On September 18, 2013, the Merit Systems Protection Board issued its decision in Chandler v. Department of the Treasury, 2013 MSPB 74, among the first cases to reach the appellate level at the MSPB concerning the standards to be used in deciding furlough appeals.Chandler is a GS-14 senior tax analyst at the IRS who was furloughed for along with other IRS employees in recent months.

The Board majority held that the furloughing agency meets its burden of showing the furlough promotes the efficiency of the service by showing (a) that the furlough was a “reasonable management solution" to an agency’s financial restrictions, and (b) that the decision on who to furlough was made in a “fair and even manner", with similar employees treated similarly and any deviations justified by legitimate reasons.The majority analogized furloughs to reductions-in-force (RIFs), and so applied its preexisting RIF caselaw.

A dispute also arose before the administrative judge as to the proper scope of discovery in a furlough case, causing the AJ to invoke a rare procedure allowing legal issues to be appealed to the MSPB before a merits decision had been issued by the AJ at the hearing stage (an “interlocutory appeal").On appeal, the MSPB split over the correct scope of discovery, based on fundamental disputes over what issues are legitimately reviewable by the MSPB in a furlough appeal.

The majority excluded from MSPB review the legitimacy of the furloughing agency’s spending decisions or to disparities in furlough treatment between groups of employees who were now similarly situated.Accordingly, the majority disallowed Chandler’s discovery requests concerning other spending decisions such as hiring of new employees and contractors and authorization of overtime for non-furloughed employees, but allowed discovery concerning which employees were not furloughed and whether favored employees were selectively given bonuses to compensate for lost wages.The majority also disallowed discovery requests concerning the agency’s choice of which specific days to conduct furloughs, and discovery on why the agency proceeded with furloughs while active collective bargaining was occurring with the union.

Vice Chair Wagner wrote a partial dissent, disagreeing with the majority’s analogy of furloughs to RIFs.Vice Chair Wagner also believed that reviewing a furloughing agency’s spending decisions was within the scope of the MSPB’s review in a furlough appeal, reasoning that spending information was relevant to testing whether the agency’s decision to furlough was a reasonable management action in the budgetary circumstances.The Vice Chair also would have permitted discovery on the choice of specific furlough days as relevant to assessing the evenhandedness of the furlough implementation, and discovery on the timing of furloughs in connection with collective bargaining as relevant to a possible affirmative defense of reprisal for protected union activity.

Chair Grundmann filed a concurring opinion in response to Vice Chair Wagner, arguing in support of the analogy between RIFs and furloughs, especially given that little prior MSPB precedent exists concerning furloughs.

The case could set important precedent as MSPB works through more than 30,000 furlough appeals now pending before it, the large majority of them filed by Defense Department employees.

* 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.

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