Here is a brief background of the case taken from the United States Court of Appeals for the Federal Circuit decision:

Mr. Saunders held the position of PS-11 Electronic Technician [ET] at the USPS’s Roanoke, Virginia Processing and Distribution Center. The adverse action was based on an incident that occurred in April 2006. During the week of April 23-27, 2006 Mr. Saunders April 26 Mr. Saunders was scheduled to take the final examination for the training course. Before taking the exam, Mr. Saunders approached three course instructors and told them that he was going to fail the course. The instructors testified that they attempted to reassure him, and told him that he needed to answer only five (out of 20) questions correctly. According to the instructors, Mr. Saunders responded by saying that he will fail the test on purpose, because he is in “a pissing contest” with his supervisor. As the instructors were trying to convince Mr. Saunders to take the test, he asked one of them if he had an “Uzi.” The instructor informed Mr. Saunders that jokes about weapons were inappropriate. Once the test began, Mr. Saunders handed in a blank answer sheet within one minute. According to the instructors’ testimony, Mr. Saunders appeared visibly upset.

The agency [USPS] held a pre-disciplinary interview with Mr. Saunders. At the interview, he admitted making the remark about the Uzi, but maintained that it was merely a joke. He denied failing the course on purpose, maintaining that he could not concentrate. Following the interview, the agency issued a notice of proposed removal, listing two grounds for the proposed action. First, the notice charged Mr. Saunders with “improper conduct,” and second, it charged him with “unsatisfactory performance.” In support of the improper conduct charge the agency listed the events related to the failed exam and also accused Mr. Saunders of “lack of candor” during the pre-disciplinary interview. In support of the “unsatisfactory performance” charge the agency alleged that Mr. Saunders purposely failed to complete the training which was required of him. The agency noted that he had three prior suspensions for improper conduct, unsatisfactory attendance, and unsatisfactory performance. The proposal notice stated that the appellant was in violation of provisions of the Employee and Labor Relations Manual §§685.16 and 662.1, which list regulations governing behavior of federal employees, as well as §665.24, which addresses violent or threatening behavior. The agency also pointed to the Joint Statement on Violence and Behavior in the Workplace, which requires employees to prevent work-related violence.

The Appeals Court (no surprise) upheld the decision of MSPB.
Read the entire decision and Saunders defense: Billy J. Saunders v. United States Postal Service (PDF)