Office pools: A bigger gamble than you think

Neil McPhie is Director of Legal Services for Tully Rinckey PLLC.

With the National Collegiate Athletic Association’s March Madness basketball tournament around the corner, federal employees will again face the temptation of participating in office pools and betting a few dollars. It never ceases to amaze me how many federal employees, especially office pool organizers, consider brackets to be a benign game. They are, however, gambling much more than they realize, and during my first year as chairman of the Merit Systems Protection Board, the Board made clear that the stakes, indeed, are high.

The Standards of Conduct prohibit federal employees from participating in any gambling activity “[w]hile on Government-owned or leased property or on duty for the Government.” NASA’s Table for Disciplinary Offenses and Penalties, for example, calls for anything from a reprimand to a three-day suspension for a first-time violation of this regulation. A third-time violation could result in anything from a seven-day suspension to removal.

Sometimes agencies may not punish employees who participate in such pools or supervisors who fail to report such activity so long as they cooperate with an investigation that focuses on the operators of the gambling operation. That was what happened in Howard v. U.S. Postal Service (1984). The employee in this case had been the operator of a numbers game. Even though the employee had 18 years of service with the agency, the Board affirmed his removal. The Board said “[t]he offense with which appellant was charged was serious and directly related to his ability to perform his duties since it was conducted on the job site and during the work day. Moreover, it is clear that appellant’s gambling activity affected the work of others too, because it occurred when they should have been performing their duties.”

More recently in Anderson v. Smithsonian Institution (2013), a probationary employee claimed his agency removed him for gambling while on agency premises. He claimed an agency supervisor had asked him to administer a football poll. The Board affirmed an MSPB judge’s dismissal of the employee’s appeal for lack of jurisdiction. And in Whitemore v. Department of Labor (2009), the MSPB found an employee’s disclosure to his agency’s inspector general about his supervisor conducting an “illegal gambling pool for the NCAA Men’s Basketball tournament” was protected under the Whistleblower Protection Act. The agency later confiscated the supervisor’s computer, and the illegal activity was reported to an administrator for action.

In Hunt v. Department of Health and Human Services (1985) an employee had argued that anti-gambling regulation violations were not serious offenses and that office gambling was “passively if not actively encouraged by management.” The U.S. Court of Appeals for the Federal Circuit rejected this view and declared, “a violation of the anti-gambling regulation, even for a first-time offense, is punishable by removal for the efficiency of the service where the evidence to support the charge is substantial and credible, and the decision is not arbitrary, capricious, or unlawful.”

On at least one occasion, in Luna v. Department of the Army (1988), the Board had allowed an employee charged with operating and promoting an illegal gambling operation to avoid removal and instead receive a 90-day suspension. However, in Jones v. Department of the Interior (2004), the Board, while I was chairman, noted that Luna was a unique case because the employee “did not profit from the gambling operation, and he had rehabilitative potential because he was remorseful, accepted full responsibility for his conduct, and alerted the agency to continuing gambling activities.” Additionally, there were no indications that the employee in Luna was convicted on his conspiracy and illegal gambling charges. Ultimately, the Board maintained that “removal is appropriate for on-duty gambling offenses” and held that “Luna does not mandate mitigation.”

They don’t call it “March Madness” for nothing. Basketball fans can lose their heads, and federal employees can lose their jobs.