Does a Federal Senior Executive Service Employee Have a Protected Property Interest in the SES Position?

An Army SES employee who was demoted to a GS position after a performance appraisal decision argued she had a property interest in her SES position.

The case is Esparraguera v Department of the Army (USCADC No. 22-5150, 5/10/2024) These facts are from the appeals court decision.

The Civil Service Reform Act of 1978 created the federal Senior Executive Service (SES) consisting of top managers to assure a corps of senior political and career executives “responsive to the needs, policies, and goals of the Nation and otherwise is of the highest quality.” (Opinion p. 1) As mandated by this law, the Army established an SES performance appraisal system. If an Army SES employee is rated at less that fully successful or unsatisfactory, this can lead to removal from the SES position.

Ms. Esparraguera was appointed in 2010 as a career SES employee at Army and served as the top personnel attorney. She was recommended by her supervisor for an outstanding rating in 2017, but before the rating was finalized its was put on hold. Apparently she was not told the reason but as the court reports the Office of Special Counsel (OSC) was investigating Esparraguera’s role in an earlier hiring decision that had come under scrutiny. The final OSC report recommended that Army take disciplinary action against her because OSC concluded Esparraguera had committed a prohibited personnel practice in the course of that hiring process. At OSC’s request, Army kept that agency’s report from her. (Pp. 1-3)

An Army Performance Review Board (PRB) was convened to consider the matter. That PRB recommended to the Under Secretary of the Army that Esparraguera’s performance rating be lowered from Outstanding to Unsatisfactory. She was informed of her lower rating and formally notified that she would be removed from the SES and demoted to a GS-15 human resources position at her same salary. The demotion affected Esparraguera’s paid leave and other benefits. The performance rating and demotions were based on the PRB recommendation and the OSC report which Esparraguera was not given an opportunity to see or address. (Pp 3-4)

The Merit Systems Protection Board (MSPB) reviewed the agency’s action in an informal hearing. The Board sent a transcript along with the hearing record to the OSC, the Office of Personnel Management (OPM) and the Army, indicating that MSPB could not decide the matter or provide relief. That apparently was the end of it as far as Army was concerned. (Pp. 4-5)

Ms. Esparraguera appealed the MSPB decision (non-decision) to the federal court of appeals but that court dismissed her case for lack of jurisdiction. She then tried the federal district court in D.C. arguing the Army had violated her due process rights. That court dismissed her case ruling that she had “no constitutionally protected property interest in her SES status,” and, therefore, the court did not rule on whether she had received due process. (P 5)

The current decision was rendered by the U.S. Court of Appeals for the D.C. Circuit. At last Esparraguera got some good news in the form of a 2-1 decision by a panel of that court. The court concluded that Esparraguera had a property interest in her career SES status. Having jumped that hurdle, the court then considered whether she had received adequate due process in the decision to remove her from the SES. Swayed by her arguments that she did not receive nor have a chance to review and respond to the evidence used against her, the court held that she was entitled to, at the very least, notice and a chance to respond. Because the district court did not reach the due process issue having found that it did not have jurisdiction to entertain her challenge, the appeals court majority now reverses and remands the case to that lower court. (P.21)

There are only 8,000 plus SES employees in the federal workforce, and typically only about 0.4 percent of those were rated minimally satisfactory or unsatisfactory, so this decision has minimal impact on our readers. But it will be of interest to those who have long sought to have the courts declare that there is a property interest in a federal position.

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.