Sistek v. Dep't of Veterans Affairs

955 F.3d 948

Leonard A. SISTEK, Jr., Petitioner

v.DEPARTMENT OF VETERANS AFFAIRS, Respondent

2019-1168

United States Court of Appeals, Federal Circuit.

Decided: April 8, 2020

Andrew Bakaj, Mark S. Zaid, P.C., Washington, DC, argued for petitioner.

Steven Michael Mager, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for respondent. Also represented by Joseph H. Hunt, Elizabeth Marie Hosford, Robert Edward Kirschman, Jr.

Before Dyk, Taranto, and Stoll, Circuit Judges.

Stoll, Circuit Judge.

Petitioner Leonard Sistek, Jr. appeals the final decision of the Merit Systems Protection Board denying corrective action in his claim filed under the Whistleblower Protection Act. Mr. Sistek, now retired, was a director at the Department of Veterans Affairs who made multiple protected disclosures over the course of several years. He alleged that certain individuals at the agency launched an investigation against him in retaliation for his whistleblowing activities, ultimately resulting in a letter of reprimand filed against him. The Board denied corrective action for the allegedly retaliatory investigation based on its view that a retaliatory investigation, in and of itself, does not qualify as a personnel action within the meaning of the WPA. For the reasons explained below, we affirm the Board’s decision.

BACKGROUND

I

In April 2011, Mr. Sistek was appointed to a director role at the VA’s Chief Business Office Purchased Care in Denver, Colorado. While serving in that role, Mr. Sistek made several protected disclosures to the VA’s Office of the Inspector General (OIG) questioning various financial practices at the VA. For example, Mr. Sistek raised concerns in August 2012 regarding the "parking" of certain appropriated funds. Mr. Sistek also contacted the OIG in October 2013 regarding certain perceived contractual anomalies.

During a conference call with agency staff on January 17, 2014, Mr. Sistek expressed his concerns regarding the VA’s use of certain funds that were purportedly appropriated for a different purpose. Mr. Sistek’s second-line supervisor, Cynthia Kindred, participated in that call. Shortly thereafter, Ms. Kindred appointed an Administrative Investigation Board (AIB) to investigate alleged misconduct in the organization, including certain allegations relating to inappropriate relationships with subordinate staff.

The AIB interviewed Mr. Sistek several weeks later on February 4, 2014. According to Mr. Sistek, he received notification that he would be interviewed by the AIB as a witness, and he first realized that he was a subject of the investigation during questioning by the AIB members. Shortly after the interview, Mr. Sistek sent an email to the OIG expressing concern that he was being subjected to an investigation in retaliation for his prior whistleblowing activities. On the following day, Ms. Kindred formally added Mr. Sistek as a subject of the investigation.

On April 21, 2014, the AIB issued a report detailing its findings regarding a number of allegations, among them a "failure to act and/or investigate allegations of a hostile work environment" by the management team, which included Mr. Sistek. J.A. 64, 73–76. The investigation culminated in a July 2014 report concluding that Mr. Sistek had failed to properly report information and allegations regarding an inappropriate sexual relationship between a director and that director’s subordinate staff member. The July 2014 report recommended that Mr. Sistek receive "an admonishment or reprimand" on that basis. J.A. 85. In August 2014, Mr. Sistek’s immediate supervisor, Lori Amos, issued a letter of reprimand consistent with that recommendation.

Mr. Sistek filed a formal grievance in response to the letter of reprimand. The assigned grievance examiner issued a report in December 2014 substantiating the conduct supporting the reprimand and recommending that Mr. Sistek’s grievance and requested relief be denied. In January 2015, Ms. Amos’s supervisor Stan Johnson rescinded the letter of reprimand and expunged it from Mr. Sistek’s record. Mr. Johnson did not provide a reason for the rescission and expungement.

In March 2015, the OIG confirmed that the concerns raised by Mr. Sistek on the conference call in January 2014 were justified: the VA had violated appropriations law by improperly reallocating certain funds. In June 2015, the OIG confirmed that the "parking" of appropriated funds, as flagged by Mr. Sistek in August 2012, was unauthorized. Mr. Sistek retired from the VA in January 2018.

II

Following the issuance of the April 2014 report from the AIB investigation, Mr. Sistek filed a complaint with the U.S. Office of Special Counsel (OSC) alleging whistleblower reprisal based on several personnel actions, including the letter of reprimand. After the OSC issued a closure letter, Mr. Sistek filed an individual right of action appeal with the Board, alleging that certain VA officials had retaliated against him for certain disclosures and activities protected under the Whistleblower Protection Act.

Before the Administrative Judge, Mr. Sistek originally identified four reviewable personnel actions, including the letter of reprimand. The Administrative Judge later added retaliatory investigations to the list of alleged personnel actions. The Administrative Judge ordered the parties to submit supplemental briefing on whether the alleged retaliatory investigations could qualify for corrective action under the WPA. In his supplemental brief, Mr. Sistek argued that the investigation at issue merited corrective action because it was launched against him in retaliation for his whistleblowing, resulting in the letter of reprimand and the creation of a hostile work environment.

After evaluating Mr. Sistek’s various whistleblower claims, the Administrative Judge declined to order any corrective action in favor of Mr. Sistek. See generally Sistek v. Dep’t of Veterans Affairs , No. DE-1221-18-0100-W-1, 2018 MSPB LEXIS 3010 (M.S.P.B. Aug. 8, 2018) (Decision ). Relevant here, the Administrative Judge determined that a retaliatory investigation, in and of itself, does not qualify as a personnel action eligible for corrective action under the WPA. And when evaluating the remainder of Mr. Sistek’s whistleblower claims, the Administrative Judge did not consider the allegedly retaliatory investigation any further. For example, the Administrative Judge considered only Ms. Amos’s knowledge—and not Ms. Kindred’s knowledge even though she initiated the investigation—in evaluating Mr. Sistek’s claim based on the letter of reprimand. The Administrative Judge rejected that claim after finding that Ms. Amos, the official who issued the reprimand, had no actual or constructive knowledge of Mr. Sistek’s protected disclosures to the OIG.

The Administrative Judge’s initial decision became the final decision of the Board. Mr. Sistek now petitions for review. We have jurisdiction under 28 U.S.C. § 1295(a)(9).

DISCUSSION

On appeal, Mr. Sistek challenges the Board’s final decision denying corrective action for the allegedly retaliatory investigation.¹ The Board reasoned that a retaliatory investigation, in and of itself, is not a personnel action within the meaning of the Whistleblower Protection Act. We review the Board’s interpretation of a statute de novo, Marano v. Dep’t of Justice , 2 F.3d 1137, 1141 (Fed. Cir. 1993), and the Board’s factual determinations for substantial evidence, McGuffin v. Soc. Sec. Admin. , 942 F.3d 1099, 1107 (Fed. Cir. 2019) (citing McMillan v. Dep’t of Justice , 812 F.3d 1364, 1371 (Fed. Cir. 2016) ). We may reverse the Board’s decision only if it is "(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). The petitioner bears the burden of establishing reversible error in the Board’s final decision. Fernandez v. Dep’t of the Army , 234 F.3d 553, 555 (Fed. Cir. 2000) (citing Harris v. Dep’t of Veterans Affairs , 142 F.3d 1463, 1467 (Fed. Cir. 1998) ). For the reasons that follow, we conclude that Mr. Sistek has only identified harmless errors in the Board’s decision. Accordingly, we affirm.

I

For the Board to determine that an agency action merits corrective action under the Whistleblower Protection Act, the Board must first find that (1) there was a disclosure or activity protected under the WPA; (2) there was a personnel action authorized for relief under the WPA; and (3) the protected disclosure or activity was a contributing factor to the personnel action. See 5 U.S.C. § 1221(e)(1) ; see also Piccolo v. Merit Sys. Prot. Bd. , 869 F.3d 1369, 1371 (Fed. Cir. 2017). The petitioner must prove these elements by a preponderance of the evidence. Whitmore v. Dep’t of Labor , 680 F.3d 1353, 1367 (Fed. Cir. 2012). Once the petitioner has done so, the agency may rebut the petitioner’s prima facie case of reprisal with "clear and convincing evidence that it would have taken ‘the same personnel action in the absence of such disclosure.’ " Id. (quoting 5 U.S.C. § 1221(e)(2) ).

Thus, a "personnel action," as defined by the WPA, is a predicate for a whistleblower appeal. Only upon proof of a qualifying personnel action may a claimant seek corrective action from the Board. See 5 U.S.C. § 1221(a). The WPA defines the set of qualifying personnel actions at 5 U.S.C. § 2302(a)(2)(A). That section of the statute lists eleven specific personnel actions—including, for example, "an appointment," "a performance evaluation," and "a decision concerning pay"—followed by a catch-all provision: "any other significant change in duties, responsibilities, or working conditions." Id. § 2302(a)(2)(A)(i)–(xii). Noticeably absent from the list, however, is any mention of a "retaliatory investigation," or indeed, any investigation at all.

The statutory language...