                          UNITED STATES OF AMERICA
                       MERIT SYSTEMS PROTECTION BOARD


     RICHARD S. KRUGMAN,                             DOCKET NUMBER
                   Appellant,                        DA-1221-13-0288-B-1

                  v.

     DEPARTMENT OF VETERANS                          DATE: April 2, 2015
       AFFAIRS,
                 Agency.



             THIS FINAL ORDER IS NO NPRECEDENTIAL 1

           Anthony W. Walluk, Esquire, San Antonio, Texas, for the appellant.

           Thomas Herpin, Esquire, Houston, Texas, for the agency.


                                           BEFORE

                              Susan Tsui Grundmann, Chairman
                                 Mark A. Robbins, Member


                                       FINAL ORDER

¶1        The appellant has filed a petition for review of the remand initial decision,
     which denied his request for corrective action. Generally, we grant petitions such
     as this one only when: the initial decision contains erroneous findings of material
     fact; the initial decision is based on an erroneous interpretation of statute or


     1
        A nonprecedential order is one that the Board has determined does not add
     sign ificantly to the body of MSPB case law. Parties may cite nonprecedential orders,
     but such orders have no precedential value; the Board and administrative judges are not
     required to follow or distinguish them in any future decisions. In contrast, a
     precedential decision issued as an Opinion and Order has been identified by the Board
     as significantly contributing to the Board’s case law. See 5 C.F.R. § 1201.117(c).
                                                                                         2

     regulation or the erroneous application of the law to the facts of the case; the
     judge’s rulings during either the course of the appeal or the initial decision were
     not consistent with required procedures or involved an abuse of discretion, and
     the resulting error affected the outcome of the case; or new and material evidence
     or legal argument is available that, despite the petitioner’s due diligence, was not
     available when the record closed. See Title 5 of the Code of Federal Regulations,
     section 1201.115 (5 C.F.R. § 1201.115). After fully considering the filings in this
     appeal, and based on the following points and authorities, we conclude that the
     petitioner has not established any basis under section 1201.115 for granting the
     petition for review. Therefore, we DENY the petition for review and AFFIRM
     the remand initial decision, which, along with the initial decision in this matter, is
     now the Board’s final decision. 5 C.F.R. § 1201.113(b).
¶2        The Board remanded this appeal to the administrative judge for further
     adjudication of the appellant’s whistleblowing claim, specifically on the issue of
     whether the agency established by clear and convincing evidence that it would
     have removed the appellant from his position as the Associate Chief of Staff for
     Primary Care during his probationary period in the absence of his protected
     whistleblowing activity.    Krugman v. Department of Veterans Affairs, MSPB
     Docket No. DA-1221-13-0288-W-1 (W-1), Remand Order (June 12, 2014). Upon
     remand, the administrative judge opted not to hold another hearing and instead
     provided the parties with an opportunity to provide evidence and written
     argument on the issue.      Krugman v. Department of Veterans Affairs, MSPB
     Docket No. DA-1221-13-0288-B-1 (B-1), Remand Appeal File (RAF), Tab 8.
     Both parties responded to the remand order and replied to the other party’s
     response. RAF, Tabs 12-13, 15-16.
¶3        As instructed in the remand order, the administrative judge considered
     further documentation regarding the appellant’s disclosures to the Office of
     Special Counsel (OSC), including the agency’s supplemental report of its
     investigation into the appellant’s disclosures and OSC’s report to the President
                                                                                        3

     regarding the remedial measures that the agency took as a result of the
     investigation.   RAF, Tab 17, Remand Initial Decision (RID) at 3-4; Remand
     Order at 4-5; see W-1, Initial Appeal File (IAF) Tab 34 at 5-10; see also RAF,
     Tab 12 at 14-21, 29-34. He also considered the circumstances of the appellant’s
     hiring as well as the possible repercussions of the appellant’s disclosures on the
     agency officials involved in terminating the appellant’s employment during his
     probationary period.    RID at 4-7.    After considering the parties’ respective
     submissions, the administrative judge determined that the agency established by
     clear and convincing evidence that it would have removed the appellant during
     his probationary period in the absence of his protected whistleblowing activity
     and consequently denied the appellant’s request for corrective action. RID at 7.
¶4        In his petition for review, the appellant maintains that the agency hired him
     primarily for his expertise in establishing ambulatory surgical centers but that it
     took away those duties after he made protected disclosures regarding deficiencies
     in the agency’s new ambulatory surgical center, which was then under
     construction, and he specifically challenges the administrative judge’s credibility
     determinations on that issue. B-1, Remand Petition for Review File, Tab 1 at 2,
     4-9. He contends that the agency subsequently gave him a set of alternate duties
     for which he was not qualified and then terminated him for his inability to
     perform them. Id. at 2. He reiterates his argument that the potential sanctions
     resulting from the investigation into his whistleblowing disclosures “is a more
     realistic cause for reprisals than an ultimate sanction being taken.” Id. at 3. He
     further argues that if the Professional Services Board (PSB) that recommended
     his termination had access to his disclosures and the investigations and reports
     resulting from them, its decision might have been different.       Id. at 5-6.   The
     agency has not responded to the appellant’s petition for review.
¶5        In determining whether the agency has established that it would have taken
     this action in the absence of the appellant’s whistleblowing activity, the Board
     will consider the following factors: (1) the strength of the agency’s evidence in
                                                                                      4

     support of its action; (2) the existence and strength of any motive to retaliate on
     the part of the agency officials who were involved in the decision; and (3) any
     evidence that the agency takes similar actions against employees who are not
     whistleblowers but who are otherwise similarly situated.       See Carr v. Social
     Security Administration, 185 F.3d 1318, 1323 (Fed. Cir. 1999). Moreover, such
     evidence only clearly and convincingly supports such a conclusion in the
     aggregate, considering all the evidence in the record, even that which fairly
     detracts from that conclusion. Whitmore v. Department of Labor, 680 F.3d 1353,
     1368 (Fed. Cir. 2012). As the following discussion indicates, we are satisfied
     that the administrative judge has done so on remand and we agree with his
     conclusion that the agency met its burden of proof.
¶6        The circumstances under which the agency hired the appellant, and why it
     decided to terminate him, speak to the first Carr factor set forth above, the
     strength of the agency’s evidence in support of its action. After reviewing the
     parties’ submissions on remand and explicitly considering the potentially
     contradictory evidence noted in the Board’s remand order, the administrative
     judge again found the appellant’s assertion that the agency hired him primarily
     for his expertise in operating ambulatory surgical centers was not credible. RID
     at 5-7.      Although the record reflects that agency officials discussed the
     appellant’s obvious expertise in this area during the hiring process, and we do not
     doubt that the agency viewed such experience as an asset, the weight of the
     record does not indicate that it was the primary reason for the appellant’s hiring.
     The record instead reflects that the appellant accepted a position for which the
     PSB, the members of which the appellant concedes were unaware of his alleged
     whistleblowing activity, found his performance unsatisfactory. See IAF, Tab 4,
     Subtab 4e.
¶7        For example, one of the areas of the appellant’s performance which the PSB
     found unsatisfactory was his failure to review fee basis consults in a timely
     manner, which it found led to low morale among agency staff and patient
                                                                                       5

     dissatisfaction. See id. at 5. The appellant asserted before the PSB that, as an
     Anesthesiologist by training, he was unqualified to perform such consults, which
     involve approving referrals to outside medical providers, and the PSB noted his
     obvious discomfort with bearing the responsibility of reviewing them. 2 Id. at 10.
     Nevertheless, the PSB also observed that the Chief of Anesthesiology in its North
     Texas facility performed such a duty, as did similar professionals in other
     locations. Id. Thus, the agency reasonably expected the appellant to perform this
     duty and his failure to satisfactorily do so gave the agency ample reason to
     terminate the appellant during his probationary period. See IAF, Tab 4, Subtab
     4e.
¶8         Significantly, as the administrative judge observed, hearing testimony
     indicated that the appellant was ultimately the sole remaining candidate out of six
     who applied for the position at issue. RID at 5. The hospital’s Chief of Staff,
     whom the administrative judge found was a credible witness, testified that he
     understood the appellant’s limitations but hired him anyway because it was
     difficult to recruit physicians at his location and he believed that the appellant
     could still be of service to the agency. RID at 5-6. Thus, based on the testimony
     before him and his observation of the witnesses’ demeanor, the administrative
     judge found that the record did not support a conclusion that the appellant was
     hired for significantly different duties than those of his position of record as
     reviewed by the PSB, the Assistant Chief of Staff for Primary Care. RID at 7; see
     IAF, Tab 4, Subtab 4e.     The Board must give deference to an administrative
     judge’s credibility determinations when they are based, explicitly or implicitly,
     on the observation of the demeanor of witnesses testifying at a hearing; the Board
     may overturn such determinations only when it has “sufficiently sound” reasons
     for doing so. Haebe v. Department of Justice, 288 F.3d 1288, 1301 (Fed. Cir.
     2002) . We do not find, and the appellant fails to identify, such sufficiently sound
     2
      The PSB also noted the appellant’s contrary assertion that he did feel confident
     making such determinations. See IAF, Tab 4, Subtab 4e at 5.
                                                                                         6

      reasons in his petition for review.     Ultimately, the PSB determined that the
      appellant’s performance in his position of record was unsatisfactory and his
      assertions regarding the circumstances of his hiring do not indicate that it did so
      in error.    IAF, Tab 4, Subtab 4e. This is perhaps the strongest evidence that
      clearly indicates that the agency would have removed the appellant in the absence
      of his protected whistleblowing activity.
¶9          As for the second Carr factor, i.e., the existence and strength of any motive
      to retaliate on the part of the agency officials who were involved in the decision,
      the administrative judge found, and we agree, that the record does not support a
      significant motive to retaliate against the appellant on behalf of anyone involved
      in this matter. RID at 3-4. The record instead reflects that the agency thoroughly
      investigated the deficiencies identified by the appellant, and that although the
      agency took remedial measures as a result of the appellant’s disclosures, the
      administrative judge found no indication of gross negligence or mismanagement.
      RID at 4.     The administrative judge further found no evidence to support the
      appellant’s speculation that certain individuals were transferred to other facilities
      as a consequence of the appellant’s disclosures.      RID at 4-5.    Importantly, as
      instructed in the Board’s remand order, Remand Order at 5, the administrative
      judge considered whether the record revealed that the agency officials responsible
      for the appellant’s termination were motivated to retaliate against him even
      though they were not directly implicated by his disclosures, RID at 7.           The
      administrative judge found no evidence of any such motive, especially on behalf
      of the members of the PSB who recommended the appellant’s termination for
      unsatisfactory performance during his probationary period. Id.; see IAF, Tab 4,
      Subtab 4e.
¶10         On the third Carr factor, we note that, although the record does not address
      the extent to which the agency has taken similar actions against otherwise
      similarly-situated employees who are not whistleblowers, “the absence of any
      evidence relating to Carr factor three can effectively remove that factor from the
                                                                                  7

analysis.” Whitmore, 680 F.3d at 1374. Nevertheless, on the basis of his analysis
of the first two Carr factors, we agree with the administrative judge that the
agency established by clear and convincing evidence that it would have removed
the appellant in the absence of his protected disclosures. As a result, we affirm
the remand initial decision.

                 NOTICE TO THE APPELLANT REGARDING
                    YOUR FURTHER REVIEW RIGHTS
        You have the right to request review of this final decision by the United
States Court of Appeals for the Federal Circuit.
        The court must receive your request for review no later than 60 calendar
days after the date of this order. See 5 U.S.C. § 7703(b)(1)(A) (as rev. eff. Dec.
27, 2012). If you choose to file, be very careful to file on time. The court has
held that normally it does not have the authority to waive this statutory deadline
and that filings that do not comply with the deadline must be dismissed. See
Pinat v. Office of Personnel Management, 931 F.2d 1544 (Fed. Cir. 1991).
        If you want to request review of the Board’s decision concerning your
claims    of   prohibited   personnel   practices   under 5   U.S.C.   § 2302(b)(8),
(b)(9)(A)(i), (b)(9)(B), (b)(9)(C), or (b)(9)(D), but you do not want to challenge
the Board’s disposition of any other claims of prohibited personnel practices, you
may request review of this final decision by the United States Court of Appeals
for the Federal Circuit or any court of appeals of competent jurisdiction. The
court of appeals must receive your petition for review within 60 days after the
date of this order. See 5 U.S.C. § 7703(b)(1)(B) (as rev. eff. Dec. 27, 2012). If
you choose to file, be very careful to file on time. You may choose to request
review of the Board’s decision in the United States Court of Appeals for the
Federal Circuit or any other court of appeals of competent jurisdiction, but not
both.    Once you choose to seek review in one court of appeals, you may be
precluded from seeking review in any other court.
                                                                                  8

     If you need further information about your right to appeal this decision to
court, you should refer to the federal law that gives you this right. It is found in
Title 5 of the United States Code, section 7703 (5 U.S.C. § 7703) (as rev. eff.
Dec. 27, 2012). You may read this law as well as other sections of the United
States   Code,    at   our   website,   http://www.mspb.gov/appeals/uscode.htm.
Additional information about the United States Court of Appeals for the Federal
Circuit is available at the court's website, www.cafc.uscourts.gov. Of particular
relevance is the court's "Guide for Pro Se Petitioners and Appellants," which is
contained within the court's Rules of Practice, and Forms 5, 6, and 11.
Additional information about other courts of appeals can be found at their
respective       websites,     which       can         be    accessed       through
http://www.uscourts.gov/Court_Locator/CourtWebsites.aspx.
     If you are interested in securing pro bono representation for an appeal to the
United States Court of Appeals for the Federal Circuit, you may visit our website
at http://www.mspb.gov/probono for a list of attorneys who have expressed
interest in providing pro bono representation for Merit Systems Protection Board
appellants before the Federal Circuit.      The Merit Systems Protection Board
neither endorses the services provided by any attorney nor warrants that any
attorney will accept representation in a given case.




FOR THE BOARD:                            ______________________________
                                          William D. Spencer
                                          Clerk of the Board
Washington, D.C.
