PSBCA No. 6286

April 23, 2012


Appeal of

PSBCA No. 6286                    

Laura K. McNew

Shoshana O. Epstein, Esq.


 Appellant, Laura K. McNew, delivered mail under a contract with Respondent, United States Postal Service.  Respondent terminated the contract for default based upon Appellant’s attempt to use a coupon that had been mailed to a former customer on her route, and Appellant appealed.

 At the parties’ request, the case is being decided on the written record, without an oral hearing.


 1.  On June 2, 2006, Respondent renewed Appellant’s contract HCR 81173 for delivery of mail along a route originating in the Bayfield, Colorado Post Office.  The contract term was from July 1, 2006, to March 31, 2010, at an annual rate of $27,370.23.  (Appeal File, Tab (“AF”) 7).

 2.  The contract required Appellant to “carry all mail tendered for transportation under this contract . . . with certainty, celerity, and security,” and “to protect the mail from loss, depredation, or damage.”  (AF 7, Contract Clauses B.3.a and c (pp. 99-100)).

 3.  The contract permitted Respondent to terminate for Appellant’s default and incorporated by reference an Events of Default clause, which listed circumstances that would constitute a default under the contract (AF 7, Contract Clauses 2.3.1 m and s (pp. 124-125)).

 4.  The listed grounds for default termination of the contract included:  if Appellant failed to perform service according to the terms of the contract; if she failed properly to account for mail and other property pursuant to the contract; or if she were not reliable, trustworthy or of good character (AF 8, Clause B 69, Events of Default (January 1997), subsections a, f, g).

 5.  Under the contract’s termination for default provision, “if it is determined that the Postal Service improperly terminated this contract for default, such termination will be deemed a termination for convenience.”  (AF 7, Contract Clause 2.3.1 m (p. 124)).

6.  The Bayfield Postmaster was identified as the Administrative Official (“AO”) for the contract.  As the AO, the postmaster was responsible to supervise and administer Appellant’s contract.  (AF 7, pp. 95, 117).
 7.  Appellant was required to return undeliverable mail to the Bayfield Post Office.  Some categories of undeliverable mail qualified to be forwarded to a new address on file and some qualified to be returned to the sender, but certain undeliverable advertising mail was not entitled to forwarding or return service.  This mail, known as UBBM, undeliverable bulk business mail, was to be disposed of at the post office as trash.  (AF 10, ¶ 2; AF 11, ¶¶ 4, 5, 6; Corrected Statement ).

 8.  Carriers and mail delivery contractors such as Appellant were to place UBBM brought back from their routes into containers in the work area of the post office.  The containers also were used for disposal of general trash.  From time to time, a post office janitorial contractor emptied the bins into the trash dumpster, which was on the premises at the dock.  (AF 10, ¶¶ 5, 6, 7; AF 11, ¶¶ 7, 8; App. Comp. Exh. 10).

 9.  In practice, not all UBBM returned to the Bayfield Post Office was disposed of as trash.  The postmaster allowed undeliverable promotional items, such as pens, to be used in the post office or by post office employees and contractors instead of being disposed of as trash.  On one occasion, a promotional mailing contained one dollar bills, and employees opened the UBBM and turned the money over to the postmaster.  Perishable fruit shipments that were undeliverable and not returnable were made available for consumption by those working in the post office.  (App. Exh. 1, 3, 4; App. Comp. Exh. 10). 

10.  Appellant worked at the Bayfield Post Office for 14 years.  She and the postmaster (since 2007) did not get along, and Appellant believed the postmaster wished to remove her from her route.  In July 2009, Appellant and other employees in the office signed a petition for submission to higher-level management requesting removal of the postmaster and describing what they considered her poor management of the office.  (App. Exh. 1, 3, 5; App. Comp. Exh. 25; Corrected Statement).

11.  In early June 2009, after delivering her route, Appellant returned to the post office with a UBBM envelope addressed to a customer who had moved and no longer received mail on her route.  The mail was from True Value Hardware, and the envelope bore the words, “valuable coupon inside.”  (AF 2 (pp. 18, 45); Corrected Statement).

 12.  Instead of leaving the envelope unopened in a UBBM/trash bin in the workroom, Appellant opened the envelope and removed the $10 True Value Hardware coupon it contained (AF 2 (p. 45)).

 13.  On June 10, 2009, Appellant tried to redeem the coupon at a local True Value Hardware store.  However, the coupon was a True Value Rewards certificate issued specifically to the former route customer and contained a barcode so indicating.  After scanning the certificate, the store clerk, who knew the person to whom the certificate was issued, refused to let Appellant redeem it.  When asked where she got the certificate, Appellant told the clerk that she may have gotten it on her mail route.  Another store clerk recognized Appellant as her mail carrier.  Appellant completed her purchases without using the certificate and left the store.  (AF 2 (pp. 23-25, 30, 33, 35-37, 39)).

 14.  The store clerk called the named certificate owner and left a message (AF 2 (p. 35)).  The addressee’s wife eventually called the Bayfield Postmaster and complained that Appellant had taken a piece of her mail (AF 11, ¶ 11).

 15.  The postmaster reported the call to the contracting officer’s staff, who directed her to report the matter to the Postal Service Office of Inspector General (“OIG”), which she did on June 29, 2009 (AF 2 (p. 16), 11 (¶ 11)).

16.  OIG special agents investigated the circumstances surrounding the True Value coupon and interviewed a number of persons, including Appellant.  In the presence of the OIG agents, on July 9, 2009, Appellant prepared and signed a written statement under penalty of perjury in which she stated,
I had a piece of third class mail that was not forwardable, it said “valuable coupon” inside.  Instead of leaving it in the trash, I attempted to use the coupon.  I knew it was wrong at the time and I shouldn’t have done it.

It was addressed to [ ] at 1004 N. Oak.

Coupon was for $10 off at True Value Hardware Store.

By initialing and signing forms accompanying the statement, Appellant acknowledged that the interview with the OIG agents was strictly voluntary and that she could leave at any time.  Additionally she acknowledged, “I desire to make the following statement.  I make the decision freely, knowingly, and voluntarily, and without any threats or promises having been extended to me.” 
(AF 2 (pp. 43-46)).

 17.  A copy of the OIG Report of Investigation, including the agents’ narrative report and the statements given by Appellant and others, was provided to the contracting officer (AF 9, ¶ 7).  Based solely on the Report, the contracting officer concluded that Appellant took mail for her own use and personal gain when she took the $10 certificate from the post office and tried to use it.  He considered her conduct to constitute theft of mail.  (AF 9, ¶¶ 8, 9).  The OIG Report of Investigation did not mention the practice in the Bayfield Post Office whereby the postmaster commonly allowed use of promotional items from UBBM by employees (AF 2).

18.  On July 28, 2009, the contracting officer terminated Appellant’s contract for default (AF 5 (p. 70); 9 (¶¶ 8-12)).  The grounds he specified were that “on June 10, 2009, [Appellant] attempted to use a True Value reward certificate at the Lewis True Value (Lewis Mercantile) in Bayfield, CO, that came from mail addressed to a postal customer along [her] route.”  (AF 5).  It was solely his decision to terminate the contract (Manchego Decl. ¶ 18).

 19.  On August 24, 2009, Appellant appealed the termination of the contract (AF 6).


Respondent argues that Appellant taking the True Value coupon intended for a former customer on her route constituted theft of mail justifying the default termination of her contract (Findings 2, 4).  Respondent argues that by taking the mail, Appellant failed to perform the services required by the contract, failed properly to account for the mail, and demonstrated that she was not reliable, trustworthy and of good character, all grounds for termination under the contract (Finding 4).  Appellant does not deny opening the envelope and taking the $10 coupon but argues initially that she properly deposited the mail in a public trash container whereupon it was no longer mail and was free for the taking by anyone, including her.

We reject that argument.  First, there are no “public” trash bins within the work area of the post office.  Access to the work area is restricted to authorized on-duty Postal Service employees and authorized contractors (Postal Service Administrative Support Manual, Section 273.121).  Bins for deposit of UBBM, whether also containing general trash or not, remained under the Postal Service’s exclusive control,  and were by no means “public” trash containers freely accessible to the public.   There is no evidence that Respondent had abandoned or intentionally relinquished all right to possession of the contents of the bins within the work area  (See United States v. Markland, 489 F. Supp. 932, 936-937 (D. Conn. 1980)).

 In her Corrected Statement, Appellant argues that her conduct did not violate any contract requirement because the mail at issue was addressed to “Occupant” at the former address of the customer and that address was vacant at the time.  Appellant’s argument presumes that UBBM addressed to “Occupant” is entitled to less security than mail addressed by name to a specific customer and suggests such mail is free for the taking.  We need not determine whether the mail was addressed by customer name or to “Occupant” because we are not persuaded that UBBM addressed to “Occupant” should be treated differently than mail bearing the name of an addressee.

Appellant concedes that the UBBM at issue should have been trashed.  Yet in this case, she did not do so.  Rather she opened the envelope and took for her own use the $10 coupon inside.  The unauthorized taking of mail, even mail of little value, is a serious breach of the specific duty required under Appellant’s contract to deliver the public’s mail “with certainty, celerity and security.”  Such a breach can warrant termination of a mail delivery contract.  See Richard Lewis Danel, PSBCA No. 3470, 94-2 BCA ¶ 26,687, and cases cited therein.  By not trashing the UBBM, as she knew was the correct procedure, Appellant failed “properly to account” for the mail (Findings 2-4).  The contracting officer was justified in terminating Appellant’s contract for default based on the information in the OIG Report of Investigation.

Respondent, having the burden of proof in this appeal, has established a prima facie case sustaining the default termination.  Therefore, the burden shifts to Appellant to present evidence of excusable causes, Charli Selsa Schiver d/b/a NGX-Schiver, PSBCA No. 4545, 02-2 BCA ¶ 31,937; Patricia J. Stevens, PSBCA No. 3272, 94-1 BCA ¶ 26,419, or to show that the termination was an abuse of the contracting officer's discretion, Jesse A. Farmer, PSBCA No. 2702, 91-3 BCA ¶ 24,181.

Appellant argues that even if her conduct violated the contract requirements, the breach should be excused because her actions were consistent with the established practice in the Bayfield Post Office.  Others in the post office took and used items from undeliverable mail that was not forwardable or returnable—notably promotional pens and other items of nominal value, which were commonly used in the post office.  Gift packages of perishable fruit that were nonreturnable were shared among those in the office.  (Finding 9).  Appellant presented several unsworn statements of others who worked in the post office that supported her Corrected Statement and confirmed such occurrences.  Respondent submitted the declaration of the Bayfield Postmaster, but that declaration was directed to the then-current (2011) practices and did not rebut Appellant’s evidence that in 2009 the post office practice permitted use of promotional items from UBBM.  Appellant contends that terminating her contract for conduct that was accepted at the Bayfield Post Office was discriminatory and improper.

Taking the coupon from the UBBM breached Appellant’s contractual obligation to dispose of the undeliverable item as trash.  However, given the practice in the Bayfield Post Office allowing employees’ and contractors’ use of promotional items from UBBM, condoned by the contract’s AO (Findings 6, 9), it would have been reasonable for Appellant to believe that she was permitted to take for her personal use the coupon that was destined for the trash.  See O. Gary Bollschweiler and Anna Marie Bollschweiler, PSBCA Nos. 3844, 3852, 96-2 BCA ¶ 28,536.  Accordingly, the breach of her contract obligation regarding handling of UBBM is excused.  For the same reason, her conduct consistent with the Bayfield Post Office practice regarding treatment of UBBM negates any finding that her taking of the coupon demonstrated a lack of trustworthiness or reliability or that she was not of good character.  See Wayne L. Orr, 10-2 BCA ¶ 34,560.


Appellant’s taking of mail from the post office for her personal use breached her obligations under the contract, but her actions were excused because they were consistent with the prevailing practice in the Bayfield Post Office, permitted by the contract’s AO, of allowing use of items from UBBM by those working in the post office. 

The appeal is granted.  The termination for default is converted to a termination for Respondent’s convenience under the contract (Finding 5).

William A. Campbell 
Administrative Judge

David I. Brochstein
Administrative Judge
Vice Chairman

I dissent:

I agree with the majority that Appellant’s taking the coupon from the UBBM materially breached her contractual obligations and justified the contracting officer’s termination of the contract.  I do not agree that the treatment of UBBM in the Bayfield Post Office excused Appellant’s breach.

The Bayfield Post Office practice of using promotional pens and other items from UBBM and making undeliverable perishable fruit available to those in the office violated Postal Service regulations.  Those regulations require that usable food items and undeliverable merchandise samples be donated to nonprofit organizations.  Postal Operations Manual, Sections 691.531, 691.533.  “Employees are not permitted to remove undeliverable mail and/or waste or waste receptacles from postal facilities for personal use or for any use not authorized by the Postal Service.”  Postal Operations Manual, Section 681.7.

The failure to follow these rules at the Bayfield Post Office does not justify Appellant taking a valuable coupon from the mail, even though undeliverable, for her personal use.  Others’ violations of postal regulations regarding UBBM do not waive the requirements of Appellant’s contract that she handle the mail appropriately, keep it secure, and properly account for it.  Postal employees are not authorized to take UBBM for themselves and may not authorize others to do so.  Their unauthorized conduct does not bind Respondent and does not prevent the contracting officer from terminating Appellant’s contract for taking mail.  See Bonnie Dolin, PSBCA No. 2394, 92 2 BCA ¶ 25,014.

  Moreover, the taking of a $10 coupon differs from the practice of allowing employees to use undeliverable promotional items of nominal value.  Taking the $10 coupon was less like the use of promotional pens and more akin to the treatment of one-dollar bills included in a promotional mailing.  Everyone in that instance promptly turned over the one-dollar bills to the postmaster (Finding 9); no one took that cash for personal use, whether directly from the mail or after placing the mail for a moment in a trash bin.  Additionally, using nominal-valued promotional items in the post office or privately by employees, while still in violation of postal regulations, does not have the potential of tarnishing Respondent’s reputation for securely handling the public’s mail, as did Appellant’s conduct.  Because of these distinctions between Appellant’s conduct and the problematic practices at the Bayfield Post Office, any reliance by Appellant on the practice in the post office to take the $10 coupon and use it at a local store was unreasonable.

Appellant argues that the termination was an abuse of the contracting officer’s discretion because the termination resulted from malicious actions of the postmaster.  Appellant submitted statements of others from the Bayfield Post Office supporting her claim that the postmaster was out to get her and regularly harassed her.  Appellant cited a number of instances of the postmaster's conduct she considered to constitute harassment.  In July of 2009, before her termination, Appellant signed a petition, also signed by a number of employees of the post office, asking higher level management to take steps to relieve the postmaster of her position.  (Finding 10).  Appellant contends the postmaster utilized the allegedly stolen mail as an excuse to fire her in retaliation.

However, the postmaster’s report to the OIG predated the petition for the postmaster’s removal and was based on a complaint from a customer that Appellant had taken a piece of the customer’s mail (Findings 14, 15).  The postmaster’s report to the contracting officer’s staff and, upon their direction, to the OIG, of an allegation of theft from the mail was appropriate.  Moreover, the contracting officer based his decision to terminate the contract on the OIG Report of Investigation; Appellant has not shown that any animus on the part of the postmaster was a factor in the contracting officer’s decision (Findings 17, 18).  See Larry J. Miller, 95-1 BCA ¶ 27,448; Karen L. Wilson, PSBCA No. 1494, 86-3 BCA ¶ 19,256; Francis E. Fekkers, PSBCA No. 1259, 84-3 BCA ¶ 17,557.

Appellant's contention that she received no training or instruction on the handling of undeliverable mail does not excuse her failure to perform in accordance with the terms of her contract.  Even in the absence of specific training, Appellant knew it was her duty under her contract to deposit UBBM in the post office trash (Findings 7, 16).  In her statement to the OIG special agent, Appellant admitted that she knew taking the coupon was wrong (Finding 16).  In her Corrected Statement, she asserted that the interviewers pressured her and told her that she had to admit that her conduct was wrong.  However, at the time she gave the statement to the OIG agents, she acknowledged that the statement was given freely and without coercion (Finding 16).

Moreover, in her August 24, 2009 Notice of Appeal, she stated that the investigators “told me I needed to write out my version of the story,” complaining only that they insisted that she do so “then and there” and that they did not tell her she could have had a representative present.  In the Notice of Appeal she mentioned that she was extremely nervous, but she did not suggest, as she does in the Corrected Statement, that the investigators told her what to say in the statement.  Their insistence that she write out her version of the story was appropriate,  and I am satisfied that she understood that taking the coupon from the mail was inconsistent with her contractual duties.

I would find that Appellant’s taking of the coupon from the mail materially breached the requirements of her contract, and that Appellant has not shown that the contracting officer abused his discretion; that practices or conditions in the Bayfield Post Office excused her actions; or that for any other reason the termination was improper.   I would deny the appeal.

Norman D. Menegat
Administrative Judge
Board Member


[1] With her Complaint, Appellant filed a May 12, 2010 document titled Corrected Statement of Laura McNew (“Corrected Statement”).  In the statement, made under penalty of perjury, Appellant contradicted findings in an Office of Inspector General Report of Investigation and the contracting officer’s conclusions reflected in his final decision terminating the contract.

[2] Exhibits Appellant submitted on September 30, 2010, are referred to as “App. Exh.”  Exhibits submitted with Appellant’s Complaint are referred to as “App. Comp. Exh.”

[3] The customer’s name has been deleted for privacy.

[4] The Postal Service has the specific power “to provide for the collection, handling, transportation, delivery, forwarding, returning, and holding of mail, and for the disposition of undeliverable mail.”  39 U.S.C. §404(a).

[5] Had Appellant deposited the True Value advertising mail in the “public” trash, i.e. a trash container not within the work area of the post office, knowing that undeliverable mail was to be returned to the post office, that may have constituted a ground for terminating the contract.  See Larry J. Miller, PSBCA No. 3632, 95-1 BCA ¶ 27,448.

[6] Appellant in her Corrected Statement does not suggest that she retrieved the coupon envelope from the office dumpster after the janitorial contractor had emptied the workstation bins, and we find it likely that if that is what she did, she would have so stated.  We do not address whether UBBM that reaches the office dumpster is entitled to less security than that remaining within the work area of the post office.

[7] In any event, placing the mail at issue in the bin momentarily and then taking it would not absolve her of the impropriety of taking mail intended for another and putting it to her own use.

[8] The taking of an item from the mail for personal use distinguishes this case from cases finding minor infractions of post office requirements insufficient to justify a default termination.  E.g. Wayne L. Orr, PSBCA No. 6268, 10-2 BCA ¶ 34,560 (having small knife on the premises, of type commonly used in the post office with knowledge and consent of postal officials); Robert E. Davis, PSBCA No. 3400, 94-3 BCA ¶ 27,164 (only two delivery delays within 5 weeks following the contracting officer’s final warning to improve performance).  Assuring the security of the mail is a material requirement of Appellant’s mail delivery contract, and Appellant’s action justified termination of her contract.

[9] It is not necessary to decide whether her statement was given voluntarily as we only need to weigh the evidence and decide if it is persuasive.  Dae Lim Industrial Co., ASBCA No. 28416, 90 1 BCA ¶ 22,368 at 112,392.  Her statement that she understood that taking the True Value mailing was wrong is unequivocal and persuasive.  Moreover, her insistence that she was permitted to take the True Value mail piece because she took it from a “public” trash can available to anyone also supports a finding that she knew it was improper to remove mail from the postal—non-public—trash containers within the work area of the post office.

[10] Because I would find that Appellant’s breach was not excused, I need not address Respondent’s argument regarding lack of trustworthiness, reliability or good character.