Employee Gets Another Appeal Despite “Last Chance” Agreement

A federal employee who was found to be “rude and obnoxious” ended up being fired as the incident occurred after he had already signed a “last chance” agreement with the agency. The employee waived his appeal rights with the agreement but a federal court sends the case back to the MSPB anyway.

Federal agencies and employees brought up on removal charges often sign "last chance" agreements. Typically under such an agreement, the agency holds up on the removal and gives the employee one last chance to clean up his act—one more violation within a set period of time will result in reinstatement of the removal action and immediate dismissal. In return for this one last chance, the employee waives appeal rights. When an agency fires an employee for failing to live up to a last chance, it’s pretty difficult for an employee to overcome the appeal waiver. Time and time again, the Merit Systems Protection Board has routinely dismissed such an appeal because it lacks jurisdiction due to the waiver of appeal rights.

Such was the case in Lizzio v. Department of the Army, C.A.F.C. No. 2007-3224, 7/16/08. However, the appeals court has bounced this removal case back to the MSPB and ordered the Board to try again. The facts are taken from the court’s decision.

Lizzio was a special agent with the Department of Army’s Major Procurement Fraud Unit at its Criminal Investigation Command (CID). A few years ago, the agency issued a final decision removing Lizzio for insubordination and conduct unbecoming a federal employee. At this point, the agency and Lizzio signed a last chance agreement. The agency would hold its removal action in abeyance, and Lizzio would have one year in which he would have to avoid any "misconduct." If he did engage in "misconduct," then the agency could "immediately execute its original decision to remove him…" (pp. 1-3) Lizzio waived his appeal rights in the event he breached his obligations and the agency removed him. (p. 3)

Before the year was up, Lizzio "engaged in a confrontation with GE security officers" when he went with an agency team to interview witnesses at the contractor’s plant. (p. 4) The company reported the incident and the agency conducted an inquiry. The report concluded that Lizzio "failed to maintain the highest standards of personal conduct and professionalism to avoid embarrassment to the Army and the government." (p. 4)

The agency invoked the last chance agreement and immediately terminated Lizzio. He appealed to the MSPB, arguing that he had not breached the last chance agreement and therefore his appeal rights waiver was not enforceable. (p. 4)

After a hearing, the Administrative Judge, even though branding Lizzio’s behavior as "rude and obnoxious," sided with Lizzio, holding that he had not breached the agreement, the waiver was therefore not applicable, and the Board had jurisdiction over his appeal, effectively wiping out the agency’s removal action. (pp. 5-8)

The agency asked the full Board to review. The Board overturned the AJ and held that it did not have jurisdiction over Lizzio’s appeal since the appeal rights waiver was valid under the circumstances. The Board held that it did not have to consider the basis cited by the agency for its decision in invoking the last chance agreement–Lizzio’s removal came about as the result of his prior misconduct and reinstatement of the earlier removal action against him. The fact that the AJ found his behavior to be "rude and obnoxious" was enough for the Board to conclude that Lizzio had breached the last chance agreement. (pp. 8-9)

The appeals court now begs to differ with the Board, holding that Lizzio could overcome his waiver "by establishing that he did not breach the last chance agreement." (p. 11) On the one hand, the court agrees with the Board’s reasoning that the breach of the agreement was not a separate charge, but rather had the effect of reinstating the original charge. More importantly, however, the court disagrees with the Board on its reasoning that it could rely on a basis for the agency’s action that was different from what the agency actually cited, i.e. Lizzio’s "rude and obnoxious" behavior. The court indicates that the Board is required to weigh what the agency actually cited in invoking the agreement, just as the AJ had done. By considering a totally different basis for the agency’s action, the Board deprived Lizzio of due process. (pp. 16-18)

In short, this one is going back to the MSPB.

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.