Keith Reilly, a criminal investigator for the Department of Labor's Office of the Inspector General, reported being harassed by a supervisor. Around the same time, Reilly disclosed medical conditions, leading doctors to find him unfit for duty. The Department subsequently relieved him of his position, and he was placed on unpaid leave before being approved for disability retirement. After his retirement took effect, Reilly attempted to return to work or secure other positions within the Department. He alleged that the Department blocked him from applying for a temporary investigator position and failed to select him for a protective services role because of his prior whistleblowing. The Merit Systems Protection Board dismissed his claims, first finding he had not sufficiently alleged a causal link between his protected activity and the inability to apply, and later finding he failed to exhaust remedies regarding the non-selection claim. Reilly appealed these decisions to the Fourth Circuit.
Chief Judge Diaz, writing for a unanimous panel, applied the highly deferential standard of review required for agency decisions, noting that the court may only set aside findings if they are arbitrary, capricious, an abuse of discretion, or unsupported by substantial evidence. The court addressed two primary claims. First, regarding the inability to apply for a temporary position, the court affirmed the Board's conclusion that while Reilly established a prima facie case of retaliation, the Department successfully rebutted it. The Department demonstrated by clear and convincing evidence that it would have limited the applicant pool to internal candidates regardless of Reilly's disclosures, citing legitimate reasons such as the need for an employee who could immediately step into the role. Second, regarding the non-selection for a protective services job, the court upheld the Board's dismissal for lack of jurisdiction. The administrative judge found that Reilly's initial complaint to the Office of Special Counsel did not allege retaliation but rather claimed an unfair hiring advantage for another candidate. Because Reilly failed to provide the Office of Special Counsel with factual allegations linking his whistleblowing to the non-selection, he did not exhaust his administrative remedies. The court found no error in the Board's application of the statutory standard requiring nonfrivolous allegations that protected activity was a contributing factor.
The decision leaves the Department of Labor's adverse employment actions against Reilly in place, denying him corrective relief such as reinstatement or back pay. It reinforces the strict procedural requirements for federal whistleblowers, emphasizing that employees must explicitly allege retaliation at the initial administrative stage to preserve jurisdiction. The ruling clarifies that an agency can defeat a retaliation claim by showing it would have taken the same personnel action for legitimate, non-retaliatory reasons, even if the employee proves a protected disclosure was a contributing factor.