Lentz v. MSPB , 876 F.3d 1380 ( 2017 )

United States Court of Appeals
for the Federal Circuit
______________________
CHASE M. LENTZ,
Petitioner
v.
MERIT SYSTEMS PROTECTION BOARD,
Respondent
______________________
2017-1285
______________________
Petition for review of the Merit Systems Protection
Board in No. SF-4324-15-0364-I-1.
______________________
Decided: December 12, 2017
______________________
CHASE M. LENTZ, FRESNO, CA, pro se.
CALVIN M. MORROW, Office of the General Counsel,
Merit Systems Protection Board, Washington, DC, for
respondent. Also represented by BRYAN G. POLISUK,
KATHERINE M. SMITH.
______________________
Before NEWMAN, DYK, and HUGHES, Circuit Judges.
NEWMAN, Circuit Judge.
Chase M. Lentz appeals the decision of the Merit Sys-
tems Protection Board (MSPB or “Board”), holding that
2 LENTZ v. MSPB
his resignation from federal employment was a voluntary
act and not a constructive discharge. We vacate the
Board’s decision, as based on incorrect evidentiary proce-
dures including the inappropriate application of collateral
estoppel. We remand to the MSPB for redetermination of
the issue of constructive discharge.
BACKGROUND
Mr. Lentz entered federal service in 2002, and at the
times here relevant was employed as a botanist with the
Bureau of Land Management of the Department of the
Interior (the “Agency”) in California. Mr. Lentz had no
disciplinary record until May 15, 2014, when his supervi-
sor issued a letter of reprimand for “acting outside the
scope of his authority” and “conduct unbecoming.” MSPB
Appx 34. These charges were based on his authorization
to permit goat grazing on certain public lands, without
the prior approval of his supervisors. Id. On November
13, 2014 Mr. Lentz’s supervisor issued a letter proposing
a fourteen-day suspension for various infractions, citing
his management of interns, his behavior toward his
supervisors, and his interaction with outside entities. Id.
at 34–35. Soon after receiving this letter, Mr. Lentz went
on medical leave. The proposed fourteen-day suspension
was sustained on February 10, 2015, during his medical
leave, to commence on February 15, 2015.
Mr. Lentz resigned on February 13, 2015. His letter
of resignation cites harassment and a hostile work envi-
ronment that aggravated an illness and his veterans
disability, and made his work circumstances intolerable.
He states, “I had been pushed to the limits of what I could
endure and had to take significant amounts of sick leave
as a result.” Initial Appeal File (IAF), Tab 9 at 29. He
states that until the most recent two years (and new
supervisors) his performance had consistently been rated
“superior.” He states that he has filed complaints for
discrimination and harassment by his supervisors, includ-
LENTZ v. MSPB 3
ing complaints for violation of the Uniformed Services
Employment and Reemployment Rights Act (USERRA),
38 U.S.C. §§ 4301–4335, and that the letters of reprimand
are retaliatory.
On February 25, 2015, Mr. Lentz filed an appeal with
the MSPB, asserting constructive discharge. He stated
that the May 2014 letter of reprimand and the November
2014 letter and fourteen-day suspension were retaliatory
and discriminatory, leading to his constructive discharge.
IAF, Tab 1. He stated that his ensuing illness and medi-
cal leave should be viewed as a constructive suspension,
and that “the agency coerced my resignation by bringing
unjustifiable charges and creating unreasonably difficult
working conditions.” IAF, Tab 1 at 5. He also alleged
discrimination on the basis of his status as a disabled
veteran, and retaliation for having previously filed a
complaint for violation of USERRA. In separate appeals
to the MSPB, not here at issue, he alleged that the Agen-
cy actions were in retaliation for protected whistleblower
activity.
The MSPB’s Administrative Judge (AJ), at the West-
ern Regional Office, bifurcated the February 25, 2015
appeal into two separate cases. The first case (Lentz I) 1
designated the appeal as a claim for involuntary resigna-
tion under 5 U.S.C. Chapter 75. The second case (Lentz
II) 2 designated the appeal as a complaint under USERRA.
The AJ dismissed Lentz I for lack of jurisdiction, and the
AJ subsequently held that Mr. Lentz was collaterally
estopped from raising in Lentz II the evidence and issues
1 Lentz v. Dep’t of Interior, No. SF-0752-15-0363-I-1,
2016 WL 106602 (M.S.P.B. Jan. 11, 2016) (Lentz I). This
decision was not appealed to the Federal Circuit.
2 Lentz v. Dep’t of Interior, No. SF-4324-15-0364-I-1,
2016 WL 6069072 (M.S.P.B. Oct. 14, 2016) (Lentz II).
4 LENTZ v. MSPB
that the AJ had assigned to Lentz I. Mr. Lentz states that
by separating the several factual aspects and concerns
that contributed to his involuntary resignation, their
combined weight was never considered, distorting the
MSPB’s review.
The Lentz I proceeding
The first proceeding was designated by the AJ as a
dismissal action under Chapter 75, and was limited by
the AJ to the issue of constructive discharge based on Mr.
Lentz’s assertions that the Agency “brought unjustifiable
charges in support of its reprimand and 14-day suspen-
sion,” “committed prohibited personnel practices by using
his protected disclosures of information as a basis for
discipline,” and “misrepresented, exaggerated and omitted
evidence.” MSPB Appx 39–40.
The Agency moved to dismiss the Lentz I proceeding
for “lack of jurisdiction.” The AJ granted the motion
without the requested hearing, stating that “[Mr. Lentz]
has failed to nonfrivolously allege he was subjected to a
discriminatory/retaliatory hostile work environment so
coercive in nature that he had no choice but to resign.”
MSPB Appx 51. The full Board affirmed this decision,
and Mr. Lentz did not appeal to this court.
The Lentz II proceeding
The AJ commenced this proceeding shortly after the
full Board decided Lentz I, stating that it was “limited to
claims that an employer discriminated in employment or
took an adverse employment action because of protected
USERRA activity.” Lentz II at ¶12. The Agency again
moved to dismiss for lack of jurisdiction, and the AJ again
granted the motion, stating that “the appellant has failed
to make non-frivolous allegations that a reasonable
person in his position would have felt compelled to resign
due to USERRA-based discrimination or reprisal.” MSPB
Appx 7.
LENTZ v. MSPB 5
The AJ stated that collateral estoppel arose from
Lentz I, stating that “[t]o the extent the appellant is
seeking to relitigate the overall issue of whether his
resignation was involuntary, I find that he is collaterally
estopped from doing so.” Id. at 6. The AJ stated that “[t]o
the extent that the appellant is seeking to relitigate the
issue of whether the agency violated USERRA by denying
his request for accommodation, I find that he is collateral-
ly estopped from relitigating this matter as well.” Id. at 6
n.5. The AJ concluded that “the appellant has failed to
nonfrivolously allege that he was subjected to a USERRA
discriminatory/retaliatory hostile work environment so
coercive in nature that he had no choice but to resign,”
and dismissed the appeal. Id. at 8.
Mr. Lentz appealed to the full Board. The Board re-
ferred to the AJ’s refusal to consider whether the resigna-
tion was involuntary, because it would relitigate Lentz I,
as “[c]onfusing[].” Lentz II at ¶7. The Board observed
that the AJ separated the issues into Lentz I and Lentz II
“[f]or reasons that are unclear;” but the Board did not
discuss whether this separation was proper, or how it
might have affected the dismissal for “lack of jurisdic-
tion.” Id. at ¶5.
The full Board upheld the AJ’s application of collat-
eral estoppel, stating that “the identical issue of whether
the appellant’s resignation was voluntary previously was
litigated in Lentz I,” and that the requirements of collat-
eral estoppel had been met. Lentz II at ¶13. The Board
then limited its review in Lentz II to the USERRA issues,
stating that “jurisdiction under 38 U.S.C. § 4311(b) is
limited to claims that an employer discriminated in
employment or took an adverse employment action be-
cause of protected USERRA activity.” Lentz II at ¶12.
The full Board affirmed the AJ’s dismissal for lack of
jurisdiction of Mr. Lentz’s claim of constructive discharge.
This appeal followed.
6 LENTZ v. MSPB
DISCUSSION
This court is assigned jurisdiction under 5 U.S.C.
§ 7703 to review final decisions of the Board. The stand-
ard is whether a decision of the Board is (1) arbitrary,
capricious, an abuse of discretion, or otherwise not in
accordance with law; (2) obtained without procedures
required by law, rule, or regulation having been followed;
or (3) unsupported by substantial evidence. 5 U.S.C.
§ 7703(c).
The Board’s jurisdictional determinations receive ple-
nary review. McCormick v. Dep’t of the Air Force, 307
F.3d 1339, 1340 (Fed. Cir. 2002). When the Board has
made factual findings affecting the jurisdictional inquiry,
these findings are reviewed for support by substantial
evidence in the record. Parrott v. Merit Sys. Prot. Bd., 519
F.3d 1328, 1334 (Fed. Cir. 2008). The substantial evi-
dence standard requires “such relevant evidence as a
reasonable mind might accept as adequate to support a
conclusion.” Consol. Edison Co. of N.Y. v. NLRB, 305 U.S.
197, 229 (1938).
When determining whether a resignation was invol-
untary, the MSPB examines “the surrounding circum-
stances to test the ability of the employee to exercise free
choice.” Perlman v. United States, 490 F.2d 928, 933 (Ct.
Cl. 1974). See also Scharf v. Dep’t of the Air Force, 710
F.2d 1572, 1574 (Fed. Cir. 1983) (“[I]t has been held that
the element of voluntariness is vitiated when . . . an
employee resigns under duress brought on by government
action.” (citing McGucken v. United States, 407 F.2d 1349,
1351 (Ct. Cl. 1969))). Mr. Lentz states that the Board did
not reach this stage, based in part on the separation of his
case into two distinct proceedings, and placing some
evidence in one proceeding and some evidence in the other
proceeding. He states that the combined weight of the
evidence of coerced resignation was thereby diluted, and
that the fragmentation of the factors “compromised my
LENTZ v. MSPB 7
ability to present an integrated and coherent claim.”
Lentz Br. 2 (citing Whitmore v. Dep’t of Labor, 680 F.3d
1353, 1368 (Fed. Cir. 2012) (“Evidence only . . . supports a
conclusion when it does so in the aggregate considering all
the pertinent evidence in the record. . . .”)).
Mr. Lentz stresses that the Board’s dismissal of Lentz
II for lack of jurisdiction was done on the Agency’s motion,
before he had a chance to develop a full record. He states
that he provided thirty-six pieces of evidence, none of
which was directly addressed. 3 He states that the AJ
declined to consider any of the information that had been
segregated into Lentz I, the AJ stating that “the appel-
lant’s general claim that he was constructively discharged
was fully litigated in Lentz [I].” MSPB Appx 6. The AJ
ruled that Mr. Lentz “had a full and fair opportunity to
litigate his constructive discharge claim in his prior
appeal.” Id. Mr. Lentz points out that the issue was not
litigated at all, but was dismissed for lack of jurisdiction.
The full Board confirmed the application of collateral
estoppel, stating that “the identical issue of whether the
appellant’s resignation was voluntary previously was
litigated in Lentz I,” and that “the appellant was a party,
and he had a full and fair opportunity to litigate his
claims.” Lentz II at ¶13. The full Board noted, “[I]t is
unclear to what extent the appellant’s constructive sus-
pension claim rests on the allegedly improper denial of
reasonable accommodation.” Lentz II at 5 n.3. However,
Mr. Lentz’s petition for Board review clearly stated that
consideration of the denial of reasonable accommodation
3 The AJ reported that Mr. Lentz did not request a
hearing in Lentz II. IAF, Tab 12 at 2 (citing IAF, Tab 9 at
5 (“I do not request a hearing, but I am entitled to and
request the opportunity to further develop the written
record on my USERRA claim”)).
8 LENTZ v. MSPB
“is essential in the determination of whether or not I was
subject to a constructive suspension.” Petition for Review
File, Tab 1, at 9.
The MSPB now concedes that it erred in the applica-
tion of collateral estoppel, stating that “the respondent
has determined that the Board’s modification of the
administrative judge’s decision by substituting collateral
estoppel as the basis for finding lack of jurisdiction with
respect to whether the petitioner nonfrivolously alleged a
USERRA-related involuntary removal was in error,” and
referring to the Board’s legal reasoning as “clear legal
error.” MSPB Br. 12, 16. However, neither the MSPB nor
the Agency has acted to remedy this admitted error,
according to the record before us, the MSPB stating that
the judgment is correct despite the acknowledgment of
improper procedure. See Lawrence v. Chater, 516 U.S.
163, 172 (1996) (“If it appears reasonably probable that a
confession of error reveals a genuine and potentially
determinative error by the court below, [an order to
vacate and remand] may be appropriate.”).
The Board must set aside a decision where the appel-
lant “shows harmful error in the application of the agen-
cy’s procedures in arriving at such decision,” or where it is
shown “that the decision was not in accordance with law.”
5 U.S.C. § 7701(c)(2); see also 5 C.F.R. § 1201.56(c).
Harmful error occurs where “[e]rror by the agency in the
application of its procedures that is likely to have caused
the agency to reach a conclusion different from the one it
would have reached in the absence or cure of the error.” 5
C.F.R. § 1201.4(r). The court must set aside agency
findings that are “obtained without procedures required
by law, rule, or regulation having been followed.” 5
U.S.C. § 7703(c)(2).
The Board recognized that the separation of Mr.
Lentz’s claim into multiple cases was confusing and
LENTZ v. MSPB 9
unclear, but did not determine whether the separation
resulted in harmful error. The Court has stated:
The Administrative Procedure Act, which governs
the proceedings of administrative agencies and re-
lated judicial review, establishes a scheme of rea-
soned decisionmaking. Not only must an agency's
decreed result be within the scope of its lawful au-
thority, but the process by which it reaches that
result must be logical and rational.
Allentown Mack Sales and Serv., Inc. v. NLRB., 522 U.S.
359, 374 (1998) (internal citation and quotation marks
omitted); see also In re Sang Su Lee, 277 F.3d 1338, 1342
(Fed. Cir. 2002) (“For judicial review to be meaningfully
achieved within these strictures, the agency tribunal
must present a full and reasoned explanation of its deci-
sion.”). The record provided by the parties does not
explain why the Board divided Mr. Lentz’s appeal into
separate cases and limited the evidence presented in each
case.
Mr. Lentz asserts procedural and legal error, and con-
tends that it prejudiced the result. See Petition for Review
File, Tab 1 at 14 (“[T]he application of collateral estoppel
to my appeal is in error.”). The MSPB states that even if
it erred and collateral estoppel does not apply, this court
should “affirm the MSPB’s decision dismissing the peti-
tioner’s appeal for lack of jurisdiction on the basis of the
MSPB administrative judge’s finding that the petitioner
failed to make nonfrivolous allegations of an involuntary
resignation caused by violations of USERRA.” MSPB Br.
16. The MSPB does not criticize the AJ’s “unclear” sepa-
ration of the appeal and evidence into two separate cases,
decided separately as Lentz I and Lentz II. Instead, the
MSPB proposes that our review is limited to USERRA
issues, ignoring the assertions of discrimination, hostile
environment, and retaliation that had been segregated
into Lentz I and removed from consideration in Lentz II.
10 LENTZ v. MSPB
Because the issue improperly separated into Lentz I—
that Mr. Lentz failed to make nonfrivolous allegations of
involuntary resignation based on alleged coercive agency
actions other than violations of USERRA—is not the same
issue that is presented in Lentz II, it has no preclusive
effect here. As a result of the bifurcation, neither the
Board’s decision in Lentz I nor in Lentz II addressed the
proper question of whether the totality of the evidence,
including both the evidence of alleged USSERA violations
and the evidence of other coercive agency actions, ren-
dered Mr. Lentz’s resignation involuntary. Therefore,
collateral estoppel cannot apply to the constructive dis-
charge claim. Likewise, the propriety of the bifurcation
was not litigated in the first Board proceeding and is not
collaterally estopped here.
We hold that the MSPB committed two errors. First,
the MSPB erred by improperly bifurcating the two pro-
ceedings. Second, it erred by failing to consider the
totality of the evidence in determining the question of
voluntariness in Lentz II.
The cause of action in the Lentz II appeal is construc-
tive discharge, not the USERRA violation alone. All of
the evidence relevant to constructive discharge must be
considered, not simply Mr. Lentz’s allegations of
USERRA-violating retaliation, as the MSPB argues.
MSPB Br. 16. The appropriate standard is whether the
totality of events, on all of the evidence, produced a work-
ing environment sufficiently hostile as to lead to involun-
tary resignation. See Kline v. Dep’t of Transp., FAA, 808
F.2d 43, 46 (Fed. Cir. 1986) (vacating and remanding to
the Board where “the record does not demonstrate that
the presiding official identified, balanced and then consid-
ered” the relevant evidence); DeLaughter v. U.S. Postal
Serv., 3 F.3d 1522, 1524 (Fed. Cir. 1993) (remanding to
the Board where “it is abundantly clear that the Postal
Service failed to follow the appellate review procedure”
LENTZ v. MSPB 11
before the Board), abrogated on other grounds by Guil-
lebeau v. Dep't of Navy, 362 F.3d 1329 (Fed. Cir. 2004).
The Board’s decision must be vacated and the case
remanded to address these questions. In ordering a
remand we do not decide the question of whether Mr.
Lentz’s allegations are non-frivolous based on the totality
of the evidence.
CONCLUSION
The procedures followed by the MSPB did not permit
full and fair consideration of all of the circumstances that
Mr. Lentz states combined to produce constructive dis-
charge. The Board’s dismissal is vacated, and the case is
remanded for determination of the merits of Mr. Lentz’s
appeal, on consideration of all of the circumstances.
VACATED AND REMANDED
Costs to Mr. Lentz.