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Sarah Bennett v. Merit Systems Protection Board

March 30, 2011


Petition for review of the Merit Systems Protection Board in case no. PH0752090673-I-1.

The opinion of the court was delivered by: Gajarsa, Circuit Judge.

Before GAJARSA, PROST, and MOORE, Circuit Judges.

This case arises from a decision of the Merit Systems Protection Board ("MSPB"), dismissing Sarah Bennett's ("Bennett") appeal of her removal from her position as a sales clerk in the Veterans Canteen Services ("VCS"). The MSPB dismissed the appeal for lack of jurisdiction. The issue before us is whether an individual hired by the VCS pursuant to 38 U.S.C. § 7802 has appeal rights under chapters 75 and 77 of title 5. For the reasons discussed below, we hold that such an employee does not, and we affirm the MSPB's decision.


Bennett's employment with the VCS began in August 2004 when she was hired as a part-time sales clerk. The VCS extended this temporary appointment on December 11, 2004, and subsequently her appointment was converted to permanent status in the excepted*fn1 service on May 1, 2005 pursuant to 38 U.S.C. § 7802. Chapter 78 of title 38 provides for the creation and regulation of the VCS. Specifically, section 7802(e) governs the appointment of VCS personnel. That subsection states that:

The Secretary shall employ such persons as are necessary for the establishment, maintenance, and operation of the Service, and pay the salaries, wages, and expenses of all such employees from the funds of the Service. Personnel necessary for the transaction of the business of the Service at canteens, warehouses, and storage depots shall be appointed, compensated from funds of the Service, and removed by the Secretary without regard to the provisions of title 5 governing appointments in the competitive service and chapter 51 and sub-chapter III of chapter 53 of title 5. Those employees are subject to the provisions of title 5 relating to a preference eligible described in section 2108(3) of title 5, subchapter I of chapter 81 of title 5, and subchapter III of chapter 83 of title 5.

38 U.S.C. § 7802(e). Both parties agree that Bennett was not a preference eligible employee.*fn2 During her employment, Bennett was thus a non-preference eligible employee in the excepted service.

On September 17, 2008, Bennett was notifiedof her proposed removal from employment for misconduct and given fourteen days to reply. Her alleged misconduct included failing to render proper payment for VCS merchandise, failing to register proper cash register transactions, and violating the VCS employee purchase policy. Bennett appealed the removal decision to the MSPB on September 25, 2009 pursuant to 5 U.S.C. § 7513(d).

Chapters 75 and 77 of title 5 relate to adverse actions taken against certain government employees and the rights those employees have to contest such actions. Section 7513(d) gives an employee, as defined by sections 7511(a)(1) and (b), the right to appeal an adverse action to the MSPB.

Although several jurisdictional issues relating to Bennett's appeal were raised,*fn3 only one is relevant here. The Department of Veterans Affairs ("DVA") asserted in a motion for a stay that the MSPB lacked jurisdiction because Bennett was appointed under 38 U.S.C. § 7802(e), which excluded her from the protections of 5 U.S.C. § 7513(d). The administrative judge ("AJ") granted the stay and issued an order on October 15, 2009, stating that Bennett was "entitled to the hearing she requested only if she makes a non-frivolous allegation of jurisdiction." Bennett v. Dep't of Veterans Affairs, Docket No. PH-0752-09-0673-I-1, slip op. at 2 (M.S.P.B. Oct. 15, 2009). In her response, Bennett argued that the MSPB had jurisdiction because her appeal was filed under chapters 75 and 77 of title 5 and she met the statutory definition of "employee" under section 7511(a)(1)(C). The DVA response maintained that Bennett's termination was within the exclusive authority of the Secretary of Veterans Affairs ("Secretary") under 38 U.S.C. § 7802(e) and the provisions of title 5 were inapplicable. Bennett replied that because the VCS was not explicitly excluded from chapter 75, she had appeal rights from an adverse employment action.

In his initial decision of December 7, 2009, the AJ found that Bennett's appointment was made pursuant to 38 U.S.C. § 7802(e) and dismissed her appeal. The AJ adopted the reasoning in Chavez v. Dep't of Veterans Affairs, 65 M.S.P.R. 590 (1994), which held that certain non-preference eligible employees in the excepted services-like Bennett-were excluded from the appointing provisions of chapter 75 of title 5. Neither party petitioned the MSPB to review the AJ's decision, and, pursuant to 5 C.F.R. § 1201.113, the AJ's initial decision became the final decision of the MSPB on January 11, 2010. Bennett then timely filed her appeal with this court. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(9) and 38 U.S.C. § 4324(d).


Our review of MSPB decisions is limited under 5 U.S.C. § 7703(c). The MSPB's holding must be affirmed unless it is found to be: "(1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (2) obtained without procedures required by law, rule, or regulation having been followed; or (3) unsupported by substantial evidence." 5 U.S.C. § 7703(c); Barrett v. Soc. Sec. Admin., 309 F.3d 781, 785 (Fed. Cir. 2002). The MSPB's determination that it lacked ...

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