Swygert, Chief Judge, Castle, Senior Circuit Judge, and Morgan, District Judge.*fn*
CASTLE, Senior Circuit Judge.
Appellee Phillip S. Wood was discharged by the United States Postal Service*fn1 after he allegedly participated in the falsification of postal timecards. After the charges against him were sustained by an administrative hearing and two appeals, Wood filed suit in the district court challenging the legality of the procedures used by the Postal Service to gather evidence and to discharge him. That court found instead that the charges were not supported by substantial evidence, and ordered that Wood be reinstated with back pay. On this appeal the Postal Service challenges both the standard of review utilized by the district court and its ultimate findings.
Phillip Wood was a foreman in the United States Post Office at Wheaton, Illinois in March, 1969 when he received a letter from postal inspectors informing him that the Post Office Department proposed to take adverse action (including possible removal from employment) against him. The letter listed four specific reasons which warranted the disciplinary action. As given in the letter, they were:
1. You are charged with the participation in the falsification of your timecard at the Wheaton, Illinois Post Office. On February 16, 1969, John Anthony Salemi clocked in for you on your time-card at 1.00 hours. You were not in the Wheaton Post Office at the specified time and date.
2. You are charged with the participation in the falsification of your timecard at the Wheaton, Illinois Post Office. On March 9, 1969, John Anthony Salemi clocked in for you on your timecard at 1.32 hours. You were not in the Wheaton Post Office at the specified date and time.
3. You are charged with the participation in the falsification of your timecard at the Wheaton, Illinois Post Office. On March 16, 1969, John Anthony Salemi clocked in for you on your timecard at 1.04 hours. You were not in the Wheaton Post Office at the specified date and time.
4. You are charged with the participation in the falsification of a subordinate employee's timecard at the Wheaton Post Office. On March 2, 1969 you clocked in for John Anthony Salemi, on his time-card, at 1.48 hours. John Anthony Salemi was not in the Wheaton Post Office at the specified date and time.
Before the expiration of the ten day period which Wood was given to respond to these charges, the same inspectors filed a criminal complaint against Wood and Salemi which charged them with aiding and abetting the making of false claims against the United States, conspiracy, and actually making false claims, in violation of 18 U.S.C. §§ 2, 286, and 287. Wood protested that the prosecution of both the administrative and criminal charges against him deprived him of the opportunity to respond to the administrative charges without incriminating himself and subjected him to double jeopardy, and he subsequently filed suit to enjoin the administrative proceedings. Prior to any disposition in this suit of record, the Deputy Regional Director of the Post Office Department notified Wood that he would be discharged on May 31, 1969, for the evidence against him was sufficient to justify such action. Wood appealed the Deputy Director's decision on May 23, and on June 5, 1969, the U.S. Attorney agreed that the administrative proceedings against Wood would be stayed pending the disposition of the criminal charges.
A jury found Wood guilty of all the criminal charges against him on July 14, 1969.*fn2 On August 6, 1969 an administrative hearing was held concerning Wood's appeal at which the Post Office Department presented its evidence against Wood to a hearing officer, and Wood and his attorney were given an opportunity to respond. After reviewing the testimony presented at the hearing, the hearing officer found that all four charges against Wood were supported by the evidence. The findings of fact which the hearing officer issued with his decision accepted Wood's denial at the hearing that he had authorized anyone to punch his timecard, for they contained the findings that Wood did not authorize nor advise anyone to punch his card. But the hearing officer apparently disbelieved Wood's assertion that he had not known about anyone falsifying his card, for the findings of fact did not incorporate this denial.
Wood appealed the decision of the hearing officer to the Assistant Post-master General, but on October 21, 1969 this officer rejected the appeal, telling Wood that "it is inconceivable that you were unaware of the falsification" and that the charges against him were supported by substantial evidence. Wood chose to argue his final appeal to the Post Office Board of Appeals and Review, but was unsuccessful.
On January 8, 1971, Wood filed a complaint in district court which alleged various irregularities in the proceedings leading to his discharge. Not reaching the procedural objections, the court held that employee removal actions conducted by administrative agencies were subject to judicial review under the substantial evidence test and that Wood's removal was not supported by substantial evidence. Accordingly, it ordered Wood's reinstatement and the award of back pay to him.
The two issues raised by the Postal Service on this appeal are 1) whether judicial review of employee discharge actions should determine whether the discharge was supported by substantial evidence, or whether courts should determine only whether the discharge was arbitrary and capricious, and 2) whether the evidence produced at the administrative hearing was sufficient to meet the proper test of judicial review for employee discharge cases.
Past decisions of this court have held that discharges of employees by administrative agencies will be overturned only if they are arbitrary or capricious, Farmer v. Blount (7th Cir.) (Slip Opinion No. 71-1867, November 22, 1972 at 3), Pauley v. United States, 419 F.2d 1061, 1065 (7th Cir. 1969), and that the substantial evidence test is an inappropriate standard of review for administrative discharge actions. Brown v. Zuckert, 349 F.2d 461, 463 (7th Cir. 1965), cert. denied, 382 U.S. 998, 86 S. Ct. 588, 15 L. Ed. 2d 486 (1966). The Administrative Procedure Act requires no more.*fn3 Accordingly, a court will order reinstatement of a discharged government employee only if his discharge is "not supportable on any rational basis."*fn4 Pauley v. United States, 419 F.2d at 1066. See also, Jenkins v. Macy, 357 F.2d ...