HHS Ordered to Compute Back Pay and Benefits After Violating Veterans Act

HHS was ordered to hire a veteran and to compute back pay where the agency conceded that it would have selected a veteran had it not made an error in removing his name from the list of candidates for a competitive service position.

The Federal Circuit Court of Appeals has stepped in to order up the appropriate remedy in a case where the agency conceded that it would have selected a veteran had it not made an error in removing his name from the list of candidates for a competitive service position. In Marshall v Department of Health and Human Services, C.A.F.C. No. 2009-3086, 12/1/2009, the court has reversed and remanded the case to the Merit Systems Protection Board.

The court’s opinion reflects a certain amount of exasperation: “Despite the lengthy, tortured procedure due to disagreements between HHS and the MSPB over how to remedy the government’s error, this is a simple case. HHS violated the Veterans Employment Opportunities Act (VEOA) of 1998 when HHS selected a non-veteran over Mr. Marshall without obtaining approval from the Office of Personnel Management (OPM).” (Opinion pp. 1-2)

Without parsing the facts of the case and the back and forth sparring between HHS and MSPB, suffice it to say that HHS erroneously removed Marshall’s name from the candidate list for a GS-13 Budget Analyst position with the Centers for Disease Control, selected a non-veteran without the required OPM approval, and therefore violated VEOA. (p. 2)

The central issue became what was the appropriate remedy for this violation of the VEOA. MSPB ordered up a reconstruction remedy and HHS argues that it has complied. The MSPB agreed. However, Marshall argues to a sympathetic appeals court that the remedy is inadequate.

HHS reconstructed the selection process and ended up deciding that it would not have made a selection from the reconstructed list of eligibles—including Mr. Marshall—and would have cancelled the announcement. Therefore, under the agency’s view of the world the violation was remedied. The court scoffs: “This manufactured result has no basis in realty. Reconstruction seeks to determine whether the agency would have selected the veteran at the time of the original selection process; reconstruction does not allow an agency to conduct a new selection process under new circumstances.” (p. 11)

Since the agency admitted but for its error it would have hired Marshall in the first place, the court now orders up this remedy: “We therefore hold that the appropriate remedy is for Mr. Marshall to be placed in the job for which he applied.” (p. 12) The court also orders that Marshall be compensated for any loss of wages or benefits that he suffered as a result of the agency’s violation of the law. Since Marshall had taken a lower paying job with another agency, the court now orders that the agency compute and pay him the difference between the pay and benefits he would have been earning had it selected Marshall for the GS-13 job in the first place. The back pay is to cover the period of time from when he should have been put into the job until the date he assumes the position he would have been offered or declines it. (p. 13)

Finally, the court brushed aside the agency’s argument that Marshall waived any argument for receiving liquidated damages for a willful violation of the law, stating, “Mr. Marshall continually raised the issue of willfulness throughout this case.” (p. 14) The court has shipped this particular issue back to the MSPB for a determination whether the violation was willful, and, if so “it shall award an amount equal to backpay as liquidated damages.” (p. 14)

This violation of the VEOA could end up costing HHS quite a bit when all is said and done.

Marshall v. HHS 2009-3086

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.