Federal Court: Agencies Can Punish Employees for Refusing to Break Rules

State Department employee was not protected because he refused to violate a contracting regulation, rather than a federal law.

The State Department acted properly when it punished an employee for refusing to carry out a rule-breaking assignment, a federal court has decided, setting a new precedent in the federal workforce.

The U.S. Court of Appeals upheld a ruling originally determined by the Merit Systems Protection Board in Rainey v. State, in which an employee argued the department improperly gave him a poor performance review and took away responsibilities when he refused to carry out a directive that went against federal rules. Instead, the court affirmed in a precedent-setting opinion, State was permitted to take those actions because rules and regulations do not qualify as federal statute.

The Whistleblower Protection Act protects a federal employee from retaliation “for refusing to obey an order that would require the individual to violate a law.” Timothy Rainey was instructed by a supervisor to compel a contractor to rehire a fired subcontractor, according to court documents. Such a request violates a provision of the Federal Acquisition Regulation, and Rainey refused to carry out the order.

Rainey’s supervisors later gave him a negative performance review and stripped his duties as a contracting officer for his failure to comply with direction. Upon challenging the decision, MSPB ruled and the U.S. Court of Appeals for the Federal Circuit affirmed the “right to disobey” provision of the whistleblower law applies only when an employee is asked to violate federal law specifically.

In other words, the court set a precedent that when a supervisor asks an employee to violate a federal rule or regulation, the employee must comply.

MSPB’s central board in 2015 cited a recent Supreme Court decision -- in which the high court ruled in favor of the employee -- to back up its ruling. In Department of Homeland Security v. MacLean, the Supreme Court found a Transportation Security Administration employee, Robert MacLean, was entitled to whistleblower protections because he had only violated a rule -- not a law -- when blowing the whistle on TSA’s decision to cut costs by reducing the number of air marshals on long-distance flights.

In the majority opinion of that case, Chief Justice John Roberts stated that “interpreting the word ‘law’ to include rules and regulations could defeat the purpose of the whistleblower statute” and allow an agency to insulate itself from a key section of the act that protects against retaliation by simply writing a regulation prohibiting whistleblowing. 

Whereas MacLean prevailed and ultimately was reinstated in his job with back pay, the federal appeals court in Rainey v. State used the same rules versus laws logic to the employee’s detriment.