Vassallo v. Defense , 797 F.3d 1327 ( 2015 )

United States Court of Appeals
for the Federal Circuit
______________________
ROSS VASSALLO,
Petitioner
v.
DEPARTMENT OF DEFENSE,
Respondent
______________________
2015-3101
______________________
Petition for review of the Merit Systems Protection
Board in No. PH-3330-13-0049-R-1.
______________________
Decided: August 14, 2015
______________________
ROSS VASSALLO, Easton, CT, pro se.
ALBERT S. IAROSSI, Commercial Litigation Branch,
Civil Division, United States Department of Justice,
Washington, DC, for respondent. Also represented by
BENJAMIN C. MIZER, ROBERT E. KIRSCHMAN, JR., ALLISON
KIDD-MILLER.
______________________
Before PROST, Chief Judge, WALLACH and TARANTO,
Circuit Judges.
2 VASSALLO v. DEP’T OF DEF.
WALLACH, Circuit Judge.
Petitioner Ross Vassallo appeals the decision of the
Merit Systems Protection Board (“the Board”) denying his
request for corrective action. See Vassallo v. Dep’t of Def.,
PH-3330-13-0049-R-1 (M.S.P.B. Jan. 15, 2015) (Resp’t’s
App. 50–55). Mr. Vassallo, a veteran, sought corrective
action from the Board after he applied for a position at
the Department of Defense (“DOD”), and the Office of
Personnel Management (“OPM”) determined that the
DOD was not required to afford him veterans employment
preferences under the Veterans Employment Opportuni-
ties Act of 1998 (“VEOA”). The central question in this
appeal is whether OPM’s regulation permissibly fills a
gap in the governing statute. The Board found that it did.
The court affirms.
BACKGROUND
I. Legal Framework
“Federal agencies generally use two types of selection
to fill vacancies: (1) the open ‘competitive examination’
process and (2) the ‘merit promotion’ process.” Joseph v.
Fed. Trade Comm’n, 505 F.3d 1380, 1381 (Fed. Cir. 2007)
(citation omitted). “The merit promotion process is used
when the position is to be filled by an employee of the
agency or by an applicant from outside the agency who
has ‘status’ in the competitive service.” Id. at 1382 (cita-
tions omitted).
In 1998, Congress passed the VEOA to ensure that
veterans receive due consideration when they apply for
vacant positions available through the merit promotion
process. See generally Veterans Employment Opportuni-
ties Act of 1998, Pub. L. No. 105-339, 112 Stat. 3182
(codified as amended in scattered sections of 2, 3, 5, 10,
28, 31, 38, and 49 U.S.C.). In relevant part, Congress
provided veterans “may not be denied the opportunity to
compete for vacant positions for which the agency making
VASSALLO v. DEP’T OF DEF. 3
the announcement will accept applications from individu-
als outside its own workforce under merit promotion
procedures.” 5 U.S.C. § 3304(f)(1) (2012). The statute
does not define “agency.” To fill this gap, Congress pro-
vided that “[OPM] shall prescribe regulations necessary
for the administration of this subsection.” Id. § 3304(f)(5).
OPM promulgated such regulations in Title 5 of the
Code of Federal Regulations. The regulations parrot the
statutory mandate, explaining that eligible veterans “may
compete for vacancies under merit promotion when an
agency accepts applications from individuals outside its
own workforce” and, if selected, veterans “will be given
career or career conditional appointments under
§ 315.611 of this chapter.” 5 C.F.R. § 335.106 (2012). The
regulations define “agency” as “an executive agency as
defined in 5 U.S.C. [§] 105.” 5 C.F.R. § 315.611(b). The
statutory provision cited by the regulations defines “exec-
utive agency” as “an Executive department, a Govern-
ment corporation, and an independent establishment.”
5 U.S.C. § 105. An executive department includes, among
others, the DOD. 5 U.S.C. § 101.
II. Facts and Proceedings
The Defense Contract Management Agency
(“DCMA”), a sub-agency within the DOD, employed Mr.
Vassallo as a computer engineer in 2012. That summer,
DCMA announced a vacancy for the position of Lead
Interdisciplinary Engineer. The announcement stated
that only certain individuals could apply for the position,
namely “[c]urrent [DCMA]” employees or “[c]urrent
[DOD] [e]mployee[s] with the Acquisition, Technology,
and Logistics . . . [w]orkforce who are outside of the Mili-
tary Components.” Resp’t’s App. 7. Mr. Vassallo submit-
ted an application, but DCMA rejected it on the basis that
he failed to submit the requisite forms.
Mr. Vassallo subsequently sought corrective action
from the Board. In these circumstances, the Board au-
4 VASSALLO v. DEP’T OF DEF.
thority to grant corrective action falls under 5 U.S.C.
§ 3330a(d), which provides for review of a qualified veter-
an’s allegation that an agency has violated 5 U.S.C.
§ 3304(f)(1). Mr. Vassallo’s claim to the Board, therefore,
depends on whether 5 U.S.C. § 3304(f)(1) applies to the
hiring process about which he complains. Errors in the
handling of Mr. Vassallo’s application are outside the
Board’s authority unless 5 U.S.C. § 3304(f)(1) applies.
He did not succeed in his efforts. Before an adminis-
trative judge, Mr. Vassallo alleged that DCMA violated
5 U.S.C. § 3304(f)(1) because DCMA was the relevant
agency making the announcement and the post invited
applications from non-DCMA employees. As an initial
matter, the administrative judge held that DCMA erred
in rejecting Mr. Vassallo’s application because he had, in
fact, submitted the correct forms. Nevertheless, the
administrative judge found that Mr. Vassallo did not
demonstrate that DCMA violated the statute. The admin-
istrative judge held that “agency” in 5 U.S.C. § 3304(f)(1)
meant the DOD, not DCMA. Resp’t’s App. 11–12. The
administrative judge relied upon OPM’s “VetGuide,”
which explains that “agency” under the VEOA means
“parent agency, i.e., Treasury, not the Internal Revenue
Service, and the [DOD], not Department of the Army.” Id.
at 12. Because DCMA accepted applications only from
DOD employees, the administrative judge held that
DCMA did not accept applications from outside the DOD
workforce and, consequently, denied Mr. Vassallo’s re-
quest for corrective action. Id. Mr. Vassallo subsequently
appealed to the full Board.
After initially reversing the administrative judge, the
Board reconsidered its decision and rejected Mr. Vassal-
lo’s request for corrective action. The Board rejected
OPM’s argument that “agency” in 5 U.S.C. § 3304(f)(1)
unambiguously borrows from the definition of “Executive
agency” in 5 U.S.C. § 105, finding instead that “[t]he
unmodified term ‘agency’ is not defined in 5 U.S.C.
VASSALLO v. DEP’T OF DEF. 5
§§ 101–105.” Id. at 54. The Board next observed that
OPM permissibly filled this gap with the regulatory
definition provided in 5 C.F.R. § 315.611(b). According to
the Board, OPM’s decision to define “the word ‘agency’ in
5 U.S.C. § 3304(f)(1) to mean ‘Executive agency’ as de-
fined in 5 U.S.C. § 105 is a permissible construction of the
statute.” Id. at 54–55. The Board concluded that DCMA
was not required to give Mr. Vassallo an opportunity to
compete under 5 U.S.C. § 3304(f)(1) because the DOD—
the agency making the announcement—did not accept
applications from outside its own workforce. Id. at 55.
Accordingly, the Board denied Mr. Vassallo’s request for
corrective action.
Mr. Vassallo appeals. The court has jurisdiction pur-
suant to 28 U.S.C. § 1295(a)(9) (2012).
DISCUSSION
I. Standard of Review
This court’s “scope of . . . review of [B]oard decisions is
limited to whether they are (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) unsupport-
ed by substantial evidence.” Forest v. Merit Sys. Prot. Bd.,
47 F.3d 409, 410 (Fed. Cir. 1995) (citing 5 U.S.C. § 7703(c)
(1988)). Petitioner bears the burden of establishing error
in the Board’s decision. Harris v. Dep’t of Veterans Af-
fairs, 142 F.3d 1463, 1467 (Fed. Cir. 1998). The court
reviews the Board’s legal determinations de novo.
Welshans v. U.S. Postal Serv., 550 F.3d 1100, 1102 (Fed.
Cir. 2008).
We review an agency’s statutory interpretation using
the two-pronged framework established by Chevron,
U.S.A. v. Natural Res. Def. Council, Inc., 467 U.S. 837
(1984). The first prong requires the court to assess
“whether Congress has directly spoken to the precise
6 VASSALLO v. DEP’T OF DEF.
question at issue”; if so, the court “must give effect to the
unambiguously expressed intent of Congress.” Id. at 842–
43. If the statute does not answer the specific question,
meaning that it is “silent or ambiguous,” then the court
must discern whether the agency provided “a permissible
construction of the statute.” Id. at 843; Wilder v. Merit
Sys. Prot. Bd., 675 F.3d 1319, 1322 (Fed. Cir. 2012). “If
Congress has explicitly left a gap for the agency to fill,
there is an express delegation of authority to the agency
to elucidate a specific provision of the statute by regula-
tion.” Chevron, 467 U.S. at 843–44. “Such legislative
regulations are given controlling weight unless they are
arbitrary, capricious, or manifestly contrary to the stat-
ute.” Id. at 844 (footnote omitted).
II. The Board Properly Afforded Controlling Weight to
OPM’s Regulation
Mr. Vassallo argues that the OPM regulation contra-
dicts the plain terms of the statute and otherwise unrea-
sonably undermines the purpose of the VEOA. The
government counters that the Board erred because the
statute is unambiguous and that, alternatively, the Board
correctly deferred to OPM’s regulation. The Board
properly deferred to OPM’s regulation.
A. The Statute is Ambiguous
The government contends that the Board “was not re-
quired to defer to OPM’s regulation[] because the plain
language of the statute makes clear that DOD is ‘the
agency’ for purposes of the VEOA.” Resp’t Br. 9–10.
Because 5 U.S.C. § 105 defines “executive agency” to cover
“executive departments,” not the executive departments’
subcomponents, the government argues that “the use of
the word ‘agency’” in 5 U.S.C. § 3304(f)(1) “to mean ‘Exec-
utive Agency’ follows naturally when examining the
statutory scheme as a whole.” Id. at 11.
VASSALLO v. DEP’T OF DEF. 7
The statutory scheme does not answer the precise
question, i.e., whether “agency” in 5 U.S.C. § 3304(f)(1)
means “executive agency” in 5 U.S.C. § 105. Section 105
of Title 5 of the United States Code provides that “[f]or
purposes of [5 U.S.C.], ‘Executive agency’ means Execu-
tive department . . . .” 5 U.S.C. § 105. In turn, § 101 of
the same title explains that the term “Executive depart-
ments” includes, among others, the DOD. 5 U.S.C. § 101.
The Board correctly observed that “[t]he unmodified term
‘agency’ is not defined in 5 U.S.C. §§ 101–105.” Resp’t’s
App. 54; see 5 U.S.C. §§ 101 (where “agency” does not
appear), 102 (same), 103 (same), 104 (same), 105 (where
“executive” modifies “agency”). Indeed, neither “execu-
tive” nor “department” appears in 5 U.S.C. § 3304, still
less do they appear in subsection (f) of that provision. As
a result, we cannot say that Congress unambiguously
intended to equate “agency” in 5 U.S.C. § 3304(f)(1) with
“executive agency” in 5 U.S.C. § 105. In view of this
ambiguity, the Board properly proceeded to the second
step under Chevron.
B. OPM’s Regulation Governs
Mr. Vassallo raises a series of statistics-based argu-
ments about the alleged universe of civil and military
employees in federal service. 1 Mr. Vassallo argues that
these statistics demonstrate that 5 C.F.R. § 315.611(b)
unreasonably expands the pool of potential workers from
which the DOD may hire and, as a consequence, limits
the benefits that Congress intended for the VEOA to
provide to veterans.
1 Mr. Vassallo offered virtually none of the statis-
tics that he discusses in his brief to the Board. Because
the court disposes of his appeal on other grounds, we need
not address the appropriateness vel non of judicial notice.
8 VASSALLO v. DEP’T OF DEF.
Statistics alone, however, do not govern this court’s
analysis of OPM’s regulation; rather, we must discern
whether the regulation “[is] arbitrary, capricious, or
manifestly contrary to the statute.” Chevron, 467 U.S. at
844. As previously stated, OPM’s regulation defines
“agency” as “an executive agency as defined in 5 U.S.C.
[§] 105.” 5 C.F.R. § 315.611(b). As explained above,
“executive agency” encompasses “executive departments,”
which include the DOD but not its subcomponents, such
as DCMA. 5 U.S.C. §§ 101, 105. The Board observed that
“[t]here can be no doubt that interpreting the word ‘agen-
cy’ in 5 U.S.C. § 3304(f)(1) to mean ‘Executive agency’ as
defined in 5 U.S.C. § 105 is a permissible construction of
the statute.” Resp’t’s App. 54–55. The court agrees,
particularly given that Congress expressly directed OPM
to “elucidate a specific provision of the statute by regula-
tion” and that those regulations warrant “controlling
weight.” Chevron, 467 U.S. at 843–44; see 5 U.S.C.
§ 3304(f)(5) (“[OPM] shall prescribe regulations necessary
for the administration of this subsection”). An agency
regulation that adopts as its own a relevant definition
from the governing statutory scheme does not “manifestly
contra[dict]” the statute. Cf. Chevron, 467 U.S. at 844.
CONCLUSION
Accordingly, the decision of the Merit Systems Protec-
tion Board is
AFFIRMED
COSTS
Each party shall bear its own costs.