This appeal arises pursuant to the judicial review provisions of the Civil Service Reform Act of 1978 (the Act), 5 U.S.C. § 7703.1 Dimas Bonet appeals the decision of the Merit Systems Protection Board (the Board) affirming his discharge from employment with the United States Postal Service (Postal Service) because of alleged grossly immoral off-duty conduct. Finding no evidence in support of the conclusion that Bonet's removal will promote the efficiency of the Postal Service, we reverse and remand for further proceedings.

On November 28, 1979, Dimas Bonet was fired from the Postal Service after serving 21 years with that department (and a total 24 years with the federal government). At the time of his discharge, Bonet was manager of an El Paso, Texas, post office branch station.

The Postal Service instituted an investigation of Bonet following the August 11, 1979, publication in an El Paso newspaper of the names of 22 people, including Bonet, who were indicted by an El Paso county grand jury. Bonet was charged with indecency with a child. The indictment was based upon an alleged indecent act by Bonet involving his eleven-year-old stepdaughter. On September 7, 1979, the indictment against Bonet was dismissed, due to the unwillingness of the mother to prosecute and a family reconciliation.

The Postal Service secured a copy of the district attorney's file and, on October 25, 1979, issued Bonet a notice of proposed removal. Simultaneously, Bonet was suspended, effective October 29, 1979. The Postal Service's proposed removal action was based on: (1) the charge against Bonet of indecency with a child, and (2) other alleged acts of indecency committed by Bonet said to constitute criminal, dishonest, notoriously disgraceful, and immoral conduct. Bonet denied the charges. On November 8, 1979, the Postal Service removed Bonet on the basis of the two charges listed in the notice of proposed removal.

Bonet appealed the Postal Service decision to the Merit Systems Protection Board, which affirmed the agency action, finding that both charges were supported by a preponderance of the evidence.2 Moreover, the Board concluded that Bonet's removal would promote the efficiency of the Postal Service.

On appeal, Bonet contends that no findings were made and no evidence exists in the record to support the conclusion that his discharge will promote the efficiency of the service. Accordingly, Bonet argues, the Board's decision was arbitrary, capricious, and an abuse of discretion, and, therefore, must be reversed.

The Civil Service Reform Act of 1978, Pub.L.No. 95-454, 92 Stat. 1111 (codified in scattered sections of 5 U.S.C.), retains the same measure of protection for the federal civilian employee that was guaranteed by statute3 prior to enactment of the new civil service legislation. Thus, the 1978 Act provides that the federal government employer may discharge its employees "only for such cause as will promote the efficiency of the service." 5 U.S.C. 7513(a). The 1978 Act further provides that, absent criminal conviction, an agency may take disciplinary action against an employee only on the basis of conduct that adversely affects the performance of the employee himself or of other employees.4 Administrative regulations adopted to effectuate the purposes of the Act specify that disciplinary action against any employee to "promote the efficiency of the service" must be based on: (1) whether the conduct of the individual may reasonably be expected to adversely affect effective performance by the employee of the duties of his position, or (2) whether such conduct may reasonably be expected to adversely affect the effective performance by the agency itself of its duties and responsibilities.5

Accordingly, in an agency removal action based on employee misconduct, the agency must make two determinations: (1) that the employee, in fact, committed the alleged misconduct; and (2) that the employee's discharge, based on this misconduct, will promote the efficiency of the service. Cooper v. United States, 639 F.2d 727 (Ct.Cl. 1980); Phillips v. Bergland, 586 F.2d 1007 (4th Cir. 1978). With regard to the latter determination, the statutory scheme anticipates that the agency will establish what has been termed a "vital nexus" between the misconduct-whether it be criminal, immoral, or both-and the efficiency of the service. See Cooper v. United States, 639 F.2d at 729; Phillips v. Bergland, 586 F.2d at 1011; Young v. Hampton, 568 F.2d 1253 (7th Cir. 1977); Doe v. Hampton, 566 F.2d 265 (D.C.Cir.1977).

With the enactment of the civil service reform legislation in 1978, Congress supplied the courts of appeals with a specific standard of review applicable in federal employee appeals from adverse agency action. The reviewing court is directed to set aside any agency action, findings, or conclusions found to be:

(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.

The essence of Bonet's complaint on appeal is that the agency decision is arbitrary and capricious because it is not based on specific findings of a "nexus" between the charged misconduct and the efficiency of the service, and that the record would not support such findings.7

We find no evidence exists in the administrative record to support the conclusion that Bonet's removal will promote the efficiency of the service. The administrative finding rests on the assumption that the retention of an employee who commits sexually indecent conduct with minors, regardless of any circumstances and without regard to whether this conduct is a matter of public knowledge or not, necessarily reflects adversely on the image of the service, and the further assumption that sanctions against an employee who violates a general standard of off-duty conduct expected of employees necessarily promotes the efficiency of the service.

The Agency Record and the Administrative Findings

Bonet's discharge is based upon his off-duty conduct constituting a violation of section 661.53 of the Code of Ethical Conduct, Employee and Labor Relations Manual of the United States Postal Service. Section 661.53, entitled "Unacceptable Conduct," provides:

No employee will engage in criminal, dishonest, notoriously disgraceful or immoral conduct, or other conduct prejudicial to the Postal Service. Conviction of a violation of any criminal statute may be grounds for disciplinary action by the Postal Service, in addition to any other penalty imposed by or pursuant to statute.

The formal notice of proposed discharge lists two charges, alleging five sexually indecent acts Bonet committed with his stepdaughters in his home. The notice concludes: "Conduct of this nature reflects unfavorably upon the image of the U. S. Postal Service and flagrantly violates the standards of conduct prescribed for-and required of-all employees."

The agency discharge, affirmed by the Board, relied upon the following evidentiary showings: (a) the copy of a newspaper account of 22 indictments by the county grand jury, one of which named Bonet, gave his address and noted the offense ("indecency with a child"), without identifying him as a postal employee; and (b) two in-house investigative memoranda prepared by a postal inspector identifying and attaching the district attorney's file, accompanied by a copy of a Texas statute indicating that the conduct charged was criminal. The memoranda noted that the indictment had been dismissed, primarily at the insistence of the mother of the children, since a reconciliation had been effected. The agency report in support of the dismissal acknowledged a communication from the Texas Department of Human Resources advising that the state agency was not filing any charges in connection with the allegations of sexual misconduct and commending Bonet and his family for the initiative exercised by them in resolving their problems.

Finding the sexual misconduct proved by the affidavits, the Postal Service discharged Bonet for gross immorality. The agency acknowledged that Bonet was "a good manager," but stated:

(H)is discharge is not predicated upon his work record during the period of his employment, but is predicated upon the appellant's immoral conduct -unacceptable conduct for a postal employee .... (T)he acts committed by the appellant, if committed off duty, if a serious crime, and if immoral or unethical is (sic) sufficient justification for discipline up to and including discharge .... The acts committed by the appellant are acts protected against in every nation of this globe. It rubs strongly against the moral fiber of a civilized society-it cannot be said to be ethical; it cannot be said to be moral. While the appellant may argue that it is not job related, it is certainly conduct that is contrary to established work rules and language of the ELM (Employees and Labor Relations Manual).

(Emphasis in original.)

At this point, we note the following: (1) The agency made no finding, nor was there any evidentiary showing that the private immoral conduct adversely affected the employee in the performance of its function; (2) the indictment for indecent conduct with a minor is shown to have been dismissed; and (3) so far as the record shows, the private sexual misconduct in Bonet's home is known to the employing authority only because of an in-house postal investigation. A dismissed indictment as to one incident, without more, does not show public knowledge of the employee's sexual misconduct or that it is "notorious."

On review of the agency's discharge of Bonet, the Merit Systems Protection Board found the substantive misconduct to be proved adequately and found that it constituted cause for discharge, being conduct in violation of section 661.53, the code of ethical conduct for employees. As noted, this section prohibits any employee from engaging "in criminal, dishonest, notoriously disgraceful or immoral conduct, or other conduct prejudicial to the Postal Service." (Emphasis added.) For purposes of argument, the Board accepted the employee's contention that the conduct was not "criminal." It held, however, that the conduct was "disgraceful," "immoral," and "notorious" as (in the Board's words) "evidenced by the newspaper item which identified the appellant as having been charged with the offense of Indecency with a Child." (Emphasis added.)

We have already stated that a dismissed indictment does not, without more, constitute notorious knowledge of conduct merely charged by an indictment. Nor are we persuaded of the correctness of the Board's unsupported assumption that because Bonet was the manager of a large urban branch office, "(t)herefore he was known as a Postal employee by a large segment of the population." (Emphasis added.) Aside from these deficiencies in the findings, the Board fell into clear error in concluding-on the showing made-that the discharge was shown to "promote the efficiency of the service," a statutory prerequisite for disciplinary action against a protected employee.

The Efficiency of the Service Determination

Before the Board and this court, the Postal Service argued that to maintain Bonet as a branch manager of an important postal station, in light of public knowledge of his indictment for indecency with a child, could conceivably undermine the public confidence and trust in postal employees necessary for the efficient collection and delivery of the mails. Based upon this reasoning8-albeit unsupported by any evidentiary showing on the administrative record-the Board found, "the conduct with which (Bonet) was charged could reasonably be expected to interfere with or prevent the effective performance by the agency of its duties and responsibilities."

The agency cannot satisfy the statutory requirement that an employee's removal promote the efficiency of the service by use of unsupported, general assertions that such action is necessary to maintain the public confidence. To permit otherwise would be to render nugatory the protections afforded the federal employee by the imposition of a standard for removal which requires a connection between employee misconduct (especially when off-duty and non-work related) and the job.9 The agency must demonstrate, therefore, a relationship between this employee's misconduct and the spectre that public confidence will be undermined. See Phillips v. Bergland; Young v. Hampton; Doe v. Hampton. See also Comment, supra note 4, at 227.

Nor is it sufficient that the agency rely on internal regulations proscribing in general certain employee conduct (e. g., "immoral" or "disgraceful") as proof of the required nexus. The Postal Service's reliance on its code of ethical conduct in this respect amounts to a presumed or per se nexus. The government maintains that a per se nexus is appropriate when the employee engages in conduct like that charged to Bonet. While we agree that the off-duty conduct attributed to Bonet is indeed reprehensible-and we, by no means, intend to mitigate or condone such conduct by our disposition of the instant appeal, nor to intimate upon proper showing of nexus that it could not be cause for disciplinary action-we cannot agree that the agency is thereby relieved of its statutory duty to determine the requisite connection between the employee misconduct and the possible undermining of public confidence.

Despite our reflective revulsion for the type of off-duty misconduct in question, whether resulting from a now-cured mental disability or not, the 1978 Act does not permit this court nor an employing agency to characterize off-duty conduct as so obnoxious as to show, per se, a nexus between it and the efficiency of the service. The 1978 Act prohibits the discharge of a federal employee for conduct that does not adversely affect the performance of that employee or his co-employees, 5 U.S.C. § 2302(b)(10).10 While the administrative regulations provide that an essential determination for discharge of an employee to promote the efficiency of the service is that the conduct charged must reasonably be expected to adversely affect the employee's effective performance of his duties or the effective performance by the employing agency of its responsibilities. 5 C.F.R. § 731.202(a). See note 5, supra. Furthermore, the statutory standard of judicial review now applicable directs us to set aside any agency findings or conclusions found to be unsupported by substantial evidence. 5 U.S.C. § 7703(c).

These provisions clearly signal a legislative intent that the agency must demonstrate by sufficient evidence that the off-duty misconduct, upon which the disciplinary action is founded, adversely affects the performance of the duties of the employee or of the agency. We further conclude, in light of the statutory requirements, that the reviewing authority may not place upon the employee, as the Board did, the burden of showing that his continued employment will not affect the efficiency of the service. The Board may not shift the burden of proof by presumption or application of the per se rule.

Those pre-Act cases recognizing that certain employee misconduct on its face establishes the requisite nexus can generally be distinguished as involving work-related activities easily identifiable with and directly connected to employee performance and agency efficiency. Thus, the following misconduct has been considered to have a bearing "on its face" on the efficiency of the service: insubordination,11 falsification of official time reports,12 and misuse of official funds.13 Similarly, certain misconduct, although taking place away from the workplace, has been found to be so closely associated with the type of work performed by the employee that the nexus can be presumed. In Hoover v. United States, 206 Ct. Cl. 640, 513 F.2d 603 (Ct.Cl.1975), the removal of an IRS tax technician responsible for overseeing taxpayer returns, who himself falsified his personal tax returns, was upheld.

However, when the employee misconduct is off-duty and non-work related, even before the 1978 Act, the courts have been generally unwilling to presume that the discharge will promote the efficiency of the service.14 Therefore, the courts have reversed employee discharges founded on the following conduct: homosexual advances,15 physical attack of a fellow employee,16 and conviction for possession of marijuana.17 The general thrust of these cases is that in situations involving off-duty activities, the reviewing court will require the agency to demonstrate that removal will promote the efficiency of the service. Identification of the cause for removal is not sufficient; the agency must also establish the relationship between the employee misconduct and the adverse effect on its abilities to perform successfully its assigned functions.18

In the instant case, the Postal Service admitted that Bonet's employment record was satisfactory throughout his 21 year tenure and that he was considered a good station manager. The agency considered that Bonet's work record was not at issue. Rather, the issue was whether Bonet's private immoral conduct was unacceptable conduct for a postal employee. We agree that Bonet's misconduct may be unacceptable for a postal employee, or at least for a visible management position. However, it can only be the basis for discharge if the agency proves by adequate evidence that the conduct adversely affects the efficiency of the postal service. In the absence of any attempt on the part of the agency to prove any actual nexus between the misconduct and the position of employment, we cannot uphold the decision to discharge.

We must set aside the Board's affirmance of the agency's discharge of Bonet. The conclusory findings do not support the determination that his discharge will promote the efficiency of the service. The record is devoid of proof that Bonet's continued employment is detrimental to the public confidence and trust in the Postal Service or in its employees. Our decision rests partially on the basis of the 1978 legislation apparently not noted as applicable by either the employee or the agency in the prior proceedings. Under these circumstances, we deem it appropriate to remand this cause to the Board, with leave to remand to the agency, if it so chooses, for further proceedings consistent with this opinion.

REVERSED and REMANDED.