Before Rader, Schall, and Bryson, Circuit Judges.
The opinion of the court was delivered by: Bryson, Circuit Judge.
Appealed from: Merit Systems Protection Board
The Office of Personnel Management ("OPM") separated petitioner Richard J. O'Brien from his position with the agency following a reduction in force. Mr. O'Brien appealed, and the Merit Systems Protection Board sustained his removal. Mr. O'Brien argues that he was not placed in a proper "competitive area" and that he was therefore denied an opportunity to compete for retention during the reduction in force. We conclude that substantial evidence supports the decision of the administrative Judge that Mr. O'Brien was placed in a proper competitive area and that Mr. O'Brien's competitive area, although small, was lawfully constituted under the pertinent statute and regulations. We therefore affirm.
Mr. O'Brien was employed as a management analyst in the Federal Quality Institute ("FQI"), a subdivision of OPM. FQI was the office responsible for implementing Total Quality Management principles within the government. Mr. O'Brien's role at FQI was to direct the President's Quality Award Program, a competitive program that recognized superior efforts by federal agencies in applying those principles. As of 1995, Mr. O'Brien had a total of 41 years of government service, including five years at FQI.
FQI was adversely affected by proposed cutbacks in OPM's budget for fiscal year 1996. Congress's proposed budget sharply reduced OPM's allocation and eliminated all funding for FQI. In July 1995, OPM determined that the proposed budget cuts would require consolidation of certain agency functions and a reduction in force. FQI was slated to be abolished and its principal duties transferred to the Office of Executive Resources, another subdivision within the agency.
Before 1995, FQI and several other subdivisions of OPM had been grouped together as part of the "Office of the Director," which was designated as a single competitive area. The significance of that designation is that, in the event of a reduction in force, employees compete for retention with other employees in their competitive area whose job classifications place them in the same competitive level. See 5 C.F.R. part 351. In general, the larger an employee's competitive area, the better the employee's chances of retention in case of a reduction in force.
In early 1995, OPM conducted an internal reorganization. Following the reorganization, employees in OPM's headquarters operations were grouped into 15 competitive areas. FQI became a separate competitive area, although it had only nine employees. The effect of the new classification was that FQI employees were not permitted to compete with other OPM employees for retention during the reduction in force. Because FQI was abolished in its entirety, Mr. O'Brien and the other FQI personnel were all separated effective September 29, 1995.
Mr. O'Brien appealed his separation to the Merit Systems Protection Board. Before the administrative Judge, he argued that the reduction in force was unnecessary, that he was denied "transfer of function" rights when his duties were shifted to the Office of Executive Resources, that OPM had improperly designated FQI as a single competitive area, and that his separation was the result of age discrimination by the agency. The administrative Judge rejected each of those arguments and sustained Mr. O'Brien's separation. The full Merit Systems Protection Board denied Mr. O'Brien's petition for review. Vice Chair Slavet, however, dissented from the denial of the petition. In her Dissenting opinion, Vice Chair Slavet focused on the competitive area issue, explaining that in her view FQI could be a proper competitive area only if the head of FQI possessed "appointing authority." O'Brien v. Office of Personnel Management, 75 M.S.P.R. 300, 307 (1997). Because Vice Chair Slavet found no evidence in the record attributing such authority to the head of FQI, she would have reversed Mr. O'Brien's separation.
On appeal, Mr. O'Brien raises only his challenge to the designation of FQI as a separate competitive area. Adopting the reasoning of Vice Chair Slavet's Dissent, Mr. O'Brien argues that OPM did not satisfy its burden to prove that the head of FQI possessed appointing authority, and that FQI therefore did not have sufficient independence to qualify as a separate competitive area. Mr. O'Brien also argues that FQI was not a proper competitive area because its small size precluded any competition for retention during the reduction in force.
OPM asserts that the court should refuse to consider the merits of Mr. O'Brien's appeal because he failed to present his argument concerning appointing authority to the administrative Judge. Although Mr. O'Brien's legal arguments have evolved throughout his appeal, he has consistently challenged the scope of his competitive area. That Mr. O'Brien has chosen to formulate his proposed legal test as turning on "appointing authority" does not alter the basic issue on appeal, which is whether OPM satisfied its legal burden to demonstrate that FQI is a proper competitive area. See Yee v. City of Escondido, 503 U.S. 519, 534-35 (1992). We therefore conclude that Mr. O'Brien has preserved for review the issue of the scope of his competitive area, and we turn to whether substantial evidence supports the administrative Judge's conclusion that OPM satisfied its burden of proof on that issue.
During a reduction in force, federal employees may compete for retention based on tenure of employment, military preference, length of service, and efficiency or performance ratings. See 5 U.S.C. § 3502(a). Employees may compete for retention, however, only with employees in the same competitive area. See Grier v. Department of Health & Human Servs., 750 F.2d 944, 945 (Fed. Cir. 1984). Retention competition is limited to competitive areas in order to minimize disruption in the ...