[00:00:00] Speaker 04:
This is rhetoric versus FDIC.

[00:00:39] Speaker 02:
Good morning.

[00:00:49] Speaker 02:
I'm Parish Shah, counsel for the petitioner, Timothy Reddick.

[00:00:53] Speaker 04:
Mr. Shah, you're reserving three minutes from butthole time, is that correct?

[00:00:56] Speaker 02:
That's correct.

[00:00:57] Speaker 02:
Okay.

[00:00:58] Speaker 02:
With me at counsel's table is my colleague, Larry Adkins.

[00:01:01] Speaker 02:
The sole issue before this court is whether FDIC removed Mr. Reddick from his position

[00:01:07] Speaker 02:
within the meaning of Section 7512 of Title V. If so, the arbitrators ruling that Mr. Redick was not removed and in turn not denied his Section 7513 procedural rights must be set aside as contrary to law.

[00:01:24] Speaker 02:
I'd like to cover three things today.

[00:01:26] Speaker 02:
First, what isn't in dispute between the parties.

[00:01:29] Speaker 02:
Second, why these areas of agreement coupled with the record below demonstrate that Mr. Redick was removed from his position

[00:01:37] Speaker 02:
and denied his Section 7513.

[00:01:39] Speaker 04:
Let me ask you a question.

[00:01:40] Speaker 04:
When Mr. Redick got the offer to extend his employment by two years, and he qualified that offer by his having to meet the certain qualifications, when he received the offer and he accepted the offer, did his two-year employment automatically extend to a four-year, or are we still looking at

[00:02:07] Speaker 04:
at two-year segments here.

[00:02:11] Speaker 02:
Our position is that upon acceptance, Mr. Redick's two-year term appointment transformed into a single four-year term.

[00:02:19] Speaker 02:
The plain language of FDIC's offer, which Mr. Redick accepted, it uses the term offer of extension.

[00:02:36] Speaker 02:
And it then specifies that if accepted, the end date of Mr. Redick's term appointment would change from September 26, 2012 to September 26, 2014.

[00:02:47] Speaker 02:
In other words, Mr. Redick's term would be extended to September 2014, making it a four-year term, which is the maximum term possible under the applicable regulations.

[00:02:59] Speaker 04:
It adds up to four years, but when he was made the offer and he accepted,

[00:03:04] Speaker 04:
Does that change the nature, the underlying nature of the employment from a two-year to a four-year employment?

[00:03:09] Speaker 02:
Yes, it does.

[00:03:10] Speaker 04:
And this is shown by... But what's the legal authority for that?

[00:03:14] Speaker 02:
FDIC has conceded that it relied on 5 CFR part 316.301A in making this offer to Mr. Redick.

[00:03:23] Speaker 02:
And what that regulatory provision does is that it authorizes agencies to extend term appointments.

[00:03:29] Speaker 03:
In other words, it allows... But is there anything in that regulation that

[00:03:33] Speaker 03:
inconsistent with staffing two-term appointments.

[00:03:36] Speaker 03:
I looked at it this morning and I didn't see anything that suggested that you couldn't.

[00:03:40] Speaker 03:
If you wanted to say, we're going to give you one two-year appointment, and when you're getting near the end, say, we're going to extend this and give you another two-year appointment.

[00:03:48] Speaker 02:
Your Honor, that would be a reappointment.

[00:03:50] Speaker 02:
If there were two separate two-year terms, that would be a reappointment.

[00:03:53] Speaker 02:
And that is something that is dealt with in a different regulatory section than the one FDIC relied upon.

[00:03:59] Speaker 02:
in making a software.

[00:04:01] Speaker 01:
Mr. Shaw, what about the fact that the letter that was sent to Mr. Reddick, the April 13, 2012 letter says that the extended employment for an additional period of 24 months is effective September 27, 2012.

[00:04:22] Speaker 01:
So I read that and it says that, all right, we're giving you this extension if you accept it.

[00:04:30] Speaker 01:
it becomes effective on September 27, 2012.

[00:04:33] Speaker 01:
So why wasn't the agency free to rescind it prior to September 27?

[00:04:43] Speaker 01:
I would agree if it said, maybe if it didn't say anything, or if it said effective immediately, but it says effective September 27, and the agency rescinded it before that date.

[00:04:54] Speaker 02:
Your Honor, that effective date language wouldn't make sense and come into play if we were dealing with two consecutive

[00:05:00] Speaker 03:
But the problem is, it seems like you're suggesting that under that regulation, the agency could never, if it gives a term appointment, that regulation specifically says you start with two years, but it can go up to four, I think, or you start with one and it can go up to four, that they can never structure it such that if they wanted to extend, it could be a conditional extension.

[00:05:24] Speaker 03:
In your view, it seems like if they decide they want to keep somebody and they offer them an extension,

[00:05:29] Speaker 03:
and they accept, then that's automatic.

[00:05:32] Speaker 03:
But that seems to be not just wrong legally, but from the way that agencies operate, a pretty bad idea.

[00:05:41] Speaker 02:
So there's two points there, Your Honor.

[00:05:44] Speaker 02:
First, the regulations treat separately term extensions, which is what we believe happened here, and reappointments to second consecutive terms.

[00:05:54] Speaker 03:
So let me just be clear, because I think I want to understand what you're saying.

[00:05:58] Speaker 03:
you're saying that regulation they relied on absolutely prohibits them stacking two term appointments together.

[00:06:05] Speaker 02:
If FDIC had wanted to stack two consecutive two-year terms together, it should have proceeded... Can you point to any language in that regulation that says that?

[00:06:14] Speaker 03:
Because it seems to me all it says is you can appoint somebody for a term appointment and then you can extend them for an additional period.

[00:06:21] Speaker 03:
But it doesn't say you can't do it as a new SF50 with a new not to exceed date.

[00:06:26] Speaker 02:
So the key term in

[00:06:28] Speaker 02:
316.301 is extend.

[00:06:30] Speaker 02:
If you look at 316.302, that deals with reappointments.

[00:06:35] Speaker 02:
And SDIC has never argued that it relied on 316.302.

[00:06:39] Speaker 02:
It has conceded that it relied on 316.301.

[00:06:43] Speaker 02:
In other words, it is saying that it extended as opposed to making a reappointment.

[00:06:49] Speaker 04:
If there's a reappointment, would Mr. Reddick have to present a new employment document at that point?

[00:06:56] Speaker 02:
So yes, Your Honor, our position is that had FDIC offered Mr. Redick reappointment to his second consecutive two-year term in his competitive service position, it would have had to have done one of two things, comply with Part 332's competitive service requirements or state or demonstrate that an exception to those competitive service requirements existed.

[00:07:18] Speaker 02:
It is never argued that it did one of those two things.

[00:07:22] Speaker 02:
And that further shows that this was not a reappointment.

[00:07:25] Speaker 02:
And that's consistent with

[00:07:26] Speaker 03:
the plain term of uh... i wanted to get offered i mean your view is that this original at that the uh... appointed him with a not to be dated it doesn't well with extended is the operative legal document this offer to extend and his acceptance yet let the operative legal act the operative like to be accepting of when they're acting he

[00:07:53] Speaker 03:
create an operative legal act on part of the agency.

[00:07:56] Speaker 03:
Doesn't the agency have to effectively appoint him to a position?

[00:08:00] Speaker 02:
Mr. Rettick was already serving in his position.

[00:08:02] Speaker 03:
The agency was offering to... We do not have to see data 2012, but see operative legal act that extended back to 2014.

[00:08:10] Speaker 02:
The offer and acceptance that you see at Joint Defendix 31, that document, when Mr. Rettick accepted... So if that's the case, then when he reached the end of his 2012 appointment,

[00:08:22] Speaker 03:
There was no need for any further legal action by the agency.

[00:08:25] Speaker 03:
It was automatically extended.

[00:08:27] Speaker 02:
The September 26, 2012 end date was null and void upon Mr. Reddick's acceptance of FDIC's offer, which specified a new end date.

[00:08:37] Speaker 03:
That seems like that's not the way it would work.

[00:08:39] Speaker 03:
It seems like that at the end of the date, if you were actually going to be extended, the agency would have issued a new SF50 with a new not to exceed date.

[00:08:50] Speaker 03:
But the implication of your argument is that the legal document is the offer and acceptance, and that new SF50 is not necessary.

[00:08:57] Speaker 02:
Well, Your Honor, as to when the agency would issue a new SF50, that is within the agency's purview.

[00:09:04] Speaker 02:
It could have done so upon receiving Mr. Reck's acceptance, or FDIC's position is that it did not issue a new SF50 until, it did not ever, but it did not plan to do so until this effective date.

[00:09:16] Speaker 03:
Can I get back to the thing I was trying to get at and I think I got sidetracked is it seems again like your view is that there can't be any kind of conditional extension here.

[00:09:31] Speaker 03:
That once they do it, it's done.

[00:09:33] Speaker 03:
So why is that a good idea?

[00:09:35] Speaker 03:
I mean, if the agency, I mean, I assume they're using these term appointments because they have an increased workload, but they're not sure that it's going to maintain a certain level.

[00:09:46] Speaker 03:
And so they're going to offer an extension on a preliminary doing of good job performance, because they want to keep these people and don't want them to go out to look for other jobs.

[00:09:56] Speaker 03:
But they want to reserve the right to not give them an extension if it turns out, sometimes during the course of that job, they're not doing a good performance.

[00:10:06] Speaker 03:
Why isn't that system upset by your notion of the law?

[00:10:11] Speaker 02:
That's two points there, Your Honor.

[00:10:13] Speaker 02:
First, the agency's authority here

[00:10:15] Speaker 02:
is derived from the regulation, which says you may extend term appointments.

[00:10:19] Speaker 02:
It does not authorize the agencies to attach conditions.

[00:10:23] Speaker 02:
And the more fundamentally, Your Honor, to the extent of the agency- It doesn't prohibit him from attaching conditions, does it?

[00:10:28] Speaker 02:
It does not explicitly do that, but the more fundamentally, Your Honor, if at any point during Mr. Redick's term, if the agency had a reason to think that, well, we do not wish to employ him any further, it should have proceeded as Congress intended, which is proposal removal

[00:10:44] Speaker 02:
afford him his section 7513 rights and then proceed that way.

[00:10:50] Speaker 04:
Let me ask you this, what is it that, let's say we fine in favor of your client, what is it that you want?

[00:10:58] Speaker 04:
What do we do here?

[00:11:01] Speaker 02:
If you fine for our client, Mr. Reddick should receive back pay for the two years that he was unable to work because he was

[00:11:08] Speaker 02:
effectively removed in a manner inconsistent with the statute.

[00:11:11] Speaker 04:
Okay, so we can't give him his job back.

[00:11:13] Speaker 04:
You're saying he gets back pay for the two years.

[00:11:16] Speaker 02:
Correct.

[00:11:17] Speaker 02:
Mr. Rex's term would have expired one year ago.

[00:11:20] Speaker 04:
So going back to the letter where he was offered the employment, it says this extended employment is subject to the conditions of employment.

[00:11:28] Speaker 04:
It goes on and says it's subject to your continued successful performance.

[00:11:33] Speaker 04:
After you got the letter, your client was adjudged not to have

[00:11:36] Speaker 04:
successful performance, why were they not correct to rescind this offer?

[00:11:46] Speaker 02:
So, two points there, Your Honor.

[00:11:47] Speaker 02:
Again, the agency's authority to offer this extension and extend Mr. Vanek's term appointment derives from the regulation.

[00:11:57] Speaker 02:
Nothing in the regulation allowed the attachment of conditions.

[00:12:01] Speaker 03:
So, in your view, they can't do that.

[00:12:03] Speaker 03:
They can't say, we're going to give you a conditional extension.

[00:12:05] Speaker 03:
it's either up or down once they give it to you they're done.

[00:12:08] Speaker 03:
They're stuck with this guy.

[00:12:10] Speaker 02:
Well, they're not stuck with this guy.

[00:12:13] Speaker 03:
They're stuck with giving him appeal rights.

[00:12:15] Speaker 02:
Right, to which he isn't entitled by statute.

[00:12:17] Speaker 03:
Well, only if he's an employee, but if he's serving in a term appointment and it expires, he's not.

[00:12:24] Speaker 03:
I mean, that's the whole purpose of using these term appointments sometimes is so that you don't bring on people and give them full appeal rights forever that

[00:12:34] Speaker 03:
If their term expires and they're not performing satisfactory, the agency doesn't have to retain them.

[00:12:39] Speaker 02:
The purpose of the regulation allowing extension of term appointments is to benefit the agency, is to allow efficiency.

[00:12:46] Speaker 02:
They want to go through the competitive service requirements.

[00:12:49] Speaker 02:
And it's to ensure continuity.

[00:12:50] Speaker 02:
They can keep somebody they want to keep.

[00:12:52] Speaker 02:
Here, FDIC purported to rescind based on some recordings that Mr. Redick had completed in the course of his duties.

[00:13:02] Speaker 02:
There's no question here that FDIC knew about the conduct that it later based his rescission on before it extended the offer, and that it didn't purport to rescind until four months after Mr. Raddick had accepted that offer.

[00:13:17] Speaker 04:
Counsel, you're into your rebuttal time.

[00:13:19] Speaker 04:
Do you want to stop now, and I'll restore you back to your three minutes when you come back up.

[00:13:23] Speaker 04:
Yes, thank you.

[00:13:29] Speaker 04:
Mr. Sweet?

[00:13:38] Speaker 04:
Why is it that the letter that made the offer of the extended employment, why did that change the underlying nature of employment from a two-year to a four-year?

[00:13:51] Speaker 00:
Up until that letter, his end date was September 26, 2012.

[00:13:55] Speaker 00:
So it was only through that letter that he would have been extended beyond that end date.

[00:14:01] Speaker 00:
However, as Your Honor pointed out, that letter expressly stated that the extension wouldn't be effective until September 27, 2012.

[00:14:09] Speaker 00:
It did not state that it would be effective upon acceptance.

[00:14:13] Speaker 00:
Therefore, that extension offer never became effective.

[00:14:17] Speaker 04:
But it's an offer of employment, isn't it?

[00:14:19] Speaker 04:
It's saying, we're going to offer you a job, do you want it or not?

[00:14:22] Speaker 04:
And he said, yes, I do.

[00:14:23] Speaker 00:
Yes, but employment is not governed by contract law.

[00:14:26] Speaker 00:
the employee drives his benefits from the appointment, not from a contract.

[00:14:31] Speaker 04:
The purpose of this whole nature of extending these types of offers, the agency was implementing a program trying to preserve workers with experience and workers that were working on particular cases that may have been complex.

[00:14:49] Speaker 04:
And so you adopted this system of turning the two-year term into a four-year term.

[00:14:56] Speaker 00:
Well, I think that's not entirely accurate.

[00:14:59] Speaker 00:
The reason that they had these temporary employees was during the financial crisis, they were experiencing a surge in workload requirements, and so they needed people.

[00:15:08] Speaker 00:
But again, they weren't sure how long that was going to last.

[00:15:12] Speaker 00:
Right.

[00:15:13] Speaker 04:
So you have temporary employees, and you had a program by which you could make an offer and extend it to two years and make it into four years.

[00:15:22] Speaker 00:
Yes, that's correct.

[00:15:24] Speaker 00:
However, again, that extension never became effective.

[00:15:27] Speaker 00:
It would have become effective on September 27, 2012, but the agency revoked it before then.

[00:15:33] Speaker 04:
So it didn't become effective because of the activities that Mr. Reddick had engaged in, the recording activities and things.

[00:15:45] Speaker 04:
But it seems to me that when you look at the offer that was made and his acceptance, that those activities had already taken place.

[00:15:52] Speaker 04:
Shouldn't you, if you're going to say we're appointing them to a new term and you look at the letters as subject to your continued successful appointment or performance, doesn't that mean to his performance in the new term or are you referring to the initial two year term?

[00:16:09] Speaker 00:
The agency wasn't aware when it made the offer of the extent of his misconduct.

[00:16:14] Speaker 00:
The OIG report had not been issued at that point.

[00:16:18] Speaker 01:
This is the right hand, not the left hand.

[00:16:21] Speaker 00:
I mean the OIG report hadn't come out yet, so they didn't have an official documentation yet as to the extent of his misconduct.

[00:16:31] Speaker 00:
There was a miscommunication, though you're correct, and the decision-maker had thought that OIG had determined that his conduct wasn't bad.

[00:16:41] Speaker 01:
One question I just want to make sure I understand.

[00:16:44] Speaker 01:
You say at the beginning of your brief that we don't have jurisdiction because

[00:16:50] Speaker 01:
for purposes of 5 USC 4303, the FDIC is not an agency, right?

[00:16:58] Speaker 01:
And you're saying that we don't have jurisdiction under 7512, not because the FDIC isn't an agency, but because he wasn't removed.

[00:17:07] Speaker 01:
Is that correct?

[00:17:08] Speaker 00:
Oh, that's correct, Your Honor.

[00:17:10] Speaker 01:
So really, the 7512 argument, the jurisdictional argument here is really kind of intertwined with the merits of what we've been discussing.

[00:17:17] Speaker 00:
Exactly.

[00:17:18] Speaker 00:
All right.

[00:17:19] Speaker 01:
I'm sorry to interrupt.

[00:17:20] Speaker 01:
I just want to make sure I understood that.

[00:17:21] Speaker 00:
Oh, no.

[00:17:21] Speaker 00:
And just to be clear, the fact that the FDIC is a government corporation does not preclude jurisdiction under 7512.

[00:17:29] Speaker 00:
That only applies to 7512.

[00:17:30] Speaker 01:
I thought that was the case, but I just want to make sure.

[00:17:32] Speaker 00:
Yes.

[00:17:32] Speaker 00:
And it appears from Mr. Reddick's reply that he's not relying on 74, or 4303, and he's only relying on 7512.

[00:17:40] Speaker 04:
Did I hear you correct that the agency wasn't aware of Mr. Redick's activities until the OIG report came out?

[00:17:48] Speaker 00:
No, I said that they didn't know the full extent of it.

[00:17:50] Speaker 00:
But they were aware of it?

[00:17:52] Speaker 04:
Yes.

[00:17:52] Speaker 04:
When the letter came out, the agency was aware of those activities?

[00:17:56] Speaker 00:
Yes, they didn't have the OIG report, but they knew that he had served issues for the recorded conversation.

[00:18:01] Speaker 01:
Well, it was reflected in his performance review in March.

[00:18:04] Speaker 01:
Yes.

[00:18:05] Speaker 01:
his supervisors were critical of him for not demonstrating good judgment, and that showed up in his March performance evaluation, right?

[00:18:15] Speaker 00:
Yes, that's correct, John.

[00:18:16] Speaker 04:
And despite that evaluation, he still made the offer for employment.

[00:18:22] Speaker 00:
Yes, that's correct.

[00:18:22] Speaker 00:
But again, that was before you had an OIG investigation report.

[00:18:26] Speaker 04:
What did the OIG investigative report show that changed that?

[00:18:30] Speaker 00:
It showed the number of recordings, but also, as the arbitrator found,

[00:18:35] Speaker 00:
There is a difference between just having the allegations and not having the complete report and then having OIG saying that there was illegal activity, which is what the report showed.

[00:18:47] Speaker 00:
But I also want to point out that there was a misunderstanding and that the decision maker had thought that OIG had concluded that the activity was not illegal when in fact OIG had only determined that the U.S.

[00:19:02] Speaker 00:
attorney was not going to prosecute.

[00:19:04] Speaker 04:
But ultimately, the OIG report... Are you saying the OIG report showed illegal activity?

[00:19:09] Speaker 00:
Yes.

[00:19:10] Speaker 04:
Where does it do that?

[00:19:11] Speaker 00:
I believe he says it's illegal in California to record secretly.

[00:19:16] Speaker 04:
Does it say it's illegal or do you believe it's illegal?

[00:19:19] Speaker 04:
One moment, Your Honor.

[00:19:21] Speaker 01:
I think this was where the DA in California, you're saying, in California, in some states, a conversation, I guess, can be recorded with the consent

[00:19:31] Speaker 01:
of one of the parties, whereas in California they both have to consent.

[00:19:35] Speaker 01:
And what you're saying is that the local California authorities, although Mr. Reddick had violated that particular statute, chose not to pursue any criminal.

[00:19:47] Speaker 00:
That's correct.

[00:19:49] Speaker 00:
But the, and I don't have the exact page here, but I do recall that the OIG report stated that it's illegal to record conversations without dual consent.

[00:19:59] Speaker 01:
One of the things you mentioned in responding to Judge Reyna's question was the deciding person.

[00:20:07] Speaker 01:
Who ultimately had authority here to make a decision as to an extension or a non-extension?

[00:20:15] Speaker 01:
Because clearly in the record, we have the immediate supervisor sending the letter and Mr. Reddick accepting it.

[00:20:22] Speaker 01:
But then people higher up the chain.

[00:20:25] Speaker 01:
Is there a regulation or anything that says,

[00:20:28] Speaker 01:
Who had the final word on this?

[00:20:31] Speaker 00:
There's nothing in the record, but the record does show that the Human Resources Department did sign off on the letter.

[00:20:39] Speaker 01:
The April 13 letter?

[00:20:41] Speaker 00:
Yes.

[00:20:42] Speaker 00:
No, I'm sorry, the initial letter offering to extend.

[00:20:45] Speaker 01:
That's the April 13 letter.

[00:20:46] Speaker 00:
Right.

[00:20:47] Speaker 00:
So they ultimately had authority, but there's no dispute that authority was granted to issue that April 13 letter.

[00:20:55] Speaker 04:
Let's go back a little bit to whether there's criminal activity or not, because I think it makes a difference.

[00:21:03] Speaker 04:
Now, the Department of Justice email that reviewed this issue says, the language of the California Penal Code, Section 632, does not explicitly address the issue whether the statute was intended to apply when one party to a telephone call is in California and another party is outside of California.

[00:21:23] Speaker 04:
The record, the way I saw it, was that there was no determination of illegal activity, that they could not resolve that particular question.

[00:21:32] Speaker 04:
And I believe that's at JA57.

[00:21:35] Speaker 04:
The reason this is important to me, because I'm looking at on what basis was he removed after he made the offer of employment.

[00:21:51] Speaker 04:
It seems to me that the record is

[00:21:53] Speaker 04:
clear that the agency was aware that he was recording conversations.

[00:22:01] Speaker 04:
They were aware to the extent that he had done this.

[00:22:04] Speaker 04:
And they knew it was a problem.

[00:22:08] Speaker 04:
And they went ahead and made the offer of employment, notwithstanding that.

[00:22:12] Speaker 00:
This letter, Your Honor, on JA57, that's the misunderstanding.

[00:22:15] Speaker 00:
This is what the conversation, that was the basis for.

[00:22:19] Speaker 00:
offering the letter.

[00:22:21] Speaker 00:
So this is showing that there was a misunderstanding as to whether it was illegal or not.

[00:22:26] Speaker 04:
Right.

[00:22:26] Speaker 04:
I mean, the letter shows that it's up in the air.

[00:22:30] Speaker 04:
The law is not clear in California.

[00:22:32] Speaker 00:
And that was a misperception.

[00:22:34] Speaker 00:
That's what they thought when they offered the extension letter.

[00:22:36] Speaker 00:
They thought it was unclear.

[00:22:38] Speaker 00:
Ultimately, and again, I apologize.

[00:22:40] Speaker 00:
I'm looking for it.

[00:22:41] Speaker 00:
If you look at the ORHG investigation report, they determined that that's incorrect and that's clear under California law.

[00:22:47] Speaker 00:
that you need dual consent.

[00:22:50] Speaker 00:
Go ahead.

[00:22:51] Speaker 01:
No, I was going to say, where's the OIG report?

[00:22:54] Speaker 00:
I believe that's in the appendix, but... I remember... I remember seeing it in there, but I'm just... Yeah, now... Oh, here.

[00:23:02] Speaker 00:
It's tab 19, page 67.

[00:23:05] Speaker 00:
Pardon?

[00:23:06] Speaker 00:
It looks like it's joint appendix page 67.

[00:23:09] Speaker 01:
It starts on... 60... Yeah, it looks like...

[00:23:17] Speaker 00:
68.

[00:23:18] Speaker 00:
And then if you look at the beginning, 68 through 71.

[00:23:48] Speaker 01:
But I think I sort of, Judge Hughes, I think had a question.

[00:23:52] Speaker 03:
Well, I take it it's your view that we're not reviewing why they made their decision to revoke this offer and not extend it.

[00:24:04] Speaker 03:
I mean, up until September 26th, they could have decided for any reason.

[00:24:10] Speaker 03:
Maybe the work completely dried up and they didn't need anybody anymore.

[00:24:14] Speaker 00:
They could have decided not to reappoint him.

[00:24:16] Speaker 00:
That's correct, Your Honor.

[00:24:18] Speaker 00:
Mr. Redick has never challenged the merits of the decision to revoke his extension here.

[00:24:25] Speaker 00:
He did before the arbitrator, but he's never appealed the arbitrator's decision that it was fine to issue the revocation based on the OIG report.

[00:24:35] Speaker 03:
The only issue he raises is, how did, practically speaking, the agencies use their appointment authority and demonstrate that these terms had been

[00:24:46] Speaker 03:
either extended or new terms, however you want to do it.

[00:24:49] Speaker 00:
Yes, Your Honor.

[00:24:50] Speaker 00:
And this is a response to your earlier question.

[00:24:52] Speaker 00:
For the employees who were extended, on September 27, 2012, they received new SF50s with the new end date.

[00:25:00] Speaker 03:
So what would have happened here if he got this offer to extend and he accepted it?

[00:25:08] Speaker 03:
And on September 26, there was no new SF50 issue reappointing.

[00:25:15] Speaker 03:
Could this document legally satisfy as an appointment document?

[00:25:20] Speaker 00:
Well, I think under RAID and the SF-50 wouldn't necessarily be required for the appointment, although that case recognized you can still revoke, but that held that you don't need the SF-50.

[00:25:32] Speaker 03:
So you think this document could be a legal appointment document?

[00:25:37] Speaker 00:
I think you need the SF-50 for the appointment to be completed, but I think the case law says that that's not kind of the last step.

[00:25:46] Speaker 04:
Is that for a reappointment?

[00:25:48] Speaker 00:
Yes, they issue these either for the reappointment or the extension.

[00:25:51] Speaker 04:
So if it's not a reappointment, just an extension, do you still need a new SF-50?

[00:25:57] Speaker 00:
Yes, all the other employees who were extended to temporary employees all received SF-50s on September 27.

[00:26:06] Speaker 00:
So, if Your Honors have no further questions.

[00:26:09] Speaker 00:
Do you have any questions?

[00:26:11] Speaker 00:
No.

[00:26:11] Speaker 00:
No, thank you.

[00:26:12] Speaker 00:
Thank you.

[00:26:12] Speaker 02:
Your Honor, just three quick points.

[00:26:27] Speaker 01:
Just to ask you a question of picking up on the colloquy with opposing counsel.

[00:26:33] Speaker 01:
There was discussion about how, at the time,

[00:26:36] Speaker 01:
of the rescission of the offer the agency knew about the recording of the conversations and so forth.

[00:26:44] Speaker 01:
Supposing what we had here was a situation where something came to light after, say, on August the 1st, after Mr. Redick accepted the offer on April 18th.

[00:26:59] Speaker 01:
Information came to the agency's attention that it did not have before.

[00:27:04] Speaker 01:
What would be the situation then?

[00:27:08] Speaker 01:
Under those circumstances, in your view, have rescinded the offer.

[00:27:13] Speaker 02:
Your Honor, in that situation, the appropriate course would be for the agency to propose a removal and afford the employee here, Mr. Reddick.

[00:27:21] Speaker 01:
No, what if it just said, no, we're not going to remove you, we're just not going to renew the term.

[00:27:27] Speaker 01:
We're rescinding the extension of April 13, 18.

[00:27:34] Speaker 02:
Your Honor, this notion that an agency can

[00:27:36] Speaker 02:
rescind and already accepted offer to extend without calling it a removal and without giving the employee Chapter 7513 due process rights is simply a fiction.

[00:27:47] Speaker 02:
It's not a real personnel action.

[00:27:49] Speaker 02:
It doesn't exist and there's no authority for it.

[00:27:53] Speaker 01:
One of these, what exactly did Mr. Redick lose here?

[00:27:57] Speaker 01:
I mean, it's undisputed he continued to the end of the original two-year period, correct?

[00:28:03] Speaker 01:
Correct.

[00:28:04] Speaker 01:
And while I can certainly see

[00:28:05] Speaker 01:
there were failed expectations and disappointment on his part.

[00:28:10] Speaker 01:
I can understand that.

[00:28:12] Speaker 01:
He, there's nothing on his record.

[00:28:15] Speaker 01:
It's negative.

[00:28:17] Speaker 01:
They just rescinded an offer and he was fully paid.

[00:28:20] Speaker 01:
And what, what is, what did he, what did he really lose?

[00:28:24] Speaker 02:
Uh, your honor, Mr. Rex lost two very important things.

[00:28:26] Speaker 02:
First, he lost the rights that Congress intended for him to have.

[00:28:30] Speaker 02:
He lost his rights to procedural due process before being

[00:28:34] Speaker 02:
forced to leave FDIC two years earlier than he had anticipated.

[00:28:38] Speaker 02:
And as a result, because he was involuntarily forced to leave FDIC in 2012 as opposed to 2014, he lost two years of pay.

[00:28:50] Speaker 03:
If this offer letter said, we are going to offer you a second to your term,

[00:29:01] Speaker 03:
And at the expiration on September 26, you will be given a second two-year term effective September 27.

[00:29:09] Speaker 03:
That's not extending the term, right?

[00:29:15] Speaker 03:
That's a new second year appointment.

[00:29:17] Speaker 03:
I understand your objections to that, that they couldn't do it.

[00:29:20] Speaker 03:
I assume that's not the case.

[00:29:22] Speaker 02:
Yeah, that's correct.

[00:29:23] Speaker 02:
That's correct, Your Honor.

[00:29:24] Speaker 03:
And so if that happened, even if he had accepted the second two-year term, they could

[00:29:31] Speaker 03:
before it starts, revoke it, right?

[00:29:33] Speaker 02:
Yes.

[00:29:34] Speaker 03:
And so they could just say, we're not going to give you this new two-year term.

[00:29:38] Speaker 02:
Correct.

[00:29:38] Speaker 02:
And that's just an entirely different situation.

[00:29:40] Speaker 02:
That's the opposite of what I heard here.

[00:29:41] Speaker 03:
Well, so that's what kind of troubles me a little bit about your argument, because it seems like you're saying there's a blurring of the facts in the law here.

[00:29:51] Speaker 03:
If we read this April letter as doing exactly that, saying your second two-year term will be effective, and it does use the word effective,

[00:29:59] Speaker 03:
September 27, 2012, then isn't that precisely that situation?

[00:30:09] Speaker 02:
Your Honor, the word re-appointment is never used in this letter.

[00:30:12] Speaker 02:
The word extension is used.

[00:30:15] Speaker 02:
FDIC has conceded it relied on the term extension regulation, not the re-appointment regulation.

[00:30:20] Speaker 02:
So we do not have a re-appointment.

[00:30:22] Speaker 02:
As to the effective date,

[00:30:26] Speaker 02:
We believe the letter from SBIC must be read in conjunction with the regulation that authorized it, all of which pertained to extensions.

[00:30:35] Speaker 02:
An effective date would make sense in a situation where you have a reappointment, where you're going to have a start date, an effective date.

[00:30:42] Speaker 02:
That is not this situation.

[00:30:43] Speaker 02:
Mr. Redick was already on the job.

[00:30:46] Speaker 02:
And the extension served the length of the thing to term.

[00:30:49] Speaker 04:
What are the circumstances under which the agency will make a reappointment versus an extension?

[00:30:57] Speaker 02:
Well, I believe the agency would have the option to do either, and here I simply chose the extension course as to the reappointment course.

[00:31:04] Speaker 04:
And I say that with the caveat that in a competitive service term position- Does this change the employee's seniority status or performance status or anything like that?

[00:31:14] Speaker 04:
I say that because I'm looking at the FDIC management report at J57, and it's talking about rhetoric being instrumental.

[00:31:24] Speaker 04:
This is after knowledge about

[00:31:26] Speaker 04:
the recordings that come out.

[00:31:30] Speaker 04:
And they say that he's a lead investigator in another case.

[00:31:33] Speaker 04:
He has satisfactory performance.

[00:31:34] Speaker 04:
He's got 40 plus years of investigative experience.

[00:31:38] Speaker 04:
Says, Tim is a valuable resource for training fraud.

[00:31:41] Speaker 04:
So he's valuable for training other folks in other regions.

[00:31:47] Speaker 04:
So does this change?

[00:31:51] Speaker 04:
Does this alter that evaluation if he's reappointed versus

[00:31:56] Speaker 04:
versus extended?

[00:31:58] Speaker 02:
Your Honor, I'm not sure if I followed the question.

[00:32:05] Speaker 04:
Whether he's reappointed or his employment is extended, does that alter his status as an employee in terms of seniority, in terms of his work history and things of that nature?

[00:32:19] Speaker 02:
Your Honor, I'm not sure about the seniority.

[00:32:22] Speaker 02:
I would think not, but I'm not sure.

[00:32:24] Speaker 02:
his work history and his past successful performance, and that would obviously still be there.

[00:32:29] Speaker 02:
And I think it's important here, as our friend on the other side and your honors discussed, FDIC knew about this conduct before it extended Mr. Redick's employment, before it made its offer.

[00:32:45] Speaker 02:
JA57, that internal email chain, we don't believe that that reflects a misunderstanding or any confusion.

[00:32:51] Speaker 02:
We believe it's clear.

[00:32:52] Speaker 02:
FDIC knew what was happening.

[00:32:55] Speaker 02:
In contrast to FDIC's view, we don't believe the OIG report characterized what happened to the illegal.

[00:33:02] Speaker 02:
We think it's more accurate to say that it remained an open question.

[00:33:07] Speaker 04:
Okay, you're well into your time.

[00:33:09] Speaker 04:
Do you want to have a closing thought?

[00:33:11] Speaker 02:
Your Honor, in conclusion, we believe the offer letter and FDIC's concession that relied on 5 CFR part 316.31, the term extension regulation for that letter, we believe those two things

[00:33:25] Speaker 02:
answer the question here, which is that Mr. Redick was extended and therefore under board president he was removed when FDIC canceled the final two years of his four-year term of employment.

[00:33:36] Speaker 02:
Thank you.