Santos v. Nasa ( 2021 )

Case: 19-2345 Document: 44 Page: 1 Filed: 03/11/2021
United States Court of Appeals
for the Federal Circuit
______________________
FERNANDO SANTOS,
Petitioner
v.
NATIONAL AERONAUTICS AND SPACE
ADMINISTRATION,
Respondent
______________________
2019-2345
______________________
Petition for review of the Merit Systems Protection
Board in No. AT-0432-19-0074-I-1.
______________________
Decided: March 11, 2021
______________________
FERNANDO SANTOS, Orlando, FL, pro se.
ROBERT R. KIEPURA, Commercial Litigation Branch,
Civil Division, United States Department of Justice,
Washington, DC, for respondent. Also represented by
DEBORAH ANN BYNUM, JEFFREY B. CLARK, ROBERT EDWARD
KIRSCHMAN, JR.; TREVOR OKTAY TEZEL, Office of the Chief
Counsel, NASA Kennedy Space Center, Kennedy Space
Center, FL.
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2 SANTOS v. NASA
DEBRA LYNN ROTH, Shaw, Bransford & Roth P.C.,
Washington, DC, as amicus curiae counsel. CONOR DIRKS,
JAMES GARAY HEELAN also appearing.
______________________
Before O’MALLEY, BRYSON, and HUGHES, Circuit Judges.
Opinion for the court filed by Circuit Judge O’MALLEY.
Concurring opinion filed by Circuit Judge Hughes.
O’MALLEY, Circuit Judge.
In 2018, Fernando Santos—a mechanical engineer for
National Aeronautics and Space Administration (“NASA”)
and a commander in the United States Navy Reserve—was
transferred to a new division of NASA and placed under
the supervision of Angela Balles, chief of the Ground Sys-
tems Branch of the Commercial Division. Despite working
at NASA for over 18 years and receiving multiple accolades
for his service, Santos began receiving letters of instruction
and reprimand under his new supervisor alleging deficient
performance. Although Balles maintained that she had no
problems with Santos’s mandatory military obligations,
the timing of many letters coincided with Santos’s requests
for or absences due to military leave. The letters, moreo-
ver, made much of Santos’s ability to “report to work in a
timely manner and maintain regular attendance at work.”
After months of difficulties, Balles formally placed Santos
on a performance improvement plan (“PIP”). On August
27, 2018, Balles issued Santos a notice of proposed re-
moval. Santos was removed from his position on Septem-
ber 26, 2018.
On October 26, 2018, Santos appealed his removal to
the Merit Systems Protection Board (“Board”). Santos v.
Nat’l Aeronautics & Space Admin, No.
AT-0432-19-0074-I-1, 2019 WL 2176543 (M.S.P.B. May 21,
2019). The administrative judge (“AJ”) issued an initial de-
cision upholding NASA’s removal and rejecting Santos’s
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SANTOS v. NASA 3
claim under the Uniformed Services Employment and
Reemployment Rights Act (“USERRA”). Id. The AJ’s ini-
tial decision became the Board’s final decision because San-
tos did not petition the Board for review. Santos appeals.
Because the Board applied the wrong legal framework
when assessing Santos’s removal and did not adequately
analyze his USERRA claim, we vacate and remand.
I. BACKGROUND
Santos’s affiliation with NASA started in 1997. Alt-
hough he began his career as a prime contractor supporting
the space shuttle division, NASA hired Santos three years
later. Santos, 2019 WL 2176543, at *2. Santos then served
as the lead engineer on various projects, including the OV-
105 Endeavor, OV-104 Atlantis, and OV-103 Discovery.
For seventeen years, NASA recognized Santos’s efforts.
Santos, for example, was an Engineering Employee of the
Month, received the NASA Honor Award and the Space
Shuttle Program Manager Commendation, and accepted
the Silver Snoopy Award—an award given to less than 1%
of the entire NASA and contractor workforce. From 2011
through 2017, Santos received ratings of Fully Successful
(3), Accomplished (4), and Distinguished (5) on his perfor-
mance evaluations.
In early 2017, Santos joined the newly created Ground
Systems Branch in the Commercial Systems Division of the
Engineering Directorate. As a mechanical engineer in the
Ground Systems Branch, Santos’s supervisor was Balles.
In addition to his work with NASA, Santos was a com-
mander in the United States Navy Reserve with over
twenty years of service as an engineering duty officer. As
a senior officer in the Navy, Santos commanded two units,
SurgeMain San Antonio and SurgeMain Little Rock,
wherein he managed a team charged with supporting war-
ship modifications and maintenance. He also served as the
officer-in-charge for Space and Naval Warfare and regu-
larly led cybersecurity trainings. To fulfill these
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4 SANTOS v. NASA
obligations, Santos regularly took military leave from
NASA, sometimes for as long as eight weeks.
Before the Board, Santos testified that, although he
“had never had problems with his use of military leave pre-
viously, he noticed as the year progressed that Balles was
routinely taking a longer amount of time to approve his use
of military leave.” He also testified that he was often held
accountable for meetings missed due to his military obliga-
tions, even though those meetings were scheduled after he
had submitted notice of military leave. In November 2017,
for example, Santos notified Balles that he would be out on
military leave from November 5, 2017 through November
19, 2017. Upon his return, Santos alleged that Balles in-
structed him to develop a report that required knowledge
of what was discussed during a meeting that took place
while he was on leave. Although Santos eventually ob-
tained a copy of the meeting minutes and submitted the
report, Balles informed Santos that the report was unsat-
isfactory and asked another employee to redo Santos’s
work. Additionally, on February 13, 2018—one day after
Balles had officially approved another request for Santos’s
military leave—Balles issued a Letter of Instruction
providing “explicit instructions concerning [Santos’s] use of
leave, [] work schedule, and the recording of [] hours at
work.”
According to Santos, this cycle repeated itself for the
next few months: Balles would assign Santos a task that
coincided with his military duty; Santos would be unable
to complete the task due to his concurrent military obliga-
tions; and Balles would reprimand Santos for failing to
complete the task to a satisfactory level. Santos also al-
leged that, when he expressed concerns about projects that
would be due during his upcoming military leave, Balles
responded that it was “his responsibility to figure out how
to have everything covered.” And, Santos noted that Balles
issued him a Letter of Reprimand for a training that had
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SANTOS v. NASA 5
lapsed while he was out on military duty, but which he
completed two days after returning from leave.
On May 31, 2018, Balles placed Santos on a PIP for 45
days and assigned him eleven deliverable assignments.
Throughout this period, Balles met with Santos to discuss
his progress and give him feedback on his work product.
Because Santos’s military leave overlapped with the last
two days of this probationary period, Balles allowed Santos
to make certain edits on the written assignments and to
schedule presentations after the PIP period expired. Balles
ultimately determined that Santos’s deliverables were un-
satisfactory and proposed his removal based on a charge of
unacceptable performance. Accordingly, Santos was re-
moved from his position on September 26, 2018.
Santos appealed his removal, arguing (inter alia) that
it was retaliatory and violated USERRA. The Board af-
firmed. See Santos, 2019 WL 2176543. Pursuant to 5
U.S.C. § 43, the Board considered whether NASA proved
by substantial evidence that: (1) Santos’s performance
failed to meet the PIP-established performance standards
in one or more critical elements of his position; (2) NASA
established performance standards and critical elements
and communicated them to Santos at the beginning of the
PIP; (3) NASA warned Santos of the inadequacies of his
performance during the PIP and gave him adequate oppor-
tunity to improve; and (4) after an adequate improvement
period, Santos’s performance remained unacceptable in at
least one critical element. Id. at *3. After considering the
evidence related to Santos’s performance during the PIP,
the Board concluded that NASA had “established by sub-
stantial evidence each of the elements necessary to have its
decision to remove [Santos] using chapter 43 procedures
sustained by the Board.” Id. at *11. Notably, the Board
did not address Santos’s argument that he should not have
been put on a PIP in the first place; the Board justified this
decision by citing Wright v. Department of Labor, No.
CH-0432-98-0134-I-1, 1999 WL 316948, at ¶ 12 (M.S.P.B.
Case: 19-2345 Document: 44 Page: 6 Filed: 03/11/2021
6 SANTOS v. NASA
May 12, 1999), in which the Board held that “an agency is
not required to prove that an appellant was performing un-
acceptably prior to the PIP.” Santos, 2019 WL 2176543,
at *5.
The Board also rejected Santos’s USERRA claim, hold-
ing that Santos failed to show that his uniformed service
was a substantial or motivating factor in his removal. Id.at *11–12. In reaching this conclusion, the Board con-
cluded that there was no evidence supporting Santos’s
claim because Balles “thanked him for his service,” was
“very patriotic,” and did not express to others that Santos
took too much military leave. Id. at *12.
Santos appealed the Board’s decision. We have juris-
diction pursuant to 28 U.S.C. § 1295(a)(9).
II. DISCUSSION
This court holds unlawful and sets aside any agency
action, findings, or conclusions found to be “(1) arbitrary,
capricious, an abuse of discretion, or otherwise not in ac-
cordance with law; (2) obtained without procedures re-
quired by law, rule, or regulation having been followed; or
(3) unsupported by substantial evidence.” 5 U.S.C.
§ 7703(c). The Board abuses its discretion when “its deci-
sion (1) is clearly unreasonable, arbitrary, or fanciful; (2) is
based on an erroneous conclusion of law; (3) rests on clearly
erroneous fact findings; or (4) follows from a record that
contains no evidence on which the [Board] could rationally
base its decision.” Mayers v. Merit Sys. Prot. Bd., 693 F.
App’x 902, 903 (Fed. Cir. 2017) (citing Sterling Fed. Sys.,
Inc. v. Goldin, 16 F.3d 1177, 1182 (Fed. Cir. 1994)). We
review the Board’s underlying factual determinations for
substantial evidence. McMillan v. Dep’t of Justice,
812 F.3d 1364, 1371 (Fed. Cir. 2016).
Santos argues that the Board’s determination was un-
lawful because (1) the AJ failed to consider the events pre-
ceding his PIP when assessing the propriety of his removal;
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SANTOS v. NASA 7
(2) failed to engage in the correct legal inquiry when as-
sessing his USERRA claim; and (3) predicated its conclu-
sion that his military service was not a primary motivating
factor in his removal on inadequate facts. We agree with
Santos on each point.
A.
The statute governing post-PIP removals, 5 U.S.C.
§ 4302, provides that employees “who continue to have un-
acceptable performance” may only be removed “after an op-
portunity to demonstrate acceptable performance.”
5 U.S.C. § 4302(c)(6). The Board has held that this provi-
sion does not require an agency to prove that an employee
was performing unacceptably prior to the PIP in order to
justify a post-PIP removal. See Wilson v. Dep’t of Navy,
24 M.S.P.R. 583, 586 (1984) (finding “no statutory or regu-
latory basis” to require an agency to establish appellant’s
unsatisfactory performance prior to the PIP 1). The Board
has consistently applied this interpretation to PIP remov-
als. See, e.g., Brown v. Veterans Admin., 44 M.S.P.R. 635,
640 (1990) (“[I]f the employee’s performance is unaccepta-
ble during the PIP, the agency may generally base an ac-
tion on this deficiency and need not also show that the
employee’s performance was unacceptable prior to the PIP,
as the Board held in Wilson . . . .”).
We have not directly addressed the question of
whether, when an agency predicates removal on an em-
ployee’s failure to satisfy obligations imposed by a PIP and
that removal is challenged, the agency must justify impo-
sition of a PIP in the first instance under 5 U.S.C. § 4302,
1 The Wilson Board interpreted 5 U.S.C.
§ 4302(b)(6), a prior version of 5 U.S.C. § 4302(c)(6). Be-
cause the amended version predates the adverse employ-
ment action at issue here, this opinion refers to the more
recent codification.
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8 SANTOS v. NASA
though we have discussed the general relevance of pre-PIP
performance to a PIP removal. See Harris v. Sec. & Exch.
Comm’n, 972 F.3d 1307, 1316–17 (Fed. Cir. 2020). Today
we confirm that the statute’s plain language demonstrates
that an agency must justify institution of a PIP when an
employee challenges a PIP-based removal.
Section 4302 requires agencies to develop a perfor-
mance appraisal system that, inter alia, “provide[s] for pe-
riodic appraisals of job performance of employees.”
5 U.S.C. § 4302(a)(1). Section 4302(c) contains six subsec-
tions that detail what must comprise an agency’s perfor-
mance appraisal system. Subsections (c)(5) and (c)(6)
advise how an agency’s performance appraisal system
should handle “unacceptable performance.” An agency’s
performance appraisal system should provide for “assisting
employees in improving unacceptable performance,”
5 U.S.C. § 4302(c)(5), as well as “reassigning, reducing in
grade, or removing employees who continue to have unac-
ceptable performance but only after an opportunity to
demonstrate acceptable performance,” 5 U.S.C.
§ 4302(c)(6) (emphasis added). Agencies usually provide
employees “an opportunity to demonstrate acceptable per-
formance” by placing them on a PIP. See Harris, 972 F.3d
at 1311.
Thus, Section 4302(c)(6) makes clear that an agency is
only allowed to “reassign[], reduc[e] in grade, or remov[e]
employees who continue to have unacceptable perfor-
mance” during a PIP. 5 U.S.C. § 4302(c)(6) (emphasis
added). To “continue to have unacceptable performance”
during the PIP, as the statutory text requires, an employee
must have displayed unacceptable performance prior to the
PIP. Under the plain meaning of the statute, then, an
agency must defend a challenged removal by establishing
that the employee had unacceptable performance before
the PIP and “continue[d] to” do so during the PIP.
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SANTOS v. NASA 9
The Office of Personnel Management (“OPM”), the
agency tasked with implementing the performance ap-
praisal system of Chapter 43, reads Section 4302 the same
way. OPM published a regulation entitled “Addressing
Unacceptable Performance,” which pertains to subsections
(c)(5) and (c)(6) of Section 4302. See 5 C.F.R. § 432.104.
OPM published a notice of final rulemaking on October 16,
2020, amending this regulation to provide:
At any time during the performance appraisal cycle
that an employee’s performance is determined to be
unacceptable in one or more critical elements, the
agency shall notify the employee of the critical ele-
ment(s) for which performance is unacceptable and
inform the employee of the performance require-
ment(s) or standard(s) that must be attained in or-
der to demonstrate acceptable performance in his
or her position.
Id. Notably, OPM stated in its notice of final rulemaking
that “[t]he amended rule does not relieve agencies of the
responsibility to demonstrate that an employee was per-
forming unacceptably – which per statute covers the period
both prior to and during a formal opportunity period – be-
fore initiating an adverse action under chapter 43.” Proba-
tion on Initial Appointment to a Competitive Position,
Performance-Based Reduction in Grade and Removal Ac-
tions and Adverse Actions, 85 Fed. Reg. 65940, 65957
(Oct. 16, 2020) (emphasis added). OPM’s statement ac-
cords with our understanding that Section 4302(c)(6) re-
quires agencies to justify a challenged post-PIP-based
removal by establishing the propriety of the PIP in the first
instance.
Our holdings in Harris and Lovshin v. Department of
Navy, 767 F.2d 826 (Fed. Cir. 1985) are not inconsistent
with this reading of Section 4302. Lovshin delineated four
requirements agencies must satisfy before removing an un-
derperforming employee under Section 4303. Agencies
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10 SANTOS v. NASA
must: (a) establish an approved performance appraisal sys-
tem; (b) communicate the performance standards and crit-
ical elements of an employee’s position to the employee;
(c) warn the employee of inadequacies in “critical ele-
ments”; and (d) offer an underperforming employee coun-
seling and an opportunity for improvement. Lovshin, 767
F.2d at 834. There, we emphasized that these require-
ments are consistent with fundamental fairness to employ-
ees. Harris clarified the third Lovshin element, holding
that “the PIP notice itself often serves as the warning” of a
performance problem. Harris, 972 F.3d at 1316.
But, Harris also confirmed that pre-PIP performance
by the terminated employee and the agency’s pre-PIP
treatment of the employee may be relevant to the removal
inquiry. See Harris, 972 F.3d at 1316–1317. While we did
not find the pre-PIP evidence in Harris sufficient to over-
ride the agency’s removal decision, we expressly discussed
the AJ’s consideration of it, concluding that the AJ had ad-
equately done so in that case. Id. at 1320–21.
Confirming an agency’s obligation to justify initiation
of a PIP where the PIP leads to removal is particularly ap-
propriate, moreover, in situations resembling Santos’s,
where an employee alleges that both the PIP and the re-
moval based on the PIP were in retaliation for protected
conduct. Otherwise, an agency could establish a PIP in di-
rect retaliation for protected conduct and set up unreason-
able expectations in the PIP in the hopes of predicating
removal on them without ever being held accountable for
the original retaliatory conduct. Indeed, these are the cir-
cumstances in which the issue of pre-PIP performance
would be most relevant.
NASA agrees that, pursuant to § 4302(c)(6), “the em-
ployee in question must have had unacceptable perfor-
mance prior to being placed on a PIP.” It, thus, appears to
agree with Santos that the Board’s longstanding practice
of ignoring pre-PIP circumstances is erroneous. NASA
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SANTOS v. NASA 11
maintains, however, that Section 4303 governs the PIP
process and is silent on whether agencies bear the burden
of establishing the unacceptability of pre-PIP performance
where a post-PIP removal is challenged. Section 4303’s si-
lence, according to NASA, signals that the burden rests on
the “employee to demonstrate that the agency’s action was
improper.” NASA also asserts that, since “an agency is not
required [under Harris] to even notify an employee of un-
acceptable performance prior to the issuance of the PIP,”
“there [must be] no requirement that an agency affirma-
tively establish unacceptable performance prior to the is-
suance of the PIP.”
NASA’s arguments miss the mark. In our July 1, 2020
Order, we directed the parties to brief “whether, pursuant
to 5 U.S.C. § 4302(c)(6), an agency must establish that an
employee had ‘unacceptable performance’ prior to the im-
plementation of a [PIP].” Order Requesting Supplemental
Briefing, No. 19-2345 (July 1, 2020), ECF 31, at 2 (empha-
sis in original). Instead of discussing Section 4302, NASA
analyzes Section 4303, erroneously reasoning that
“[w]hether an agency’s action in issuing a PIP was proper
is governed by Section 4303.” But we have made clear that
Section 4302 governs the statutory PIP process. See, e.g.,
Harris, 972 F.3d at 1311; see also Moltzen v. Dep’t of Labor,
504 F. App’x 912, 914 (Fed. Cir. 2013). NASA’s argument
concerning Section 4303’s silence on an agency’s burden to
prove that an employee’s pre-PIP performance was unac-
ceptable ignores the most relevant statutory language—
that in Section 4302(c)(6).
NASA’s reliance on Harris is also misplaced. To be
sure, an employee may not seek review of the decision to
implement a PIP at the time it is instituted, either at the
Board or otherwise. And, as Harris makes clear, the insti-
tution of the PIP can itself satisfy the notice component of
Section 4303, but, when an agency chooses to remove an
employee at the end of the PIP period, pre-PIP conduct may
be relevant to the removal decision, as Harris also
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12 SANTOS v. NASA
confirms. Allowing a PIP to serve as the pre-removal notice
required by Section 4303 is not the same as allowing the
mere fact of a PIP to create a presumption that the pre-PIP
conduct was actually unacceptable. Thus, we hold that,
once an agency chooses to impose a post-PIP termination,
it must prove by substantial evidence that the employee’s
unacceptable performance “continued”—i.e., it was unac-
ceptable before the PIP and remained so during the PIP.
Importantly, we are not prescribing any particular ev-
identiary showing with respect to the employee’s pre-PIP
performance. Performance failures can be documented or
established in any number of ways. The burden would then
shift to the employee to prove that the motive for imposing
the PIP and, ultimately termination, was discriminatory
under well-established guidelines for making such a show-
ing.
Because the Board’s decision to not consider Santos’s
allegation that he should never have been placed on a PIP
was based on a misinterpretation of Section 4302(c)(6), we
find that the Board abused its discretion. We therefore va-
cate and remand this issue for the Board to decide whether
NASA established that Santos performed unacceptably
prior to being placed on the PIP, thus satisfying the “con-
tinue[d] to have unacceptable performance” language un-
der 5 U.S.C. § 4302(c)(6).
B.
Santos also argues that, even if some aspects of his per-
formance were unacceptable, his military service was a pri-
mary motivating factor in his removal. USERRA
“prohibit[s] discrimination against persons because of their
service in the uniformed services.” 38 U.S.C. § 4301(a)(3).
The act prohibits an agency from denying any person who
has a military obligation “any benefit of employment by an
employer on the basis of . . . performance of service.”
38 U.S.C. § 4311(a). As we articulated in Sheehan v. De-
partment of Navy, 240 F.3d 1009 (Fed. Cir. 2001), “an
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SANTOS v. NASA 13
employee making a USERRA claim of discrimination
. . . bear[s] the initial burden of showing by a preponder-
ance of the evidence that the employee’s military service
was ‘a substantial or motivating factor’ in the adverse em-
ployment action.” Id. at 1013. It need not be the only mo-
tivating factor, but it must be a substantial one. Sheehan
establishes four non-exclusive factors that can help the
Board determine whether a discriminatory motivation may
reasonably be inferred in a USERRA challenge:
[1] proximity in time between the employee’s mili-
tary activity and the adverse employment action,
[2] inconsistencies between the proffered reason
and other actions of the employer, [3] an employer’s
expressed hostility towards members protected by
the statute together with knowledge of the em-
ployee’s military activity, and [4] disparate treat-
ment of certain employees compared to other
employees with similar work records or offenses.
Id. at 1014. Once the employee has made the requisite
showing, “the employer then has the opportunity to come
forward with evidence to show, by a preponderance of the
evidence, that the employer would have taken the adverse
action anyway, for a valid reason.” Id. at 1013. “[A]n em-
ployer [cannot] treat employees on military duty like those
on nonmilitary leave of absence.” Erickson v. U.S. Postal
Serv., 571 F.3d 1364, 1369 (Fed. Cir. 2009) (internal quota-
tion marks omitted).
Because we vacate and remand the Board’s conclusions
regarding Santos’s performance, we must vacate and re-
mand the Board’s assessment of Santos’s USERRA claim
as well. The two inquiries are related since the validity of
the reason proffered for a discharge is a factor in the
Sheehan analysis. The events leading to Santos’s PIP may
be directly relevant to Santos’s ability to satisfy his initial
burden under USERRA. We therefore vacate and remand
this issue to the Board for additional fact findings
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14 SANTOS v. NASA
concerning Santos’s pre-PIP performance and Ms. Balles’s
motivations for instituting the PIP.
We make clear, moreover, that, on remand, the Board
must actually apply the Sheehan factors, which it has not
yet done. Santos argued to the Board that “his removal
was discriminatory because . . . management held the time
he was absent for military service against him.” Santos,
2019 WL 2176543, at *12. And he detailed the extent to
which reprimands or complaints about his performance
dovetailed with his requests to fulfill his military obliga-
tions. The Board simply concluded that Santos failed to
show his military service was a substantial or motivating
factor in his removal because Balles “thanked [Santos] for
his service” and was “very patriotic.” Id. Those minimal
factual findings do not suffice under Sheehan. On remand,
the Board must apply the Sheehan factors to all the facts
concerning Santos’s performance and Balles’s supervision
of Santos, both pre- and post-PIP. 2
III. CONCLUSION
For the reasons discussed above, we conclude that the
Board’s decisions were not in accordance with the law. We
therefore vacate and remand for further proceedings con-
sistent with this decision.
VACATED AND REMANDED
COSTS
Costs to petitioner.
2 The Board must consider, inter alia, Santos’s alle-
gations that the timing of his letters of reprimand, the PIP
itself, and the nature of the PIP requirements are relevant
to his USERRA claim.
Case: 19-2345 Document: 44 Page: 15 Filed: 03/11/2021
United States Court of Appeals
for the Federal Circuit
______________________
FERNANDO SANTOS,
Petitioner
v.
NATIONAL AERONAUTICS AND SPACE
ADMINISTRATION,
Respondent
______________________
2019-2345
______________________
Petition for review of the Merit Systems Protection
Board in No. AT-0432-19-0074-I-1.
______________________
HUGHES, Circuit Judge, concurring in the judgment.
The Board failed to properly consider Mr. Santos’s
claims pursuant to USERRA, including his claim that the
agency’s decision to place him on a PIP in the first place
was due to unlawful retaliation or discrimination prohib-
ited by USERRA. I agree that the case should be re-
manded. Accordingly, I concur in the judgment.