Taking the Stand appears periodically in Washington Lawyer as a forum for D.C. Bar members to address issues of importance to them and that would be of interest to others. The opinions expressed are the authors own.
Paying the Price of Disclosure
By Robert J. McCarthy
Federal law requires government employees to report fraud, waste, and abuse while promising to protect them from retaliation. Sadly, 30 years after whistleblower legislation was first adopted, it has neither curbed government malfeasance nor kept workers who act on the false promise of protection safe from reprisal. As a result, Americans often learn too late, if at all, about tragic government abuses such as false rationalizations for illegal wars. Meanwhile, many conscientious government employees are shocked to find their careers destroyed and lives thrown into crisis.
A whistleblower’s descent into the nightmare of retaliation begins with a disclosure of agency wrongdoing. Often denigrated as “leaks,” such disclosures are in fact mandated by a variety of laws and regulations. An executive order and a federal regulation both proclaim that “[e]mployees shall disclose waste, fraud, abuse, and corruption to appropriate authorities.” Federal employees also have a statutory obligation to report criminal wrongdoing by other employees, and there are a variety of other statutes and regulations that mandate particular types of reporting and reporting by certain categories of employees.
Recognizing that an employee who blows the whistle on corrupt officials risks retaliation, Congress included whistleblower protections in the Civil Service Reform Act of 1978 (CSRA), making it illegal for a federal agency to fire, demote, or take other adverse personnel actions against an employee in reprisal for disclosing illegality, waste, or corruption. The CSRA also created the U.S. Office of Special Counsel (OSC) and the U.S. Merit Systems Protection Board (MSPB). Congress charged the OSC with both investigating disclosures and defending whistleblowers against retaliatory personnel actions before the MSPB.
A 1994 Senate report observed that a decade after the CSRA was passed, the “OSC had not brought a single corrective action case since 1979 to the [MSPB] on behalf of a whistleblower.” Congress attempted to remedy the situation with the passage of the Whistleblower Protection Act (WPA) in 1989, granting whistleblowers the right to pursue their own cases before the MSPB, although the OSC retained its obligations to assist whistleblowers and investigate disclosures. Further amendments in 1994 sought to clarify and strengthen the OSC’s responsibilities to protect whistleblowers.
The WPA contemplates that a disclosure will be made to the OSC, but it may also be made to a superior, an inspector general, Congress, or even to a news reporter. It is “protected,” however, only if made to someone other than the wrongdoer, even if that is the agency management. Additionally, if it is the regular duty of the employee to make the disclosure in question, and the disclosure is made through the usual channels employed in the performance of those duties, then the disclosure is not protected.
Excluded from the WPA’s coverage are employees in some confidential or policy–making positions. Although not mentioned in the WPA, government lawyers are covered by the Act. The WPA does not protect employees in the military, at the U.S. Postal Service, the Government Accountability Office (GAO), and the Federal Bureau of Investigation (FBI), although other statutes offer varying degrees of protection to whistleblowers at these agencies. In addition, the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) administers the whistleblower provisions of 21 laws covering U.S. workers. None of these laws are adjudicated by the MSPB, and the OSC has no role in their enforcement.
Also statutorily excluded from the protection of the WPA are employees at intelligence agencies. An alarming ruling by the U.S. Court of Appeals for the Federal Circuit, issued August 17, 2012, effectively expands the “national security” exemption to encompass any position designated as “sensitive” by any agency. Unless reversed on review or by Congress, the ruling in Berry v. Conyers allows an agency to designate the basis for the removal of an employee as “ineligibility to occupy a sensitive position,” thereby precluding MSPB and judicial review of the merits of the action, as well as of claims of retaliation, discrimination, and other constitutional and statutory violations.
Protection Promise Falls Short
A 2010 MSPB survey of more than 40,000 federal employees found that more than 10 percent of the workers had personally observed “illegal or wasteful activities” in their own agencies in just the prior 12 months. Yet a mere 1.1 percent of those who observed wrongdoing said they reported it to the OSC, 0.6 percent said they reported it to the GAO, 1.5 percent made disclosures to law enforcement, and 5.1 percent said they reported the misconduct to an agency inspector general.
The main reason for not reporting unlawful activity is the belief that “nothing would be done,” with fear of retaliation a close second. Indeed, the OSC has done little to instill faith in whistleblowers either that their disclosures will be investigated or that they will be protected against retaliation. What is far more appalling is that the MSPB has virtually guaranteed federal employers that they may retaliate against whistleblowers with impunity.
The OSC reported that it “processed and closed” a total of 1,006 whistleblower disclosures in fiscal year 2010. However, 94 percent of those disclosures were closed without the slightest attempt at investigation. The OSC referred 24 disclosures to agency heads for internal investigation (a procedure unlikely to comfort a whistleblower), and sent just two disclosures to agency inspectors general for further inquiry. The OSC “substantiated” whistleblowers’ disclosures in only 62 cases, and found the disclosures in just five cases “unsubstantiated.”
The WPA charges the OSC with the duty to receive allegations of prohibited personnel practices (PPPs), including reprisal against whistleblowers, and to investigate such allegations, as well as to conduct an investigation of possible PPPs on its own initiative absent any allegation. The OSC received 2,431 PPP complaints in fiscal year 2010, and carried over an additional 769 complaints from the previous year, yet the agency filed zero corrective action complaints with the MSPB in 2010. The OSC filed no corrective action complaint in 2008 and 2009, and only one each in 2006 and 2007.
The OSC may also seek disciplinary action against an agency official who has committed whistleblower retaliation or another PPP; however, the OSC has been loath to use this power as well. The OSC filed no disciplinary action complaint with the MSPB against the perpetrators of PPPs in 2009 and 2010, three complaints in 2008, and none in 2006 or 2007.
Although some must first “exhaust” remedies at the OSC, all whistleblowers ultimately may file appeals on their own behalf with the MSPB, which is governed by three bipartisan board members appointed by the president. The board, in turn, employs a large cadre of “administrative judges” who hold hearings in whistleblower and other personnel appeals and who issue “initial decisions.” An initial decision may be appealed to the board for a “final decision” or, alternatively, an appellant may allow the initial decision to become final for the MSPB. Either way, the federal circuit has exclusive jurisdiction over appeals from MSPB final decisions.
Most MSPB appeals are from adverse actions unrelated to whistleblowing, including performance-based or conduct-based firings, demotions, suspensions, and reductions in grade or pay. Discrimination allegations fall within the board’s jurisdiction only if made in connection with matters that are appealable to the board, otherwise they are the province of the U.S. Equal Employment Opportunity Commission.
Retaliation is raised as an affirmative defense in an MSPB appeal of an adverse action. The appellant must prove by “preponderant evidence” that he or she made a protected disclosure, and that the disclosure was a “contributing factor” in the agency’s decision to take the personnel action. If the appellant meets this burden of proof, the agency can still prevail if it proves by “clear and convincing evidence” that it would have taken the same personnel action absent the disclosure.
MSPB administrative judges issued 6,536 initial decisions in fiscal year 2010, of which a staggering 95 percent favored the agencies involved and denied the employees’ claims. The way the MSPB records its cases makes it difficult to identify all of those that involve whistleblowing, but an examination of those appeals that raised no issues other than retaliation reveals that over 98 percent of initial decisions in such cases were decided in favor of the agencies. On further appeal, the full board affirmed an estimated 97 percent of the initial whistleblower decisions and 85 percent of other personnel decisions.
The federal circuit court decided just 21 whistleblower appeals in fiscal year 2010, ordered zero corrective actions, and remanded three cases for further proceedings. The MSPB boasts that 98 percent of its final decisions were “left unchanged” by the circuit court, exceeding its more modest goal of 92 percent.
The Government Accountability Project (GAP), a leading whistleblower advocacy group, notes that the court “has a 3–219 track record against whistleblowers since Congress last reaffirmed the law in 1994.”
Eviscerating Employee Rights
For whistleblowers and other federal employees alike, this elaborate civil service appeals process looks like a giant rubber stamp for approving adverse personnel actions. Notwithstanding occasional victories by beleaguered litigants, including some especially notable appellants represented by lawyers at the nonprofit Public Employees for Environmental Responsibility (PEER), the wholesale rejection of whistleblower complaints and other personnel appeals cries out for both explanation and remedy. The simple explanation is that those in power have consciously designed the system to penalize the whistleblower. The remedy will necessitate mobilizing sufficient support for a truly meaningful change.
Initial adjudication by MSPB administrative judges is at the root of the situation, and continues to stymie all efforts at reform. Despite the deceptive similarity in titles, MSPB administrative judges are not administrative law judges (commonly referred to as ALJs), an entirely separate classification of independent, highly skilled, and carefully screened judicial officers defined by the Administrative Procedure Act (APA). The APA actually makes no reference to administrative judges, nor does the MSPB organic statute, which does refer to administrative law judges. MSPB administrative judges, it turns out, are a creation of the MSPB itself.
Although the APA generally mandates that an adjudicatory hearing on the record be held before an ALJ, cases involving “the selection or tenure of an employee” are exempt. The CSRA grants an employee or applicant for employment a hearing on the record, but permits the board to hear the appeal itself, or to assign it to an ALJ or to an “employee of the Board designated by the Board to hear such cases, except that in any case involving a removal from the service, the case shall be heard by the Board, an employee experienced in hearing appeals, or an administrative law judge.”
Seizing on the flexibility permitted by these statutes (while ignoring the precatory language regarding ALJs), the MSPB adopted regulations that define “judge” to include “[a]ny person authorized by the Board to hold a hearing or to decide a case without a hearing, including an attorney-examiner, an administrative judge, an administrative law judge, the Board, or any member of the Board.” While thus coining the disingenuous title “administrative judge,” the MSPB has largely dispensed with ALJs. The “judge” label is misleading for another reason, since the MSPB itself uses the term “attorney-examiner” for performance evaluations of its so-called administrative judges, who actually are the agency’s own lawyers.
Presumably the MSPB sought to save money when it decided to deprive federal employees of the opportunity to be heard by an ALJ, since the more qualified ALJs make higher salaries than do the board’s attorneys. Yet the board’s rules grant MSPB employees, including the board members themselves, the right to a hearing before an ALJ. The right to an ALJ hearing is also extended to officials accused of violating personnel laws, including retaliation against whistleblowers.
The MSPB’s 30–year–old regulations have effected a quiet evisceration of employee rights because the board’s lawyers are far less likely than ALJs to dispense justice fairly and with a modicum of due process. Indeed, a record of rulings over 30 years suggests that the MSPB and its cut-rate hearing officers have undermined the entire civil service merit system. MSPB regulations and board precedent accord these ersatz judges broad discretion to determine legal and factual issues, to control discovery, to admit or deny evidence and witnesses, and to rule on objections—in essence, to manipulate the record that is before the reviewing tribunal.
The board and, in turn, the federal circuit defer to factual findings if there is “substantial evidence” in the record to support them. More significantly, findings concerning the credibility of witnesses are deemed “virtually unreviewable.” Ironically, these highly deferential standards are taken directly from the APA standards of review as applied to hearings conducted by ALJs, and from appellate court rules regarding findings by U.S. district court judges. Such deference assumes competence, independence, and lofty judicial ethics, yet MSPB administrative judges are held to no standards remotely comparable to those that apply to ALJs, let alone Article III federal judges.
Slim Chances of Success
ALJs are far from perfect, and in fact they are frequently accused of pro–agency bias. U.S. Coast Guard ALJs, for example, were the subject of congressional hearings in 2007 regarding allegations of extreme bias in favor of the agency. A class action lawsuit filed in 2011 in New York alleges systematic bias by U.S. Social Security Administration ALJs against low–income, disabled individuals seeking disability benefits. The presumed motive for such suspected bias is that despite their statutory independence, ethical standards, and professional qualifications, ALJs are likely to identify with their employer, the government, and with the government attorneys and officials who most often appear before them.
Agencies also may attempt to pressure ALJs to issue favorable rulings. Indeed, some ALJs have claimed exactly this type of agency interference in their judicial independence in whistleblower appeals filed with the MSPB. Some ALJs may find it easier not to resist such pressures, and some may even seek to curry favor with parties for whom they might like to work or consult when they leave the bench. ALJs may also be influenced by latent biases such as political views, class, gender, and race that may result in subtle discrimination against many appellants. Lacking ALJs’ legal protections and judicial qualifications, MSPB lawyers and other non–ALJ hearing officers are far more likely to indulge such inclinations.
Under laws comparable to the WPA that mandate hearings before ALJs, appellants routinely prevail in far greater numbers than do those whose hearings are held by MSPB attorney-examiners. For example, GAO examined the success rate of whistleblowers in approximately 1,800 complaints filed in fiscal year 2007 under the array of statutes administered by OSHA. GAO found that appellants prevailed in up to a third of initial administrative appeals before ALJs. Aided by reasonably fair and full administrative records, those denied relief by ALJs still prevailed in fully half of further appeals taken to OSHA’s Administrative Review Board (ARB). (GAO did not examine reversal rates on appeals to the federal courts.)
Notwithstanding an overall record of awarding relief that far outstrips the MSPB, OSHA has been widely criticized as being hostile to whistleblowers. For example, a 2007 study looked at OSHA’s handling of whistleblower complaints under the Sarbanes–Oxley Act, which protects corporate employees from reprisal for disclosing securities fraud. On initial administrative appeal, OSHA ALJs reversed 6.5 percent of agency decisions denying complaints of retaliation. (Although ALJ decisions may be further appealed for discretionary review by the ARB, and then the circuit courts, the study did not include the third and fourth level of review.) Despite reporting a record more than three times as favorable to whistleblowers than that of the MSPB, the study’s author was highly critical of OSHA. Leading whistleblower advocacy groups, such as PEER, have called for OSHA to be stripped of responsibility for whistleblower protection.
Studies involving other types of administrative appeals suggest that appellants who have hearings before ALJs are much more likely to succeed at the initial and even subsequent levels of appeal than appellants whose journeys start before non–ALJ hearing officers. For example, a 2002 study of Social Security disability determinations found that more than half of agency decisions were reversed by ALJs. Unsuccessful claimants who pursued further appeal through the Social Security Appeals Council had significant success, and those who persisted through appeals to the district courts prevailed in an astounding 50 percent of the cases.
Federal immigration judges provide a striking example of the converse. Like MSPB judges, they lack the statutory protections and qualifications of ALJs. As a result, they are subject to agency political pressures and are unlikely to possess the judicial independence and character of ALJs. In 2007 the Chicago Sun–Times reported the dismissal of more than a dozen immigration judges by the executive branch for an alleged failure to deport aliens at a fast enough pace. Critics charge that immigration judges are hired on the basis of partisan politics rather than competence, and are beholden to the U.S. Department of Justice. In a welcome distinction from the relation between the federal circuit and the MSPB, several circuit courts have denounced such alleged bias.
Unimpaired by one–sided administrative records prepared by unqualified or prejudiced initial decision makers, appellants of all stripes typically enjoy rates of success in both administrative and judicial forums that far exceed those experienced by MSPB appellants. For example, a 2002 study cited data stating that, between 1992 and 1999, disability claims denials by the Department of Veterans’ Affairs had a reversal rate of 18 percent before the Board of Veterans Appeals (BVA), whereas the U.S. Court of Veterans Appeals reversed 50 percent of BVA decisions.
A series of studies of federal court employment discrimination cases over three decades found that employment discrimination plaintiffs, like all types of plaintiffs, won up to 40 percent of trial adjudications and 10 percent of appeals from defendants’ trial court victories. Some studies report that the U.S. Courts of Appeals affirmed 90 percent of all cases they decided from 1995 to 2005. Other studies suggest an overall affirmation rate for all types of federal civil appeals to be about 80 percent.
‘Baited Trap’ for Whistleblowers
The confounding record of affirmance for adverse personnel actions that has been racked up by MSPB judges, the MSPB board, and the federal circuit simply has no analogue. The sheer futility of the appeals process suggests the entire MSPB bureaucracy serves little valid purpose (and the OSC even less). As for the WPA, it is a cruel hoax on federal employees and the American public. Workers are encouraged to blow the whistle on government fraud and are promised protection from retaliation, but the promise is hollow. An elaborate appeals system obscures the reality in an expensive costume of faux due process. It would be less hypocritical and more humane simply to rescind the WPA in its entirety and to stop luring innocent federal workers into a baited trap.
Whistleblowers who appeal retaliatory personnel actions find that their employers engage in extensive character assassination in order to create the strongest possible case for sustaining adverse action. In turn, the MSPB decision frequently recites only the evidence that supports the judgment. Under such conditions, even a “successful” appellant will have his or her reputation ruined with baseless charges. How low will they go? A vengeful employer may seek not only to remove the whistleblower from federal service, but also to make it all but impossible for the whistleblower to find employment elsewhere. Criminal prosecutions of whistleblowers are increasingly common, especially for any disclosure that implicates national security, no matter how attenuated the link.
Some whistleblower advocates have applauded President Obama’s recent appointments to the MSPB board and his selection of a new special counsel. Perhaps these developments augur some greater degree of access to justice for federal workers. The new special counsel has staked out some encouraging policy positions, although aggressive advocacy is not yet apparent. The new MSPB board gives far less cause for optimism.
The MSPB currently is revising its rules and regulations for the first time since its creation in 1978; however, the proposed rules changes (posted on the agency’s Web site) consist mainly of technical housekeeping amendments to procedures, perhaps best characterized as rearranging the deck furniture on the Titanic. To the extent that the changes affect the substantive rights of appellants, the new rules would further restrict those rights. For example, in a pathetic proposal that seems designed both to diminish the role of the OSC and to limit the rights of appellants who first consult the OSC, such appellants would be restricted to raising the issue of retaliation, and they would be barred from raising other issues in their appeals, such as whether the agency proved its charges and the reasonableness of the penalty. They would likewise forfeit the right to raise other affirmative defenses, such as harmful procedural error and discrimination, all because they sought assistance from the OSC before filing an appeal.
New Wave of Reforms
Responding to demands from a broad bipartisan coalition led by groups such as GAP and PEER, Congress is once again considering legislation to strengthen protections against retaliation. The Whistleblower Protection Enhancement Act of 2012, which has passed the Senate, would, among other things, allow certain whistleblowers to request jury trials in federal district court, under a five–year pilot program; allow whistleblowers to appeal decisions on their cases to any federal court of appeals, also subject to a five–year sunset; provide whistleblowers with a forum to challenge retaliatory security clearance determinations; expand protections available to employees in national security agencies and at the Transportation Security Administration; add specific protections for scientific freedom; and once again strengthen the ability of the OSC to assist whistleblowers and prosecute wrongdoers.
Despite its proposed improvements in the law, the legislation unfortunately would leave the vast majority of whistleblowers at the mercy of MSPB administrative judges. Under the jury trial provision, for example, relatively few cases are expected to be heard outside the MSPB forum due to the cost and complexity of court proceedings.
The single reform that would have the greatest impact is missing from all of the current proposals. The MSPB’s use of administrative judges, attorney–examiners, or whatever else they might be called, should be eliminated in favor of initial adjudication by fully–qualified, independent ALJs. Such basic due process should be extended not just to whistleblowers but to all federal employees, at the very least in cases where they face loss of employment.
Robert J. McCarthy has served as field solicitor for the U.S. Department of the Interior and as general counsel, U.S. Section, for the International Boundary and Water Commission. The Oklahoma Bar Association honored him in 2008 with its Fern Holland Courageous Lawyer Award for helping to expose the Interior Department’s mismanagement of $3.5 billion in Indian trust resources. He is the author of “Blowing in the Wind: Answers for Federal Whistleblowers,” published in the spring 2012 issue of the William & Mary Policy Review, from which this article is adapted. Mr. McCarthy is a litigant represented by PEER in a whistleblower appeal to the federal circuit from a decision of the MSPB, which he has written about previously.