The D.C. Circuit reminded agencies that they cannot ignore obligations they have discretion to implement.
The check is in the mail. This saying serves as the age-old excuse for payment not arriving on time—and a plausible one, considering that the U.S. Postal Service processes and delivers an average of 167 million pieces of mail per day.
Processing such a large volume of letters and packages requires an extensive workforce that is trained and well-supervised, which is why a recent decision by the U.S. Court of Appeals for the D.C. Circuit may have implications for people other than Washington, D.C. lawyers. In a case called National Association of Postal Supervisors v. United States Postal Service, the D.C. Circuit Court of Appeals addressed how the Postal Service pays those who supervise the mail’s processing and delivery, focusing on how the law controls decisions by federal agencies.
In its argument, the National Association of Postal Supervisors (NAPS) claimed that postal supervisors had been shortchanged by a Postal Service decision on pay rates. NAPS said that this discrepancy resulted from the Postal Service violating legal rules on how to set the supervisors’ pay. NAPS sued the Postal Service over its 2016–2019 pay package, which NAPS claimed did not provide a pay scale that would keep clerks from making more than managers and failed to consider private sector compensation and benefits.
The trial court held in favor of the Postal Service, explaining that the Postal Service had not violated a “clear and mandatory statutory directive” because the Postal Reorganization Act of 1970 gave the Postal Service broad discretion to decide how best to determine pay differentials and consider private sector benefits and compensation.
The appellate court reversed the trial court’s judgment, finding that the Postal Service did not have discretion to choose any policy it liked or to implement it any way that Postal Service thought right. The court’s message in essence was that just because an agency has discretion to determine how best to meet its statutory obligations does not mean it has discretion to ignore those obligations.
The Postal Reorganization Act authorizes the Postal Service to set all employees’s “compensation and benefits.” It also states that “it shall be the policy” of Postal Service to offer pay differentials between different classes of employees and to consider private sector benefits and compensation.
As NAPS conceded, federal law governing the Postal Service specifies that the Service’s actions fall outside the normal provisions for judicial review found in the Administrative Procedure Act (APA). Nonetheless, NAPS argued that, based on the D.C. Circuit’s own past precedent, the court still could engage in a non-APA review of the Postal Service’s actions to decide whether the agency exceeded its authority.
The Postal Service, in contrast, said that, unlike the earlier cases providing for such review, NAPS was challenging decisions that were wholly within the Postal Service’s discretion respecting matters of policy. In its view, courts should not be able to review those decisions
The APA generally grants courts the power to review agency actions. Where a law gives an agency discretion over what actions it takes, courts defer to reasonable agency judgments that are within the scope of that discretionary authority. According to the U.S. Supreme Court’s decision in Chevron v. National Resources Defense Council, if the U.S. Congress gives an agency discretion over a particular policy judgment, courts should not second-guess the agency’s decision. For the same reason, agencies’ discretionary policy judgments that are authorized by law also fall outside courts’ non-APA review authority.
The appellate court noted, however, that courts still are responsible for ensuring that agencies do not go outside their statutory authority. The appellate court decided in this instance that the Postal Service exceeded its statutory authority by failing to give higher pay to managers than to clerks. The appeals court acknowledged that the Postal Service has discretion to determine the size of any pay difference, but it could not have no difference between pay for those categories of employees.
In addition, the court found that although the Postal Service’s had discretion to determine the best methods for keeping its compensation comparable to private sector compensation, the APA still required the Postal Service to show that its employees’ benefits and compensation are comparable to those in the private sector.
The Postal Service had examined comparable private sector compensation and benefits—but for only eight employment positions out of 1,000. This minimal investigation led the court to conclude that Postal Service had not stayed within the requirements of the law.
The D.C. Circuit Court’s decision in Postal Supervisors makes it clear that the Postal Service cannot slight its statute’s directives—that is, when it comes to analyzing what it pays its staff, it cannot just mail it in.