Federal Court Rules Against Retroactive VA "Accountability" for the Third Time

The Department of Veterans Affairs Accountability and Whistleblower Protection Act (the Act) was enacted by Congress in 2017 and has provided the agency a “fast track” to suspend, demote, and terminate Title 5 VA employees. However, for the third time since the law was passed, the U.S. Court of Appeals for the Federal Circuit ruled in Brenner v. Department of Veterans Affairs in March 2021 that the VA was prohibited from using the law to discipline an employee for acts that happened before the enactment of the law. 

In Sayers v. Department of Veterans Affairs (2020), the appeals court ruled that it was unlawful for the VA to terminate an employee for misconduct under 38 U.S.C. § 714 of the Act since the alleged misconduct occurred before the law was enacted. Furthermore, the court also held that the MSPB failed to consider if the penalty imposed was justified. In conclusion, the appeals court ruled in favor of the employee and vacated the termination. 

In Harrington v. Department of Veterans Affairs (2020), the VA argued that the appeals court should affirm an employee’s removal because he did not raise any issue about retroactive application—even though the alleged misconduct occurred before the Act became law—and, thus, “waived” the argument. However, the court reaffirmed its stance in Sayers on retroactivity and penalty consideration, and the “waiver” had no bearing on the retroactivity issue because the argument purely questioned the law, there was no doubt about the proper resolution, and the employee had been protected by certain civil rights against improper termination when the alleged misconduct transpired. Therefore, the appeals court vacated the employee’s removal. 

Alas, in Brenner v. Department of Veterans Affairs, the VA argued that the ruling in Sayers should not apply since the employee’s termination was due to allegedly poor performance prior to the passing of the Act but worsened after the Act was enacted. But the appeals court said that the VA must proceed in accordance with Chapter 43 or Chapter 75 to remove an employee for conduct prior to the Act’s enactment, instead of under provisions of the Act. 

Yet, the VA argued that the removal was based on performance and claimed the only differences between Chapter 43 and 38 U.S.C. § 714 were procedural rules that make it possible for retroactive application for the law, according to Landgraf v. USI Film Prods. (1994). The court disagreed with the government’s interpretation of the Landgraf ruling, stating that statutory retroactivity does not apply to property rights since the worker had a property interest in continually being employed. 

When it comes to the differences between Chapter 43 and 38 U.S.C. § 714, the appeals court argued that the former offers employees more pre-removal due process protections than the latter. The court explained the protections are not procedural, but rather providing a specific process that differs from the less rigorous and expedited procedures of 38 U.S.C. § 714. Therefore, retroactivity is impermissible. 

The appeals court also supported in rulings in Sayers and Harrington that MSPB officials must take into consideration if penalties imposed on the employee are reasonable. If not, then the decision must be reversed. 

In the end, the appeals court vacated the MSPB’s decision affirming the removal and sent the case back to MSPB to determine if the termination decision and penalty are reinforced by significant evidence using only the evidence gathered after the enactment of the Act. 

If you are dealing with a VA federal employment law issue in Atlanta, Baltimore, or Houston, contact Pines Federal today at (888) 898-9902 and get a legal team with more than 50 years of combined experience on your side! 

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