Fedweek Legal

In a decision that will make it easier for federal agencies to defend their choices of penalties, the U.S. Court of Appeals for the Federal Circuit has minimized the importance of agency-issued Tables of Penalties (ToP) in many cases. In Farrell v. Dept. of the Interior, (Federal Circuit No. 02-3108, December 18, 2002), the employee argued that the penalty chosen was not consistent with the closest penalty in the agency’s ToP and that the agency acted unlawfully when it failed to abide by its ToP. The court agreed with Farrell that the penalty charged was inconsistent with offense selected from the ToP. However, the Court stated that it had to decide if the ToP was “binding” on the agency and held that it was not.

The court first noted that the ToP was not issued as a formal regulation or as the result of notice and comment rulemaking. Therefore, the ToP could not be binding on the public. The next inquiry was whether the ToP was binding on the agency itself. The court found that an agency is bound to a statement that was not issued as a formal regulation only if it intends to be bound. The primary test of the agency’s intent is the text of the agency statement itself. In this case, the court found that the ToP was called a “guide” and that it contained no mandatory language. There was also language permitting penalties to vary from those listed. Therefore, the court found that the agency did not intend to be bound by its own Table of Penalties. Because the ToP is just one factor to be considered in a penalty determination, the court let the penalty stand.

Federal employees will need to examine agency ToPs to see if there is any mandatory language. If there is, argue the ToP is binding. If there is no mandatory language, other mitigation factors will have to be relied upon more heavily than the agency’s compliance with its ToP.

** This information is provided by the attorneys at Passman & Kaplan, P.C., a law firm dedicated to the representation of federal employees worldwide. For more information on Passman & Kaplan, P.C., go to http://www.passmanandkaplan.com. **