Merit Systems Protection Board June 2011 – Federal Register Recent Federal Regulation Documents

In Graves v. Department of Veterans Affairs, 114 M.S.P.R. 245 (2010), and Graves v. Department of Veterans Affairs, 114 M.S.P.R. 209 (2010), which involved appeals filed under the Veterans Employment Opportunities Act of 1998 (VEOA), the Board held that the agency's use of veterans' preference status as a ``tie-breaker'' in making selections for excepted service ``hybrid'' positions under 38 U.S.C. 7401(3), which includes the Medical Records Technician (MRT) positions at issue in these cases, was inadequate, and that the agency must comply with the competitive service veterans' preference requirements set forth in title 5 of the United States Code. The Board reasoned that although title 5 provisions such as those relating to veterans' preference rights do not apply to appointments listed under 38 U.S.C. 7401(1) (physicians, dentists, etc.) because those appointments are made ``without regard to civil-service requirements,'' ``hybrid'' employees retain many title 5 rights, including the adverse action and reduction in force (RIF) rights mentioned in 38 U.S.C. 7403(f)(3). The Board noted that section 7403(f)(2) provides that ``[i]n using such authority to appoint individuals to such positions, the Secretary shall apply the principles of preference for the hiring of veterans and other persons established in subchapter I of chapter 33 of title 5,'' and that section 7403(f)(3) provides that ``the applicability of the principles of preference referred to in paragraph (2) * * * shall be resolved under the provisions of title 5 as though such individuals had been appointed under that title.'' Based on its reading of these two provisions, the Board concluded that title 5 competitive service veterans' preference requirements apply to appointments made to 38 U.S.C. 7401(3) positions such as MRTs. The Board also suggested in Graves, 114 M.S.P.R. 209, ]] 12-15, that the agency violated veterans' preference requirements set forth in the Office of Personnel Management's Delegated Examining Operations Handbook and VetGuide, and that corrective action was therefore warranted. The Graves cases are now before the Board on petition for review after remand. The agency has raised several arguments regarding the above findings. The agency asserts that 38 U.S.C. 7403(f)(3) does not address the appointment of individuals because its plain language refers multiple times to individuals who have already been appointed. Thus, the agency contends that the Board's decisions do not give effect to the word ``appointed'' in section 7403(f)(3), and under the statutory construction maxim noscitur a sociis (a word is defined by the company it keeps), the reference in section 7403(f)(3) to ``matters relating to * * * the applicability of the principles of preference referred to in paragraph (2)'' should mean matters relating to veterans' preference principles that apply to individuals who have already been appointed, like ``matters relating to'' adverse actions, RIFs, part-time employees, disciplinary actions, and grievance procedures. The agency also contends that the legislative history for 5 U.S.C. 7403(f)(2)-(3) indicates that a Senate committee specifically intended for the agency to apply a tie-breaker principle to ``hybrid'' applicants, and that Congress did not intend to require the agency to apply title 5 rights to applicants for employment. The agency further asserts that in 1984 it provided notice in the Federal Register that it would be implementing the ``principles of preference'' requirement in the statute through an internal circular that called for the use of the ``tie-breaker'' principle that has been in effect from 1984 through the Board's decisions in Graves. We also note that while section 7403(f)(2) calls for applying ``the principles of preference for the hiring of veterans and other persons established in subchapter I of chapter 33 of title 5,'' such application appears to relate to the use of ``such authority,'' i.e., the ``authority'' mentioned in 38 U.S.C. 7403(a), which in turn calls for appointments to be made ``without regard to civil-service requirements.'' See Scarnati v. Department of Veterans Affairs, 344 F.3d 1246, 1248 (Fed. Cir. 2003) (under 38 U.S.C. 7403(a), title 5 provisions, including those regarding veterans' preference rights, do not apply to appointments made ``without regard to civil service requirements''). Further, deference is generally given to an agency's consistent, long-standing regulatory interpretation of an ambiguous statute as long as it is reasonable, Rosete v. Office of Personnel Management, 48 F.3d 514, 518-19 (Fed. Cir. 1995), and Congress is presumed to be aware of an administrative or judicial interpretation of a statute and to adopt that interpretation when it adopts a new law incorporating sections of a prior law without change, Fitzgerald v. Department of Defense, 80 M.S.P.R. 1, 14 (1998). The Graves cases thus present the following legal issues: (1) Does 38 U.S.C. 7403(f)(2) require the agency to apply title 5 veterans' preference provisions, including but not limited to 5 U.S.C. 3305(b) and 5 CFR 332.311(a), which the Board found the agency violated in not accepting the appellant's late-filed application, see Graves, 114 M.S.P.R. 245, ]] 12-15, in filling ``hybrid'' positions under 38 U.S.C. 7401(3); (2) does the legislative history for the applicable statutory provisions offer guidance regarding how those provisions should be interpreted; (3) are the Delegated Examining Operations Handbook and VetGuide ``statute[s] or regulation[s]'' relating to veterans' preference within the meaning of 5 U.S.C. 3330a(a)(1)(A), such that a violation of a provision in those documents would constitute a violation under VEOA; (4) does the law of the case doctrine apply to the Board's rulings in these cases; and (5) if so, is there a basis for finding that the ``clearly erroneous'' exception to that doctrine has been met? In addition, we note that the resolution of the above issues may affect whether the Board has jurisdiction over VEOA appeals filed by ``hybrid'' applicants. Interested parties may submit amicus briefs or other comments on these issues no later than June 30, 2011. Amicus briefs must be filed with the Clerk of the Board. Briefs shall not exceed 30 pages in length. The text shall be double-spaced, except for quotations and footnotes, and the briefs shall be on 8\1/2\ by 11 inch paper with one inch margins on all four sides.