Management Upheld on Furlough Decision

A federal appeals court has issued the latest in a string of decisions upholding management’s furlough decisions, in a case involving the 2013 sequestration furloughs but that could apply as well to similar situations ahead due to tight budgets.

The case involved a six-day save-money furlough imposed on a group of employees at a DoD working capital fund entity. Such units are self-supporting on fees and services they charge to customers–often other units within the same parent agency or in a different agency–and do not receive appropriations from Congress.

The employees argued that their furlough was improper because they were working on a project funded by a defense contractor. A hearing officer, though, found that the furlough was a reasonable management solution to the shortage of funds caused by sequestration. The decision stressed that they were paid from the fund itself, not directly by the contractor, and thus had the same status as other employees who were furloughed.

The merit board allowed that decision to stand, and on appeal, the Court of Appeals for the Federal Circuit agreed that the key point was that the employees were directly paid by DoD, regardless of the source of funding for the project.

“The court further agreed that, taking a holistic view of budget management, the decision to furlough employees paid by a WCF was a reasonable management solution to the budget shortfall because, among other reasons, preserving money in the WCFs generally provided DoD with the flexibility to meet higher priority needs during the critical time period,” according to an MSPB summary of the decision.