Background Investigation Finds “Issues” and Appeal Upholds Agency Action

After a background investigation turned up “issues” for a person tentatively offered a job with the IRS, the agency put the job offer on hold. It subsequently did not fill the job. A court upholds the agencies action.

A decision by an agency to cancel a vacancy announcement did not amount to an adverse suitability determination by the agency. It was within its rights to cancel according to the Merit Systems Protection Board as affirmed by the Federal Circuit Court of Appeals. (Iyer v. Department of the Treasury, C.A.F.C. No. 2008-3013 (nonprecedential), 2/11/08)

The facts are as reported in the court’s opinion.

The Internal Revenue Service announced a vacancy for an internal revenue agent in Wilmington, Delaware. Mr. Iyer applied, was interviewed and tentatively offered the position as well as scheduled for an orientation session, pending completion of a background check. However, the agency placed Iyer’s appointment on hold because of “issues” that came up during the background investigation. (The court’s opinion does not go into any details as to just what those “issues” were.) (Opinion, pp. 1-2)

The agency turned to the Office of Personnel Management for a suitability determination on Iyer. Finding that certain “inconsistencies” in his application were the result of typos, OPM decided that it had no basis to adjudicate Iyer’s suitability since any misconduct on his part in earlier employment had happened well before his application to the IRS. (p. 2)

Nevertheless, the agency decided to cancel the vacancy in Wilmington and Iyer was so notified. He appealed to the MSPB arguing that the agency had made a suitability determination against him and this gave rise to jurisdiction before the Board. The Administrative Judge held a hearing but then dismissed Iyer’s appeal for lack of jurisdiction. He accepted the agency’s explanation that it had simply decided not to fill the position. (p. 2)

The appeals court now declines to overturn the MSPB decision, pointing out that the AJ concluded that Iyer failed to prove that the agency decision was based on suitability. “The court will rarely disturb such evaluations…as…’virtually unreviewable’ at this level.” (p. 3; citations omitted) Since the AJ accepted the agency’s position that it was prepared to make an unsuitability determination but did not have to when the decision was made not to fill the position, then the court agrees with the MSPB that it did not have jurisdiction. (p. 3)

In short, the appeals court affirms the MSPB’s decision and Iyer is out of luck.

About the Author

Susan McGuire Smith spent most of her federal legal career with NASA, serving as Chief Counsel at Marshall Space Flight Center for 14 years. Her expertise is in government contracts, ethics, and personnel law.