Richard A. Leatherbury v. Department of the Army

United States Court of Appeals for the Federal Circuit
2007-3261
RICHARD A. LEATHERBURY,
Petitioner,
v.
DEPARTMENT OF THE ARMY,
Respondent.
David H. Giggs, Dolan Griggs LLP, of Portland, Oregon, argued for petitioner.
Hillary A. Stern, Senior Trial Counsel, Commercial Litigation Branch, Civil Division,
United States Department of Justice, of Washington, DC, argued for respondent. On the
brief were Jeanne E. Davidson, Director; Todd M. Hughes, Deputy Director; and Dawn S.
Conrad, Trial Attorney. Of counsel on the brief was James R. Herald, Assistant District
Counsel, Office of Counsel, Portland District, United States Army Corps of Engineers, of
Portland, Oregon.
Appealed from: Merit Systems Protection Board

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United States Court of Appeals for the Federal Circuit
2007-3261
RICHARD A. LEATHERBURY,
Petitioner,
v.
DEPARTMENT OF THE ARMY,
Respondent.
Petition for review of the Merit Systems Protection Board in SF0752060100-I-1
___________________________
DECIDED: April 29, 2008
___________________________
Before BRYSON, Circuit Judge, CLEVENGER, Senior Circuit Judge, and DYK, Circuit
Judge.
DYK, Circuit Judge.
Richard A. Leatherbury (“Leatherbury”) appeals a final decision of the Merit
Systems Protection Board (“Board”) upholding the Department of the Army’s (“agency”)
removal of Leatherbury from his position with the U.S. Army Corps of Engineers.
Because we conclude that one of the three charges sustained by the Board was not
supported by substantial evidence, and that the Board improperly overturned credibility
findings of the Administrative Judge (“AJ”) on another charge, we reverse and remand.
BACKGROUND
Leatherbury, at the time of his removal, held the position of Assistant Operations
Manager for The Dalles, John Day, Willow Creek Project (the “Project”) in the Army

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Corps of Engineers’ Portland, Oregon, District. In his 34 years of total experience in the
federal service, 29 of which he served as a civilian with the agency, Leatherbury had not
been disciplined prior to the charges that led to his removal.
The Project involved the operation of three hydroelectric dams located on the
Columbia River east of Portland, Oregon. Leatherbury lived in The Dalles, Oregon, just
west of The Dalles Dam, and maintained his regular duty station at the John Day Dam
in Rufus, Oregon, to the east of The Dalles Dam. Leatherbury’s daily commute took
him right past The Dalles Dam on his way to the John Day Dam, located 24 miles east
of The Dalles Dam along Interstate 84, which runs parallel along that stretch to the
Columbia River. The events leading up to Leatherbury’s dismissal can be summarized
briefly.
I The Overtime Claim
For many years, beginning in the early 1990s, Leatherbury transported Project
mail on an informal basis during his morning and evening commutes between The
Dalles Dam (which received the mail addressed to the John Day Dam from the Postal
Service) and the John Day Dam. After stopping in the morning for the mail at The
Dalles Dam, Leatherbury would exchange his personal vehicle for a government-owned
vehicle to drive between the two work sites. His regular work shift began when he
arrived at the John Day Dam. At the end of his regular shift at the John Day Dam, he
would transport the outgoing mail to The Dalles Dam where it would be given to the
Postal Service. Leatherbury continued transporting the mail between the two dams until
January 2002, when the United Power Trade Organization (“the union”) filed a
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grievance against him based on his use of the government-owned vehicle. As a result
of the grievance, Leatherbury’s supervisors no longer allowed him to take the
government-owned vehicle between sites, and Leatherbury stopped delivering the mail.
Thereafter, bargaining unit employees took up the job of transporting mail between the
work sites, and the agency paid them overtime compensation for their time.
Once Leatherbury and his supervisor, Terry Armentrout (“Armentrout”), learned
that the bargaining unit employees were being paid overtime for transporting the mail
between work sites, they began to inquire about the possibility of claiming back pay for
the overtime hours that Leatherbury had spent delivering mail prior to the start of, and
after the end of, his regular work shifts. Leatherbury and Armentrout contacted Robin
Steward (“Steward”), the Administrative Officer for the Project, to determine whether
Leatherbury could seek retroactive overtime compensation, and if so, what the
procedures were for filing such a claim. Steward agreed that Leatherbury could submit
a claim for overtime going back six years—the maximum period allowed by the statute
of limitations.
In an email to Steward, Leatherbury requested that someone from administrative
services prepare the appropriate paperwork, which he would review. In that email
request, Leatherbury provided Steward with the type of information that he determined
was relevant in compiling a request—average number of sick days, leave days, and
other miscellaneous days that he estimated he had not transported mail. Leatherbury
testified that “I wanted it constructed by others so that it would be impartially done.” J.A.
at 491. Steward agreed to have administrative services prepare the request, and
delegated the task to Kathleen Mincks (“Mincks”), an office automation clerk. Using the
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relevant information that Leatherbury provided, Mincks prepared an informal typewritten
one-page document entitled “Time History” detailing the number of hours that
Leatherbury spent, on average, over the 1996-2001 time frame transporting mail.
Armentrout drafted a cover memorandum entitled “Request for Overtime Pay for Dick
Leatherbury” to accompany the Time History. Both Leatherbury and Armentrout
reviewed the Time History, and Leatherbury reviewed the Armentrout memorandum
before submitting both documents together to the District Office in Portland for approval.
In late 2002, Leatherbury received a reimbursement check in the amount of $24,422.43
covering his claim for overtime reimbursement.
II The Travel Reimbursement Claim
In January 2002, after Leatherbury ceased using a government-owned vehicle to
transport mail between The Dalles Dam and the John Day Dam, he began using his
own private vehicle to drive between the two dams. Often, Leatherbury would stop
during business hours at The Dalles Dam on his way to work in the morning or on his
way home in the evening to conduct official business. Leatherbury frequently made
these stops to meet with other Project managers, including his direct supervisor,
Armentrout, who was stationed at The Dalles Dam. Leatherbury tracked his travel
mileage between the two dams when that travel was taken for official business
purposes and during duty hours, and submitted that mileage to the agency in the form
of local travel vouchers as a claim for reimbursement. Leatherbury submitted eleven
separate vouchers over a two-and-a-half year period between January 14, 2002, and
June 9, 2004, for a reimbursement amount totaling $1,257.57.
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III Proceedings Below
The agency issued a notice of proposed removal as finally amended on April 18,
2005. The notice included six charges, four of which were sustained by the deciding
official and are pertinent to this appeal.
Charge 1, “Filing a False Claim Against the Government,” was directed to
Leatherbury’s overtime claim and included three specifications. Specification 1 stated in
part: “the representation that you [Leatherbury] transported the mail on a daily basis
between 0600 and 0630, and between 1700 and 1730 is false. You knew or should
have known that Mr. Armentrout included this false information in his memorandum
when he transmitted your overtime claim to the [Resource Management Office].” J.A.
at 666. Specification 2 stated in part:
The ‘Time History’ . . . represented that you [Leatherbury] transported the
mail . . . for an average of 155 overtime hours per year for six years . . . In
fact, you transported the mail during overtime hours substantially less than
155 hours per year. You knew or should have known that the Time
History falsely represented that you transported the mail during overtime
hours an average of 155 hours per year. You provided the Time History to
Mr. Armentrout with this false information with the intent of misleading the
agency into paying you the amount claimed in reliance on the false
information.
Id. at 666-67. Specification 3 accused Leatherbury of improperly claiming overtime
compensation in the first place, given that the task was incidental to his normal daily
commute.
Charge 2, “Filing a False Travel Voucher,” included eleven specifications for each
travel voucher that Leatherbury submitted claiming reimbursement for his travel mileage
between the two work sites. The agency alleged that Leatherbury improperly claimed
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and received reimbursement for his non-reimbursable commute to the John Day Dam—
an expense not covered by the Joint Travel Regulations.
Charge 3, “Approving a Local Travel Voucher That Included Expenses That You
Knew Or Should Have Known Were Not Reimbursable Under The Joint Travel
Regulation,” was directed to Leatherbury’s approval of his subordinate’s travel
vouchers, which similarly included the disputed mileage between the two work sites.
Charge 6, “Claiming Overtime Compensation Not Covered By Federal Law,”
referred to three discrete instances in 1998 where Leatherbury claimed overtime
compensation for work-related travel between his home in The Dalles and, on one
occasion, Spokane, Washington, and on the two other occasions, Omaha, Nebraska.
Charge 6 is not related to the circumstances that gave rise to Charge 1.
On October 4, 2005, Colonel Thomas O’Donovan issued a decision removing
Leatherbury and sustaining the four charges described above—Charges 1, 2, 3, and 6.
Leatherbury challenged his removal before the Board. An administrative judge (“AJ”),
after a hearing, sustained the agency on Charge 3, but held that the agency had not
proven by a preponderance of the evidence the elements of Charges 1, 2, and 6.
With respect to Charge 1, the AJ held that the agency failed to prove the first two
specifications by a preponderance of the evidence, finding that Leatherbury could not
have “supplied incorrect information” by submitting the overtime claim because the
claim was merely an estimate. J.A. at 14. The AJ also held that the agency failed to
prove that Leatherbury submitted the overtime claim with intent to defraud. The AJ
concluded that he was “unconvinced that when [Leatherbury] approved the estimates
alleged in Specifications 1 and 2, and allowed them to be submitted to the District Office
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for further review, he acted either with specific intent to defraud the agency or with
reckless disregard for the truth.” J.A. at 16. In connection with specification 3, the AJ
determined that the agency failed to show that Leatherbury “was guilty of fraudulent
concealment,” since he found that the agency “was well aware that the [overtime] claim
covered trips that were part of [Leatherbury’s] daily commute.” J.A. at 17. The AJ
therefore sustained none of the three specifications in Charge 1.
Turning to the travel vouchers, the AJ found that none of the 11 specifications in
Charge 2 could be sustained. Here too, the AJ found that the agency had failed to
show that Leatherbury submitted the travel vouchers “with intent to defraud.” J.A. at 18.
He determined that the agency was well aware of the nature of Leatherbury’s commute
(given the earlier controversy with the union over Leatherbury’s use of the government-
owned vehicle) and that he did not, therefore, attempt to conceal any material
information from the agency. The AJ also found credible Leatherbury’s testimony that
he submitted the vouchers in good faith, concluding that it was “quite plausible that
[Leatherbury] was honestly mistaken about his entitlement under the specific
circumstances presented in these vouchers, and the evidence bears this out.” J.A. at
19.
The AJ sustained charge 3, finding that the agency established that Leatherbury
improperly approved his subordinate’s travel vouchers that included the disputed
mileage. In doing so, he noted that the charge differed from the other charges in that it
did not include an element of intent, and was instead akin to a charge of negligence in
the performance of Leatherbury’s official duty.
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Finally, the AJ held that Charge 6 could not be sustained, again finding that the
agency failed to show that Leatherbury knowingly supplied false information or did so
with an intent to defraud. The AJ then determined that the penalty of removal could not
be upheld based solely on Charge 3, and accordingly mitigated Leatherbury’s
punishment to a written reprimand.
The agency petitioned the full Board for review. The full Board reversed the AJ’s
initial decision with respect to Charge 1, based on Specifications 1 and 2 (but not
Specification 3), and Charge 2, and affirmed with respect to Charges 3 and 6.1 With
respect to Specifications 1 and 2 of Charge 1, the Board disagreed with the AJ that the
overtime claim was in fact an estimate, finding that “the ‘Time History’ appears to
represent an exact accounting of the overtime compensation owed to [Leatherbury]
between 1996 and 2001.” J.A. at 39. It concluded that Leatherbury “acted with reckless
disregard for the truth or for ascertaining the truth with respect to Specifications 1 and
2,” and that Leatherbury “knowingly supplied incorrect information with the intention of
defrauding the agency.” J.A. at 40. However, the Board agreed with the AJ that,
because the agency was “well aware” that the overtime claim covered the trips that
Leatherbury made as part of his daily commute, the agency failed to establish
Specification 3 of Charge 1.
In sustaining Charge 2, the Board focused on the fact that Leatherbury was a
Travel Approving Official, had attended a Travel Approving Official Class, was a
supervisor responsible for approving his subordinates’ travel vouchers, and had
1 On appeal, the agency does not contest the Board’s decision dismissing
Charge 6, and Leatherbury does not contest the Board’s decision sustaining Charge 3.
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received a number of policy memoranda and an email regarding the general rule that
employees must deduct their commuter mileage. The Board therefore concluded that
“[b]ased on the totality of the circumstances . . . [Leatherbury] possessed a specific
intent to defraud the government by submitting the false travel vouchers, or that he
acted with a reckless disregard either for the truth or for ascertaining the truth . . . .”
J.A. at 43.
The Board concluded that the agency’s decision to remove Leatherbury from his
position was reasonable “[i]n light of the nature of the sustained misconduct,” J.A. at 47,
and accordingly reinstated the penalty of removal imposed by the agency. Leatherbury
timely appealed. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(9).
DISCUSSION
Our review of the Board’s decision is limited and governed by statute. We may
only set aside a decision of the Board if it is: “(1) arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law; (2) obtained without procedures
required by law, rule, or regulation having been followed; or (3) unsupported by
substantial evidence[.]” 5 U.S.C. § 7703(c); Haebe v. Dep’t of Justice, 288 F.3d 1288,
1298 (Fed. Cir. 2002).
Leatherbury challenges the Board’s findings with respect to Charges 1 and 2.
Leatherbury contends that, under both charges, the Board’s findings are not supported
by substantial evidence. Substantial evidence is “more than a mere scintilla. It means
such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion.” Bradley v. Veterans Admin., 900 F.2d 233, 234 (Fed. Cir. 1990) (quoting
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Universal Camera Corp. v. Labor Bd., 340 U.S. 474, 477 (1951)). On appeal, “[w]e
must determine whether, considering the record as a whole, the agency’s evidence is
sufficient to be found by a reasonable factfinder to meet the evidentiary burden
applicable to the particular case.” Bradley, 900 F.2d at 234. “The substantiality of
evidence must take into account whatever in the record fairly detracts from its weight.”
Jacobs v. Dep’t of Justice, 35 F.3d 1543, 1546 (Fed. Cir. 1994) (quoting Universal
Camera, 340 U.S. at 488).
Both Charges 1 and 2 are based on allegations of falsification. Each involved an
allegation that Leatherbury submitted a false statement prepared by another person—in
the case of specification 1, a false statement by his supervisor (Armentrout), and in the
case of specification 2, a false statement by the clerk who prepared the Time History
(Mincks).
In order to sustain a charge of intentionally submitting false information, the
agency “must prove by a preponderance of the evidence that the employee knowingly
supplied wrong information, and that he did so with the intention of defrauding the
agency.” Naekel v. Dep’t of Transp., 782 F.2d 975, 977 (Fed. Cir. 1986). In Naekel, we
explained that the charge of falsification requires proof “not only [of a false statement],
but also that [the false statement] was given with intent to deceive or mislead the
agency.” Id. at 978. A false statement alone “cannot control the question of intent.” Id.
Otherwise, “the ‘intent’ element of the charge would be subsumed within the distinct
inquiry of whether the employee’s [statement] adheres to the true state of facts.” Id.
The agency may establish an employee’s intention to deceive or mislead the agency by
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circumstantial evidence. Kumferman v. Dep’t of Navy, 785 F.2d 286, 290 (Fed. Cir.
1986).
A charge that an employee knowingly supplied wrong information with an intent
to defraud the agency requires first that the agency prove that the information submitted
included a false statement. The test here is objective and is made without regard to the
employee’s subjective understanding or knowledge. Second, the agency must prove
that the false statement was material. Third, the agency must show that the employee
acted with the requisite intent. Our cases confirm that the intent element itself requires
two distinct showings: (a) that the employee intended to deceive or mislead the agency,
and (b) that he intended to defraud the agency for his own private material gain. See
Bradley, 900 F.2d at 237 (finding the false statement motivated by a desire for privacy
rather than a desire to defraud). Under the first intent prong (a), it is sufficient that the
employee either knew that the submission included a false statement of material fact, or
was reckless with respect to ascertaining the truth of the statement. See Kumferman,
785 F.2d at 290.
However, an employee’s good faith explanation can negate an inference of intent
to deceive or mislead the agency. See Naekel, 782 F.2d at 979-80; Kumferman, 785
F.2d at 290; Dennis v. Dep’t of Health & Human Servs., 804 F.2d 670, 673 (Fed. Cir.
1986) (finding credible an employee’s explanation that she relied on supervisor
instructions). Thus, a reasonable good faith belief in the truth of a statement precludes
a finding that an employee acted with deceptive intent.
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I
Leatherbury contends, with respect to Charge 1, that the Board’s finding is not
based on substantial evidence that his submission of the claim for overtime
compensation was a false statement. We begin with the assumption for purposes of
this appeal that Leatherbury did not engage in misconduct in making an overtime claim,
because the Board found that he was reasonable in believing that he was entitled to
make an overtime claim and did not sustain Specification 3 of Charge 1.
The Board’s opinion is unclear as to whether it found a violation of Specification 1
and 2 based on: 1) the theory that it was not proper for Leatherbury to submit an
overtime claim based entirely on an estimate, or 2) the theory that Leatherbury’s
overtime claim purported to be a precise calculation of actual time worked and not an
estimate. We address each in turn.
As to the first theory, the Board apparently found that Leatherbury was not
entitled to submit an estimate, stating that “[d]espite having not kept time and
attendance records by which he could have calculated the amount of overtime incurred
over the preceding years, the appellant nonetheless set out to formulate a claim against
the government.” J.A. at 39. It then appeared to fault Leatherbury for transferring the
task of generating an estimate to administrative personnel without any records. It
stated: “rather than calculating the time figures himself, the only person in a position to
possibly know the precise amount of overtime worked, [Leatherbury] transferred the
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task of completing the ‘Time History’ to administrative personnel, who would have had
no way of knowing how much time he actually spent working overtime.” Id. 2
We are at a loss to understand how an employee could be said to engage in
misconduct by submitting an overtime claim based on an estimate so long as the
estimate was reasonable. In a related context, courts have approved of estimates to
satisfy an employee’s burden of proof in cases brought under the Fair Labor Standards
Act (“FLSA”) seeking unpaid wages or overtime compensation. See, e.g., Anderson v.
Mt. Clemens Pottery Co., 328 U.S. 680, 687-88 (1946) superseded by statute on other
grounds as stated in United States v. Cook, 795 F.2d 987, 990-91 (Fed. Cir. 1986);
Arias v. U.S. Serv. Indus., Inc., 80 F.3d 509, 511 (D.C. Cir. 1996). In cases where an
employer has failed to keep accurate records in accordance with FLSA requirements:
an employee has carried out his burden if he proves that he has in fact
performed work for which he was improperly compensated and if he
produces sufficient evidence to show the amount and extent of that work
as a matter of just and reasonable inference. The burden then shifts to the
employer to come forward with evidence of the precise amount of work
performed or with evidence to negative the reasonableness of the
inference to be drawn from the employee's evidence. If the employer fails
to produce such evidence, the court may then award damages to the
employee, even though the result be only approximate.
Anderson, 328 U.S. at 687-88 (emphases added). We conclude that Leatherbury was
entitled to submit an estimate for his overtime claim.
Nor can the Board’s decision be sustained on the second theory—that
Leatherbury’s submission was not an estimate but rather an exact calculation. The
Board concluded:
2 Notably on appeal the government admits that “there were not [any]
records of when Mr. Leatherbury worked overtime transporting the mail . . . .”
Appellee’s Br. at 28.
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[N]owhere in the “Time History” did [Leatherbury], or anyone else, note
that the figures and calculations presented in the document, apart from
perhaps the interest rates cited and [Leatherbury’s] 1996 salary, were
mere estimates; instead, the “Time History” appears to represent an exact
accounting of the overtime compensation owed to the appellant between
1996 and 2001. The dollar figures presented in the “Time History” were
calculated to the exact penny, without any hint or acknowledgment that
the figures were anything less than a complete, accurate, and truthful
representation of the overtime compensation owed to [Leatherbury].
J.A. at 39-40 (internal citations omitted) (emphases added). We disagree.
Leatherbury’s overtime claim, as reflected in the Time History, was clearly
intended to be an estimate. Leatherbury testified without contradiction that the overtime
claim was intended to be an estimate. Also, Mincks, the administrative clerk who
actually prepared the Time History, testified that she understood that what she was
preparing was an estimate. J.A. at 369 (“It was trying to figure out an estimate of what
days might be that he [Leatherbury] had come to John Day.”). The language used in
the Time History itself reveals that it was an estimate of the amount that Leatherbury
thought he was entitled to, and not a precise determination of such an amount. 3
3 The Time History in its entirety provides:
Time History for Dick Leatherbury
In figuring out the time that Dick Leatherbury spent conducting
government business, carrying the mail to and from John Day Dam, the
following figures have been used.
If one counts the number of possible regular work days in one calendar
year, the total would be 208 days.
208 work days in a calendar year would include:
• 21 vacation days
• 10 holidays
• 2 sick days
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The Time History is a one-page document. It begins: “In figuring out the time that
Dick Leatherbury spent conducting government business . . . the following figures have
been used.” J.A. at 647. It then sets out that “[i]f one counts the number of possible
regular work days in one calendar year, the total would be 208 days.” Id. (emphasis
added). It then lists the average number of vacation days, holidays, sick days, and
miscellaneous time away from the Project that Leatherbury would have been expected
to take in any given year. It states specifically that the “hours for the years 1997
through 2002 have been averaged out for one year.” Id. From there, it determines that
on average, Leatherbury would have transported mail 155 days each year, resulting in
• 20 miscellaneous time away from Project on official government
business
• 155 days that Mr. Leatherbury took the mail from The Dalles to
John Day and back from John Day to The Dalles Dam. This would
be 310 one trips at ½ hour each totaling 155 hours.
It is necessary to go back six years for a correct compensation calculation.
There are no Salary Tables prior to 1997. The hours for the years 1997
through 2002 have been averaged out for one year. The following is
based on the GS 10 step 1 at the overtime rate for each year.
Also, of consideration is the issue of interests [sic] rates. The
determination is difficult to calculate, as we do not know how the rate is
calculated. Is it calculated monthly, quarterly, yearly, or at what
determination level.
YEAR HOURLY
WAGE
TOTAL X 155
hours
INTERSEST
RATE
INTEREST
TOTAL
GRAND
TOTAL
Averaged Year $26.33 $4,081.15 7.75 Average $316.28 $4,397.43
1997 $24.54 $3,803.70 8.0 $304.29 $4,107.99
1998 $25.25 $3,913.75 7.25 Average $283.74 $4,197.49
1999 $26.15 $4,053.25 8.0 $324.26 $4,377.51
2000 $27.36 $4,240.88 9.0 $381.67 $4,622.55
2001 $28.34 $4,392.70 7.25 Average $318.47 $4,711.17
TOTAL $24,485.43 TOTAL $1928.71 $26,414.14
J.A. at 647.
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310 one-way trips. Each trip, according to the Time History, would take on average
about thirty minutes. The Time History concludes with a table, which includes a row for
each of the six prior years, an average hourly wage, and an average interest rate. The
average hourly wage is multiplied by 155 hours to determine what Leatherbury would
have been paid each year that he felt entitled to overtime. The table then adds an
adjustment for interest to each year, and sums the total dollar amount for each year to
arrive at the grand total of $26,414.14.
There is nothing in the document that purports to be a precise calculation of the
actual number of hours that Leatherbury worked in any given year. Instead, the Time
History makes clear that all the numbers used are averages and are based on
assumptions. There is also evidence that the deciding official (reviewing Leatherbury’s
proposed removal) recognized that it was an estimate. In the Memorandum Notice of
Decision on Leatherbury’s Proposed Removal, Colonel O’Donovan expressly refers to
the overtime submission as an “estimate.” See J.A. at 198 (“The evidence of a reckless
disregard for the facts includes your use of an estimate[ and] your failure to use actual
data to support your claim[.]”) (emphasis added). Finally, the Armentrout Memorandum
itself suggests that the overtime claim was an estimate. In it, Armentrout refers to
Leatherbury picking up the mail “at about 6:00 A.M.” and returning it “at about 5:30.”
J.A. at 651 (emphases added). There is, therefore, no support for the Board’s
conclusion that the Time History falsely purported to be an exact calculation.
Accordingly, substantial evidence does not support a finding that the statements
made by Leatherbury in his overtime claim were false, and we do not reach the question
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of whether substantial evidence supports a finding that he submitted the claim with an
intent to defraud the agency.
II
Leatherbury also asserts that substantial evidence does not support the Board’s
finding that he filed a false travel voucher with an intent to deceive or mislead the
agency. Under this charge, Leatherbury does not dispute that he was not entitled to
reimbursement for the mileage claimed in the submitted travel vouchers under the
agency’s reading of the Joint Travel Regulations. Instead, Leatherbury claims that he
had a reasonable good faith belief that he could seek reimbursement for the disputed
mileage, and that he could not have been reckless with regard to the truth because of
that reasonable good faith belief.
The AJ found credible Leatherbury’s testimony that “he submitted the[]
vouchers . . . in good faith, and did not understand that they were contrary to the [Joint
Travel Regulations].” J.A. at 18. He also found credible Leatherbury’s testimony that
he did not actually read the relevant documents that the agency had circulated
describing the Joint Travel Regulations policy. Moreover, the AJ explained that “the
agency did not show that [Leatherbury’s travel] training covered the relatively arcane
situation presented in these vouchers; i.e., where use of [a privately owned vehicle]
duplicates part of the local commute but takes place during duty hours rather than
before or after the work day; it begins and ends on agency property, the employee has
official business at both locations, and could otherwise have used a [government owned
vehicle] to drive the same miles.” J.A. at 19. The AJ concluded that, based on
Leatherbury’s testimony, the nature of his position as an engineer, and the limited
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extent of his travel regulations training, that “it is quite plausible that [Leatherbury] was
honestly mistaken about his entitlement . . . .” Id.
The Board disagreed. It relied on the evidence establishing that Leatherbury was
designated as a Travel Approving Official, had attended a training course entitled
“Travel Approving Official Class” covering the general rule that an employee must
deduct his normal daily commute from local travel vouchers, and had received multiple
policy memoranda serving to remind employees of the general rule regarding deduction
of commuter mileage. The Board concluded that “[b]ased on the totality of the
circumstances, it appears more likely to be true than untrue that either the appellant
possessed a specific intent to defraud the government by submitting the false travel
vouchers, or that he acted with a reckless disregard either for the truth or for
ascertaining the truth in the matter.” J.A. at 43.
The general rule is that the Board is free to substitute its judgment for that of one
of its administrative judges. Connolly v. U.S. Dep’t of Justice, 766 F.2d 507, 512 (Fed.
Cir. 1985). An important exception, however, is that the Board is not “free to overturn
an administrative judge’s demeanor based credibility findings merely because it
disagrees with those findings.” Haebe, 288 F.3d at 1299. This requirement to defer to
the AJ’s credibility findings “spring[s] from a fundamental notion of fairness . . . [that]
great deference must be granted to the trier of fact who has had the opportunity to
observe the demeanor of the witnesses, whereas the reviewing body looks only at ‘cold
records.’” Id. (quoting Jackson v. Veterans Admin., 768 F.2d 1325, 1331 (Fed. Cir.
1985)).
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We explained in Haebe that where “an administrative judge [is] able to observe
the demeanor of a testifying witness and, as a result, the administrative judge’s findings
[are] explicitly or implicitly based on the demeanor of the witness,” “the Board may not
simply disagree with the AJ’s assessment of credibility . . . unless the board has
articulated sound reasons, based on the record, for its contrary evaluation of the
testimonial evidence.” Haebe, 288 F.3d at 1300 (quoting Kimm v. Dep’t of Treasury, 61
F.3d 888, 892 (Fed. Cir. 1995). “[I]f the [Board’s] reasons for overturning demeanor-
based credibility determinations are not sufficiently sound, its decision does not survive
substantial evidence review.” Id. at 1301. Thus, absent an adequate explanation, the
Board may not “substitute its judgment on issues of credibility based on the demeanor
of the witness.” Id. at 1302.
The AJ’s findings in this case, crediting Leatherbury’s explanation, were implicitly
based on a credibility finding. Here, Leatherbury testified in person and explained his
good faith belief. The record in this case does not support a finding that the AJ’s
credibility determination was unreasonable. There is no direct evidence that
Leatherbury was actually aware that the mileage he was claiming was not reimbursable
under the regulations. The only support for rejecting Leatherbury’s explanation is the
oral advice that he received that commuter expenses were not reimbursable and the
various publications sent to Leatherbury stating that commuter travel must be deducted.
But for the most part, the publications were addressed to situations in which the
employee traveled from home to a different work place and then home again. They
were not generally addressed to Leatherbury’s situation, where he started at an
alternate work site and claimed travel from there to his regular work site. There was
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only one example in the various publications received by Leatherbury—an example in
the Joint Travel Regulations—that even approaches the unique circumstances of
Leatherbury’s commute, and that example itself was not crystal clear.4
Even more significant, despite the evidence that Leatherbury received the
various publications, the AJ specifically found that Leatherbury did not read these
documents, and that Leatherbury did not understand the policy to bar reimbursement.
While Leatherbury may have been familiar with the general rule that commuting
expenses were not reimbursable, the AJ found that Leatherbury did not receive training
that covered the specific situation involved here. The Board did not find otherwise.
There is therefore no basis to infer that Leatherbury read and understood the single
example in the Joint Travel Regulations on which the agency places its primary reliance
or that he received similar specific advice orally. Leatherbury also made no effort to
conceal the basis for his claim, and his supervisor, Armentrout, was well aware of the
basis for the claim. Indeed, Armentrout testified that Armentrout himself also
(mistakenly) understood the Joint Travel Regulations to allow such a claim for
4 One of the examples given in the Joint Travel Regulations provides:
Employee’s one-way commuting distance to regular place of work is 12
miles. In the morning the employee drives to an alternate work site (45
miles). In the afternoon the employee returns to the regular place of work
(67 miles). After completion of work employee returns to residence, a
distance of 12 miles.
In this case the employee is entitled to be reimbursed for the distance that
exceeds the normal round trip commuting distance (24 miles). The
employee is reimbursed for 100 miles (45 + 67 + 12 - 24 = 100).
J.A. at 82. We note that in the example the employee’s reimbursement exceeds
the 67 miles traveled between the two job sites.
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2007-3261 21
reimbursement, and that he told Leatherbury that he should file the disputed claims.
Armentrout approved each of the travel vouchers at issue. Under these circumstances,
there was no basis for the Board to overturn the AJ’s credibility finding as to
Leatherbury’s good faith.
We find that the Board failed to give the AJ the deference required by Haebe and
impermissibly reversed the AJ’s credibility determination that Leatherbury had a
reasonable good faith belief. Charge 2, therefore, cannot be sustained.
CONCLUSION
We find that the Board’s conclusion with respect to Charge 1, that Leatherbury
submitted a false overtime claim, is not supported by substantial evidence. We also find
that the Board’s conclusion with respect to Charge 2, that Leatherbury submitted false
travel vouchers, is not supported by substantial evidence because, without justification,
it overturned a credibility finding made by the AJ. The Board’s conclusion that
Leatherbury violated Charge 3 stands. Because the only charge sustained is Charge 3,
and because the AJ determined that the penalty of removal is not warranted on that
charge alone—an issue not addressed by the full Board—we reinstate the AJ’s penalty
of a written reprimand.5 We therefore reverse and remand for further proceedings
consistent with this opinion.
REVERSED AND REMANDED.
No Costs.
5 The AJ made a credibility finding that he did not believe the testimony of
deciding official O’Donovan, who asserted that the agency would have removed
Leatherbury based solely on any one of the charges in question.

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