds to refuse a religious accommodation request. But the Supreme Court looked at this in the DeGroff versus DeJoy case and said, that's not right. That's not the correct interpretation of the civil rights statute. Instead, the Supreme Court said now,
religious accommodations and their burden to the employer have to be looked at under the specific circumstances of the case and specific circumstances of the employment. So while they didn't come out firmly in favor of our postal carrier, Mr. Groff in this case, the court made it very clear that agency employers like the US Postal Service, enormous in their size and large in their...
their ability to accommodate is meaningful in this instance. And so it looks like Mr. Groff was poised to get his Sunday accommodation because his employer was so large and so capable of accommodating that request. So that really made a splash this summer. Employers across the country, both private and federal sector, state level, we're all paying attention to what they now have to consider when addressing employee requests for religious accommodation.
James (11:33.244)
It's really, really quite interesting case.
Michael Sgarlat (11:35.562)
Yeah, I agree. It is an interesting case. You know, when you look at the old test, what they're saying here is I think it's a really practical holding because, you know, what the court's saying is that more than de minimis does not equate to an undue hardship. So what the test they're setting going forward is that there has to be like a substantial burden in the overall business context. And so what does that mean going forward for federal employees? Well, you know, the old test, that's a pretty low.
James (11:51.996)
Mm-hmm.
Michael Sgarlat (12:05.622)
threshold for the government to meet, you know, to not grant an accommodation. But going forward, it's going to be a lot harder for the government to show that there's a substantial impact on the overall business context. And what does that mean? That means that probably more religious accommodations will be granted in these federal agencies.
James (12:29.32)
And I do think it's important to look at the text of the decision because when this case came out over the summer, there was plenty of news and talking heads referring to the decision as though it were some sort of activism by the court. But if you look at the decision itself, it's focused on statutory interpretation. It's focused on the meaning of undue hardship as set out by Congress. Congress didn't define undue hardship or undue burden.
They left that to the courts to decide. So the Supreme Court in this case looked at the whole context of the statute to try to decipher what Congress really intended by the words undue burden on the employer. That de minimis test from 1967, that's nowhere in the statute. That was a court construction. So the court in this 2023 case is really trying to or is representing that it's taking
the case law back to the statute itself and to the intent of Congress.
Natalia Castro (13:33.242)
James, one thing that strikes me as interesting is that the court seems to be moving away from the de minimis standard, which felt like more of a bright line rule. It's easy to look at an accommodation and figure out whether or not it has a de minimis impact. But now, looking at the broader business context, it appears that it's a much more fact-specific inquiry, and this case could come out very differently depending on the federal agency.
Michael Sgarlat (13:43.918)
teaching those kind of things.
Natalia Castro (13:59.834)
for a large federal agency, as you mentioned, there's a different business context than maybe a really small federal agency that only has a couple of people making up the office. Is that a correct interpretation that it's gonna be much more fact specific and the agencies, particularly smaller ones, are gonna have to think about that business context differently than larger agencies?
James (14:23.108)
I do think that's correct. The US Postal Service is obviously larger and more capable than some of those five or six employee, small agencies, commissions, boards, et cetera, that exist in government. Those smaller agencies would be less likely to have to provide this kind of accommodation to Mr. Groff than the US Postal Service because their circumstances are different, their resources are much fewer, their employee pool is much smaller. And so a
accommodating this kind of request would have a much broader impact on its workforce and the budget of the agency. But of course, fact-specific is not new to EEO law. EEO cases are very fact-specific. I think Michael might agree that in the world of cases that we litigate here at the law firm, EEO cases are among the most fact-specific, difficult to predict the outcome from because they're so...
detail-focused. What do you think, Michael?
Michael Sgarlat (15:23.334)
Yeah, surely. I definitely think that EEO cases are fact specific. I mean, what you're doing there is applying the law to the facts. And the law hasn't really changed in the EEO world for quite some time since McDonnell Douglas. But, you know, in application, you know, every single case is different. Federal employees have a wide spectrum of fact patterns that they raise up, whether it's like, you know, performance appraisals.
getting extra assignments, getting ancillary duties, it always changes. And it's really how the district courts and the EOC really look at that matters.
Natalia Castro (16:08.662)
And on the theme of EEO discrimination, you flagged an inspector general report this year coming out of the Department of Interior as notable. Can you tell us why that was?
James (16:20.696)
Right, so this year, the Department of Interior, OIG, came out with a report on its Office of Diversity, Inclusion, and Civil Rights that from 2019 to 2021 was applying an incorrectly low legal standard, an incorrectly low burden of proof, in making determinations about whether or not discrimination had occurred within the agency. So just to give the listeners a bit of context.
When an individual files an EEO complaint and goes through a formal EEO investigation, when they get the report of investigation, it's up to the complainant to decide where to take that record. How do they want to get a decision on whether discrimination occurred? One of the options is to have the agency's EEO office look at just the record of that report and make a determination on whether discrimination occurred in a final agency decision.
FAD or FAD. And so this IG report was finding that the ODICR office at Interior was applying an incorrectly low standard of proof. The standard of proof that they were supposed to apply is preponderance of the evidence, meaning on this record, is it more likely than not that discrimination occurred? But instead, this office was applying requirements
that evidence be viewed in the quote, light most favorable to the complainant, end quote, and to make quote, all justifiable inferences, end quote, in favor of the complainant. So really bending over backwards to put the best possible sheen on the complainant's case. And the IG found that resulted in incorrect findings of discrimination, incorrect findings of discrimination against the Department of Interior.
James (19:44.776)
So because the Office of Diversity, Inclusion, and Civil Rights was really bending over backward to find discrimination, the IG concluded that they were making incorrect findings of discrimination against the agency. So if this could happen at a large department-like interior, it could happen anywhere. And it may not come to light because this isn't the kind of thing that people or agencies would normally file IG complaints about.
The standard of proof applied by an EEO office is not the kind of thing that would normally make its way into an IG complaint. So oversight on this maybe lacks. These kinds of activities may be going under the radar, but they're incredibly impactful because applying the standard of proof that is correct is to correctly apply the statute, correctly apply the law.
Anytime that we apply incorrect standards of proof, we're going to get errors. We're going to get incorrect determinations. And whether or not they're in favor of an employer or an employee, they should be correct determinations. They should be correctly calibrated to reach the right result in light of the statute in the congressional intent.
Natalia Castro (20:57.238)
One of the things I talk about often in the context of trust among the American people in the rule of law and in the judiciary is this idea that whether the case comes out for you or against you, you have to have confidence that the result is correct and that the result is fair. And so for me, this IG report really emphasized the importance of making sure that there is an equal playing field.
Michael Sgarlat (20:57.57)
Yeah.
Natalia Castro (21:23.406)
for everyone. Michael, do you want to jump in here on your perspective on the case?
Michael Sgarlat (21:28.495)
You know, I think that this OIG memo, while not, you know, a case decision, it still crystallizes what we're seeing and have seen in 2023 that, you know, agencies have to apply the correct legal standard. They just do. And you know, whether it is in making final agency decisions, whether it's in looking at their own internal policies, you know.
regardless of what's going on here, you have to apply the correct legal standard. And so I thought that this OIG memo, you know, highlighted that theme for us nicely. And it's why it's one of the things we've reviewed at the end of the year here.
James (22:10.504)
You know, one more reason it's so important to get the standard right is because when you apply an incorrect standard, it raises questions of why. And that creates doubt and I think mistrust within the general public. I don't know if the general public's really reading this DOI IG report from 2023, but the listeners of this show and the readers of our newsletters may be aware of it. And it raises the natural question, why were they applying an incorrectly low burden of proof? Was there an agenda? Were there political reasons for it?
with their personal reasons, deep state reasons for it, depending on the person's perspective, receiving and evaluating that information. And the government should operate as free from those kinds of suspicions as possible. The integrity of the system is incredibly important. Sometimes Congress does create statutes that stack the law or the cases in favor of one party or another, but that's not for individual offices of the federal government.
to decide to rebalance or try to make an effort to even out. It is Congress's purpose. It is their prerogative.
Natalia Castro (23:19.562)
And to your point, James, the American people might not know about this IG report, but they do know about general perceptions of fairness and accountability within federal agencies. And that is a sentiment that I think is very much an ongoing cause of concern in the public. So helping agencies get back to the correct legal standard and apply the correct legal standard, even if the vast majority of Americans don't know about.
kind of the nitty gritty legal issues here. They do know about these general perceptions of fairness and accountability. And that's why it's really important for our government to act in a way that is fair and accountable and in line with the law, as you mentioned.
Jason Briefel (24:02.287)
And I would emphasize and I appreciate James saying the word trust. You know, the law is the law until it's not. And I think that that's where some of the cases that we talk will be talking about and have talked about. You know, there's been a lot of experimentation around VA accountability, and we've seen a lot of decisions there and we'll get to that later in our discussion. But I think that this is one of those things. You know, the trust in the federal government is at a historic low. And, you know, when
James (24:19.406)
Mm-hmm.
Jason Briefel (24:31.155)
people feel that agencies may be putting their finger on the scale on one side or the other, that's only gonna exacerbate those feelings. And so I think this is where it's really important that we are having this clarity, that we do have courts and watchdogs and others making sure that people stay in the lanes. We have rules for a reason. They're important to be followed and to have clarity there. And I think that the next one that we're gonna talk about gets into that issue as well.
but in the context of adjudicators, whether these are arbitrators in the middle, third party, neutral third party in the middle of a dispute or administrative judges who are weighing in on disputes within agencies. Can you tell us about a case coming out of the Bureau of Prisons that spoke to this issue?
Michael Sgarlat (25:22.71)
Yeah, we have Williams v. BOP. So in that case, a Federal Circuit case, we had a BOP official who had a relationship with a former inmate, and it was against agency policy to do so. So at the agency level, Ms. Williams, the BOP official, she was removed on two charges.
failure to report this relationship and Improper contact with a former inmate both of them were sustained at the agency level So she appealed it went to an arbitrator and the arbitrator Sustained one of those two charges the improper contact charge and in doing so the arbitrator gave difference to the penalty But at the same time she had a really interesting blurb
where she said, you know, really the fair thing to do, given all these facts, would be to give this employee a lengthy suspension and not remove her. But she deferred to the penalty and the agency employee was removed. So the BOP official, Ms. Williams, she appealed it to the federal circuit.
and this is the third time the Federal Circuit has spoken on the legal issue here, which was how much deference should an agency get in a penalty decision when it fails to prove all the charges on appeal? Well, what the Federal Circuit said was if all the charges aren't sustained on appeal, the adjudicator must independently assess the penalty.
they're not stuck to what the agency says when all the charges aren't sustained. It's a practical application of the law. And, you know, I hope with this decision going forward, you know, a third reminder from the federal circuit that administrative judges and arbitrators will start to really evaluate penalties and the fairness and reasonableness of penalties themselves.
James (27:39.844)
So the case goes to sort of this tension between allowing agencies to make their own employment decisions and to having to prove up their cases on an appeal to the Merit Systems Protection Board or in this case of Ms. Williams before an arbitrator. The Federal Circuit has said several times that when an agency proves up all of its charges that the adjudicator, whether it be an arbitrator
or an administrative judge should defer to the agency's evaluation of the penalty. The, you know, that third party reviewer should not replace their judgment for that of the agency. Unless, unless the agency fails to prove all of its charges, meaning that they haven't carried their burden. And so that their evaluation of the penalty that was based on all of those charges should not receive deference, right?
the agency was making that penalty determination on one version of the facts that it couldn't prove up. And so the federal circuit is saying, hey, when an agency cannot prove up all its charges, third party reviewer, judge or arbitrator, you've got to review the penalty independently. You have to take a fresh look at it, take a fresh evaluation and give the employee a fair shake on what the agency was actually able to prove on the employee's appeal.
I have no idea why it's taken three decisions now for the federal circuit to keep ringing this bell. But in my experience, and I'm sure Michael's experience here at the law firm, I have not.
Rather, I have seen judges be very deferential to agency determinations, even when not all the charges were sustained. I don't wanna speculate as to why. I think it would be unfair to speculate as to why. Of course, me in these cases was representing the employee, the appellant. And so I think that my clients received incorrect decisions.
James (29:46.524)
But just because I think so doesn't mean that there's a remedy for it, right? If you're an employee and you think you get an unfair shake at the MSPB AJ level, it's incumbent on you to bear the expense of pursuing further remedy, pursuing further review. It's not cheap, it's not timely, and it can result in a more public opinion, for example, if you go to...
the MSPB board for a published decision, or you go into the federal circuit for a federal court decision. You know, you go to those levels just to get a fair shake of the law. And, you know, suddenly those decisions are gonna pop up anytime someone Googles you for the next decade or more.
Michael Sgarlat (30:31.674)
Yeah, and I think, you know, part of it, and again, I don't want to, you know, speculate as you don't, James, but I think part of it is that, you know, adjudicators just don't want to step into the shoes of what managers want to do with their employees. I think there's some kind of reluctance to do that. And the legislative history of Title V actually shows that Congress had some kind of intent there. But at the same time, you know, these adjudicators are required to follow the law. And you know...
certain charges and again coming back to the factual application to the law, you know, not all charges have the same weight. A lack of candor charge is a little bit more hefty than a failure to follow instruction charge in most circumstances. But you know, say that you know, a fail, you know, the lack of candor charge isn't sustained. You know, you've got to give an independent assessment then of, you know, what you have here. It's not all the same. It's not all treated equally.
And I hope this third time around that adjudicators and people making these decisions really start to listen to what the Federal Circuit has to say.
Natalia Castro (31:46.422)
When we talk often in the policy realm about, you know, either a court case or a change in the law that is intended to change the behavior of federal employees, but does not, one of the things we often point to is issues related to training and culture. Culture being there's just an entrenched view of how we do things and this kind of outside pressure to change.
there could be some resistance to it. And then on the training side, there's just not an awareness about some of these things that are going on either in the federal circuit, at the MSPB or at these different levels. I know you guys don't wanna speculate as to the reason why these issues might exist, but do you think that there could be a greater need for some of that training to really break through this culture and help AJs and arbitrators understand these decisions that
that seemed to happen over and over again.
James (32:46.984)
You know, I wish it were that simple. I wish that I thought that was effective, but I can speak from personal experience, briefing a particular case and citing to the 2017 Tartaglia case, which is a federal circuit case that previously rung the spell. And I didn't think that the administrative judge in that matter.
James (33:11.588)
abided by the letter of that decision. And so, you know, they were on full notice. They knew that the federal circuit had spoken, but, you know, did the thing anyway. And again, I was the employee's advocate, and so I disagreed with it. And I really think that my client should have gotten a different result. But there's something there, I think, to the culture. There's something there to wanting decisions.
that maybe shrug off responsibility of the adjudicator or accountability or whenever it might be, again, I don't wanna get deep into speculation, but there is definitely a resistance. And I think that the Federal Circuit has acknowledged that resistance now by going three times to the same well to give the same instruction.
Natalia Castro (34:05.898)
Another area of law where I think we've seen resistance, not so much from federal agencies, but actually within the judiciary. I know I've looked very closely over the last couple of years at Bivens litigation and the way that the court has kind of tried to continually pare back avenues for citizens to raise Bivens suits.
acknowledging that the Bivens' revity in and of itself is a little bit a judicial creation, not as much of a creation of Congress. And yet there are still district court decisions that seem dead set on expanding Bivens. It has been repeatedly brought to the Supreme Court. We're seeing these cases all over the country still. And so I want to talk a little bit here about Bivens.
James (34:38.929)
Mm-hmm.
Natalia Castro (34:58.498)
and some of the developments that you guys have seen.
Jason Briefel (35:02.107)
And before we dive into the developments, just so that for our listeners who may not know what Bivens is, can you tell us what that is and why it matters?
Michael Sgarlat (35:11.782)
Sure. So Bivens is a Supreme Court case. And it, what the Supreme Court did in Bivens was it developed an implied cause of action for individuals, for the public to seek damages against federal officials for constitutional violations. In Bivens itself, it was a Fourth Amendment violation.
Michael Sgarlat (35:40.982)
And since then, Bivens was extended by the Supreme Court on just two other occasions, one in Carlson and the other in Davis v. Passman. And since then, you know, what the Supreme Court has really done is tinker away at narrowing down Bivens, and it really hasn't been extended since. This year, and very recently, we looked at a case out of the Seventh Circuit called Sergeant v. Barfield.
And in that case, we had a federal prisoner. It was another BOP case. I guess I'm just talking about BOP today, but it was another BOP case. And you've got a federal prisoner who filed some grievances against correctional officers there at one of the facilities. And this federal prisoner said that he was retaliated against, moved into a cell with.
more violent prisoners and raised a Bivens lawsuit saying that the government failed to protect him. That it was retaliation as well. But what this case really focused on was this failure to protect peace under the Eighth Amendment. And the question was, you know, whether that's a new Bivens context, whether Bivens would be extended to this scenario. And
Really, there's actually a circuit court split on this. And so it could be something primed for SCOTUS review this next coming year. But really, there's this case called Farmer v Brennan. And in that case, the Supreme Court said there's an implied Bivens' Revenue for this failure to protect aspect. But they didn't come out and directly say it. And it wasn't that.
that's not what the holding of the decision was. And some circuits took this case and said, oh, this is a new extension of Bivens since Carlson and since Davis, while others didn't. And here the seventh circuit sided with say like the fourth circuit, who were one of those courts that said, this is not a new Bivens context. The Supreme Court didn't say that. And if you look at really more recent Supreme Court decisions,
Michael Sgarlat (38:06.142)
such as Abbasi and Egbert, as well as Hernandez, all of them outline, Bivens has only been extended twice, Carlson and Davis, they don't mention Farmer V Brennan. So that's where the Seventh Circuit really dove on that. But, you know, what I think was really interesting outside of that piece with this Sargent case was sort of how they applied
the Supreme Court's most recent decision in Egbert v. Boulet. Egbert kind of reframed the two-step test in Abbasi for establishing a new Bivens claim, which is first, you know, is there a new context? That's the first step. And then, you know, what the Supreme Court said in Egbert v. Boulet was
both of the steps and Bivens, they come down to a simple question, which is, is Congress better suited to decide on this?
than the courts. And in most cases, they are. Michael, I think it's time.
Natalia Castro (39:20.642)
Michael, if I could just pop in here for a quick clarification. I agree with everything you're saying. I just wanted to give our readers a little bit of extra context here. Congress, one of the big reasons why the court asks, is Congress the right person to make this decision, is because at the state and local level, Congress did pass legislation providing a cause of action for constitutional violations.
Michael Sgarlat (39:25.649)
So, thank you.
Natalia Castro (39:49.05)
That's what we often hear of as 1983. Congress did not do that for federal employees. The court did through Bivens. And so that's why that we asked that question, is it better for Congress to do it or the courts to do it is because we generally in our constitutional system view Congress as taking the lead on making these types of laws. Bivens was a little bit of an outlier.
and the extensions of Bivens were similarly an outlier. I just wanted to give our listeners a little bit of context of why that question matters. Should it be Congress or should it be the courts?
James (40:27.42)
Right, it does require some fundamental understanding about how the US system, especially the federal courts, are supposed to function. Unlike state courts, where you can bring a lawsuit over anything, those are called courts of equity. They have plenary authority. This goes back to high school civics and our federal system. States have lots of authority unless the US Constitution has taken it from them. The federal government and its system of courts
only has the authority that was given to them by the Constitution. They do not have inherent powers. They only have the powers given to them by the Constitution. So the federal courts are very different than state courts in that respect. And so you can only bring a claim in federal court if you can point to an approved cause of action. Most of those causes of action, almost all of them that I can think of, are going to be congressional statutes, congressional
Natalia Castro (41:27.574)
Last year we talked about, or might've been in 2021 now even, we talked about Tanzan v Tanvir, one of you guys will tell me, Tanzan v Tanvir where Congress authorized individuals to sue for monetary damages for religious freedom violations by the federal government. That's a classic example. Congress spoke.
James (41:37.008)
Yeah, 10s if you 10 fear.
James (41:53.447)
Right.
Natalia Castro (41:55.214)
They gave people a right to sue when their religious rights have been violated.
James (42:00.388)
And in Bivens, back in the early 1970s, a lawsuit was brought by an individual who had their home searched without a warrant. The individual was manacled to a radiator and his person was searched. It was a violation of that person's Fourth Amendment rights. It was such an egregious violation that though the federal courts could not point to any congressional action approving the lawsuit, they pointed...
to the Fourth Amendment itself. Instead, the Constitution itself guarantees protection of this right, and implied in the protection of that right is the ability to sue the offending officers personally from their own personal financial accounts for a remedy for that wrong.
Natalia Castro (42:51.659)
And as Michael was, oh go ahead.
James (42:51.844)
And so it doesn't say so as Michael is saying, there's a couple of extensions. When we talk about extensions of Bivens, we're talking about other kinds of violations that the Supreme Court has authorized lawsuits for, where there were no covering congressional actions, no statutes covering those kinds of activities. But ever since 1980, the Supreme Court has really rolled back and...
narrowed Bivens. When I say narrow, I mean really strictly confined to the kinds of cases that can be brought under that theory to the specific facts, very narrowly tailored facts that are just like or very similar to Bivens and the other two approved causes of action. The Supreme Court has said over these 40-some years, whoa, this is a slippery slope. We can't open this door any further.
we really have to focus on Congress's authority. And as Natalia pointed out, the courts interpret Congress's actions and inactions to mean what the court should or should not do. And so in this instance, here we sit 2023, Congress has had, you know, 100 some years, 150 years since it created the statute authorizing lawsuits against state actors, state employees. It has not.
created an equivalent statute for lawsuits against federal employees. And this Supreme Court says that is meaningful. That means that Congress has done so with reason and the courts should defer to that reason. So as we talked about last year with the case of Egbert B. Boulet, the smugglers in case of a Washington state, really fascinating fact pattern. It's a good read, I recommend it.
In that case, the court spoke and said that oftentimes the question about whether a Bivens case can proceed boils down to asking whether the courts are in a better position than Congress to make that determination. And of course, the answer is almost certainly always going to be no. And so, despite that decision, we still have some circuit disputes about whether to allow for the Bivens actions. So there's some pushback within the lower courts.
James (45:09.315)
in the form of allowing cases to proceed.
Michael Sgarlat (45:12.586)
Yeah, and what I was saying earlier, like one of the things I actually like about the Seventh Circuit decision was kind of how it looked at Egbert and what it's doing with sort of that two step factor test is, you know, which was, it still is, is there a new context and are there factors counseling hesitation? But, you know, it really crystallized what it was saying, like how this is often reduced into one question, is Congress better suited? And.
what it comes down to in this case at least was, you know, special factors find themselves in both steps of that framework. And in this case, there are a couple of them. And I just thought it was a really good read on how to look at Egbert and how circuit courts are looking at Egbert going forward.
Jason Briefel (46:03.711)
I think part of the practical application of all this is whether or not federal employees are constantly being sued, spending their own time and resources and potentially agency resources and doing that, and figuring out if that's a good way, you know, to adjudicate disputes and problems in our country. And James, to your point, Congress has had a century and a half to act on this, but has chosen not to in this context.
But there are other areas, particularly at the VA, where Congress has been doing a lot of work, particularly over the last decade around VA accountability. And I think this is the last case that we're gonna be talking about today, kind of more decisions dealing with what I'd call Congress's experiments with VA accountability reform.
James (46:59.688)
Right, I think.
Jason Briefel (47:00.672)
What happened here this year?
James (47:03.324)
Well, to understand what happened this year, we have to understand what happened back in 2014 and 2017. Back in 2014, many listeners may remember there was a lot of fear, both in Congress and the media and the general public, about allegations regarding waitlist issues at the VA and the supposed impact on veterans. As a result of that fear, Congress enacted a statute in 2014 that made it quicker and really...
implemented a totally different system for VA removal of senior executive employees. As a result of litigation, including litigation by this law firm, the VA stopped using that statute because it had constitutional issues. In 2017, Congress replaced that statute altogether, made it a moot point, replaced the statute altogether with a new system for...
removing VA senior executives in a new system that applied to most of the rest of the VA workforce in a section of law called Title 38, Section 714, that made it quicker to remove federal employees for performance and for misconduct. Now, this is really meaningful because in the long-standing system under Title 5 of the U.S. Code, which applies to most of the people who are listening to this show who work for the federal government,
There are two different processes for removing employees from misconduct or for performance. Misconduct is under Title V, Chapter 75. That requires agencies to prove misconduct by preponderant evidence on an employee's appeal to the MSPB. Performance actions are processed through Title V, Chapter 43. And that is a longer process that requires agencies to work with employees to try to rehabilitate their performance.
bring them up to an acceptable level of performance, through the performance improvement process or PIP process. And if an employee fails to pass their PIP, then an agency is allowed to remove them for performance reasons. And on appeal, the agency's decision gets much more deference than a misconduct action. Much, much more deference. They have to prove the employee's poor performance by a lower burden of proof. So in 2017, when Congress enacted a law,
James (49:26.788)
applying the same process for performance and misconduct actions, that really changed the game for performance actions. Because now what we have the courts, I'm sorry, what the MSPB said this year in the case of Seminov versus Department of Veterans Affairs is that when VA takes a performance action under the new law, they're required to prove by the preponderance of the evidence standard, just like a misconduct case, because Congress didn't say any differently.
In this case, VA tried to assert to the MSPB that it should receive the same kind of deferential burden of proof as the Title V Chapter 43 process. In this case, the board wagged its finger and said, absolutely not. Absolutely not. This really caps off a series of four or five, maybe six different decisions over the last several years out of the Federal Circuit and the American Systems Protection Board.
that have wrapped VA's hands about the way that it has implemented the 2017 statute, such that a month or so before the Seminoff case came out, the secretary of the VA issued a memo saying the agency was done using the Section 714 process against most of its workforce, that they were just going to rely on the tried and true Title V process. So I think that was really remarkable, Jason. You talk about an experiment in the VA workforce.
While this year we have the secretary of the VA throwing up the agency's hands and saying, we're going to stick with old faithful, the Title V process that everyone knows and understands, and that the agency, you know, can ably implement in a reliable way that's not going to result in all these overturned decisions. Really remarkable.
Jason Briefel (51:17.271)
Yeah, and I'll jump in here on this. I agree that it's remarkable and it's also been fascinating as someone has watched and worked this from the policy side of this for so long. And what the public might not know is, you know, the VA fired several thousand employees under this new statute and burden. And then given those handful of decisions that came out of various levels of courts, the agency had to put all of those people back to work.
Not because they deserved necessarily to be back at work. They perhaps, a handful of them should have been fired, but because their rights were violated, because the agency applied that incorrect legal standard, the agency had to unwind all of those personnel actions, put those people back in and make them whole again. And in my mind, this kind of links back to some of the things that we've talked about earlier in this discussion. What is the rule of law? What rights do people have?
Agencies cannot put their finger on the scale one side or the other to get the outcomes they wanted. You know, then there was, you know, inspector general reports at the VA that found that the agency selectively hit a evidence, selectively advanced evidence to make and win cases because they wanted to slam dunk on employees' heads and fire as many people as possible during the Trump administration. And then that all got unwound and you still see this debate raging in Congress.
with competing bills between the House and the Senate. The House wants to re-codify this burden of proof which will not work in the courts. Whereas on the Senate side, you see real learning. There's a bipartisan bill from the chair and the ranking member of the Senate VA committee that would update and modify these statutes, but applies the lessons learned so that the VA doesn't find itself in this.
never ending legal quagmire, but is instead able to uphold the law, discipline employees when they deserve it, but also follow standards that can, can be upheld, um, within a court of law.
Natalia Castro (53:30.278)
I think there's also something interesting to just spend a second on here. It can be easy, I think, for the American public and for most people who are at-will employees to think, who cares? So what? So what that their rights were violated? There are obviously people who should not have had jobs who were reinstated because their rights were violated. And as Jason mentioned, you know, there's...
the sentiment that, oh, now we have these employees back who probably should have been fired because their rights were violated. Why does that matter? Why can't we just get rid of employees regardless of their rights? And I think it's important in all of these conversations we've been having about the importance of clarifying the correct standard of making sure that the process is equitable for everyone, making sure it's fair. One thing that we often say at this firm is that if federal employees
are willing to violate the rights of their coworkers, it is a short trip from violating the rights of the American people. And it is really critical that our government is held to the highest standard and really does consistently demonstrate that respect for individual rights to ensure that there is an equal and just enforcement of the law. And it cannot be said enough.
that if a federal agency is willing to violate the rights of its own people, it will not be long until they violate the rights of the American people. And so I think it's just important to emphasize that the correct standard, the correct burden, all of those things are what lead to the trust, as James mentioned, and ultimately the integrity and the respect of the rule of law in this country. And that's why this really matters to me.
James (55:22.412)
Yeah, I wholeheartedly agree, Natalia, wholeheartedly agree. Adding on one other layer, part of the reason Congress has enacted these statutes and made these kinds of decisions publicly available is because it's important for the American public to have insight into the reasons federal agencies do what they do. Having an agency be able to establish that
The reasons that articulated for firing somebody are in fact legitimate reasons or provable reasons is important. Firing the federal workforce should not be a PR move. This is not the private sector where tossing a few high level managers can be a public representation that a company's really taken an issue seriously and they've offed the big names and so everything's really different now.
That's not the federal government. The federal government has to establish and tell the American public why it's doing things. Show the American public that its actions are making a meaningful difference to address the matter of public concern. The public relations is not a good enough reason. Congress is not allowed PR to be a reason for taking action against career civil servants.
Natalia Castro (56:43.322)
And to be clear, when that happens in the private sector, it often doesn't work. Hiring a couple of high-level managers doesn't usually change the company culture, but it's good for the press release, so it's fine. In the federal government, as you mentioned, James, it's not good enough. We don't showboat with scapegoats. We need real change, and that's why there has to be that justification that shows that real change is good.
James (56:47.184)
Hahaha
Michael Sgarlat (57:06.286)
Yeah, agencies aren't supposed to be allowed to just, you know, do whatever they want here. Like they have to be held to standards. It's what we've seen this whole year. What's the limit of an agency's authority to take an action? And, you know, fortunately, I'm happy to see that the, you know, VA is using Title V again, instead of, you know, 38 USC 714. I feel like they're trying to cut corners.
I mean, as you saw in this case that James just talked about, you know, they're trying to have it both ways. They're trying to use the Title V standard of proof for performance actions while having a more quick process to get rid of the employee. That's not how our government works. It's not how it's supposed to work. And you know, I'm happy to see that the VA issued this memo and is learning some lessons from this experiment.
Jason Briefel (58:04.991)
I think the last thing I'd add on this is that, you know, that memo started an important conversation with Congress and helped advance that conversation. This is what we're doing. This is why. These were the issues and things that we experienced. Think about all the staff time that we had to dedicate to unwinding those firings, putting all those people back to work, firing the ones who deserved it properly. When at the same time...
We need to increase the healthcare workforce. We need to focus our resources on other things like the mission of the agency. And that's what the consistent message from HR, legal, and the secretary there has said is, enough with these distractions and these novel approaches to dealing with these personnel matters. Let's use what works, what's worked for 45 years and get to the business of the agency. And...
I think that that's been important. Again, we'll see where Congress ends up on this. These debates are still ongoing with those competing bills I talked about earlier. Today we've talked a lot and this has been a really interesting discussion. James and Michael, thank you for being with us. You know, I would I think we would be remiss to not talk about a couple of the big administrative law issues.
that we're also tracking that can have import for both federal agencies as well as employees who work at those agencies. And so in our last few minutes here, Natalia, I'm going to I'm going to ask you to share with us some of the things that you've been tracking there on the administrative law side of this ledger. And I know we'll be coming back to these issues later in this season, toward the end of the court's term in the springtime.
Natalia Castro (59:49.91)
Yeah, absolutely. Thanks, Jason. Michael and James, they have this phenomenal knowledge about the kind of the everyday personnel issues that we see. But there are a lot of also larger issues going on within the kind of constitutional administrative law context. There's a really big decision that came out in April. Two cases kind of coupled next to each other, Axon versus FTC and Cochrane versus
SEC, there were both challenges to what they argue were an unconstitutional agency structure. So people might be hearing about whether or not certain federal employees can have two layers of for-cause protections. There are a lot of issues about percolating about the right to fire employees and things like that. So these two cases, they were...
whether or not these dual layers of four-cause protections are permissible, but what the individuals in this case really wanted was to go to district court to argue that constitutional issue rather than being forced to go through the agency administrative process. And the court did ultimately allow these individuals to go to district court to argue that their agency structure is unconstitutional.
prior to having to exhaust the agency's administrative process. And this really accelerates the timeline for individuals looking to challenge unconstitutional agency structures. The court didn't, you know, create a new doctrine where they said this is permissible in every case. They look to and establish structure, the thunder basin factors as they're called.
But what the court really signaled and what we really heard in these opinions was an increased willingness by the court to acknowledge that just being subject to an agency procedure that might be unconstitutional is in and of itself a harm and a damage. And allowing people to go to district court initially to challenge that unconstitutional agency structure.
Natalia Castro (01:02:08.39)
prior to having to exhaust their administrative remedies is a way that people can both address this unconstitutional agency challenge and make sure that there is a real valuable victory of not being subject to that unconstitutional process. Why I think that case is so interesting is because as this court signals a willingness to really speak and take cases.
on unconstitutional agency structures, I think this case really opens the door for a lot more of those cases to be percolating in the district courts. So something I'm watching from a kind of high level academic perspective is are we going to see more cases in district courts challenging unconstitutional, potentially allegedly unconstitutional agency structures?
especially since the Supreme Court has really expressed a willingness to consider these challenges. So I think that is going to be something to watch coming out of these Axon and Cochrane decisions. We're also seeing one major case that I'm tracking this term is Jarkusy versus the SEC. That case raises several challenges, arguing that the SEC structure is unconstitutional.
And I think all of the different challenges have the potential to either have widespread ramifications or to kind of just reinforce some of the existing law on those four cause protections. The courts are really, I think circuits like the Fifth Circuit, which has been a little bit more critical historically of the administrative state, they're taking a much bolder approach towards challenging agency structures.
And it's going to be really interesting to see how the Supreme Court deals with that, since this is a Supreme Court that has signaled a little bit more of a willingness to take on these big administrative law constitutional questions. So I think it's going to be really, really interesting to see how that trend continues in the current court. And those are some of the cases that I'm going to be watching. And I'm really excited to talk more about on this program later this season.
Jason Briefel (01:04:29.299)
Thanks so much, Natalia. And I think I really appreciate you sharing all that. And I think that this is that intersection. You know, what powers does the president have? What powers the agency heads have over their employees? What standards are people being held to if they want to discipline or fire an employee? Who gets to review that stuff? And where and how? At the end of the day, this is all the nuts and bolts of how government is happening.
James (01:04:37.72)
Thank you.
Jason Briefel (01:04:55.875)
Um, and, and some of these things may cause big changes. Some of them may cause big changes at a specific agency, and then we'll see dominance fall and I think this is why. You know, we're excited to kind of frame up our discussions this season here on fed talk through this lens of the federal government and flux, there's a lot going on, this is a 2 million person enterprise, the largest single employer in the country. Um, uh, and, and obviously it, it touches every American. And so.
We're going to keep plumbing around on these issues and exploring kind of what's going on in the judiciary, in the executive branch, and in Congress, and what that means for the federal workforce, as well as for the American people. So I'm really glad that we've had this conversation today. And again, I'm very appreciative for Michael and James joining us here today on Fed Talk.
James (01:05:48.804)
Yeah, pleased to be here. Thanks for having us.
Michael Sgarlat (01:05:51.094)
Yeah, thanks for having us. It's a pleasure.
Natalia Castro (01:05:53.55)
That's all the time we have for today. We wish everyone a great week. This is Fed Talk brought to you by the law firm of Shaw Brandsford and Roth. I'm Natalia Castro with my cohost, Jason Breifel.
