Appeals Court Rules on Former VA Director’s Termination

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Former Phoenix VA Director Sharon Helman

Former Phoenix VA Director Sharon Helman

In Helman v. Department of Veterans Affairs (CAFC No. 2015-3086, 5/9/17), the Federal Circuit Court of Appeals has handed down a significant decision that basically upholds the new DVA removal procedures, but finds unconstitutional that part of the law that in effect leaves the appeal decision entirely in the hands of an administrative law judge at the Merit Systems Protection Board (MSPB).

Until special rules were enacted for dealing with malfeasance by senior DVA officials, adverse actions followed the dictates of the Civil Service Reform Act of 1978 (5 USC 1101 et seq). Following the Congressional outrage over widespread problems at the DVA, a new law was enacted with the goal of making it easier to remove or transfer senior (SES) VA employees. (Veterans Access, Choice, and Accountability Act of 2014 (38 USC 713).

As the court explains, the new section 713 procedures differed from the Title 5 provisions in two basic ways. First, the Secretary of DVA may now remove or transfer an SES employee for poor performance with few protections….7 days to respond to notice rather than 30; no save pay in a new position to which executive is transferred; no administrative leave while action is pending; and no moratorium on taking action during first 120 days of new agency head taking over. (Opinion pp. 4-5)

Second, section 713 expedites the MSPB review process for appeals from such actions. … 7 days versus 30 to appeal to MSPB; MSPB required to refer all such appeals to an ALJ who has 21 days to issue a decision with no stays permitted; ALJ decision is final with no appeal to full Board or any further appeal; and no pay or benefits for the executive while the appeal is pending. (Opinion pp. 4-6)

Shortly after this new law took effect, Ms. Sharon Helman, Director of the Phoenix Veterans Affairs Health Care System was removed following the new 713 procedures. She appealed to the MSPB and the Administrative Law Judge (ALJ), following the new expedited procedures mandated by 713, issued a decision finding the agency failed to prove the lack of oversight charge, but did prove the remaining charges. When Helman tried to take her case to the full MSPB, it informed her no further action would be taken in accordance with the new 713 procedures. (pp. 6-7)

On to the federal appeals court where Helman argued the new law was unconstitutional.

The first question addressed by the court was whether 713 took away the right of the court to review the case. The government and Helman argued, notwithstanding the law’s language that the ALJ decision would be final and unreviewable, that the court did have jurisdiction to review the constitutional claims, and the court agreed. (p. 8)

The snag in 713, as far as the appeals court has now ruled, is that by making the ALJ decision final and unreviewable by the MSPB, it violates the constitutional Appointments Clause because final, unreviewable decisions by a government official requires that the official be properly appointed an officer of the U.S. The government agreed in its argument to the court that an ALJ of the MSPB does not meet that test and therefore the law runs afoul of the Constitution. The government further argued that the remedy should be to surgically fix this flaw rather than find 713 in its entirety unconstitutional as Helman argued. The court sided with the government . Ruling that the “problematic portions of the statute are severable and, thus, the proper remedy … is to sever those portions of the statute and leave the remainder intact.” (p. 11)

In the end, the appeals court ruled that the decision to remove Helman and the ALJ decision sustaining her removal would stand. However, the court declared portions of 713 invalid insofar as banning review by the MSPB of the ALJ decision. In what amounts to a rewriting of the law, the court has send the case back to the Board, indicating that:

“Upon severing the offending portions of [section] 713, Board review of the administrative judges’ decisions is now permitted. Accordingly, the appropriate relief here is to remand to the Board for its review of the administrative judge’s decision affirming Ms. Helman’s removal.” (pp. 31-31)

As an interesting aside in this case, the government did not appear to make an effort to defend the constitutionality of section 713’s appeals procedures. It did, of course, argue strenuously for judicial surgery on the law to salvage most of it while re-writing it to allow MSPB review of these appeals once the ALJ has ruled. A much more vigorous defense of the law was apparently made by the Intervenors (Veterans of Foreign Wars, AMVETS, et al.), who argued to uphold all aspects, including the limited appeal process with no appeal from the decision of the ALJ.

Helman v. VA (2015-3086)

© 2019 Susan McGuire Smith. All rights reserved. This article may not be reproduced without express written consent from Susan McGuire Smith.

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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.

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