                            UNITED STATES OF AMERICA
                         MERIT SYSTEMS PROTECTION BOARD
                                         2015 MSPB 46

                               Docket No. DC-0432-15-0032-I-1

                                        Sandra Epley,
                                          Appellant,
                                               v.
                                Inter-American Foundation,
                                            Agency.
                                          July 24, 2015

              Darrin W. Gibbons, Esquire, Richmond, Virginia, for the appellant.

              Josh C. Hildreth, Washington, D.C., for the agency.

                                           BEFORE

                               Susan Tsui Grundmann, Chairman
                                  Mark A. Robbins, Member



                                   OPINION AND ORDER

¶1            The appellant has filed a petition for review of the initial decision, which
     dismissed her removal appeal for lack of Board jurisdiction.        For the reasons
     discussed below, we GRANT the appellant’s petition for review, REVERSE the
     administrative judge’s finding of no jurisdiction, and REMAND the case to the
     regional office for further adjudication in accordance with this Opinion and
     Order.
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                                       BACKGROUND
¶2            The appellant held the position of Program Administrator for the
     Inter-American Foundation (Foundation). 1        Initial Appeal File (IAF), Tab 11
     at 23.    The Foundation proposed her removal for failing to meet performance
     standards. Id. at 5-13. After the appellant responded, the Foundation issued its
     decision, removing her from service effective September 9, 2014. Id. at 14-23.
¶3            The appellant filed a Board appeal challenging her removal. IAF, Tab 1.
     The Foundation responded by disputing the Board’s jurisdiction over the matter.
     IAF, Tab 8 at 4-5. Subsequently, the administrative judge issued orders directing
     the appellant to meet her jurisdictional burden and directing the Foundation to
     provide additional information. IAF, Tabs 10, 12. After both parties responded,
     IAF, Tabs 11, 13-15, the administrative judge dismissed the appeal for lack of
     jurisdiction, IAF, Tab 17, Initial Decision (ID).
¶4            The administrative judge concluded that the Foundation is a Government
     corporation, statutorily excluded from chapter 43 of Title 5; the Foundation
     removed the appellant pursuant to the powers granted to it under 22 U.S.C.
     § 290f(e); and the appellant failed to make a nonfrivolous allegation that she had
     Board appeal rights under chapter 75 of Title 5. ID at 6-14. The appellant has
     filed a petition for review.     Petition for Review (PFR) File, Tabs 1-2.         The
     Foundation has filed a response. PFR File, Tab 6.

                                          ANALYSIS
     The Foundation is a Government corporation, excluded from chapter 43 of
     Title 5.
¶5            The appellant asserted below that the Board has jurisdiction over her
     performance-based removal pursuant to chapter 43 of Title 5. IAF, Tab 9 at 4-5.


     1
       Because one of the issues below was whether the Inter-American Foundation qualifies
     as an “agency” as defined in chapter 43 of Title 5, we will refer to it as the
     “Foundation” rather than the “agency.” Initial Appeal File, Tab 9 at 4-5, Tab 13 at 4-5.
                                                                                     3

     She argued that the Foundation was not a Government corporation exempt from
     chapter 43.     Id.     Among other things, she noted that the Standard Form 50
     documenting her removal referenced “REG 432.101” as the legal authority for her
     removal.     See IAF, Tab 13 at 18, Tab 14; see generally 5 C.F.R. § 432.101
     (pertaining to performance-based actions taken pursuant to chapter 43 of Title 5).
     The administrative judge found that chapter 43 is not applicable to the
     Foundation, ID at 6-9, and we agree.
¶6            Under 5 U.S.C. § 4303, an agency may remove an employee for
     unacceptable performance. However, for the purposes of the subchapter, the term
     “agency” is defined in 5 U.S.C. § 4301(1). Among other things, that definition
     includes a provision specifying that an “agency” does not include a Government
     corporation. 5 U.S.C. § 4301(1)(B)(i). “Government corporation” is defined as
     “a corporation owned or controlled by the Government of the United
     States.” 5 U.S.C. § 103. As the appellant now concedes, PFR File, Tab 2 at 4,
     the Foundation meets that definition, see, e.g., 22 U.S.C. § 290f(a), (f), (n).
     Therefore, we find that the Foundation is not an “agency” with the authority to
     remove employees for unacceptable performance using chapter 43 of Title 5.
     The administrative judge erred in finding that the appellant’s removal does not
     fall within the Board’s jurisdiction under chapter 75 of Title 5.
¶7            The appellant alleges that the Board has jurisdiction over her removal
     pursuant to chapter 75. PFR File, Tab 1 at 4-5, Tab 2 at 4-5. We agree.
¶8         Although Government corporations such as the Foundation are statutorily
     excluded from chapter 43, chapter 75 contains no such exclusion. See 5 U.S.C.
     §§ 7501-7513.         In addition, it is well-settled that an agency may impose an
     adverse action for unacceptable performance under chapter 75. See Fairall v.
     Veterans Administration, 33 M.S.P.R. 33, 40, aff’d, 844 F.2d 775 (Fed. Cir.
     1987).     In fact, the Board previously has adjudicated the performance-based
     adverse action of a Foundation employee under chapter 75. See Patermaster v.
     Inter-American Foundation, 10 M.S.P.R. 364 (1982).         Therefore, the question
                                                                                        4

      that remains is whether the Foundation may effectuate a performance-based
      removal outside the bounds of Title 5.
¶9          The Foundation argues that it removed the appellant for unacceptable
      performance pursuant to the powers delegated to it in 22 U.S.C. § 290f, the
      statute creating the Foundation. E.g., PFR File, Tab 6 at 5-11. Section “e” of the
      statute lists the Foundation’s powers and functions. 5 U.S.C. § 290f(e). Included
      is the authority to employ no more than 100 persons. 22 U.S.C. § 290f(e)(5).
      Also included is “such other powers as may be necessary and incident to carrying
      out its powers and duties under this section.”     22 U.S.C. § 290f(e)(11).     The
      Foundation’s Chief Executive Officer, in a sworn declaration, cites that broad
      authority as its basis for removing the appellant. See, e.g., IAF, Tab 13 at 22-24.
¶10         When interpreting a statute, we must first determine, by using “traditional
      tools of statutory construction,” if “Congress had an intention on the precise
      question at issue, [and if so,] that intention is the law and must be given effect.”
      Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837,
      843 n.9 (1984); see Delverde, SrL v. United States, 202 F.3d 1360, 1363 (Fed.
      Cir. 2000) (explaining that the “traditional tools of statutory construction”
      include an examination of the statute’s text, structure, and legislative history, as
      well as an application of the relevant canons of interpretation). If the statute is
      silent or ambiguous concerning the specific issue, the inquiry proceeds to the
      question of whether an agency’s interpretation is based on a permissible
      construction of the statute. Chevron, 467 U.S. at 842-43.
¶11         Here, we find nothing pertaining to 22 U.S.C. § 290f to indicate that
      Congress had any specific intention regarding the issue before us. The text of the
      statute confirms that Congress intended to grant the Foundation the authority to
      employ up to 100 people, and exercise necessary and incidental powers in doing
      so. 22 U.S.C. § 290f(e)(5), (11). However, we are aware of nothing in the statute
      or its history to support a conclusion that Congress intended the “necessary and
                                                                                      5

      incident powers” to include the authority to effectuate a performance-based
      removal outside the scope of Title 5.
¶12         By comparison, it is well-established that Congress enacted the Civil
      Service Reform Act (CSRA) to replace the prior “patchwork system” of laws that
      had governed Federal employment with “an integrated scheme of administrative
      and judicial review, designed to balance the legitimate interests of the various
      categories of Federal employees with the needs of sound and efficient
      administration.” United States v. Fausto, 484 U.S. 439, 445 (1988), superseded
      by statute on other grounds as stated in Kaplan v. Conyers, 733 F.3d 1148 (Fed.
      Cir. 2013), cert. denied sub nom. Northover v. Archuleta, 134 S. Ct. 1759 (2014).
      The Supreme Court has found that, given the “comprehensive nature” of the
      CSRA, the exclusion of certain employees from the protections of chapter 75 was
      deliberate. Id. at 448-49; see generally, e.g., 5 U.S.C. § 7511(b)(7) (statutorily
      excluding Central Intelligence Agency and Government Accountability Office
      employees from the chapter 75 adverse action Board appeal process).
¶13         Despite there being no deliberate exclusion of its employees in the CSRA
      itself, the Foundation’s governing statute, or any other rule of law, the
      Foundation would have the Board defer to its interpretation of 22 U.S.C.
      § 290f(e)(5), (11) as permitting such exclusion.      PFR File, Tab 6 at 7-9.
      However, we are unable to do so. The text of 22 U.S.C. § 290f(e)(11) grants the
      Foundation broad power, but limits that power to that which is “necessary and
      incident.” As described above, the Foundation remains capable of effectuating a
      performance-based removal under chapter 75, despite being unable to do so under
      chapter 43. Accordingly, the power to effect a performance-based removal is not
      “necessary and incident to carrying out [the Foundation’s] powers and duties”
      under section 290f. 22 U.S.C. § 290f(e)(11).
¶14         As the Supreme Court has explained, “the CSRA makes [Board]
      jurisdiction over an appeal dependent only on the nature of the employee and the
      employment action at issue.” Elgin v. Department of the Treasury, 132 S. Ct.
                                                                                             6

      2126, 2137 (2012) (citations omitted).       Here, the appellant meets both of the
      alterative definitions of an “employee” under 5 U.S.C. § 7511(a)(1)(A).              See
      McCormick v. Department of the Air Force, 307 F.3d 1339, 1341-42 (Fed. Cir.
      2002) (holding that an individual is a covered employee if she meets either of the
      definitions under this section). When the appellant was removed, she was not
      serving a probationary or trial period, and she had completed 1 year of current
      continuous service under other than a temporary appointment limited to 1 year or
      less. See IAF, Tab 13 at 18, 19. In addition, a removal is an action covered by
      Title 5, chapter 75, subchapter II. 5 U.S.C. § 7512(1). Therefore, we conclude
      that the action falls within the Board’s jurisdiction. See 5 U.S.C. § 7513(d).

                                              ORDER
¶15         For the reasons discussed above, we REMAND this case to the regional
      office for further adjudication in accordance with this Opinion and Order. 2



      FOR THE BOARD:


      ______________________________
      William D. Spencer
      Clerk of the Board
      Washington, D.C.




      2
        In part, the appellant seems to request that the Board reverse her removal, rather than
      remand the matter for adjudication on the merits. See PFR File, Tab 2 at 5. That
      request is denied. Any claims of violations of due process or harmful procedural error
      are more appropriately raised before the administrative judge on remand.
