The Merit Systems Protection Board recently reversed the initial decision of an MSPB administrative judge who reversed the Office of Personnel Management’s (OPM) decision to deny an application for disability retirement benefits. In Stevenson v. Office of Personnel Management, 2006 MPSB 289 (Sep. 26, 2006), the majority opinion of the MSPB was that the administrative judge should have considered evidence regarding a cancelled removal action against the employee and the employee’s application for disability retirement only after his removal for misconduct made his application for disability retirement less effective.

James C. Stevenson was a GS-5 forestry technician with the Department of Agriculture (USDA) and was removed November 2, 2002, on two misconduct charges. During the appeal of his removal, Mr. Stevenson asserted that he was unable to perform a substantial portion of his job duties, specifically those duties which involved walking for long periods of time at a high altitude on uneven ground, and firefighting. After appealing his removal, Mr. Stevenson entered into a settlement agreement with the USDA. Per the settlement agreement, the USDA agreed to cancel the removal action for misconduct, to remove any record of the misconduct removal from Mr. Stevenson’s personnel files, and to instead substitute a removal for medical inability to perform the essential duties of his position. This settlement agreement was accepted into the record for enforcement in an initial decision by the MSPB.

After executing the settlement agreement, Mr. Stevenson applied for disability retirement, based on chronic obstructive pulmonary disease, pulmonary fibrosis, and congestive heart failure. In his application for disability retirement, Mr. Stevenson claimed that he was unable to perform 50 percent of his major duties because he was unable to hike for numerous hours of each day over uneven surfaces at high altitudes and was unable to perform firefighting duties. In denying his application for disability retirement, OPM held that Mr. Stevenson was unable to establish that he had a disabling medical condition, and ruled that there was no nexus between his misconduct removal and his medical conditions. Mr. Stevenson requested reconsideration of this decision and filed a petition for enforcement of his prior settlement agreement. In the proceedings regarding the enforcement of the prior settlement agreement, Mr. Stevenson entered into a new settlement agreement in which the USDA agreed to send a letter to OPM indicating its position that Mr. Stevenson was unable to perform his job duties because he was restricted from exposure to forest fire smoke and that it could not accommodate his medical condition.

Mr. Stevenson’s request for reconsideration was denied on the basis that his alleged misconduct was his principal service deficiency and that he had not submitted sufficient medical evidence to show that he was unable to perform the duties of his position. Mr. Stevenson appealed OPM’s final decision to the MSPB, where the administrative judge held that the USDA erred when it submitted information to OPM regarding Mr. Stevenson’s misconduct removal and that the appropriate remedy was for the MSPB to disregard any information regarding that removal. OPM filed a petition for review arguing that (1) the administrative judge erred in not considering the cancelled removal action; and (2) that the medical evidence did not show that Mr. Stevenson’s medical condition did not prevent him from performing useful and efficient service, and that the USDA could have accommodated his disability.

The Board has previously held that OPM has the authority to disregard a personnel action that was taken pursuant to a settlement agreement to which OPM is not a party, when the personnel action was an evasive device designed to allow an employee to qualify for retirement benefits for which he would otherwise not be eligible to receive. The Board then stated that if OPM was authorized to look behind a settlement agreement when determining disability retirement claims, then it follows that when reviewing OPM decisions, the Board should be able to look behind settlement agreements as well. The Board then concluded that, in looking behind the settlement agreement in Mr. Stevenson’s case, the misconduct allegation was a relevant factor that detracted from the force of his disability retirement application.

To be eligible for disability retirement under FERS, an employee must have completed at least 18 months of creditable civilian service, must be unable, because of disease or injury, to render useful and efficient service in is position, and must not have declined a reasonable offer of reassignment to a vacant position in the agency at the same or greater grade or pay level. OPM regulations also require that the medical condition be expected to continue for at least one year from the date the application is filed and that the accommodation of the medical condition be unreasonable.

Although she recognized that Mr. Stevenson’s health could have been improved enough to perform hiking, the administrative judge held that Mr. Stevenson was nonetheless disabled because he was unable to be exposed to smoke and that firefighting was one of his duties. OPM argued that Mr. Stevenson should be precluded from receiving a disability retirement annuity because he repeatedly failed to follow medical advice to lose weight and stop smoking and that failure to follow reasonable medical advice provides strong support for OPM’s denial of disability retirement.

As this decision illustrates, OPM is reviewing disability retirement applications more closely in recent years. For federal employees this decision carries two important messages. First, when entering into settlement agreements in which a removal for alleged misconduct is cancelled and replaced with a removal for medical inability to perform, employees need to be aware that this rescinded misconduct action could still be considered by OPM, and subsequently by the MSPB if the employee’s disability retirement application is denied. In addition, federal employees applying for disability retirement must also be aware that failure to follow reasonable medical advice could also provide the basis for a denial of disability retirement. Therefore, when entering into a settlement agreement involving the conversion of a misconduct removal to a removal for medical inability to perform, the employee should make sure that he is independently qualified for disability retirement and that the settlement agreement prohibits the agency from submitting information regarding the employee’s misconduct removal to OPM. Otherwise, the employee risks having his disability retirement application denied.

** 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. **

The attorneys at Passman & Kaplan, P.C, are the authors of The Federal Employees Legal Survival Guide, Second Edition, a comprehensive overview of federal employees’ legal rights. To order your copy, go to http://www.fedweek.com/pub/index.php.