case law update

Federal Circuit: Crime Exception Still Applies when Agency Provides Evidence to Grand Jury

A Program Analyst at the Department of Veterans Affairs was indicted by a Federal grand jury on 50 counts of making false statements related to health care matters.

When the VA used the “crime exception” to place him on indefinite suspension with a shorter notice period, the employee appealed the indefinite suspension, arguing that the Agency didn’t meet the requirements for the use of the “crime exception.” On December 26, 2017, the United States Court of Appeals for the Federal Circuit affirmed the Merit Systems Protection Board’s decision to sustain the indefinite suspension.

After the employee was indicted, the VA moved quickly to propose his indefinite suspension, informing the employee that the VA had reasonable cause to believe he had committed a crime for which a sentence of imprisonment could be imposed, given that his indictment was on 50 counts of making false statements related to health care, all alleged violations of 18 U.S.C. § 1035. Per the statute, each count is punishable by fines, imprisonment, or both. When an agency has reasonable cause to believe an employee has committed a crime for which a sentence of imprisonment could be imposed, the agency may suspend an employee with advance notice of less than the typically-required thirty days. This exception to the thirty-day notice rule is often referred to as the “crime exception.”

The employee appealed his indefinite suspension to the MSPB, and an MSPB administrative judge found that the grand jury indictment satisfied the requirements for use of the “crime exception.” The employee appealed the administrative judge’s initial decision to the full Board, but the full Board agreed with the administrative judge, stating that “an indictment provides more than enough evidence of possible misconduct to meet the threshold requirement of reasonable cause” for the “crime exception.” After the Board’s decision was issued, the employee appealed the decision to the United States Court of Appeals for the Federal Circuit.

Although the employee readily admitted on appeal to the Federal Circuit that indictments issued by a grand jury generally constitute sufficient cause for use of the crime exception, the employee attempted to distinguish his case. The employee contended that his indictment did not provide reasonable cause for his suspension because the VA itself was instrumental in “procuring” the indictment using what the employee referred to as “vague allegations.” The employee also argued that employees of the VA allegedly supplied the grand jury with the testimony and evidence it considered before returning an indictment against him. Therefore, he argued, the grand jury did not act as an “independent arbiter of facts,” but was instead merely an extension of the VA and its desire to remove him from employment.

The appeals court did not find this argument persuasive, finding that the record was “devoid of any evidence suggesting that the federal grand jury which returned the indictment against [the employee] failed to independently and impartially weigh the evidence presented.” The appeals court also found that the VA allegedly providing evidence to the grand jury “[did] not negate the fact that an independent deliberative body determined that there was probable cause to believe that he had committed a serious crime.”

For the above stated reasons, the United States Court of Appeals for the Federal Circuit affirmed the Board’s decision to sustain the employee’s indefinite suspension.

Read the full case: Henderson v. Department of Veterans Affairs


This case law update was written by Conor D. Dirks, Associate Attorney, Shaw Bransford & Roth, PC.

For thirty years, Shaw Bransford & Roth P.C. has provided superior representation on a wide range of federal employment law issues, from representing federal employees nationwide in administrative investigations, disciplinary and performance actions, and Bivens lawsuits, to handling security clearance adjudications and employment discrimination cases.






Posted in Case Law Update

Tags: Veterans Affairs, MSPB


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