Probation on Initial Appointment to a Competitive Position, Performance-Based Reduction in Grade and Removal Actions and Adverse Actions, 65940-65988 [2020-20427]

Download as PDF 65940 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations OFFICE OF PERSONNEL MANAGEMENT 5 CFR Parts 315, 432 and 752 RIN 3206–AN60 Probation on Initial Appointment to a Competitive Position, PerformanceBased Reduction in Grade and Removal Actions and Adverse Actions Office of Personnel Management. ACTION: Final rule. AGENCY: The Office of Personnel Management (OPM) is issuing final regulations governing probation on initial appointment to a competitive position, performance-based reduction in grade and removal actions, and adverse actions. The final rule will effect a revision of OPM’s regulations to make procedures relating to these subjects more efficient and effective. The final rule also amends the regulations to incorporate statutory changes and technical revisions. DATES: Effective November 16, 2020. FOR FURTHER INFORMATION CONTACT: Timothy Curry by email at employee accountability@opm.gov or by telephone at (202) 606–2930. SUPPLEMENTARY INFORMATION: The Office of Personnel Management (OPM) is issuing revised regulations governing probation on initial appointment to a competitive position; performancebased reduction in grade and removal actions; and adverse actions under statutory authority vested in it by Congress in 5 U.S.C. 3321, 4305, 4315, 7504, 7514 and 7543. The regulations assist agencies in carrying out, consistent with law, certain of the President’s directives to the Executive Branch pursuant to Executive Order 13839 that were not subject to judicially-imposed limitations at the time of the proposed rule, and update current procedures to make them more efficient and effective. The revised regulations update current regulatory language, commensurate with statutory changes. They also clarify procedures and requirements to support managers in addressing unacceptable performance and promoting employee accountability for performance-based reduction-ingrade, removal actions and adverse actions while recognizing employee rights and protections. The revised regulations support agencies in implementing their plans to maximize employee performance, as required by Office of Management and Budget (OMB) M–17–22 (April 12, 2017), and to fulfill elements of the President’s jbell on DSKJLSW7X2PROD with RULES2 SUMMARY: VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 Management Agenda relating to the Workforce for the 21st Century. At the time revisions to these regulations were proposed, there were judicially imposed limitations on implementing certain other portions of Executive Order 13839. These revised regulations were not intended to implement portions of the Executive Order that were previously enjoined when OPM initially proposed them. As the previously enjoined portions of the Executive Order are now fully effective and binding on executive agencies, OPM anticipates proposing additional revisions to regulations, pursuant to the Administrative Procedures Act’s noticeand-comment process, consistent with the President’s expressed policy goals. The Case for Action With the issuance of Executive Order (E.O.) 13839 on May 25, 2018, President Trump set a new direction for promoting efficient and effective use of the Federal workforce—reinforcing that Federal employees should be both rewarded and held accountable for performance and conduct. Merit system principles provide a framework for employee conduct that is aligned with the broader responsibility Federal government employees assume when they take the oath to preserve and defend the Constitution and accept the duties and obligations of their positions. In keeping with merit system principles, the President’s Management Agenda (PMA) recognizes that Federal employees underpin nearly all the operations of the Government, ensuring the smooth functioning of our democracy. The Federal personnel system needs to keep pace with changing workplace needs and carry out its core functions in a manner that more effectively upholds the public trust. Finally, the PMA calls for agencies to establish processes that help agencies retain top employees and efficiently terminate or remove those who fail to perform or to uphold the public’s trust. Prior to establishment of the current PMA, the Office of Management and Budget (OMB) issued a memorandum to agencies on April 12, 2017 entitled ‘‘M– 17–22—Comprehensive Plan for Reforming the Federal Government and Reducing the Federal Civilian Workforce.’’ M–17–22 called on agencies to take near-term actions to ensure that the workforce they hire and retain is as effective as possible. OMB called on agencies to determine whether aspects of their current policies and practices present barriers to hiring and retaining the workforce necessary to execute their missions as well as appropriately managing the workforce PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 and, if necessary, removing poor performers and employees who commit misconduct. Notably, M–17–22 directed agencies to ensure that managers have the tools and support they need to manage performance and conduct effectively to achieve high-quality results for the American people. Agencies were recently reminded of these important requirements in OPM guidance issued on September 25, 2019 and entitled: Maximization of Employee Performance Management and Engagement by Streamlining Agency Performance and Dismissal Policies and Procedures. E.O. 13839’s purpose is based on the merit system principles’ call for holding Federal employees accountable for performance and conduct. The applicable merit system principles state that employees should maintain high standards of integrity, conduct, and concern for the public interest, and that the Federal workforce should be used efficiently and effectively. 5 U.S.C. 2301(b)(4)—(b)(6). The merit system principles further state that employees should be retained based on the adequacy of their performance, inadequate performance should be corrected, and employees should be separated who cannot or will not improve their performance to meet required standards. Id. E.O. 13839 states that implementation of America’s civil service laws has fallen far short of these ideals. It cited the Federal Employee Viewpoint Survey which has consistently found that less than onethird of Federal employees believe that the Government deals with poor performers effectively. E.O. 13839 also finds that failure to address unacceptable performance and misconduct undermines morale, burdens good performers with subpar colleagues, and inhibits the ability of executive agencies to accomplish their missions. On September 17, 2019, OPM issued proposed regulations governing probation on initial appointment to a competitive position, performancebased reduction in grade and removal actions, and adverse actions (84 FR 48794, September 17, 2019). The proposed regulations were revising OPM’s regulations to make procedures relating to these subjects more efficient and effective. The proposed regulations were also amending the regulations to incorporate other statutory changes and technical revisions. After consideration of public comments on the proposed regulations, OPM is now issuing these revised regulations to implement certain requirements of E.O. 13839 as well as to fulfill the vision of the PMA and the E:\FR\FM\16OCR2.SGM 16OCR2 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations jbell on DSKJLSW7X2PROD with RULES2 objectives of M–17–22. These revisions not only will support agency efforts in implementing E.O. 13839 and M–17–22, and pursuing the PMA, but also will facilitate the ability of agencies to deliver on their mission and provide good service to the American people. Ultimately, these changes support President Trump’s goal of effective stewardship of taxpayers’ money by our government. Data Collection of Adverse Actions Section 6 of E.O. 13839 outlines certain types of data for agencies to collect and report to OPM as of fiscal year 2018. To enhance public accountability of agencies, OPM will collect and, consistent with applicable law, publish the information received from agencies aggregated at a level necessary to protect personal privacy. OPM may withhold particular information if publication would unduly risk disclosing information protected by law, including personally identifiable information. Section 6 requires annual reporting of various categories of data, including: (1) The number of civilian employees in a probationary period or otherwise employed for a specific term whose employment was terminated during that period or term; (2) the number of civilian employees reprimanded in writing by the agency; (3) the number of civilian employees afforded an opportunity period by the agency under section 4302(c)(6) of title 5, United States Code, breaking out the number of such employees receiving an opportunity period longer than 30 days; (4) the number of adverse actions taken against civilian employees by the agency, broken down by type of adverse action, including reduction in grade or pay (or equivalent), suspension, and removal; (5) the number of decisions on proposed removals by the agency taken under chapter 75 of title 5, United States Code, not issued within 15 business days of the end of the employee reply period; (6) the number of adverse actions by the agency for which employees received written notice in excess of the 30 days prescribed in section 7513(b)(1) of title 5, United States Code; (7) the number and key terms of settlements reached by the agency with civilian employees in cases arising out of adverse actions; and (8) the resolutions or outcomes of litigation about adverse actions involving civilian employees reached by the agency. On July 5, 2018, OPM issued guidance for implementation of E.O. 13839. This guidance included instructions for each department or agency head to coordinate the collection of data from VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 their components and compile one consolidated report for submission to OPM using the form attached to the guidance memo. Forms must be submitted electronically to OPM via email at employeeaccountability@ opm.gov generally no later than 60 days following the conclusion of each fiscal year. In lieu of outlining the data collection requirements in OPM regulations, OPM will issue reminders of this requirement annually and provide periodic guidance consistent with the requirements of E.O. 13839. Public Comments In response to the proposed rule, OPM received 1,198 comments during the 30-day public comment period from a wide variety of individuals, including current and retired Federal employees, labor organizations, Federal agencies, management associations, law firms, and the general public. At the conclusion of the public comment period, OPM reviewed and analyzed the comments. In general, the comments ranged from categorical rejection of the proposed regulations to enthusiastic support. Many comments focused on issues relating to fairness, the opportunity to demonstrate acceptable performance, and the protection of employee rights. Several Federal agencies, organizations, and commenters agreed with many aspects of the proposed regulations. Those in support of the regulatory changes cited the benefit of streamlined processes and the benefits to management of the Federal workforce associated with increases in efficiency and accountability. An agency commented that the use of progressive discipline has led to many delays in removal and hardship for supervisors. The agency highlighted that this rule will give more discretion to supervisors to remove problematic employees and shorten the years-long process for getting rid of poor performers and those with misconduct issues, thus increasing the efficiency of the service. In addition, some organizations commended OPM for reiterating that progressive discipline is not a requirement. One of these organizations further noted that progressive discipline has grown within most agencies to the point of being a roadblock in many instances to removals or suspensions that would promote the efficiency of the service because there was no prior discipline. Also, with reference to tables of penalties, this organization stated that the rule is ‘‘right on point’’ in its reference to tables of penalties as contrary to the efficiency of the service. Some agencies and organizations PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 65941 expressed support for providing notifications to supervisors about probationary periods ending but requested clarification on how the process should be implemented. Additionally, included among the comments of Federal agencies were concerns regarding: The consequence of supervisors not taking affirmative steps to retain employees before the end of a probation period; the non-delegation from the head of the agency to adjudicate retaliation claims, as well as whether such ‘‘decisions could be perceived to be politically motivated resulting in claims of whistleblower retaliation’’; and whether agencies may satisfy the requirement to provide assistance before or during the opportunity period without placing agencies at risk of acting contrary to statute or other OPM regulations. Many of the comments were from national labor organizations and their members, including many which were seemingly submitted using text from a template. This widely utilized letter expressed general opposition to the proposed regulations. Specific concerns expressed included: Commenters’ confusion about probationary period notifications, the lack of required utilization of progressive discipline and the discouraged use of tables of penalties, the existence of adequate assistance for employees with unacceptable performance to demonstrate improvement, and the loss of ability to modify personnel records through settlement agreements. Other commenters had similar concerns in addition to concerns regarding whether the revised regulations were consistent with existing statutes, other regulations, case law, and merit principles. OPM reviewed and carefully considered all comments and arguments made in support of and in opposition to the proposed changes. The comments are summarized below, together with a discussion of the changes made as a result of the comments. Also summarized are the suggestions for revisions that we considered and did not adopt. In addition to substantive comments, we received several editorial suggestions, one of which was adopted. Finally, we received a number of comments that were not addressed below because they were beyond the scope of the proposed changes to regulations or were vague or incomplete. In the first section below, we address general or overarching comments. In the sections that follow, we address comments related to specific portions of the regulations. E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 65942 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations General Comments Federal agencies, management associations, some Federal employees and some members of the public expressed strong support for the changes. An agency concurred with the proposed rule as written and other individual commenters and management associations asserted that the rule changes are prudent and long overdue. Some commenters stated that they had observed Federal employees who do not perform their jobs acceptably, expressed the belief that the burden on managers in handling underperforming employees is too onerous, and welcomed the regulation changes as a means of addressing these issues. Commenters stated that the current rules protect ‘‘bad’’ employees and this change would make it easier for employers to remove ‘‘bad’’ employees and focus more time on the ‘‘stellar’’ employees including rewarding them. Another commenter referred to these changes as common-sense reforms that will aid in holding all Federal employees more accountable. Another commenter stated that it is time to hold all Federal employees accountable, including management. One commenter, who did not identify whether he or she is a member of a union, stated that although the national union may encourage its members to voice disagreement, the commenter agrees with the rule. This commenter also asserted that for far too long Federal government unions have protected poor performers. Some commenters asserted that Federal employees should not expect to be treated differently than private sector workers and voiced their support of the rule changes. A commenter fully supported the rule and believed it is long overdue for the Federal government to get in sync with the private sector when addressing both employee performance and conduct. The commenter added that the proposed changes will assist in retaining appropriate employee safeguards while promoting the public trust in government. Another commenter supported the proposed rule because high performing employees will now be able to be rewarded and subpar employees removed from an agency. A commenter also expressed full support and stated that supervisors should be held equally responsible as rank and file employees. A management association expressed that overall it was in favor of the proposed rule, although some members of this management association ‘‘expressed concern in the area of subjectivity if someone has a boss that is ‘out to get them.’ ’’ VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 Two management associations, while offering their support of the rule, emphasized the importance of training. One management association urged OPM to act with all haste to process the comments it receives, issue a final rule, and ensure managers are educated and trained about the changes. This management association asserted that ultimately, OPM proposes much needed and reasonable reforms that give management clearer control over their workforce from the initial hiring process through the individual’s tenure in the Federal service. However, the management association stated that the most important determinant of these rules’ success will be not how they are written but how the managers and supervisors are trained on their implementation. The management association stated that managers and supervisors must be given the tools and support to institute these reforms within their offices. Further, the management association stated that performance appraisals for managers should be tied to their adherence to these rules. This management association asserted that, in order to create a culture that values accountability and efficiency, leaders in the Federal government must be efficient and accountable in inaugurating the changes. Another management association stated that when finalized and implemented, the rule will provide much needed simplicity and clarity for federal leaders who are responsible for managing an accountable workforce. OPM acknowledges the support for the rule received from commenters. In regard to tools and support to assist managers and supervisors, one of the requirements of E.O. 13839 is that the OPM Director and the Chief Human Capital Officers Council undertake a Government-wide initiative to educate Federal supervisors about holding employees accountable for unacceptable performance or misconduct under those rules, and that this undertaking begins within a reasonable time after the adoption of any final rule issued to effectuate the principles of accountability in the Federal workforce in Section 2 of E.O. 13839. Other commenters expressed numerous other concerns about the proposed rule. National unions, organizations and many other commenters urged OPM to withdraw the proposed rule and consider what they believe to be more reasoned and equitable approaches to addressing employee probation, and employee performance and conduct concerns. Some commenters stated that the changes to the regulations are invalid, PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 and others stated that they are unnecessary. One national union and a commenter voiced opposition to all proposed changes except the whistleblower provisions. In expressing their opposition, other commenters remarked that the rule purports to accomplish the goal of ‘‘assist[ing] agencies in streamlining and clarifying procedures and requirements to better support managers in addressing unacceptable performance and promoting employee accountability for performance-based reduction in grade and removal actions as well as adverse actions,’’ but does not actually do so. A national union stated that contrary to what the proposed rule states, these regulations will not reward good workers or promote public trust in the Federal government. A commenter asserted that because civil servants are dedicated to Government service and work with pride regardless of the conditions, the performance management system should reciprocate the same tolerance and adaptability when agencies are administering disciplinary action against Federal employees, which, the commenter observes, would not be the case if these changes are adopted. One commenter stated that, on its face, the proposed changes seem reasonable. The commenter asserted, however, that it appears as though the goal is to reduce Government rules, regulations, agencies and employees. The commenter disagreed with these reductions as agencies and employees keep our country moving forward and serving people. Another commenter asserted that adoption of the proposed rule would demonstrate poor judgement and a blatant disregard for the Federal government’s most valuable asset, its employees. OPM disagrees with those commenters who challenge the underlying validity of and necessity for these regulations. Congress has conferred upon OPM general authority to regulate in these areas; see, e.g., 5 U.S.C. 3321, 4305, 7504, 7514 and 7543. OPM is also promulgating these rule changes to implement the requirements of E.O. 13839 and M–17–22, as well as to fulfill administration policy priorities laid out in the PMA. Furthermore, these rules are being promulgated under the President’s authority provided in 5 U.S.C. 3301, 3302 and 3303 and which he delegated to OPM. These changes not only support agency efforts to implement E.O. 13839 and M–17–22, and to pursue PMA goals, but also will facilitate the ability of agencies to deliver on their missions and provide service to the American people. To carry E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations out E.O. 13839, the rule facilitates a Federal supervisor’s ability to promote civil servant accountability while simultaneously preserving employee’s rights and protections. We also disagree with the commenters’ contention that the proposed rule does not streamline and clarify procedures and requirements to better support managers in addressing unacceptable performance and pursuing adverse actions. We decline to make changes based on these comments because the proposed rule effectuates changes that, in fact, make procedures more efficient and effective. The proposed rule was published to facilitate the ability of agencies to deliver on their mission and on providing service to the American people. For example, the requirement of the proposed rule for timely notifications to supervisors regarding probationary periods will assist agencies in making more effective use of the probationary period. Additionally, the proposed rule establishes limits on the opportunity to demonstrate acceptable performance by precluding additional opportunity periods beyond what is required by law, which encourages efficient use of the procedures under chapter 43. As another illustration of streamlining and clarifying performance-related procedures and requirements, the proposed rule makes clear that an agency is not required to use progressive discipline under subpart 752.202. Specifically, the proposed rule adopts the requirement to propose and impose a penalty that is within the bounds of tolerable reasonableness. Further, the proposed amendments emphasize that the penalty for an instance of misconduct should be tailored to the facts and circumstances, in lieu of the type of formulaic and rigid penalty determination that frequently results from agency publication of tables of penalties. Thus, OPM believes the rule does make procedures more efficient and effective and is consistent with E.O. 13839’s policy goals and requirements. Many commenters and organizations asserted that OPM did not have the authority to promulgate this rule because employee procedural rights are governed by statute and should be modified only through congressional action. Some commenters said the rule would be unconstitutional if effected. An organization stated that the proposed regulations are contrary to statutory authority and established case law, and directly undermine the due process protections afforded to Federal employees. Another organization stated that OPM should dispense with these VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 regulations as written or substantially revise them to conform to due process, fundamental fairness, Federal statute and Federal court precedent. We disagree with the general assertions contesting OPM’s authority and challenging the legality and constitutionality of the revised regulations. OPM is promulgating these regulations under its congressionally granted authority to regulate. Not all existing provisions were constitutionally or statutorily mandated, and to the extent they were not, OPM has authority to revise them to make the process work more effectively. In so doing, OPM has been mindful of the President’s expressed policy direction. Further, this rule will not eliminate any employee rights provided under statute. Federal employees will continue to enjoy all core civil service protections provided by statute, including merit system principles, procedural rights, and appeal rights. An agency pointed out that when the proposed regulations were drafted, there were judicially imposed limitations on implementing portions of E.O. 13839 precluding inclusion of these subjects in the proposed regulation. The agency recommended that, due to the court injunction being lifted, any matter that would have been included in the regulation, but for the injunction, be added so that agencies can benefit from those matters as well. The agency is correct that various sections of E.O. 13839 were subject to judicially imposed limitations when these regulations were proposed and that the proposed regulations did not seek to incorporate enjoined sections of the E.O. For the same reason, however, these sections were not subject to notice-and-comment rulemaking requirements. As a result, such changes will not be included in the final rule with respect to the current rule-making process. As the previously enjoined portions of the Executive Order are now fully effective and binding on executive agencies, OPM anticipates proposing additional revisions to regulations, pursuant to the Administrative Procedures Act’s notice-and-comment process, consistent with the President’s expressed policy goals, at a future date. One national union noted that ‘‘the proposed regulations will diminish employees’ right to collectively bargain by limiting the topics that are negotiable. They noted the regulations are contrary to the vision and spirit of the Federal Service Labor-Management Relations Statute (the Statute), which allows Federal employees to collectively bargain and participate in decisions PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 65943 affecting their working conditions.’’ This national union further noted that ‘‘while OPM has the authority to issue regulations in the area of federal labor relations, it may not dilute the value of employees’ statutory right to collectively bargain.’’ They further state ‘‘OPM does not consider how its proposed regulations will severely impede the right to collectively bargain. The regulations should not be implemented because they would diminish the core elements of collective bargaining by reducing negotiations over primary conditions of employment including discipline, improvement opportunities, and settlements.’’ In response to these comments, OPM notes that there are numerous ways in which the proposed rule does not impact collective bargaining at all. Generally, in fact, the regulations simply provide direction to agency officials exercising the discretion afforded to them by law, including the right to discipline employees and the right to hire. Legally negotiated agreements, for instance, could not force agency officials to select a specific penalty based on employee misconduct, require them to enter into settlement agreements that provide employees clean records, or preclude them from utilizing probationary periods when making decisions regarding the nature of an appointment. These decisions remain at the discretion of the agency’s authority as to discipline, settlement, and hiring and employment. In other cases, the proposed rule provides only aspirational goals that constitute guides for agency officials rather than absolute mandates that would preclude bargaining over these subjects. An example is the provision providing that agencies should limit to the required 30 days the advance notice of adverse action when practicable. Similarly, the provision explaining that agencies are not required to use progressive discipline is a guide, not a mandate. Although the proposed revisions to these Government-wide regulations may result in limiting collective bargaining on certain topics, we disagree with the view that these changes are contrary to the vision and spirit of the Statute (5 U.S.C. chapter 71). They are in accord not only with both of these concepts but also, and most importantly, with the letter of the law, including 5 U.S.C. 7117. Further, 5 U.S.C. 7101(b) states in its entirety that ‘‘[i]t is the purpose of this chapter to prescribe certain rights and obligations of the employees of the Federal Government and to establish procedures which are designed to meet the special requirements of Government. The provisions of this chapter should be E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 65944 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations interpreted in a manner consistent with the requirement of an effective and efficient Government.’’ These provisions include significant limitations on collective bargaining relating to matters that are the subject of Federal law or Government-wide rule or regulation; see 5 U.S.C. 7117(a)(1). And while commenters may disagree, as a matter of policy, with the subjects the President has determined are sufficiently important for inclusion in an Executive Order and federal regulation, it is well established that the President has the authority to make this determination and that OPM regulations issued pursuant to this authority constitute Government-wide rules under section 7117(a)(1) for the purpose of foreclosing bargaining. See NTEU v. FLRA, 30 F.3d 1510, 1514–16 (D.C. Cir. 1994). We would also note that certain exceptions to collective bargaining are set forth in the Statute itself, including a prohibition on substantively bargaining over management rights as outlined in 5 U.S.C. 7106(a). This includes management’s statutory rights to suspend, remove, reduce in grade or pay, or otherwise discipline employees. Bargaining proposals that would, for instance, mandate a particular penalty determination, and mandate the use of progressive discipline and/or tables of penalties would impermissibly interfere with the exercise of a statutory management right to discipline employees and thereby not appropriately be subject to bargaining. One commenter also suggested that the ‘‘article’’ should be open for dialogue from the union. Because this comment is not clear, we are unable to respond to it. We note, however, that what we published is not a proposed article intended for inclusion in collective bargaining agreements between agencies and labor organizations. These provisions are proposed revisions to Government-wide regulations issued by OPM. We provided a copy of the proposed rule to labor organizations which have been granted consultation rights with OPM on Government-wide rules or regulations effecting any substantive change in any condition of employment in accordance with 5 U.S.C. 7117(d) and provided an opportunity to make comments and recommendations. Additionally, all unions were able to submit comments and recommendations through the rulemaking process and we have considered and responded to all comments that were within the scope of the rule. Some commenters asserted that the timing of this notice is suspicious, and appears to coincide with alleged VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 administration efforts to circumvent Congress on Federal agency appropriations and authorizations, cripple unions, remove Federal employees via proposing drastic agency budget cuts, and impose ‘‘absurd’’ new Federal workplace policies such as restricting telework. The proposed regulations simply implement the requirements of E.O. 13839, along with the PMA and the objectives of M–17–22. There is no correlation between the timing of the notice and any budget or other administrative process. Some commenters stated that reform to the civil service system has long been necessary, but that this proposed rulemaking is the wrong approach. A commenter stated while reform is needed, the approach must be fair. Further, an organization asserted that loosening adverse action standards, as demonstrated by a recent non-title 5 statute for Federal employees and ‘‘simply making it procedurally easier to fire employees does not in practice improve the overall efficiency of the Federal service.’’ Commenters including labor organizations generally expressed concern that these changes, separately and together, would weaken or vitiate the procedural rights or protections of Federal employees. One commenter asserted that, at a time when protections for Federal workers should be strengthened, this proposed rule weakens protections. Many national unions, organizations and individual commenters expressed a desire to remain under the current system with its existing protections, citing too much power being given to managers and supervisors with no corresponding accountability, at the cost of destroying a properly functioning workforce. They argued that the changes would substantially make the Federal government an ‘‘at will’’ employer. Another commenter observed that checks and balances are at the core of a functioning democracy and requested that we not tear down those attributes by implementing this ‘‘archaic’’ rule. Moreover, an organization stated that removing protections that ensure that such actions are warranted does not promote an efficient, professional and productive Federal workforce. It instead, they argue, takes the Federal civil service steps closer back to the spoils system, and thus is a ‘‘big step in the wrong direction.’’ Further, an organization opined that this administration’s approach of undermining due process protections is the wrong path to reforming government if the goal is to improve the performance PO 00000 Frm 00006 Fmt 4701 Sfmt 4700 of services to the American people. This organization posited that if the goal is to dismantle the civil service, reduce the number of Federal employees by violating due process rights, and increase discrimination, harassment, and retaliation in the workplace, these changes will have the desired effect. A commenter remarked that OPM should not forget that procedures were set in place to protect an employee from retaliation or from being removed for arbitrary reasons. Citing specifically the Civil Service Reform Act of 1978 (CSRA), a national union intimated that the proposed rule would permit agencies to act without meaningful review and that Federal employees would receive only lipservice to due process and stated that it was not the purpose of the CSRA to bring about such results. This national union asserted that instead the heart of the CSRA was the desire to balance the needs of an efficient government with due process and fundamental fairness for Federal employees. The national union stated that the proposed regulations upset this balance and stated that they should therefore be abandoned. A commenter also stated that the proposed regulations seem ‘‘anti-union’’ and ‘‘just unfair’’ and that the proposal ‘‘is an attack on Federal Employees.’’ Another commenter endorsed the importance of unions and stated that these regulations are another attempt to take union rights away. An organization declared that one of the fundamental principles of this civil service system is due process for Federal employees and the ‘‘for cause’’ standard for termination. This organization further observed that due process protections in the civil service system are the most significant difference between most non-unionized private employees, who are at will, and most Federal employees, who can only be removed for cause. The organization additionally stated that the basic principle of due process is derived from hundreds of years of our nation’s civil service experience, which has shown that the best way to avoid nepotism, discrimination, and prohibited personnel practices is to ensure that Federal employees can be removed only for cause. National unions and commenters further stated that Congress created a comprehensive scheme to rectify past issues of arbitrary and discriminatory punishments against Federal workers and asserted that the proposed regulations weaken those protections. The organization further stated that preserving the rights of Federal employees is essential to furthering the principles of the civil E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations service, merits system and continuous service, and it does not believe that the proposed regulations accomplish the goals of a fair and merit-based civil service. Another commenter stated that OPM should understand that there is a foundation for the appeals process and requested that OPM not create a different problem by solely focusing on what could be summarized as opening up punishment without the process, review, or oversight that is due. One commenter stated that it is important for OPM to understand that anything that limits due process for employees is ‘‘a dangerous, slippery slope.’’ The commenter stated that it is imperative that we have a strong due process system for Federal employees and a check-and-balances system so that supervisors with perverse incentives cannot act unilaterally. Another commenter expressed that the proposed rule was poorly drafted and an affront to the Federal workforce, citing that it does not meet the standards of due process. We disagree with commenters’ assertions that the regulation is not consistent with the rights and duties that the CSRA prescribes and removes procedural rights. Consistent with E.O. 13839, the rule streamlines adverse actions and appeal procedures, but without compromising constitutional Due Process rights. The remaining statutory and regulatory procedures for the Federal workforce meet and exceed constitutional requirements. Employees will still receive notice of a proposed adverse action, the right to reply, a final decision and a post-decision review of any appealable action, that is, what the Constitution requires. But further, they retain their right to a full-blown evidentiary post-action hearing as well as judicial review. In fact, they retain a host of choices of avenues of redress. Further, we disagree with the many national unions, organizations and individual commenters who expressed that the regulation changes would substantially make the Federal government an ‘‘at will’’ employer. As discussed above, the rule does not remove constitutional Due Process rights or statutory or regulatory procedures. Thus, Federal employees are not deemed at will as a result of the rule. Further, the rule promotes fair and equitable treatment of employees through its provisions. The proposed regulations encourage managers to think carefully about when and how to impose discipline and to consider all relevant circumstances including the best interests of all employees, the agency’s mission, and how best to VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 achieve an effective and efficient workplace when making decisions. The rule is intended to clarify the requirements in chapter 43 and chapter 75 of title 5 of the United States Code and to make sure that employee conduct and performance that are inconsistent with a well-functioning merit-based system are addressed promptly and resolutely. Therefore, the proposed rule will not ‘‘upset’’ the balance between efficient Government and employee protection as one commenter stated; it will restore it. We also disagree that the proposed regulations take away union rights. Although the proposed regulations may result in limiting collective bargaining on certain matters of elevated importance to the President and OPM, similar to the impact any other Government-wide rule may have under 5 U.S.C. 7117, the regulations do not change the rights and duties afforded to labor organizations in 5 U.S.C. chapter 71. The President has determined that these limitations are necessary to make procedures relating to performancebased actions and adverse actions more efficient and effective and has directed OPM to issue a Government-wide rule consistent with this imperative. Additional commenters contended the rule removes protections against retaliation. National unions and other commenters voiced concerns that the proposed rule can have the impact of employees being disciplined or removed for whistleblower activity. A national union stated that Federal employment is deeply engrained with policies that promote efficiency and high-quality performance, while also protecting employees from arbitrary and discriminatory actions by supervisory and managerial personnel. The national union, citing a Merit Systems Protection Board (Board) study, stated that Congress has implemented safeguards to ensure Federal employees are ‘‘protect[ed] from the harmful effects of management acting for improper reasons such as discrimination or retaliation for whistleblowing.’’ This union stated that the proposed regulations will weaken protections for Federal employees and create a system that gives wide discretion to agencies to take punitive action against employees, regardless of whether that action is inequitable or discriminatory. Another commenter asked what the recourse is for someone who is harassed or mistreated and cannot report it to someone. We disagree with the commenters’ suggestions that the proposed regulation will have the impact of employees being disciplined or removed for PO 00000 Frm 00007 Fmt 4701 Sfmt 4700 65945 whistleblower activity. OPM is prohibited from waiving or modifying any provision relating to prohibited personnel practices or merit system principles, including continuing prohibitions of reprisal for whistleblowing or unlawful discrimination. The regulations therefore do not modify these protections in any way. The commenters’ apprehensions about the rule diminishing or removing protections against retaliatory action are not supported by the language of the rule itself. In fact, the rule reinforces the responsibility of agencies to protect whistleblowers from retaliation. These requirements are significant because of the essential protections they provide. OPM’s rule incorporates new requirements pursuant to 5 U.S.C. 7515 and assists agencies in understanding how to meet the additional requirements in connection with whistleblower protections. The rule helps to undergird and support agencies in meeting their requirements to take action against any supervisor who retaliates against whistleblowers. An organization asserted that current statutes and regulations, if appropriately applied by agencies, provide more than adequate means to regulate the civil service in meritorious cases where disciplinary or performance action is warranted. This organization stated that the revisions in the proposed rule are based on the erroneous stereotype that it is difficult to fire Federal employees and asserted that this is not the case. The organization pointed to the Government Accountability Office report, ‘‘GAO–18–48, FEDERAL EMPLOYEE MISCONDUCT: Actions Needed to Ensure Agencies Have Tools to Effectively Address Misconduct and noted that (based on OPM’s statistics) almost 1% of the Federal workforce is subject to adverse actions every year. Arguments against the proposed changes based on alleged erroneous stereotypes concerning the challenges of removing employees disregard the objectives of E.O. 13839. OPM proposed these revised regulations, as required by E.O. 13839, in order to promote more effective and efficient functioning of the Executive Branch and to provide a more straightforward process to address misconduct and unacceptable performance, which will serve to minimize the burden on supervisors. Potential misconceptions regarding removal of Federal employees do not eliminate OPM’s need to implement the Executive Order by proposing changes that support the Order’s goals. Commenters, including a national union, stated that the proposed changes E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 65946 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations will allow for unchecked supervisory conduct and favoritism. A national union asserted that it is unacceptable for OPM to put forth proposed regulations that, in the union’s view, prioritize such arbitrary conduct under ‘‘the phony guise of government efficiency and effectiveness to eviscerate the protected rights of employees.’’ Commenters and national unions voiced concerns that the regulations will likely cause significant harm to employees. A commenter also stated that employees would have a constant fear of being removed over minor infractions. In another instance, a commenter observed that creating a ‘‘nebulous employee concern by threatening discipline and salary decreases,’’ as the commenter asserts this proposal does, has a negative impact on good employees. Further, the national union argued that the proposed changes will not achieve any of the supposed benefits for the Government; instead, these regulations will allow good employees to be terminated and create a high turnover rate among Federal employees and will cost the Government extra money as Federal employees are exposed to the arbitrary whims of supervisory personnel. Other commenters stated that the proposed streamlining effort places the power in the hands of agencies and leaves employees to be at the will of their agencies or at the very least opens the door to abuse of power, authority and the threat of coercion in the workplace. These commenters expressed the view that, currently, inherent checks and balances through established practices, peer review, and multistage discipline expose decisions to ‘‘ridicule’’ if improper. Furthermore, commenters asserted that, given what they believe to be the vagueness of this rule, there is not enough limitation on the power of supervisors, and dedicated public servants can be removed for any reason, including politics. Commenters stated that the proposed rule ‘‘skews the rights towards management and away from employees who will have little recourse.’’ Asserting that unions were created to ensure employees are treated fairly and management follows the rules, a commenter questioned what will prevent the abuse of the new rule and who the new rule will protect. The commenter stated that because of the rule changes, unfairness will perpetuate, if not increase, alleged management ineptness. The results, they argue, will be that employees will leave Federal service or be removed without due process. One commenter stated that while changes to discipline and VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 removals can be beneficial, the rule gives management more power to remove someone without just cause. Moreover, another commenter observed that any change to the current regulation will only foster the negative feelings that the commenter believes already exists between management and employees. This commenter expressed the viewpoint that these matters are compounded if one is a person of color and that ‘‘inclusion of all should be the goal not exclusion due to a difference no matter how perceived [which] is, in my opinion, another form of discrimination.’’ Further, another commenter voiced concern that it will be easier to remove Federal employees and that procedures that provide fair and equitable treatment will be stripped away, which will sow further distrust between employees and management and will unnecessarily create unforeseen problems. In response to commenters that expressed concern about negative impact on good employees, OPM notes that addressing misconduct or poor performance in this fashion will enhance the experience of wellperforming employees, because poor performing employees place a resource strain on more productive employees and damage morale generally. OPM further believes that the positive impact associated with more effectively and expeditiously addressing poorly performing employees outweighs any negative impacts. Further, national unions and other commenters voiced concern that the rule would give rise to nepotism. National unions and other commenters stated that the proposed rule changes are based on an Executive Order issued by an administration that, in the view of these commenters, has openly stated its anti-union animus and disregard for the laws that govern and protect Federal workers. The commenters asserted that these laws were designed to put a halt to nepotism, discrimination and unfairness at all levels of Federal employment. This proposed rule, they conclude, conflicts with the letter and spirit of those laws. Notwithstanding these assertions, the regulation does not permit unchecked supervisory behavior and favoritism, remove employee protections, or permit nepotism. The final regulation streamlines and simplifies performancebased actions and adverse actions without compromising employees’ statutory rights and protections. The statutory protections for Federal employees remain in force and are not affected by the rule. Thus, the concern of many commenters that managers will PO 00000 Frm 00008 Fmt 4701 Sfmt 4700 abuse their authority as a result of the rule is unfounded. While commenters advocated for remaining with the current system, the proposed rule carries out the requirements of E.O. 13839. Importantly, agencies continue to be responsible for holding managers accountable for proper use of their authority. Regarding the comments that the proposed rule impacts employees’ rights and the role of unions, we believe the changes appropriately protect employee statutory rights while providing for efficient government operations. E.O. 13839 requires executive agencies (as defined in section 105 of title 5, U.S. Code, excluding the Government Accountability Office) to facilitate a Federal supervisor’s ability to promote civil servant accountability while simultaneously recognizing employees’ procedural rights and protections. In response to the comment that the proposed rule changes are based on an Executive Order issued by this administration which has openly stated its anti-union animus and disregard for the laws which govern and protect federal workers, we reiterate that the policy goals of E.O. 13839 are to promote civil servant accountability consistent with merit system principles while simultaneously recognizing employees’ procedural rights and protections. These are the policy goals underlying the rule. Notwithstanding the commenter’s speculations regarding the intent of the rule, the rule changes adhere to legal requirements. A national union stated that the need for employee protections has been put into ‘‘sharp relief’’ by actions of this administration which appear to target Federal employees. Commenters voiced opposition to the proposed rule because it allows employees to be fired for political reasons or other non-workrelated facets of an employee. A commenter noted that ‘‘people died for union rights’’ and OPM should not take them away. Another commenter stated that the rule changes are ‘‘punitive’’ for employees and enable management to continue ‘‘bad behavior’’ that is arbitrary and without employee recourse. This commenter posited that if these issues were not a reality, unions would have no need to exist. Commenters stated that scientists and civil servants most likely to face censure under this administration are those who render their professional opinions or follow scholarly findings and evidencebased reasoning and thus the expanded powers of the proposed rule in no way benefits the public. OPM does not agree that the proposed regulations target employees in any E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations manner. The final regulations streamline and simplify performancebased actions and adverse actions without compromising employees’ statutory rights and protections. The statutory protections for Federal employees remain in force and are not affected by the rule. The regulations also do not change the rights and duties afforded to labor organizations and agencies pursuant to 5 U.S.C. chapter 71. OPM believes that these changes are necessary to make procedures relating to performancebased actions and adverse actions more efficient and effective. Some commenters voiced confusion and believe that the rule is another action by the administration to arbitrarily punish and dispense with Federal employees and union representatives in the name of ‘‘efficiency.’’ Many commenters stated that the proposed rule will make it easier to remove employees who do not comply with the administration’s views. In particular, one commenter stated the proposal was politically motivated and that the ability of elected officials with political motives to quickly terminate Federal employees leads to excessive influence and poor decision making. The commenter observed that it needs to be ‘‘hard’’ to remove a Federal employee so that they can ‘‘operate independently.’’ Another observed that competent people do not deserve to lose their jobs ‘‘based on who’s in power.’’ A commenter stated that one of the hallmarks of our current system is its freedom from political influence which could change under this proposed rule. One commenter proposed adding protections for those employees who do not comply with the administration and opined that the protections will prevent employees from inadvertently breaking Federal laws, help the American public, and prevent costly wrongful termination lawsuits. This commenter asserted that the rule creates openings for managers to wield political influence in the Federal workplace and to change the workforce to meet a personal or political agenda, rather than fulfilling the mission of the organization. Finally, the commenter stated that Americans deserve a politically neutral Federal workforce. In response to these concerns, please see our earlier discussion regarding protections. The statutory protections for Federal employees remain in force and are not affected by the rule. In addition, the current and revised procedures are content-neutral; there is nothing in the changes that further permits or encourages the initiation of a personnel action based on an VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 employee’s opinion or viewpoint. All avenues of redress for employees remain unchanged by this regulation, and, should an employee believe that he or she is the subject of a prohibited personnel action, reprisal, etc., the employee remains able to exercise rights to appeal to the Merit Systems Protection Board (MSPB or Board), to seek relief from the Office of Special Counsel (OSC), etc. A significant issue raised in the public comments concerns the proposed rule’s fairness. Many commenters stated that the rule is unfair, fosters a toxic work environment, or weakens employee protections. One commenter stated that when there is ‘‘no equal fairness,’’ work productivity will suffer and that OPM ‘‘should tread softly’’ regarding the proposed rule. Another commenter further stated that he has seen the workplace be degraded and morale reduced because of vindictive approaches to employee relations and questionable policy changes at the expense of workplace engagement, performance incentives, and public health and welfare. Additional commenters were of the view that the proposed rule is senseless and wrong, while another commenter stated that the rule is ‘‘morally questionable.’’ Many commenters stated that the proposed rule would seriously disrupt and remove all notions of fairness when Federal employees are subject to adverse actions or that the rule is ‘‘abhorrent.’’ Multiple commenters asserted that the proposed rule would foster disparate standards for application to both performance and conduct-based actions. They expressed a view that parts of the rule are merely confusing, while other parts appear to be designed to foster contentious labor relations, rather than resolving these issues in a cooperative and constructive manner. Commenters voiced concerns regarding fairness for those civil service employees who are veterans. Without providing specifics, a commenter stated this rule is very unfair to those individuals who served in the military and those who work as Federal employees. Still another commenter, again without giving a basis for the comment, voiced concerns regarding stripping away rights of those Federal employees who have served this nation and continue to serve and stated that those rights should be left alone. As previously explained, we disagree that the proposed regulations take employee rights away or are unfair. Although we have made changes to the proposed regulations, statutes that guard against arbitrary actions remain intact. Additionally, protection of employee PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 65947 rights is an important element of fair treatment in the Federal workforce. The rule observes and is consistent with the merit system principles which state that employees should maintain high standards of integrity, conduct, and concern for the public interest, and that the Federal workforce should be used efficiently and effectively. The rule and the procedures contained therein apply to all employees equally. All employees, including those who served in the military, and labor organizations continue to have the right to challenge or seek review of key decisions. Although we have made changes to the proposed regulations, procedural rights and other legal protections are preserved. Mirroring statutory requirements, the regulations continue to provide employees with notice, a right to reply, a final written decision, and a post-decision review of any appealable action. Bargaining unit employees continue to have the option to use negotiated grievance procedures over subjects otherwise not excluded while other employees continue to have the ability to utilize administrative grievance procedures. These regulations do not change the rights and duties afforded to labor organizations in 5 U.S.C. chapter 71. We believe these changes are necessary to make procedures relating to performancebased actions and adverse actions more efficient and effective. It is not clear what the concern is regarding the comment about ‘‘fostering disparate standards for application to both performance and conduct-based actions.’’ The statutory scheme in 5 U.S.C. chapter 43, Actions Based on Unacceptable Performance, and 5 U.S.C. chapter 75, Adverse Actions, are different and each establishes a distinct procedural process. The proposed regulations are consistent with the statutes that govern these actions. Regarding those commenters who expressed a view that parts of the rule are confusing, while other parts appear to be designed to foster contentious labor relations, rather than resolving issues in a cooperative and constructive manner, we are not able to provide a response without specific reference to the parts of the proposed rule about which they are commenting. National unions and other commenters asserted that the approval of the proposed rule will set the efficiency of the Federal service back several decades and contribute to what they assert are current issues concerning retention of stellar employees and recruitment in key agencies. Many national unions and commenters expressed considerable apprehension E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 65948 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations about the rule’s impact on retention and recruitment of employees in the Federal government with an already dwindling workforce. Some commenters pointed out that the rule changes will undermine integrity and morale as well as hamper the recruitment and retention of a quality Federal workforce. Some commenters requested that OPM reconsider given the long-term ramifications that this rule would cause and the dire effects these commenters believe it would have on employee morale, retention, and recruitment. Other commenters stressed that the proposed rule would ‘‘wreak havoc’’ on the stability of the civilian workforce, lower morale, and create a hostile employee/employer relationship during a time when many agencies already suffer from personnel shortages. We disagree that the rule will unfavorably impact the retention and recruitment of employees in the Federal government or undermine morale. The rule is not a plan for reducing recruitment or interfering with the retention of staff performing at an acceptable level. Rather, the rule carries out E.O. 13839 which notes that merit system principles call for holding Federal employees accountable for performance and conduct. E.O. 13839 finds that the failure to address unacceptable performance or misconduct undermines morale, burdens good performers with subpar colleagues and inhibits the ability of executive agencies to accomplish their missions. Accordingly, the rule is intended to have a positive impact on the Federal government’s ability to accomplish its mission for the American taxpayers. More specifically, with respect to retention, commenters asserted that many talented individuals will not consider the Federal government as an employer and those individuals currently in the Federal government will look elsewhere for employment. Some commenters stated that many agencies have recently executed poorly planned office moves and other reorganizations which have resulted in employees leaving in disgust and a loss of institutional knowledge, accelerating employee losses from attrition. These commenters stated that poorly planned changes to Federal employee performance management such as those in the proposed rule will ensure similar results. One commenter further reflected that imposing damaging rules will make employee retention more difficult than in the private sector and that it will make serving Federal customers ‘‘challenging’’ because it is a known fact that ‘‘happy employees work harder.’’ VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 One commenter asserted that, with what the commenter described as ‘‘the hiring restrictions,’’ the proposed rule will result in reducing the efficiency and strength of the Federal workforce as there will be mass attrition and mass migration away from Federal jobs to the severe detriment of all U.S. citizens who need Federal employees. A commenter stated that the rule serves as additional evidence that the rights of thousands of Federal employees no longer mattered or are valued. Another commenter asserted that these changes are a direct attack on Federal workers and their livelihoods as these rule amendments only make it easier for management to punish arbitrarily and fire at will; the changes thus constitute a major blow to the prospect of the Government becoming a desirable place to work again. Further, one national union stated that the proposed regulations will allow good employees to be terminated and create a high turnover rate in the Federal government. A commenter also wrote that the commenter felt disrespected by efforts to remove existing benefits for Federal employees and that this rule may result in employees deciding that the private sector is a better option. A commenter remarked that bad treatment of employees will ensure the inevitable failure of our government. The assertions that the proposed rule would adversely impact retention of Federal employees are incorrect and not supported by any data. The rule does not remove statutory procedural rights afforded to Federal employees and does not turn Federal employees into at-will employees. The rule does not change the protections of notice, an opportunity to reply, the right to representation, and the right to appeal to a third-party entity (and, eventually, the entity’s Federal reviewing courts). The rule clearly acknowledges the ongoing obligation of Federal employers to provide statutory safeguards to their workforce. It therefore should be evident from the rule that the Federal government remains committed to practices of fair treatment for employees. In fact, the rule promotes processes that help agencies retain employees who are performing acceptably and efficiently remove those who fail to perform or to uphold the public’s trust. Commenters also raised concerns about recruitment of talented individuals into the Federal workforce. A commenter stated that, although the existing system may have been overly generous to employees, the proposed changes are so ‘‘draconian’’ as to discourage ‘‘our best young people’’ PO 00000 Frm 00010 Fmt 4701 Sfmt 4700 from wanting to serve their country in Federal civil service. Another commenter asserted that it was hard to believe that the proposed rule would have a positive impact on the Federal government and that ‘‘adding a ‘lifetime at will’ line to the contract after the first year will not attract the best and brightest’’. Further, a commenter stated that it is deeply troubling that it will be easier to remove Federal employees and that procedures that provide fair and equitable treatment will be stripped away, which would result in attracting a less qualified pool of applicants. Additionally, with respect to recruitment, another commenter stressed that the role of a government employee is unique and the individuals occupying these roles hold specialized and institutional knowledge not common in private enterprise. This commenter went on to state that if the basic protections of Federal employment are removed, so will be any incentive for individuals to seek and apply for government jobs, an impact that may be hard to overcome or reverse. Another commenter asked what skilled persons would work for the Government if they knew they could be disciplined or fired abruptly for very little or no reason at all, and the commenter further stated that we need those who are skilled to perform the functions of the Federal government. OPM disagrees that the rule will have an adverse effect on recruitment of talented individuals to the Federal government. Maintaining high standards of integrity, conduct, and concern for the public interest, as enumerated by the merit system principles, and furthered by the rule, only serves to help agencies to deliver on their mission and on providing service to American people. It is thus reasonable to conclude that adherence to these standards will contribute to successful recruitment efforts for the Federal workforce. Referring to the probationary period in relation to recruitment, a national union stated that in certain regions, the Government experiences challenges in recruiting and retaining first responders. The national union added that the Government provides initial training and certification to new employees to help fill much needed positions. The national union further stated that under the proposed regulations, employees who must complete a two-year probationary period upon appointment could be terminated based on their supervisors’ assessment that they cannot adequately perform the job duties. The national union asserted that the proposed regulations will result in the Government losing their investment in E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations highly skilled workers and continuing to struggle to fill essential first responder positions, leaving government personnel and property more vulnerable to emergencies. The rule does not change the procedures for terminating a probationer’s appointment; it merely requires that agencies notify supervisors to make an assessment of the probationer’s overall fitness and qualifications for continued employment at prescribed timeframes before the conclusion of the probationary period. Current regulation, as reinforced by E.O. 13839 and previous OPM guidance, already provides that an agency shall utilize the probationary period as fully as possible to determine the fitness of the employee and shall terminate his services during this period if he fails to demonstrate fully his qualifications for continued employment. See 5 CFR 315.803(a). In response to the comment regarding expenditure of agency resources associated with terminations in year two of a probationary period, OPM believes that while a termination in the second year of a probationary term represents a loss of value from significant agency expenses, it would be more wasteful to retain the individual past the probationary period, allow him or her to acquire career status (and adverse action rights), and then be forced to pursue a formal performance-based action or adverse action to remove an employee who had proven to be unable to perform the duties of the position in an acceptable manner even before those rights accrued. One national union stated that the proposed changes are unsupported by the facts and are likely to have an overall negative effect on government operations by reducing due process for Federal employees and increasing arbitrary and capricious agency conduct. This national union stated that what they described as ‘‘the so-called’’ Case for Action that OPM sets forth at the beginning of the proposed regulations is not grounded in fact. The national union further stated that OPM looks to the Federal Employee Viewpoint Survey (FEVS), which is a subjective survey of employee perceptions. That union further claims that, although ‘‘a majority of both employees and managers agree that the performance management system fails to reward the best and address unacceptable performance,’’ the evidence actually shows that, far from failing to adequately address poor performance, Federal agencies routinely take actions against employees based on allegations of misconduct or poor VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 performance and that those actions are almost always upheld. The national union stated that when cases are not upheld by the Board, this small number of cases is not a failure of the system but rather an example of the system working effectively in a manner that fosters merit system principles. The national union also pointed out that given the reasons on which each reversal was based, the proposed regulations will not avoid or eliminate similar outcomes in the future. The national union asserted that OPM’s contention that ‘‘interpretations of chapter 43 have made it difficult for agencies to take actions against unacceptable performers and to have those actions upheld’’ is thus demonstrably untrue. The national union argues, therefore, that changes proposed by OPM to 5 CFR part 432 are unwarranted. It further stated that the above-referenced case outcomes are neither anomalous nor confined to performance-based actions. The national union further expounded on its point and stated that, going back to fiscal year 2016, the Board’s Annual Report for Fiscal Year 2016 statistics continue to demonstrate that agencies are, in fact, overwhelmingly successful in taking actions based on misconduct or performance. Consequently, this national union stated that The Case for Action that OPM purports to make is illusory. OPM disagrees with the union’s discounting of OPM’s reliance upon FEVS statistics. E.O. 13839 asserted that the FEVS has consistently found that less than one-third of Federal employees believe that the Government deals with poor performers effectively. OPM believes that this statistic is particularly relevant to the intent of E.O. 13839 and thus to the changes proposed in these regulations. Merit system principles state that employees should maintain high standards of integrity, conduct, and concern for the public interest, and that the Federal workforce should be used efficiently and effectively. They further state that employees should be retained based on the adequacy of their performance, that inadequate performance should be corrected, and that employees should be separated who cannot or will not improve their performance to meet required standards. With respect to the frequency with which agencies prevail at the Board, we do not believe any such success makes the rule changes unnecessary. As previously discussed, even if this phenomenon is real, statistics surrounding rate of actions being sustained does not obviate the need to improve the effectiveness and efficiency of the process. These regulations carry PO 00000 Frm 00011 Fmt 4701 Sfmt 4700 65949 out E.O. 13839 to facilitate a Federal supervisor’s ability to promote civil servant accountability while simultaneously recognizing employees’ statutory procedural rights and protections. They clarify procedures and requirements to support managers in addressing unacceptable performance and promoting employee accountability for performance-based reduction in grade, removal actions and adverse actions. Another national union also discussed The Case for Action, arguing that the rule weakens civil service protections and that it relies upon a premise, as its central argument, that it is too hard to fire Federal employees. The union, without evidence, opined that underlying that premise is the belief that more employees need to be fired. It also noted that while OPM relies upon the FEVS, where a majority of both employees and managers agree that the performance management system fails to reward the best and address unacceptable performance, OPM does not cite responses to specific FEVS questions that support this statement. The union goes on to cite responses in 2018 to two FEVS questions: Question 23—‘‘In my work unit, steps are taken to deal with a poor performer who cannot or will not improve’’ and Question 25—‘‘Awards in my work unit depend on how well employees perform their job.’’ The union gave the percentages of the total respondents who either disagreed or strongly disagreed with these statements and noted that this did not constitute a majority of responders. They also noted that a large percentage of respondents strongly agreed or agreed that they were held accountable for achieving results and felt that the overall quality of their unit’s work was good to very good. According to the union, in general, respondents see themselves and others in their work units as being held accountable and performing well, while perceiving that others are not. Additionally, the national union asserted that OPM has ‘‘simplistically’’ cited FEVS data and not followed OPM’s own advice, which cautions, on the page titled ‘‘Understanding Results,’’ that the survey results do not explain why employees respond to questions as they do and that survey data should be used with other data to assess the state of human capital management. OPM believes that the union’s reliance and characterization of the FEVS data for 2018 is inadequate to dismiss The Case for Action. While the national union asserts that OPM is ‘‘simplistically’’ citing FEVS data, it appears the national union may be E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 65950 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations doing this to support its own position. As explained in E.O. 13839, the FEVS has consistently found that less than one-third of Federal employees believe that the Government deals with poor performers effectively. As noted in OPM’s FEVS Governmentwide Management Report for 2019, this continued a five-year trend of reporting concerns about the manner in which poor performance is addressed. From 2015 to 2019, as few as 28% and as many as 34% of employees believed that steps are taken to deal with poor performers in their work unit. Additionally, the FEVS is only one of the several foundations presented in The Case for Action. Merit system principles are referred to in The Case for Action as the basis for holding Federal employees accountable for performance and conduct. Merit system principles state that employees should maintain high standards of integrity, conduct, and concern for the public interest, and that the Federal workforce should be used efficiently and effectively. They further state that employees should be retained based on the adequacy of their performance, inadequate performance should be corrected, and employees who cannot or will not improve their performance to meet required standards should be separated. Also, the PMA is a key component of The Case for Action. The PMA recognizes that Federal employees underpin nearly all the operations of the Government, ensuring the smooth functioning of our democracy. Further, The Case for Action sets forth that prior to establishment of the PMA, the memorandum M–17–22 called on agencies to take near-term actions to ensure that the workforce they hire and retain is as effective as possible. More recently, E.O. 13839 notes that merit system principles call for holding Federal employees accountable for performance and conduct and found that failure to address unacceptable performance and misconduct undermines morale, burdens good performers with subpar colleagues and inhibits the ability of executive agencies to accomplish their missions. Finally, the union’s reliance on how often agencies prevail in employee appeals before the Board is undermined by the FEVS data which shows that a majority of both employees and managers agree that the performance management system fails to reward the best and address unacceptable performance. In fact, OPM did not state that these regulatory changes are related to how often agencies win or lose before the Board. How often agencies prevail on cases that VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 are actually appealed to the Board is not relevant to why OPM proposed these changes. One commenter asserted that OPM does not state that it has done a Federal workplace root cause analysis to justify the proposed rule, and that, instead, OPM cites a non-scientific FEVS based on subjective opinions. The commenter cautioned OPM that implementing the rule without such analysis can end up costing Federal agencies, although the commenter did not specify in what way there could be a cost to Federal agencies. Another commenter criticized OPM’s use of FEVS results to justify the need to support drastic changes to regulations. Other commenters stated that E.O. 13563 cited within the proposed rule emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules and of promoting flexibility and that the proposed rule appears to do none of these things. Some commenters criticized the proposed rule because it does not include an assessment. Two commenters further asserted that OPM should have provided an analysis of the costs and benefits anticipated from the regulatory action as well as an analysis of alternatives. The commenters stated that this omission is especially problematic in light of the Preamble on page 48794 of the Federal Register notice of the proposed rule, which ‘‘recognizes that federal employees underpin nearly all the operations of the Government, ensuring the smooth functioning of our democracy.’’ The commenters stated that, because the proposed rule is a ‘‘significant regulatory action’’ under E.O. 12866, OPM must assess the potential costs and benefits of the regulatory action. In addition, the commenters opined that, in addition to this status as a ‘‘significant regulatory action,’’ the proposed rule should also be considered ‘‘economically significant.’’ In the commenters’ view, it is likely to have an annual effect on the economy of $100 million or more unless OPM can certify that Federal departments and agencies will use the rule to expedite adverse actions of fewer than 1,000 full time equivalents (FTEs) Government-wide. As the basis for this estimate, the commenters stated, ‘‘For example, the Proposed Rule would have an effect of $100 million, such as cost savings, if it would lead to job losses of at least 1,000 full-time equivalent employees earning approximately $100,000 per employee in salary and benefits. The average salary for federal employees, excluding benefits, was $84,558, according to OPM PO 00000 Frm 00012 Fmt 4701 Sfmt 4700 FedScope data for Sept. 2018 (most recent available data) . . . . For example, IRS employees have an average return on investment of at least $2 in revenue collection per $1 on enforcement staff costs, according to GAO–13–151. SSA employees performing certain eligibility reviews have an estimated return on investment of $15 in savings per $1 on staff costs, as noted in GAO–16–250. Similarly, productivity changes could result from other federal employees, including auditors, investigators, and inspectors general with returns on investment for taxpayers and effects on the economy. However, the rule does not assess costs and benefits and does not present or analyze alternatives.’’ The commenters asserted that the rule is likely to have ‘‘an annual effect’’ of at least $100 million in terms of direct and indirect costs. In the view of the commenters, direct costs include appeals and litigation among other costs and indirect costs include productivity changes and secondary effects such as economic multiplier effects. The commenter did not further explain what is meant by ‘‘economic multiplier effects.’’ We disagree that the proposed rule does not assess costs or reflect benefits that will be conferred, that there is a requirement for the proposed rule to present or analyze alternatives and that there is a requirement to conduct a root cause analysis. In The Case for Action, the proposed rule presents the costs and benefits in numerous instances. We discuss that in the FEVS, a majority of both employees and managers agree that the performance management system fails to reward the best and address unacceptable performance. We refer to the PMA and its call for agencies to establish processes that help agencies retain top employees and efficiently remove those who fail to perform or to uphold the public’s trust. The Case for Action considers, as well, M–17–22 which notably directed agencies to ensure that managers have the tools and support they need to manage performance and conduct effectively to achieve high-quality results for the American people. As explained in The Case for Action, the changes to the regulations are proposed to implement requirements of E.O. 13839, the vision of the PMA and the objectives of M–17– 22. These proposed changes not only support agency efforts in implementing E.O. 13839, the PMA and M–17–22, but also will facilitate the ability of agencies to deliver on their mission and on providing service to American people. Noting that merit system principles call for holding Federal employees accountable for performance and E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations conduct, OPM also observed that the merit system principles require that employees should maintain high standards of integrity, conduct and concern for the public trust, and that the Federal workforce should be used efficiently and effectively. Similarly, OPM explained that the merit system principles provide that employees should be retained based on the adequacy of their performance, inadequate performance should be corrected, and employees should be separated who cannot or will not improve their performance to meet required standards. Ultimately, as covered in The Case for Action, these changes support both the merit system principles and the President’s goal of effective stewardship of taxpayers’ money by our government. Thus, costs and benefits associated with the proposed rule are assessed in The Case for Action. We disagree with the commenters’ assertion that the proposed rule should be considered ‘‘economically significant’’ because it is likely to have an annual effect on the economy of $100 million or more, unless OPM certifies that Federal departments and agencies use the proposed rule to expedite adverse actions of fewer than 1,000 full time equivalents (FTEs) Governmentwide. The commenters assume incorrectly that the Federal government will remove a certain number of FTE positions in one year without any basis for arriving at that figure. Furthermore, in response to the commenters’ discussion of direct costs in the form of appeals and litigation, there is nothing to indicate that the changes pursuant to the regulations will in any way increase the number of formal disputes generated rather than make the process more efficient which will actually save the government money. The indirect costs put forward by the commenters include ‘‘productivity changes and secondary effects such as economic multiplier effects.’’ To reiterate, the supposition that the proposed rule would have an annual effect on the economy of $100 million or more unless OPM certifies that the proposed rule would be used to ‘‘expedite adverse actions’’ of fewer than 1,000 FTEs is not based on any reasonable, objective criteria. OPM is unable to fully respond to these comments since the commenter did not explain the basis for their assertions. Another individual commenter wrote that the proposed rule is a good idea but questioned whether the timeframes were realistic for management to meet, noting that adverse actions and performance-based actions require review and input from several offices in VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 an agency and that coordinating these moving pieces is often a large part of why actions take so long. The commenter asked, ‘‘Is it really only the case that when there’s a deviation from the timeframes, the agency reports it to OPM and moves on? What are the consequences?’’ This commenter also requested that we clarify the extent to which the proposed rule applies to nonexecutive agencies and employees. Although the commenter did not refer to a particular section, we surmised that the commenter is referring to § 752.404(b) of the rule which provides that, to the extent an agency, in its sole and exclusive discretion deems practicable, agencies should limit written notice of adverse actions taken under subpart D to the 30 days prescribed in 5 U.S.C. 7513(b)(1). Any notice period greater than 30 days must be reported to OPM. Regarding whether the timeframe is realistic, the provision stipulates that it is required only ‘‘to the extent an agency . . . deems practicable.’’ As to what consequences will ensue for departure from the time period prescribed, the rule provides only for a report to OPM. Finally, in response to the commenter’s question as to the extent to which the proposed rule applies to non-executive agencies and employees, those agencies covered by title 5 are enumerated in 5 U.S.C. chapter 1. A national union critiqued the requirement for agencies to collect data about disciplinary, performance and adverse actions taken against probationers and employees as burdensome because it appeared to the national union to be intended to serve no purpose other than to encourage agencies to take such actions. The union averred that adverse personnel actions should be a last resort, not a primary tool for human resource management and that the rule will only discourage the public from pursuing government careers. Yet the overall, unfounded theme of these regulations, according to the union is that more Federal employees need to be fired more quickly. The union stated that OPM cites no authoritative data or studies to support this notion and that no reputable private sector employer publishes attrition or termination data for the obvious reason that it would send the message to prospective applicants: ‘‘You don’t want to work here.’’ The union surmises that perhaps that is the point of the data collection requirement. The union recommended that instead of collecting data on punitive measures, data should be collected on agency efforts to improve the skills and PO 00000 Frm 00013 Fmt 4701 Sfmt 4700 65951 performance levels of their workforce, such as the number of employees who successfully completed their probationary periods and the number of employees who successfully completed a performance improvement period. This union highlighted that much is invested in recruiting and training employees, and if the government wants to portray itself as a welcoming workplace, it should place the emphasis on securing a return on that investment. The data collection requirement in the rule’s preamble carries out E.O. 13839 to enhance public accountability of agencies. It is not a signal to prospective candidates for employment to refrain from joining the Federal workforce. Also, private employers do not have the responsibility to be accountable to the public in the same way as the Federal government. Some commenters stated that in addition to the issues concerning the legal and technical substance of the rule, there appear to be procedural issues as well. These commenters took objection to the preamble to the rule stating that the rule will not include new regulations to codify the ‘‘Data Collection of Adverse Actions’’ section of the guidance issued by OPM on July 5, 2018, and instead, OPM will issue reminders each year. The commenters asserted that this is a circumvention of requirements for transparent government, and that they believed OPM must issue rules for Federal agencies to comply with, rather than ‘‘conducting business and issuing directives behind closed doors, eroding the public’s trust rather than building on it.’’ We disagree with the argument that OPM must outline data requirements in this rule and that not doing so is a circumvention of requirements for transparent government. The data collection requirements are transparent because they are outlined in the publicly available E.O., and OPM’s guidance documents to agencies are typically posted on a public Government website. 5 CFR Part 315, Subpart H—Probation on Initial Appointment to a Competitive Position Section 2(i) of E.O. 13839 providesa probationary period should be used as the final step in the hiring process of a new employee. Supervisors should use that period to assess how well an employee can perform the duties of a job. A probationary period can be a highly effective tool to evaluate a candidate’s potential to be an asset to an agency before the candidate’s appointment becomes final. E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 65952 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations OPM proposed an amendment to 5 CFR part 315.803(a), which would require agencies to notify supervisors that an employee’s probationary period is ending, at least three months or 90 days prior to expiration of the probationary period, and then again one month or 30 days prior to expiration of the probationary period, and advise a supervisor to make an affirmative decision regarding the employee’s fitness for continued employment or otherwise take appropriate action. Pursuant to current OPM regulations, supervisors are currently required to utilize the probationary period as fully as possible to determine the fitness of employees and further required to terminate the services of a probationary employee if they fail to fully demonstrate qualifications for continued employment. Supervisors choosing to terminate a probationary employee under the procedures outlined in Part 315 must do so affirmatively prior to the conclusion of the probationary period, while an employee is permitted to continue employment following probation merely on the basis of the supervisor’s not taking action. Nevertheless, and at the heart of this proposed regulation is the fact that supervisors actions or omissions determine whether a probationary employee is retained or terminated in each and every instance. The proposed rule simply reminds supervisors of their responsibility to make an affirmative decision and not allow a probationer to become a career employ merely by default; it does not alter the decision-making process nor does it in any way alter the regulatory structure currently in place that governs the decision-making process. An agency suggested that OPM amend the proposed rule to change the 90-day and 30-day notification periods to calendar days for clarity. The same agency suggested that agencies may need to develop stand-alone technology solutions for making supervisory notifications because of the lack of Government-wide or even departmentwide technology solutions and capabilities. This agency recommends that OPM account for the time it may take for agencies to develop such automated solutions into any implementation timeframes. OPM agrees that further clarification with respect to the notification periods would be helpful. We have modified the proposed language to require agencies to notify supervisors three months and one month in advance of an employee’s expiring probationary period. For example, if an employee’s probationary period is due to expire on June 19, 2020, VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 the three-month notification would occur on March 19, 2020, and the onemonth notification on May 19, 2020. OPM has updated the final rule accordingly. Agencies have the discretion to determine the method for making supervisory notifications, but OPM encourages agencies to use existing automated tools, to the extent practicable, to comply with the notification requirement. Two management associations supported the proposed rule, citing reports issued by the MSPB and the Government Accountability Office (GAO) that highlight Government’s inconsistent and poor use of the probationary period for new hires and for new supervisors. These organizations also emphasized the importance of the effective use of probationary periods for both new supervisors and executives. With regard to the assertion that probationary periods are handled poorly or inconsistently, these concerns are addressed in the current language of the regulation, in part, by encouraging full utilization of probationary periods which allows for effective review of employee fitness for a position and through the 90- and 30-day reminders in the amended regulation which serve both to promote consistency in this process and promote accountability by requiring that agencies affirmatively determine employee fitness rather than making such decisions through inaction. Also, the proposed rule does not impact supervisory or executive probationary periods, which are regulated at subpart I of 5 CFR 315 and subpart E of 5 CFR 317, respectively. A management association supported the proposed rule and commented that some agencies have cumbersome and time-consuming review processes which make the 90-day notification period ineffective. This organization suggested OPM add a 180-day notification period with 90- and 30-day follow up periods. OPM is not adopting this suggestion. OPM believes the proposed intervals (three months and one month) before expiration are sufficient. Agencies may adopt more frequent reminder periods if they choose to do so. One agency supported the proposed rule noting that it may make managers and supervisors more aware of probationary deadlines, thus preventing them from waiting until the last minute to decide whether an employee is fit for service beyond the probationary period, and requiring them to better utilize the probationary period. The agency also noted the proposed rule creates a new procedural technicality for agencies to overlook, and noted that inconsistent PO 00000 Frm 00014 Fmt 4701 Sfmt 4700 notification methods may be problematic across agencies. This agency suggested OPM clarify that an agency’s failure to notify supervisors at the proposed intervals does not give the employee any additional appeal rights with respect to probation. OPM believes such an amendment to the regulation is unnecessary. The oneand three-month notification represents an administrative tool to be utilized internally by agencies to promote efficiency and accountability; it is not intended to, and does not, expand or otherwise impact procedural rights of probationary employees. An agency’s non-compliance with these requirements does not give the employee any additional appeal rights beyond those an employee may already have. The procedures for terminating probationers for unsatisfactory performance or conduct are described in § 315.804 and those procedures are unaltered by the changes here. Despite some support for the proposed rule, OPM received comments from many who expressed opposition and concern. One individual opposed the rule because it does not specify a timeframe within which a supervisor must respond to the employing agency with a decision on whether a probationer should be permanently employed. This individual also commented that the proposed rule change did not provide an avenue for an employee to address an untimely notification from his or her supervisor as to his or her continued employment. Finally, the commenter noted that the proposed rule does not specify any consequences for a supervisor who fails to make a timely notification to the employing agency. The proposed rule implements Section 2(i) of E.O. 13839. This section provides that a probationary period should be used as the final step in the hiring process of a new employee. This is consistent with OPM’s longstanding approach, is supported by judicial decisions, and is also in accord with MSPB’s oft-stated guidance urging supervisors to use the probationary period to the fullest possible extent. See, for example, ‘‘The Probationary Period: A Critical Assessment Opportunity’’ (2005) and ‘‘Navigating the Probationary Period after Van Wersch and McCormick’’ (2007). E.O. 13839 also encourages supervisors to use that period to assess how well an employee can perform the duties of a job. E.O. 13839 does not discuss when a supervisor should notify his or her employee of the supervisor’s decision pertaining to the employee’s continued employment. OPM defers to the E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations employing agencies as to the frequency, timing, and method of supervisoremployee communications. OPM also defers to agencies in terms of how to address supervisors who fail to make timely decisions regarding their probationary employees, thus creating the potential for the retention, at least in the short run, of an employee unfit to perform the duties of the position and the imposition of additional burden if the agency determines to attempt to remove the employee through a performance-based or adverse action. Another individual was concerned that the 90-day and 30-day period reminders would cause managers to second guess their hires. The commenter believes that a manager should know what the options are if there are issues within the first year of the employee’s appointment and should not need a reminder. OPM disagrees with this comment. The purpose of the proposed rule is to encourage supervisors to make more effective use of the probationary period. The probationary period is the final, evaluative stage in the examining process, not a period to ‘‘second guess’’ new hires. The three-month and onemonth notification reminders are designed to help supervisors take full advantage of the probationary period in order to make informed decisions about whether to retain an individual in the agency’s permanent workforce. The requirement also promotes accountability amongst supervisors by reminding them of their very important responsibility to assess employee fitness during the probationary period to ensure that public resources in the form of FTEs are being utilized smartly and efficiently. An agency asked whether OPM foresees any negative impact related to the ability of an agency to terminate probationary employees if the agency fails to notify supervisors both at the 90day and 30-day mark that an employee’s probationary period is ending, and the supervisor fails to make an affirmative decision regarding the employee’s fitness for continued employment or otherwise take appropriate action. OPM does not foresee noncompliance with this notification requirement having this unintended effect. As explained previously, the proposed language is an internal administrative requirement intended as a reminder to supervisors to make timely determinations regarding probationary employees. It is not intended, however, to modify the current performance assessment process, change the manner in which a supervisor makes such a determination, VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 or to otherwise bestow any additional rights upon probationary employees. Should an agency decide to issue a termination of an employee during the probationary period, the agency will still rely upon the same assessment pursuant to 5 CFR 315.804 regarding adequacy of employee performance and conduct. The same agency commented that an assessment of the capability of existing automated tools, or some other method for notification to supervisors that probationary periods are ending is required to ensure consistent and efficient compliance with this regulation. Agencies have the discretion to determine the method for making the notifications to supervisors. OPM encourages agencies to use existing automated tools to facilitate timely and consistent notification and understands that, for agencies that do not have this current technical capacity, there will be a need to take steps to implement a reliable system in a timely manner. The proposed rule does not, however, require the use of automated tools. One individual commented that the proposed rule places probationers in limbo by requiring a supervisor to provide an affirmative determination for continued employment beyond the probationary period. In addition, this commenter noted the proposed rule does not address situations (or penalties) for supervisors who fail to make a determination either positively or negatively with respect to the determination and noted a lack of fairness because of this. OPM disagrees with these comments. The proposed rule does not require supervisory determination for continued employment. The proposed regulation requires agencies to remind supervisors of their obligation to make an affirmative decision regarding the employee’s fitness for continued employment or otherwise take appropriate action. Supervisors who let the probationary period lapse without consideration of the probationary employee for continued employment run the risk, in the short run, of having to retain poor performers or employees otherwise inadequately suited to perform the duties of a job. This failure to act will also have the effect of increasing the burden on the agency if it later seeks to remove the employee through performance-based or adverse action procedures. However, as explained earlier, it is within the discretion of each agency how they choose to address any such noncompliance. Two individuals commented that OPM has not addressed why the current PO 00000 Frm 00015 Fmt 4701 Sfmt 4700 65953 one-year probationary period is insufficient to assess employee effectiveness. These commenters recommended that instead of extending the probationary period, OPM should leave the current probationary period in place and encourage management to make better use of this period. OPM disagrees with these comments, because the commenters have misunderstood the proposed rule. The rule does not seek to modify the length of the probationary period on initial appointment to a competitive position (currently established as one year in § 315.801). The rule seeks to encourage agencies to fully utilize the current probationary period by requiring agencies to notify their supervisors three months and one month prior to the expiration of an employee’s probationary period of their obligations to make an assessment as to whether the employee should be retained beyond the one-year probationary period. Seven national unions opposed the proposed rule, commenting that it requires supervisors to make a decision prior to the end of an employee’s probationary period, thereby depriving an employee of the full probationary period during which the employee can demonstrate his or her fitness for continued employment. These unions stated that probationary periods are set in statute, and that there is no requirement or obligation on the part of an employee to seek a determination at the end of his or her probationary period. These organizations accurately note that the proposed rule does not address the status of an employee whose supervisor fails to make a determination for continued employment before the probationary period ends. For these reasons, these entities believe this requirement is deceptive and will worsen the Federal Government’s hiring and retention issues. Several members of one of the unions echoed the same concerns and added that it is improper for OPM to substitute its reasoning for that of Congress. As a point of clarification, the length of a probationary period on initial appointment to a competitive position is currently established as one year in § 315.801, not statute. Nevertheless, the amended regulation does not mandate that a supervisory determination for continued employment take place at any particular time nor does it establish the 90- or 30-day benchmarks as the conclusion of a supervisor’s assessment period. Rather, the rule merely requires agencies to remind a supervisor to make an affirmative decision regarding the employee’s fitness for continued employment and take appropriate E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 65954 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations action. The supervisor may use this reminder to begin gathering materials or collecting his or her thoughts while still deferring the actual decision to the end of the probationary period. Thus, the rule does not prevent an employee from completing the entire one-year probationary period. OPM believes the proposed measures will improve the Federal Government’s ability to hire and retain individuals more effectively than is currently the case. The intent is to avoid situations in which a probationer who is not fit for continued employment is retained because a supervisor was not aware of the probationary period expiration date. OPM trusts that commenters share the goal of providing the most comprehensive information possible to supervisors to enable them to make an informed decision that will ultimately best serve the public. A national union commented that the revised regulation requires a supervisor to make an affirmative decision and thus for an employee to receive an affirmative decision for continued employment beyond the probationary period. This union suggested OPM clarify that the affirmative supervisory decision contemplated by the proposed rule has no effect on whether an employee’s probationary period has been completed, and also clarify that an employee is under no obligation to seek or obtain such an affirmative supervisory decision. Lastly, the union stated that if OPM is requiring agencies to notify supervisors in advance of the end of an employee’s probationary period, OPM should also require supervisors to notify their employees. Similarly, a local union commented that there is no reason for a supervisor to provide an affirmative decision regarding an employee’s fitness at the end of the probationary period. The union commented that employees will be harmed if a supervisor forgets to make an affirmative decision, and the proposed rule does not address the consequences of such an omission. The union also stated the proposed rule shortens the probationary period on their belief that supervisors must make an affirmative decision for continued employment 30 days before the end of the probationary period. OPM disagrees with these comments. The rule does not require that a supervisor notify an employee or make an affirmative decision regarding an employee’s fitness for continued service, nor does it require an employee to receive such a decision. The proposed rule requires agencies to notify their supervisors of the need to consider whether to retain probationers three months and one month prior to VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 the expiration of an employee’s probationary period. In addition, the proposed regulation requires an agency to advise a supervisor to make an affirmative decision regarding the employee’s fitness for continued employment and take appropriate action in a timely manner to avoid additional burden. The proposed rule does not prevent an employee from completing the one-year probationary period. Further, after completing a probationary period, with or without an affirmative supervisory determination, the individual becomes a nonprobationary employee and attains appeal rights in accordance with 5 U.S.C. 7511. As noted above the proposed rule does not require an employee to receive an affirmative supervisory determination in order to complete the probationary period. Rather, the proposed rule requires agencies to advise a supervisor to make an affirmative decision regarding the employee’s fitness for continued employment or otherwise take appropriate action, so that the individual does not gain a career position solely by default. OPM is not adopting the suggestion to require a supervisor to notify his or her employee of an expiring probationary period. The purpose of these rules is to improve communications between agencies and their supervisors with the aim of better utilizing the probationary period. This rule is not intended to modify or otherwise impact mechanisms for assessment of employee performance pursuant to part 432 and applicable agency policies. Another national union strongly objected to the proposed rule, commenting that it is contrary to the goal of promoting public trust in the Federal workforce. The union went on to say that instead of using the probationary period to assess an employee’s ability to perform the job, supervisors are encouraged to terminate probationers for any reason, simply because the probationary period is ending. The union also stated these rules facilitate agencies’ ability to terminate probationers as well as permanent employees without providing them with an adequate opportunity to improve their performance. OPM disagrees that the rule makes it easier for agencies to terminate probationary employees. Termination actions during the probationary period must be taken in accordance with § 315.804 and the criteria for termination established pursuant to these regulations remains unchanged by the revised regulation. OPM also PO 00000 Frm 00016 Fmt 4701 Sfmt 4700 disagrees with the union’s comment that the proposed rule encourages agencies to terminate employees simply because the probationary period is ending. The purpose of the proposed rule is to assist supervisors in using the probationary period properly (i.e., as a period to determine whether an individual is fit for continued employment). Another national union opposed the rule stating that it is unnecessary and that it sends the message that it is more important to terminate probationers than assist them with successfully completing their probationary period. The same union also commented that OPM should address the consequences of when an agency fails to notify the supervisor at the 90- and 30-day marks, and whether this situation creates a potential defense for a manager faced with a disciplinary or performancebased action for being a poor manager. OPM disagrees with the assertion that supervisory notification is unnecessary and the suggestion that this rule sends a message that supervisors should terminate probationers rather than assist them in improving their performance. The message this change sends is that supervisors should fulfill their responsibilities by affirmatively making a determination as to the fitness of a probationary employee. It does not encourage supervisors to make any particular determination including to terminate an employee. Instead, it prevents instances where a supervisor may make a decision by default, where the probationary period lapses due to a lack of awareness of the end of the period. Supervisors who allow the probationary period to lapse without consideration of the fitness of the probationary employee to perform the duties of the position create a risk of retaining poor performers or employees otherwise inadequately suited for their position. This outcome benefits neither the agency, the employee nor the public. Several individuals who identified themselves as members of one of the national unions commented that the proposed rule is deceptive and/or confusing in that it requires an employee to receive an affirmative supervisory determination in order to complete the probationary period, despite no statutory requirement for such a determination. The commenters suggested the proposed rule be eliminated or corrected to avoid confusion. They disagreed with the need to require a separate, affirmative supervisory approval before an employee is found to have completed his or her probationary period and noted there is no obligation on the part of the employee to seek supervisory E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations approval. One of the individuals added, ‘‘The confusion between this rule and the statute will do nothing but create problems.’’ Another added, ‘‘The end of a time period is the end.’’ One of the union members stated that since probationary periods are controlled by statute, it is confusing to require supervisory determination. OPM disagrees with any notion that the proposed rule is deceptive and notes that the probationary period for initial appointment to a competitive position is established in regulation at § 315.801. The amended regulation does not require an employee to receive an affirmative supervisory determination in order to complete the probationary period nor does it require a supervisor to take any action that they are not already required to take. The rule requires agencies to notify supervisors three months and one month prior to the expiration of an employee’s probationary period, and to advise a supervisor to make an affirmative decision regarding the employee’s fitness for continued employment or otherwise take appropriate action. The purpose of this language is to serve as a reminder to supervisors that an employee’s probationary period will be ending soon, and of the need to consider whether the employee is fit for continued employment beyond the end of the probationary period. Thus, the communication is between the agency and the supervisor, not the supervisor and employee. It is an internal management matter that is not intended to, and does not, confer rights on probationary employees if a supervisor fails to heed this reminder. OPM is not adopting the suggestion to eliminate or amend the proposed rule because it does not conflict with or otherwise alter the statutory or regulatory authority pertaining to probationary periods. OPM is also not adopting the suggestion to require a supervisor to notify his or her employee of an expiring probationary period. The purpose of these rules is to improve communications between agencies and their supervisors with the aim of better utilizing the probationary period. One individual commented that there is little need to require agencies to notify supervisors of the impending expiration of probationary periods because supervisors closely track these dates. OPM disagrees with the notion that there is little need for the proposed supervisory notification of an employee’s probationary period expiration date. In some instances, supervisors let the probationary period lapse because they are not mindful of VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 the expiration date. Supervisors who let the probationary period lapse without consideration of the probationer for continued employment run the risk of having to retain poor performers or employees otherwise inadequately suited to perform the duties of a job in the short run and imposing additional burden on the agency if the agency wishes to remove the employee later by a performance-based or adverse action. This outcome benefits neither the agency nor the employee. By reminding supervisors to diligently and promptly make required fitness determinations regarding probationary employees and by issuing these reminders at the same point in time during the probationary period, OPM believes that this requirement promotes procedural consistency and works to the benefit of supervisors and probationers alike. An agency suggested OPM amend the proposed rule to require only one supervisory notification 90 days prior to the expiration of an employee’s probationary period. The agency also asked OPM to address what the consequences will be for an agency which does not provide the supervisory notification. OPM is not adopting the suggestion to require only one notification to supervisors 90 days before the end of an employee’s probationary period. We believe the proposed notification periods are best designed to meet the aim of the Executive Order. We note that agencies may choose to provide more frequent notifications. A probationary period can be a highly effective tool to evaluate a candidate’s potential to be an asset to an agency before the candidate’s appointment becomes final. The procedures for terminating probationers for unsatisfactory performance or conduct are contained in § 315.804 and are not impacted by the revised regulation. The same agency suggested that OPM amend the proposed rule to require supervisory notification during a set period of time, or window, rather than on the three-month and one-month marks. This commenter suggested OPM amend the rule to allow for supervisory notification ‘‘and then again at least one month or thirty days prior to the expiration of the probationary period.’’ OPM is not adopting this suggestion. We believe agency notification to its supervisors is more effective when it occurs on a specific date, rather than during a window of dates, because the supervisor will know precisely how much time is left in the employee’s probationary period. This approach also promotes uniformity. PO 00000 Frm 00017 Fmt 4701 Sfmt 4700 65955 An organization opposed the proposed rule for four reasons: First, the organization commented that the 30-day supervisory notification undermines § 315.805, which provides an employee a reasonable amount of time to respond in writing to a termination action for conditions arising before appointment. OPM disagrees the proposed rule could impact an employee’s right to respond to a proposed termination action based on conditions arising before appointment pursuant to § 315.805. Under § 315.805(a) an employee is entitled to advanced written notice, and § 315.805(c) states the employee is to be notified of the agency’s decision at the earliest practicable date. The proposed rule does not alter this regulatory structure and instead only requires an agency to remind supervisors three months and one month ahead of the end of an employee’s probationary period. These provisions do not impact § 315.805. Secondly, this organization commented that the proposed rule does not require a supervisor to in fact make a decision or to provide any notice to an employee with sufficient time to allow the employee to respond. The procedures for making determinations concerning employees serving in a probationary period, including criteria for termination, are covered under OPM regulations §§ 315.803—315.805. The commentator’s assessment is accurate that no ‘‘notice’’ is required when issuing a termination under this authority, nor is there an opportunity to respond. Again, the changes proposed in this regulation do nothing to alter this regulatory structure. Next, the organization stated that the proposed rule undermines due process because it provides no guidance or requirement that the agency notify the employee prior to their termination for performance or conduct deficiencies. Due process of law under the Constitution turns on the possession of a pre-existing property or liberty interest. The courts have held, therefore, that constitutional Due Process applies only to tenured public employees—not probationers, who are terminable at will. OPM’s regulations govern the procedures applicable to probationers. Agency termination procedures applicable to probationers, including notification to an employee of a termination action, are addressed in §§ 315.804 and 315.805. Lastly, this organization stated that the proposed rule ignores what it considers to be the real issue which is constructive performance management. The organization commented that the E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 65956 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations proposed rule merely proposes a reminder system to notify supervisors of the need to terminate employees prior to the completion of their probationary period, without ever addressing an employee’s performance or conduct until their termination. The organization noted that a supervisory determination of poor performance made for the first time 30 days before the probationary period ends does not allow an employee to improve his or her performance. The organization accurately notes the proposed rule creates a reminder system to aid supervisors in determining the fitness of their employees for continued service. However, the commenter misinterprets the regulation by stating that it constitutes a reminder to terminate a probationary employee rather than what this provision will actually serve to do, which will be to simply remind a supervisor of the need to prepare to make a timely determination regarding the future employment status of probationary employees. The point is to remind supervisors of the impending end of the probationary period, to enable them to make thoughtful decisions, not to point the supervisors toward one direction or the other Again, the intent of these provisions is to remind supervisors of the importance of considering a probationer’s performance, good or bad, in determining whether the employee should be retained beyond the probationary period. As current regulations require supervisors to fully utilize the probationary period to assess employee fitness, OPM would contemplate that agencies would not want supervisors to wait until the final month of the probationary period to begin making any such assessment. OPM further notes that the proposed rule, by helping supervisors avoid ‘‘last minute’’ determinations, may improve the quality of such decisions, which is to everyone’s benefit. An agency recommended that supervisory notifications occur 120 days before the end of an employee’s probationary period, rather than the proposed 90- and 30-day notifications. This agency expressed concern that the proposed notification intervals may mitigate or conflict with employee due process and adverse action appeal rights. The agency recommended that OPM amend the proposed language in § 315.803(a) to state that appropriate action will be taken to determine whether the employee meets the definition of employee in 5 U.S.C. 7511 and is entitled to due process and appeal rights. OPM is not adopting the suggestion to require supervisory notification 120 VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 days and 60 days prior to expiration of an employee’s probationary period. We believe the proposed notification periods of three months and one month before expiration provide sufficient reminders to supervisors. OPM is also not adopting the suggestion to amend § 315.803(a) to require agencies to take appropriate action with respect to determining whether an employee is entitled to Due Process and appeal rights under 5 U.S.C. 7511. OPM would again clarify that the purpose of the proposed rule is to implement Section 2(i) of E.O. 13839 and support OPM’s consistent position (supported as well by reports of the MSPB) that agencies should make efficient use of the probationary period by requiring agencies to notify supervisors of the date an employee’s probationary period ends. The proposed rule represents an internal administrative tool to be utilized by agencies to assist supervisors; it is not intended nor does it modify or impact any procedural processes or rights afforded by statute or regulation. The procedures for terminating probationers for unsatisfactory performance or conduct are contained in § 315.804 and employee appeal rights are described in § 315.806. These provisions are not impacted by the proposed rule. The proposed rule does not impact appeal rights for employees covered by 5 U.S.C 7511 nor does it preclude agencies from informing an employee covered by 5 U.S.C. 7511 (or the employee’s supervisor) of any procedural rights to which he or she may be entitled under section 7511. An organization commented that the proposed rule encourages agencies to terminate an employee before chapter 75 procedures are required. This organization believes the supervisory notification periods were proposed to remind supervisors to terminate any such employees before the end of the probationary period. As discussed, OPM disagrees with the contention that the purpose of the proposed rule is to encourage agencies to terminate probationers before chapter 75 procedures are required. The purpose is to encourage supervisors to make a timely determination as to whether to retain an employee beyond the probationary period, whatever that determination may be. The regulation is neutral in terms of what determination a supervisor ultimately makes as it does not steer supervisors in either direction. It simply reminds them of the need to make a determination which is already their responsibility. PO 00000 Frm 00018 Fmt 4701 Sfmt 4700 5 CFR part 432—Performance-Based Reduction In Grade And Removal Actions Section 432.101 Statutory Authority Part 432 applies to reduction in grade and removal of covered employees based on performance at the unacceptable level. In the proposed rule, OPM restated Congress’ intent in enacting chapter 43, in part, to create a simple, dedicated, though not exclusive, process for agencies to use in taking actions based on unacceptable performance. An organization concurred with OPM’s explanation of its statutory authority in § 432.101 in the SUPPLEMENTARY INFORMATION. OPM will not adopt any revisions based on this comment as no revisions were requested. Section 432.104 Addressing Unacceptable Performance This section clarifies that, other than those requirements listed, there is no specific requirement regarding any assistance offered or provided during an opportunity period. In addition, the proposed rule stated that the nature of assistance is not determinative of the ultimate outcome with respect to reduction in grade or pay, or removal. Some commenters, including an agency and two national unions, voiced concerns that the proposed change minimized the importance of providing assistance or relieved agencies of the obligation to provide meaningful assistance. In response, as discussed in greater detail below, OPM has revised § 432.104 to remove the statement that the nature of assistance is not determinative of the outcome with respect to a reduction in grade or pay or removal. However, it is still the case that assistance need not take any particular form. To that end, the final regulation will state that the nature of assistance provided is in the sole and exclusive discretion of the agency.’’ The section also states that no additional performance improvement period or similar informal period to demonstrate acceptable performance to meet the required performance standards shall be provided prior to or in addition to the opportunity period under this part. Three management associations commended OPM for streamlining methods for addressing unacceptable performance through chapter 43 procedures. The organizations lamented the status quo in agencies with respect to such actions as burdensome, cumbersome and slow. They expressed support for clarifying agency E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations requirements with respect to the number and duration of opportunity periods, types of assistance offered to employees with unacceptable performance and the impact of such assistance on a final personnel decision. One of the organizations expressed the view that there should be no lengthy or extensive requirements beyond what the law requires to improve performance. The organizations did not recommend any changes to § 432.104. Indeed, OPM agrees with the commenters that the amended regulation promotes a straightforward and efficient process for addressing unacceptable performance. Two agencies concurred with the amendment to § 432.104 because it dispels the misconception in some agencies that a pre-Performance Improvement Plan (pre-PIP) or similar informal assistance period is required or advisable for chapter 43 procedures. One of the agencies stated that it believes the amended regulation will result in a shorter, less burdensome, less discouraging, more efficient process for addressing poor performance, but nevertheless made further recommendations. The agency recommended that the decision to extend an employee’s performance period should be at the discretion of the employee’s immediate supervisor if an employee needs more time to improve his or her performance. The agency stated that an employee with performance issues should be notified formally and given clear direction on how to correct the issues, or else the agency will have difficulty defending a decision to remove the employee. Finally, the agency recommended that OPM provide further guidance in the final rule regarding the types of situations where extending or limiting an opportunity period would be appropriate. In response, OPM confirms that addressing poor performance should be a straightforward process that minimizes the burden on managers and supervisors and makes the best use of resources, including time spent by agency officials. There is nothing in the proposed rule that prevents or prohibits a supervisor from considering specific facts and circumstances that may impact an employee’s job performance and developing a reasonable approach to helping the employee achieve acceptable performance. With regard to formal notice of unacceptable performance, OPM notes that requirements concerning performance evaluation and notification already exist within the law (see 5 U.S.C. 4302 and 4303) and that the proposed amendments to the regulations do not VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 impact the regulatory requirements that currently exist for agencies to notify employees performing at an unacceptable level ‘‘of the critical element(s) for which performance is unacceptable and inform the employee of the performance requirement(s) or standard(s) that must be attained in order to demonstrate acceptable performance in his or her position.’’ See § 432.104. Concerning recommendations surrounding the extension of an opportunity period, OPM notes that current and proposed § 432.104 both require that agencies afford a reasonable opportunity to demonstrate acceptable performance, commensurate with the duties and responsibilities of the employee’s position. (Emphasis added.) The factors and considerations that establish what constitutes a reasonable opportunity period are also delineated in OPM guidance and case law. For these reasons, OPM believes it is unnecessary to amend the regulation as the agency suggests. The other agency that concurred with the amendment at § 432.104 stated that the changes lessen the likelihood that a ‘‘ ‘failure to provide adequate assistance’ ’’ argument would be persuasive at the Merit Systems Protection Board (MSPB). The agency recommended adding a reference to agencies’ requirement to comply with their collective bargaining agreements. OPM agrees but would somewhat qualify the comment. The regulation should preclude employees from raising failure to provide assistance during the opportunity period as a defense against a chapter 43 action to the extent that agencies are required to provide assistance during the opportunity period, though the assistance may take whatever form the supervisor deems necessary to help the employee succeed in his or her position. OPM will not adopt the agency’s recommendation as collective bargaining obligations are preserved as required by law under 5 U.S.C. chapter 71. Further, as stated in E.O. 13839, agencies must consult with their employee labor representatives about the implementation of the Executive Order. National unions and commenters expressed concerns regarding the rule’s impact on performance-based actions, and an employee’s opportunity to improve performance. A commenter stated that, although poor performers should be removed from the Federal government, the proposed rule may give some managers the ability to remove employees without factual evidence to back up the removal action. In a similar observation, a national union and PO 00000 Frm 00019 Fmt 4701 Sfmt 4700 65957 commenter stated that the proposal would remove important protections from employees and deny them the ability to either counter the agency’s assessment or correct through a mandated improvement process. OPM disagrees with these comments. Nothing in the proposed regulations should be construed to relieve agencies of their obligations under Federal law. Additionally, 5 U.S.C. 2301(b)(2) provides that employees should receive fair and equitable treatment. Finally, as Government officials are entitled to a presumption of good faith, OPM does not accept that changes to the governing regulation intended to improve efficiency will lead to abuse. Accordingly, OPM does not believe that the proposed rule would lead to the removal of employees without factual evidence or interfere with important protections for employees, including the ability to provide a response to an accusation or receive the required opportunity to demonstrate acceptable performance. The amended rule does not relieve agencies of the responsibility to demonstrate that an employee was performing unacceptably—which per statute covers the period both prior to and during a formal opportunity period—before initiating an adverse action under chapter 43. Many commenters objected to the proposed rule at § 432.104 on the bases that the amendment conflicts with certain Executive Orders, statutes, case law, and/or the merit system principles; sets bad management policy; opens the door to supervisors taking a performance-based action hastily without offering or providing assistance to an employee who has rendered unacceptable performance; may result in agencies employing a one-size-fits-all approach to addressing unacceptable performance; weakens or violates protections for Federal employees; and may cause harm to or confusion among Federal employees and or the civil service. One agency stated that there is a conflict between the current regulation, which requires that an employee be given an opportunity to demonstrate acceptable performance, and E.O. 13839 provisions that (1) promote the use of chapter 75 procedures for addressing unacceptable performance; and (2) require Executive Branch agencies to ensure that no collective bargaining agreements include a provision requiring the use of chapter 43 procedures to address unacceptable performance. To address this concern, the agency suggests rewriting this requirement to make it clearer that it applies under chapter 43 (i.e., if an E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 65958 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations employee’s removal or demotion if proposed under chapter 43), rather than at ‘‘any time’’ an employee’s performance is unacceptable. OPM will not adopt revisions based on this comment because the regulation already makes it clear that the requirement in question relates to procedures pursuant to chapter 43. Because the requirement is only found under chapter 43, it will only apply if an agency opts to use that particular set of procedures to address an instance of unacceptable performance. If an agency opts to use chapter 75 procedures to address unacceptable performance, the opportunity period, pursuant to chapter 43 would not be applicable. Finally, OPM disagrees that the requirements of 5 U.S.C. chapter 43 or any of the revisions to 5 CFR part 432 conflict with the direction provided to Executive Branch agencies in E.O. 13839. Rather, E.O. 13839 states that chapter 75 should be utilized in appropriate cases and prohibits agencies from agreeing to incorporate into collective bargaining agreements provisions that would preclude use of chapter 75 to address unacceptable performance. The Executive Order also directs agencies to streamline the process of addressing unacceptable job performance by more strategically using the legal authorities that already exist. The revisions to 5 CFR part 432 support the objectives described in the Executive Order by revising regulatory provisions that flow from long-standing and established statutory requirements. Three national unions emphasized that an agency must meet all the requirements set forth in 5 U.S.C. 4302(c)(5) before taking an action based on unacceptable performance, a substantive right intended by Congress. One of the unions reasoned that, ‘‘The assistance required by § 4302(c)(5) is assistance during the opportunity period because (a) by definition, assistance ‘in improving unacceptable performance’ occurs after the agency has found performance to be unacceptable; (b) under 5 CFR 432.104 the agency must notify an employee ‘[a]t any time . . . that an employee’s performance is determined to be unacceptable’; and (c) the opportunity period begins when the employee is so notified. Because a determination of unacceptable performance triggers the obligation to notify, and notification starts the opportunity period, these three events— the determination, the notification, and the start of the period—are essentially, simultaneous. Upon making the determination, the agency must provide, not delay, the notification; and the notification starts the opportunity VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 period. Thus, § 4302 (c)(5) assistance ‘in improving unacceptable performance’ is assistance that occurs during the opportunity period.’’ The union recommended retention of the ‘‘correct, clear, and simple’’ language in the current regulation at § 432.104. Two of the national unions cited Sandland v. General Services Administration, 23 M.S.P.R. 583, 589 (1984) to support their point that the procedural requirements of chapter 43, including provision of a reasonable opportunity to improve, are substantive guarantees and may not be diminished by regulation. One stated that the amended regulation will lead agencies away from providing employees who face performance issues with genuine opportunities to improve, contrary to the language and intent of the Civil Service Reform Act (CSRA). The other union characterized the proposed rule as eliminating required assistance during the opportunity period, contrary to section 4302(c)(6), and minimizing the importance of the assistance provided during the opportunity period by stating that the nature of such assistance is not determinative of a performance-based action, contrary to MSPB case law. Several national unions and many of their members (via what appeared to be a template letter) expressed concern that the proposed rule eliminates a meaningful opportunity period for Federal workers to improve performance and save agency resources. The commenters stated that the amendments will eliminate and change elements of statutory requirements for opportunity periods. They stated also that the proposed rule ‘‘discourages the use of simple, easy-to-follow, objective standards which (when used correctly by supervisors and managers) create consistency across the federal workforce.’’ Finally, the commenters asserted that supervisors will be granted power in a way that was not contemplated by Congress and that conflicts with substantive statutory rights. In response to the union that recommended retention of § 432.104 as currently written, OPM disagrees. OPM notes that both the current and amended regulations flesh out the statutory requirements of 5 U.S.C. 4302 and 4303 concerning the baseline requirements that all agencies must meet in addressing instances of unacceptable job performance. The proposed rule specifically acknowledges and incorporates the statutory requirement to provide assistance that is set forth in 5 U.S.C. 4302(c)(5). The reference to the relevant statute is intended to convey PO 00000 Frm 00020 Fmt 4701 Sfmt 4700 that the regulation will work in concert with the law. OPM understands further that the statute requires agencies to assist employees in improving unacceptable performance and in accordance with 5 U.S.C. 4302(c)(6), agencies may take a performance-based action only after affording an employee an opportunity to improve. The amended regulation does not lead agencies away from providing employees who face performance issues with meaningful or genuine opportunities to improve, and nor is it contrary to the language and intent of the CSRA, as one of the unions contends. For further clarification regarding concerns that OPM is eliminating statutory requirements for opportunity periods or minimizing the importance of the assistance provided during the opportunity period, OPM has decided to further amend the regulation. Specifically, the language originally proposed for § 432.104 will be replaced with, ‘‘The requirement described in 5 U.S.C. 4302(c)(5) refers only to that formal assistance provided during the period wherein an employee is provided with an opportunity to demonstrate acceptable performance, as referenced in 5 U.S.C. 4302(c)(6). The nature of assistance provided is in the sole and exclusive discretion of the agency. No additional performance assistance period or similar informal period shall be provided prior to or in addition to the opportunity period provided under this section.’’ Some commenters believe that OPM has not demonstrated that the current management tools are insufficient. The commenters argued that the tools exist today through performance assistance plans and performance improvement plans and OPM is removing these tools. The commenters further stated that changes in performance assessment could have a chilling effect on employees and allow for removals that cannot be suitably challenged. Also, the commenters expressed concern that these changes will undermine integrity and morale as well as hamper the recruitment and retention of a quality Federal workforce. One commenter in particular asserted that prohibiting an informal assistance period is excessively restrictive and is not mandated by E.O. 13839. The commenter recommended that OPM allow agencies maximum flexibility in managing their workforce by permitting use of informal assistance periods besides the period mandated by 5 U.S.C. 4302(c)(5). The commenter stated, ‘‘Retaining experienced employees who demonstrate temporarily unacceptable performance rather than moving swiftly toward E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations removal increases stability and improves the efficiency of the Federal service.’’ The commenter recommended that OPM revise the proposed rule to state that no additional assistance period or similar informal period ‘‘is required’’ rather than ‘‘shall be provided.’’ OPM disagrees and will not make any revisions based on these comments. Establishing limits on the opportunity to demonstrate acceptable performance by precluding additional opportunity periods beyond what is required by law encourages efficient use of chapter 43 procedures and furthers effective delivery of agency mission while still providing employees sufficient opportunity to demonstrate acceptable performance as required by law. It should also be noted that there is nothing in this new requirement that precludes routine performance management practices such as close supervision and training for employees that encounter performance challenges prior to their reaching the point at which they are determined to be performing at an unacceptable level and OPM anticipates that such efforts will often take place prior to reaching this point. Several commenters, also via a template letter, stated that the proposed revisions to performance-based actions ‘‘end-run,’’ or ‘‘violate,’’ employee rights and a chance to improve during the opportunity period. The commenters believe that the proposed rule gives no consideration to assisting an employee to attain acceptable performance or making the opportunity period genuine and meaningful. The commenters went on to say that the opportunity period is a statutory requirement that OPM may not eliminate or modify by regulation. They stated that OPM is making a mockery of the opportunity period by jettisoning well-established practices and essentially discouraging the use of objective standards and improvement plans, which will result in granting virtually unfettered discretion to supervisors in determining what constitutes an adequate opportunity period. The commenters urged OPM to acknowledge that a reasonable opportunity to improve is a substantive, statutory right that may not be diminished by regulation. Again, OPM notes that the amended § 432.104 does not alter the statutory requirement concerning agency obligations to address instances of unacceptable job performance, providing that ‘‘[f]or each critical element in which the employee’s performance is unacceptable, the agency shall afford the employee a reasonable VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 opportunity to demonstrate acceptable performance, commensurate with the duties and responsibilities of the employee’s position.’’ OPM does not seek to eliminate or modify the statutory opportunity period as asserted; however, OPM does have the authority pursuant to its statutory delegation (see 5 U.S.C 4305) to elaborate on procedures for addressing unacceptable performance to the extent that those procedures are not already delineated in chapter 43. It is unclear what specific practices the commenters believe are being jettisoned and why the commenters believe that the proposed rule discourages the use of objective standards and improvement plans. Nonetheless, OPM disagrees with these characterizations. One commenter recommended that the prohibition on additional performance assistance periods be deleted from the proposed rule and suggested new language providing an agency with ‘‘sole and exclusive’’ discretion to informally assist an employee in demonstrating acceptable performance. The commenter noted that ‘‘sole and exclusive’’ discretion would place such assistance outside the duty to bargain and otherwise provide agencies the ability to determine their own policies on such matters. The commenter found it ironic that the regulation would prevent agencies from determining their own policies while the Supplementary Information section in support of the proposed rule ‘‘quite plainly attacks disciplinary solutions ‘imposed from above’ ’’ with regard to tables of penalties. The commenter is correct that OPM is taking different approaches regarding the prohibition of additional performance assistance periods and the use of tables of penalties. However, we believe different approaches are appropriate. The Supplementary discussion on tables of penalties only informs agencies that the use of tables of penalties is not required by law or OPM regulations and reminds them that it may limit the scope of management’s discretion to tailor the penalty to the facts and circumstances of a particular case by excluding certain penalties along the continuum. These two issues do converge, however, in the sense that additional performance assistance periods are also not required by law or OPM regulations and can negatively impact efficient use of the procedures under chapter 43. While providing ‘‘sole and exclusive’’ discretion would limit collective bargaining on the use of informal assistance as the commenter suggests, the proposed regulatory language would have a similar impact PO 00000 Frm 00021 Fmt 4701 Sfmt 4700 65959 on collective bargaining. In other words, by precluding the use of informal periods, any bargaining proposal that sought to establish an informal process beyond what is required by law would be considered nonnegotiable, pursuant to 5 U.S.C. 7117. For example, offering an additional opportunity period beyond what is required by 5 U.S.C. 4302(b)(6) would be nonnegotiable by these regulations. It should be emphasized that the regulation does not prevent agencies from making appropriate determinations when offering assistance required by law. Specifically, agencies are provided sole and exclusive discretion by Section 4(c) of E.O. 13839 to offer longer opportunity periods under 5 U.S.C. 4302(b)(6) to provide sufficient time to evaluate an employee’s performance. OPM believes this discretion to provide for longer periods provides agencies sufficient discretion to address an employee’s performance based on the circumstances. A national union commented that the proposed change to § 432.104 would generally limit opportunity periods to 30 days, a period of time it deemed often insufficient to determine if an employee can improve his or her performance. Similarly, an organization expressed opposition to E.O. 13839 Sections 2 and 6(iii), which it perceives as pressuring agencies to limit opportunity periods to a period (30 calendar days) that would be insufficient for the purpose of demonstrating improvement in many occupations of the Federal workforce. The organization also opposes amended §§ 432.104 and 432.105 to the extent that they excuse agencies from what it described as routine procedures, such as regular supervisor meetings and guidance, that support the opportunity period. The organization cites Pine v. Department. of the Air Force, 28 M.S.P.R 453 (1985), and Sandland in support of its position that an opportunity to improve is not merely a procedural right but rather a substantive condition precedent to a chapter 43 action, and that counseling is a part of the opportunity period. The organization expressed concern that the proposed rule would allow supervisors to declare that an employee’s performance is unsatisfactory without contextualizing the specific ways that an employee needs to substantively improve. An individual commenter weighed in with the observation that the proposed rule would ‘‘detrimentally push federal departments and agencies to limit the length of an opportunity period to 30 days,’’ and that the existing E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 65960 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations regulations present a more reasonable approach and better comport with statutory requirements. Although Section 4(c) of E.0. 13839 addresses the length of performance improvement periods and is in full force and effect, the proposed rule at § 432.104 does not limit the opportunity period to 30 days, as the national union contends. The regulation preserves statutory and regulatory requirements that agencies afford a reasonable opportunity to demonstrate acceptable performance, commensurate with the duties and responsibilities of the employee’s position, and offer or provide assistance during the opportunity period. There is also nothing in the regulation that would discourage supervisors from performing routine performance management duties such as providing guidance and meeting with employees and it is anticipated that supervisors would continue to give full consideration to the specific facts and circumstances impacting an employee’s job performance and develop a reasonable approach to help the employee achieve acceptable performance. Some commenters expressed concern that supervisors will deny assistance to employees who are performing unacceptably and hastily remove employees. An organization stated that the proposed rule reduces the requirements for an agency, including making no specific requirement regarding the nature of any assistance an agency should provide to an employee during an opportunity period. One individual asserted that amended § 432.104 is not aligned with the merit system principle at 5 U.S.C. 2301(b)(7), which states that employees should be provided effective education and training when such education and training would result in better organizational and individual performance. The commenter added that it would be a prohibited personnel practice against an employee, via 5 U.S.C. 2302(a)(2)(A)(ix), which encompasses decisions concerning pay, benefits, or awards, or concerning education or training, for an agency to withhold such education or training if the education or training may reasonably be expected to lead to an appointment, promotion, performance evaluation, or other action described in subparagraph (a)(2)(A). One individual observed that providing assistance with regard to performance issues is costeffective given the significant amounts of money agencies invest in hiring, onboarding, and training. An agency wrote about cases in which appropriate assistance proved successful and VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 avoided unnecessary costs associated with turnover, litigation, training and rehiring. With respect to the concern that supervisors may take abrupt actions without offering or providing assistance to an employee performing at an unacceptable level, OPM would emphasize that the amended regulation does not infringe upon an employee’s right to a reasonable opportunity to improve, and it does not excuse Federal agencies from effective performance management or the merit system principles, including with regard to education and training. The amended regulation instead excludes additional assistance requirements outside of that described in 5 U.S.C. 4302(c)(5). OPM neither promotes nor encourages agencies to engage in prohibited personnel practices nor does it believe the changes to the regulation encourage prohibited personnel practices. (Indeed, OPM has an affirmative obligation to enforce the law governing the civil service. See 5 U.S.C. 1103(a)(5).) With regard to comments relating to potential cost savings associated with performance assistance, OPM believes that the procedures will make this process more efficient, which represents a cost savings. Many employees receiving performance assistance will improve their performance to an acceptable level; for those that do not, taking an action such as a removal or a demotion to a position and grade where the employee can perform duties at an acceptable level significantly reduces the public expenditure associated with low productivity. One national union asserted that the proposed rule changes make it easier for agencies to terminate both probationary and permanent employees, without providing them an adequate opportunity to improve their performance. Another commenter observed that the proposed regulations limit the opportunities that employees have to improve their performance thereby actually creating a more inequitable environment for Federal employees. Regarding specific protections provided, OPM would reiterate that permanent employees continue to have the same protections as required by statute, including a reasonable opportunity to demonstrate acceptable performance. Individuals who are excluded from coverage under chapter 43 are not covered under part 432 of the regulations and are thus unaffected by the changes to this regulation. Two national unions, one organization and several individuals voiced concerns that the proposed rule ignores the possibility that employees PO 00000 Frm 00022 Fmt 4701 Sfmt 4700 have different performance needs and types of jobs and may require different types of assistance and different periods of time to demonstrate improvement. Commenters noted that various professional and personal challenges, poor management, lack of training by supervisory staff, and other factors may underlie or contribute to unacceptable performance. One commenter included man-made or natural disasters, cyber security incidents, or continuing resolutions as events that may interrupt or impact an opportunity period. The same commenter compared the proposed rule to other laws, such as the Family and Medical Leave Act, that contain protections and provisions for employees to take more than 30 days in order to address employment, medical, and other factors. The commenter asserted that the proposed rule would run counter to the Americans with Disabilities Act and the Rehabilitation Act. Another commenter raised a concern that the amendment to § 432.104 will restrict management’s ability to interact creatively and proactively to address workplace performance issues collaboratively with employees. Collectively, the commenters cautioned against a onesize-fits-all approach to addressing unacceptable performance and advocated for granting supervisors maximum flexibility and empowering them to determine the best course of action for managing their workforce and improving employee performance, including with respect to the duration of an opportunity period, the number of opportunity periods and the degree to which an employee has improved. Some believe that the existing regulation provides just that. As noted above, the amended regulation does not prevent management from evaluating the facts and circumstances underlying any individual case of unacceptable performance and collaborating with the employee to determine the best course of action for performance improvement. Under the current and amended regulation, in fact, the opportunity period must be commensurate with the duties and responsibilities of the employee’s position. In addition, agencies must continue to abide by the requirements of the Family and Medical Leave Act and the Rehabilitation Act for eligible employees and the amended regulation does nothing to curtail the exercise of employee rights under these laws. Neither does the amended regulation curtail a manager’s authority to determine whether an employee has improved during a formal opportunity E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations period. Rather, it merely clarifies the procedures and requirements to support managers in addressing unacceptable performance and promoting employee accountability. The commenter’s assertion that the performance assistance provided during the opportunity period is not and should not be a one-size-fits-all approach is well taken. Indeed, OPM views this comment as actually supporting the provision of the regulation that prevents agencies from being tied to any particular type of performance assistance. With respect to the concern over deficits in supervisory management skills and training and the potential impact on employee performance, OPM does not discount this possibility. There is nothing, however, in the amended regulations that increases the likelihood of this circumstance, and OPM believes that the regulatory changes provide supervisors with the flexibility to rely upon the skills and expertise they possess to provide the most effective assistance. Several national unions, organizations and individuals raised concerns about potential harm to employees and the civil service system as a whole. For example, one union described the limit on additional opportunity periods as ‘‘arbitrarily harsh’’ and believes that employees will be penalized for not making progress as quickly as the agency desires, contrary to the purpose of the opportunity period. One commenter described the proposed rule as punitive and mean-spirited, believing that it will weaken protections for Federal workers and make it easier for management to fire honest civil servants for ideological, partisan, extralegal or even illegal reasons. The commenter contends that OPM does not justify the proposed rule, other than citing the ‘‘non-scientific’’ Federal Employee Viewpoint Survey. Another commenter claimed not to have seen any incentives for positive performance, adding that there appear to be many approaches designed to limit achievement and prevent success. In the commenter’s view, no actual performance management is required, and this will destroy Federal agencies. The commenter shared a personal experience of having been told by a supervisor that the supervisor wanted to fire her because the supervisor disliked her, not due to her work. The commenter wrote that had the proposed rule been in place, she could have been fired, to the detriment of the mission. Still another commenter stated that the proposed rule at § 432.104 will damage the civil service system. The commenter described having seen VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 managers and supervisors failing to provide any assistance to employees who were having problems doing a portion of their job. The commenter believes that many managers considered this to be a waste of their time and not worth the effort, though it is an essential part of the managers’ duties to provide leadership and direction to their employees. One individual expressed support for changes to address poor performance but believes that the changes proposed for the opportunity period go too far. In a different commenter’s view, the proposed revisions are an ‘‘injustice to the employee, whose opportunity and improvement will be at the discretion of the supervisor.’’ The commenter expressed concern that employees will be open to discriminatory and biased decisions that are based on feeling, not on accomplishment or facts. Finally, a commenter stated that her agency has invested a great deal of training and money into its workforce, and retraining and retaining should be equally practiced for employees and management. OPM does not agree that the amended regulation is arbitrary, harsh, or punitive, nor does OPM believe that it weakens or violates employee rights. OPM is not seeking to limit or prevent achievement, success or cooperation. The amended regulation continues to require, per statute and regulation, that supervisors of employees performing unacceptably provide them with performance assistance and provide them with an opportunity to improve in each and every case. The regulation does this while also supporting the principles and requirements for efficiency and accountability in the Federal workforce as outlined in E.O. 13839 and including a straightforward process for addressing unacceptable performance. Establishing limits on the opportunity to demonstrate acceptable performance, by precluding additional opportunity periods beyond what is required by law, encourages efficient use of chapter 43 procedures and furthers effective delivery of agency mission while still providing employees sufficient opportunity to demonstrate acceptable performance as required by law. Federal employees will continue to enjoy all core civil service protections under the law, including the merit system principles, procedural rights and appeal rights. Some commenters objected to the proposed rule at § 432.104 on the basis that OPM, in their view, added language that was unclear and confusing. A national union critiqued the sentence: ‘‘No additional performance assistance PO 00000 Frm 00023 Fmt 4701 Sfmt 4700 65961 period or similar informal period shall be provided prior to or in addition to the opportunity period provided under this section’’ as ‘‘unclear’’ and ‘‘absurd or silly.’’ Instead, the union recommended: ‘‘Employees who properly are notified by the agency that their performance is unacceptable are entitled only to one period of time affording reasonable opportunity to demonstrate acceptable performance.’’ A different national union expressed concern that the reference to an informal assistance period will cause confusion because, in the union’s view, it is unclear whether assistance to improve marginal or unacceptable performance prior to an opportunity period would constitute an informal assistance period. The union added that such assistance should not be prohibited if the law does not require it. An agency described the same sentence as confusing and unnecessary, adding that the terms ‘‘informal period’’ and ‘‘additional performance assistance period’’ are not defined and are vague. An individual commenter offered the following revision: ‘‘Prior to initiating the reasonable opportunity to demonstrate acceptable performance, the agency has sole and exclusive discretion to informally assist the employee in demonstrating acceptable performance.’’ OPM will not adopt the suggested changes as the recommendations are unnecessary. The amended regulation clarifies that agencies are precluded from allowing additional opportunity periods beyond what is required by law. OPM is effectuating the prohibition on additional opportunity periods—beyond what the underlying statute requires—in response to the direction in E.O. 13839. Some agencies have utilized additional, less formal opportunity periods, in response to unacceptable performance, that precede formal opportunity periods, and OPM does not believe that this practice constitutes an efficient use of resources. Moreover, it is not required by statute. For clarification purposes, OPM would distinguish between routine performance management measures such as training and coaching, which may be utilized when employees encounter challenges in the course of their duties, and informal opportunity periods. The first scenario is not impacted by the changes to the regulation; the second is impacted. One individual commented that the Supplementary Information section of the proposed rule, in its discussion of § 432.104, refers to the 5 U.S.C. 2301(b)(2) requirement that employees should receive fair and equitable treatment without regard to political E:\FR\FM\16OCR2.SGM 16OCR2 65962 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations jbell on DSKJLSW7X2PROD with RULES2 affiliation, race, color, religion, national origin, sex, marital status, age and handicapping condition. However, the commenter stated that the language needs to be revised to note that Executive Order 11478, as amended by Executive Order 13672, extends equal employment opportunity protections to include sexual orientation or identity as protected categories. OPM agrees that Executive Order 13672 expands the categories described in the equal employment opportunity policy originally articulated at Executive Order 11478. Executive Order 13672, however, did not (and could not) amend section 2301, the provision that OPM referenced in the Supplementary Information. And, in any event, case law precedents under the Civil Rights Act determine this issue, from a legal perspective. For this reason, the comment is inapt. Finally, the edit suggested by the commenter does not relate to any language in the proposed rule. Instead it relates solely to language found only in the Supplementary Information section of the notice, in which OPM explained its rationale for related changes to the regulations. Accordingly, there are no substantive changes that can be made to the regulations in response to this comment. Section 432.105 Proposing and Taking Action Based on Unacceptable Performance This section specifies the procedures for proposing and taking action based on unacceptable performance once an employee has been afforded an opportunity to demonstrate acceptable performance. 5 U.S.C. 4302(c)(5) provides for ‘‘assisting employees in improving unacceptable performance;’’ and 5 U.S.C. 4302(c)(6) provides for ‘‘reassigning, reducing in grade, or removing employees who continue to have unacceptable performance but only after an opportunity to demonstrate acceptable performance.’’ The intent of the proposed rule was to clarify the distinction between the statutory requirements found in 5 U.S.C. 4302(c)(5) and (6) by explaining, in § 432.105, that the opportunity to demonstrate acceptable performance required prior to initiating an action pursuant to 5 U.S.C. 4303 may include any and all performance assistance measures taken during the performance appraisal period to assist employees pursuant to 5 U.S.C. 4302(c)(5), not just those taken during the formal opportunity period. The effort to distinguish these provisions was met with significant opposition and concerns from commenters, with the exception of three management VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 associations. The vast majority of commenters who opposed the proposed rule presented arguments that the proposed rule, as written, could result in circumstances where an agency relies upon assistance provided prior to determining that an employee has unacceptable performance to fulfill the agency’s obligation under 5 U.S.C. 4302(c)(5), which explicitly calls for assistance to an employee who has ‘‘unacceptable performance.’’ One commenter interpreted the proposed rule to suggest that an agency can satisfy a formal opportunity period before an opportunity to correct inadequate performance has begun, which the commenter described as unreasonable, unrealistic and out of alignment with the merit system principles at 5 U.S.C. 2301(b)(6). A selfdescribed employee relations practitioner claiming more than 30 years of experience opposed the proposed rule and questioned whether it would be consistent with the law. The commenter noted 5 U.S.C. 4302(c)(5) states that ‘‘each agency’s performance appraisal system shall provide for ‘assisting employees in improving unacceptable performance.’ (emphasis added).’’ The commenter went on to say, ‘‘If OPM means any kind of assistance offered at any performance level during the rating period, this is not what the statutory requirement in 4302(c)(5) addresses.’’ The commenter described being ‘‘confident’’ in saying that an employee who learns that he or she is performing at an unacceptable level and is placed on an improvement plan during the opportunity period is often surprised and in disbelief. The commenter’s concern is that, in such a scenario, the agency may say that it offered the employee assistance six months prior to this time and does not need to offer any further assistance during ‘‘this one and only opportunity period.’’ The commenter believes that most employees will not know what steps to take to improve their performance unless management provides them assistance in doing so. In the commenter’s view, OPM is violating the spirit and intent of chapter 43 statutory requirements concerning assistance and an opportunity to improve. The commenter recommended that OPM reconsider and continue to require assistance during the opportunity period to alleviate potential for abuse and misuse by some agencies. A national union objected to the proposed amendment at § 432.105(a)(1), calling it ‘‘nonsensical’’ and contrary to case law to allow the assistance requirement to be satisfied before the opportunity period. The union cited PO 00000 Frm 00024 Fmt 4701 Sfmt 4700 Brown v. Department of Veterans Affairs, 44 MSPR 635 (1990), and Sullivan v. Department of the Navy, 44 MSPR at 646 (1990), in which ‘‘the Board emphasized the critical, statutory requirement that employees be notified of the critical job elements which they are failing and be provided a ‘meaningful opportunity to demonstrate acceptable performance’ in those elements.’’ A different national union objected to the proposed added language to § 432.105(a)(1) with the rationale that ‘‘the second sentence contradicts the first and is contrary to law.’’ The union stated that assisting an employee before determining that the employee has unacceptable performance and notifying the employee of such is not ‘‘for the purpose of assisting employees pursuant to 5 U.S.C. 4302(c)(5),’’ which requires ‘‘assisting employees in improving unacceptable performance’’ at any time the determination is made. The union recommended that instead of the proposed passage, OPM state, ‘‘For the purposes of this section, reasonable opportunity to demonstrate acceptable performance includes reasonable assistance in improving unacceptable performance that the agency provides during the appraisal period, either during the opportunity period or after the opportunity period, and before the agency proposes a reduction-in-grade or removal action.’’ An agency recommended that OPM’s proposed amendments to § 432.105(a)(1) not be added or applied to the final version of the regulation and raised a concern that, as written, the proposed rule will create situations where an employee may not get any management help, thereby putting agencies at risk for appeals and litigation. One commenter recommended that OPM remove the sentence: ‘‘For the purposes of this section, the opportunity to demonstrate acceptable performance includes measures taken during the opportunity period as well as any other measures taken during the appraisal period for the purpose of assisting employees pursuant to 5 U.S.C. 4302(c)(5),’’ The commenter described the sentence as factually inaccurate, contrary to the plain language of the statute, and not mandated by E.O. 13839. One individual asserted that the proposed rule is illogical because the statute requires that agencies assist employees who have unacceptable performance, and since employees who have unacceptable performance should be placed on a Performance Improvement Plan (PIP), there should not be a time other than the period E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations during which the employee is on the PIP when an employee with unacceptable performance is receiving assistance that would meet the statutory requirement. The commenter expressed concern that performance assistance could devolve into a ‘‘check-the-box’’ exercise if the agency can demonstrate that it provided the employee with assistance at any point during the rating cycle. One organization, an agency, and some individual commenters went so far as to say that the proposed rule gave the impression that an agency might take an action for unacceptable performance prior to an impacted employee’s completion of an opportunity period. The organization objected to distinguishing between 5 U.S.C. 4302(c)(5) and (c)(6). It stated that the proposed rule contradicts 5 U.S.C. 4302(c)(6) and is inconsistent with established case law interpreting that statute, including cases that have held a meaningful opportunity to improve to be a substantive right. In the organization’s interpretation, the proposed rule could allow an agency to remove an employee for performance prior to an opportunity period, even if the employee has successful performance during the opportunity period. The organization stated that the proposed rule ‘‘purports to allow an agency to use assistance measures even if the employee has not been notified of the subpar performance,’’ which would be ‘‘fundamentally unfair’’ and ‘‘dissuade supervisors from offering adequate training, counseling, and assistance’’ during an opportunity period. Three management associations expressed support for the proposal to distinguish 5 U.S.C. 4302(c)(5) and 4302(c)(6), describing it as a valuable clarification of agency obligations and a modernization of the Federal performance review process that better matches the needs of agencies working to achieve mission success. However, OPM finds greater merit in the objectors’ arguments. Accordingly, the proposed amendment to the regulations at 5 CFR 432.105(a)(1), which adds the language ‘‘Agencies may satisfy the requirement to provide assistance before or during the opportunity period’’ will not be adopted. We will retain the provision that the obligation to assist can be met through measures taken during the appraisal period as well as measures taken during the opportunity period. Permitting an agency to include measures taken during the appraisal period for the purpose of assisting employees pursuant to U.S.C. 4302(c)(5) VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 encourages managers to engage in continuous performance feedback and early correction of performance concerns, thereby supporting the principles espoused in the Executive Order for promoting accountability. A commenter stated that the intended purpose of the proposed amendment to § 432.105 could be achieved ‘‘by writing: There is no mechanical requirement regarding the form that assistance to an employee should take. Agencies shall satisfy the requirement to assist the employee by providing adequate instructions regarding the manner in which the employee is expected to perform the duties of his position.’’ The commenter added that this change ‘‘would establish that assistance is not an onerous burden without engaging in a misbegotten attempt to ‘delink’ the assistance from the opportunity period.’’ It is unclear where the commenter is proposing to insert the recommended language or what language it would replace. OPM will not adopt the commenter’s recommendation. Section 432.108 Settlement Agreements This section effectuates Section 5 of E.O. 13839. Section 5 establishes a new requirement that an agency shall not agree to erase, remove, alter or withhold from another agency any information about a civilian employee’s performance or conduct in that employee’s official personnel records, including an employee’s Official Personnel Folder and Employee Performance File, as part of, or as a condition to, resolving a formal or informal complaint by the employee or settling an administrative challenge to an adverse personnel action. Such agreements have traditionally been referred to as ‘‘clean record’’ agreements. This new requirement is intended to promote the high standards of integrity and accountability within the Federal workforce by requiring agencies to maintain personnel records that reflect complete information and not to alter the information contained in those records in connection with a formal or informal complaint or adverse personnel action. This regulation, derived from a corresponding provision in E.O. 13839, is further intended to equip Federal agencies with full information needed to assess candidate qualifications and suitability or fitness for Federal employment and make informed hiring decisions. In furtherance of this important goal, instances of employee misconduct and unacceptable performance that may be determinative in these assessments PO 00000 Frm 00025 Fmt 4701 Sfmt 4700 65963 should not be expunged as a function of a clean record agreement, as doing so deprives agencies of vital information necessary to fulfill their obligation to hire the best candidate within reach. Section 5 requirements should not be construed to prevent agencies from taking corrective action should it come to light, including during or after the issuance of an adverse personnel action, that the information contained in a personnel record is not accurate or records an action taken by the agency illegally or in error. Agencies have the authority, unilaterally or by agreement, to modify an employee’s personnel file to remove inaccurate information or the record of an erroneous or illegal action. An agency may take such action even if an appeal/complaint has been filed relating to the information that the agency determines to be inaccurate or to reflect an action taken illegally or in error. In all events, however, the agency must ensure that it removes only information that the agency itself has determined to be inaccurate or to reflect an action taken illegally or in error. And an agency should report any agreements relating to the removal of such information as part of its annual report to the OPM Director required by Section 6 of E.O. 13839. Documents subject to withdrawal or modification could include, for example, an SF–50 issuing a disciplinary or performance-based action, a decision memorandum accompanying such action, or an employee performance appraisal. Further, when persuasive evidence comes to light prior to the issuance of a final agency decision on an adverse personnel action casting doubt on the validity of the action or the ability of the agency to sustain the action in litigation, an agency may decide to cancel or vacate the proposed action. Additional information may come to light at any stage of the process prior to final agency decision including during an employee response period. To the extent an employee’s personnel file or other agency records contain a proposed action that is subsequently cancelled, an agency would have the authority to remove that action from the employee’s personnel file or other agency files. Section 5’s requirements would continue to apply to any accurate information about the employee’s conduct leading up to that proposed action or separation from Federal service. Section 5 requirements apply to actions taken under parts 432 and 752. All comments related to settlement agreements are addressed here in the Supplementary Information for the E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 65964 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations change at § 432.108, where the change appears first. Three management associations expressed support for preventing agencies from erasing, removing, altering or withholding information about a civilian employee’s performance in their official personnel record. Two of the organizations, however, noted that some agencies’ practice of offering clean record settlement agreements has historically facilitated employee departures in a manner that minimizes litigation and results in a mutually agreeable outcome for agencies and taxpayers. An individual expressed support for the proposed amendment to § 432.108, describing it as ‘‘very helpful to hiring managers who should have this information’’ before bringing on a potential ‘‘problem employee.’’ OPM will not make any revisions based on these comments. An agency discussed potential benefits and drawbacks of the proposed rule, including that it would assist management in making better hiring decisions and discourage employees from using the Equal Employment Opportunity (EEO) process as a way to have records expunged while perhaps at the same time making it difficult and costly for agencies to settle cases. The agency recommended further clarification on the parameters of the rule. As the commenter did not pose specific questions about parameters, we are unable to respond. Despite some showing of support for the proposed rule, many commenters objected for a variety of reasons. One commenter asserted that an agency cannot issue a rule unless granted authority to do so by law and believes that OPM has exceeded the scope of its regulatory authorities. Specifically, the commenter questioned whether OPM has the authority to regulate settlement agreements. OPM does not agree that it has exceeded its authority. E.O. 13839 directs OPM to propose appropriate regulations to effectuate the principles set forth in Section 2 and the requirements of Sections 3, 4, 5 and 6 of the order. This final rule effectuates the requirements of E.O. 13839. With respect to the question of OPM’s authority raised by commenters, OPM would emphasize that OPM’s regulation pertains to the integrity of personnel files which are maintained by OPM and which OPM has the authority and responsibility to maintain; see 5 U.S.C. 2951. OPM also has authority to regulate personnel management functions, hiring appointments, and to oversee the merit system principles; see e.g. 5. U.S.C. 1103(a)(5) (stating that OPM’s Director executes, administers, and enforces the VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 law governing the civil service), and (7) (stating that functions vested with the OPM Director include ‘‘aiding the President, as the President may request, in preparing such civil service rules as the President prescribes, and otherwise advising the President on actions which may be taken to promote an efficient civil service and a systematic application of the merit system principles, including recommending policies relating to the selection, promotion, transfer, performance, pay, conditions of service, tenure, and separation of employees’’); see also 5 U.S.C. 3301 (establishing the President’s authority to ascertain fitness of applicants for employment sought). OPM would also emphasize that other than those issues pertaining to areas for which OPM has the authority to regulate, agencies are free to handle settlement agreements as they choose, subject to other appropriate authorities. Several individuals, via a template letter, commented that the proposed rule at §§ 432.108, 752.104, 752.203(h), 752.407 and 752.607 will ‘‘only lead to bitter and contentious disputes.’’ The commenters stated that unless there is ‘‘some provision for settlement or informal resolution of disputes,’’ employees will have little choice but to pursue arbitration or litigation. The commenters urged for an amendment to the proposed rule that would allow cancellation of a proposed action as part of a settlement agreement, so long as no final agency action has been taken. The commenters believe this would ‘‘help resolve 90% of disputes without resorting to more legal processes.’’ A group of several national unions and their members disagreed with the proposed rule at §§ 432.108, 752.104, 752.203(h), 752.407 and 752.607 and requested that the changes be withdrawn on the basis that agency managers and Federal workers represented by unions disfavor the prohibition on settlement agreements. The commenters stated that the proposed change removes a tool that allows unions and managers to settle disputes efficiently and effectively and forces them to arbitration or litigation instead of encouraging the use of early alternative dispute resolution (ADR). The commenters asserted that OPM presumes that agency supervisors are infallible and their decisions not subject to review, which violates the spirit of the law and creates a Federal workforce which is corruptible, subject to undue influence, and puts the burden of a supervisor’s mistake on an employee for the rest of their career. OPM has not made changes based on these comments and believes that the PO 00000 Frm 00026 Fmt 4701 Sfmt 4700 concerns are unsubstantiated and, in many respects, addressed in the regulation itself. The proposed regulation effectuates E.O. 13839 requirements. While Section 5 of the E.O. 13839 places restrictions on agency management with regard to certain matters within settlement agreements, it neither prevents settlement agreements nor discourages other forms of alternative dispute resolution utilized by agencies seeking to resolve a formal or informal complaint and avoid litigation. The regulation has protections built in that address commenters’ concerns. To the extent that an employee’s personnel file or other agency records contain a proposed action that is subsequently cancelled, the action can be removed from the employee’s personnel file or other agency files. As explained in the regulation, agencies are permitted to correct errors, either unilaterally or pursuant to a settlement agreement, based on discovery of agency error or illegality. The regulation further permits agencies to cancel or vacate a proposed action when persuasive evidence comes to light casting doubt on the validity of the action or the ability of the agency to sustain the action in litigation. The final rule promotes integrity and accountability and facilitates the sharing of records between Federal agencies in a manner that permits the agencies to make appropriate and informed decisions regarding a prospective employee’s qualification, fitness and suitability as applicable to future employment. Two organizations and several individuals objected to restrictions on settlement agreements that limit resolution options or reduce the likelihood of the parties reaching a mutually agreeable resolution of informal or formal complaints. One of the organizations opined that employees who seek such relief will be more inclined to litigate, which will increase the burden on the administrative bodies that hear such cases and cause ‘‘unnecessary cost and distraction in the workplace.’’ The other organization strongly opposed the proposed rule at §§ 432.108, 752.104, 752.203(h), 752.407 and 752.607 on the basis that its members’ experience demonstrates that Section 5 has ‘‘eliminated the possibility of settlement agreements in cases involving disciplinary or performance actions, especially once the personnel action occurs.’’ The organization claimed that the limiting effect of Section 5 has followed on the heels of agencies implementing new and stringent limits on ‘‘non-record E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations modification settlements,’’ which we understood to mean settlements that do not involve modification of records and pointed to a particular Federal agency as an example. From the organization’s perspective, agencies have been ‘‘highly deterred’’ from agreeing to postpersonnel action settlements involving record modification because they are ‘‘loath’’ to acknowledge a personnel action as illegal, inaccurate or the product of agency error. The organization stated that this forces cases into costly merits litigation, which has risks for all parties involved. The organization raised a concern that the proposed rule gives too much discretion to ‘‘low level supervisors’’ by rendering their decisions in personnel actions far harder to reverse later through settlement. The commenter stated that, previously, settlement mechanisms provided a means for higher-level management to review the actions of subordinates and make changes to their discretionary decisions through settlement agreements. OPM will not make any revisions based on these comments. The amended regulation effectuates the requirements of E.O. 13839 and thereby facilitates a Federal supervisor’s ability to promote civil servant accountability and transparency across the Executive Branch. An organization commented that the proposed rule at § 432.108 ‘‘fundamentally contradicts existing federal law in several respects’’ by (1) creating ‘‘an absolute bar’’ to potential mitigation of a final agency decision when persuasive evidence of an error or mistake is discovered after the final agency decision is issued (such as ‘‘during an appeal period or during an appeal’’) [emphasis in original]; (2) not mandating that an agency correct an employee’s personnel record (before a decision) despite the agency obligation to correct an employee’s record when it determines there has been an error under the Privacy Act; and (3) causing unnecessary economic issues, such as litigating costs and lost salary and leave, for both employees and agencies and crowding the dockets of the Merit Systems Protection Board (MSPB), the Office of Special Counsel (OSC), and/or Equal Employment Opportunity Commission (EEOC). In response, OPM notes that it is incorrect to interpret the proposed rule at § 432.108 as ‘‘an absolute bar’’ to potential mitigation of a final agency decision when persuasive evidence of an error or mistake is discovered after the decision is issued (such as during an appeal period or during an appeal). In fact, the change at § 432.108(b) permits VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 an agency to take corrective action should it come to light, including during or after the issuance of an adverse personnel action, that the information contained in a personnel record is not accurate or records an action taken by the agency illegally or in error. OPM believes that it is understood that the scope of this provision would include actions taken that were out of compliance with the Privacy Act. OPM also disagrees with the organization on the question of economic issues for employees and agencies and potential crowding of MSPB, OSC, and/or EEOC dockets. While the regulation implementing Section 5 of E.O. 13839 places restrictions on agency management with regard to certain matters within settlement agreements, it does not prevent all settlement agreements from occurring or being pursued by an agency involved in a dispute process. With regard to comments expressing concerns over potential impact on the practice of higher-level settlement review, this comment presumes that all but the highest level management officials are equipped to use their discretion soundly and accurately, a presumption with which OPM does not agree. Further, as discussed elsewhere, all procedural protections built into the adverse action process, including a notice and opportunity for reply remain intact. Additionally, the organization objected to §§ 752.104(a)-(c) and 752.203(h) for the reasons cited above and because the organization believes that the proposed amendments are ‘‘blatantly prejudicial to employees and contrary to an agency’s duty to apply mitigating circumstances developed in Douglas v. Veterans Administration.’’ The organization stated that the proposed rule would provide agencies with an opportunity to impose disproportionate penalties. OPM disagrees and notes that §§ 752.104(c), 752.203(h)(3), 752.407(c) and 752.607(c) permit an agency to cancel or vacate a proposed action when persuasive evidence comes to light, prior to a final agency decision, that casts doubt on the validity of the action or the ability of the agency to sustain the action in litigation. The proposed rule does not prevent the agency from mitigating a proposed penalty in such instances as long as the agency adheres to penalty determination provisions in §§ 752.102, 752.202, 752.403 and 752.603 as applicable. The organization restated similar objections to § 752.407 and added more details to support its position. The PO 00000 Frm 00027 Fmt 4701 Sfmt 4700 65965 organization expressed concern that the proposed rule will do the opposite of increasing the efficiency of management decisions because it undermines the ability of agencies to settle cases. In the organization’s views, the proposed rule is ‘‘simply inoperable in practice,’’ even allowing for corrective action to a personnel record based on discovery of agency error or discovery of material information prior to final agency action. The organization stated that agencies will be unwilling or unlikely to admit error, unless ordered to do so by a court, not least because of potential further liability. OPM disagrees with the organization’s assessment. It is not unusual for dispositive information to come to light after an adverse action is proposed, such as during the employee’s reply period or in the submission of the employee’s supporting material. Such dispositive information could very well lead to an agency cancelling or vacating a proposed action during settlement negotiations. The proposed rule facilitates a Federal supervisor’s ability to promote civil servant accountability and simultaneously recognize employee’s procedural rights and protections. Moreover, the proposed rule does not ‘‘bar’’ the EEOC, MSPB, arbitrators and courts from requiring modification of a personnel record as an appropriate remedy for a matter before them based on an agency’s adverse personnel action. One national union asserted that § 432.108 will diminish the right to collective bargaining, contrary to the spirit of the Federal Service LaborManagement Relations Statute (FSLMRS), by prohibiting agencies from agreeing to clean record terms during collective bargaining negotiations and settlement discussions. In the union’s view, Congress did not intend for agencies and employees to negotiate an appropriate resolution to a matter only to be precluded from implementation by an ‘‘unnecessary regulation.’’ The union believes that the clean record agreements are used by employees in many cases to remove ‘‘unfair, baseless charges’’ from their files and the amended regulations unfairly closes this avenue for employees. OPM does not agree that the amended regulation impacts collective bargaining in the manner asserted by commenters. Initially, management’s rights pursuant to 5 U.S.C. 7106, including the right to discipline, cannot be diminished through bargaining. Each and every decision as to whether to settle a case and what penalty is appropriate falls within the discretion of agency management and is outside the scope of E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 65966 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations bargaining. Further, to the extent that there are any narrow areas of negotiability relating to the use of settlement agreements, the regulation does not preclude bargaining in this area. Rather, consistent with the Executive Order, it directs agencies in terms of how to proceed when making decisions, pursuant to the President’s authority to issue such directives and pursuant to management’s discretion in disciplinary context. These changes appropriately balance employee rights with efficient government operations. A national union commented that damage to agencies’ and employees’ abilities to resolve disputes will outweigh whatever transparency may derive from the proposed rule. The union asserted that litigation will increase exponentially and added that allowing an agency to amend or rescind a record unilaterally is ‘‘hardly a savings’’ because parties are ‘‘loath’’ to admit fault. The union believes that the proposed restrictions on amending personnel records ignore realities. The union also accused OPM of impermissibly inserting itself into the collective bargaining relationship by taking clean record terms off the table, to the extent such clauses are not otherwise prohibited by law. In the union’s estimation, because grievance settlements are an extension of the collective bargaining process, OPM’s regulation would unilaterally constrict the scope of collective bargaining by precluding a commonly negotiated remedy. Another national union commented that by preventing clean record agreements, OPM ‘‘stymies’’ efficient and effective resolution of disputes. The union added that by giving agencies ‘‘unfettered power to unilaterally modify an employee’s personnel record,’’ the proposed rule opens the door to arbitrary and capricious agency action and potential Privacy Act violations. The union stated, ‘‘These regulations should be withdrawn.’’ As discussed in the proposed rule, this new requirement is intended to promote the high standards of integrity and accountability within the Federal workforce by requiring agencies to maintain personnel records that reflect complete and accurate information, and not to alter the information contained in those records in connection with a formal or informal complaint or adverse personnel action. We disagree that OPM is impermissibly interfering in the collective bargaining relationship between the agency and the exclusive representative by prohibiting agencies from entering into clean record agreements. Individual supervisory VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 decisions exercised in the context of settlement agreements are not subject to collective bargaining and cannot be diminished through the collective bargaining process. OPM does not agree that a link exists between settlement agreements of discrete, individual personnel actions and the collective bargaining process over broad conditions of employment which occurs under 5 U.S.C. chapter 71. Also, the President has broad authority to manage the conduct of the Federal workforce. This includes issuing directives to agency supervisors regarding how to exercise their discretion in the context of making decisions on disciplinary actions, including settlement agreements. It is also worth noting that the now vacated preliminary injunction by the DC District Court left intact Section 5 of E.O. 13839 regarding matters related to settlement agreements. Finally, OPM has the authority to require agencies to maintain specific information in personnel records. The prohibition on the use of clean record agreements by agencies would not prevent parties from entering into other types of settlement agreements or other forms of alternative dispute resolution. It would only preclude agencies from entering into agreements that could serve to circumvent necessary transparency. With respect to the concern that the proposed rule could violate the Privacy Act, OPM notes that there is nothing in the rule that relieves agencies of their obligation to maintain accurate personnel records in accordance with the Privacy Act. A commenter objected to the proposed rule change for §§ 432.108, 752.203, 752.407 and 752.607 concerning settlement agreements, and stated that ‘‘prohibiting clean record settlements is a horrible waste of taxpayer money.’’ The commenter asserted that allowing such settlements provides maximum flexibility to agencies and promotes quick settlement of cases at low or no cost to the Government. The commenter stated also that prohibiting agencies from agreeing to alter, erase or withhold information in personnel records would force agencies to engage in lengthy, resourceintensive legal battles, ‘‘contrary to the effectiveness and efficiency of the government.’’ Another commenter shared a similar concern that restrictions on clean record agreements will lead to unnecessary, expensive results that are wasteful of time, money and resources. OPM disagrees. As stated above, this new requirement promotes the high standards of integrity and PO 00000 Frm 00028 Fmt 4701 Sfmt 4700 accountability within the Federal workforce by requiring agencies to maintain personnel records that reflect complete and accurate information, and not to alter the information contained in those records in connection with a formal or informal complaint or adverse personnel action. Agencies may experience fewer matters that give rise to arbitration and litigation because the prohibition on clean record agreements facilitates the sharing of records between Federal agencies. Agencies will be better able to make appropriate and informed decisions regarding a prospective employee’s qualification, fitness and suitability as applicable to future employment. A commenter stated that the Supplementary Information references a ‘‘partial clean record,’’ and the proposed rule itself omitted any reference to a ‘‘partial clean record.’’ The commenter suggested that prohibition on expunging personnel records as part of a settlement may force aggrieved former employees to file suit under the Privacy Act to enjoin the disclosure of false derogatory information to another agency or to another prospective employer. The commenter stated that the proposed rule provided no recourse for an employee to challenge the accuracy of the record, or to expunge information about an underlying incident if the employee and agency disagree about the accuracy or legality of the reported action. The commenter added that the ‘‘current law provides a workable procedure for bona fide allegations of misconduct or unsatisfactory performance.’’ As an alternative to the proposed rule, the commenter recommended improved guidance to supervisors and human resources staff and improved quality of data on misconduct. OPM will not adopt any changes based on this comment. Partial clean record settlements are those in which the agency agrees to withhold negative information from any prospective future non-Federal employers but, in conformance with E.O. 13839, does not agree to withhold any negative information from other Federal agencies. Although the language in §§ 432.108, 752.104, 752.203(h), 752.407 and 752.607, does not include the phrase ‘‘partial clean record,’’ the rule does in fact state that an agency may not erase, remove, alter or withhold from another agency any information about a civilian employee’s performance or conduct in that employee’s official personnel records. (Emphasis added.) Thus, there was no contradiction or inconsistency between the Supplementary Information and the proposed rule. E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations Some commenters erroneously interpreted E.O. 13839 and the proposed rule to mean that settlement agreements are eliminated or characterized the proposed amendments as having an intent to cause harm to Federal employees. One commenter stated that E.O. 13839 and the proposed regulations eliminate settlement agreements and fail to recognize that there are ‘‘many incompetent managers whose motives do not align with public service.’’ The commenter stated that additional safeguards are warranted. The commenter asserted that a hardworking, capable employee who loses his or her job should not be further harmed by untruthful allegations that could impede his or her job search. The commenter expressed concern that probationary employees are often afforded no opportunity to contest or submit evidence to support continuation of employment, resulting in personnel files that may not have an accurate picture. A retiree who relies on OPM ‘‘for everything’’ expressed concern for OPM employees and a wish for OPM employees to be treated with respect and fairness. One individual described clean record agreements as a longstanding practice that, if removed, ‘‘will only hurt . . . employees.’’ The commenter asked, ‘‘please stop seeking to eliminate federal employee rights.’’ Other commenters likened the proposed rule to ‘‘prohibition on finding someone innocent’’ and called it ‘‘sadly disconcerting.’’ Yet another stated, ‘‘Basically any wrong can never be righted, regardless of time or improvement in performance.’’ An individual commented that removing the ability for a record to be ‘‘cleaned’’ is an unfair practice. Believing that everyone has a ‘‘bad day,’’ the commenter asked if this is ‘‘a just reason to have a black mark on their record?’’ A commenter stated that eliminating ‘‘clean record’’ agreements would mean that any negative mark on an employee’s record would be permanent, and that employee rights ‘‘should not be eliminated through Executive Order.’’ The commenter went on to say that employee rights are given via ‘‘congressional approval and the rule of law,’’ and should be changed in those venues. A commenter opposed the proposed changes that ‘‘abolish clean record settlements’’ on the basis that OPM ‘‘wants to make it harder to amicably settle employment disputes and instead make their resolution less effective and efficient and more contentious.’’ A national union commented that eliminating the opportunity to reach clean record agreements reduces VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 workplace flexibility. The union asserted that a prohibition on clean record agreements ‘‘ensure[s] federal workers are seen in the worst possible light.’’ A local union commented that the proposed rule can only be interpreted as an attempt to ‘‘stack the deck’’ against an employee under consideration for punishment. The union asserted that under the proposed rule, performance issues from years ago would be used as justification for severe punishment, while letters of admonishment and reprimand are currently removed from an employee’s file after a set period of time. The union stated that clean record settlement agreements are a valuable tool to resolve labor-management disputes, since both parties prefer to settle disputes through settlement rather than through litigation. OPM will not adopt any revisions to the proposed rule based on these comments. Section 5 of the E.O. 13839 does not prevent parties from entering into settlement agreements to resolve workplace disputes. OPM is not seeking to harm employees, cast them in the worst possible light, ‘‘stack the deck’’ against them, eliminate employee rights, or impede job searches. Further, the amended regulations will not convert time-limited personnel records such as letters of admonishment and reprimand into permanent documents. As previously discussed, Federal employees will continue to enjoy all core civil service protections under the law, be protected by the merit system principles and possess procedural rights and appeal rights. All procedural protections afforded employees who are subject to an adverse action remain unaltered, including the right to contest a proposed adverse action if an employee believes the agency has acted impermissibly or relied upon an error and through submission of a reply and supporting materials. Also, agencies are permitted to correct errors based on discovery of agency error or illegality. The regulation further permits agencies to cancel or vacate a proposed action when persuasive evidence comes to light casting doubt on the validity of the action or the ability of the agency to sustain the action in litigation. OPM is simply effectuating the requirements of E.O. 13839 and thereby facilitating a Federal supervisor’s ability to promote civil servant accountability and simultaneously recognize employee’s procedural rights and protections. A commenter reacted to the proposed rule at §§ 432.108, 752.104, 752.203(h), 752.407 and 752.607 by stating that it subjects government employees to a standard unseen in the private sector. PO 00000 Frm 00029 Fmt 4701 Sfmt 4700 65967 The individual added that government employees need the same protections as private sector employees with regard to sharing employment history. The commenter did not identify what ‘‘protections’’ private sector employees have with respect to sharing employment history. OPM notes that public sector employment is different from private sector employment in a number of key ways, including the fact that Federal employees enjoy additional job protections above and beyond what is codified and afforded to private sector employees (See e.g., 5 U.S.C. chapter 23—Merit System Principles). OPM will not adopt changes based on this comment. An agency recommended removing the references to the OPM report in § 752.104(b) because it is the only time a specific section of the OPM report is discussed. The agency went on to say that it is not clear why there is a ‘‘discrete reference’’ to one part of a larger OPM report ‘‘when the report is not otherwise discussed in the text of the regulations.’’ The agency further recommended either adding a new separate section in the regulations discussing the report and its components, or having the report be covered by E.O. 13839 and OPM policy. OPM notes that §§ 432.108(b), 752.203(h)(2), 752.407(b) and 752.607(b) also refer to the reporting requirements in Section 6 of E.O. 13839. OPM will not adopt the agency’s recommendations because OPM believes that the reference to reporting requirements, in addition to the instructions provided in E.O. 13839, OPM’s guidance memoranda of July 3, 2018, and October 10, 2018, and any instructions OPM will provide in the data call process constitute useful guidance. A commenter expressed the view that eliminating clean record agreements would mean that any negative mark, such as letters of admonishment and reprimand, on an employee’s record would be permanent and could be used as justification for proposing a subsequent more severe form of punishment. OPM does not fully agree with this assertion. OPM notes that, for employees that engage in repeated misconduct, increasing the severity of disciplinary measures is likely to be appropriate, and, to the extent that preserving the integrity and accuracy of an employee’s personnel file facilitates an agency’s ability to take such appropriate measures, this is beneficial to the agency and to the public. OPM also notes that the questions of when, how, and for how long an agency may rely on prior incidents of misconduct is E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 65968 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations governed by a legal framework that is independent from and unaffected by this rule. Finally, OPM would note that the regulatory amendments also do not impact guidelines surrounding disciplinary instruments such as letters of reprimand or admonishment, the preservation of which is also governed by procedures that are independent of and unaffected by this rule. A national union recommended that OPM rewrite § 432.108 to make it ‘‘clear, comprehensive, and less wordy’’ and offered the following revision: ‘‘(a) Agreements to alter personnel records. Except as provided in subsection (b), an agency shall not agree to erase, remove, alter, or withhold from another agency any information about a civilian employee’s performance or conduct in that employee’s official personnel records, including an employee’s Official Personal Folder and Employee Performance File, as part of, or as a condition to, resolving a formal or informal complaint by the employee or settling an administrative challenge to an adverse action. (b) Corrective action. An agency unilaterally or as part of, or as a condition to, resolving by agreement a formal or informal complaint by the employee, or settling an administrative challenge to an adverse action, may at any time erase, remove, alter, or withhold from another agency any information about a civilian employee’s performance or conduct in that employee’s official personnel records, including an employee’s Official Personnel Folder and Employee Performance File if the agency has reason to believe that: (1) The complaint or administrative challenge is, or might reasonably be found by an adjudicator to be, valid; (2) the information is, or might reasonably be found by an adjudicator to be, inaccurate; (3) the adverse action was, or might reasonably be found by an adjudicator to have been, proposed or taken illegally or in error; or (4) the information records, or might reasonably be found by an adjudicator to record, an adverse action or other agency action that was proposed or taken illegally or in error. (c) Reporting. An agency should report any agreements relating to the removal of Information under subsection (b) as part of its annual report to the OPM Director required by Section 6 of E.O. 13839.’’ OPM believes that the proposed changes would not make these provisions clearer while they would substantially change the meaning and intent of the proposed rule and would be inconsistent with the requirements of E.O. 13839. Also, as currently written, § 432.108(b) and (c) permit agencies to take corrective action based on VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 discovery of agency error and discovery of material information prior to final agency action, respectively, before any adjudicator is involved. Further, the union’s revision gives the impression that the reporting requirement applies to actions that are cancelled or vacated based on discovery of material information prior to final agency action, which is not the case. Finally, in response to suggestions regarding postadjudication action, such a change to the rule would be unnecessary to the extent that OPM would be compelled to initiate any changes to personnel records required to conform to a judicial order. For the foregoing reasons, OPM will not adopt the union’s recommended revision. In sum, the amended regulation at § 432.108 effectuates Section 5 of E.O. 13839, and thereby promotes integrity and accountability and facilitates the sharing of records between Federal employers in a manner that permits agencies to make appropriate and informed decisions regarding a prospective employee’s qualification, fitness, and suitability as applicable to future employment. However, Section 5 requirements should not be construed to prevent agencies from correcting records should it come to light, including during or after the issuance of an adverse personnel action, that the information contained in a personnel record is not accurate or records an action taken by the agency illegally or in error. An agency may take such action even if an appeal/complaint has been filed relating to the information that the agency determines to be inaccurate or to reflect an action taken illegally or in error. In all events, however, the agency must ensure that it removes only information that the agency itself has determined to be inaccurate or to reflect an action taken illegally or in error. Section 5 requirements should also not be construed to prevent agencies from entering into partial clean record settlements with regard to information provided to non-Federal employers. Finally, when persuasive evidence comes to light prior to the issuance of a final agency decision on an adverse personnel action casting doubt on the validity of the action or the ability of the agency to sustain the action in litigation, an agency may decide to cancel or vacate the proposed action. Additional information may come to light at any stage of the process prior to final agency decision including during an employee response period. To the extent an employee’s personnel file or other agency records contain a proposed action that is subsequently cancelled, an PO 00000 Frm 00030 Fmt 4701 Sfmt 4700 agency would have the authority to remove that action from the employee’s personnel file or other agency files. However, the requirements described in Section 5 would continue to apply to any accurate information about the employee’s performance or conduct which comes to light prior to issuance of a final agency decision on an adverse action. Based on the foregoing, the final rule at § 432.108 reflects E.O. 13839’s restrictions on settlement agreements arising from chapter 43 actions. Technical Amendments The final rule corrects the spelling of the word ‘‘incumbents’’ within § 432.103(g) and the word ‘‘extension’’ at § 432.105(a)(4)(i)(B)(3). OPM replaces the term ‘‘handicapping condition’’ with ‘‘disability’’ at § 432.105(a)(4)(i)(B)(4) to bring the definition into conformance with 29 U.S.C. 705. In this rule, OPM also revises § 432.105(a)(4)(i)(C) to correctly identify the office that an agency shall contact if it believes that an extension of the advance notice period is necessary for a reason other than those listed in § 432.105(a)(4)(i)(B). OPM revises § 432.106(b)(1) to replace ‘‘i.g.’’ with ‘‘i.e.’’ within the parenthetical concerning non-exclusion by the parties to a collective bargaining agreement. Finally, OPM corrects the use of the word ‘‘affected’’ versus ‘‘effected’’ within § 432.107(b). An agency recommended reviewing and correcting the use of ‘‘affect’’ and ‘‘effect’’ throughout the proposed rule. The final rule corrects the use of the word ‘‘affected’’ versus ‘‘effected’’ within § 432.107(b). There were no other misuses of ‘‘affect’’ and ‘‘effect’’ in the proposed rule. Therefore, no additional changes are necessary based on this comment. Another commenter recommended that agencies expunge records ‘‘after 90 days or until the next formal performance rating, whichever is shorter’’ if, because of performance improvement during the notice period, the employee is not reduced in grade or removed. OPM will not adopt any revisions based on this comment. The proposed rule is simply a technical amendment intended to make a grammatical correction (i.e., it changes the word ‘‘affected’’ to ‘‘effected’’). The rest of the language in this section reflects requirements that exist today and predate this proposed regulatory revision. E:\FR\FM\16OCR2.SGM 16OCR2 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations jbell on DSKJLSW7X2PROD with RULES2 5 CFR part 752—Adverse Actions Subpart A — Discipline of Supervisors Based on Retaliation Against Whistleblowers Recent changes enacted by Congress modifying 5 U.S.C. 7515 establish mandatory procedures for addressing retaliation by supervisors for whistleblowing. The regulations, issued pursuant to this Statute, reinforce the responsibility of agencies to protect whistleblowers from retaliation. These requirements are significant because of the essential protections they provide. Prohibited personnel actions are not consistent with the notion of a system based on merit, and failure to observe these prohibitions must be addressed promptly and resolutely. OPM has revised our regulations to incorporate these statutory changes and to ensure that agencies understand how to meet the additional requirements in connection with prohibited personnel actions. This new rule falls under subpart A of 5 CFR part 752 as ‘‘Discipline of supervisors based on retaliation against whistleblowers.’’ An agency suggested that OPM remove portions of the newly created subpart A on the rationale that the Office of Special Counsel (OSC) should issue regulations pertaining to discipline of supervisors based on retaliation against whistleblowers if it desires to do so. This agency stated also that the regulations should be in chapter VIII, of title 5, Code of Federal Regulations. We will not make any revisions to the final rule as a result of this comment. Congress granted OPM authority to regulate adverse actions. The final language implements the statutory authority and procedures of 5 U.S.C. 7515 and reinforces the principle that increased accountability is warranted in situations where a supervisor commits a prohibited personnel action against an employee of an agency in violation of paragraph (8), (9), or (14) of 5 U.S.C. 2302(b). Two organizations and one individual expressed broad support for subpart A. One of the organizations fully commended OPM, while reminding us that claims of retaliation must be substantiated and proven and cautioning against mere allegations resulting in the dismissal of management. In addition, the organization reminded OPM that managers and supervisors can be whistleblowers as well, but often lack protections equal to those applicable to other employees in making whistleblower disclosures. Lastly, the organization encouraged OPM to protect whistleblowers at all levels and hold all VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 employees equally accountable for retaliation. While another organization voiced its support for whistleblower protection, the organization emphasized that supervisors, managers, and executives can be whistleblowers, and changes to the system cannot embed an us-versus-them mentality between different levels of the workforce. OPM agrees with these commenters. We understand that under the relevant statute (i.e., 5 U.S.C. 7515(b)), the claims of retaliation must be substantiated and proven and that mere allegations may not be the basis for the dismissal of management. Further, we believe that the regulations reinforce the responsibility of agencies to protect all whistleblowers from retaliation. These regulations help to undergird and support agencies in meeting their requirements to take action against ‘‘any’’ supervisor who retaliates against whistleblowers. Accordingly, different levels of the workforce are subject to the increased accountability and protections. In response to these comments, OPM also provides the following clarification: The initiation of a removal action pursuant to 7515(b)(1)(B) should be understood to be required under this statute only if a disciplinary action, initiated pursuant to 7515(b)(1)(A)— based on an agency finding of retaliation made pursuant to procedures outlined in 7515(b)(2)(B)—is either uncontested or if contested, is upheld by a third party. As a corollary to this observation, OPM notes that, should a disciplinary action initiated pursuant to 7515(b)(1)(A) be contested and not sustained, a subsequent and separate determination by the agency that a supervisor engaged in a prohibited personnel practice (again after following procedures in 7515(b)(2)(B)), would trigger a proposal under 7515(b)(1)(A), not 7515(b)(1)(B). Section 752.101 Coverage The final rule describes the adverse actions covered and defines key terms used throughout the subchapter. An organization suggested, without any additional information or specific recommendations, that clarification of definitions in this section is needed and would be helpful. Due to the lack of specifics, OPM did not consider any revisions based on this comment. The final rule also includes a definition for ‘‘insufficient evidence.’’ OPM defines this new term as evidence that fails to meet the substantial evidence standard described in 5 CFR 1201.4(p). One commenter objected to this definition and recommended that OPM either remove it or change it as PO 00000 Frm 00031 Fmt 4701 Sfmt 4700 65969 follows: ‘‘Insufficient Sufficient evidence means evidence that fails to meet meets the substantial evidence standard described in 5 CFR 1201.4(p).’’ The commenter argued that the rule introduces the substantial evidence standard into chapter 75 adverse action procedures. He believes his recommendation will ensure that the agency retains the preponderance of the evidence burden of proof while still maintaining the substantial evidence burden of proof for the employee refuting an allegation of a prohibited personnel action. OPM will not adopt any revisions based on this comment because the recommended changes are unnecessary. First, the term ‘‘insufficient evidence’’ mirrors the content of 5 U.S.C. 7515, which OPM has no authority to change. Further, the employee’s burden of proof of substantial evidence in the proposed regulations applies only to the evidence furnished prior to any agency action. If an action is taken and the employee appeals to the MSPB, the agency bears the burden of proof. The agency’s action must be sustained by a preponderance of the evidence if the action is brought under chapter 75, as it is here. Also, with respect to coverage, a commenter expressed concern that 5 U.S.C. 7515 fails to hold political appointees accountable for retaliation against whistleblowers and observed that the proposed rule weakens Federal workforce protections at a time when they should be strengthened. OPM did not adopt any revisions based on this comment. An agency head need not follow the procedures outlined in section 7515 in order to separate a political appointee who engaged in whistleblower retaliation. Political appointees serve at will and can be separated at the pleasure of the agency head at any time, including for violating whistleblower rights. Therefore, political appointees can be held accountable for retaliation against whistleblowers. As to the broader assertion that the proposed rule weakens Federal workplace protections, OPM emphasizes that Federal employees will continue to enjoy all core civil service protections under the law, be protected by the merit system principles, and possess procedural rights and appeal rights. The final rule does not remove the procedural protections afforded employees who are subject to an adverse action, including the right to contest a proposed adverse action if an employee believes the agency has acted impermissibly or relied upon an error and the right to submit a reply and supporting materials. E:\FR\FM\16OCR2.SGM 16OCR2 65970 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations jbell on DSKJLSW7X2PROD with RULES2 Section 752.102 Standard for Action and Penalty Determination 5 U.S.C. 7515 incorporates many of the procedural elements of 5 U.S.C. 7503, 7513 and 7543, to include the standards of action applied to each type of adverse action. For supervisors not covered under subchapter V of title 5, the proposed rule applies the efficiency of the service standard. For supervisors who are members of the Senior Executive Service (SES), the proposed rule defines the standard of action as misconduct, neglect of duty, malfeasance, or failure to accept a directed reassignment, or to accompany a position in a transfer of function. 5 U.S.C. 7515 enhances statutory protection for whistleblowers through the creation of proposed mandatory penalties. In accordance with the statute, the final rule at § 752.102 outlines the penalty structure. Specifically, for the first incident of a prohibited personnel action, an agency is required to propose the penalty at a level no less than a 3-day suspension. Further, the agency may propose an additional action, including a reduction in grade or pay. For the second incident of a prohibited personnel action, an agency is required to propose that the supervisor be removed. In one agency’s view, the required penalties under § 752.102 seem to conflict with language regarding progressive discipline and the penalty determination in the remaining sections of 5 CFR part 752. The agency’s commenter stated that it is possible a third-party would see the lower-tiered disciplinary level (suspension) and argue that it should have been taken first (absent any prior disciplinary action). For the first prohibited personnel action committed by the supervisor, the agency recommended modifying § 752.102(b)(1)(i) to state, ‘Shall propose a penalty up to and including removal.’’ Another commenter who was concerned about the penalty structure stated that a suspension of a minimum of three days for retaliation against a whistleblower is not sufficient given the severity of the offense and opined that a suspension should be a minimum of 30 days or more depending on the severity of the offense. This commenter further stated that if the offending supervisor is retained, then he or she should be retrained for a minimum of 5 days in addition to the suspension. Finally, the commenter stated that if the whistleblower was terminated, the supervisor’s penalty should also be termination. VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 We will not make any revisions to the regulation based on these comments. The mandatory proposed penalties as listed in § 752.102(b)(1) track the relevant statute, 5 U.S.C. 7515. Specifically, for the first incident of a prohibited personnel practice, an agency is required to propose the penalty at a level no less than a 3-day suspension. (Emphasis added.) Further, the agency may propose an additional action, including a reduction in grade or pay. We believe the regulation as written is sufficiently broad to give agencies the flexibility and guidance needed to propose a penalty suited to the facts and circumstances of the instant whistleblower retaliation, including severity of the offense. One commenter stated that any rule change should include notifying employees of what action has been taken to correct a supervisor’s ‘‘future behavior,’’ which we understood to mean notifying employees of what action was taken to correct a supervisor’s behavior to prevent any future wrongdoing. We will not adopt this proposed change based on the need to protect employees’ personal privacy. An agency may only share information from an individual’s personnel records with those who have a need to know, such as human resources staff involved in advising management and any management official responsible for approving the action. Section 752.103 Procedures The final rule establishes the procedures to be utilized for actions taken under this subpart. The procedures in the subpart are the same as those described in 5 U.S.C. 7503, 7513 and 7543. However, the final rule also includes some key exceptions, namely the provisions concerning the reply period and advance notice. Under this subpart, supervisors against whom an action is proposed are entitled to no more than 14 days to answer after receipt of the proposal notice. At the conclusion of the 14-day reply period, the agency shall carry out the proposed action if the supervisor fails to provide evidence or provides evidence that the head of the agency deems insufficient. To the extent practicable, an agency should issue the decision on a proposed removal under this subpart within 15 business days of the conclusion of the employee’s opportunity to respond. Several commenters, including three agencies, an organization and a national union, expressed concern about the procedures promulgated in § 752.103(d). The agencies inquired about any exceptions to the required timeframe of not more than 14 days to furnish PO 00000 Frm 00032 Fmt 4701 Sfmt 4700 evidence as provided in 5 U.S.C. 7515(b)(2)(B) in the instance of, for example illness, extenuating circumstances, or in response to a request for extension from the employee or the employee’s legal representative. One of the agencies recommended specifically that OPM clarify this matter as to circumstances which may justify extension of this 14-day answer period, if any. With respect to § 752.103(d)(2), the organization characterized the proposed regulation as contrary to statute, stating that OPM cannot waive the statutory requirements for advance notice of proposed adverse actions by regulation, and so cannot set up a scheme whereby the effective date of an adverse action is less than the absolute statutory minimum. Similarly, an individual commenter asserted that it contradicts 5 U.S.C. 7513(b)(1) and 5 U.S.C 7543(b)(1) with respect to an agency’s requirement to give 30-day advance notice of a proposed adverse action. The commenter argued that a statutory amendment is required to exclude disciplinary actions for prohibited personnel practices from the statutorily prescribed notice and response times. The national union also raised objections to the amount of time allowed for an employee to defend a proposed adverse action under § 752.103, claiming that the proposed rule does not consider the time it may take an employee to gather evidence or obtain capable representation. The union added that agencies must then evaluate evidence and render a decision within 15 days after the response period closes. The union called this a ‘‘hurried’’ approach that places unreasonable time constraints on employees and agencies and favors expediency over accuracy. Another agency recommended clarifying that the 15-business day limit does not apply to suspensions, reductions in grade or pay, or lesser penalties. OPM will not adopt any revisions based on these comments. The response period and advance notice period in § 752.103 do not represent guidelines originating from OPM regulations, as indicated by these commenters but rather effectuate the statutory requirements in 5 U.S.C. 7515, and the principle outlined in Section 2(f) of E.O. 13839 that provides, to the extent practicable, agencies should issue decisions on proposed removals taken under chapter 75. The requirement regarding the 14 days to submit an answer and furnish evidence in support of that answer is derived from an explicit statutory limitation (See 5 U.S.C. 7515(b)(2)). The statute further E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations states that if after the end of the 14-day period a supervisor does not furnish any evidence, the head of the agency ‘‘shall’’ carry out the action proposed. The clear language of the statute specifically directing that the head of the agency carry out the action at the conclusion of 14 days reflects a mandatory process that provides no discretion for OPM to make exceptions through regulation nor does it offer discretion for agencies to diverge from the statutory requirements by permitting extensions. Additionally, a commenting organization expressed concern that, although the 15 business days to issue decisions is ‘‘doable’’ and will speed up the process, these types of actions sometimes do not receive attention in a timely manner at senior level. The organization stated that some of their members have reported removal decisions that are pending for months with the employee in limbo and the office scrambling to accomplish work. The commenter recommended that the reporting requirement should emphasize the importance of meeting the time period of 15 business days to issue decisions. OPM will not adopt the recommendation that the reporting requirement should emphasize the importance of adhering to the time period of 15 business days to issue decisions. By emphasizing the nondiscretionary nature of this reporting requirement in the Data Collection section above.,, OPM believes that it is conveying the importance of meeting this deadline. That said, OPM agrees that adhering to the time period of 15 business days to issue adverse action decisions is important and would further emphasize that this requirement supports the objective to make disciplinary procedures more efficient and effective. OPM received comments as well on other requirements established in § 752.103. An agency raised a concern regarding written notice about the right of the supervisor to review the material relied on, as provided for at 752.103(c)(2); and written notice of any right to appeal the action pursuant to section 1097(b)(2)(A), as provided for at 752.103(c)(3). The agency highlighted specifically that according to the National Defense Authorization Act (NDAA) for Fiscal Year 2018, Pubic Law 115–91, Sec. 1097(b)(2)(A) requirements only apply to proposal notices under 5 U.S.C. 7503(b)(1), 7513(b)(1), and 7543(b)(1) as stated in the law. The commenter stated that Public Law 115– 91 Sec. 1097(b)(2)(A) requirements do not apply to 5 U.S.C. 7515 actions and therefore should not be applicable to VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 proposal notices under section 7515. Also, the commenter went on to observe that 5 U.S.C. 7515 specifically states that its provisions are not subject to 5 U.S.C. 7503(b)(1), 7513(b)(1) and 7543(b)(1). Upon further review and careful consideration of this comment, OPM has determined that it will not incorporate the requirement to provide information on appeal rights in any notice to an employee for an action taken under section 7515. An agency and one individual commenter also raised concerns about including appeal rights information in the notice of proposed action. The agency commented that this seems to imply that an employee obtains a right to appeal an action under Public Law 115–91 section 1097(b)(2)(A) while the statute only requires that the agency provide notice of detailed information with respect to any right to appeal the action. The agency suggested that OPM revise § 752.103(c)(3) to read ‘‘. . . provides, pursuant to section 1097(b)(2)(A) of Public Law 115–91, notice of any right to appeal. . . .’’ The individual commenter stated that parts 315, 432, and 752 require that a notice of proposed action include the employee’s appeal rights and time limits, which is inappropriate at the proposal stage. The commenter’s concern is that employees would file appeals before an action is final and create a bottleneck downstream. As noted above, the amended regulation will not require that agencies include appeals rights information in a notice of proposed action taken under section 7515. Notwithstanding, it is important that the commenters understand that current and amended parts 315 and 432 do not require that agencies provide advance notice of appeal rights. (It is unclear if by ‘‘time limits’’ the commenter is referring to time in which to file an appeal or time to respond to notice of a proposed action.) Further, it is well-established in statute, regulation, and case law that an employee cannot appeal a proposed action. Finally, the regulation at § 752.103 also includes the requirement that, if the head of an agency is responsible for determining whether a supervisor has committed a prohibited personnel action, that responsibility may not be delegated. This non-delegation provision generated a significant number of comments. One organization, three agencies, and one individual questioned how it would work to have the head of an agency responsible for determining whether a supervisor has committed a prohibited personnel PO 00000 Frm 00033 Fmt 4701 Sfmt 4700 65971 action. The organization stated that larger agencies such as the Department of Defense have traditionally delegated authorities to Components who may further delegate within their command structure. The commenters asked for clarity on when an agency head would be responsible for determining whether a supervisor committed a prohibited personnel action. One of the agencies commented that the meaning of this provision is unclear specifically as to whether the head of the agency is responsible for determining, without delegation permitted, whether a supervisor committed a prohibited personnel action or if an agency has decided internally via its disciplinary procedures that the head of the agency must make this determination, then it cannot be delegated. The agency suggested that OPM should exercise its authority to provide more guidance regarding the meaning of 5 U.S.C. 7515(b)(3). A second agency stated that as a political appointee, the head of an agency may be perceived as making politically motivated decisions, resulting in claims of whistleblower retaliation. Another of the agency’s concerns is that a limitation on delegation could be inconsistent with the statute. This agency, along with a third agency, recommended agency discretion to determine delegation level. Some clarification in response to these comments may be useful. The requirement regarding non-delegation is an explicit statutory limitation under 5 U.S.C. 7515(b)(3) contingent upon whether the head of any agency is responsible for determining whether a supervisor has committed a prohibited personnel practice. The statute states that if the head of the agency responsible for making the determination of whether a supervisor committed a prohibited personnel action in retaliation against a whistleblower, the responsibility may not be delegated. However, if that responsibility rests at a lower level within the agency, then decisionmaking authority as it relates to these types of actions would be similarly redelegated. Consistent with this wording and with the general authority granted to agencies pursuant to 5 U.S.C. 302, OPM interprets this language to provide agencies with the discretion to internally re-delegate this function to an appropriate level resulting in these responsibilities then resting at that level for the purpose of making these determinations regarding supervisory conduct. E:\FR\FM\16OCR2.SGM 16OCR2 65972 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations Section 752.104 Settlement Agreements The language in this section establishes the same requirement that is detailed in the rule changes at § 432.108, Settlement agreements. Please see discussion in § 432.108. Subpart B—Regulatory Requirements for Suspension for 14 Days or Less This subpart addresses the procedural requirements for suspensions of 14 days or less for covered employees. jbell on DSKJLSW7X2PROD with RULES2 Section 752.201 Coverage Pursuant to the creation of subpart A within the final rule, § 752.201(c) reflects an exclusion for actions taken under 5 U.S.C. 7515. Section 752.202 Standard for Action and Penalty Determination While the standard for action under this subpart remains unchanged, the final rule makes clear that an agency is not required to use progressive discipline under this subpart. The final rule supports Section 2(b) of E.O. 13839, which states that supervisors and deciding officials should not be required to use progressive discipline. Three management associations endorsed this clarification. Two of the associations recognized explicitly that supervisors, managers and executives encounter unique circumstances whereby they must apply their judgment, understanding of context and knowledge of their workforce and organization in a manner that collectively informs personnel decisions. One of the groups added that managers who have greater autonomy over personnel actions can better work with their employees to determine which personnel actions will foster success for the agency in the long term. One association stated that the amended regulation ‘‘takes the penalty out of the bargaining arena,’’ and added that it ‘‘never belonged there in the first place.’’ As reflected in the language of the rule, specifically that a penalty decision is in the sole and exclusive discretion of the deciding official, bargaining proposals involving penalty determinations such as mandatory use of progressive discipline and tables of penalties impermissibly interfere with the exercise of a statutory management right to discipline employees, and are thus contrary to law. Two of the associations recommended that OPM use ‘‘plain English’’ as much as feasible when updating the regulations. The organization noted that there are many legal phrases used in the Federal employment context which can be highly confusing if not properly VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 defined and clarified. OPM will not make any revisions based on these comments as the commenters did not identify any specific phrases or terms for consideration and the regulations are based on statutory requirements. An agency expressed support for OPM’s clarification that agencies are not required to use progressive discipline, adding that use of progressive discipline has led to many delays in removal as well as hardship for supervisors. The agency noted that the rule will give more discretion to supervisors to remove ‘‘problematic’’ employees, thus increasing the efficiency of the service. However, the agency added that progressive discipline is often useful to justify an agency’s action; defeat claims of favoritism, preferential treatment, and discrimination; and provide more consistency between managers. The agency recommended that OPM provide further guidance on when and to what extent progressive discipline should be used as well as clarification on the extent to which agencies should rely upon tables of penalties in making disciplinary decisions. In fact, OPM recently provided such information in a memorandum, ‘‘Guidance on Progressive Discipline and Tables of Penalties,’’ issued on October 10, 2019. An individual commenter also expressed support for the clarifications as they relate to progressive discipline, tables of penalties and selection of a penalty appropriate to the facts and circumstances, including removal, even if the employee has not been previously subject to an adverse action. Another commenter found the clarification at § 752.202 to be helpful, with the caveat that implementation will be difficult as labor and employee relations staff seem to have it ingrained that progressive discipline is the ‘‘safest way to go’’ to avoid litigation. The commenter observed that without support from labor and employee relations staff, frontline supervisors are often constrained by senior managers. OPM will not make any revisions based on these comments as no revision was requested. Many commenters objected to the regulatory amendments regarding standard for action and penalty determination. Some, including four national unions, characterized the amendments as eliminating, attacking, or discarding progressive discipline, and argued strongly for withdrawal of the proposed rule. One of the unions commented that ‘‘eliminating’’ progressive discipline places an inordinate amount of power in the hands of deciding officials, who are being directed to impose the most severe penalty possible. The union PO 00000 Frm 00034 Fmt 4701 Sfmt 4700 added that agencies will impose penalties ‘‘within the bounds of tolerable reasonableness’’ in a manner that leads to subjective discipline. Another national union argued that progressive discipline helps to foster a successful workplace by giving employees an opportunity to learn from their mistakes and ensuring that discipline is proportionate to mistakes. The union went on to say that the rule weakens workplace flexibility and eliminates the ability of Federal managers and employees to come together to develop fair disciplinary procedures. Yet another national union described progressive discipline as an important tool that agencies should use in order to avoid ‘‘arbitrary and capricious’’ penalty determinations. The union expressed concern that a critical safeguard against arbitrary and capricious agency action is being taken away in favor of ‘‘inconsistent and adhoc decision-making.’’ Pointing to the CSRA, the union said, ‘‘Put simply, jettisoning progressive discipline, confusing the use of comparator evidence, and discouraging tables of penalties, creates an improper bias toward the most drastic penalty an agency thinks it can get away with.’’ This national union asserted such a ‘‘rule of severity’’ is not only counterproductive and likely to lead to a greater number of penalty reversals, it is also contrary to the text, structure, and purpose of the CSRA. The national union stated that the proposed regulations upset this balance and asserted that OPM’s claim that ‘‘[p]rogressive discipline and tables of penalties are inimical to good management principles’’ is nothing more than a cheap soundbite. This national union insisted that it is not based on sound analysis or solid evidence and stated that the proposed regulations should therefore be abandoned. The fourth national union stated that the rule will have the ‘‘perverse effect’’ of encouraging agencies to terminate an employee even where there are no prior disciplinary issues and regardless of the seriousness of the infraction at issue. The union went on to say that such results would erode the public trust in Federal agencies and devalue the contributions of hard-working Federal employees. This national union stated that the Federal government invests considerable time and money in training Federal employees, and the notion that a supervisor could decide to fire an employee over a minor transgression and give a written reprimand for the same transgression to another employee E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations is antithetical to the principles of an unbiased and fair civil service system. In addition to the comments discussed above that were submitted individually by labor organizations, we received a letter signed by seven national unions as well as comments via a template letter from members of one of the undersigned unions. They discussed that progressive discipline is the ‘‘law of the land’’ and deemed it weakened by the proposed rule. The commenters further stated that the proposed rule does nothing but weaken protections for Federal employees in an effort to circumvent the ‘‘efficiency of the service’’ standard. Also, the commenters opined that the proposed changes cannot change an agency’s obligation to determine an appropriate penalty in accordance with Douglas v. Veterans Administration, 5 MSPR 280 (MSPB 1981). The commenters stated the proposed change will lead to confusion and the unjustified punishment of Federal workers, not to mention disparate treatment. One of the union members added that progressive discipline is fair and allows employees a chance to improve their performance without fear of losing their livelihood. The commenter went on to say that progressive discipline prevents favoritism, nepotism and the ‘‘good ole boy’’ networks from forming and flourishing in Federal agencies. The commenter is concerned that rules such as this will deter ‘‘young and new talent’’ from applying for Federal jobs and drive existing workers to the private sector. Via a different template letter, several members of another national union also interpreted the proposed rule to mean that progressive discipline is abolished. The commenters expressed concern that the regulatory changes will lead to widely varying, incoherent, and discriminatory discipline for similarly situated employees. One of the commenters self-identified as a union steward and asked that their workload is lightened, not increased. In addition, a national union objected to the proposed rule regarding progressive discipline on the basis that a standard of ‘‘tolerable limits of reasonableness’’ is less clear and may result in various interpretations by supervisory personnel even within the same department of an agency. The union expressed concern that ‘‘mandating’’ that the threshold for review be at a less clear standard invites workplace chaos in which inconsistent penalties and unfair discipline is administered without the opportunity for it to be corrected. VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 An organization disagreed with the rule because in their view it flies in the face of proportionate discipline, due process and fairness. The organization commented that the regulation is contrary to statutory authority in 5 U.S.C. 7513 and established case law. They stated that eliminating progressive discipline and the consideration of mitigating factors would essentially eliminate the ‘‘for cause’’ standard and turn Federal employees into ‘‘at will’’ employees. The organization observed that this is the type of drastic action that would undo, impermissibly, the dictates of title 5 and interpretive case law, and is the type of action that can only be taken by Congress. An organization opposed the proposed rule to the extent that it ‘‘undercuts’’ progressive discipline. The organization stated that progressive discipline is a wise approach and asserted that a supervisor can deviate from the guidelines of progressive discipline in certain situations if they have a reasoned explanation for doing so. Additional commenters expressed concern about potential negative consequences of discouraging progressive discipline, calling it a poor stewardship of tax dollars, contrary to the public interest and a lead up to disparate treatment and retaliation. Some commenters worry that agencies will impose discipline arbitrarily, up to and including removal, for any offense with no obligation to first correct employee behavior. Commenters advocated that agencies give employees an opportunity to be made aware of and correct behavior before being suspended or terminated, including calling it improper to do otherwise. Even a commenter who acknowledged that the rule changes could be beneficial expressed concern that managers are being given ‘‘more power’’ to remove employees without just cause. One asserted that this is a clear violation of the CSRA. We will not make changes to the final rule based on these comments. The final rule does not eliminate progressive discipline. Rather, the regulatory language makes clear that an agency ‘‘is not required’’ to use progressive discipline under this subpart. In fact, progressive discipline has never been required by law or OPM regulations. It is not the ‘‘law of the land’’ as asserted by one commenter. Notwithstanding a number of comments submitted, the clarifying language in the amended regulations does not set aside or discard progressive discipline but it does, consistent with the Principles for Accountability in the Federal Workforce PO 00000 Frm 00035 Fmt 4701 Sfmt 4700 65973 contained in Section 2 of E.O. 13839, emphasize that penalties for misconduct should be tailored to specific facts and circumstances, that a more stringent penalty may be appropriate if warranted based on those facts and circumstances, and that a singular focus on whether an agency had followed progressive discipline to the detriment of a more comprehensive fact-based, contextual assessment does not serve to promote accountability nor an effective or efficient government. The regulatory changes emphasize principles and policies contained in E.O. 13839 but are also supported by well-established legal authority: That the penalty for an instance of misconduct should be tailored to the facts and circumstances; an agency shall adhere to the standard of proposing and imposing a penalty that is within the bounds of tolerable reasonableness; employees should be treated equitably; and conduct that justifies discipline of one employee at one time does not necessarily justify similar discipline of a different employee at a different time. Concerns expressed by commenters that the ‘‘bounds of tolerable reasonableness’’ is insufficiently clear appear to take issue with the state of the law, not OPM’s rule which simply incorporates the appropriate legal standard. The rule is also consistent with the efficiency of the service standard for imposing discipline contained in the CSRA notwithstanding assertions that it circumvents this standard. While commenters argued that the changes weaken agency flexibility, reliance upon the efficiency of the service standard, like reliance upon the bounds of tolerable reasonableness in the context of penalty selection in fact provides necessary flexibility to encompass the range of facts and circumstances associated with each individual adverse action. Agencies remained constrained by law to select penalties that conform to these legal requirements and any such penalty remains subject to challenge based on alleged failure to do so. This is undisturbed by the revised rule. Whether or not agencies choose to adopt further, internal constraints beyond these legal standards is purely discretionary, and OPM reminding agencies of this fact does not direct agencies to issue nor otherwise encourage more stringent penalties than are warranted given specific facts and circumstances. Federal employees will continue to enjoy the protections enshrined in law, including notice, a right to reply, a final written decision, and a post-decision review when an agency proposes to E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 65974 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations deprive them of constitutionally protected interests in their employment. Although we have made changes to the regulations, due process and other legal protections are preserved as required by Congress. Regarding a commenter’s criticism that there is a need to look at disciplinary actions before they are taken, the rule does not change the requirement for disciplinary actions to be reviewed under the current regulatory requirements. The existing regulations at §§ 752.203 and 752.404 require that the employee must be provided an opportunity to provide an answer orally and in writing. The agency must consider any answer provided by the employee in making its decision. Moreover, for appealable adverse actions, § 752.404 provides that the agency must designate a deciding official to hear the oral answer who has authority to make or recommend a final decision on the proposed adverse action. Thus, further review of an agency proposed action is required before a decision to take any administrative action. Regarding the assertion that the regulations cannot be used to circumvent required assessment of the Douglas factors, OPM would emphasize that there is no effort to evade any such legal requirement. Douglas itself states that the Board will not mitigate a penalty unless it is beyond the bounds of tolerable reasonableness. This permits, but does not require, agencies to impose the maximum reasonable penalty. OPM’s regulations on progressive discipline are manifestly in accord with longstanding decisional law. Moreover, the analysis pursuant to Douglas that each deciding official must make provides a means of promoting fairness and discouraging the type of subjectivity and disproportionality which some commenters allege the new rule promotes. Meanwhile, the Douglas factors ensure consideration of all relevant factors that may impact a penalty determination, consistent with the language of E.O. 13839 and this rule. This includes consideration of whether an employee engaged in previous misconduct or did not engage in previous misconduct. While again, OPM is not seeking to prevent agencies from imposing less than the maximum reasonable penalty with this rule, and the exercise of sole and exclusive discretion is reposed in agencies, not OPM, considerations such as this, carefully weighed alongside numerous other relevant considerations such as the severity of the misconduct and any potential mitigating circumstances provide a carefully calibrated VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 assessment of penalty that should not be superseded by singular reliance on progressive discipline which may artificially constrain a more comprehensive analysis. One union noted that the proposed regulations will prevent agencies from engaging in any collective bargaining negotiations that allow for progressive discipline. They asserted that the regulations are contrary to the intent and purpose of the Federal Service Labor-Management Relations Statute (the Statute). The union stated an agency’s policy on disciplinary structure directly affects an employee’s conditions of employment and is the exact condition that Congress intended to be collectively bargained. While recognizing OPM’s authority to issue regulations in the area of Federal labor relations, the union added that OPM may not ‘‘dilute the value of employees’ statutory right to collectively bargain.’’ The union further stated the regulations should not be implemented because they would ‘‘diminish the core elements of collective bargaining by reducing negotiations over primary conditions of employment,’’ including discipline. We agree that Federal employees have a statutory right to collectively bargain over their conditions of employment. However, there are certain exceptions outlined in the Statute, including a prohibition on substantively bargaining over management rights as outlined in 5 U.S.C. 7106(a). This includes management’s statutory right to suspend, remove, reduce in grade or pay, or otherwise discipline employees. Accordingly, bargaining proposals that would mandate a specific penalty under certain circumstances or which mandate the use of progressive discipline and tables of penalties impermissibly interfere with the exercise of a statutory management right to discipline employees. In clarifying that a proposed penalty is at the sole and exclusive discretion of the proposing official, and the penalty decision is at the sole and exclusive discretion of the deciding official (subject to appellate or other review procedures prescribed by law), the rule further elaborates on what is already established by law, management’s inherent and nonnegotiable right to utilize its discretion in this area, it does not enhance those rights nor diminish bargaining rights in this area. Some commenters focused especially on OPM’s adoption by regulation of the standard applied by MSPB in Douglas to removals, suspensions and demotions, including suspensions of fewer than 15 days. Specifically, the final rule adopts the requirement to propose and impose PO 00000 Frm 00036 Fmt 4701 Sfmt 4700 a penalty that is within the bounds of tolerable reasonableness. An organization discussed that while OPM may issue regulations regarding the procedures to be followed in adverse actions, an action against any employee may only be taken ‘‘for such cause as will promote the efficiency of the service,’’ 5 U.S.C. 7513(a). Citing Douglas itself and other case law, the organization described as a basic principle of civil service disciplinary action that the penalty must be reasonable in light of the charges and that the penalty not be grossly disproportionate to the offense. The commenter noted that ‘‘efficiency of the service’’ is colloquially referred to as the ‘‘nexus’’ requirement which requires the agency to establish a ‘‘clear and direct relationship demonstrated between the articulated grounds for an adverse personnel action and either the employee’s ability to accomplish his or her duties satisfactorily or some other legitimate government interest promoting the efficiency of the service.’’ The organization objected also to the consideration of ‘‘all prior misconduct.’’ The organization argued that existing case law allows the deciding official to evaluate whether or not prior misconduct should be used as an aggravating or mitigating factor, whereas the regulatory change appears to ‘‘require’’ the deciding official to use the prior discipline as an aggravating factor against the employee. They stated that it would be ‘‘patently illogical’’ for potentially unrelated misconduct from years or decades ago to be considered when determining a penalty for a current instance of misconduct. OPM notes that the amended regulation is intended to ensure that the deciding official has the discretion to consider any past incident of misconduct that is relevant and applicable while making a penalty determination, consistent with law. To that end, OPM will amend the regulation to clarify that agencies should consider all applicable prior misconduct when taking an action under this subpart. A national union declared that OPM is not empowered to ‘‘regulate away’’ the Douglas factors. The union stated that the proposed rule would improperly result in an override of MSPB’s longstanding determination of what should be considered in assessing potential employee discipline. In particular, the union believes the proposed rule is at odds with progressive discipline considerations in Douglas factors 1, 3, 9 and 12, and penalty consistency considerations in Douglas factors 6 and 7. E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations In addition, an agency commented that OPM only explicitly discussed certain Douglas factors, thereby giving the impression that agencies should only prioritize consideration of these factors over those not mentioned. The agency added that ‘‘relevant factors’’ is undefined and vague. The agency recommends that OPM clarify its intention, so agencies and adjudicators have a clear understanding of what standards to apply by either including explicit references to all the factors or making a reference to Douglas itself. OPM disagrees with the commenters and will not make any revisions based on these comments. As explicitly described in the proposed rule, the standard for action under this subpart remains unchanged. Specifically, the final rule at §§ 752.202, 752.403, and 752.603 adopts the requirement to propose and impose a penalty that is within the bounds of tolerable reasonableness and make it clear that this standard applies not only to those actions taken under 5 U.S.C. 7513 and 7543 but apply as well to those taken under 5 U.S.C. 7503. As to the criticism that the proposed rule does not observe the efficiency of the service standard and the nexus requirement, §§ 752.202, 752.403, and 752.603 includes: the penalty for an instance of misconduct should be tailored to the facts and circumstances; an agency shall adhere to the standard of proposing and imposing a penalty that is within the bounds of tolerable reasonableness; employees should be treated equitably; and conduct that justifies discipline of one employee at one time does not necessarily justify similar discipline of a different employee at a different time. OPM understands and reiterates that agencies continue to be responsible for ensuring that discipline is fair and reasonable, including applying the Douglas factors. It is unnecessary to list all the Douglas factors in the regulations, but this should not be interpreted to place focus on some more than others. The proposed rule is not at odds with the Douglas factors. Factors such as the seriousness of the misconduct and the clarity of notice remain unchanged. The consistency of penalty with a table of penalties would only be applicable if an agency has adopted a table of penalties. This Douglas factor, however, does not in any way require or compel an agency to adopt one (though again, there is nothing in the rule that precludes an agency from doing so). Regarding an employee’s past disciplinary record, the rule incorporates the consideration of all applicable prior misconduct. The rule does not require an agency to VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 consider all applicable prior discipline but gives agencies the discretion to do so. With regard to the consistency of penalty with other employees who have engaged in the same or similar conduct, while the rule incorporates the current legal standard, which informs this analysis, it does nothing to alter the Douglas factor itself. Similarly, the Douglas factor addressing the adequacy of alternative sanctions to deter conduct remains unaltered, and in fact, this consideration provides a further safeguard against the subjective and disproportionate penalties some commenters allege will result from the changes to the regulation. If a penalty is disproportionate to the misconduct or unreasonable, the agency risks having the penalty mitigated or reversed. For these reasons, we urge managers to exercise thoughtful and careful judgment in applying the broad flexibility and discretion they are granted in addressing misconduct and making penalty determinations. We received many submissions that included significant objections to OPM’s discussion of the risks of tables of penalties in the Supplementary Information section of the proposed rule. Again, as with progressive discipline, many commenters, including three national unions, had the mistaken impression that the rule somehow eliminated tables of penalties. They expressed concern that the amended regulations will remove transparency and accountability; create an environment of fear, distrust, and resentment; and empower deciding officials to mete out discipline arbitrarily, disparately, and inequitably. The unions advocated for use of tables of penalties, believing that they ensure that discipline is dispensed fairly and employees are treated equitably; provide support to employees by helping them recognize if a penalty is disproportionate to an infraction; and support supervisors by providing readily available and clear guidance. One of the unions claimed to see in the proposed rule a bias toward removal that is ‘‘inconsistent with due process and unjustified.’’ In support of its position, the union quoted a 2018 U.S. Government Accountability Office (GAO) report as saying that ‘‘tables of penalties—a list of recommended disciplinary actions for various types of misconduct—though not required by statute, case law, or OPM regulations, nor used by all agencies, can help ensure the appropriateness and consistency of a penalty in relation to an infraction.’’ The union added that GAO reported that penalty tables can help ensure the disciplinary process is PO 00000 Frm 00037 Fmt 4701 Sfmt 4700 65975 aligned with merit principles by making the process more transparent, reduce arbitrary or capricious penalties and provide guidance to supervisors. The union claimed that OPM’s citation to Nazelrod v. Department of Justice, 43 F.3d 663 (Fed. Cir. 1994) is ‘‘nonsensical’’ and added that this will not change the requirement that an agency must prove all the elements of a charged offense. The union goes on to cite Cleveland Board of Education v. Loudermill, 470 U.S. 532, 542 (1985) to make its point that an employee against whom an action has been proposed is entitled to notice and an opportunity to be heard before the action may become final. Another national union commented that the regulatory changes weaken rules that forbid disparate treatment for similarly situated employees. In the union’s view, tables of penalties help ensure equitable treatment and guard against discrimination, retribution and favoritism. Two unions asserted that agencies with whom they work typically allow supervisors to assess the situation and use their discretion in determining what action is appropriate rather than using penalty tables blindly or rigidly. The unions urged OPM to withdraw or reject the proposed rule and consider alternative approaches. Via a template letter, several members of a national union observed that the proposed rule discourages tables of penalties. The commenters expressed concern that the regulatory changes will lead to widely varying, incoherent, and discriminatory discipline for similarly situated employees, regardless of whether the same or different supervisors are involved. They expressed a strong belief that penalties should be the same or similar for similar offenses and dispensed of any idea that identical or similar offenses could lead to disparate discipline as inherently inequitable or invalid. One of the commenters added that in the absence of set penalties, sanctions for like violations will be unequal and invite litigation and tie up agency resources. Others added that the changes are unnecessary and put employees at the mercy of supervisors. Another selfidentified as a retiree and called the regulatory changes ‘‘unAmerican.’’ An agency commented, drawing upon its own experience, that the benefits of a table of penalties have outweighed the cons. The agency listed as benefits helping supervisors and employees recognize what constitutes misconduct, deterring employees from engaging in misconduct, and giving all supervisors and employees a general understanding of the type and level of disciplinary E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 65976 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations consequences that can arise from committing misconduct. The agency stated that its table has always been used as advisory guidance, and it requires supervisors to provide an explanation if they want to exceed the table of penalties. Another agency argued that, when tables of penalties are used properly as guidance, the unique facts of each case are taken into consideration. The agency notes that one of the Douglas factors is the consideration of the agency’s table of penalties, if any, and thus it is contemplated that such information would be weighed in conjunction with the other factors outlined in Douglas. The agency recommends that OPM either delete this discussion from the Supplementary Information or significantly revise it to stress, as a best practice, that tables of penalties, if used, should serve as a guide for disciplinary penalty determinations, and ‘‘that offenses contained in such a table of penalties should be written broadly enough to address unique offenses or misconduct that may have not been contemplated in offense.’’ After expressing general support for incorporation of the Douglas factor analysis into the regulations, an organization commented that the proposed rule is contradictory in that it states the importance of Douglas, but ‘‘undercuts’’ Douglas factor 7, ‘‘consistency of the penalty with any applicable agency table of penalties.’’ The organization described tables of penalties as valuable tools that provide a measure of uniformity; help avoid real or perceived favoritism, disparate treatment, and discrimination; and reduce the risk of litigation. The organization is concerned in particular that there will be an increase in disparate treatment complaints before the EEOC and MSPB. According to the organization, its membership has observed that most penalty tables make clear that, in certain situations, a supervisor can deviate from the guidelines if there is a reasoned explanation for doing so. This sentiment was shared by another organization that disputed that agencies adhere to tables of penalties in a formulaic manner, as stated by OPM in the proposed rule. One commenter wrote that the proposed rule does not acknowledge any advantages or benefits of progressive discipline or tables of penalties. The commenter suggested that the final rule should state that an agency may choose to but is not required to use progressive discipline. Another commenter referred to cumulative infractions as typically leading to escalating enforcement VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 actions, which the commenter described as fair. The person went on to express that ‘‘[t]his E.O.,’’ which we understood to mean E.O. 13839, will allow Federal employees to be removed for nearly any perceived infraction and stated not to allow the Executive Order to be passed. Yet another commenter raised the concern that while it does make sense to take disciplinary action for performance reasons or misconduct, there should be ‘‘levels’’ on which actions are taken. The commenter also stated that any ‘‘offense should be looked at before taking any action’’ because disgruntled employees could be that way due to poor management. One person noted that managers actually make more and worse choices than bargaining unit staff but are not held accountable. Another person characterized the revised regulations as demoralizing to the Federal workforce and expressed concern that they will produce a Government that is ‘‘fearful, cautious, and incapable of making bold decisions’’ rather than the ‘‘resourceful, creative, and effective’’ Government that we need. Finally, a management association disagreed with OPM that agencies can address misconduct appropriately without a table of penalties, though the association did agree that nothing surpasses a manager’s judgment and independent thinking when determining the best way to handle their team. The Supplementary Information in the proposed rule identified pitfalls agencies may encounter when basing disciplinary decisions on a table of penalties. The Supplementary Information reminded agencies that penalty consideration requires an individual assessment of all relevant facts and circumstances. To promote efficiency and accountability, OPM is encouraging agencies to afford their managers the flexibility to take actions that are proportional to an offense but further the mission of the agency and promote effective stewardship. The existence of tables of penalties may create confusion for supervisors who believe that only the misconduct explicitly identified in the table can be addressed through a chapter 75 process. Inappropriate reliance on a table of penalties or progressive discipline can prevent management from taking an adverse action that would promote the efficiency of the service and survive judicial scrutiny. Chapter 75 does not only apply to misconduct. It applies to any action an agency may take to promote the efficiency of the service, including unacceptable performance and certain furloughs. Further, there is PO 00000 Frm 00038 Fmt 4701 Sfmt 4700 no way to define the infinite permutations, combinations and variations of possible misconduct through preconceived labels. Many types of misconduct or behavior that must be dealt with to promote the efficiency of the service fall in the gaps between offenses listed in tables of penalties. And some of these labeled charges require an agency to meet an elevated standard of proof, such as intent, whereas behavior warranting discipline may be merely negligent or careless or unintentional. Further, someone charged with a certain type of misconduct not enumerated in the table of penalties may argue that he was not on notice that what he did was wrong. Tables of penalties are rigid, inflexible documents that may cause valid adverse actions to be overturned. Further, they promote mechanistic decision-making, which is contrary to OPM’s policy that proposing and deciding officials exercise independent judgment in every case according to its particular facts and circumstances in leveling the charge and the appropriate penalty. With respect to the GAO report, OPM notes that the report does not explain how having a table of penalties will help an agency prevent misconduct or respond to it. The mere existence of a table of penalties does not necessarily serve as a warning to employees or compel supervisors to carry out more disciplinary actions for the conduct identified in the table. If anything, it is as likely to de-emphasize constructive early intervention in favor of a more punitive approach that focuses only on the offenses covered by the table. It may also be read or understood to induce or worse, require, managers in some cases to impose a lesser penalty where a greater penalty is warranted. The GAO report references some of OPM’s concerns about tables of penalties, but there is no serious discussion of the disadvantages of a table of penalties, which we believe are important in assessing their value. It is vital for effective workforce management consistent with the CSRA and the merit system principles that supervisors use independent judgement, take appropriate steps in gathering facts and conduct a thorough analysis to decide the appropriate penalty in individual cases. We reiterate that the creation and use of a table of penalties is not required by statute, case law or OPM regulation. These regulations do not prohibit an agency from establishing a table of penalties, though OPM strongly advises against their use. However, once an agency establishes a table of penalties, it will have to live with the E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations consequences of a document containing mechanistic and perhaps arbitrarilyselected labels, possibly issued years or even decades earlier at a safe remove from the realities and variety of day-today life in the Federal workplace. For that reason, the amendments emphasize that the penalty for an instance of misconduct should be tailored to the facts and circumstances, in lieu of any formulaic and rigid penalty determination. The final rule states that employees should be treated equitably and that an agency should consider appropriate comparators as the agency evaluates a potential disciplinary action, as well as other relevant factors including an employee’s disciplinary record and past work record, including all applicable prior misconduct, when taking an action under this subpart. With respect to appropriate comparators, as stated in the proposed rule, conduct that justifies discipline of one employee at one time by a particular deciding official does not necessarily justify the same or a similar disciplinary decision for a different employee at a different time. For this reason, we have decided to incorporate the Miskill test. The language in the proposed rule reflected important language in Miskill v. Social Security Administration, 863 F.3d 1379 (2017), that a comparator is an employee that ‘‘was in the same work unit, with the same supervisor, and was subjected to the same standards governing discipline.’’ As explained in detail below and in response to many commenters, including national unions, who objected to the definition of comparator in the proposed rule, OPM has modified the final rule to clarify that appropriate comparators are primarily individuals in the same work unit, with the same supervisor, who engaged in the same or similar misconduct. A management association lauded the Government-wide application of Miskill and clarification of the standard for comparators. However, other commenters expressed that the adoption of Miskill narrows the scope of comparators in a manner that will make it difficult for employees to demonstrate inequitable discipline or abuse of discretion and easy for managers to engage in arbitrary and capricious conduct. Some, including a national union, went so far as to say that OPM misinterpreted and misapplied Miskill. The union argued that in Miskill, the court merely applied existing law and did not make any material change to the evaluation of agency penalties nor adopt any manner of new test or bright line rule. The union stated that the amended regulation is not responsive to the issue VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 of disparate penalties and will lead to confusion and an increase in arbitrary and capricious agency conduct. An individual commenter stated that incorporating Miskill into the regulations assumes that the case overrules Lewis v. Department of Veterans Affairs, which it does not. (We interpret this as a citation to 113 M.S.P.R. 657, 660 (2010).) Another national union claimed that there is no legal support for such a narrow assessment of comparators. In the union’s view, comparators serve as a safeguard against unfair and arbitrary discipline. The union is deeply concerned that their members will be improperly disciplined, with minimal avenue for recourse. The union advocated for use of comparators in helping supervisors administer penalties that align with the offense, with allowances for supervisors to use their discretion to deviate from the suggested penalty when necessary. An organization asserted that OPM is making a limited, mechanical analysis of comparators. The organization’s commenter stated that this approach ignores significant realities of disciplinary actions, agency organizational structures, and actual comparators. As an example, the organization offered a scenario in which two employees with different supervisors are together involved in one instance of misconduct and receive different penalties. The organization asserted that these two individuals would not qualify as comparators under the OPM regulations and would be unable to challenge their penalties as disparate, which undermines the basic principles of fairness that undergird the merit system principles. The organization also opined that certain charges—‘‘low level charges, AWOL [absence without leave], failure to follow instructions, etc.’’—should receive the same punishment regardless of the supervisor, whereas more egregious conduct may require ‘‘a deeper analysis.’’ The organization added that the regulatory amendments will allow two supervisors with differing opinions of discipline to issue disparate penalties to similarly situated employees for similar misconduct. In a similar scenario, one commenter posited that narrowing the scope of comparators also means that employees in different work units would be operating under vastly different sets of conduct rules and expectations, which does not foster the efficiency and effectiveness of Government. In addition, the commenter stated that a consistent set of rules for the workforce and a consistent ‘‘conduct of code’’ and PO 00000 Frm 00039 Fmt 4701 Sfmt 4700 65977 discipline facilitates managers’ jobs and helps protect them from perceptions of unfairness, favoritism and discrimination. An agency commented that OPM should specify that appropriate comparators have also engaged in the same or similar offense. The agency stated that this is unclear in the current wording. The agency’s commenter added that including a definition of appropriate comparators in the regulation is limiting and recommended deleting the last sentence. After considering the comments on this regulation, OPM provides the following assessment and amplification of the philosophy and approach underlying this regulatory change. First, as we have previously said regarding progressive discipline and tables of penalties, each action stands on its own footing and demands careful consideration of facts, circumstances, and, as one commenter wrote, context and nuance. It is the proposing and deciding official who are conferred the authority and charged with the responsibility to make these careful assessments. Second, no proposing or deciding official should be forced into a decisional straitjacket based on what others in comparable situations have done in the past. These prior decisions are not a binding set of precedent, and a different assessment is not a deviation from settled principle imposing a burden of explanation. However, the officials should explain their reasoning, which implicitly or explicitly will distinguish their principled reasoning from that of previous proposals and outcomes. If previous proposals and decisions were to serve as a body of precedent, it logically follows that current proposing and deciding officials would be in many cases constrained or impeded from expressing an accurate assessment (or view) on the matter at hand. Proposing and deciding officials are not administrative agencies or courts. Rather, they are executive branch management officials, responsible for managing their own workforce. Further, mechanistic subservience to what has occurred before could bind a new agency official to penalties that he or she believes to have been too harsh as well as, in some cases, too lenient. Those commenters who have written that this regulation would in some way deprive employees of something of value that they had before overlook that what occurred before not only might have been of little value to an employee against whom an adverse action was taken, but also might have caused them E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 65978 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations to be disadvantaged or harmed by rote obedience to what was done earlier. That said, as the agency endowed with authority conferred by Congress and the President to make personnel policy through notice-and-comment regulation, and after having reviewed and considered the comments and decisional law to date, OPM decided to change the proposed regulatory text. The better approach is to change the proposed regulatory language to recognize that the decisions of similarly situated agency officials might be useful to a current decisionmaker, though not constraining. Accordingly, we are modifying the regulation somewhat to read ‘‘Appropriate comparators ‘primarily’ are individuals in the same work unit . . . .’’ We are also adding language to clarify that proposing and deciding officials are not bound by previous decisions, but should consider them, as the proposing and deciding officials, in their sole and exclusive discretion. This approach is consistent with current decisional law set forth recently in Miskill, an outgrowth of earlier decisions. OPM does not intend to and is not upending existing decisional law but is filling a regulatory void in exercise of its policy and legal authority. We are placing the focus where most appropriate. Here, it is management officials who bear the burden of managing their workforce and who are solely accountable to their superiors and agency heads for effectiveness, efficiency, productivity and the morale of their work unit. Along with this responsibility, they must be allowed to choose to implement a different approach from predecessors or peers to achieve that goal. The rule in no way detracts from the rights of or harms employees against whom an adverse action is initiated. A commenter discussed the 2018 GAO report in reference to guidance for agencies on penalty determination. According to the commenter, GAO reported that Federal agencies formally discipline approximately 17,000 employees annually. The commenter stated that agency officials interviewed by GAO reported that they were unfamiliar with the disciplinary process, had inadequate training, or received inadequate support from human resource offices. GAO recommended improved guidance to supervisors and human relations staff along with improved quality of data on misconduct. Note that OPM provides guidance to agencies through its accountability toolkit, which includes some of the key practices and lessons learned discussed in the GAO report. OPM frequently VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 communicates these strategies and approaches to the Federal community through the OPM website and ongoing outreach to agencies. As discussed above, on October 10, 2019, OPM issued a memorandum to agencies entitled ‘‘Guidance on Progressive Discipline and Tables of Penalties.’’ Regarding data on misconduct, it is not feasible to collect instances of misconduct at an enterprise level given the array of potential types of misconduct that may form the basis for management action. While common types of misconduct exist, such as time-and-attendance infractions, many unique types of misconduct cannot be placed into easily identifiable categories. Instead, agencies should address the unique aspects of each instance of misconduct and tailor discipline to the specific situation. Moreover, Section 6 of E.O. 13839 requires agencies to report the frequency or timeliness with which various types of penalties for misconduct are imposed (e.g., how many written reprimands, how many adverse actions broken down by type, including removals, suspensions, and reductions in grade or pay, removals, and how many suspensions). OPM believes that agencies will find value in collecting such data by providing each agency an enterprise-wide view of employee accountability. Moreover, the final rule at § 752.202 (f) adds language stating that a suspension should not be a substitute for removal in circumstances in which removal would be appropriate. Agencies should not require that an employee have previously been suspended or demoted before a proposing official may propose removal, except as may be appropriate under applicable facts. An agency suggested adding ‘‘more’’ before ‘‘appropriate’’ in the first sentence of § 752.202(f). The agency stated that as written, the language could be read as requiring removal even if suspension would be more appropriate. OPM disagrees and will not adopt the recommended revision. The language is clear as written. The penalty for an instance of misconduct should be tailored to the facts and circumstances of each case. If the facts and circumstances of a case warrant removal, an agency should not substitute a suspension. We emphasize again that there is no substitute for managers thinking independently and carefully about each incident as it arises, and, as appropriate, proposing or deciding the best penalty to fit the circumstances. PO 00000 Frm 00040 Fmt 4701 Sfmt 4700 Section 752.203 Procedures Section 752.203(b) discusses the requirements for a proposal notice issued under this subpart. This section provides that the notice of proposed action must state the specific reason(s) for the proposed action and inform the employee of his or her right to review the material which is relied on to support the reasons for action given in the notice. The final rule includes language that the notice must also provide detailed information with respect to any right to appeal the action pursuant to Public Law 115–91 section 1097(b)(2)(A); specifically, the forums in which the employee may file an appeal, and any limitations on the rights of the employee that would apply because of the forum in which the employee decides to file. This additional language implements the requirement within Public Law 115–91 section 1097(b)(2)(A), which mandates that this information be included in any proposal notice provided to an employee under 5 U.S.C. 7503(b)(1), 7513(b)(1), or 7543(b)(1). In relation to this provision of the proposed rule, OPM received several comments. A national union recommended that OPM revise § 752.203(b) to add ‘‘and any other material relevant to the action’’ to the end of the sentence requiring that agencies inform the employee of his or her right to review the material relied upon to support the reasons for action given in the notice. To support its recommendation, the union gave an example of a scenario wherein there are conflicting witness statements in an investigative report and the agency provides only the statements that it relied upon to propose action. The union believes that in such a scenario, the agency should be obligated to provide all witness statements, including those not relied upon to propose the action. The union’s recommended change does not conform to the statute, which requires only that agencies provide employees with materials relied upon to support the action upon request. A management association provided comments explaining that one of their members agrees with including more detailed information with respect to appeal rights. The commenting manager cited the benefits to an employee becoming aware of available options before the decision letter thus enabling them to seek legal counsel at an early stage if necessary. As noted above in § 752.103, an agency raised a concern about including appeal rights information in the notice E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations of proposed action. The agency suggested that OPM revise the second sentence of § 752.203(b) to read ‘‘. . . provides, pursuant to section 1097(b)(2)(A) of Public Law 115–91, notice of any right to appeal . . . .’’ OPM will not accept the suggested change but will offer some clarification. The requirement to provide the appeal rights information at the proposal notice stage is a statutory requirement under section 1097(b)(2)(A) of Public Law 115–91. Part 752 is amended in part to effectuate the statute, which requires that a notice of proposed action under subparts B, D and F include detailed information about any right to appeal any action upheld, the forum in which the employee may file an appeal, and any limitations on the rights of the employee that would apply because of the forum in which the employee decides to file. This regulatory change does not confer on an employee a right to seek redress at the proposal stage that an employee did not have previously. As the abovereferenced commenter notes, this information may assist employees with regard to decisions such as whether he or she may want to seek representation. While there are specific circumstances where there may be a cause of action at the proposal stage, such as when an employee alleges that a proposed action constitutes retaliation for previous whistleblower activity, an employee would generally not have a colorable claim under any of the venues discussed in the appeal rights section unless and until a decision was issued that conferred such rights on the employee. OPM would further clarify that the appeal rights language included at the proposal stage specifically relating to choice of forum and limitations related to an employee’s choice of forum will vary depending on circumstances, the nature of a claim and the type of employee. Appeal rights may include but are not be limited to filing an Equal Employment Opportunity complaint with the Equal Employment Opportunity Commission; a prohibited personnel practice complaint with the U.S. Office of Special Counsel (OSC); a grievance under a negotiated grievance procedure; or an appeal with the Merit Systems Protection Board. Each process has different requirements and standards that must be satisfied. Meanwhile, the extent to which a choice of venue may preclude subsequent pursuit of a claim in a different venue will be determined by a statutory patchwork that includes 5 U.S.C. 7121 and 5 U.S.C. 7702. OPM does not view the addition of procedural appeal rights language in the VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 regulation to constitute a requirement to provide substantive legal guidance at the proposal stage or to serve as a substitute for the advice from an employee’s representative. Given this, as well as the divergent circumstances and individualized nature of any particular adverse action, agencies are encouraged and advised to consult closely with their agency counsel to develop the best course of action for implementation of this requirement. Employees are encouraged to consult with their representatives to determine the best options available to them at the proposal and/or decision stage if an employee believes that an agency has taken an action which triggers the right to file a complaint, an appeal or a grievance. Finally, the language in § 752.203(h) establishes the same requirement that is detailed in the final rule changes at § 432.108, Settlement agreements. See discussion in § 432.108. Subpart D—Regulatory Requirements for Removal, Suspension for More Than 14 Days, Reduction in Grade or Pay, or Furlough for 30 Days or Less This subpart addresses the procedural requirements for removals, suspensions for more than 14 days, including indefinite suspensions, reductions in grade, reductions in pay, and furloughs of 30 days or less for covered employees. Section 752.401 Coverage Pursuant to the creation of subpart A within the final rule, § 752.401(b)(14) reflects an exclusion for actions taken under 5 U.S.C. 7515. Section 752.401(c) identifies employees covered by this subpart. The final rule at § 752.401(c)(2) updates coverage to include an employee in the competitive service who is not serving a probationary or trial period under an initial appointment or, except as provided in section 1599e of title 10, United States Code, who has completed 1 year of current continuous service under other than a temporary appointment limited to 1 year or less. This language has been updated to align with 5 U.S.C. 7511(a)(1)(A)(ii). Section 752.402 Definitions The final rule includes a definition for the term ‘‘business day.’’ This addition is necessary to implement the 15business day decision period described in E.O. 13839. Section 752.403 Standard for Action and Penalty Determination As with the rule changes finalized for § 752.202, the standard for action under PO 00000 Frm 00041 Fmt 4701 Sfmt 4700 65979 this subpart remains unchanged and incorporates a penalty determination based on the principles of E.O. 13839. One commenter recommended changing § 752.403(d) to add to the end ‘‘Differences in penalties between similarly situated employees must depend on specific factual difference between those employees. To the greatest extent practicable, agencies must document and explain these differences in the record to defend against later allegations of disparate penalties.’’ In support of his position, the commenter cites Lewis v. Department of Veterans Affairs, 111 M.S.P.R. 388, 391 (2009) and quotes the decision whereby an agency must prove a legitimate reason for the difference in treatment by a preponderance of evidence if an employee raises an allegation of disparate penalties in comparison to specified employees. OPM will not adopt the recommended change as it is unnecessary. Please see discussion in § 752.202 for further details. The final rule at § 752.403 also adds paragraph (f) which states that a suspension or a reduction in pay or grade should not be a substitute for removal in circumstances in which removal would be appropriate. Agencies should not require that an employee have previously been suspended or reduced in pay or grade before a proposing official may propose removal, except as may be appropriate under applicable facts. A management association concurred with OPM that a demotion or suspension should not be substituted for removal when removal is appropriate. The association reasoned that such a substitution will not fix the underlying problem. As the association did not recommend any changes, none will be made based on this comment. An agency suggested adding ‘‘more’’ before ‘‘appropriate’’ in the first sentence of 752.403(f). The agency stated that as written, the language could be read as requiring removal even if suspension would be more appropriate. For the reasons discussed in § 752.202, OPM will not adopt the revision. Section 752.404 Procedures Section 752.404(b) discusses the requirements for a notice of proposed action issued under this subpart. In particular, § 752.404(b)(1) provides that, to the extent an agency, in its sole and exclusive discretion deems practicable, agencies should limit written notice of adverse actions taken under this subpart to the 30 days prescribed in 5 U.S.C. E:\FR\FM\16OCR2.SGM 16OCR2 jbell on DSKJLSW7X2PROD with RULES2 65980 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations 7513(b)(1). Any notice period greater than 30 days must be reported to OPM. In reference to § 752.404(b)(1) regarding notice periods, a national union stated that ‘‘OPM cannot unilaterally take a negotiable topic off the bargaining table, as this subsection would do.’’ We disagree. In fact, the Statute recognizes situations where bargaining would not extend to matters that are the subject of Federal law or Government-wide rule or regulation; see 5 U.S.C. 7117(a)(1). And while commenters may disagree, as a matter of policy, with the subjects the President has determined are sufficiently important for inclusion in an Executive Order and Federal regulation, it is well established that the President has the authority to make this determination and that OPM regulations issued pursuant to this authority constitute Government-wide rules under Section 7117(a)(1) for the purpose of foreclosing bargaining. See NTEU v. FLRA, 30 F.3d 1510, 1514–16 (D.C. Cir. 1994). The final rule also includes the requirement that the notice must provide detailed information with respect to any right to appeal the action pursuant to Public Law 115–91 section 1097(b)(2)(A); specifically, the forums in which the employee may file an appeal, and any limitations on the rights of the employee that would apply because of the forum in which the employee decides to file. This additional language implements the requirement in Public Law 115–91 section 1097(b)(2)(A), which mandates that this information be included in any proposal notice provided to an employee under 5 U.S.C. 7503(b)(1), 7513(b)(1), or 7543(b)(1). As noted above, an agency voiced concern about including appeal rights information in the notice of proposed action. The agency recommended modifying § 752.404(b)(1) to read ‘‘The notice must further include, pursuant to section 1097(b)(2)(A) of Public Law 155–91, detailed information with respect to any right to appeal . . . .’’ For the reasons discussed above in § 752.203, OPM will not accept the suggested change. The final rule at § 752.404(b)(3)(iv) also discusses the provisions of 5 U.S.C. 6329b, the Administrative Leave Act of 2016, related to placing an employee in a paid non-duty status during the advance notice period. An agency stated that the rule is silent on an agency’s authorization to use administrative leave for the duration of the notice period (i.e., 30 days), which would be in excess of the 10 days per year limitation under 5 U.S.C. 6329a. The agency asked for clarification on the authority by which agencies may or may not use VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 administrative leave for the duration of the notice period until notice leave regulations are implemented. Until OPM has published the final regulation for 5 U.S.C. 6329b and after the conclusion of the agency implementation period, in those rare circumstances where the agency determines that the employee’s continued presence in the workplace during the notice period may pose a threat to the employee or others, result in loss of or damage to Government property, or otherwise jeopardize legitimate Government interests, an agency will continue to have as an alternative the ability to place an employee in a paid non-duty status for such time to effect the action. Thereafter, an agency may use the provisions of 5 U.S.C. 6329b as applicable. An individual commented that the rule appears to be incorrect in stating that an agency may place an employee in a notice leave status ‘‘after conclusion of the agency implementation period.’’ The commenter stated that the subpart needs to be modified to reflect ‘‘investigative leave.’’ We note that the rule addresses the notice of proposed action, which would be subsequent to the investigation. Investigative leave would be an inappropriate status during the notice period. The ‘‘implementation period’’ refers to the statutory requirement that agencies, not later than 270 calendar days after the publication date of OPM regulations effectuating 5 U.S.C. 6329b, must revise and implement the internal policies of the agency to meet the notice leave requirements. See 5 U.S.C. 6329b(h)(2). Finally, the final rule at § 752.404(g) discusses the requirements for an agency decision issued under this subpart. Specifically, the final rule at § 752.404(g)(3) includes new language that, to the extent practicable, an agency should issue the decision on a proposed removal under this subpart within 15 business days of the conclusion of the employee’s opportunity to respond to reflect a key principle of E.O. 13839. An agency expressed support for the timely handling of adverse actions and added that the regulatory amendments will discourage unreasonable delays for both employees and supervisors. The agency cautioned that human resources staffs will need to have sufficient resources to assist supervisors in meeting the 15-business day limit. The agency recommended that OPM clarify in the final rule what will happen in the event an agency does not comply with the time limitation set by the rule as well as the consequence for the employee and/or manager that does not PO 00000 Frm 00042 Fmt 4701 Sfmt 4700 meet the deadline. OPM concurs that the regulatory changes will discourage unreasonable delays. OPM believes the recommended modification is unnecessary. The regulatory amendment states that agencies are to issue decisions on proposed removals within 15 business days, to the extent practicable. The purpose of the change is to facilitate an agency’s ability to resolve adverse actions in a timely manner. To the extent an agency fails to exercise its authority to act promptly, the agency risks retaining a subpar or unfit employee longer than necessary. Two national unions objected to limiting advance notice of an adverse action to 30 days. One of the unions objected further to requiring agencies to report to OPM the number of adverse actions for which employees receive written notice in excess of 30 days. Claiming that the requirements are unsupported by facts and counterproductive, the union stated that the regulations will hinder the efficient resolution of cases prior to litigation by curtailing the time in which an agency and employee might reach an alternative resolution. The union called for the limitation to be withdrawn. The other union asserted that due process violations could result if agencies rush the time to respond or give an employee too little time to respond in such circumstances as voluminous materials to review or a personal emergency. The union asserted the limited time frame for an employee to respond to a proposed disciplinary action is contrary to the due process protections of the Constitution. Citing Loudermill and Stone v. Federal Deposit Insurance Corporation, 179 F.3d 1368, 1376 (Fed. Cir. 1999), the union noted that an employee must be given a meaningful opportunity to respond and invoke the discretion of the deciding official. In addition, an organization discussed the various tasks such as securing counsel, drafting affidavits and interviewing witnesses that may impact an employee’s ability or time to respond to a proposed action. The organization expressed concern that limiting the written notice of an adverse action to the 30 days prescribed in 5 U.S.C. 7513(b)(1) in turn limits the opportunity for identification of evidence and rushes management into hasty decisions. The organization objected to a cap on the response period or a limit on an agency’s discretion to extend the notice period or implement the adverse action. The organization believes that agencies should retain discretion to go beyond 30 days for a decision when requested by the employee for good reason. The organization added that the existing E:\FR\FM\16OCR2.SGM 16OCR2 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations system works satisfactorily, and agencies are not prejudiced given that they are in control of the length of any extension. OPM will not make any revisions based on these comments. The regulatory changes effectuate the principles and requirements of E.O. 13839, including swift and appropriate action when addressing misconduct. These changes facilitate timely resolution of adverse actions while preserving employee rights provided under the law. Section 752.407 Settlement Agreements The language in this section establishes the same requirement that is detailed in the final rule changes at § 432.108, Settlement agreements. See discussion regarding § 432.108 above. Subpart F—Regulatory Requirements for Taking Adverse Actions Under the Senior Executive Service This subpart addresses the procedural requirements for suspensions for more than 14 days and removals from the civil service as set forth in 5 U.S.C. 7542. A management association commented that it does not see much difference between SES and the rest of the workforce in this situation. OPM will not adopt any revisions based on this comment as none were requested. Section 752.601 Coverage Pursuant to the creation of subpart A within the final rule, § 752.601(b)(2) reflects an exclusion for actions taken under 5 U.S.C. 7515. Section 752.602 Definitions The final rule includes a definition for the term ‘‘business day.’’ This addition is necessary to implement the 15business day decision period described in E.O. 13839. jbell on DSKJLSW7X2PROD with RULES2 Section 752.603 Standard for Action and Penalty Determination As with the final rule changes for §§ 752.202 and 752.403, the standard for action under this subpart remains unchanged and incorporates a penalty determination based on the principles of E.O. 13839. In addition, the proposed rule at § 752.603 adds paragraph (f) which states that a suspension or a reduction in pay or grade should not be a substitute for removal in circumstances in which removal would be appropriate. Agencies should not require that an employee have previously been suspended or reduced in pay or grade before a proposing official may propose removal, except as VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 may be appropriate under applicable facts. Please see discussion in §§ 752.202 and 752.403. Section 752.604 Procedures Section 752.604(b) discusses the requirements for a notice of proposed action issued under this subpart. We have revised the language in this subpart to be consistent with the advance notice period for general schedule employees. Specifically, § 752.604(b)(1) provides that, to the extent an agency, in its sole and exclusive discretion deems practicable, agencies should limit written notice of adverse actions taken under this subpart to the 30 days prescribed in 5 U.S.C. 7543(b)(1). Any notice period greater than 30 days must be reported to OPM. The final rule also includes additional language that the notice must provide detailed information with respect to any right to appeal the action pursuant to Pub. L. 115–91 section 1097(b)(2)(A); specifically, the forums in which the employee may file an appeal, and any limitations on the rights of the employee that would apply because of the forum in which the employee decides to file. This additional language implements the requirement within Public Law 115– 91 section 1097(b)(2)(A), which mandates that this information be included in any proposal notice provided to an employee under 5 U.S.C. 7503(b)(1), 7513(b)(1), or 7543(b)(1). As previously discussed, an agency recommended modifying the regulatory language regarding advance notice of appeal rights information at the proposal stage. Specifically, the agency recommended changing § 752.604(b)(1) to read ‘‘The notice must further include, pursuant to section 1097(b)(2)(A) of Public Law 155–91, detailed information with respect to any right to appeal . . .’’ For the reasons discussed in § 752.203, OPM will not adopt the recommendation. The final rule at § 752.604(b)(2)(iv) also discusses the provisions of 5 U.S.C. 6329b, the Administrative Leave Act of 2016, related to placing an employee in a paid non-duty status during the advance notice period. However, as noted above, until OPM has published the final regulation for 5 U.S.C. 6329b, and after conclusion of the agency implementation period, in those rare circumstances where the agency determines that the employee’s continued presence in the workplace during the notice period may pose a threat to the employee or others, result in loss of or damage to Government property, or otherwise jeopardize legitimate Government interests, an PO 00000 Frm 00043 Fmt 4701 Sfmt 4700 65981 agency will continue to have as an alternative the ability to place an employee in a paid, nonduty status for such time to effect the action. Thereafter, an agency may use the provisions of 5 U.S.C. 6329b as applicable. Finally, the final rule at § 752.604(g) discusses the requirements for an agency decision issued under this subpart. Specifically, the final rule at § 752.604(g)(3) includes new language that, to the extent practicable, an agency should issue the decision on a proposed removal under this subpart within 15 business days of the conclusion of the employee’s opportunity to respond to reflect one of the key principles of E.O. 13839. Please see also the discussion in §§ 752.203 and 752.404. Section 752.607 Agreements Settlement The language in this section establishes the same requirement that is detailed in the final rule changes at §§ 432.108, 752.203 and 752.407. Please see discussion regarding § 432.108 above. Technical Amendment This final rule makes ‘‘forum’’ plural in § 752.203(b). Regulatory Flexibility Act I certify that this regulation will not have a significant impact on a substantial number of small entities because it applies only to Federal agencies and employees. E.O. 13563 and E.O. 12866, Regulatory Review Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has not been designated a ‘‘significant regulatory action,’’ under Executive Order 12866. Executive Order 13771, Reducing Regulation and Controlling Regulatory Costs This proposed rule is not expected to be subject to the requirements of E.O. 13771 (82 FR 9339, February 3, 2017) E:\FR\FM\16OCR2.SGM 16OCR2 65982 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations because this rule is not significant under 12866. E.O. 13132, Federalism This regulation will not have substantial direct effects on the States, on the relationship between the National Government and the States, or on distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to warrant preparation of a Federalism Assessment. E.O. 12988, Civil Justice Reform This regulation meets the applicable standard set forth in Section 3(a) and (b)(2) of Executive Order 12988. Unfunded Mandates Reform Act of 1995 This rule will not result in the expenditure by State, local or tribal governments of more than $100 million annually. Thus, no written assessment of unfunded mandates is required. Congressional Review Act This action pertains to agency management, personnel and organization and does not substantially affect the rights or obligations of nonagency parties and, accordingly, is not a ‘rule’ as that term is used by the Congressional Review Act (Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)). Therefore, the reporting requirement of 5 U.S.C. 801 does not apply. Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35) This regulatory action will not impose any additional reporting or recordkeeping requirements under the Paperwork Reduction Act. List of Subjects in 5 CFR Parts 315, 432 and 752 Government employees. Office of Personnel Management. Alexys Stanley, Regulatory Affairs Analyst. jbell on DSKJLSW7X2PROD with RULES2 Accordingly, for the reasons stated in the preamble, OPM amends 5 CFR parts 315, 432, and 752 as follows: PART 315–CAREER AND CAREER– CONDITIONAL EMPLOYMENT E.O. 13162, and E.O. 13839. Secs. 315.601 and 315.609 also issued under 22 U.S.C. 3651 and 3652. Secs. 315.602 and 315.604 also issued under 5 U.S.C. 1104. Sec. 315.603 also issued under 5 U.S.C. 8151. Sec. 315.605 also issued under E.O. 12034, 3 CFR, 1978 Comp. p.111. Sec. 315.606 also issued under E.O. 11219, 3 CFR, 1964–1965 Comp. p. 303. Sec. 315.607 also issued under 22 U.S.C. 2506. Sec. 315.608 also issued under E.O. 12721, 3 CFR, 1990 Comp. p. 293. Sec. 315.610 also issued under 5 U.S.C. 3304(c). Sec. 315.611 also issued under 5 U.S.C. 3304(f). Sec. 315.612 also issued under E.O. 13473. Sec. 315.708 also issued under E.O.13318, 3 CFR, 2004 Comp. p. 265. Sec. 315.710 also issued under E.O. 12596, 3 CFR, 1987 Comp. p. 229. Subpart I also issued under 5 U.S. C. 3321, E.O. 12107, 3 CFR, 1978 Comp. p. 264. Subpart H–Probation on Initial Appointment to a Competitive Position 2. Revise § 315.803(a) to read as follows: ■ § 315.803 Agency action during probationary period (general). (a) The agency shall utilize the probationary period as fully as possible to determine the fitness of the employee and shall terminate his or her services during this period if the employee fails to demonstrate fully his or her qualifications for continued employment. The agency must notify its supervisors that an employee’s probationary period is ending three months prior to the expiration of an employee’s probationary period, and then again one month prior to the expiration of the probationary period, and advise a supervisor to make an affirmative decision regarding an employee’s fitness for continued employment or otherwise take appropriate action. For example, if an employee’s probationary period ends on August 15, 2020, the agency must notify the employee’s supervisor on May 15, 2020, and then again on July 15, 2020. If the 3-month and 1-month dates fall on a holiday or weekend, agencies must provide notification on the last business day before the holiday or weekend. * * * * * PART 432—PERFORMANCE BASED REDUCTION IN GRADE AND REMOVAL ACTIONS 3. Revise the authority citation for part 432 to read as follows: ■ Authority: 5 U.S.C. 4303, 4305. ■ 1. Revise the authority citation for part 315 to read as follows: * * * * ■ 4. Amend § 432.103 by revising paragraph (g) to read as follows: Authority: 5 U.S.C. 1302, 2301, 2302, 3301, and 3302; E.O. 10577, 3 CFR, 1954– 1958 Comp. p. 218, unless otherwise noted; § 432.103 VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 * * PO 00000 * Definitions. * Frm 00044 * Fmt 4701 * Sfmt 4700 (g) Similar positions mean positions in which the duties performed are similar in nature and character and require substantially the same or similar qualifications, so that the incumbents could be interchanged without significant training or undue interruption to the work. * * * * * ■ 5. Revise § 432.104 to read as follows: § 432.104 Addressing unacceptable performance. At any time during the performance appraisal cycle that an employee’s performance is determined to be unacceptable in one or more critical elements, the agency shall notify the employee of the critical element(s) for which performance is unacceptable and inform the employee of the performance requirement(s) or standard(s) that must be attained in order to demonstrate acceptable performance in his or her position. The agency should also inform the employee that unless his or her performance in the critical element(s) improves to and is sustained at an acceptable level, the employee may be reduced in grade or removed. For each critical element in which the employee’s performance is unacceptable, the agency shall afford the employee a reasonable opportunity to demonstrate acceptable performance, commensurate with the duties and responsibilities of the employee’s position. The requirement described in 5 U.S.C. 4302(c)(5) refers only to that formal assistance provided during the period wherein an employee is provided with an opportunity to demonstrate acceptable performance, as referenced in 5 U.S.C. 4302(c)(6). The nature of assistance provided is in the sole and exclusive discretion of the agency. No additional performance assistance period or similar informal period shall be provided prior to or in addition to the opportunity period provided under this section. ■ 6. Amend § 432.105 by revising paragraphs (a)(1), (a)(4)(i)(B)(3) and (4) and paragraph (a)(4)(i)(C) to read as follows: § 432.105 Proposing and taking action based on unacceptable performance. (a) * * * (1) Once an employee has been afforded a reasonable opportunity to demonstrate acceptable performance pursuant to § 432.104, an agency may propose a reduction-in-grade or removal action if the employee’s performance during or following the opportunity to demonstrate acceptable performance is unacceptable in one or more of the critical elements for which the E:\FR\FM\16OCR2.SGM 16OCR2 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations employee was afforded an opportunity to demonstrate acceptable performance. For the purposes of this section, the agency’s obligation to provide assistance, under 5 U.S.C. 4302(c)(5), may be discharged through measures, such as supervisory assistance, taken prior to the beginning of the opportunity period in addition to measures taken during the opportunity period. The agency must take some measures to provide assistance during the opportunity period in order to both comply with section 4302(c)(5) and provide an opportunity to demonstrate acceptable performance under 4302(c)(6). * * * * * (4) * * * (i) * * * (B) * * * (3) To consider the employee’s answer if an extension to the period for an answer has been granted (e.g., because of the employee’s illness or incapacitation); (4) To consider reasonable accommodation of a disability; * * * * * (C) If an agency believes that an extension of the advance notice period is necessary for another reason, it may request prior approval for such extension from the Manager, Employee Accountability, Accountability and Workforce Relations, Employee Services, Office of Personnel Management, 1900 E Street NW, Washington, DC 20415. * * * * * ■ 7. Revise § 432.106(b)(1) to read as follows: § 432.106 Appeal and grievance rights. * * * * * (b) Grievance rights. (1) A bargaining unit employee covered under § 432.102(e) who has been removed or reduced in grade under this part may file a grievance under an applicable negotiated grievance procedure if the removal or reduction in grade action falls within its coverage (i.e., is not excluded by the parties to the collective bargaining agreement) and the employee is: * * * * * ■ 8. Revise § 432.107(b) to read as follows: jbell on DSKJLSW7X2PROD with RULES2 § 432.107 Agency records. * * * * * (b) When the action is not effected. As provided at 5 U.S.C. 4303(d), if, because of performance improvement by the employee during the notice period, the employee is not reduced in grade or removed, and the employee’s VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 performance continues to be acceptable for one year from the date of the advanced written notice provided in accordance with § 432.105(a)(4)(i), any entry or other notation of the unacceptable performance for which the action was proposed shall be removed from any agency record relating to the employee. ■ 9. Add § 432.108 to read as follows: § 432.108 Settlement agreements. (a) Agreements to alter personnel records. An agency shall not agree to erase, remove, alter, or withhold from another agency any information about a civilian employee’s performance or conduct in that employee’s official personnel records, including an employee’s Official Personnel Folder and Employee Performance File, as part of, or as a condition to, resolving a formal or informal complaint by the employee or settling an administrative challenge to an adverse action. (b) Corrective action based on discovery of agency error. The requirements described in paragraph (a) of this section should not be construed to prevent agencies from taking corrective action should it come to light, including during or after the issuance of an adverse personnel action, that the information contained in a personnel record is not accurate or records an action taken by the agency illegally or in error. In such cases, an agency would have the authority, unilaterally or by agreement, to modify an employee’s personnel record(s) to remove inaccurate information or the record of an erroneous or illegal action. An agency may take such action even if an appeal/complaint has been filed relating to the information that the agency determines to be inaccurate or to reflect an action taken illegally or in error. In all events, however, the agency must ensure that it removes only information that the agency itself has determined to be inaccurate or to reflect an action taken illegally or in error. And an agency should report any agreements relating to the removal of such information as part of its annual report to the OPM Director required by section 6 of E.O. 13839. Documents subject to withdrawal or modification could include, for example, an SF–50 issuing a disciplinary or performance-based action, a decision memorandum accompanying such action, or an employee performance appraisal. (c) Corrective action based on discovery of material information prior to final agency action. When persuasive evidence comes to light prior to the issuance of a final agency decision on an adverse personnel action casting PO 00000 Frm 00045 Fmt 4701 Sfmt 4700 65983 doubt on the validity of the action or the ability of the agency to sustain the action in litigation, an agency may decide to cancel or vacate the proposed action. Additional information may come to light at any stage of the process prior to final agency decision including during an employee response period. To the extent an employee’s personnel file or other agency records contain a proposed action that is subsequently cancelled, an agency would have the authority to remove that action from the employee’s personnel file or other agency records. The requirements described in paragraph (a) of this section would, however, continue to apply to any accurate information about the employee’s conduct leading up to that proposed action or separation from Federal service. PART 752—ADVERSE ACTIONS Subpart A—Discipline of Supervisors Based on Retaliation Against Whistleblowers Subpart B—Regulatory Requirements for Suspension for 14 Days or Less Sec. 752.201 Coverage. 752.202 Standard for action and penalty determination. 752.203 Procedures. Subpart C [Reserved] Subpart D—Regulatory Requirements for Removal, Suspension for More Than 14 Days, Reduction in Grade or Pay, or Furlough for 30 Days or Less Sec. 752.401 Coverage. 752.402 Definitions. 752.403 Standard for action and penalty determination. 752.404 Procedures. 752.405 Appeal and grievance rights. 752.406 Agency records. 752.407 Settlement agreements. Subpart E [Reserved] Subpart F—Regulatory Requirements for Taking Adverse Actions Under the Senior Executive Service Sec. 752.601 Coverage. 752.602 Definitions. 752.603 Standard for action and penalty determination. 752.604 Procedures. 752.605 Appeal rights. 752.606 Agency records. 752.607 Settlement agreements. 10. Revise the authority citation for part 752 to read as follows: ■ Authority: 5 U.S.C. 7504, 7514, and 7543, Pub. L. 115–91. 11. Add subpart A to part 752 to read as follows: ■ E:\FR\FM\16OCR2.SGM 16OCR2 65984 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations Subpart A —Discipline of Supervisors Based on Retaliation Against Whistleblowers Sec. 752.101 Coverage. 752.102 Standard for action and penalty determination. 752.103 Procedures. 752.104 Settlement agreements. § 752.101 Coverage. (a) Adverse actions covered. This subpart applies to actions taken under 5 U.S.C. 7515. (b) Definitions. In this subpart— Agency— (1) Has the meaning given the term in 5 U.S.C. 2302(a)(2)(C), without regard to whether any other provision of this chapter is applicable to the entity; and (2) Does not include any entity that is an element of the intelligence community, as defined in section 3 of the National Security Act of 1947 (50 U.S.C. 3003). Business day means any day other than a Saturday, Sunday, or legal public holiday under 5 U.S.C. 6103(a). Day means a calendar day. Grade means a level of classification under a position classification system. Insufficient evidence means evidence that fails to meet the substantial evidence standard described in 5 CFR 1201.4(p). Pay means the rate of basic pay fixed by law or administrative action for the position held by the employee, that is, the rate of pay before any deductions and exclusive of additional pay of any kind. Prohibited personnel action means taking or failing to take an action in violation of paragraph (8), (9), or (14) of 5 U.S.C. 2302(b) against an employee of an agency. Supervisor means an employee who would be a supervisor, as defined in 5 U.S.C. 7103(a)(10), if the entity employing the employee was an agency. Suspension means the placing of an employee, for disciplinary reasons, in a temporary status without duties and pay. jbell on DSKJLSW7X2PROD with RULES2 § 752.102 Standard for action and penalty determination. (a) Except for actions taken against supervisors covered under subchapter V of title 5, an agency may take an action under this subpart for such cause as will promote the efficiency of the service as described in 5 U.S.C. 7503(a) and 7513(a). For actions taken under this subpart against supervisors covered under subchapter V of title 5, an agency may take an action based on the standard described in 5 U.S.C. 7543(a). (b) Subject to 5 U.S.C. 1214(f), if the head of the agency in which a VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 supervisor is employed, an administrative law judge, the Merit Systems Protection Board, the Special Counsel, a judge of the United States, or the Inspector General of the agency in which a supervisor is employed has determined that the supervisor committed a prohibited personnel action, the head of the agency in which the supervisor is employed, consistent with the procedures required under this subpart— (1) For the first prohibited personnel action committed by the supervisor— (i) Shall propose suspending the supervisor for a period that is not less than 3 days; and (ii) May propose an additional action determined appropriate by the head of the agency, including a reduction in grade or pay; and (2) For the second prohibited personnel action committed by the supervisor, shall propose removing the supervisor. § 752.103 Procedures. (a) Non-delegation. If the head of an agency is responsible for determining whether a supervisor has committed a prohibited personnel action for purposes of § 752.102(b), the head of the agency may not delegate that responsibility. (b) Scope. An action carried out under this subpart— (1) Except as provided in paragraph (b)(2) of this section, shall be subject to the same requirements and procedures, including those with respect to an appeal, as an action under 5 U.S.C. 7503, 7513, or 7543; and (2) Shall not be subject to— (i) Paragraphs (1) and (2) of 5 U.S.C. 7503(b); (ii) Paragraphs (1) and (2) of subsection (b) and subsection (c) of 5 U.S.C. 7513; and (iii) Paragraphs (1) and (2) of subsection (b) and subsection (c) of 5 U.S.C. 7543. (c) Notice. A supervisor against whom an action is proposed to be taken under this subpart is entitled to written notice that— (1) States the specific reasons for the proposed action; (2) Informs the supervisor about the right of the supervisor to review the material that is relied on to support the reasons given in the notice for the proposed action; and (d) Answer and evidence. (1) A supervisor who receives notice under paragraph (c) of this section may, not later than 14 days after the date on which the supervisor receives the notice, submit an answer and furnish evidence in support of that answer. PO 00000 Frm 00046 Fmt 4701 Sfmt 4700 (2) If, after the end of the 14-day period described in paragraph (d)(1) of this section, a supervisor does not furnish any evidence as described in that clause, or if the head of the agency in which the supervisor is employed determines that the evidence furnished by the supervisor is insufficient, the head of the agency shall carry out the action proposed under § 752.102 (b), as applicable. (3) To the extent practicable, an agency should issue the decision on a proposed removal under this subpart within 15 business days of the conclusion of the employee’s opportunity to respond under paragraph (d)(1) of this section. § 752.104 Settlement agreements. (a) Agreements to alter official personnel records. An agency shall not agree to erase, remove, alter, or withhold from another agency any information about a civilian employee’s performance or conduct in that employee’s official personnel records, including an employee’s Official Personnel Folder and Employee Performance File, as part of, or as a condition to, resolving a formal or informal complaint by the employee or settling an administrative challenge to an adverse action. (b) Corrective action based on discovery of agency error. The requirements described in paragraph (a) of this section should not be construed to prevent agencies from taking corrective action should it come to light, including during or after the issuance of an adverse personnel action, that the information contained in a personnel record is not accurate or records an action taken by the agency illegally or in error. In such cases, the agency would have the authority, unilaterally or by agreement, to modify an employee’s personnel record(s) to remove inaccurate information or the record of an erroneous or illegal action. An agency may take such action even if an appeal/complaint has been filed relating to the information that the agency determines to be inaccurate or to reflect an action taken illegally or in error. In all events, however, the agency must ensure that it removes only information that the agency itself has determined to be inaccurate or to reflect an action taken illegally or in error. And an agency should report any agreements relating to the removal of such information as part of its annual report to the OPM Director required by section 6 of E.O. 13839. Documents subject to withdrawal or modification could include, for example, an SF–50 issuing a disciplinary or performance-based E:\FR\FM\16OCR2.SGM 16OCR2 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations action, a decision memorandum accompanying such action or an employee performance appraisal. (c) Corrective action based on discovery of material information prior to final agency action. When persuasive evidence comes to light prior to the issuance of a final agency decision on an adverse personnel action casting doubt on the validity of the action or the ability of the agency to sustain the action in litigation, an agency may decide to cancel or vacate the proposed action. Additional information may come to light at any stage of the process prior to final agency decision including during an employee response period. To the extent an employee’s personnel file or other agency records contain a proposed action that is subsequently cancelled, an agency would have the authority to remove that action from the employee’s personnel file or other agency records. The requirements described in paragraph (a) of this section would, however, continue to apply to any accurate information about the employee’s conduct leading up to that proposed action or separation from Federal service. ■ 12. In § 752.201, revise paragraphs (c)(4) and (5) and add paragraph (c)(6) to read as follows: § 752.201 Coverage. * * * * * (c) * * * (4) Of a re-employed annuitant; (5) Of a National Guard Technician; or (6) Taken under 5 U.S.C. 7515. * * * * * ■ 13. In § 752.202, revise the section heading and add paragraphs (c) through (f) to read as follows: § 752.202 Standard for action and penalty determination. jbell on DSKJLSW7X2PROD with RULES2 * * * * * (c) An agency is not required to use progressive discipline under this subpart. The penalty for an instance of misconduct should be tailored to the facts and circumstances. In making a determination regarding the appropriate penalty for an instance of misconduct, an agency shall adhere to the standard of proposing and imposing a penalty that is within the bounds of tolerable reasonableness. Within the agency, a proposed penalty is in the sole and exclusive discretion of a proposing official, and a penalty decision is in the sole and exclusive discretion of the deciding official. Penalty decisions are subject to appellate or other review procedures prescribed in law. (d) Employees should be treated equitably. Conduct that justifies discipline of one employee at one time VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 does not necessarily justify similar discipline of a different employee at a different time. An agency should consider appropriate comparators as the agency evaluates a potential disciplinary action. Appropriate comparators to be considered are primarily individuals in the same work unit, with the same supervisor, who engaged in the same or similar misconduct. Proposing and deciding officials are not bound by previous decisions in earlier similar cases, but should, as they deem appropriate, consider such decisions consonant with their own managerial authority and responsibilities and independent judgment. For example, a supervisor is not bound by his or her predecessor whenever there is similar conduct. A minor indiscretion for one supervisor based on a particular set of facts can amount to a more serious offense under a different supervisor. Nevertheless, they should be able to articulate why a more or less severe penalty is appropriate. (e) Among other relevant factors, agencies should consider an employee’s disciplinary record and past work record, including all applicable prior misconduct, when taking an action under this subpart. (f) A suspension should not be a substitute for removal in circumstances in which removal would be appropriate. Agencies should not require that an employee have previously been suspended or demoted before a proposing official may propose removal, except as may be appropriate under applicable facts. ■ 14. Amend § 752.203 by revising paragraph (b) and by adding paragraph (h) to read as follows: § 752.203 Procedures. * * * * * (b) Notice of proposed action. The notice must state the specific reason(s) for the proposed action, and inform the employee of his or her right to review the material which is relied on to support the reasons for action given in the notice. The notice must further include detailed information with respect to any right to appeal the action pursuant to section 1097(b)(2)(A) of Public Law 115–91, the forums in which the employee may file an appeal, and any limitations on the rights of the employee that would apply because of the forum in which the employee decides to file. * * * * * (h) Settlement agreements. (1) An agency shall not agree to erase, remove, alter, or withhold from another agency PO 00000 Frm 00047 Fmt 4701 Sfmt 4700 65985 any information about a civilian employee’s performance or conduct in that employee’s official personnel records, including an employee’s Official Personnel Folder and Employee Performance File, as part of, or as a condition to, resolving a formal or informal complaint by the employee or settling an administrative challenge to an adverse action. (2) The requirements described in paragraph (h)(1) of this section should not be construed to prevent agencies from taking corrective action should it come to light, including during or after the issuance of an adverse personnel action that the information contained in a personnel record is not accurate or records an action taken by the agency illegally or in error. In such cases, an agency would have the authority, unilaterally or by agreement, to modify an employee’s personnel record(s) to remove inaccurate information or the record of an erroneous or illegal action. An agency may take such action even if an appeal/complaint has been filed relating to the information that the agency determines to be inaccurate or to reflect an action taken illegally or in error. In all events, however, the agency must ensure that it removes only information that the agency itself has determined to be inaccurate or to reflect an action taken illegally or in error. And an agency should report any agreements relating to the removal of such information as part of its annual report to the OPM Director required by Section 6 of E.O. 13839. Documents subject to withdrawal or modification could include, for example, an SF–50 issuing a disciplinary or performance-based action, a decision memorandum accompanying such action or an employee performance appraisal. (3) Corrective action based on discovery of material information prior to final agency action. When persuasive evidence comes to light prior to the issuance of a final agency decision on an adverse personnel action casting doubt on the validity of the action or the ability of the agency to sustain the action in litigation, an agency may decide to cancel or vacate the proposed action. Additional information may come to light at any stage of the process prior to final agency decision including during an employee response period. To the extent an employee’s personnel file or other agency records contain a proposed action that is subsequently cancelled, an agency would have the authority to remove that action from the employee’s personnel file or other agency records. The requirements described in paragraph (h)(1) of this section would, however, continue to E:\FR\FM\16OCR2.SGM 16OCR2 65986 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations apply to any accurate information about the employee’s conduct leading up to that proposed action or separation from Federal service. ■ 15. In § 752.401, revise paragraphs (b)(14) and (15), add paragraphs (b)(16) and revise paragraph (c)(2) to read as follows: § 752.401 Coverage. * * * * * (b) * * * (14) Placement of an employee serving on an intermittent or seasonal basis in a temporary nonduty, nonpay status in accordance with conditions established at the time of appointment; (15) Reduction of an employee’s rate of basic pay from a rate that is contrary to law or regulation, including a reduction necessary to comply with the amendments made by Public Law 108– 411, regarding pay-setting under the General Schedule and Federal Wage System and regulations implementing those amendments; or (16) An action taken under 5 U.S.C. 7515. (c) * * * (2) An employee in the competitive service— (i) Who is not serving a probationary or trial period under an initial appointment; or (ii) Except as provided in section 1599e of title 10, United States Code, who has completed one year of current continuous service under other than a temporary appointment limited to one year or less; * * * * * ■ 16. In § 752.402, add the definition for ‘‘Business day’’ in alphabetical order to read as follows: § 752.402 Definitions. * * * * * Business day means any day other than a Saturday, Sunday, or legal public holiday under 5 U.S.C. 6103(a). * * * * * ■ 17. In § 752.403, revise the section heading and add paragraphs (c) through (f) to read as follows: § 752.403 Standard for action and penalty determination. jbell on DSKJLSW7X2PROD with RULES2 * * * * * (c) An agency is not required to use progressive discipline under this subpart. The penalty for an instance of misconduct should be tailored to the facts and circumstances. In making a determination regarding the appropriate penalty for an instance of misconduct, an agency shall adhere to the standard of proposing and imposing a penalty that is within the bounds of tolerable VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 reasonableness. Within the agency, a proposed penalty is in the sole and exclusive discretion of a proposing official, and a penalty decision is in the sole and exclusive discretion of the deciding official. Penalty decisions are subject to appellate or other review procedures prescribed in law. (d) Employees should be treated equitably. Conduct that justifies discipline of one employee at one time does not necessarily justify similar discipline of a different employee at a different time. An agency should consider appropriate comparators as the agency evaluates a potential disciplinary action. Appropriate comparators to be considered are primarily individuals in the same work unit, with the same supervisor, who engaged in the same or similar misconduct. Proposing and deciding officials are not bound by previous decisions in earlier similar cases, but should, as they deem appropriate, consider such decisions consonant with their own managerial authority and responsibilities and independent judgment. For example, a supervisor is not bound by his or her predecessor whenever there is similar conduct. A minor indiscretion for one supervisor based on a particular set of facts can amount to a more serious offense under a different supervisor. Nevertheless, they should be able to articulate why a more or less severe penalty is appropriate. (e) Among other relevant factors, agencies should consider an employee’s disciplinary record and past work record, including all applicable prior misconduct, when taking an action under this subpart. (f) A suspension or a reduction in grade or pay should not be a substitute for removal in circumstances in which removal would be appropriate. Agencies should not require that an employee have previously been suspended or reduced in pay or grade before a proposing official may propose removal, except as may be appropriate under applicable facts. ■ 18. Amend § 752.404 by revising paragraphs (b)(1) and (b)(3)(iv), and adding paragraph (g)(3) to read as follows: § 752.404 Procedures. * * * * * (b) * * * (1) An employee against whom an action is proposed is entitled to at least 30 days’ advance written notice unless there is an exception pursuant to paragraph (d) of this section. However, to the extent an agency in its sole and exclusive discretion deems practicable, PO 00000 Frm 00048 Fmt 4701 Sfmt 4700 agencies should limit a written notice of an adverse action to the 30 days prescribed in section 7513(b)(1) of title 5, United States Code. Advance notices of greater than 30 days must be reported to the Office of Personnel Management. The notice must state the specific reason(s) for the proposed action and inform the employee of his or her right to review the material which is relied on to support the reasons for action given in the notice. The notice must further include detailed information with respect to any right to appeal the action pursuant to section 1097(b)(2)(A) of Public Law 115–91, the forums in which the employee may file an appeal, and any limitations on the rights of the employee that would apply because of the forum in which the employee decides to file. * * * * * (3) * * * (iv) Placing the employee in a paid, nonduty status for such time as is necessary to effect the action. After publication of regulations for 5 U.S.C. 6329b, and the subsequent agency implementation period in accordance with 5 U.S.C. 6329b, an agency may place the employee in a notice leave status when applicable. * * * * * (g) * * * (3) To the extent practicable, an agency should issue the decision on a proposed removal under this subpart within 15 business days of the conclusion of the employee’s opportunity to respond under paragraph (c) of this section. * * * * * ■ 19. Add § 752.407 to read as follows: § 752.407 Settlement agreements. (a) Agreements to alter official personnel records. An agency shall not agree to erase, remove, alter, or withhold from another agency any information about a civilian employee’s performance or conduct in that employee’s official personnel records, including an employee’s Official Personnel Folder and Employee Performance File, as part of, or as a condition to, resolving a formal or informal complaint by the employee or settling an administrative challenge to an adverse action. (b) Corrective action based on discovery of agency error. The requirements described in paragraph (a) of this section should not be construed to prevent agencies from taking corrective action, should it come to light, including during or after the issuance of an adverse personnel action that the information contained in a E:\FR\FM\16OCR2.SGM 16OCR2 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations personnel record is not accurate or records an action taken by the agency illegally or in error. In such cases, an agency would have the authority, unilaterally or by agreement, to modify an employee’s personnel record(s) to remove inaccurate information or the record of an erroneous or illegal action. An agency may take such action even if an appeal/complaint has been filed relating to the information that the agency determines to be inaccurate or to reflect an action taken illegally or in error. In all events, however, the agency must ensure that it removes only information that the agency itself has determined to be inaccurate or to reflect an action taken illegally or in error. And an agency should report any agreements relating to the removal of such information as part of its annual report to the OPM Director required by section 6 of E.O. 13839. Documents subject to withdrawal or modification could include, for example, an SF–50 issuing a disciplinary or performance-based action, a decision memorandum accompanying such action or an employee performance appraisal. (c) Corrective action based on discovery of material information prior to final agency action. When persuasive evidence comes to light prior to the issuance of a final agency decision on an adverse personnel action casting doubt on the validity of the action or the ability of the agency to sustain the action in litigation, an agency may decide to cancel or vacate the proposed action. Additional information may come to light at any stage of the process prior to final agency decision including during an employee response period. To the extent an employee’s personnel file or other agency records contain a proposed action that is subsequently cancelled, an agency would have the authority to remove that action from the employee’s personnel file or other agency records. The requirements described in paragraph (a) of this section would, however, continue to apply to any accurate information about the employee’s conduct leading up to that proposed action or separation from Federal service. 20. Revise § 752.601(b)(2) to read as follows: ■ jbell on DSKJLSW7X2PROD with RULES2 § 752.601 Coverage. * * * * * (b) * * * (2) This subpart does not apply to actions taken under 5 U.S.C. 1215, 3592, 3595, 7532, or 7515. * * * * * VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 21. Amend § 752.602 by adding a definition for ‘‘Business day’’ in alphabetical order to read as follows: ■ § 752.602 Definitions. * * * * * Business day means any day other than a Saturday, Sunday, or legal public holiday under 5 U.S.C. 6103(a). * * * * * ■ 22. In § 752.603, revise the section heading and add paragraphs (c) through (f) to read as follows: § 752.603 Standard for action and penalty determination. * * * * * (c) An agency is not required to use progressive discipline under this subpart. The penalty for an instance of misconduct should be tailored to the facts and circumstances. In making a determination regarding the appropriate penalty for an instance of misconduct, an agency shall adhere to the standard of proposing and imposing a penalty that is within the bounds of tolerable reasonableness. (d) Employees should be treated equitably. Conduct that justifies discipline of one employee at one time does not necessarily justify similar discipline of a different employee at a different time. An agency should consider appropriate comparators as the agency evaluates a potential disciplinary action. Appropriate comparators to be considered are primarily individuals in the same work unit, with the same supervisor, who engaged in the same or similar misconduct. Proposing and deciding officials are not bound by previous decisions in earlier similar cases, but should, as they deem appropriate, consider such decisions consonant with their own managerial authority and responsibilities and independent judgment. For example, a supervisor is not bound by his or her predecessor whenever there is similar conduct. A minor indiscretion for one supervisor based on a particular set of facts can amount to a more serious offense under a different supervisor. Nevertheless, they should be able to articulate why a more or less severe penalty is appropriate. (e) Among other relevant factors, agencies should consider an employee’s disciplinary record and past work record, including all applicable prior misconduct, when taking an action under this subpart. (f) A suspension or reduction in grade or pay should not be a substitute for removal in circumstances in which removal would be appropriate. Agencies should not require that an employee PO 00000 Frm 00049 Fmt 4701 Sfmt 4700 65987 have previously been suspended or reduced in pay or grade before a proposing official may propose removal, except as may be appropriate under applicable facts. ■ 23. Amend § 752.604 by revising paragraphs (b)(1) and (b)(2)(iv), and adding paragraph (g)(3) to read as follows: § 752.604 Procedures. * * * * * (b) * * * (1) An appointee against whom an action is proposed is entitled to at least 30 days’ advance written notice unless there is an exception pursuant to paragraph (d) of this section. However, to the extent an agency in its sole and exclusive discretion deems practicable, agencies should limit a written notice of an adverse action to the 30 days prescribed in section 7543(b)(1) of title 5, United States Code. Advance notices of greater than 30 days must be reported to the Office of Personnel Management. The notice must state the specific reason(s) for the proposed action, and inform the appointee of his or her right to review the material that is relied on to support the reasons for action given in the notice. The notice must further include detailed information with respect to any right to appeal the action pursuant to section 1097(b) (2) (A) of Public Law 115–91, the forums in which the employee may file an appeal, and any limitations on the rights of the employee that would apply because of the forum in which the employee decides to file. (2) * * * (iv) Placing the appointee in a paid, no duty status for such time as is necessary to effect the action. After publication of regulations for 5 U.S.C. 6329b, and the subsequent agency implementation period in accordance with 5 U.S.C. 6329b, an agency may place the employee in a notice leave status when applicable. * * * * * (g) * * * (3) To the extent practicable, an agency should issue the decision on a proposed removal under this subpart within 15 business days of the conclusion of the employee’s opportunity to respond under paragraph (c) of this section. * * * * * ■ 24. Add § 752.607 to read as follows: § 752.607 Settlement agreements. (a) Agreements to alter official personnel records. An agency shall not agree to erase, remove, alter, or withhold from another agency any E:\FR\FM\16OCR2.SGM 16OCR2 65988 Federal Register / Vol. 85, No. 201 / Friday, October 16, 2020 / Rules and Regulations jbell on DSKJLSW7X2PROD with RULES2 information about a civilian employee’s performance or conduct in that employee’s official personnel records, including an employee’s Official Personnel Folder and Employee Performance File, as part of, or as a condition to, resolving a formal or informal complaint by the employee or settling an administrative challenge to an adverse action. (b) Corrective action based on discovery of agency error. The requirements described in paragraph (a) of this section should not be construed to prevent agencies from taking corrective action, should it come to light, including during or after the issuance of an adverse personnel action that the information contained in a personnel record is not accurate or records an action taken by the agency illegally or in error. In such cases, an agency would have the authority, unilaterally or by agreement, to modify an employee’s personnel record(s) to remove inaccurate information or the VerDate Sep<11>2014 20:11 Oct 15, 2020 Jkt 253001 record of an erroneous or illegal action. An agency may take such action even if an appeal/complaint has been filed relating to the information that the agency determines to be inaccurate or to reflect an action taken illegally or in error. In all events, however, the agency must ensure that it removes only information that the agency itself has determined to be inaccurate or to reflect an action taken illegally or in error. And an agency should report any agreements relating to the removal of such information as part of its annual report to the OPM Director required by Section 6 of E.O. 13839. Documents subject to withdrawal or modification could include, for example, an SF–50 issuing a disciplinary or performance-based action, a decision memorandum accompanying such action or an employee performance appraisal. (c) Corrective action based on discovery of material information prior to final agency action. When persuasive evidence comes to light prior to the PO 00000 Frm 00050 Fmt 4701 Sfmt 9990 issuance of a final agency decision on an adverse personnel action casting doubt on the validity of the action or the ability of the agency to sustain the action in litigation, an agency may decide to cancel or vacate the proposed action. Additional information may come to light at any stage of the process prior to final agency decision including during an employee response period. To the extent an employee’s personnel file or other agency records contain a proposed action that is subsequently cancelled, an agency would have the authority to remove that action from the employee’s personnel file or other agency records. The requirements described in paragraph (a) of this section would, however, continue to apply to any accurate information about the employee’s conduct leading up to that proposed action or separation from Federal service. [FR Doc. 2020–20427 Filed 10–15–20; 8:45 am] BILLING CODE 6325–39–P E:\FR\FM\16OCR2.SGM 16OCR2

Agencies

[Federal Register Volume 85, Number 201 (Friday, October 16, 2020)]
[Rules and Regulations]
[Pages 65940-65988]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-20427]



[[Page 65939]]

Vol. 85

Friday,

No. 201

October 16, 2020

Part III





Office of Personnel Management





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5 CFR Parts 315, 432 and 752





Probation on Initial Appointment to a Competitive Position, 
Performance-Based Reduction in Grade and Removal Actions and Adverse 
Actions; Final Rule

Federal Register / Vol. 85 , No. 201 / Friday, October 16, 2020 / 
Rules and Regulations

[[Page 65940]]


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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 315, 432 and 752

RIN 3206-AN60


Probation on Initial Appointment to a Competitive Position, 
Performance-Based Reduction in Grade and Removal Actions and Adverse 
Actions

AGENCY: Office of Personnel Management.

ACTION: Final rule.

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SUMMARY: The Office of Personnel Management (OPM) is issuing final 
regulations governing probation on initial appointment to a competitive 
position, performance-based reduction in grade and removal actions, and 
adverse actions. The final rule will effect a revision of OPM's 
regulations to make procedures relating to these subjects more 
efficient and effective. The final rule also amends the regulations to 
incorporate statutory changes and technical revisions.

DATES: Effective November 16, 2020.

FOR FURTHER INFORMATION CONTACT: Timothy Curry by email at 
[email protected] or by telephone at (202) 606-2930.

SUPPLEMENTARY INFORMATION: The Office of Personnel Management (OPM) is 
issuing revised regulations governing probation on initial appointment 
to a competitive position; performance-based reduction in grade and 
removal actions; and adverse actions under statutory authority vested 
in it by Congress in 5 U.S.C. 3321, 4305, 4315, 7504, 7514 and 7543. 
The regulations assist agencies in carrying out, consistent with law, 
certain of the President's directives to the Executive Branch pursuant 
to Executive Order 13839 that were not subject to judicially-imposed 
limitations at the time of the proposed rule, and update current 
procedures to make them more efficient and effective. The revised 
regulations update current regulatory language, commensurate with 
statutory changes. They also clarify procedures and requirements to 
support managers in addressing unacceptable performance and promoting 
employee accountability for performance-based reduction-in-grade, 
removal actions and adverse actions while recognizing employee rights 
and protections. The revised regulations support agencies in 
implementing their plans to maximize employee performance, as required 
by Office of Management and Budget (OMB) M-17-22 (April 12, 2017), and 
to fulfill elements of the President's Management Agenda relating to 
the Workforce for the 21st Century.
    At the time revisions to these regulations were proposed, there 
were judicially imposed limitations on implementing certain other 
portions of Executive Order 13839. These revised regulations were not 
intended to implement portions of the Executive Order that were 
previously enjoined when OPM initially proposed them. As the previously 
enjoined portions of the Executive Order are now fully effective and 
binding on executive agencies, OPM anticipates proposing additional 
revisions to regulations, pursuant to the Administrative Procedures 
Act's notice-and-comment process, consistent with the President's 
expressed policy goals.

The Case for Action

    With the issuance of Executive Order (E.O.) 13839 on May 25, 2018, 
President Trump set a new direction for promoting efficient and 
effective use of the Federal workforce--reinforcing that Federal 
employees should be both rewarded and held accountable for performance 
and conduct. Merit system principles provide a framework for employee 
conduct that is aligned with the broader responsibility Federal 
government employees assume when they take the oath to preserve and 
defend the Constitution and accept the duties and obligations of their 
positions. In keeping with merit system principles, the President's 
Management Agenda (PMA) recognizes that Federal employees underpin 
nearly all the operations of the Government, ensuring the smooth 
functioning of our democracy. The Federal personnel system needs to 
keep pace with changing workplace needs and carry out its core 
functions in a manner that more effectively upholds the public trust. 
Finally, the PMA calls for agencies to establish processes that help 
agencies retain top employees and efficiently terminate or remove those 
who fail to perform or to uphold the public's trust.
    Prior to establishment of the current PMA, the Office of Management 
and Budget (OMB) issued a memorandum to agencies on April 12, 2017 
entitled ``M-17-22--Comprehensive Plan for Reforming the Federal 
Government and Reducing the Federal Civilian Workforce.'' M-17-22 
called on agencies to take near-term actions to ensure that the 
workforce they hire and retain is as effective as possible. OMB called 
on agencies to determine whether aspects of their current policies and 
practices present barriers to hiring and retaining the workforce 
necessary to execute their missions as well as appropriately managing 
the workforce and, if necessary, removing poor performers and employees 
who commit misconduct. Notably, M-17-22 directed agencies to ensure 
that managers have the tools and support they need to manage 
performance and conduct effectively to achieve high-quality results for 
the American people. Agencies were recently reminded of these important 
requirements in OPM guidance issued on September 25, 2019 and entitled: 
Maximization of Employee Performance Management and Engagement by 
Streamlining Agency Performance and Dismissal Policies and Procedures.
    E.O. 13839's purpose is based on the merit system principles' call 
for holding Federal employees accountable for performance and conduct. 
The applicable merit system principles state that employees should 
maintain high standards of integrity, conduct, and concern for the 
public interest, and that the Federal workforce should be used 
efficiently and effectively. 5 U.S.C. 2301(b)(4)--(b)(6). The merit 
system principles further state that employees should be retained based 
on the adequacy of their performance, inadequate performance should be 
corrected, and employees should be separated who cannot or will not 
improve their performance to meet required standards. Id. E.O. 13839 
states that implementation of America's civil service laws has fallen 
far short of these ideals. It cited the Federal Employee Viewpoint 
Survey which has consistently found that less than one-third of Federal 
employees believe that the Government deals with poor performers 
effectively. E.O. 13839 also finds that failure to address unacceptable 
performance and misconduct undermines morale, burdens good performers 
with subpar colleagues, and inhibits the ability of executive agencies 
to accomplish their missions.
    On September 17, 2019, OPM issued proposed regulations governing 
probation on initial appointment to a competitive position, 
performance-based reduction in grade and removal actions, and adverse 
actions (84 FR 48794, September 17, 2019). The proposed regulations 
were revising OPM's regulations to make procedures relating to these 
subjects more efficient and effective. The proposed regulations were 
also amending the regulations to incorporate other statutory changes 
and technical revisions. After consideration of public comments on the 
proposed regulations, OPM is now issuing these revised regulations to 
implement certain requirements of E.O. 13839 as well as to fulfill the 
vision of the PMA and the

[[Page 65941]]

objectives of M-17-22. These revisions not only will support agency 
efforts in implementing E.O. 13839 and M-17-22, and pursuing the PMA, 
but also will facilitate the ability of agencies to deliver on their 
mission and provide good service to the American people. Ultimately, 
these changes support President Trump's goal of effective stewardship 
of taxpayers' money by our government.

Data Collection of Adverse Actions

    Section 6 of E.O. 13839 outlines certain types of data for agencies 
to collect and report to OPM as of fiscal year 2018. To enhance public 
accountability of agencies, OPM will collect and, consistent with 
applicable law, publish the information received from agencies 
aggregated at a level necessary to protect personal privacy. OPM may 
withhold particular information if publication would unduly risk 
disclosing information protected by law, including personally 
identifiable information. Section 6 requires annual reporting of 
various categories of data, including: (1) The number of civilian 
employees in a probationary period or otherwise employed for a specific 
term whose employment was terminated during that period or term; (2) 
the number of civilian employees reprimanded in writing by the agency; 
(3) the number of civilian employees afforded an opportunity period by 
the agency under section 4302(c)(6) of title 5, United States Code, 
breaking out the number of such employees receiving an opportunity 
period longer than 30 days; (4) the number of adverse actions taken 
against civilian employees by the agency, broken down by type of 
adverse action, including reduction in grade or pay (or equivalent), 
suspension, and removal; (5) the number of decisions on proposed 
removals by the agency taken under chapter 75 of title 5, United States 
Code, not issued within 15 business days of the end of the employee 
reply period; (6) the number of adverse actions by the agency for which 
employees received written notice in excess of the 30 days prescribed 
in section 7513(b)(1) of title 5, United States Code; (7) the number 
and key terms of settlements reached by the agency with civilian 
employees in cases arising out of adverse actions; and (8) the 
resolutions or outcomes of litigation about adverse actions involving 
civilian employees reached by the agency.
    On July 5, 2018, OPM issued guidance for implementation of E.O. 
13839. This guidance included instructions for each department or 
agency head to coordinate the collection of data from their components 
and compile one consolidated report for submission to OPM using the 
form attached to the guidance memo. Forms must be submitted 
electronically to OPM via email at [email protected] 
generally no later than 60 days following the conclusion of each fiscal 
year. In lieu of outlining the data collection requirements in OPM 
regulations, OPM will issue reminders of this requirement annually and 
provide periodic guidance consistent with the requirements of E.O. 
13839.

Public Comments

    In response to the proposed rule, OPM received 1,198 comments 
during the 30-day public comment period from a wide variety of 
individuals, including current and retired Federal employees, labor 
organizations, Federal agencies, management associations, law firms, 
and the general public. At the conclusion of the public comment period, 
OPM reviewed and analyzed the comments. In general, the comments ranged 
from categorical rejection of the proposed regulations to enthusiastic 
support. Many comments focused on issues relating to fairness, the 
opportunity to demonstrate acceptable performance, and the protection 
of employee rights.
    Several Federal agencies, organizations, and commenters agreed with 
many aspects of the proposed regulations. Those in support of the 
regulatory changes cited the benefit of streamlined processes and the 
benefits to management of the Federal workforce associated with 
increases in efficiency and accountability. An agency commented that 
the use of progressive discipline has led to many delays in removal and 
hardship for supervisors. The agency highlighted that this rule will 
give more discretion to supervisors to remove problematic employees and 
shorten the years-long process for getting rid of poor performers and 
those with misconduct issues, thus increasing the efficiency of the 
service. In addition, some organizations commended OPM for reiterating 
that progressive discipline is not a requirement. One of these 
organizations further noted that progressive discipline has grown 
within most agencies to the point of being a roadblock in many 
instances to removals or suspensions that would promote the efficiency 
of the service because there was no prior discipline. Also, with 
reference to tables of penalties, this organization stated that the 
rule is ``right on point'' in its reference to tables of penalties as 
contrary to the efficiency of the service. Some agencies and 
organizations expressed support for providing notifications to 
supervisors about probationary periods ending but requested 
clarification on how the process should be implemented. Additionally, 
included among the comments of Federal agencies were concerns 
regarding: The consequence of supervisors not taking affirmative steps 
to retain employees before the end of a probation period; the non-
delegation from the head of the agency to adjudicate retaliation 
claims, as well as whether such ``decisions could be perceived to be 
politically motivated resulting in claims of whistleblower 
retaliation''; and whether agencies may satisfy the requirement to 
provide assistance before or during the opportunity period without 
placing agencies at risk of acting contrary to statute or other OPM 
regulations.
    Many of the comments were from national labor organizations and 
their members, including many which were seemingly submitted using text 
from a template. This widely utilized letter expressed general 
opposition to the proposed regulations. Specific concerns expressed 
included: Commenters' confusion about probationary period 
notifications, the lack of required utilization of progressive 
discipline and the discouraged use of tables of penalties, the 
existence of adequate assistance for employees with unacceptable 
performance to demonstrate improvement, and the loss of ability to 
modify personnel records through settlement agreements. Other 
commenters had similar concerns in addition to concerns regarding 
whether the revised regulations were consistent with existing statutes, 
other regulations, case law, and merit principles. OPM reviewed and 
carefully considered all comments and arguments made in support of and 
in opposition to the proposed changes. The comments are summarized 
below, together with a discussion of the changes made as a result of 
the comments. Also summarized are the suggestions for revisions that we 
considered and did not adopt. In addition to substantive comments, we 
received several editorial suggestions, one of which was adopted. 
Finally, we received a number of comments that were not addressed below 
because they were beyond the scope of the proposed changes to 
regulations or were vague or incomplete.
    In the first section below, we address general or overarching 
comments. In the sections that follow, we address comments related to 
specific portions of the regulations.

[[Page 65942]]

General Comments

    Federal agencies, management associations, some Federal employees 
and some members of the public expressed strong support for the 
changes. An agency concurred with the proposed rule as written and 
other individual commenters and management associations asserted that 
the rule changes are prudent and long overdue. Some commenters stated 
that they had observed Federal employees who do not perform their jobs 
acceptably, expressed the belief that the burden on managers in 
handling under-performing employees is too onerous, and welcomed the 
regulation changes as a means of addressing these issues. Commenters 
stated that the current rules protect ``bad'' employees and this change 
would make it easier for employers to remove ``bad'' employees and 
focus more time on the ``stellar'' employees including rewarding them. 
Another commenter referred to these changes as common-sense reforms 
that will aid in holding all Federal employees more accountable. 
Another commenter stated that it is time to hold all Federal employees 
accountable, including management. One commenter, who did not identify 
whether he or she is a member of a union, stated that although the 
national union may encourage its members to voice disagreement, the 
commenter agrees with the rule. This commenter also asserted that for 
far too long Federal government unions have protected poor performers. 
Some commenters asserted that Federal employees should not expect to be 
treated differently than private sector workers and voiced their 
support of the rule changes. A commenter fully supported the rule and 
believed it is long overdue for the Federal government to get in sync 
with the private sector when addressing both employee performance and 
conduct. The commenter added that the proposed changes will assist in 
retaining appropriate employee safeguards while promoting the public 
trust in government. Another commenter supported the proposed rule 
because high performing employees will now be able to be rewarded and 
subpar employees removed from an agency. A commenter also expressed 
full support and stated that supervisors should be held equally 
responsible as rank and file employees. A management association 
expressed that overall it was in favor of the proposed rule, although 
some members of this management association ``expressed concern in the 
area of subjectivity if someone has a boss that is `out to get them.' 
''
    Two management associations, while offering their support of the 
rule, emphasized the importance of training. One management association 
urged OPM to act with all haste to process the comments it receives, 
issue a final rule, and ensure managers are educated and trained about 
the changes. This management association asserted that ultimately, OPM 
proposes much needed and reasonable reforms that give management 
clearer control over their workforce from the initial hiring process 
through the individual's tenure in the Federal service. However, the 
management association stated that the most important determinant of 
these rules' success will be not how they are written but how the 
managers and supervisors are trained on their implementation. The 
management association stated that managers and supervisors must be 
given the tools and support to institute these reforms within their 
offices. Further, the management association stated that performance 
appraisals for managers should be tied to their adherence to these 
rules. This management association asserted that, in order to create a 
culture that values accountability and efficiency, leaders in the 
Federal government must be efficient and accountable in inaugurating 
the changes. Another management association stated that when finalized 
and implemented, the rule will provide much needed simplicity and 
clarity for federal leaders who are responsible for managing an 
accountable workforce.
    OPM acknowledges the support for the rule received from commenters. 
In regard to tools and support to assist managers and supervisors, one 
of the requirements of E.O. 13839 is that the OPM Director and the 
Chief Human Capital Officers Council undertake a Government-wide 
initiative to educate Federal supervisors about holding employees 
accountable for unacceptable performance or misconduct under those 
rules, and that this undertaking begins within a reasonable time after 
the adoption of any final rule issued to effectuate the principles of 
accountability in the Federal workforce in Section 2 of E.O. 13839.
    Other commenters expressed numerous other concerns about the 
proposed rule. National unions, organizations and many other commenters 
urged OPM to withdraw the proposed rule and consider what they believe 
to be more reasoned and equitable approaches to addressing employee 
probation, and employee performance and conduct concerns. Some 
commenters stated that the changes to the regulations are invalid, and 
others stated that they are unnecessary. One national union and a 
commenter voiced opposition to all proposed changes except the 
whistleblower provisions. In expressing their opposition, other 
commenters remarked that the rule purports to accomplish the goal of 
``assist[ing] agencies in streamlining and clarifying procedures and 
requirements to better support managers in addressing unacceptable 
performance and promoting employee accountability for performance-based 
reduction in grade and removal actions as well as adverse actions,'' 
but does not actually do so. A national union stated that contrary to 
what the proposed rule states, these regulations will not reward good 
workers or promote public trust in the Federal government. A commenter 
asserted that because civil servants are dedicated to Government 
service and work with pride regardless of the conditions, the 
performance management system should reciprocate the same tolerance and 
adaptability when agencies are administering disciplinary action 
against Federal employees, which, the commenter observes, would not be 
the case if these changes are adopted.
    One commenter stated that, on its face, the proposed changes seem 
reasonable. The commenter asserted, however, that it appears as though 
the goal is to reduce Government rules, regulations, agencies and 
employees. The commenter disagreed with these reductions as agencies 
and employees keep our country moving forward and serving people. 
Another commenter asserted that adoption of the proposed rule would 
demonstrate poor judgement and a blatant disregard for the Federal 
government's most valuable asset, its employees.
    OPM disagrees with those commenters who challenge the underlying 
validity of and necessity for these regulations. Congress has conferred 
upon OPM general authority to regulate in these areas; see, e.g., 5 
U.S.C. 3321, 4305, 7504, 7514 and 7543. OPM is also promulgating these 
rule changes to implement the requirements of E.O. 13839 and M-17-22, 
as well as to fulfill administration policy priorities laid out in the 
PMA. Furthermore, these rules are being promulgated under the 
President's authority provided in 5 U.S.C. 3301, 3302 and 3303 and 
which he delegated to OPM. These changes not only support agency 
efforts to implement E.O. 13839 and M-17-22, and to pursue PMA goals, 
but also will facilitate the ability of agencies to deliver on their 
missions and provide service to the American people. To carry

[[Page 65943]]

out E.O. 13839, the rule facilitates a Federal supervisor's ability to 
promote civil servant accountability while simultaneously preserving 
employee's rights and protections. We also disagree with the 
commenters' contention that the proposed rule does not streamline and 
clarify procedures and requirements to better support managers in 
addressing unacceptable performance and pursuing adverse actions. We 
decline to make changes based on these comments because the proposed 
rule effectuates changes that, in fact, make procedures more efficient 
and effective. The proposed rule was published to facilitate the 
ability of agencies to deliver on their mission and on providing 
service to the American people. For example, the requirement of the 
proposed rule for timely notifications to supervisors regarding 
probationary periods will assist agencies in making more effective use 
of the probationary period. Additionally, the proposed rule establishes 
limits on the opportunity to demonstrate acceptable performance by 
precluding additional opportunity periods beyond what is required by 
law, which encourages efficient use of the procedures under chapter 43. 
As another illustration of streamlining and clarifying performance-
related procedures and requirements, the proposed rule makes clear that 
an agency is not required to use progressive discipline under subpart 
752.202. Specifically, the proposed rule adopts the requirement to 
propose and impose a penalty that is within the bounds of tolerable 
reasonableness. Further, the proposed amendments emphasize that the 
penalty for an instance of misconduct should be tailored to the facts 
and circumstances, in lieu of the type of formulaic and rigid penalty 
determination that frequently results from agency publication of tables 
of penalties. Thus, OPM believes the rule does make procedures more 
efficient and effective and is consistent with E.O. 13839's policy 
goals and requirements.
    Many commenters and organizations asserted that OPM did not have 
the authority to promulgate this rule because employee procedural 
rights are governed by statute and should be modified only through 
congressional action. Some commenters said the rule would be 
unconstitutional if effected. An organization stated that the proposed 
regulations are contrary to statutory authority and established case 
law, and directly undermine the due process protections afforded to 
Federal employees. Another organization stated that OPM should dispense 
with these regulations as written or substantially revise them to 
conform to due process, fundamental fairness, Federal statute and 
Federal court precedent.
    We disagree with the general assertions contesting OPM's authority 
and challenging the legality and constitutionality of the revised 
regulations. OPM is promulgating these regulations under its 
congressionally granted authority to regulate. Not all existing 
provisions were constitutionally or statutorily mandated, and to the 
extent they were not, OPM has authority to revise them to make the 
process work more effectively. In so doing, OPM has been mindful of the 
President's expressed policy direction. Further, this rule will not 
eliminate any employee rights provided under statute. Federal employees 
will continue to enjoy all core civil service protections provided by 
statute, including merit system principles, procedural rights, and 
appeal rights.
    An agency pointed out that when the proposed regulations were 
drafted, there were judicially imposed limitations on implementing 
portions of E.O. 13839 precluding inclusion of these subjects in the 
proposed regulation. The agency recommended that, due to the court 
injunction being lifted, any matter that would have been included in 
the regulation, but for the injunction, be added so that agencies can 
benefit from those matters as well.
    The agency is correct that various sections of E.O. 13839 were 
subject to judicially imposed limitations when these regulations were 
proposed and that the proposed regulations did not seek to incorporate 
enjoined sections of the E.O. For the same reason, however, these 
sections were not subject to notice-and-comment rulemaking 
requirements. As a result, such changes will not be included in the 
final rule with respect to the current rule-making process.
    As the previously enjoined portions of the Executive Order are now 
fully effective and binding on executive agencies, OPM anticipates 
proposing additional revisions to regulations, pursuant to the 
Administrative Procedures Act's notice-and-comment process, consistent 
with the President's expressed policy goals, at a future date.
    One national union noted that ``the proposed regulations will 
diminish employees' right to collectively bargain by limiting the 
topics that are negotiable. They noted the regulations are contrary to 
the vision and spirit of the Federal Service Labor-Management Relations 
Statute (the Statute), which allows Federal employees to collectively 
bargain and participate in decisions affecting their working 
conditions.'' This national union further noted that ``while OPM has 
the authority to issue regulations in the area of federal labor 
relations, it may not dilute the value of employees' statutory right to 
collectively bargain.'' They further state ``OPM does not consider how 
its proposed regulations will severely impede the right to collectively 
bargain. The regulations should not be implemented because they would 
diminish the core elements of collective bargaining by reducing 
negotiations over primary conditions of employment including 
discipline, improvement opportunities, and settlements.''
    In response to these comments, OPM notes that there are numerous 
ways in which the proposed rule does not impact collective bargaining 
at all. Generally, in fact, the regulations simply provide direction to 
agency officials exercising the discretion afforded to them by law, 
including the right to discipline employees and the right to hire. 
Legally negotiated agreements, for instance, could not force agency 
officials to select a specific penalty based on employee misconduct, 
require them to enter into settlement agreements that provide employees 
clean records, or preclude them from utilizing probationary periods 
when making decisions regarding the nature of an appointment. These 
decisions remain at the discretion of the agency's authority as to 
discipline, settlement, and hiring and employment. In other cases, the 
proposed rule provides only aspirational goals that constitute guides 
for agency officials rather than absolute mandates that would preclude 
bargaining over these subjects. An example is the provision providing 
that agencies should limit to the required 30 days the advance notice 
of adverse action when practicable. Similarly, the provision explaining 
that agencies are not required to use progressive discipline is a 
guide, not a mandate.
    Although the proposed revisions to these Government-wide 
regulations may result in limiting collective bargaining on certain 
topics, we disagree with the view that these changes are contrary to 
the vision and spirit of the Statute (5 U.S.C. chapter 71). They are in 
accord not only with both of these concepts but also, and most 
importantly, with the letter of the law, including 5 U.S.C. 7117. 
Further, 5 U.S.C. 7101(b) states in its entirety that ``[i]t is the 
purpose of this chapter to prescribe certain rights and obligations of 
the employees of the Federal Government and to establish procedures 
which are designed to meet the special requirements of Government. The 
provisions of this chapter should be

[[Page 65944]]

interpreted in a manner consistent with the requirement of an effective 
and efficient Government.'' These provisions include significant 
limitations on collective bargaining relating to matters that are the 
subject of Federal law or Government-wide rule or regulation; see 5 
U.S.C. 7117(a)(1). And while commenters may disagree, as a matter of 
policy, with the subjects the President has determined are sufficiently 
important for inclusion in an Executive Order and federal regulation, 
it is well established that the President has the authority to make 
this determination and that OPM regulations issued pursuant to this 
authority constitute Government-wide rules under section 7117(a)(1) for 
the purpose of foreclosing bargaining. See NTEU v. FLRA, 30 F.3d 1510, 
1514-16 (D.C. Cir. 1994).
    We would also note that certain exceptions to collective bargaining 
are set forth in the Statute itself, including a prohibition on 
substantively bargaining over management rights as outlined in 5 U.S.C. 
7106(a). This includes management's statutory rights to suspend, 
remove, reduce in grade or pay, or otherwise discipline employees. 
Bargaining proposals that would, for instance, mandate a particular 
penalty determination, and mandate the use of progressive discipline 
and/or tables of penalties would impermissibly interfere with the 
exercise of a statutory management right to discipline employees and 
thereby not appropriately be subject to bargaining.
    One commenter also suggested that the ``article'' should be open 
for dialogue from the union. Because this comment is not clear, we are 
unable to respond to it. We note, however, that what we published is 
not a proposed article intended for inclusion in collective bargaining 
agreements between agencies and labor organizations. These provisions 
are proposed revisions to Government-wide regulations issued by OPM. We 
provided a copy of the proposed rule to labor organizations which have 
been granted consultation rights with OPM on Government-wide rules or 
regulations effecting any substantive change in any condition of 
employment in accordance with 5 U.S.C. 7117(d) and provided an 
opportunity to make comments and recommendations. Additionally, all 
unions were able to submit comments and recommendations through the 
rulemaking process and we have considered and responded to all comments 
that were within the scope of the rule.
    Some commenters asserted that the timing of this notice is 
suspicious, and appears to coincide with alleged administration efforts 
to circumvent Congress on Federal agency appropriations and 
authorizations, cripple unions, remove Federal employees via proposing 
drastic agency budget cuts, and impose ``absurd'' new Federal workplace 
policies such as restricting telework.
    The proposed regulations simply implement the requirements of E.O. 
13839, along with the PMA and the objectives of M-17-22. There is no 
correlation between the timing of the notice and any budget or other 
administrative process.
    Some commenters stated that reform to the civil service system has 
long been necessary, but that this proposed rulemaking is the wrong 
approach. A commenter stated while reform is needed, the approach must 
be fair. Further, an organization asserted that loosening adverse 
action standards, as demonstrated by a recent non-title 5 statute for 
Federal employees and ``simply making it procedurally easier to fire 
employees does not in practice improve the overall efficiency of the 
Federal service.''
    Commenters including labor organizations generally expressed 
concern that these changes, separately and together, would weaken or 
vitiate the procedural rights or protections of Federal employees. One 
commenter asserted that, at a time when protections for Federal workers 
should be strengthened, this proposed rule weakens protections. Many 
national unions, organizations and individual commenters expressed a 
desire to remain under the current system with its existing 
protections, citing too much power being given to managers and 
supervisors with no corresponding accountability, at the cost of 
destroying a properly functioning workforce. They argued that the 
changes would substantially make the Federal government an ``at will'' 
employer.
    Another commenter observed that checks and balances are at the core 
of a functioning democracy and requested that we not tear down those 
attributes by implementing this ``archaic'' rule. Moreover, an 
organization stated that removing protections that ensure that such 
actions are warranted does not promote an efficient, professional and 
productive Federal workforce. It instead, they argue, takes the Federal 
civil service steps closer back to the spoils system, and thus is a 
``big step in the wrong direction.'' Further, an organization opined 
that this administration's approach of undermining due process 
protections is the wrong path to reforming government if the goal is to 
improve the performance of services to the American people. This 
organization posited that if the goal is to dismantle the civil 
service, reduce the number of Federal employees by violating due 
process rights, and increase discrimination, harassment, and 
retaliation in the workplace, these changes will have the desired 
effect. A commenter remarked that OPM should not forget that procedures 
were set in place to protect an employee from retaliation or from being 
removed for arbitrary reasons.
    Citing specifically the Civil Service Reform Act of 1978 (CSRA), a 
national union intimated that the proposed rule would permit agencies 
to act without meaningful review and that Federal employees would 
receive only lip-service to due process and stated that it was not the 
purpose of the CSRA to bring about such results. This national union 
asserted that instead the heart of the CSRA was the desire to balance 
the needs of an efficient government with due process and fundamental 
fairness for Federal employees. The national union stated that the 
proposed regulations upset this balance and stated that they should 
therefore be abandoned. A commenter also stated that the proposed 
regulations seem ``anti-union'' and ``just unfair'' and that the 
proposal ``is an attack on Federal Employees.'' Another commenter 
endorsed the importance of unions and stated that these regulations are 
another attempt to take union rights away.
    An organization declared that one of the fundamental principles of 
this civil service system is due process for Federal employees and the 
``for cause'' standard for termination. This organization further 
observed that due process protections in the civil service system are 
the most significant difference between most non-unionized private 
employees, who are at will, and most Federal employees, who can only be 
removed for cause. The organization additionally stated that the basic 
principle of due process is derived from hundreds of years of our 
nation's civil service experience, which has shown that the best way to 
avoid nepotism, discrimination, and prohibited personnel practices is 
to ensure that Federal employees can be removed only for cause. 
National unions and commenters further stated that Congress created a 
comprehensive scheme to rectify past issues of arbitrary and 
discriminatory punishments against Federal workers and asserted that 
the proposed regulations weaken those protections. The organization 
further stated that preserving the rights of Federal employees is 
essential to furthering the principles of the civil

[[Page 65945]]

service, merits system and continuous service, and it does not believe 
that the proposed regulations accomplish the goals of a fair and merit-
based civil service.
    Another commenter stated that OPM should understand that there is a 
foundation for the appeals process and requested that OPM not create a 
different problem by solely focusing on what could be summarized as 
opening up punishment without the process, review, or oversight that is 
due. One commenter stated that it is important for OPM to understand 
that anything that limits due process for employees is ``a dangerous, 
slippery slope.'' The commenter stated that it is imperative that we 
have a strong due process system for Federal employees and a check-and-
balances system so that supervisors with perverse incentives cannot act 
unilaterally. Another commenter expressed that the proposed rule was 
poorly drafted and an affront to the Federal workforce, citing that it 
does not meet the standards of due process.
    We disagree with commenters' assertions that the regulation is not 
consistent with the rights and duties that the CSRA prescribes and 
removes procedural rights. Consistent with E.O. 13839, the rule 
streamlines adverse actions and appeal procedures, but without 
compromising constitutional Due Process rights. The remaining statutory 
and regulatory procedures for the Federal workforce meet and exceed 
constitutional requirements. Employees will still receive notice of a 
proposed adverse action, the right to reply, a final decision and a 
post-decision review of any appealable action, that is, what the 
Constitution requires. But further, they retain their right to a full-
blown evidentiary post-action hearing as well as judicial review. In 
fact, they retain a host of choices of avenues of redress. Further, we 
disagree with the many national unions, organizations and individual 
commenters who expressed that the regulation changes would 
substantially make the Federal government an ``at will'' employer. As 
discussed above, the rule does not remove constitutional Due Process 
rights or statutory or regulatory procedures. Thus, Federal employees 
are not deemed at will as a result of the rule. Further, the rule 
promotes fair and equitable treatment of employees through its 
provisions. The proposed regulations encourage managers to think 
carefully about when and how to impose discipline and to consider all 
relevant circumstances including the best interests of all employees, 
the agency's mission, and how best to achieve an effective and 
efficient workplace when making decisions. The rule is intended to 
clarify the requirements in chapter 43 and chapter 75 of title 5 of the 
United States Code and to make sure that employee conduct and 
performance that are inconsistent with a well-functioning merit-based 
system are addressed promptly and resolutely. Therefore, the proposed 
rule will not ``upset'' the balance between efficient Government and 
employee protection as one commenter stated; it will restore it.
    We also disagree that the proposed regulations take away union 
rights. Although the proposed regulations may result in limiting 
collective bargaining on certain matters of elevated importance to the 
President and OPM, similar to the impact any other Government-wide rule 
may have under 5 U.S.C. 7117, the regulations do not change the rights 
and duties afforded to labor organizations in 5 U.S.C. chapter 71. The 
President has determined that these limitations are necessary to make 
procedures relating to performance-based actions and adverse actions 
more efficient and effective and has directed OPM to issue a 
Government-wide rule consistent with this imperative.
    Additional commenters contended the rule removes protections 
against retaliation. National unions and other commenters voiced 
concerns that the proposed rule can have the impact of employees being 
disciplined or removed for whistleblower activity. A national union 
stated that Federal employment is deeply engrained with policies that 
promote efficiency and high-quality performance, while also protecting 
employees from arbitrary and discriminatory actions by supervisory and 
managerial personnel. The national union, citing a Merit Systems 
Protection Board (Board) study, stated that Congress has implemented 
safeguards to ensure Federal employees are ``protect[ed] from the 
harmful effects of management acting for improper reasons such as 
discrimination or retaliation for whistleblowing.'' This union stated 
that the proposed regulations will weaken protections for Federal 
employees and create a system that gives wide discretion to agencies to 
take punitive action against employees, regardless of whether that 
action is inequitable or discriminatory. Another commenter asked what 
the recourse is for someone who is harassed or mistreated and cannot 
report it to someone.
    We disagree with the commenters' suggestions that the proposed 
regulation will have the impact of employees being disciplined or 
removed for whistleblower activity. OPM is prohibited from waiving or 
modifying any provision relating to prohibited personnel practices or 
merit system principles, including continuing prohibitions of reprisal 
for whistleblowing or unlawful discrimination. The regulations 
therefore do not modify these protections in any way. The commenters' 
apprehensions about the rule diminishing or removing protections 
against retaliatory action are not supported by the language of the 
rule itself. In fact, the rule reinforces the responsibility of 
agencies to protect whistleblowers from retaliation. These requirements 
are significant because of the essential protections they provide. 
OPM's rule incorporates new requirements pursuant to 5 U.S.C. 7515 and 
assists agencies in understanding how to meet the additional 
requirements in connection with whistleblower protections. The rule 
helps to undergird and support agencies in meeting their requirements 
to take action against any supervisor who retaliates against 
whistleblowers.
    An organization asserted that current statutes and regulations, if 
appropriately applied by agencies, provide more than adequate means to 
regulate the civil service in meritorious cases where disciplinary or 
performance action is warranted. This organization stated that the 
revisions in the proposed rule are based on the erroneous stereotype 
that it is difficult to fire Federal employees and asserted that this 
is not the case. The organization pointed to the Government 
Accountability Office report, ``GAO-18-48, FEDERAL EMPLOYEE MISCONDUCT: 
Actions Needed to Ensure Agencies Have Tools to Effectively Address 
Misconduct and noted that (based on OPM's statistics) almost 1% of the 
Federal workforce is subject to adverse actions every year.
    Arguments against the proposed changes based on alleged erroneous 
stereotypes concerning the challenges of removing employees disregard 
the objectives of E.O. 13839. OPM proposed these revised regulations, 
as required by E.O. 13839, in order to promote more effective and 
efficient functioning of the Executive Branch and to provide a more 
straightforward process to address misconduct and unacceptable 
performance, which will serve to minimize the burden on supervisors. 
Potential misconceptions regarding removal of Federal employees do not 
eliminate OPM's need to implement the Executive Order by proposing 
changes that support the Order's goals.
    Commenters, including a national union, stated that the proposed 
changes

[[Page 65946]]

will allow for unchecked supervisory conduct and favoritism. A national 
union asserted that it is unacceptable for OPM to put forth proposed 
regulations that, in the union's view, prioritize such arbitrary 
conduct under ``the phony guise of government efficiency and 
effectiveness to eviscerate the protected rights of employees.'' 
Commenters and national unions voiced concerns that the regulations 
will likely cause significant harm to employees. A commenter also 
stated that employees would have a constant fear of being removed over 
minor infractions. In another instance, a commenter observed that 
creating a ``nebulous employee concern by threatening discipline and 
salary decreases,'' as the commenter asserts this proposal does, has a 
negative impact on good employees. Further, the national union argued 
that the proposed changes will not achieve any of the supposed benefits 
for the Government; instead, these regulations will allow good 
employees to be terminated and create a high turnover rate among 
Federal employees and will cost the Government extra money as Federal 
employees are exposed to the arbitrary whims of supervisory personnel.
    Other commenters stated that the proposed streamlining effort 
places the power in the hands of agencies and leaves employees to be at 
the will of their agencies or at the very least opens the door to abuse 
of power, authority and the threat of coercion in the workplace. These 
commenters expressed the view that, currently, inherent checks and 
balances through established practices, peer review, and multistage 
discipline expose decisions to ``ridicule'' if improper. Furthermore, 
commenters asserted that, given what they believe to be the vagueness 
of this rule, there is not enough limitation on the power of 
supervisors, and dedicated public servants can be removed for any 
reason, including politics. Commenters stated that the proposed rule 
``skews the rights towards management and away from employees who will 
have little recourse.'' Asserting that unions were created to ensure 
employees are treated fairly and management follows the rules, a 
commenter questioned what will prevent the abuse of the new rule and 
who the new rule will protect. The commenter stated that because of the 
rule changes, unfairness will perpetuate, if not increase, alleged 
management ineptness. The results, they argue, will be that employees 
will leave Federal service or be removed without due process. One 
commenter stated that while changes to discipline and removals can be 
beneficial, the rule gives management more power to remove someone 
without just cause. Moreover, another commenter observed that any 
change to the current regulation will only foster the negative feelings 
that the commenter believes already exists between management and 
employees. This commenter expressed the viewpoint that these matters 
are compounded if one is a person of color and that ``inclusion of all 
should be the goal not exclusion due to a difference no matter how 
perceived [which] is, in my opinion, another form of discrimination.'' 
Further, another commenter voiced concern that it will be easier to 
remove Federal employees and that procedures that provide fair and 
equitable treatment will be stripped away, which will sow further 
distrust between employees and management and will unnecessarily create 
unforeseen problems.
    In response to commenters that expressed concern about negative 
impact on good employees, OPM notes that addressing misconduct or poor 
performance in this fashion will enhance the experience of well-
performing employees, because poor performing employees place a 
resource strain on more productive employees and damage morale 
generally. OPM further believes that the positive impact associated 
with more effectively and expeditiously addressing poorly performing 
employees outweighs any negative impacts.
    Further, national unions and other commenters voiced concern that 
the rule would give rise to nepotism. National unions and other 
commenters stated that the proposed rule changes are based on an 
Executive Order issued by an administration that, in the view of these 
commenters, has openly stated its anti-union animus and disregard for 
the laws that govern and protect Federal workers. The commenters 
asserted that these laws were designed to put a halt to nepotism, 
discrimination and unfairness at all levels of Federal employment. This 
proposed rule, they conclude, conflicts with the letter and spirit of 
those laws.
    Notwithstanding these assertions, the regulation does not permit 
unchecked supervisory behavior and favoritism, remove employee 
protections, or permit nepotism. The final regulation streamlines and 
simplifies performance-based actions and adverse actions without 
compromising employees' statutory rights and protections. The statutory 
protections for Federal employees remain in force and are not affected 
by the rule. Thus, the concern of many commenters that managers will 
abuse their authority as a result of the rule is unfounded. While 
commenters advocated for remaining with the current system, the 
proposed rule carries out the requirements of E.O. 13839.
    Importantly, agencies continue to be responsible for holding 
managers accountable for proper use of their authority. Regarding the 
comments that the proposed rule impacts employees' rights and the role 
of unions, we believe the changes appropriately protect employee 
statutory rights while providing for efficient government operations. 
E.O. 13839 requires executive agencies (as defined in section 105 of 
title 5, U.S. Code, excluding the Government Accountability Office) to 
facilitate a Federal supervisor's ability to promote civil servant 
accountability while simultaneously recognizing employees' procedural 
rights and protections. In response to the comment that the proposed 
rule changes are based on an Executive Order issued by this 
administration which has openly stated its anti-union animus and 
disregard for the laws which govern and protect federal workers, we 
reiterate that the policy goals of E.O. 13839 are to promote civil 
servant accountability consistent with merit system principles while 
simultaneously recognizing employees' procedural rights and 
protections. These are the policy goals underlying the rule. 
Notwithstanding the commenter's speculations regarding the intent of 
the rule, the rule changes adhere to legal requirements.
    A national union stated that the need for employee protections has 
been put into ``sharp relief'' by actions of this administration which 
appear to target Federal employees. Commenters voiced opposition to the 
proposed rule because it allows employees to be fired for political 
reasons or other non-work-related facets of an employee. A commenter 
noted that ``people died for union rights'' and OPM should not take 
them away. Another commenter stated that the rule changes are 
``punitive'' for employees and enable management to continue ``bad 
behavior'' that is arbitrary and without employee recourse. This 
commenter posited that if these issues were not a reality, unions would 
have no need to exist. Commenters stated that scientists and civil 
servants most likely to face censure under this administration are 
those who render their professional opinions or follow scholarly 
findings and evidence-based reasoning and thus the expanded powers of 
the proposed rule in no way benefits the public.
    OPM does not agree that the proposed regulations target employees 
in any

[[Page 65947]]

manner. The final regulations streamline and simplify performance-based 
actions and adverse actions without compromising employees' statutory 
rights and protections. The statutory protections for Federal employees 
remain in force and are not affected by the rule.
    The regulations also do not change the rights and duties afforded 
to labor organizations and agencies pursuant to 5 U.S.C. chapter 71. 
OPM believes that these changes are necessary to make procedures 
relating to performance-based actions and adverse actions more 
efficient and effective.
    Some commenters voiced confusion and believe that the rule is 
another action by the administration to arbitrarily punish and dispense 
with Federal employees and union representatives in the name of 
``efficiency.'' Many commenters stated that the proposed rule will make 
it easier to remove employees who do not comply with the 
administration's views. In particular, one commenter stated the 
proposal was politically motivated and that the ability of elected 
officials with political motives to quickly terminate Federal employees 
leads to excessive influence and poor decision making. The commenter 
observed that it needs to be ``hard'' to remove a Federal employee so 
that they can ``operate independently.'' Another observed that 
competent people do not deserve to lose their jobs ``based on who's in 
power.'' A commenter stated that one of the hallmarks of our current 
system is its freedom from political influence which could change under 
this proposed rule. One commenter proposed adding protections for those 
employees who do not comply with the administration and opined that the 
protections will prevent employees from inadvertently breaking Federal 
laws, help the American public, and prevent costly wrongful termination 
lawsuits. This commenter asserted that the rule creates openings for 
managers to wield political influence in the Federal workplace and to 
change the workforce to meet a personal or political agenda, rather 
than fulfilling the mission of the organization. Finally, the commenter 
stated that Americans deserve a politically neutral Federal workforce.
    In response to these concerns, please see our earlier discussion 
regarding protections. The statutory protections for Federal employees 
remain in force and are not affected by the rule. In addition, the 
current and revised procedures are content-neutral; there is nothing in 
the changes that further permits or encourages the initiation of a 
personnel action based on an employee's opinion or viewpoint. All 
avenues of redress for employees remain unchanged by this regulation, 
and, should an employee believe that he or she is the subject of a 
prohibited personnel action, reprisal, etc., the employee remains able 
to exercise rights to appeal to the Merit Systems Protection Board 
(MSPB or Board), to seek relief from the Office of Special Counsel 
(OSC), etc.
    A significant issue raised in the public comments concerns the 
proposed rule's fairness. Many commenters stated that the rule is 
unfair, fosters a toxic work environment, or weakens employee 
protections. One commenter stated that when there is ``no equal 
fairness,'' work productivity will suffer and that OPM ``should tread 
softly'' regarding the proposed rule. Another commenter further stated 
that he has seen the workplace be degraded and morale reduced because 
of vindictive approaches to employee relations and questionable policy 
changes at the expense of workplace engagement, performance incentives, 
and public health and welfare.
    Additional commenters were of the view that the proposed rule is 
senseless and wrong, while another commenter stated that the rule is 
``morally questionable.'' Many commenters stated that the proposed rule 
would seriously disrupt and remove all notions of fairness when Federal 
employees are subject to adverse actions or that the rule is 
``abhorrent.'' Multiple commenters asserted that the proposed rule 
would foster disparate standards for application to both performance 
and conduct-based actions. They expressed a view that parts of the rule 
are merely confusing, while other parts appear to be designed to foster 
contentious labor relations, rather than resolving these issues in a 
cooperative and constructive manner. Commenters voiced concerns 
regarding fairness for those civil service employees who are veterans. 
Without providing specifics, a commenter stated this rule is very 
unfair to those individuals who served in the military and those who 
work as Federal employees. Still another commenter, again without 
giving a basis for the comment, voiced concerns regarding stripping 
away rights of those Federal employees who have served this nation and 
continue to serve and stated that those rights should be left alone.
    As previously explained, we disagree that the proposed regulations 
take employee rights away or are unfair. Although we have made changes 
to the proposed regulations, statutes that guard against arbitrary 
actions remain intact. Additionally, protection of employee rights is 
an important element of fair treatment in the Federal workforce. The 
rule observes and is consistent with the merit system principles which 
state that employees should maintain high standards of integrity, 
conduct, and concern for the public interest, and that the Federal 
workforce should be used efficiently and effectively. The rule and the 
procedures contained therein apply to all employees equally.
    All employees, including those who served in the military, and 
labor organizations continue to have the right to challenge or seek 
review of key decisions. Although we have made changes to the proposed 
regulations, procedural rights and other legal protections are 
preserved. Mirroring statutory requirements, the regulations continue 
to provide employees with notice, a right to reply, a final written 
decision, and a post-decision review of any appealable action. 
Bargaining unit employees continue to have the option to use negotiated 
grievance procedures over subjects otherwise not excluded while other 
employees continue to have the ability to utilize administrative 
grievance procedures. These regulations do not change the rights and 
duties afforded to labor organizations in 5 U.S.C. chapter 71. We 
believe these changes are necessary to make procedures relating to 
performance-based actions and adverse actions more efficient and 
effective. It is not clear what the concern is regarding the comment 
about ``fostering disparate standards for application to both 
performance and conduct-based actions.'' The statutory scheme in 5 
U.S.C. chapter 43, Actions Based on Unacceptable Performance, and 5 
U.S.C. chapter 75, Adverse Actions, are different and each establishes 
a distinct procedural process. The proposed regulations are consistent 
with the statutes that govern these actions. Regarding those commenters 
who expressed a view that parts of the rule are confusing, while other 
parts appear to be designed to foster contentious labor relations, 
rather than resolving issues in a cooperative and constructive manner, 
we are not able to provide a response without specific reference to the 
parts of the proposed rule about which they are commenting.
    National unions and other commenters asserted that the approval of 
the proposed rule will set the efficiency of the Federal service back 
several decades and contribute to what they assert are current issues 
concerning retention of stellar employees and recruitment in key 
agencies. Many national unions and commenters expressed considerable 
apprehension

[[Page 65948]]

about the rule's impact on retention and recruitment of employees in 
the Federal government with an already dwindling workforce. Some 
commenters pointed out that the rule changes will undermine integrity 
and morale as well as hamper the recruitment and retention of a quality 
Federal workforce. Some commenters requested that OPM reconsider given 
the long-term ramifications that this rule would cause and the dire 
effects these commenters believe it would have on employee morale, 
retention, and recruitment. Other commenters stressed that the proposed 
rule would ``wreak havoc'' on the stability of the civilian workforce, 
lower morale, and create a hostile employee/employer relationship 
during a time when many agencies already suffer from personnel 
shortages.
    We disagree that the rule will unfavorably impact the retention and 
recruitment of employees in the Federal government or undermine morale. 
The rule is not a plan for reducing recruitment or interfering with the 
retention of staff performing at an acceptable level. Rather, the rule 
carries out E.O. 13839 which notes that merit system principles call 
for holding Federal employees accountable for performance and conduct. 
E.O. 13839 finds that the failure to address unacceptable performance 
or misconduct undermines morale, burdens good performers with subpar 
colleagues and inhibits the ability of executive agencies to accomplish 
their missions. Accordingly, the rule is intended to have a positive 
impact on the Federal government's ability to accomplish its mission 
for the American taxpayers.
    More specifically, with respect to retention, commenters asserted 
that many talented individuals will not consider the Federal government 
as an employer and those individuals currently in the Federal 
government will look elsewhere for employment. Some commenters stated 
that many agencies have recently executed poorly planned office moves 
and other reorganizations which have resulted in employees leaving in 
disgust and a loss of institutional knowledge, accelerating employee 
losses from attrition. These commenters stated that poorly planned 
changes to Federal employee performance management such as those in the 
proposed rule will ensure similar results. One commenter further 
reflected that imposing damaging rules will make employee retention 
more difficult than in the private sector and that it will make serving 
Federal customers ``challenging'' because it is a known fact that 
``happy employees work harder.'' One commenter asserted that, with what 
the commenter described as ``the hiring restrictions,'' the proposed 
rule will result in reducing the efficiency and strength of the Federal 
workforce as there will be mass attrition and mass migration away from 
Federal jobs to the severe detriment of all U.S. citizens who need 
Federal employees.
    A commenter stated that the rule serves as additional evidence that 
the rights of thousands of Federal employees no longer mattered or are 
valued. Another commenter asserted that these changes are a direct 
attack on Federal workers and their livelihoods as these rule 
amendments only make it easier for management to punish arbitrarily and 
fire at will; the changes thus constitute a major blow to the prospect 
of the Government becoming a desirable place to work again. Further, 
one national union stated that the proposed regulations will allow good 
employees to be terminated and create a high turnover rate in the 
Federal government.
    A commenter also wrote that the commenter felt disrespected by 
efforts to remove existing benefits for Federal employees and that this 
rule may result in employees deciding that the private sector is a 
better option. A commenter remarked that bad treatment of employees 
will ensure the inevitable failure of our government.
    The assertions that the proposed rule would adversely impact 
retention of Federal employees are incorrect and not supported by any 
data. The rule does not remove statutory procedural rights afforded to 
Federal employees and does not turn Federal employees into at-will 
employees. The rule does not change the protections of notice, an 
opportunity to reply, the right to representation, and the right to 
appeal to a third-party entity (and, eventually, the entity's Federal 
reviewing courts). The rule clearly acknowledges the ongoing obligation 
of Federal employers to provide statutory safeguards to their 
workforce. It therefore should be evident from the rule that the 
Federal government remains committed to practices of fair treatment for 
employees. In fact, the rule promotes processes that help agencies 
retain employees who are performing acceptably and efficiently remove 
those who fail to perform or to uphold the public's trust.
    Commenters also raised concerns about recruitment of talented 
individuals into the Federal workforce. A commenter stated that, 
although the existing system may have been overly generous to 
employees, the proposed changes are so ``draconian'' as to discourage 
``our best young people'' from wanting to serve their country in 
Federal civil service. Another commenter asserted that it was hard to 
believe that the proposed rule would have a positive impact on the 
Federal government and that ``adding a `lifetime at will' line to the 
contract after the first year will not attract the best and 
brightest''. Further, a commenter stated that it is deeply troubling 
that it will be easier to remove Federal employees and that procedures 
that provide fair and equitable treatment will be stripped away, which 
would result in attracting a less qualified pool of applicants.
    Additionally, with respect to recruitment, another commenter 
stressed that the role of a government employee is unique and the 
individuals occupying these roles hold specialized and institutional 
knowledge not common in private enterprise. This commenter went on to 
state that if the basic protections of Federal employment are removed, 
so will be any incentive for individuals to seek and apply for 
government jobs, an impact that may be hard to overcome or reverse. 
Another commenter asked what skilled persons would work for the 
Government if they knew they could be disciplined or fired abruptly for 
very little or no reason at all, and the commenter further stated that 
we need those who are skilled to perform the functions of the Federal 
government.
    OPM disagrees that the rule will have an adverse effect on 
recruitment of talented individuals to the Federal government. 
Maintaining high standards of integrity, conduct, and concern for the 
public interest, as enumerated by the merit system principles, and 
furthered by the rule, only serves to help agencies to deliver on their 
mission and on providing service to American people. It is thus 
reasonable to conclude that adherence to these standards will 
contribute to successful recruitment efforts for the Federal workforce.
    Referring to the probationary period in relation to recruitment, a 
national union stated that in certain regions, the Government 
experiences challenges in recruiting and retaining first responders. 
The national union added that the Government provides initial training 
and certification to new employees to help fill much needed positions. 
The national union further stated that under the proposed regulations, 
employees who must complete a two-year probationary period upon 
appointment could be terminated based on their supervisors' assessment 
that they cannot adequately perform the job duties. The national union 
asserted that the proposed regulations will result in the Government 
losing their investment in

[[Page 65949]]

highly skilled workers and continuing to struggle to fill essential 
first responder positions, leaving government personnel and property 
more vulnerable to emergencies.
    The rule does not change the procedures for terminating a 
probationer's appointment; it merely requires that agencies notify 
supervisors to make an assessment of the probationer's overall fitness 
and qualifications for continued employment at prescribed timeframes 
before the conclusion of the probationary period. Current regulation, 
as reinforced by E.O. 13839 and previous OPM guidance, already provides 
that an agency shall utilize the probationary period as fully as 
possible to determine the fitness of the employee and shall terminate 
his services during this period if he fails to demonstrate fully his 
qualifications for continued employment. See 5 CFR 315.803(a).
    In response to the comment regarding expenditure of agency 
resources associated with terminations in year two of a probationary 
period, OPM believes that while a termination in the second year of a 
probationary term represents a loss of value from significant agency 
expenses, it would be more wasteful to retain the individual past the 
probationary period, allow him or her to acquire career status (and 
adverse action rights), and then be forced to pursue a formal 
performance-based action or adverse action to remove an employee who 
had proven to be unable to perform the duties of the position in an 
acceptable manner even before those rights accrued.
    One national union stated that the proposed changes are unsupported 
by the facts and are likely to have an overall negative effect on 
government operations by reducing due process for Federal employees and 
increasing arbitrary and capricious agency conduct. This national union 
stated that what they described as ``the so-called'' Case for Action 
that OPM sets forth at the beginning of the proposed regulations is not 
grounded in fact. The national union further stated that OPM looks to 
the Federal Employee Viewpoint Survey (FEVS), which is a subjective 
survey of employee perceptions. That union further claims that, 
although ``a majority of both employees and managers agree that the 
performance management system fails to reward the best and address 
unacceptable performance,'' the evidence actually shows that, far from 
failing to adequately address poor performance, Federal agencies 
routinely take actions against employees based on allegations of 
misconduct or poor performance and that those actions are almost always 
upheld. The national union stated that when cases are not upheld by the 
Board, this small number of cases is not a failure of the system but 
rather an example of the system working effectively in a manner that 
fosters merit system principles. The national union also pointed out 
that given the reasons on which each reversal was based, the proposed 
regulations will not avoid or eliminate similar outcomes in the future. 
The national union asserted that OPM's contention that 
``interpretations of chapter 43 have made it difficult for agencies to 
take actions against unacceptable performers and to have those actions 
upheld'' is thus demonstrably untrue. The national union argues, 
therefore, that changes proposed by OPM to 5 CFR part 432 are 
unwarranted. It further stated that the above-referenced case outcomes 
are neither anomalous nor confined to performance-based actions. The 
national union further expounded on its point and stated that, going 
back to fiscal year 2016, the Board's Annual Report for Fiscal Year 
2016 statistics continue to demonstrate that agencies are, in fact, 
overwhelmingly successful in taking actions based on misconduct or 
performance. Consequently, this national union stated that The Case for 
Action that OPM purports to make is illusory.
    OPM disagrees with the union's discounting of OPM's reliance upon 
FEVS statistics. E.O. 13839 asserted that the FEVS has consistently 
found that less than one-third of Federal employees believe that the 
Government deals with poor performers effectively. OPM believes that 
this statistic is particularly relevant to the intent of E.O. 13839 and 
thus to the changes proposed in these regulations. Merit system 
principles state that employees should maintain high standards of 
integrity, conduct, and concern for the public interest, and that the 
Federal workforce should be used efficiently and effectively. They 
further state that employees should be retained based on the adequacy 
of their performance, that inadequate performance should be corrected, 
and that employees should be separated who cannot or will not improve 
their performance to meet required standards.
    With respect to the frequency with which agencies prevail at the 
Board, we do not believe any such success makes the rule changes 
unnecessary. As previously discussed, even if this phenomenon is real, 
statistics surrounding rate of actions being sustained does not obviate 
the need to improve the effectiveness and efficiency of the process. 
These regulations carry out E.O. 13839 to facilitate a Federal 
supervisor's ability to promote civil servant accountability while 
simultaneously recognizing employees' statutory procedural rights and 
protections. They clarify procedures and requirements to support 
managers in addressing unacceptable performance and promoting employee 
accountability for performance-based reduction in grade, removal 
actions and adverse actions.
    Another national union also discussed The Case for Action, arguing 
that the rule weakens civil service protections and that it relies upon 
a premise, as its central argument, that it is too hard to fire Federal 
employees. The union, without evidence, opined that underlying that 
premise is the belief that more employees need to be fired. It also 
noted that while OPM relies upon the FEVS, where a majority of both 
employees and managers agree that the performance management system 
fails to reward the best and address unacceptable performance, OPM does 
not cite responses to specific FEVS questions that support this 
statement. The union goes on to cite responses in 2018 to two FEVS 
questions: Question 23--``In my work unit, steps are taken to deal with 
a poor performer who cannot or will not improve'' and Question 25--
``Awards in my work unit depend on how well employees perform their 
job.'' The union gave the percentages of the total respondents who 
either disagreed or strongly disagreed with these statements and noted 
that this did not constitute a majority of responders. They also noted 
that a large percentage of respondents strongly agreed or agreed that 
they were held accountable for achieving results and felt that the 
overall quality of their unit's work was good to very good. According 
to the union, in general, respondents see themselves and others in 
their work units as being held accountable and performing well, while 
perceiving that others are not. Additionally, the national union 
asserted that OPM has ``simplistically'' cited FEVS data and not 
followed OPM's own advice, which cautions, on the page titled 
``Understanding Results,'' that the survey results do not explain why 
employees respond to questions as they do and that survey data should 
be used with other data to assess the state of human capital 
management.
    OPM believes that the union's reliance and characterization of the 
FEVS data for 2018 is inadequate to dismiss The Case for Action. While 
the national union asserts that OPM is ``simplistically'' citing FEVS 
data, it appears the national union may be

[[Page 65950]]

doing this to support its own position. As explained in E.O. 13839, the 
FEVS has consistently found that less than one-third of Federal 
employees believe that the Government deals with poor performers 
effectively. As noted in OPM's FEVS Governmentwide Management Report 
for 2019, this continued a five-year trend of reporting concerns about 
the manner in which poor performance is addressed. From 2015 to 2019, 
as few as 28% and as many as 34% of employees believed that steps are 
taken to deal with poor performers in their work unit. Additionally, 
the FEVS is only one of the several foundations presented in The Case 
for Action. Merit system principles are referred to in The Case for 
Action as the basis for holding Federal employees accountable for 
performance and conduct. Merit system principles state that employees 
should maintain high standards of integrity, conduct, and concern for 
the public interest, and that the Federal workforce should be used 
efficiently and effectively. They further state that employees should 
be retained based on the adequacy of their performance, inadequate 
performance should be corrected, and employees who cannot or will not 
improve their performance to meet required standards should be 
separated. Also, the PMA is a key component of The Case for Action. The 
PMA recognizes that Federal employees underpin nearly all the 
operations of the Government, ensuring the smooth functioning of our 
democracy. Further, The Case for Action sets forth that prior to 
establishment of the PMA, the memorandum M-17-22 called on agencies to 
take near-term actions to ensure that the workforce they hire and 
retain is as effective as possible. More recently, E.O. 13839 notes 
that merit system principles call for holding Federal employees 
accountable for performance and conduct and found that failure to 
address unacceptable performance and misconduct undermines morale, 
burdens good performers with subpar colleagues and inhibits the ability 
of executive agencies to accomplish their missions. Finally, the 
union's reliance on how often agencies prevail in employee appeals 
before the Board is undermined by the FEVS data which shows that a 
majority of both employees and managers agree that the performance 
management system fails to reward the best and address unacceptable 
performance. In fact, OPM did not state that these regulatory changes 
are related to how often agencies win or lose before the Board. How 
often agencies prevail on cases that are actually appealed to the Board 
is not relevant to why OPM proposed these changes.
    One commenter asserted that OPM does not state that it has done a 
Federal workplace root cause analysis to justify the proposed rule, and 
that, instead, OPM cites a non-scientific FEVS based on subjective 
opinions. The commenter cautioned OPM that implementing the rule 
without such analysis can end up costing Federal agencies, although the 
commenter did not specify in what way there could be a cost to Federal 
agencies. Another commenter criticized OPM's use of FEVS results to 
justify the need to support drastic changes to regulations. Other 
commenters stated that E.O. 13563 cited within the proposed rule 
emphasizes the importance of quantifying both costs and benefits, of 
reducing costs, of harmonizing rules and of promoting flexibility and 
that the proposed rule appears to do none of these things. Some 
commenters criticized the proposed rule because it does not include an 
assessment. Two commenters further asserted that OPM should have 
provided an analysis of the costs and benefits anticipated from the 
regulatory action as well as an analysis of alternatives. The 
commenters stated that this omission is especially problematic in light 
of the Preamble on page 48794 of the Federal Register notice of the 
proposed rule, which ``recognizes that federal employees underpin 
nearly all the operations of the Government, ensuring the smooth 
functioning of our democracy.'' The commenters stated that, because the 
proposed rule is a ``significant regulatory action'' under E.O. 12866, 
OPM must assess the potential costs and benefits of the regulatory 
action. In addition, the commenters opined that, in addition to this 
status as a ``significant regulatory action,'' the proposed rule should 
also be considered ``economically significant.'' In the commenters' 
view, it is likely to have an annual effect on the economy of $100 
million or more unless OPM can certify that Federal departments and 
agencies will use the rule to expedite adverse actions of fewer than 
1,000 full time equivalents (FTEs) Government-wide. As the basis for 
this estimate, the commenters stated, ``For example, the Proposed Rule 
would have an effect of $100 million, such as cost savings, if it would 
lead to job losses of at least 1,000 full-time equivalent employees 
earning approximately $100,000 per employee in salary and benefits. The 
average salary for federal employees, excluding benefits, was $84,558, 
according to OPM FedScope data for Sept. 2018 (most recent available 
data) . . . . For example, IRS employees have an average return on 
investment of at least $2 in revenue collection per $1 on enforcement 
staff costs, according to GAO-13-151. SSA employees performing certain 
eligibility reviews have an estimated return on investment of $15 in 
savings per $1 on staff costs, as noted in GAO-16-250. Similarly, 
productivity changes could result from other federal employees, 
including auditors, investigators, and inspectors general with returns 
on investment for taxpayers and effects on the economy. However, the 
rule does not assess costs and benefits and does not present or analyze 
alternatives.'' The commenters asserted that the rule is likely to have 
``an annual effect'' of at least $100 million in terms of direct and 
indirect costs. In the view of the commenters, direct costs include 
appeals and litigation among other costs and indirect costs include 
productivity changes and secondary effects such as economic multiplier 
effects. The commenter did not further explain what is meant by 
``economic multiplier effects.''
    We disagree that the proposed rule does not assess costs or reflect 
benefits that will be conferred, that there is a requirement for the 
proposed rule to present or analyze alternatives and that there is a 
requirement to conduct a root cause analysis. In The Case for Action, 
the proposed rule presents the costs and benefits in numerous 
instances. We discuss that in the FEVS, a majority of both employees 
and managers agree that the performance management system fails to 
reward the best and address unacceptable performance. We refer to the 
PMA and its call for agencies to establish processes that help agencies 
retain top employees and efficiently remove those who fail to perform 
or to uphold the public's trust. The Case for Action considers, as 
well, M-17-22 which notably directed agencies to ensure that managers 
have the tools and support they need to manage performance and conduct 
effectively to achieve high-quality results for the American people. As 
explained in The Case for Action, the changes to the regulations are 
proposed to implement requirements of E.O. 13839, the vision of the PMA 
and the objectives of M-17-22. These proposed changes not only support 
agency efforts in implementing E.O. 13839, the PMA and M-17-22, but 
also will facilitate the ability of agencies to deliver on their 
mission and on providing service to American people.
    Noting that merit system principles call for holding Federal 
employees accountable for performance and

[[Page 65951]]

conduct, OPM also observed that the merit system principles require 
that employees should maintain high standards of integrity, conduct and 
concern for the public trust, and that the Federal workforce should be 
used efficiently and effectively. Similarly, OPM explained that the 
merit system principles provide that employees should be retained based 
on the adequacy of their performance, inadequate performance should be 
corrected, and employees should be separated who cannot or will not 
improve their performance to meet required standards. Ultimately, as 
covered in The Case for Action, these changes support both the merit 
system principles and the President's goal of effective stewardship of 
taxpayers' money by our government. Thus, costs and benefits associated 
with the proposed rule are assessed in The Case for Action.
    We disagree with the commenters' assertion that the proposed rule 
should be considered ``economically significant'' because it is likely 
to have an annual effect on the economy of $100 million or more, unless 
OPM certifies that Federal departments and agencies use the proposed 
rule to expedite adverse actions of fewer than 1,000 full time 
equivalents (FTEs) Government-wide. The commenters assume incorrectly 
that the Federal government will remove a certain number of FTE 
positions in one year without any basis for arriving at that figure. 
Furthermore, in response to the commenters' discussion of direct costs 
in the form of appeals and litigation, there is nothing to indicate 
that the changes pursuant to the regulations will in any way increase 
the number of formal disputes generated rather than make the process 
more efficient which will actually save the government money. The 
indirect costs put forward by the commenters include ``productivity 
changes and secondary effects such as economic multiplier effects.'' To 
reiterate, the supposition that the proposed rule would have an annual 
effect on the economy of $100 million or more unless OPM certifies that 
the proposed rule would be used to ``expedite adverse actions'' of 
fewer than 1,000 FTEs is not based on any reasonable, objective 
criteria. OPM is unable to fully respond to these comments since the 
commenter did not explain the basis for their assertions.
    Another individual commenter wrote that the proposed rule is a good 
idea but questioned whether the timeframes were realistic for 
management to meet, noting that adverse actions and performance-based 
actions require review and input from several offices in an agency and 
that coordinating these moving pieces is often a large part of why 
actions take so long. The commenter asked, ``Is it really only the case 
that when there's a deviation from the timeframes, the agency reports 
it to OPM and moves on? What are the consequences?'' This commenter 
also requested that we clarify the extent to which the proposed rule 
applies to non-executive agencies and employees.
    Although the commenter did not refer to a particular section, we 
surmised that the commenter is referring to Sec.  752.404(b) of the 
rule which provides that, to the extent an agency, in its sole and 
exclusive discretion deems practicable, agencies should limit written 
notice of adverse actions taken under subpart D to the 30 days 
prescribed in 5 U.S.C. 7513(b)(1). Any notice period greater than 30 
days must be reported to OPM. Regarding whether the timeframe is 
realistic, the provision stipulates that it is required only ``to the 
extent an agency . . . deems practicable.'' As to what consequences 
will ensue for departure from the time period prescribed, the rule 
provides only for a report to OPM. Finally, in response to the 
commenter's question as to the extent to which the proposed rule 
applies to non-executive agencies and employees, those agencies covered 
by title 5 are enumerated in 5 U.S.C. chapter 1.
    A national union critiqued the requirement for agencies to collect 
data about disciplinary, performance and adverse actions taken against 
probationers and employees as burdensome because it appeared to the 
national union to be intended to serve no purpose other than to 
encourage agencies to take such actions. The union averred that adverse 
personnel actions should be a last resort, not a primary tool for human 
resource management and that the rule will only discourage the public 
from pursuing government careers. Yet the overall, unfounded theme of 
these regulations, according to the union is that more Federal 
employees need to be fired more quickly. The union stated that OPM 
cites no authoritative data or studies to support this notion and that 
no reputable private sector employer publishes attrition or termination 
data for the obvious reason that it would send the message to 
prospective applicants: ``You don't want to work here.'' The union 
surmises that perhaps that is the point of the data collection 
requirement.
    The union recommended that instead of collecting data on punitive 
measures, data should be collected on agency efforts to improve the 
skills and performance levels of their workforce, such as the number of 
employees who successfully completed their probationary periods and the 
number of employees who successfully completed a performance 
improvement period. This union highlighted that much is invested in 
recruiting and training employees, and if the government wants to 
portray itself as a welcoming workplace, it should place the emphasis 
on securing a return on that investment.
    The data collection requirement in the rule's preamble carries out 
E.O. 13839 to enhance public accountability of agencies. It is not a 
signal to prospective candidates for employment to refrain from joining 
the Federal workforce. Also, private employers do not have the 
responsibility to be accountable to the public in the same way as the 
Federal government.
    Some commenters stated that in addition to the issues concerning 
the legal and technical substance of the rule, there appear to be 
procedural issues as well. These commenters took objection to the 
preamble to the rule stating that the rule will not include new 
regulations to codify the ``Data Collection of Adverse Actions'' 
section of the guidance issued by OPM on July 5, 2018, and instead, OPM 
will issue reminders each year. The commenters asserted that this is a 
circumvention of requirements for transparent government, and that they 
believed OPM must issue rules for Federal agencies to comply with, 
rather than ``conducting business and issuing directives behind closed 
doors, eroding the public's trust rather than building on it.''
    We disagree with the argument that OPM must outline data 
requirements in this rule and that not doing so is a circumvention of 
requirements for transparent government. The data collection 
requirements are transparent because they are outlined in the publicly 
available E.O., and OPM's guidance documents to agencies are typically 
posted on a public Government website.

5 CFR Part 315, Subpart H--Probation on Initial Appointment to a 
Competitive Position

    Section 2(i) of E.O. 13839 providesa probationary period should be 
used as the final step in the hiring process of a new employee. 
Supervisors should use that period to assess how well an employee can 
perform the duties of a job. A probationary period can be a highly 
effective tool to evaluate a candidate's potential to be an asset to an 
agency before the candidate's appointment becomes final.

[[Page 65952]]

    OPM proposed an amendment to 5 CFR part 315.803(a), which would 
require agencies to notify supervisors that an employee's probationary 
period is ending, at least three months or 90 days prior to expiration 
of the probationary period, and then again one month or 30 days prior 
to expiration of the probationary period, and advise a supervisor to 
make an affirmative decision regarding the employee's fitness for 
continued employment or otherwise take appropriate action.
    Pursuant to current OPM regulations, supervisors are currently 
required to utilize the probationary period as fully as possible to 
determine the fitness of employees and further required to terminate 
the services of a probationary employee if they fail to fully 
demonstrate qualifications for continued employment. Supervisors 
choosing to terminate a probationary employee under the procedures 
outlined in Part 315 must do so affirmatively prior to the conclusion 
of the probationary period, while an employee is permitted to continue 
employment following probation merely on the basis of the supervisor's 
not taking action. Nevertheless, and at the heart of this proposed 
regulation is the fact that supervisors actions or omissions determine 
whether a probationary employee is retained or terminated in each and 
every instance. The proposed rule simply reminds supervisors of their 
responsibility to make an affirmative decision and not allow a 
probationer to become a career employ merely by default; it does not 
alter the decision-making process nor does it in any way alter the 
regulatory structure currently in place that governs the decision-
making process.
    An agency suggested that OPM amend the proposed rule to change the 
90-day and 30-day notification periods to calendar days for clarity. 
The same agency suggested that agencies may need to develop stand-alone 
technology solutions for making supervisory notifications because of 
the lack of Government-wide or even department-wide technology 
solutions and capabilities. This agency recommends that OPM account for 
the time it may take for agencies to develop such automated solutions 
into any implementation timeframes.
    OPM agrees that further clarification with respect to the 
notification periods would be helpful. We have modified the proposed 
language to require agencies to notify supervisors three months and one 
month in advance of an employee's expiring probationary period. For 
example, if an employee's probationary period is due to expire on June 
19, 2020, the three-month notification would occur on March 19, 2020, 
and the one-month notification on May 19, 2020. OPM has updated the 
final rule accordingly. Agencies have the discretion to determine the 
method for making supervisory notifications, but OPM encourages 
agencies to use existing automated tools, to the extent practicable, to 
comply with the notification requirement.
    Two management associations supported the proposed rule, citing 
reports issued by the MSPB and the Government Accountability Office 
(GAO) that highlight Government's inconsistent and poor use of the 
probationary period for new hires and for new supervisors. These 
organizations also emphasized the importance of the effective use of 
probationary periods for both new supervisors and executives.
    With regard to the assertion that probationary periods are handled 
poorly or inconsistently, these concerns are addressed in the current 
language of the regulation, in part, by encouraging full utilization of 
probationary periods which allows for effective review of employee 
fitness for a position and through the 90- and 30-day reminders in the 
amended regulation which serve both to promote consistency in this 
process and promote accountability by requiring that agencies 
affirmatively determine employee fitness rather than making such 
decisions through inaction. Also, the proposed rule does not impact 
supervisory or executive probationary periods, which are regulated at 
subpart I of 5 CFR 315 and subpart E of 5 CFR 317, respectively.
    A management association supported the proposed rule and commented 
that some agencies have cumbersome and time-consuming review processes 
which make the 90-day notification period ineffective. This 
organization suggested OPM add a 180-day notification period with 90- 
and 30-day follow up periods. OPM is not adopting this suggestion. OPM 
believes the proposed intervals (three months and one month) before 
expiration are sufficient. Agencies may adopt more frequent reminder 
periods if they choose to do so.
    One agency supported the proposed rule noting that it may make 
managers and supervisors more aware of probationary deadlines, thus 
preventing them from waiting until the last minute to decide whether an 
employee is fit for service beyond the probationary period, and 
requiring them to better utilize the probationary period. The agency 
also noted the proposed rule creates a new procedural technicality for 
agencies to overlook, and noted that inconsistent notification methods 
may be problematic across agencies. This agency suggested OPM clarify 
that an agency's failure to notify supervisors at the proposed 
intervals does not give the employee any additional appeal rights with 
respect to probation.
    OPM believes such an amendment to the regulation is unnecessary. 
The one- and three-month notification represents an administrative tool 
to be utilized internally by agencies to promote efficiency and 
accountability; it is not intended to, and does not, expand or 
otherwise impact procedural rights of probationary employees. An 
agency's non-compliance with these requirements does not give the 
employee any additional appeal rights beyond those an employee may 
already have. The procedures for terminating probationers for 
unsatisfactory performance or conduct are described in Sec.  315.804 
and those procedures are unaltered by the changes here.
    Despite some support for the proposed rule, OPM received comments 
from many who expressed opposition and concern. One individual opposed 
the rule because it does not specify a timeframe within which a 
supervisor must respond to the employing agency with a decision on 
whether a probationer should be permanently employed. This individual 
also commented that the proposed rule change did not provide an avenue 
for an employee to address an untimely notification from his or her 
supervisor as to his or her continued employment. Finally, the 
commenter noted that the proposed rule does not specify any 
consequences for a supervisor who fails to make a timely notification 
to the employing agency.
    The proposed rule implements Section 2(i) of E.O. 13839. This 
section provides that a probationary period should be used as the final 
step in the hiring process of a new employee. This is consistent with 
OPM's longstanding approach, is supported by judicial decisions, and is 
also in accord with MSPB's oft-stated guidance urging supervisors to 
use the probationary period to the fullest possible extent. See, for 
example, ``The Probationary Period: A Critical Assessment Opportunity'' 
(2005) and ``Navigating the Probationary Period after Van Wersch and 
McCormick'' (2007). E.O. 13839 also encourages supervisors to use that 
period to assess how well an employee can perform the duties of a job. 
E.O. 13839 does not discuss when a supervisor should notify his or her 
employee of the supervisor's decision pertaining to the employee's 
continued employment. OPM defers to the

[[Page 65953]]

employing agencies as to the frequency, timing, and method of 
supervisor-employee communications. OPM also defers to agencies in 
terms of how to address supervisors who fail to make timely decisions 
regarding their probationary employees, thus creating the potential for 
the retention, at least in the short run, of an employee unfit to 
perform the duties of the position and the imposition of additional 
burden if the agency determines to attempt to remove the employee 
through a performance-based or adverse action.
    Another individual was concerned that the 90-day and 30-day period 
reminders would cause managers to second guess their hires. The 
commenter believes that a manager should know what the options are if 
there are issues within the first year of the employee's appointment 
and should not need a reminder. OPM disagrees with this comment. The 
purpose of the proposed rule is to encourage supervisors to make more 
effective use of the probationary period. The probationary period is 
the final, evaluative stage in the examining process, not a period to 
``second guess'' new hires. The three-month and one-month notification 
reminders are designed to help supervisors take full advantage of the 
probationary period in order to make informed decisions about whether 
to retain an individual in the agency's permanent workforce. The 
requirement also promotes accountability amongst supervisors by 
reminding them of their very important responsibility to assess 
employee fitness during the probationary period to ensure that public 
resources in the form of FTEs are being utilized smartly and 
efficiently.
    An agency asked whether OPM foresees any negative impact related to 
the ability of an agency to terminate probationary employees if the 
agency fails to notify supervisors both at the 90-day and 30-day mark 
that an employee's probationary period is ending, and the supervisor 
fails to make an affirmative decision regarding the employee's fitness 
for continued employment or otherwise take appropriate action.
    OPM does not foresee non-compliance with this notification 
requirement having this unintended effect. As explained previously, the 
proposed language is an internal administrative requirement intended as 
a reminder to supervisors to make timely determinations regarding 
probationary employees. It is not intended, however, to modify the 
current performance assessment process, change the manner in which a 
supervisor makes such a determination, or to otherwise bestow any 
additional rights upon probationary employees. Should an agency decide 
to issue a termination of an employee during the probationary period, 
the agency will still rely upon the same assessment pursuant to 5 CFR 
315.804 regarding adequacy of employee performance and conduct.
    The same agency commented that an assessment of the capability of 
existing automated tools, or some other method for notification to 
supervisors that probationary periods are ending is required to ensure 
consistent and efficient compliance with this regulation. Agencies have 
the discretion to determine the method for making the notifications to 
supervisors. OPM encourages agencies to use existing automated tools to 
facilitate timely and consistent notification and understands that, for 
agencies that do not have this current technical capacity, there will 
be a need to take steps to implement a reliable system in a timely 
manner. The proposed rule does not, however, require the use of 
automated tools.
    One individual commented that the proposed rule places probationers 
in limbo by requiring a supervisor to provide an affirmative 
determination for continued employment beyond the probationary period. 
In addition, this commenter noted the proposed rule does not address 
situations (or penalties) for supervisors who fail to make a 
determination either positively or negatively with respect to the 
determination and noted a lack of fairness because of this.
    OPM disagrees with these comments. The proposed rule does not 
require supervisory determination for continued employment. The 
proposed regulation requires agencies to remind supervisors of their 
obligation to make an affirmative decision regarding the employee's 
fitness for continued employment or otherwise take appropriate action. 
Supervisors who let the probationary period lapse without consideration 
of the probationary employee for continued employment run the risk, in 
the short run, of having to retain poor performers or employees 
otherwise inadequately suited to perform the duties of a job. This 
failure to act will also have the effect of increasing the burden on 
the agency if it later seeks to remove the employee through 
performance-based or adverse action procedures. However, as explained 
earlier, it is within the discretion of each agency how they choose to 
address any such non-compliance.
    Two individuals commented that OPM has not addressed why the 
current one-year probationary period is insufficient to assess employee 
effectiveness. These commenters recommended that instead of extending 
the probationary period, OPM should leave the current probationary 
period in place and encourage management to make better use of this 
period.
    OPM disagrees with these comments, because the commenters have 
misunderstood the proposed rule. The rule does not seek to modify the 
length of the probationary period on initial appointment to a 
competitive position (currently established as one year in Sec.  
315.801). The rule seeks to encourage agencies to fully utilize the 
current probationary period by requiring agencies to notify their 
supervisors three months and one month prior to the expiration of an 
employee's probationary period of their obligations to make an 
assessment as to whether the employee should be retained beyond the 
one-year probationary period.
    Seven national unions opposed the proposed rule, commenting that it 
requires supervisors to make a decision prior to the end of an 
employee's probationary period, thereby depriving an employee of the 
full probationary period during which the employee can demonstrate his 
or her fitness for continued employment. These unions stated that 
probationary periods are set in statute, and that there is no 
requirement or obligation on the part of an employee to seek a 
determination at the end of his or her probationary period. These 
organizations accurately note that the proposed rule does not address 
the status of an employee whose supervisor fails to make a 
determination for continued employment before the probationary period 
ends. For these reasons, these entities believe this requirement is 
deceptive and will worsen the Federal Government's hiring and retention 
issues. Several members of one of the unions echoed the same concerns 
and added that it is improper for OPM to substitute its reasoning for 
that of Congress.
    As a point of clarification, the length of a probationary period on 
initial appointment to a competitive position is currently established 
as one year in Sec.  315.801, not statute. Nevertheless, the amended 
regulation does not mandate that a supervisory determination for 
continued employment take place at any particular time nor does it 
establish the 90- or 30-day benchmarks as the conclusion of a 
supervisor's assessment period. Rather, the rule merely requires 
agencies to remind a supervisor to make an affirmative decision 
regarding the employee's fitness for continued employment and take 
appropriate

[[Page 65954]]

action. The supervisor may use this reminder to begin gathering 
materials or collecting his or her thoughts while still deferring the 
actual decision to the end of the probationary period. Thus, the rule 
does not prevent an employee from completing the entire one-year 
probationary period. OPM believes the proposed measures will improve 
the Federal Government's ability to hire and retain individuals more 
effectively than is currently the case. The intent is to avoid 
situations in which a probationer who is not fit for continued 
employment is retained because a supervisor was not aware of the 
probationary period expiration date. OPM trusts that commenters share 
the goal of providing the most comprehensive information possible to 
supervisors to enable them to make an informed decision that will 
ultimately best serve the public.
    A national union commented that the revised regulation requires a 
supervisor to make an affirmative decision and thus for an employee to 
receive an affirmative decision for continued employment beyond the 
probationary period. This union suggested OPM clarify that the 
affirmative supervisory decision contemplated by the proposed rule has 
no effect on whether an employee's probationary period has been 
completed, and also clarify that an employee is under no obligation to 
seek or obtain such an affirmative supervisory decision. Lastly, the 
union stated that if OPM is requiring agencies to notify supervisors in 
advance of the end of an employee's probationary period, OPM should 
also require supervisors to notify their employees. Similarly, a local 
union commented that there is no reason for a supervisor to provide an 
affirmative decision regarding an employee's fitness at the end of the 
probationary period. The union commented that employees will be harmed 
if a supervisor forgets to make an affirmative decision, and the 
proposed rule does not address the consequences of such an omission. 
The union also stated the proposed rule shortens the probationary 
period on their belief that supervisors must make an affirmative 
decision for continued employment 30 days before the end of the 
probationary period.
    OPM disagrees with these comments. The rule does not require that a 
supervisor notify an employee or make an affirmative decision regarding 
an employee's fitness for continued service, nor does it require an 
employee to receive such a decision. The proposed rule requires 
agencies to notify their supervisors of the need to consider whether to 
retain probationers three months and one month prior to the expiration 
of an employee's probationary period. In addition, the proposed 
regulation requires an agency to advise a supervisor to make an 
affirmative decision regarding the employee's fitness for continued 
employment and take appropriate action in a timely manner to avoid 
additional burden. The proposed rule does not prevent an employee from 
completing the one-year probationary period.
    Further, after completing a probationary period, with or without an 
affirmative supervisory determination, the individual becomes a non-
probationary employee and attains appeal rights in accordance with 5 
U.S.C. 7511. As noted above the proposed rule does not require an 
employee to receive an affirmative supervisory determination in order 
to complete the probationary period. Rather, the proposed rule requires 
agencies to advise a supervisor to make an affirmative decision 
regarding the employee's fitness for continued employment or otherwise 
take appropriate action, so that the individual does not gain a career 
position solely by default.
    OPM is not adopting the suggestion to require a supervisor to 
notify his or her employee of an expiring probationary period. The 
purpose of these rules is to improve communications between agencies 
and their supervisors with the aim of better utilizing the probationary 
period. This rule is not intended to modify or otherwise impact 
mechanisms for assessment of employee performance pursuant to part 432 
and applicable agency policies.
    Another national union strongly objected to the proposed rule, 
commenting that it is contrary to the goal of promoting public trust in 
the Federal workforce. The union went on to say that instead of using 
the probationary period to assess an employee's ability to perform the 
job, supervisors are encouraged to terminate probationers for any 
reason, simply because the probationary period is ending. The union 
also stated these rules facilitate agencies' ability to terminate 
probationers as well as permanent employees without providing them with 
an adequate opportunity to improve their performance.
    OPM disagrees that the rule makes it easier for agencies to 
terminate probationary employees. Termination actions during the 
probationary period must be taken in accordance with Sec.  315.804 and 
the criteria for termination established pursuant to these regulations 
remains unchanged by the revised regulation. OPM also disagrees with 
the union's comment that the proposed rule encourages agencies to 
terminate employees simply because the probationary period is ending. 
The purpose of the proposed rule is to assist supervisors in using the 
probationary period properly (i.e., as a period to determine whether an 
individual is fit for continued employment).
    Another national union opposed the rule stating that it is 
unnecessary and that it sends the message that it is more important to 
terminate probationers than assist them with successfully completing 
their probationary period. The same union also commented that OPM 
should address the consequences of when an agency fails to notify the 
supervisor at the 90- and 30-day marks, and whether this situation 
creates a potential defense for a manager faced with a disciplinary or 
performance-based action for being a poor manager.
    OPM disagrees with the assertion that supervisory notification is 
unnecessary and the suggestion that this rule sends a message that 
supervisors should terminate probationers rather than assist them in 
improving their performance. The message this change sends is that 
supervisors should fulfill their responsibilities by affirmatively 
making a determination as to the fitness of a probationary employee. It 
does not encourage supervisors to make any particular determination 
including to terminate an employee. Instead, it prevents instances 
where a supervisor may make a decision by default, where the 
probationary period lapses due to a lack of awareness of the end of the 
period. Supervisors who allow the probationary period to lapse without 
consideration of the fitness of the probationary employee to perform 
the duties of the position create a risk of retaining poor performers 
or employees otherwise inadequately suited for their position. This 
outcome benefits neither the agency, the employee nor the public.
    Several individuals who identified themselves as members of one of 
the national unions commented that the proposed rule is deceptive and/
or confusing in that it requires an employee to receive an affirmative 
supervisory determination in order to complete the probationary period, 
despite no statutory requirement for such a determination. The 
commenters suggested the proposed rule be eliminated or corrected to 
avoid confusion. They disagreed with the need to require a separate, 
affirmative supervisory approval before an employee is found to have 
completed his or her probationary period and noted there is no 
obligation on the part of the employee to seek supervisory

[[Page 65955]]

approval. One of the individuals added, ``The confusion between this 
rule and the statute will do nothing but create problems.'' Another 
added, ``The end of a time period is the end.'' One of the union 
members stated that since probationary periods are controlled by 
statute, it is confusing to require supervisory determination.
    OPM disagrees with any notion that the proposed rule is deceptive 
and notes that the probationary period for initial appointment to a 
competitive position is established in regulation at Sec.  315.801. The 
amended regulation does not require an employee to receive an 
affirmative supervisory determination in order to complete the 
probationary period nor does it require a supervisor to take any action 
that they are not already required to take. The rule requires agencies 
to notify supervisors three months and one month prior to the 
expiration of an employee's probationary period, and to advise a 
supervisor to make an affirmative decision regarding the employee's 
fitness for continued employment or otherwise take appropriate action. 
The purpose of this language is to serve as a reminder to supervisors 
that an employee's probationary period will be ending soon, and of the 
need to consider whether the employee is fit for continued employment 
beyond the end of the probationary period. Thus, the communication is 
between the agency and the supervisor, not the supervisor and employee. 
It is an internal management matter that is not intended to, and does 
not, confer rights on probationary employees if a supervisor fails to 
heed this reminder. OPM is not adopting the suggestion to eliminate or 
amend the proposed rule because it does not conflict with or otherwise 
alter the statutory or regulatory authority pertaining to probationary 
periods. OPM is also not adopting the suggestion to require a 
supervisor to notify his or her employee of an expiring probationary 
period. The purpose of these rules is to improve communications between 
agencies and their supervisors with the aim of better utilizing the 
probationary period.
    One individual commented that there is little need to require 
agencies to notify supervisors of the impending expiration of 
probationary periods because supervisors closely track these dates.
    OPM disagrees with the notion that there is little need for the 
proposed supervisory notification of an employee's probationary period 
expiration date. In some instances, supervisors let the probationary 
period lapse because they are not mindful of the expiration date. 
Supervisors who let the probationary period lapse without consideration 
of the probationer for continued employment run the risk of having to 
retain poor performers or employees otherwise inadequately suited to 
perform the duties of a job in the short run and imposing additional 
burden on the agency if the agency wishes to remove the employee later 
by a performance-based or adverse action. This outcome benefits neither 
the agency nor the employee. By reminding supervisors to diligently and 
promptly make required fitness determinations regarding probationary 
employees and by issuing these reminders at the same point in time 
during the probationary period, OPM believes that this requirement 
promotes procedural consistency and works to the benefit of supervisors 
and probationers alike.
    An agency suggested OPM amend the proposed rule to require only one 
supervisory notification 90 days prior to the expiration of an 
employee's probationary period. The agency also asked OPM to address 
what the consequences will be for an agency which does not provide the 
supervisory notification.
    OPM is not adopting the suggestion to require only one notification 
to supervisors 90 days before the end of an employee's probationary 
period. We believe the proposed notification periods are best designed 
to meet the aim of the Executive Order. We note that agencies may 
choose to provide more frequent notifications. A probationary period 
can be a highly effective tool to evaluate a candidate's potential to 
be an asset to an agency before the candidate's appointment becomes 
final. The procedures for terminating probationers for unsatisfactory 
performance or conduct are contained in Sec.  315.804 and are not 
impacted by the revised regulation.
    The same agency suggested that OPM amend the proposed rule to 
require supervisory notification during a set period of time, or 
window, rather than on the three-month and one-month marks. This 
commenter suggested OPM amend the rule to allow for supervisory 
notification ``and then again at least one month or thirty days prior 
to the expiration of the probationary period.''
    OPM is not adopting this suggestion. We believe agency notification 
to its supervisors is more effective when it occurs on a specific date, 
rather than during a window of dates, because the supervisor will know 
precisely how much time is left in the employee's probationary period. 
This approach also promotes uniformity.
    An organization opposed the proposed rule for four reasons:
    First, the organization commented that the 30-day supervisory 
notification undermines Sec.  315.805, which provides an employee a 
reasonable amount of time to respond in writing to a termination action 
for conditions arising before appointment. OPM disagrees the proposed 
rule could impact an employee's right to respond to a proposed 
termination action based on conditions arising before appointment 
pursuant to Sec.  315.805. Under Sec.  315.805(a) an employee is 
entitled to advanced written notice, and Sec.  315.805(c) states the 
employee is to be notified of the agency's decision at the earliest 
practicable date. The proposed rule does not alter this regulatory 
structure and instead only requires an agency to remind supervisors 
three months and one month ahead of the end of an employee's 
probationary period. These provisions do not impact Sec.  315.805.
    Secondly, this organization commented that the proposed rule does 
not require a supervisor to in fact make a decision or to provide any 
notice to an employee with sufficient time to allow the employee to 
respond. The procedures for making determinations concerning employees 
serving in a probationary period, including criteria for termination, 
are covered under OPM regulations Sec. Sec.  315.803--315.805. The 
commentator's assessment is accurate that no ``notice'' is required 
when issuing a termination under this authority, nor is there an 
opportunity to respond. Again, the changes proposed in this regulation 
do nothing to alter this regulatory structure.
    Next, the organization stated that the proposed rule undermines due 
process because it provides no guidance or requirement that the agency 
notify the employee prior to their termination for performance or 
conduct deficiencies. Due process of law under the Constitution turns 
on the possession of a pre-existing property or liberty interest. The 
courts have held, therefore, that constitutional Due Process applies 
only to tenured public employees--not probationers, who are terminable 
at will. OPM's regulations govern the procedures applicable to 
probationers. Agency termination procedures applicable to probationers, 
including notification to an employee of a termination action, are 
addressed in Sec. Sec.  315.804 and 315.805.
    Lastly, this organization stated that the proposed rule ignores 
what it considers to be the real issue which is constructive 
performance management. The organization commented that the

[[Page 65956]]

proposed rule merely proposes a reminder system to notify supervisors 
of the need to terminate employees prior to the completion of their 
probationary period, without ever addressing an employee's performance 
or conduct until their termination. The organization noted that a 
supervisory determination of poor performance made for the first time 
30 days before the probationary period ends does not allow an employee 
to improve his or her performance.
    The organization accurately notes the proposed rule creates a 
reminder system to aid supervisors in determining the fitness of their 
employees for continued service. However, the commenter misinterprets 
the regulation by stating that it constitutes a reminder to terminate a 
probationary employee rather than what this provision will actually 
serve to do, which will be to simply remind a supervisor of the need to 
prepare to make a timely determination regarding the future employment 
status of probationary employees. The point is to remind supervisors of 
the impending end of the probationary period, to enable them to make 
thoughtful decisions, not to point the supervisors toward one direction 
or the other Again, the intent of these provisions is to remind 
supervisors of the importance of considering a probationer's 
performance, good or bad, in determining whether the employee should be 
retained beyond the probationary period. As current regulations require 
supervisors to fully utilize the probationary period to assess employee 
fitness, OPM would contemplate that agencies would not want supervisors 
to wait until the final month of the probationary period to begin 
making any such assessment. OPM further notes that the proposed rule, 
by helping supervisors avoid ``last minute'' determinations, may 
improve the quality of such decisions, which is to everyone's benefit.
    An agency recommended that supervisory notifications occur 120 days 
before the end of an employee's probationary period, rather than the 
proposed 90- and 30-day notifications. This agency expressed concern 
that the proposed notification intervals may mitigate or conflict with 
employee due process and adverse action appeal rights. The agency 
recommended that OPM amend the proposed language in Sec.  315.803(a) to 
state that appropriate action will be taken to determine whether the 
employee meets the definition of employee in 5 U.S.C. 7511 and is 
entitled to due process and appeal rights.
    OPM is not adopting the suggestion to require supervisory 
notification 120 days and 60 days prior to expiration of an employee's 
probationary period. We believe the proposed notification periods of 
three months and one month before expiration provide sufficient 
reminders to supervisors.
    OPM is also not adopting the suggestion to amend Sec.  315.803(a) 
to require agencies to take appropriate action with respect to 
determining whether an employee is entitled to Due Process and appeal 
rights under 5 U.S.C. 7511. OPM would again clarify that the purpose of 
the proposed rule is to implement Section 2(i) of E.O. 13839 and 
support OPM's consistent position (supported as well by reports of the 
MSPB) that agencies should make efficient use of the probationary 
period by requiring agencies to notify supervisors of the date an 
employee's probationary period ends. The proposed rule represents an 
internal administrative tool to be utilized by agencies to assist 
supervisors; it is not intended nor does it modify or impact any 
procedural processes or rights afforded by statute or regulation. The 
procedures for terminating probationers for unsatisfactory performance 
or conduct are contained in Sec.  315.804 and employee appeal rights 
are described in Sec.  315.806. These provisions are not impacted by 
the proposed rule. The proposed rule does not impact appeal rights for 
employees covered by 5 U.S.C 7511 nor does it preclude agencies from 
informing an employee covered by 5 U.S.C. 7511 (or the employee's 
supervisor) of any procedural rights to which he or she may be entitled 
under section 7511.
    An organization commented that the proposed rule encourages 
agencies to terminate an employee before chapter 75 procedures are 
required. This organization believes the supervisory notification 
periods were proposed to remind supervisors to terminate any such 
employees before the end of the probationary period.
    As discussed, OPM disagrees with the contention that the purpose of 
the proposed rule is to encourage agencies to terminate probationers 
before chapter 75 procedures are required. The purpose is to encourage 
supervisors to make a timely determination as to whether to retain an 
employee beyond the probationary period, whatever that determination 
may be. The regulation is neutral in terms of what determination a 
supervisor ultimately makes as it does not steer supervisors in either 
direction. It simply reminds them of the need to make a determination 
which is already their responsibility.

5 CFR part 432--Performance-Based Reduction In Grade And Removal 
Actions

Section 432.101 Statutory Authority

    Part 432 applies to reduction in grade and removal of covered 
employees based on performance at the unacceptable level. In the 
proposed rule, OPM restated Congress' intent in enacting chapter 43, in 
part, to create a simple, dedicated, though not exclusive, process for 
agencies to use in taking actions based on unacceptable performance.
    An organization concurred with OPM's explanation of its statutory 
authority in Sec.  432.101 in the Supplementary Information. OPM will 
not adopt any revisions based on this comment as no revisions were 
requested.

Section 432.104 Addressing Unacceptable Performance

    This section clarifies that, other than those requirements listed, 
there is no specific requirement regarding any assistance offered or 
provided during an opportunity period. In addition, the proposed rule 
stated that the nature of assistance is not determinative of the 
ultimate outcome with respect to reduction in grade or pay, or removal. 
Some commenters, including an agency and two national unions, voiced 
concerns that the proposed change minimized the importance of providing 
assistance or relieved agencies of the obligation to provide meaningful 
assistance. In response, as discussed in greater detail below, OPM has 
revised Sec.  432.104 to remove the statement that the nature of 
assistance is not determinative of the outcome with respect to a 
reduction in grade or pay or removal. However, it is still the case 
that assistance need not take any particular form. To that end, the 
final regulation will state that the nature of assistance provided is 
in the sole and exclusive discretion of the agency.''
    The section also states that no additional performance improvement 
period or similar informal period to demonstrate acceptable performance 
to meet the required performance standards shall be provided prior to 
or in addition to the opportunity period under this part.
    Three management associations commended OPM for streamlining 
methods for addressing unacceptable performance through chapter 43 
procedures. The organizations lamented the status quo in agencies with 
respect to such actions as burdensome, cumbersome and slow. They 
expressed support for clarifying agency

[[Page 65957]]

requirements with respect to the number and duration of opportunity 
periods, types of assistance offered to employees with unacceptable 
performance and the impact of such assistance on a final personnel 
decision. One of the organizations expressed the view that there should 
be no lengthy or extensive requirements beyond what the law requires to 
improve performance. The organizations did not recommend any changes to 
Sec.  432.104. Indeed, OPM agrees with the commenters that the amended 
regulation promotes a straightforward and efficient process for 
addressing unacceptable performance.
    Two agencies concurred with the amendment to Sec.  432.104 because 
it dispels the misconception in some agencies that a pre-Performance 
Improvement Plan (pre-PIP) or similar informal assistance period is 
required or advisable for chapter 43 procedures. One of the agencies 
stated that it believes the amended regulation will result in a 
shorter, less burdensome, less discouraging, more efficient process for 
addressing poor performance, but nevertheless made further 
recommendations. The agency recommended that the decision to extend an 
employee's performance period should be at the discretion of the 
employee's immediate supervisor if an employee needs more time to 
improve his or her performance. The agency stated that an employee with 
performance issues should be notified formally and given clear 
direction on how to correct the issues, or else the agency will have 
difficulty defending a decision to remove the employee. Finally, the 
agency recommended that OPM provide further guidance in the final rule 
regarding the types of situations where extending or limiting an 
opportunity period would be appropriate.
    In response, OPM confirms that addressing poor performance should 
be a straightforward process that minimizes the burden on managers and 
supervisors and makes the best use of resources, including time spent 
by agency officials. There is nothing in the proposed rule that 
prevents or prohibits a supervisor from considering specific facts and 
circumstances that may impact an employee's job performance and 
developing a reasonable approach to helping the employee achieve 
acceptable performance. With regard to formal notice of unacceptable 
performance, OPM notes that requirements concerning performance 
evaluation and notification already exist within the law (see 5 U.S.C. 
4302 and 4303) and that the proposed amendments to the regulations do 
not impact the regulatory requirements that currently exist for 
agencies to notify employees performing at an unacceptable level ``of 
the critical element(s) for which performance is unacceptable and 
inform the employee of the performance requirement(s) or standard(s) 
that must be attained in order to demonstrate acceptable performance in 
his or her position.'' See Sec.  432.104. Concerning recommendations 
surrounding the extension of an opportunity period, OPM notes that 
current and proposed Sec.  432.104 both require that agencies afford a 
reasonable opportunity to demonstrate acceptable performance, 
commensurate with the duties and responsibilities of the employee's 
position. (Emphasis added.) The factors and considerations that 
establish what constitutes a reasonable opportunity period are also 
delineated in OPM guidance and case law. For these reasons, OPM 
believes it is unnecessary to amend the regulation as the agency 
suggests.
    The other agency that concurred with the amendment at Sec.  432.104 
stated that the changes lessen the likelihood that a `` `failure to 
provide adequate assistance' '' argument would be persuasive at the 
Merit Systems Protection Board (MSPB). The agency recommended adding a 
reference to agencies' requirement to comply with their collective 
bargaining agreements. OPM agrees but would somewhat qualify the 
comment. The regulation should preclude employees from raising failure 
to provide assistance during the opportunity period as a defense 
against a chapter 43 action to the extent that agencies are required to 
provide assistance during the opportunity period, though the assistance 
may take whatever form the supervisor deems necessary to help the 
employee succeed in his or her position.
    OPM will not adopt the agency's recommendation as collective 
bargaining obligations are preserved as required by law under 5 U.S.C. 
chapter 71. Further, as stated in E.O. 13839, agencies must consult 
with their employee labor representatives about the implementation of 
the Executive Order.
    National unions and commenters expressed concerns regarding the 
rule's impact on performance-based actions, and an employee's 
opportunity to improve performance. A commenter stated that, although 
poor performers should be removed from the Federal government, the 
proposed rule may give some managers the ability to remove employees 
without factual evidence to back up the removal action. In a similar 
observation, a national union and commenter stated that the proposal 
would remove important protections from employees and deny them the 
ability to either counter the agency's assessment or correct through a 
mandated improvement process.
    OPM disagrees with these comments. Nothing in the proposed 
regulations should be construed to relieve agencies of their 
obligations under Federal law. Additionally, 5 U.S.C. 2301(b)(2) 
provides that employees should receive fair and equitable treatment. 
Finally, as Government officials are entitled to a presumption of good 
faith, OPM does not accept that changes to the governing regulation 
intended to improve efficiency will lead to abuse. Accordingly, OPM 
does not believe that the proposed rule would lead to the removal of 
employees without factual evidence or interfere with important 
protections for employees, including the ability to provide a response 
to an accusation or receive the required opportunity to demonstrate 
acceptable performance. The amended rule does not relieve agencies of 
the responsibility to demonstrate that an employee was performing 
unacceptably--which per statute covers the period both prior to and 
during a formal opportunity period--before initiating an adverse action 
under chapter 43.
    Many commenters objected to the proposed rule at Sec.  432.104 on 
the bases that the amendment conflicts with certain Executive Orders, 
statutes, case law, and/or the merit system principles; sets bad 
management policy; opens the door to supervisors taking a performance-
based action hastily without offering or providing assistance to an 
employee who has rendered unacceptable performance; may result in 
agencies employing a one-size-fits-all approach to addressing 
unacceptable performance; weakens or violates protections for Federal 
employees; and may cause harm to or confusion among Federal employees 
and or the civil service.
    One agency stated that there is a conflict between the current 
regulation, which requires that an employee be given an opportunity to 
demonstrate acceptable performance, and E.O. 13839 provisions that (1) 
promote the use of chapter 75 procedures for addressing unacceptable 
performance; and (2) require Executive Branch agencies to ensure that 
no collective bargaining agreements include a provision requiring the 
use of chapter 43 procedures to address unacceptable performance. To 
address this concern, the agency suggests rewriting this requirement to 
make it clearer that it applies under chapter 43 (i.e., if an

[[Page 65958]]

employee's removal or demotion if proposed under chapter 43), rather 
than at ``any time'' an employee's performance is unacceptable.
    OPM will not adopt revisions based on this comment because the 
regulation already makes it clear that the requirement in question 
relates to procedures pursuant to chapter 43. Because the requirement 
is only found under chapter 43, it will only apply if an agency opts to 
use that particular set of procedures to address an instance of 
unacceptable performance. If an agency opts to use chapter 75 
procedures to address unacceptable performance, the opportunity period, 
pursuant to chapter 43 would not be applicable. Finally, OPM disagrees 
that the requirements of 5 U.S.C. chapter 43 or any of the revisions to 
5 CFR part 432 conflict with the direction provided to Executive Branch 
agencies in E.O. 13839. Rather, E.O. 13839 states that chapter 75 
should be utilized in appropriate cases and prohibits agencies from 
agreeing to incorporate into collective bargaining agreements 
provisions that would preclude use of chapter 75 to address 
unacceptable performance. The Executive Order also directs agencies to 
streamline the process of addressing unacceptable job performance by 
more strategically using the legal authorities that already exist. The 
revisions to 5 CFR part 432 support the objectives described in the 
Executive Order by revising regulatory provisions that flow from long-
standing and established statutory requirements.
    Three national unions emphasized that an agency must meet all the 
requirements set forth in 5 U.S.C. 4302(c)(5) before taking an action 
based on unacceptable performance, a substantive right intended by 
Congress. One of the unions reasoned that, ``The assistance required by 
Sec.  4302(c)(5) is assistance during the opportunity period because 
(a) by definition, assistance `in improving unacceptable performance' 
occurs after the agency has found performance to be unacceptable; (b) 
under 5 CFR 432.104 the agency must notify an employee `[a]t any time . 
. . that an employee's performance is determined to be unacceptable'; 
and (c) the opportunity period begins when the employee is so notified. 
Because a determination of unacceptable performance triggers the 
obligation to notify, and notification starts the opportunity period, 
these three events--the determination, the notification, and the start 
of the period--are essentially, simultaneous. Upon making the 
determination, the agency must provide, not delay, the notification; 
and the notification starts the opportunity period. Thus, Sec.  4302 
(c)(5) assistance `in improving unacceptable performance' is assistance 
that occurs during the opportunity period.'' The union recommended 
retention of the ``correct, clear, and simple'' language in the current 
regulation at Sec.  432.104.
    Two of the national unions cited Sandland v. General Services 
Administration, 23 M.S.P.R. 583, 589 (1984) to support their point that 
the procedural requirements of chapter 43, including provision of a 
reasonable opportunity to improve, are substantive guarantees and may 
not be diminished by regulation. One stated that the amended regulation 
will lead agencies away from providing employees who face performance 
issues with genuine opportunities to improve, contrary to the language 
and intent of the Civil Service Reform Act (CSRA). The other union 
characterized the proposed rule as eliminating required assistance 
during the opportunity period, contrary to section 4302(c)(6), and 
minimizing the importance of the assistance provided during the 
opportunity period by stating that the nature of such assistance is not 
determinative of a performance-based action, contrary to MSPB case law.
    Several national unions and many of their members (via what 
appeared to be a template letter) expressed concern that the proposed 
rule eliminates a meaningful opportunity period for Federal workers to 
improve performance and save agency resources. The commenters stated 
that the amendments will eliminate and change elements of statutory 
requirements for opportunity periods. They stated also that the 
proposed rule ``discourages the use of simple, easy-to-follow, 
objective standards which (when used correctly by supervisors and 
managers) create consistency across the federal workforce.'' Finally, 
the commenters asserted that supervisors will be granted power in a way 
that was not contemplated by Congress and that conflicts with 
substantive statutory rights.
    In response to the union that recommended retention of Sec.  
432.104 as currently written, OPM disagrees. OPM notes that both the 
current and amended regulations flesh out the statutory requirements of 
5 U.S.C. 4302 and 4303 concerning the baseline requirements that all 
agencies must meet in addressing instances of unacceptable job 
performance. The proposed rule specifically acknowledges and 
incorporates the statutory requirement to provide assistance that is 
set forth in 5 U.S.C. 4302(c)(5). The reference to the relevant statute 
is intended to convey that the regulation will work in concert with the 
law. OPM understands further that the statute requires agencies to 
assist employees in improving unacceptable performance and in 
accordance with 5 U.S.C. 4302(c)(6), agencies may take a performance-
based action only after affording an employee an opportunity to 
improve.
    The amended regulation does not lead agencies away from providing 
employees who face performance issues with meaningful or genuine 
opportunities to improve, and nor is it contrary to the language and 
intent of the CSRA, as one of the unions contends. For further 
clarification regarding concerns that OPM is eliminating statutory 
requirements for opportunity periods or minimizing the importance of 
the assistance provided during the opportunity period, OPM has decided 
to further amend the regulation. Specifically, the language originally 
proposed for Sec.  432.104 will be replaced with, ``The requirement 
described in 5 U.S.C. 4302(c)(5) refers only to that formal assistance 
provided during the period wherein an employee is provided with an 
opportunity to demonstrate acceptable performance, as referenced in 5 
U.S.C. 4302(c)(6). The nature of assistance provided is in the sole and 
exclusive discretion of the agency. No additional performance 
assistance period or similar informal period shall be provided prior to 
or in addition to the opportunity period provided under this section.''
    Some commenters believe that OPM has not demonstrated that the 
current management tools are insufficient. The commenters argued that 
the tools exist today through performance assistance plans and 
performance improvement plans and OPM is removing these tools. The 
commenters further stated that changes in performance assessment could 
have a chilling effect on employees and allow for removals that cannot 
be suitably challenged. Also, the commenters expressed concern that 
these changes will undermine integrity and morale as well as hamper the 
recruitment and retention of a quality Federal workforce. One commenter 
in particular asserted that prohibiting an informal assistance period 
is excessively restrictive and is not mandated by E.O. 13839. The 
commenter recommended that OPM allow agencies maximum flexibility in 
managing their workforce by permitting use of informal assistance 
periods besides the period mandated by 5 U.S.C. 4302(c)(5). The 
commenter stated, ``Retaining experienced employees who demonstrate 
temporarily unacceptable performance rather than moving swiftly toward

[[Page 65959]]

removal increases stability and improves the efficiency of the Federal 
service.'' The commenter recommended that OPM revise the proposed rule 
to state that no additional assistance period or similar informal 
period ``is required'' rather than ``shall be provided.''
    OPM disagrees and will not make any revisions based on these 
comments. Establishing limits on the opportunity to demonstrate 
acceptable performance by precluding additional opportunity periods 
beyond what is required by law encourages efficient use of chapter 43 
procedures and furthers effective delivery of agency mission while 
still providing employees sufficient opportunity to demonstrate 
acceptable performance as required by law. It should also be noted that 
there is nothing in this new requirement that precludes routine 
performance management practices such as close supervision and training 
for employees that encounter performance challenges prior to their 
reaching the point at which they are determined to be performing at an 
unacceptable level and OPM anticipates that such efforts will often 
take place prior to reaching this point.
    Several commenters, also via a template letter, stated that the 
proposed revisions to performance-based actions ``end-run,'' or 
``violate,'' employee rights and a chance to improve during the 
opportunity period. The commenters believe that the proposed rule gives 
no consideration to assisting an employee to attain acceptable 
performance or making the opportunity period genuine and meaningful. 
The commenters went on to say that the opportunity period is a 
statutory requirement that OPM may not eliminate or modify by 
regulation. They stated that OPM is making a mockery of the opportunity 
period by jettisoning well-established practices and essentially 
discouraging the use of objective standards and improvement plans, 
which will result in granting virtually unfettered discretion to 
supervisors in determining what constitutes an adequate opportunity 
period. The commenters urged OPM to acknowledge that a reasonable 
opportunity to improve is a substantive, statutory right that may not 
be diminished by regulation.
    Again, OPM notes that the amended Sec.  432.104 does not alter the 
statutory requirement concerning agency obligations to address 
instances of unacceptable job performance, providing that ``[f]or each 
critical element in which the employee's performance is unacceptable, 
the agency shall afford the employee a reasonable opportunity to 
demonstrate acceptable performance, commensurate with the duties and 
responsibilities of the employee's position.'' OPM does not seek to 
eliminate or modify the statutory opportunity period as asserted; 
however, OPM does have the authority pursuant to its statutory 
delegation (see 5 U.S.C 4305) to elaborate on procedures for addressing 
unacceptable performance to the extent that those procedures are not 
already delineated in chapter 43. It is unclear what specific practices 
the commenters believe are being jettisoned and why the commenters 
believe that the proposed rule discourages the use of objective 
standards and improvement plans. Nonetheless, OPM disagrees with these 
characterizations.
    One commenter recommended that the prohibition on additional 
performance assistance periods be deleted from the proposed rule and 
suggested new language providing an agency with ``sole and exclusive'' 
discretion to informally assist an employee in demonstrating acceptable 
performance. The commenter noted that ``sole and exclusive'' discretion 
would place such assistance outside the duty to bargain and otherwise 
provide agencies the ability to determine their own policies on such 
matters. The commenter found it ironic that the regulation would 
prevent agencies from determining their own policies while the 
Supplementary Information section in support of the proposed rule 
``quite plainly attacks disciplinary solutions `imposed from above' '' 
with regard to tables of penalties.
    The commenter is correct that OPM is taking different approaches 
regarding the prohibition of additional performance assistance periods 
and the use of tables of penalties. However, we believe different 
approaches are appropriate. The Supplementary discussion on tables of 
penalties only informs agencies that the use of tables of penalties is 
not required by law or OPM regulations and reminds them that it may 
limit the scope of management's discretion to tailor the penalty to the 
facts and circumstances of a particular case by excluding certain 
penalties along the continuum. These two issues do converge, however, 
in the sense that additional performance assistance periods are also 
not required by law or OPM regulations and can negatively impact 
efficient use of the procedures under chapter 43. While providing 
``sole and exclusive'' discretion would limit collective bargaining on 
the use of informal assistance as the commenter suggests, the proposed 
regulatory language would have a similar impact on collective 
bargaining. In other words, by precluding the use of informal periods, 
any bargaining proposal that sought to establish an informal process 
beyond what is required by law would be considered nonnegotiable, 
pursuant to 5 U.S.C. 7117. For example, offering an additional 
opportunity period beyond what is required by 5 U.S.C. 4302(b)(6) would 
be nonnegotiable by these regulations. It should be emphasized that the 
regulation does not prevent agencies from making appropriate 
determinations when offering assistance required by law. Specifically, 
agencies are provided sole and exclusive discretion by Section 4(c) of 
E.O. 13839 to offer longer opportunity periods under 5 U.S.C. 
4302(b)(6) to provide sufficient time to evaluate an employee's 
performance. OPM believes this discretion to provide for longer periods 
provides agencies sufficient discretion to address an employee's 
performance based on the circumstances.
    A national union commented that the proposed change to Sec.  
432.104 would generally limit opportunity periods to 30 days, a period 
of time it deemed often insufficient to determine if an employee can 
improve his or her performance. Similarly, an organization expressed 
opposition to E.O. 13839 Sections 2 and 6(iii), which it perceives as 
pressuring agencies to limit opportunity periods to a period (30 
calendar days) that would be insufficient for the purpose of 
demonstrating improvement in many occupations of the Federal workforce. 
The organization also opposes amended Sec. Sec.  432.104 and 432.105 to 
the extent that they excuse agencies from what it described as routine 
procedures, such as regular supervisor meetings and guidance, that 
support the opportunity period. The organization cites Pine v. 
Department. of the Air Force, 28 M.S.P.R 453 (1985), and Sandland in 
support of its position that an opportunity to improve is not merely a 
procedural right but rather a substantive condition precedent to a 
chapter 43 action, and that counseling is a part of the opportunity 
period. The organization expressed concern that the proposed rule would 
allow supervisors to declare that an employee's performance is 
unsatisfactory without contextualizing the specific ways that an 
employee needs to substantively improve. An individual commenter 
weighed in with the observation that the proposed rule would 
``detrimentally push federal departments and agencies to limit the 
length of an opportunity period to 30 days,'' and that the existing

[[Page 65960]]

regulations present a more reasonable approach and better comport with 
statutory requirements.
    Although Section 4(c) of E.0. 13839 addresses the length of 
performance improvement periods and is in full force and effect, the 
proposed rule at Sec.  432.104 does not limit the opportunity period to 
30 days, as the national union contends. The regulation preserves 
statutory and regulatory requirements that agencies afford a reasonable 
opportunity to demonstrate acceptable performance, commensurate with 
the duties and responsibilities of the employee's position, and offer 
or provide assistance during the opportunity period. There is also 
nothing in the regulation that would discourage supervisors from 
performing routine performance management duties such as providing 
guidance and meeting with employees and it is anticipated that 
supervisors would continue to give full consideration to the specific 
facts and circumstances impacting an employee's job performance and 
develop a reasonable approach to help the employee achieve acceptable 
performance.
    Some commenters expressed concern that supervisors will deny 
assistance to employees who are performing unacceptably and hastily 
remove employees. An organization stated that the proposed rule reduces 
the requirements for an agency, including making no specific 
requirement regarding the nature of any assistance an agency should 
provide to an employee during an opportunity period. One individual 
asserted that amended Sec.  432.104 is not aligned with the merit 
system principle at 5 U.S.C. 2301(b)(7), which states that employees 
should be provided effective education and training when such education 
and training would result in better organizational and individual 
performance. The commenter added that it would be a prohibited 
personnel practice against an employee, via 5 U.S.C. 2302(a)(2)(A)(ix), 
which encompasses decisions concerning pay, benefits, or awards, or 
concerning education or training, for an agency to withhold such 
education or training if the education or training may reasonably be 
expected to lead to an appointment, promotion, performance evaluation, 
or other action described in subparagraph (a)(2)(A). One individual 
observed that providing assistance with regard to performance issues is 
cost-effective given the significant amounts of money agencies invest 
in hiring, onboarding, and training. An agency wrote about cases in 
which appropriate assistance proved successful and avoided unnecessary 
costs associated with turnover, litigation, training and rehiring.
    With respect to the concern that supervisors may take abrupt 
actions without offering or providing assistance to an employee 
performing at an unacceptable level, OPM would emphasize that the 
amended regulation does not infringe upon an employee's right to a 
reasonable opportunity to improve, and it does not excuse Federal 
agencies from effective performance management or the merit system 
principles, including with regard to education and training. The 
amended regulation instead excludes additional assistance requirements 
outside of that described in 5 U.S.C. 4302(c)(5). OPM neither promotes 
nor encourages agencies to engage in prohibited personnel practices nor 
does it believe the changes to the regulation encourage prohibited 
personnel practices. (Indeed, OPM has an affirmative obligation to 
enforce the law governing the civil service. See 5 U.S.C. 1103(a)(5).) 
With regard to comments relating to potential cost savings associated 
with performance assistance, OPM believes that the procedures will make 
this process more efficient, which represents a cost savings. Many 
employees receiving performance assistance will improve their 
performance to an acceptable level; for those that do not, taking an 
action such as a removal or a demotion to a position and grade where 
the employee can perform duties at an acceptable level significantly 
reduces the public expenditure associated with low productivity.
    One national union asserted that the proposed rule changes make it 
easier for agencies to terminate both probationary and permanent 
employees, without providing them an adequate opportunity to improve 
their performance. Another commenter observed that the proposed 
regulations limit the opportunities that employees have to improve 
their performance thereby actually creating a more inequitable 
environment for Federal employees.
    Regarding specific protections provided, OPM would reiterate that 
permanent employees continue to have the same protections as required 
by statute, including a reasonable opportunity to demonstrate 
acceptable performance. Individuals who are excluded from coverage 
under chapter 43 are not covered under part 432 of the regulations and 
are thus unaffected by the changes to this regulation.
    Two national unions, one organization and several individuals 
voiced concerns that the proposed rule ignores the possibility that 
employees have different performance needs and types of jobs and may 
require different types of assistance and different periods of time to 
demonstrate improvement. Commenters noted that various professional and 
personal challenges, poor management, lack of training by supervisory 
staff, and other factors may underlie or contribute to unacceptable 
performance. One commenter included man-made or natural disasters, 
cyber security incidents, or continuing resolutions as events that may 
interrupt or impact an opportunity period. The same commenter compared 
the proposed rule to other laws, such as the Family and Medical Leave 
Act, that contain protections and provisions for employees to take more 
than 30 days in order to address employment, medical, and other 
factors. The commenter asserted that the proposed rule would run 
counter to the Americans with Disabilities Act and the Rehabilitation 
Act. Another commenter raised a concern that the amendment to Sec.  
432.104 will restrict management's ability to interact creatively and 
proactively to address workplace performance issues collaboratively 
with employees. Collectively, the commenters cautioned against a one-
size-fits-all approach to addressing unacceptable performance and 
advocated for granting supervisors maximum flexibility and empowering 
them to determine the best course of action for managing their 
workforce and improving employee performance, including with respect to 
the duration of an opportunity period, the number of opportunity 
periods and the degree to which an employee has improved. Some believe 
that the existing regulation provides just that.
    As noted above, the amended regulation does not prevent management 
from evaluating the facts and circumstances underlying any individual 
case of unacceptable performance and collaborating with the employee to 
determine the best course of action for performance improvement. Under 
the current and amended regulation, in fact, the opportunity period 
must be commensurate with the duties and responsibilities of the 
employee's position. In addition, agencies must continue to abide by 
the requirements of the Family and Medical Leave Act and the 
Rehabilitation Act for eligible employees and the amended regulation 
does nothing to curtail the exercise of employee rights under these 
laws. Neither does the amended regulation curtail a manager's authority 
to determine whether an employee has improved during a formal 
opportunity

[[Page 65961]]

period. Rather, it merely clarifies the procedures and requirements to 
support managers in addressing unacceptable performance and promoting 
employee accountability. The commenter's assertion that the performance 
assistance provided during the opportunity period is not and should not 
be a one-size-fits-all approach is well taken. Indeed, OPM views this 
comment as actually supporting the provision of the regulation that 
prevents agencies from being tied to any particular type of performance 
assistance. With respect to the concern over deficits in supervisory 
management skills and training and the potential impact on employee 
performance, OPM does not discount this possibility. There is nothing, 
however, in the amended regulations that increases the likelihood of 
this circumstance, and OPM believes that the regulatory changes provide 
supervisors with the flexibility to rely upon the skills and expertise 
they possess to provide the most effective assistance.
    Several national unions, organizations and individuals raised 
concerns about potential harm to employees and the civil service system 
as a whole. For example, one union described the limit on additional 
opportunity periods as ``arbitrarily harsh'' and believes that 
employees will be penalized for not making progress as quickly as the 
agency desires, contrary to the purpose of the opportunity period. One 
commenter described the proposed rule as punitive and mean-spirited, 
believing that it will weaken protections for Federal workers and make 
it easier for management to fire honest civil servants for ideological, 
partisan, extralegal or even illegal reasons. The commenter contends 
that OPM does not justify the proposed rule, other than citing the 
``non-scientific'' Federal Employee Viewpoint Survey. Another commenter 
claimed not to have seen any incentives for positive performance, 
adding that there appear to be many approaches designed to limit 
achievement and prevent success. In the commenter's view, no actual 
performance management is required, and this will destroy Federal 
agencies. The commenter shared a personal experience of having been 
told by a supervisor that the supervisor wanted to fire her because the 
supervisor disliked her, not due to her work. The commenter wrote that 
had the proposed rule been in place, she could have been fired, to the 
detriment of the mission.
    Still another commenter stated that the proposed rule at Sec.  
432.104 will damage the civil service system. The commenter described 
having seen managers and supervisors failing to provide any assistance 
to employees who were having problems doing a portion of their job. The 
commenter believes that many managers considered this to be a waste of 
their time and not worth the effort, though it is an essential part of 
the managers' duties to provide leadership and direction to their 
employees. One individual expressed support for changes to address poor 
performance but believes that the changes proposed for the opportunity 
period go too far. In a different commenter's view, the proposed 
revisions are an ``injustice to the employee, whose opportunity and 
improvement will be at the discretion of the supervisor.'' The 
commenter expressed concern that employees will be open to 
discriminatory and biased decisions that are based on feeling, not on 
accomplishment or facts. Finally, a commenter stated that her agency 
has invested a great deal of training and money into its workforce, and 
retraining and retaining should be equally practiced for employees and 
management.
    OPM does not agree that the amended regulation is arbitrary, harsh, 
or punitive, nor does OPM believe that it weakens or violates employee 
rights. OPM is not seeking to limit or prevent achievement, success or 
cooperation. The amended regulation continues to require, per statute 
and regulation, that supervisors of employees performing unacceptably 
provide them with performance assistance and provide them with an 
opportunity to improve in each and every case. The regulation does this 
while also supporting the principles and requirements for efficiency 
and accountability in the Federal workforce as outlined in E.O. 13839 
and including a straightforward process for addressing unacceptable 
performance. Establishing limits on the opportunity to demonstrate 
acceptable performance, by precluding additional opportunity periods 
beyond what is required by law, encourages efficient use of chapter 43 
procedures and furthers effective delivery of agency mission while 
still providing employees sufficient opportunity to demonstrate 
acceptable performance as required by law. Federal employees will 
continue to enjoy all core civil service protections under the law, 
including the merit system principles, procedural rights and appeal 
rights.
    Some commenters objected to the proposed rule at Sec.  432.104 on 
the basis that OPM, in their view, added language that was unclear and 
confusing. A national union critiqued the sentence: ``No additional 
performance assistance period or similar informal period shall be 
provided prior to or in addition to the opportunity period provided 
under this section'' as ``unclear'' and ``absurd or silly.'' Instead, 
the union recommended: ``Employees who properly are notified by the 
agency that their performance is unacceptable are entitled only to one 
period of time affording reasonable opportunity to demonstrate 
acceptable performance.'' A different national union expressed concern 
that the reference to an informal assistance period will cause 
confusion because, in the union's view, it is unclear whether 
assistance to improve marginal or unacceptable performance prior to an 
opportunity period would constitute an informal assistance period. The 
union added that such assistance should not be prohibited if the law 
does not require it. An agency described the same sentence as confusing 
and unnecessary, adding that the terms ``informal period'' and 
``additional performance assistance period'' are not defined and are 
vague. An individual commenter offered the following revision: ``Prior 
to initiating the reasonable opportunity to demonstrate acceptable 
performance, the agency has sole and exclusive discretion to informally 
assist the employee in demonstrating acceptable performance.''
    OPM will not adopt the suggested changes as the recommendations are 
unnecessary. The amended regulation clarifies that agencies are 
precluded from allowing additional opportunity periods beyond what is 
required by law. OPM is effectuating the prohibition on additional 
opportunity periods--beyond what the underlying statute requires--in 
response to the direction in E.O. 13839. Some agencies have utilized 
additional, less formal opportunity periods, in response to 
unacceptable performance, that precede formal opportunity periods, and 
OPM does not believe that this practice constitutes an efficient use of 
resources. Moreover, it is not required by statute. For clarification 
purposes, OPM would distinguish between routine performance management 
measures such as training and coaching, which may be utilized when 
employees encounter challenges in the course of their duties, and 
informal opportunity periods. The first scenario is not impacted by the 
changes to the regulation; the second is impacted.
    One individual commented that the Supplementary Information section 
of the proposed rule, in its discussion of Sec.  432.104, refers to the 
5 U.S.C. 2301(b)(2) requirement that employees should receive fair and 
equitable treatment without regard to political

[[Page 65962]]

affiliation, race, color, religion, national origin, sex, marital 
status, age and handicapping condition. However, the commenter stated 
that the language needs to be revised to note that Executive Order 
11478, as amended by Executive Order 13672, extends equal employment 
opportunity protections to include sexual orientation or identity as 
protected categories.
    OPM agrees that Executive Order 13672 expands the categories 
described in the equal employment opportunity policy originally 
articulated at Executive Order 11478. Executive Order 13672, however, 
did not (and could not) amend section 2301, the provision that OPM 
referenced in the Supplementary Information. And, in any event, case 
law precedents under the Civil Rights Act determine this issue, from a 
legal perspective. For this reason, the comment is inapt. Finally, the 
edit suggested by the commenter does not relate to any language in the 
proposed rule. Instead it relates solely to language found only in the 
Supplementary Information section of the notice, in which OPM explained 
its rationale for related changes to the regulations. Accordingly, 
there are no substantive changes that can be made to the regulations in 
response to this comment.

Section 432.105 Proposing and Taking Action Based on Unacceptable 
Performance

    This section specifies the procedures for proposing and taking 
action based on unacceptable performance once an employee has been 
afforded an opportunity to demonstrate acceptable performance. 5 U.S.C. 
4302(c)(5) provides for ``assisting employees in improving unacceptable 
performance;'' and 5 U.S.C. 4302(c)(6) provides for ``reassigning, 
reducing in grade, or removing employees who continue to have 
unacceptable performance but only after an opportunity to demonstrate 
acceptable performance.'' The intent of the proposed rule was to 
clarify the distinction between the statutory requirements found in 5 
U.S.C. 4302(c)(5) and (6) by explaining, in Sec.  432.105, that the 
opportunity to demonstrate acceptable performance required prior to 
initiating an action pursuant to 5 U.S.C. 4303 may include any and all 
performance assistance measures taken during the performance appraisal 
period to assist employees pursuant to 5 U.S.C. 4302(c)(5), not just 
those taken during the formal opportunity period. The effort to 
distinguish these provisions was met with significant opposition and 
concerns from commenters, with the exception of three management 
associations. The vast majority of commenters who opposed the proposed 
rule presented arguments that the proposed rule, as written, could 
result in circumstances where an agency relies upon assistance provided 
prior to determining that an employee has unacceptable performance to 
fulfill the agency's obligation under 5 U.S.C. 4302(c)(5), which 
explicitly calls for assistance to an employee who has ``unacceptable 
performance.''
    One commenter interpreted the proposed rule to suggest that an 
agency can satisfy a formal opportunity period before an opportunity to 
correct inadequate performance has begun, which the commenter described 
as unreasonable, unrealistic and out of alignment with the merit system 
principles at 5 U.S.C. 2301(b)(6). A self-described employee relations 
practitioner claiming more than 30 years of experience opposed the 
proposed rule and questioned whether it would be consistent with the 
law. The commenter noted 5 U.S.C. 4302(c)(5) states that ``each 
agency's performance appraisal system shall provide for `assisting 
employees in improving unacceptable performance.' (emphasis added).'' 
The commenter went on to say, ``If OPM means any kind of assistance 
offered at any performance level during the rating period, this is not 
what the statutory requirement in 4302(c)(5) addresses.'' The commenter 
described being ``confident'' in saying that an employee who learns 
that he or she is performing at an unacceptable level and is placed on 
an improvement plan during the opportunity period is often surprised 
and in disbelief. The commenter's concern is that, in such a scenario, 
the agency may say that it offered the employee assistance six months 
prior to this time and does not need to offer any further assistance 
during ``this one and only opportunity period.'' The commenter believes 
that most employees will not know what steps to take to improve their 
performance unless management provides them assistance in doing so. In 
the commenter's view, OPM is violating the spirit and intent of chapter 
43 statutory requirements concerning assistance and an opportunity to 
improve. The commenter recommended that OPM reconsider and continue to 
require assistance during the opportunity period to alleviate potential 
for abuse and misuse by some agencies.
    A national union objected to the proposed amendment at Sec.  
432.105(a)(1), calling it ``nonsensical'' and contrary to case law to 
allow the assistance requirement to be satisfied before the opportunity 
period. The union cited Brown v. Department of Veterans Affairs, 44 
MSPR 635 (1990), and Sullivan v. Department of the Navy, 44 MSPR at 646 
(1990), in which ``the Board emphasized the critical, statutory 
requirement that employees be notified of the critical job elements 
which they are failing and be provided a `meaningful opportunity to 
demonstrate acceptable performance' in those elements.''
    A different national union objected to the proposed added language 
to Sec.  432.105(a)(1) with the rationale that ``the second sentence 
contradicts the first and is contrary to law.'' The union stated that 
assisting an employee before determining that the employee has 
unacceptable performance and notifying the employee of such is not 
``for the purpose of assisting employees pursuant to 5 U.S.C. 
4302(c)(5),'' which requires ``assisting employees in improving 
unacceptable performance'' at any time the determination is made. The 
union recommended that instead of the proposed passage, OPM state, 
``For the purposes of this section, reasonable opportunity to 
demonstrate acceptable performance includes reasonable assistance in 
improving unacceptable performance that the agency provides during the 
appraisal period, either during the opportunity period or after the 
opportunity period, and before the agency proposes a reduction-in-grade 
or removal action.''
    An agency recommended that OPM's proposed amendments to Sec.  
432.105(a)(1) not be added or applied to the final version of the 
regulation and raised a concern that, as written, the proposed rule 
will create situations where an employee may not get any management 
help, thereby putting agencies at risk for appeals and litigation.
    One commenter recommended that OPM remove the sentence: ``For the 
purposes of this section, the opportunity to demonstrate acceptable 
performance includes measures taken during the opportunity period as 
well as any other measures taken during the appraisal period for the 
purpose of assisting employees pursuant to 5 U.S.C. 4302(c)(5),'' The 
commenter described the sentence as factually inaccurate, contrary to 
the plain language of the statute, and not mandated by E.O. 13839.
    One individual asserted that the proposed rule is illogical because 
the statute requires that agencies assist employees who have 
unacceptable performance, and since employees who have unacceptable 
performance should be placed on a Performance Improvement Plan (PIP), 
there should not be a time other than the period

[[Page 65963]]

during which the employee is on the PIP when an employee with 
unacceptable performance is receiving assistance that would meet the 
statutory requirement. The commenter expressed concern that performance 
assistance could devolve into a ``check-the-box'' exercise if the 
agency can demonstrate that it provided the employee with assistance at 
any point during the rating cycle.
    One organization, an agency, and some individual commenters went so 
far as to say that the proposed rule gave the impression that an agency 
might take an action for unacceptable performance prior to an impacted 
employee's completion of an opportunity period. The organization 
objected to distinguishing between 5 U.S.C. 4302(c)(5) and (c)(6). It 
stated that the proposed rule contradicts 5 U.S.C. 4302(c)(6) and is 
inconsistent with established case law interpreting that statute, 
including cases that have held a meaningful opportunity to improve to 
be a substantive right. In the organization's interpretation, the 
proposed rule could allow an agency to remove an employee for 
performance prior to an opportunity period, even if the employee has 
successful performance during the opportunity period. The organization 
stated that the proposed rule ``purports to allow an agency to use 
assistance measures even if the employee has not been notified of the 
subpar performance,'' which would be ``fundamentally unfair'' and 
``dissuade supervisors from offering adequate training, counseling, and 
assistance'' during an opportunity period.
    Three management associations expressed support for the proposal to 
distinguish 5 U.S.C. 4302(c)(5) and 4302(c)(6), describing it as a 
valuable clarification of agency obligations and a modernization of the 
Federal performance review process that better matches the needs of 
agencies working to achieve mission success.
    However, OPM finds greater merit in the objectors' arguments. 
Accordingly, the proposed amendment to the regulations at 5 CFR 
432.105(a)(1), which adds the language ``Agencies may satisfy the 
requirement to provide assistance before or during the opportunity 
period'' will not be adopted. We will retain the provision that the 
obligation to assist can be met through measures taken during the 
appraisal period as well as measures taken during the opportunity 
period. Permitting an agency to include measures taken during the 
appraisal period for the purpose of assisting employees pursuant to 
U.S.C. 4302(c)(5) encourages managers to engage in continuous 
performance feedback and early correction of performance concerns, 
thereby supporting the principles espoused in the Executive Order for 
promoting accountability.
    A commenter stated that the intended purpose of the proposed 
amendment to Sec.  432.105 could be achieved ``by writing: There is no 
mechanical requirement regarding the form that assistance to an 
employee should take. Agencies shall satisfy the requirement to assist 
the employee by providing adequate instructions regarding the manner in 
which the employee is expected to perform the duties of his position.'' 
The commenter added that this change ``would establish that assistance 
is not an onerous burden without engaging in a misbegotten attempt to 
`delink' the assistance from the opportunity period.'' It is unclear 
where the commenter is proposing to insert the recommended language or 
what language it would replace. OPM will not adopt the commenter's 
recommendation.

Section 432.108 Settlement Agreements

    This section effectuates Section 5 of E.O. 13839. Section 5 
establishes a new requirement that an agency shall not agree to erase, 
remove, alter or withhold from another agency any information about a 
civilian employee's performance or conduct in that employee's official 
personnel records, including an employee's Official Personnel Folder 
and Employee Performance File, as part of, or as a condition to, 
resolving a formal or informal complaint by the employee or settling an 
administrative challenge to an adverse personnel action. Such 
agreements have traditionally been referred to as ``clean record'' 
agreements.
    This new requirement is intended to promote the high standards of 
integrity and accountability within the Federal workforce by requiring 
agencies to maintain personnel records that reflect complete 
information and not to alter the information contained in those records 
in connection with a formal or informal complaint or adverse personnel 
action. This regulation, derived from a corresponding provision in E.O. 
13839, is further intended to equip Federal agencies with full 
information needed to assess candidate qualifications and suitability 
or fitness for Federal employment and make informed hiring decisions. 
In furtherance of this important goal, instances of employee misconduct 
and unacceptable performance that may be determinative in these 
assessments should not be expunged as a function of a clean record 
agreement, as doing so deprives agencies of vital information necessary 
to fulfill their obligation to hire the best candidate within reach.
    Section 5 requirements should not be construed to prevent agencies 
from taking corrective action should it come to light, including during 
or after the issuance of an adverse personnel action, that the 
information contained in a personnel record is not accurate or records 
an action taken by the agency illegally or in error. Agencies have the 
authority, unilaterally or by agreement, to modify an employee's 
personnel file to remove inaccurate information or the record of an 
erroneous or illegal action. An agency may take such action even if an 
appeal/complaint has been filed relating to the information that the 
agency determines to be inaccurate or to reflect an action taken 
illegally or in error. In all events, however, the agency must ensure 
that it removes only information that the agency itself has determined 
to be inaccurate or to reflect an action taken illegally or in error. 
And an agency should report any agreements relating to the removal of 
such information as part of its annual report to the OPM Director 
required by Section 6 of E.O. 13839. Documents subject to withdrawal or 
modification could include, for example, an SF-50 issuing a 
disciplinary or performance-based action, a decision memorandum 
accompanying such action, or an employee performance appraisal.
    Further, when persuasive evidence comes to light prior to the 
issuance of a final agency decision on an adverse personnel action 
casting doubt on the validity of the action or the ability of the 
agency to sustain the action in litigation, an agency may decide to 
cancel or vacate the proposed action. Additional information may come 
to light at any stage of the process prior to final agency decision 
including during an employee response period. To the extent an 
employee's personnel file or other agency records contain a proposed 
action that is subsequently cancelled, an agency would have the 
authority to remove that action from the employee's personnel file or 
other agency files. Section 5's requirements would continue to apply to 
any accurate information about the employee's conduct leading up to 
that proposed action or separation from Federal service.
    Section 5 requirements apply to actions taken under parts 432 and 
752. All comments related to settlement agreements are addressed here 
in the Supplementary Information for the

[[Page 65964]]

change at Sec.  432.108, where the change appears first.
    Three management associations expressed support for preventing 
agencies from erasing, removing, altering or withholding information 
about a civilian employee's performance in their official personnel 
record. Two of the organizations, however, noted that some agencies' 
practice of offering clean record settlement agreements has 
historically facilitated employee departures in a manner that minimizes 
litigation and results in a mutually agreeable outcome for agencies and 
taxpayers. An individual expressed support for the proposed amendment 
to Sec.  432.108, describing it as ``very helpful to hiring managers 
who should have this information'' before bringing on a potential 
``problem employee.'' OPM will not make any revisions based on these 
comments.
    An agency discussed potential benefits and drawbacks of the 
proposed rule, including that it would assist management in making 
better hiring decisions and discourage employees from using the Equal 
Employment Opportunity (EEO) process as a way to have records expunged 
while perhaps at the same time making it difficult and costly for 
agencies to settle cases. The agency recommended further clarification 
on the parameters of the rule. As the commenter did not pose specific 
questions about parameters, we are unable to respond.
    Despite some showing of support for the proposed rule, many 
commenters objected for a variety of reasons. One commenter asserted 
that an agency cannot issue a rule unless granted authority to do so by 
law and believes that OPM has exceeded the scope of its regulatory 
authorities. Specifically, the commenter questioned whether OPM has the 
authority to regulate settlement agreements. OPM does not agree that it 
has exceeded its authority. E.O. 13839 directs OPM to propose 
appropriate regulations to effectuate the principles set forth in 
Section 2 and the requirements of Sections 3, 4, 5 and 6 of the order. 
This final rule effectuates the requirements of E.O. 13839.
    With respect to the question of OPM's authority raised by 
commenters, OPM would emphasize that OPM's regulation pertains to the 
integrity of personnel files which are maintained by OPM and which OPM 
has the authority and responsibility to maintain; see 5 U.S.C. 2951. 
OPM also has authority to regulate personnel management functions, 
hiring appointments, and to oversee the merit system principles; see 
e.g. 5. U.S.C. 1103(a)(5) (stating that OPM's Director executes, 
administers, and enforces the law governing the civil service), and (7) 
(stating that functions vested with the OPM Director include ``aiding 
the President, as the President may request, in preparing such civil 
service rules as the President prescribes, and otherwise advising the 
President on actions which may be taken to promote an efficient civil 
service and a systematic application of the merit system principles, 
including recommending policies relating to the selection, promotion, 
transfer, performance, pay, conditions of service, tenure, and 
separation of employees''); see also 5 U.S.C. 3301 (establishing the 
President's authority to ascertain fitness of applicants for employment 
sought). OPM would also emphasize that other than those issues 
pertaining to areas for which OPM has the authority to regulate, 
agencies are free to handle settlement agreements as they choose, 
subject to other appropriate authorities.
    Several individuals, via a template letter, commented that the 
proposed rule at Sec. Sec.  432.108, 752.104, 752.203(h), 752.407 and 
752.607 will ``only lead to bitter and contentious disputes.'' The 
commenters stated that unless there is ``some provision for settlement 
or informal resolution of disputes,'' employees will have little choice 
but to pursue arbitration or litigation. The commenters urged for an 
amendment to the proposed rule that would allow cancellation of a 
proposed action as part of a settlement agreement, so long as no final 
agency action has been taken. The commenters believe this would ``help 
resolve 90% of disputes without resorting to more legal processes.''
    A group of several national unions and their members disagreed with 
the proposed rule at Sec. Sec.  432.108, 752.104, 752.203(h), 752.407 
and 752.607 and requested that the changes be withdrawn on the basis 
that agency managers and Federal workers represented by unions disfavor 
the prohibition on settlement agreements. The commenters stated that 
the proposed change removes a tool that allows unions and managers to 
settle disputes efficiently and effectively and forces them to 
arbitration or litigation instead of encouraging the use of early 
alternative dispute resolution (ADR). The commenters asserted that OPM 
presumes that agency supervisors are infallible and their decisions not 
subject to review, which violates the spirit of the law and creates a 
Federal workforce which is corruptible, subject to undue influence, and 
puts the burden of a supervisor's mistake on an employee for the rest 
of their career.
    OPM has not made changes based on these comments and believes that 
the concerns are unsubstantiated and, in many respects, addressed in 
the regulation itself. The proposed regulation effectuates E.O. 13839 
requirements. While Section 5 of the E.O. 13839 places restrictions on 
agency management with regard to certain matters within settlement 
agreements, it neither prevents settlement agreements nor discourages 
other forms of alternative dispute resolution utilized by agencies 
seeking to resolve a formal or informal complaint and avoid litigation. 
The regulation has protections built in that address commenters' 
concerns. To the extent that an employee's personnel file or other 
agency records contain a proposed action that is subsequently 
cancelled, the action can be removed from the employee's personnel file 
or other agency files. As explained in the regulation, agencies are 
permitted to correct errors, either unilaterally or pursuant to a 
settlement agreement, based on discovery of agency error or illegality. 
The regulation further permits agencies to cancel or vacate a proposed 
action when persuasive evidence comes to light casting doubt on the 
validity of the action or the ability of the agency to sustain the 
action in litigation. The final rule promotes integrity and 
accountability and facilitates the sharing of records between Federal 
agencies in a manner that permits the agencies to make appropriate and 
informed decisions regarding a prospective employee's qualification, 
fitness and suitability as applicable to future employment.
    Two organizations and several individuals objected to restrictions 
on settlement agreements that limit resolution options or reduce the 
likelihood of the parties reaching a mutually agreeable resolution of 
informal or formal complaints. One of the organizations opined that 
employees who seek such relief will be more inclined to litigate, which 
will increase the burden on the administrative bodies that hear such 
cases and cause ``unnecessary cost and distraction in the workplace.'' 
The other organization strongly opposed the proposed rule at Sec. Sec.  
432.108, 752.104, 752.203(h), 752.407 and 752.607 on the basis that its 
members' experience demonstrates that Section 5 has ``eliminated the 
possibility of settlement agreements in cases involving disciplinary or 
performance actions, especially once the personnel action occurs.'' The 
organization claimed that the limiting effect of Section 5 has followed 
on the heels of agencies implementing new and stringent limits on 
``non-record

[[Page 65965]]

modification settlements,'' which we understood to mean settlements 
that do not involve modification of records and pointed to a particular 
Federal agency as an example. From the organization's perspective, 
agencies have been ``highly deterred'' from agreeing to post-personnel 
action settlements involving record modification because they are 
``loath'' to acknowledge a personnel action as illegal, inaccurate or 
the product of agency error. The organization stated that this forces 
cases into costly merits litigation, which has risks for all parties 
involved.
    The organization raised a concern that the proposed rule gives too 
much discretion to ``low level supervisors'' by rendering their 
decisions in personnel actions far harder to reverse later through 
settlement. The commenter stated that, previously, settlement 
mechanisms provided a means for higher-level management to review the 
actions of subordinates and make changes to their discretionary 
decisions through settlement agreements.
    OPM will not make any revisions based on these comments. The 
amended regulation effectuates the requirements of E.O. 13839 and 
thereby facilitates a Federal supervisor's ability to promote civil 
servant accountability and transparency across the Executive Branch.
    An organization commented that the proposed rule at Sec.  432.108 
``fundamentally contradicts existing federal law in several respects'' 
by (1) creating ``an absolute bar'' to potential mitigation of a final 
agency decision when persuasive evidence of an error or mistake is 
discovered after the final agency decision is issued (such as ``during 
an appeal period or during an appeal'') [emphasis in original]; (2) not 
mandating that an agency correct an employee's personnel record (before 
a decision) despite the agency obligation to correct an employee's 
record when it determines there has been an error under the Privacy 
Act; and (3) causing unnecessary economic issues, such as litigating 
costs and lost salary and leave, for both employees and agencies and 
crowding the dockets of the Merit Systems Protection Board (MSPB), the 
Office of Special Counsel (OSC), and/or Equal Employment Opportunity 
Commission (EEOC).
    In response, OPM notes that it is incorrect to interpret the 
proposed rule at Sec.  432.108 as ``an absolute bar'' to potential 
mitigation of a final agency decision when persuasive evidence of an 
error or mistake is discovered after the decision is issued (such as 
during an appeal period or during an appeal). In fact, the change at 
Sec.  432.108(b) permits an agency to take corrective action should it 
come to light, including during or after the issuance of an adverse 
personnel action, that the information contained in a personnel record 
is not accurate or records an action taken by the agency illegally or 
in error. OPM believes that it is understood that the scope of this 
provision would include actions taken that were out of compliance with 
the Privacy Act.
    OPM also disagrees with the organization on the question of 
economic issues for employees and agencies and potential crowding of 
MSPB, OSC, and/or EEOC dockets. While the regulation implementing 
Section 5 of E.O. 13839 places restrictions on agency management with 
regard to certain matters within settlement agreements, it does not 
prevent all settlement agreements from occurring or being pursued by an 
agency involved in a dispute process.
    With regard to comments expressing concerns over potential impact 
on the practice of higher-level settlement review, this comment 
presumes that all but the highest level management officials are 
equipped to use their discretion soundly and accurately, a presumption 
with which OPM does not agree. Further, as discussed elsewhere, all 
procedural protections built into the adverse action process, including 
a notice and opportunity for reply remain intact.
    Additionally, the organization objected to Sec. Sec.  752.104(a)-
(c) and 752.203(h) for the reasons cited above and because the 
organization believes that the proposed amendments are ``blatantly 
prejudicial to employees and contrary to an agency's duty to apply 
mitigating circumstances developed in Douglas v. Veterans 
Administration.'' The organization stated that the proposed rule would 
provide agencies with an opportunity to impose disproportionate 
penalties.
    OPM disagrees and notes that Sec. Sec.  752.104(c), 752.203(h)(3), 
752.407(c) and 752.607(c) permit an agency to cancel or vacate a 
proposed action when persuasive evidence comes to light, prior to a 
final agency decision, that casts doubt on the validity of the action 
or the ability of the agency to sustain the action in litigation. The 
proposed rule does not prevent the agency from mitigating a proposed 
penalty in such instances as long as the agency adheres to penalty 
determination provisions in Sec. Sec.  752.102, 752.202, 752.403 and 
752.603 as applicable.
    The organization restated similar objections to Sec.  752.407 and 
added more details to support its position. The organization expressed 
concern that the proposed rule will do the opposite of increasing the 
efficiency of management decisions because it undermines the ability of 
agencies to settle cases. In the organization's views, the proposed 
rule is ``simply inoperable in practice,'' even allowing for corrective 
action to a personnel record based on discovery of agency error or 
discovery of material information prior to final agency action. The 
organization stated that agencies will be unwilling or unlikely to 
admit error, unless ordered to do so by a court, not least because of 
potential further liability.
    OPM disagrees with the organization's assessment. It is not unusual 
for dispositive information to come to light after an adverse action is 
proposed, such as during the employee's reply period or in the 
submission of the employee's supporting material. Such dispositive 
information could very well lead to an agency cancelling or vacating a 
proposed action during settlement negotiations. The proposed rule 
facilitates a Federal supervisor's ability to promote civil servant 
accountability and simultaneously recognize employee's procedural 
rights and protections. Moreover, the proposed rule does not ``bar'' 
the EEOC, MSPB, arbitrators and courts from requiring modification of a 
personnel record as an appropriate remedy for a matter before them 
based on an agency's adverse personnel action.
    One national union asserted that Sec.  432.108 will diminish the 
right to collective bargaining, contrary to the spirit of the Federal 
Service Labor-Management Relations Statute (FSLMRS), by prohibiting 
agencies from agreeing to clean record terms during collective 
bargaining negotiations and settlement discussions. In the union's 
view, Congress did not intend for agencies and employees to negotiate 
an appropriate resolution to a matter only to be precluded from 
implementation by an ``unnecessary regulation.'' The union believes 
that the clean record agreements are used by employees in many cases to 
remove ``unfair, baseless charges'' from their files and the amended 
regulations unfairly closes this avenue for employees.
    OPM does not agree that the amended regulation impacts collective 
bargaining in the manner asserted by commenters. Initially, 
management's rights pursuant to 5 U.S.C. 7106, including the right to 
discipline, cannot be diminished through bargaining. Each and every 
decision as to whether to settle a case and what penalty is appropriate 
falls within the discretion of agency management and is outside the 
scope of

[[Page 65966]]

bargaining. Further, to the extent that there are any narrow areas of 
negotiability relating to the use of settlement agreements, the 
regulation does not preclude bargaining in this area. Rather, 
consistent with the Executive Order, it directs agencies in terms of 
how to proceed when making decisions, pursuant to the President's 
authority to issue such directives and pursuant to management's 
discretion in disciplinary context. These changes appropriately balance 
employee rights with efficient government operations.
    A national union commented that damage to agencies' and employees' 
abilities to resolve disputes will outweigh whatever transparency may 
derive from the proposed rule. The union asserted that litigation will 
increase exponentially and added that allowing an agency to amend or 
rescind a record unilaterally is ``hardly a savings'' because parties 
are ``loath'' to admit fault. The union believes that the proposed 
restrictions on amending personnel records ignore realities. The union 
also accused OPM of impermissibly inserting itself into the collective 
bargaining relationship by taking clean record terms off the table, to 
the extent such clauses are not otherwise prohibited by law. In the 
union's estimation, because grievance settlements are an extension of 
the collective bargaining process, OPM's regulation would unilaterally 
constrict the scope of collective bargaining by precluding a commonly 
negotiated remedy. Another national union commented that by preventing 
clean record agreements, OPM ``stymies'' efficient and effective 
resolution of disputes. The union added that by giving agencies 
``unfettered power to unilaterally modify an employee's personnel 
record,'' the proposed rule opens the door to arbitrary and capricious 
agency action and potential Privacy Act violations. The union stated, 
``These regulations should be withdrawn.''
    As discussed in the proposed rule, this new requirement is intended 
to promote the high standards of integrity and accountability within 
the Federal workforce by requiring agencies to maintain personnel 
records that reflect complete and accurate information, and not to 
alter the information contained in those records in connection with a 
formal or informal complaint or adverse personnel action. We disagree 
that OPM is impermissibly interfering in the collective bargaining 
relationship between the agency and the exclusive representative by 
prohibiting agencies from entering into clean record agreements. 
Individual supervisory decisions exercised in the context of settlement 
agreements are not subject to collective bargaining and cannot be 
diminished through the collective bargaining process. OPM does not 
agree that a link exists between settlement agreements of discrete, 
individual personnel actions and the collective bargaining process over 
broad conditions of employment which occurs under 5 U.S.C. chapter 71. 
Also, the President has broad authority to manage the conduct of the 
Federal workforce. This includes issuing directives to agency 
supervisors regarding how to exercise their discretion in the context 
of making decisions on disciplinary actions, including settlement 
agreements. It is also worth noting that the now vacated preliminary 
injunction by the DC District Court left intact Section 5 of E.O. 13839 
regarding matters related to settlement agreements. Finally, OPM has 
the authority to require agencies to maintain specific information in 
personnel records. The prohibition on the use of clean record 
agreements by agencies would not prevent parties from entering into 
other types of settlement agreements or other forms of alternative 
dispute resolution. It would only preclude agencies from entering into 
agreements that could serve to circumvent necessary transparency. With 
respect to the concern that the proposed rule could violate the Privacy 
Act, OPM notes that there is nothing in the rule that relieves agencies 
of their obligation to maintain accurate personnel records in 
accordance with the Privacy Act.
    A commenter objected to the proposed rule change for Sec. Sec.  
432.108, 752.203, 752.407 and 752.607 concerning settlement agreements, 
and stated that ``prohibiting clean record settlements is a horrible 
waste of taxpayer money.'' The commenter asserted that allowing such 
settlements provides maximum flexibility to agencies and promotes quick 
settlement of cases at low or no cost to the Government. The commenter 
stated also that prohibiting agencies from agreeing to alter, erase or 
withhold information in personnel records would force agencies to 
engage in lengthy, resource-intensive legal battles, ``contrary to the 
effectiveness and efficiency of the government.'' Another commenter 
shared a similar concern that restrictions on clean record agreements 
will lead to unnecessary, expensive results that are wasteful of time, 
money and resources. OPM disagrees. As stated above, this new 
requirement promotes the high standards of integrity and accountability 
within the Federal workforce by requiring agencies to maintain 
personnel records that reflect complete and accurate information, and 
not to alter the information contained in those records in connection 
with a formal or informal complaint or adverse personnel action. 
Agencies may experience fewer matters that give rise to arbitration and 
litigation because the prohibition on clean record agreements 
facilitates the sharing of records between Federal agencies. Agencies 
will be better able to make appropriate and informed decisions 
regarding a prospective employee's qualification, fitness and 
suitability as applicable to future employment.
    A commenter stated that the Supplementary Information references a 
``partial clean record,'' and the proposed rule itself omitted any 
reference to a ``partial clean record.'' The commenter suggested that 
prohibition on expunging personnel records as part of a settlement may 
force aggrieved former employees to file suit under the Privacy Act to 
enjoin the disclosure of false derogatory information to another agency 
or to another prospective employer. The commenter stated that the 
proposed rule provided no recourse for an employee to challenge the 
accuracy of the record, or to expunge information about an underlying 
incident if the employee and agency disagree about the accuracy or 
legality of the reported action. The commenter added that the ``current 
law provides a workable procedure for bona fide allegations of 
misconduct or unsatisfactory performance.'' As an alternative to the 
proposed rule, the commenter recommended improved guidance to 
supervisors and human resources staff and improved quality of data on 
misconduct.
    OPM will not adopt any changes based on this comment. Partial clean 
record settlements are those in which the agency agrees to withhold 
negative information from any prospective future non-Federal employers 
but, in conformance with E.O. 13839, does not agree to withhold any 
negative information from other Federal agencies. Although the language 
in Sec. Sec.  432.108, 752.104, 752.203(h), 752.407 and 752.607, does 
not include the phrase ``partial clean record,'' the rule does in fact 
state that an agency may not erase, remove, alter or withhold from 
another agency any information about a civilian employee's performance 
or conduct in that employee's official personnel records. (Emphasis 
added.) Thus, there was no contradiction or inconsistency between the 
Supplementary Information and the proposed rule.

[[Page 65967]]

    Some commenters erroneously interpreted E.O. 13839 and the proposed 
rule to mean that settlement agreements are eliminated or characterized 
the proposed amendments as having an intent to cause harm to Federal 
employees. One commenter stated that E.O. 13839 and the proposed 
regulations eliminate settlement agreements and fail to recognize that 
there are ``many incompetent managers whose motives do not align with 
public service.'' The commenter stated that additional safeguards are 
warranted. The commenter asserted that a hardworking, capable employee 
who loses his or her job should not be further harmed by untruthful 
allegations that could impede his or her job search. The commenter 
expressed concern that probationary employees are often afforded no 
opportunity to contest or submit evidence to support continuation of 
employment, resulting in personnel files that may not have an accurate 
picture. A retiree who relies on OPM ``for everything'' expressed 
concern for OPM employees and a wish for OPM employees to be treated 
with respect and fairness. One individual described clean record 
agreements as a long-standing practice that, if removed, ``will only 
hurt . . . employees.'' The commenter asked, ``please stop seeking to 
eliminate federal employee rights.''
    Other commenters likened the proposed rule to ``prohibition on 
finding someone innocent'' and called it ``sadly disconcerting.'' Yet 
another stated, ``Basically any wrong can never be righted, regardless 
of time or improvement in performance.'' An individual commented that 
removing the ability for a record to be ``cleaned'' is an unfair 
practice. Believing that everyone has a ``bad day,'' the commenter 
asked if this is ``a just reason to have a black mark on their 
record?'' A commenter stated that eliminating ``clean record'' 
agreements would mean that any negative mark on an employee's record 
would be permanent, and that employee rights ``should not be eliminated 
through Executive Order.'' The commenter went on to say that employee 
rights are given via ``congressional approval and the rule of law,'' 
and should be changed in those venues. A commenter opposed the proposed 
changes that ``abolish clean record settlements'' on the basis that OPM 
``wants to make it harder to amicably settle employment disputes and 
instead make their resolution less effective and efficient and more 
contentious.''
    A national union commented that eliminating the opportunity to 
reach clean record agreements reduces workplace flexibility. The union 
asserted that a prohibition on clean record agreements ``ensure[s] 
federal workers are seen in the worst possible light.'' A local union 
commented that the proposed rule can only be interpreted as an attempt 
to ``stack the deck'' against an employee under consideration for 
punishment. The union asserted that under the proposed rule, 
performance issues from years ago would be used as justification for 
severe punishment, while letters of admonishment and reprimand are 
currently removed from an employee's file after a set period of time. 
The union stated that clean record settlement agreements are a valuable 
tool to resolve labor-management disputes, since both parties prefer to 
settle disputes through settlement rather than through litigation.
    OPM will not adopt any revisions to the proposed rule based on 
these comments. Section 5 of the E.O. 13839 does not prevent parties 
from entering into settlement agreements to resolve workplace disputes. 
OPM is not seeking to harm employees, cast them in the worst possible 
light, ``stack the deck'' against them, eliminate employee rights, or 
impede job searches. Further, the amended regulations will not convert 
time-limited personnel records such as letters of admonishment and 
reprimand into permanent documents. As previously discussed, Federal 
employees will continue to enjoy all core civil service protections 
under the law, be protected by the merit system principles and possess 
procedural rights and appeal rights. All procedural protections 
afforded employees who are subject to an adverse action remain 
unaltered, including the right to contest a proposed adverse action if 
an employee believes the agency has acted impermissibly or relied upon 
an error and through submission of a reply and supporting materials. 
Also, agencies are permitted to correct errors based on discovery of 
agency error or illegality. The regulation further permits agencies to 
cancel or vacate a proposed action when persuasive evidence comes to 
light casting doubt on the validity of the action or the ability of the 
agency to sustain the action in litigation. OPM is simply effectuating 
the requirements of E.O. 13839 and thereby facilitating a Federal 
supervisor's ability to promote civil servant accountability and 
simultaneously recognize employee's procedural rights and protections.
    A commenter reacted to the proposed rule at Sec. Sec.  432.108, 
752.104, 752.203(h), 752.407 and 752.607 by stating that it subjects 
government employees to a standard unseen in the private sector. The 
individual added that government employees need the same protections as 
private sector employees with regard to sharing employment history. The 
commenter did not identify what ``protections'' private sector 
employees have with respect to sharing employment history. OPM notes 
that public sector employment is different from private sector 
employment in a number of key ways, including the fact that Federal 
employees enjoy additional job protections above and beyond what is 
codified and afforded to private sector employees (See e.g., 5 U.S.C. 
chapter 23--Merit System Principles). OPM will not adopt changes based 
on this comment.
    An agency recommended removing the references to the OPM report in 
Sec.  752.104(b) because it is the only time a specific section of the 
OPM report is discussed. The agency went on to say that it is not clear 
why there is a ``discrete reference'' to one part of a larger OPM 
report ``when the report is not otherwise discussed in the text of the 
regulations.'' The agency further recommended either adding a new 
separate section in the regulations discussing the report and its 
components, or having the report be covered by E.O. 13839 and OPM 
policy.
    OPM notes that Sec. Sec.  432.108(b), 752.203(h)(2), 752.407(b) and 
752.607(b) also refer to the reporting requirements in Section 6 of 
E.O. 13839. OPM will not adopt the agency's recommendations because OPM 
believes that the reference to reporting requirements, in addition to 
the instructions provided in E.O. 13839, OPM's guidance memoranda of 
July 3, 2018, and October 10, 2018, and any instructions OPM will 
provide in the data call process constitute useful guidance.
    A commenter expressed the view that eliminating clean record 
agreements would mean that any negative mark, such as letters of 
admonishment and reprimand, on an employee's record would be permanent 
and could be used as justification for proposing a subsequent more 
severe form of punishment. OPM does not fully agree with this 
assertion. OPM notes that, for employees that engage in repeated 
misconduct, increasing the severity of disciplinary measures is likely 
to be appropriate, and, to the extent that preserving the integrity and 
accuracy of an employee's personnel file facilitates an agency's 
ability to take such appropriate measures, this is beneficial to the 
agency and to the public. OPM also notes that the questions of when, 
how, and for how long an agency may rely on prior incidents of 
misconduct is

[[Page 65968]]

governed by a legal framework that is independent from and unaffected 
by this rule. Finally, OPM would note that the regulatory amendments 
also do not impact guidelines surrounding disciplinary instruments such 
as letters of reprimand or admonishment, the preservation of which is 
also governed by procedures that are independent of and unaffected by 
this rule.
    A national union recommended that OPM rewrite Sec.  432.108 to make 
it ``clear, comprehensive, and less wordy'' and offered the following 
revision: ``(a) Agreements to alter personnel records. Except as 
provided in subsection (b), an agency shall not agree to erase, remove, 
alter, or withhold from another agency any information about a civilian 
employee's performance or conduct in that employee's official personnel 
records, including an employee's Official Personal Folder and Employee 
Performance File, as part of, or as a condition to, resolving a formal 
or informal complaint by the employee or settling an administrative 
challenge to an adverse action. (b) Corrective action. An agency 
unilaterally or as part of, or as a condition to, resolving by 
agreement a formal or informal complaint by the employee, or settling 
an administrative challenge to an adverse action, may at any time 
erase, remove, alter, or withhold from another agency any information 
about a civilian employee's performance or conduct in that employee's 
official personnel records, including an employee's Official Personnel 
Folder and Employee Performance File if the agency has reason to 
believe that: (1) The complaint or administrative challenge is, or 
might reasonably be found by an adjudicator to be, valid; (2) the 
information is, or might reasonably be found by an adjudicator to be, 
inaccurate; (3) the adverse action was, or might reasonably be found by 
an adjudicator to have been, proposed or taken illegally or in error; 
or (4) the information records, or might reasonably be found by an 
adjudicator to record, an adverse action or other agency action that 
was proposed or taken illegally or in error. (c) Reporting. An agency 
should report any agreements relating to the removal of Information 
under subsection (b) as part of its annual report to the OPM Director 
required by Section 6 of E.O. 13839.''
    OPM believes that the proposed changes would not make these 
provisions clearer while they would substantially change the meaning 
and intent of the proposed rule and would be inconsistent with the 
requirements of E.O. 13839. Also, as currently written, Sec.  
432.108(b) and (c) permit agencies to take corrective action based on 
discovery of agency error and discovery of material information prior 
to final agency action, respectively, before any adjudicator is 
involved. Further, the union's revision gives the impression that the 
reporting requirement applies to actions that are cancelled or vacated 
based on discovery of material information prior to final agency 
action, which is not the case. Finally, in response to suggestions 
regarding post-adjudication action, such a change to the rule would be 
unnecessary to the extent that OPM would be compelled to initiate any 
changes to personnel records required to conform to a judicial order. 
For the foregoing reasons, OPM will not adopt the union's recommended 
revision.
    In sum, the amended regulation at Sec.  432.108 effectuates Section 
5 of E.O. 13839, and thereby promotes integrity and accountability and 
facilitates the sharing of records between Federal employers in a 
manner that permits agencies to make appropriate and informed decisions 
regarding a prospective employee's qualification, fitness, and 
suitability as applicable to future employment. However, Section 5 
requirements should not be construed to prevent agencies from 
correcting records should it come to light, including during or after 
the issuance of an adverse personnel action, that the information 
contained in a personnel record is not accurate or records an action 
taken by the agency illegally or in error. An agency may take such 
action even if an appeal/complaint has been filed relating to the 
information that the agency determines to be inaccurate or to reflect 
an action taken illegally or in error. In all events, however, the 
agency must ensure that it removes only information that the agency 
itself has determined to be inaccurate or to reflect an action taken 
illegally or in error. Section 5 requirements should also not be 
construed to prevent agencies from entering into partial clean record 
settlements with regard to information provided to non-Federal 
employers.
    Finally, when persuasive evidence comes to light prior to the 
issuance of a final agency decision on an adverse personnel action 
casting doubt on the validity of the action or the ability of the 
agency to sustain the action in litigation, an agency may decide to 
cancel or vacate the proposed action. Additional information may come 
to light at any stage of the process prior to final agency decision 
including during an employee response period. To the extent an 
employee's personnel file or other agency records contain a proposed 
action that is subsequently cancelled, an agency would have the 
authority to remove that action from the employee's personnel file or 
other agency files. However, the requirements described in Section 5 
would continue to apply to any accurate information about the 
employee's performance or conduct which comes to light prior to 
issuance of a final agency decision on an adverse action. Based on the 
foregoing, the final rule at Sec.  432.108 reflects E.O. 13839's 
restrictions on settlement agreements arising from chapter 43 actions.

Technical Amendments

    The final rule corrects the spelling of the word ``incumbents'' 
within Sec.  432.103(g) and the word ``extension'' at Sec.  
432.105(a)(4)(i)(B)(3). OPM replaces the term ``handicapping 
condition'' with ``disability'' at Sec.  432.105(a)(4)(i)(B)(4) to 
bring the definition into conformance with 29 U.S.C. 705. In this rule, 
OPM also revises Sec.  432.105(a)(4)(i)(C) to correctly identify the 
office that an agency shall contact if it believes that an extension of 
the advance notice period is necessary for a reason other than those 
listed in Sec.  432.105(a)(4)(i)(B). OPM revises Sec.  432.106(b)(1) to 
replace ``i.g.'' with ``i.e.'' within the parenthetical concerning non-
exclusion by the parties to a collective bargaining agreement. Finally, 
OPM corrects the use of the word ``affected'' versus ``effected'' 
within Sec.  432.107(b).
    An agency recommended reviewing and correcting the use of 
``affect'' and ``effect'' throughout the proposed rule. The final rule 
corrects the use of the word ``affected'' versus ``effected'' within 
Sec.  432.107(b). There were no other misuses of ``affect'' and 
``effect'' in the proposed rule. Therefore, no additional changes are 
necessary based on this comment.
    Another commenter recommended that agencies expunge records ``after 
90 days or until the next formal performance rating, whichever is 
shorter'' if, because of performance improvement during the notice 
period, the employee is not reduced in grade or removed. OPM will not 
adopt any revisions based on this comment. The proposed rule is simply 
a technical amendment intended to make a grammatical correction (i.e., 
it changes the word ``affected'' to ``effected''). The rest of the 
language in this section reflects requirements that exist today and 
predate this proposed regulatory revision.

[[Page 65969]]

5 CFR part 752--Adverse Actions

Subpart A -- Discipline of Supervisors Based on Retaliation Against 
Whistleblowers

    Recent changes enacted by Congress modifying 5 U.S.C. 7515 
establish mandatory procedures for addressing retaliation by 
supervisors for whistleblowing. The regulations, issued pursuant to 
this Statute, reinforce the responsibility of agencies to protect 
whistleblowers from retaliation. These requirements are significant 
because of the essential protections they provide. Prohibited personnel 
actions are not consistent with the notion of a system based on merit, 
and failure to observe these prohibitions must be addressed promptly 
and resolutely.
    OPM has revised our regulations to incorporate these statutory 
changes and to ensure that agencies understand how to meet the 
additional requirements in connection with prohibited personnel 
actions. This new rule falls under subpart A of 5 CFR part 752 as 
``Discipline of supervisors based on retaliation against 
whistleblowers.''
    An agency suggested that OPM remove portions of the newly created 
subpart A on the rationale that the Office of Special Counsel (OSC) 
should issue regulations pertaining to discipline of supervisors based 
on retaliation against whistleblowers if it desires to do so. This 
agency stated also that the regulations should be in chapter VIII, of 
title 5, Code of Federal Regulations. We will not make any revisions to 
the final rule as a result of this comment. Congress granted OPM 
authority to regulate adverse actions. The final language implements 
the statutory authority and procedures of 5 U.S.C. 7515 and reinforces 
the principle that increased accountability is warranted in situations 
where a supervisor commits a prohibited personnel action against an 
employee of an agency in violation of paragraph (8), (9), or (14) of 5 
U.S.C. 2302(b).
    Two organizations and one individual expressed broad support for 
subpart A. One of the organizations fully commended OPM, while 
reminding us that claims of retaliation must be substantiated and 
proven and cautioning against mere allegations resulting in the 
dismissal of management. In addition, the organization reminded OPM 
that managers and supervisors can be whistleblowers as well, but often 
lack protections equal to those applicable to other employees in making 
whistleblower disclosures. Lastly, the organization encouraged OPM to 
protect whistleblowers at all levels and hold all employees equally 
accountable for retaliation. While another organization voiced its 
support for whistleblower protection, the organization emphasized that 
supervisors, managers, and executives can be whistleblowers, and 
changes to the system cannot embed an us-versus-them mentality between 
different levels of the workforce.
    OPM agrees with these commenters. We understand that under the 
relevant statute (i.e., 5 U.S.C. 7515(b)), the claims of retaliation 
must be substantiated and proven and that mere allegations may not be 
the basis for the dismissal of management. Further, we believe that the 
regulations reinforce the responsibility of agencies to protect all 
whistleblowers from retaliation. These regulations help to undergird 
and support agencies in meeting their requirements to take action 
against ``any'' supervisor who retaliates against whistleblowers. 
Accordingly, different levels of the workforce are subject to the 
increased accountability and protections.
    In response to these comments, OPM also provides the following 
clarification: The initiation of a removal action pursuant to 
7515(b)(1)(B) should be understood to be required under this statute 
only if a disciplinary action, initiated pursuant to 7515(b)(1)(A)--
based on an agency finding of retaliation made pursuant to procedures 
outlined in 7515(b)(2)(B)--is either uncontested or if contested, is 
upheld by a third party. As a corollary to this observation, OPM notes 
that, should a disciplinary action initiated pursuant to 7515(b)(1)(A) 
be contested and not sustained, a subsequent and separate determination 
by the agency that a supervisor engaged in a prohibited personnel 
practice (again after following procedures in 7515(b)(2)(B)), would 
trigger a proposal under 7515(b)(1)(A), not 7515(b)(1)(B).

Section 752.101 Coverage

    The final rule describes the adverse actions covered and defines 
key terms used throughout the subchapter. An organization suggested, 
without any additional information or specific recommendations, that 
clarification of definitions in this section is needed and would be 
helpful. Due to the lack of specifics, OPM did not consider any 
revisions based on this comment.
    The final rule also includes a definition for ``insufficient 
evidence.'' OPM defines this new term as evidence that fails to meet 
the substantial evidence standard described in 5 CFR 1201.4(p). One 
commenter objected to this definition and recommended that OPM either 
remove it or change it as follows: ``Insufficient Sufficient evidence 
means evidence that fails to meet meets the substantial evidence 
standard described in 5 CFR 1201.4(p).'' The commenter argued that the 
rule introduces the substantial evidence standard into chapter 75 
adverse action procedures. He believes his recommendation will ensure 
that the agency retains the preponderance of the evidence burden of 
proof while still maintaining the substantial evidence burden of proof 
for the employee refuting an allegation of a prohibited personnel 
action. OPM will not adopt any revisions based on this comment because 
the recommended changes are unnecessary. First, the term ``insufficient 
evidence'' mirrors the content of 5 U.S.C. 7515, which OPM has no 
authority to change. Further, the employee's burden of proof of 
substantial evidence in the proposed regulations applies only to the 
evidence furnished prior to any agency action. If an action is taken 
and the employee appeals to the MSPB, the agency bears the burden of 
proof. The agency's action must be sustained by a preponderance of the 
evidence if the action is brought under chapter 75, as it is here.
    Also, with respect to coverage, a commenter expressed concern that 
5 U.S.C. 7515 fails to hold political appointees accountable for 
retaliation against whistleblowers and observed that the proposed rule 
weakens Federal workforce protections at a time when they should be 
strengthened. OPM did not adopt any revisions based on this comment. An 
agency head need not follow the procedures outlined in section 7515 in 
order to separate a political appointee who engaged in whistleblower 
retaliation. Political appointees serve at will and can be separated at 
the pleasure of the agency head at any time, including for violating 
whistleblower rights. Therefore, political appointees can be held 
accountable for retaliation against whistleblowers. As to the broader 
assertion that the proposed rule weakens Federal workplace protections, 
OPM emphasizes that Federal employees will continue to enjoy all core 
civil service protections under the law, be protected by the merit 
system principles, and possess procedural rights and appeal rights. The 
final rule does not remove the procedural protections afforded 
employees who are subject to an adverse action, including the right to 
contest a proposed adverse action if an employee believes the agency 
has acted impermissibly or relied upon an error and the right to submit 
a reply and supporting materials.

[[Page 65970]]

Section 752.102 Standard for Action and Penalty Determination

    5 U.S.C. 7515 incorporates many of the procedural elements of 5 
U.S.C. 7503, 7513 and 7543, to include the standards of action applied 
to each type of adverse action. For supervisors not covered under 
subchapter V of title 5, the proposed rule applies the efficiency of 
the service standard. For supervisors who are members of the Senior 
Executive Service (SES), the proposed rule defines the standard of 
action as misconduct, neglect of duty, malfeasance, or failure to 
accept a directed reassignment, or to accompany a position in a 
transfer of function.
    5 U.S.C. 7515 enhances statutory protection for whistleblowers 
through the creation of proposed mandatory penalties. In accordance 
with the statute, the final rule at Sec.  752.102 outlines the penalty 
structure. Specifically, for the first incident of a prohibited 
personnel action, an agency is required to propose the penalty at a 
level no less than a 3-day suspension. Further, the agency may propose 
an additional action, including a reduction in grade or pay. For the 
second incident of a prohibited personnel action, an agency is required 
to propose that the supervisor be removed.
    In one agency's view, the required penalties under Sec.  752.102 
seem to conflict with language regarding progressive discipline and the 
penalty determination in the remaining sections of 5 CFR part 752. The 
agency's commenter stated that it is possible a third-party would see 
the lower-tiered disciplinary level (suspension) and argue that it 
should have been taken first (absent any prior disciplinary action). 
For the first prohibited personnel action committed by the supervisor, 
the agency recommended modifying Sec.  752.102(b)(1)(i) to state, 
`Shall propose a penalty up to and including removal.''
    Another commenter who was concerned about the penalty structure 
stated that a suspension of a minimum of three days for retaliation 
against a whistleblower is not sufficient given the severity of the 
offense and opined that a suspension should be a minimum of 30 days or 
more depending on the severity of the offense. This commenter further 
stated that if the offending supervisor is retained, then he or she 
should be retrained for a minimum of 5 days in addition to the 
suspension. Finally, the commenter stated that if the whistleblower was 
terminated, the supervisor's penalty should also be termination.
    We will not make any revisions to the regulation based on these 
comments. The mandatory proposed penalties as listed in Sec.  
752.102(b)(1) track the relevant statute, 5 U.S.C. 7515. Specifically, 
for the first incident of a prohibited personnel practice, an agency is 
required to propose the penalty at a level no less than a 3-day 
suspension. (Emphasis added.) Further, the agency may propose an 
additional action, including a reduction in grade or pay. We believe 
the regulation as written is sufficiently broad to give agencies the 
flexibility and guidance needed to propose a penalty suited to the 
facts and circumstances of the instant whistleblower retaliation, 
including severity of the offense.
    One commenter stated that any rule change should include notifying 
employees of what action has been taken to correct a supervisor's 
``future behavior,'' which we understood to mean notifying employees of 
what action was taken to correct a supervisor's behavior to prevent any 
future wrongdoing. We will not adopt this proposed change based on the 
need to protect employees' personal privacy. An agency may only share 
information from an individual's personnel records with those who have 
a need to know, such as human resources staff involved in advising 
management and any management official responsible for approving the 
action.

Section 752.103 Procedures

    The final rule establishes the procedures to be utilized for 
actions taken under this subpart. The procedures in the subpart are the 
same as those described in 5 U.S.C. 7503, 7513 and 7543. However, the 
final rule also includes some key exceptions, namely the provisions 
concerning the reply period and advance notice. Under this subpart, 
supervisors against whom an action is proposed are entitled to no more 
than 14 days to answer after receipt of the proposal notice. At the 
conclusion of the 14-day reply period, the agency shall carry out the 
proposed action if the supervisor fails to provide evidence or provides 
evidence that the head of the agency deems insufficient. To the extent 
practicable, an agency should issue the decision on a proposed removal 
under this subpart within 15 business days of the conclusion of the 
employee's opportunity to respond.
    Several commenters, including three agencies, an organization and a 
national union, expressed concern about the procedures promulgated in 
Sec.  752.103(d). The agencies inquired about any exceptions to the 
required timeframe of not more than 14 days to furnish evidence as 
provided in 5 U.S.C. 7515(b)(2)(B) in the instance of, for example 
illness, extenuating circumstances, or in response to a request for 
extension from the employee or the employee's legal representative. One 
of the agencies recommended specifically that OPM clarify this matter 
as to circumstances which may justify extension of this 14-day answer 
period, if any. With respect to Sec.  752.103(d)(2), the organization 
characterized the proposed regulation as contrary to statute, stating 
that OPM cannot waive the statutory requirements for advance notice of 
proposed adverse actions by regulation, and so cannot set up a scheme 
whereby the effective date of an adverse action is less than the 
absolute statutory minimum. Similarly, an individual commenter asserted 
that it contradicts 5 U.S.C. 7513(b)(1) and 5 U.S.C 7543(b)(1) with 
respect to an agency's requirement to give 30-day advance notice of a 
proposed adverse action. The commenter argued that a statutory 
amendment is required to exclude disciplinary actions for prohibited 
personnel practices from the statutorily prescribed notice and response 
times.
    The national union also raised objections to the amount of time 
allowed for an employee to defend a proposed adverse action under Sec.  
752.103, claiming that the proposed rule does not consider the time it 
may take an employee to gather evidence or obtain capable 
representation. The union added that agencies must then evaluate 
evidence and render a decision within 15 days after the response period 
closes. The union called this a ``hurried'' approach that places 
unreasonable time constraints on employees and agencies and favors 
expediency over accuracy. Another agency recommended clarifying that 
the 15-business day limit does not apply to suspensions, reductions in 
grade or pay, or lesser penalties.
    OPM will not adopt any revisions based on these comments. The 
response period and advance notice period in Sec.  752.103 do not 
represent guidelines originating from OPM regulations, as indicated by 
these commenters but rather effectuate the statutory requirements in 5 
U.S.C. 7515, and the principle outlined in Section 2(f) of E.O. 13839 
that provides, to the extent practicable, agencies should issue 
decisions on proposed removals taken under chapter 75. The requirement 
regarding the 14 days to submit an answer and furnish evidence in 
support of that answer is derived from an explicit statutory limitation 
(See 5 U.S.C. 7515(b)(2)). The statute further

[[Page 65971]]

states that if after the end of the 14-day period a supervisor does not 
furnish any evidence, the head of the agency ``shall'' carry out the 
action proposed. The clear language of the statute specifically 
directing that the head of the agency carry out the action at the 
conclusion of 14 days reflects a mandatory process that provides no 
discretion for OPM to make exceptions through regulation nor does it 
offer discretion for agencies to diverge from the statutory 
requirements by permitting extensions.
    Additionally, a commenting organization expressed concern that, 
although the 15 business days to issue decisions is ``doable'' and will 
speed up the process, these types of actions sometimes do not receive 
attention in a timely manner at senior level. The organization stated 
that some of their members have reported removal decisions that are 
pending for months with the employee in limbo and the office scrambling 
to accomplish work. The commenter recommended that the reporting 
requirement should emphasize the importance of meeting the time period 
of 15 business days to issue decisions.
    OPM will not adopt the recommendation that the reporting 
requirement should emphasize the importance of adhering to the time 
period of 15 business days to issue decisions. By emphasizing the non-
discretionary nature of this reporting requirement in the Data 
Collection section above.,, OPM believes that it is conveying the 
importance of meeting this deadline. That said, OPM agrees that 
adhering to the time period of 15 business days to issue adverse action 
decisions is important and would further emphasize that this 
requirement supports the objective to make disciplinary procedures more 
efficient and effective.
    OPM received comments as well on other requirements established in 
Sec.  752.103. An agency raised a concern regarding written notice 
about the right of the supervisor to review the material relied on, as 
provided for at 752.103(c)(2); and written notice of any right to 
appeal the action pursuant to section 1097(b)(2)(A), as provided for at 
752.103(c)(3). The agency highlighted specifically that according to 
the National Defense Authorization Act (NDAA) for Fiscal Year 2018, 
Pubic Law 115-91, Sec. 1097(b)(2)(A) requirements only apply to 
proposal notices under 5 U.S.C. 7503(b)(1), 7513(b)(1), and 7543(b)(1) 
as stated in the law. The commenter stated that Public Law 115-91 Sec. 
1097(b)(2)(A) requirements do not apply to 5 U.S.C. 7515 actions and 
therefore should not be applicable to proposal notices under section 
7515. Also, the commenter went on to observe that 5 U.S.C. 7515 
specifically states that its provisions are not subject to 5 U.S.C. 
7503(b)(1), 7513(b)(1) and 7543(b)(1).
    Upon further review and careful consideration of this comment, OPM 
has determined that it will not incorporate the requirement to provide 
information on appeal rights in any notice to an employee for an action 
taken under section 7515.
    An agency and one individual commenter also raised concerns about 
including appeal rights information in the notice of proposed action. 
The agency commented that this seems to imply that an employee obtains 
a right to appeal an action under Public Law 115-91 section 
1097(b)(2)(A) while the statute only requires that the agency provide 
notice of detailed information with respect to any right to appeal the 
action. The agency suggested that OPM revise Sec.  752.103(c)(3) to 
read ``. . . provides, pursuant to section 1097(b)(2)(A) of Public Law 
115-91, notice of any right to appeal. . . .'' The individual commenter 
stated that parts 315, 432, and 752 require that a notice of proposed 
action include the employee's appeal rights and time limits, which is 
inappropriate at the proposal stage. The commenter's concern is that 
employees would file appeals before an action is final and create a 
bottleneck downstream.
    As noted above, the amended regulation will not require that 
agencies include appeals rights information in a notice of proposed 
action taken under section 7515. Notwithstanding, it is important that 
the commenters understand that current and amended parts 315 and 432 do 
not require that agencies provide advance notice of appeal rights. (It 
is unclear if by ``time limits'' the commenter is referring to time in 
which to file an appeal or time to respond to notice of a proposed 
action.) Further, it is well-established in statute, regulation, and 
case law that an employee cannot appeal a proposed action.
    Finally, the regulation at Sec.  752.103 also includes the 
requirement that, if the head of an agency is responsible for 
determining whether a supervisor has committed a prohibited personnel 
action, that responsibility may not be delegated. This non-delegation 
provision generated a significant number of comments. One organization, 
three agencies, and one individual questioned how it would work to have 
the head of an agency responsible for determining whether a supervisor 
has committed a prohibited personnel action. The organization stated 
that larger agencies such as the Department of Defense have 
traditionally delegated authorities to Components who may further 
delegate within their command structure. The commenters asked for 
clarity on when an agency head would be responsible for determining 
whether a supervisor committed a prohibited personnel action. One of 
the agencies commented that the meaning of this provision is unclear 
specifically as to whether the head of the agency is responsible for 
determining, without delegation permitted, whether a supervisor 
committed a prohibited personnel action or if an agency has decided 
internally via its disciplinary procedures that the head of the agency 
must make this determination, then it cannot be delegated. The agency 
suggested that OPM should exercise its authority to provide more 
guidance regarding the meaning of 5 U.S.C. 7515(b)(3). A second agency 
stated that as a political appointee, the head of an agency may be 
perceived as making politically motivated decisions, resulting in 
claims of whistleblower retaliation. Another of the agency's concerns 
is that a limitation on delegation could be inconsistent with the 
statute. This agency, along with a third agency, recommended agency 
discretion to determine delegation level.
    Some clarification in response to these comments may be useful. The 
requirement regarding non-delegation is an explicit statutory 
limitation under 5 U.S.C. 7515(b)(3) contingent upon whether the head 
of any agency is responsible for determining whether a supervisor has 
committed a prohibited personnel practice. The statute states that if 
the head of the agency responsible for making the determination of 
whether a supervisor committed a prohibited personnel action in 
retaliation against a whistleblower, the responsibility may not be 
delegated. However, if that responsibility rests at a lower level 
within the agency, then decision-making authority as it relates to 
these types of actions would be similarly re-delegated. Consistent with 
this wording and with the general authority granted to agencies 
pursuant to 5 U.S.C. 302, OPM interprets this language to provide 
agencies with the discretion to internally re-delegate this function to 
an appropriate level resulting in these responsibilities then resting 
at that level for the purpose of making these determinations regarding 
supervisory conduct.

[[Page 65972]]

Section 752.104 Settlement Agreements

    The language in this section establishes the same requirement that 
is detailed in the rule changes at Sec.  432.108, Settlement 
agreements. Please see discussion in Sec.  432.108.

Subpart B--Regulatory Requirements for Suspension for 14 Days or Less

    This subpart addresses the procedural requirements for suspensions 
of 14 days or less for covered employees.

Section 752.201 Coverage

    Pursuant to the creation of subpart A within the final rule, Sec.  
752.201(c) reflects an exclusion for actions taken under 5 U.S.C. 7515.

Section 752.202 Standard for Action and Penalty Determination

    While the standard for action under this subpart remains unchanged, 
the final rule makes clear that an agency is not required to use 
progressive discipline under this subpart. The final rule supports 
Section 2(b) of E.O. 13839, which states that supervisors and deciding 
officials should not be required to use progressive discipline. Three 
management associations endorsed this clarification. Two of the 
associations recognized explicitly that supervisors, managers and 
executives encounter unique circumstances whereby they must apply their 
judgment, understanding of context and knowledge of their workforce and 
organization in a manner that collectively informs personnel decisions. 
One of the groups added that managers who have greater autonomy over 
personnel actions can better work with their employees to determine 
which personnel actions will foster success for the agency in the long 
term.
    One association stated that the amended regulation ``takes the 
penalty out of the bargaining arena,'' and added that it ``never 
belonged there in the first place.'' As reflected in the language of 
the rule, specifically that a penalty decision is in the sole and 
exclusive discretion of the deciding official, bargaining proposals 
involving penalty determinations such as mandatory use of progressive 
discipline and tables of penalties impermissibly interfere with the 
exercise of a statutory management right to discipline employees, and 
are thus contrary to law.
    Two of the associations recommended that OPM use ``plain English'' 
as much as feasible when updating the regulations. The organization 
noted that there are many legal phrases used in the Federal employment 
context which can be highly confusing if not properly defined and 
clarified. OPM will not make any revisions based on these comments as 
the commenters did not identify any specific phrases or terms for 
consideration and the regulations are based on statutory requirements.
    An agency expressed support for OPM's clarification that agencies 
are not required to use progressive discipline, adding that use of 
progressive discipline has led to many delays in removal as well as 
hardship for supervisors. The agency noted that the rule will give more 
discretion to supervisors to remove ``problematic'' employees, thus 
increasing the efficiency of the service. However, the agency added 
that progressive discipline is often useful to justify an agency's 
action; defeat claims of favoritism, preferential treatment, and 
discrimination; and provide more consistency between managers. The 
agency recommended that OPM provide further guidance on when and to 
what extent progressive discipline should be used as well as 
clarification on the extent to which agencies should rely upon tables 
of penalties in making disciplinary decisions. In fact, OPM recently 
provided such information in a memorandum, ``Guidance on Progressive 
Discipline and Tables of Penalties,'' issued on October 10, 2019.
    An individual commenter also expressed support for the 
clarifications as they relate to progressive discipline, tables of 
penalties and selection of a penalty appropriate to the facts and 
circumstances, including removal, even if the employee has not been 
previously subject to an adverse action. Another commenter found the 
clarification at Sec.  752.202 to be helpful, with the caveat that 
implementation will be difficult as labor and employee relations staff 
seem to have it ingrained that progressive discipline is the ``safest 
way to go'' to avoid litigation. The commenter observed that without 
support from labor and employee relations staff, front-line supervisors 
are often constrained by senior managers. OPM will not make any 
revisions based on these comments as no revision was requested.
    Many commenters objected to the regulatory amendments regarding 
standard for action and penalty determination. Some, including four 
national unions, characterized the amendments as eliminating, 
attacking, or discarding progressive discipline, and argued strongly 
for withdrawal of the proposed rule. One of the unions commented that 
``eliminating'' progressive discipline places an inordinate amount of 
power in the hands of deciding officials, who are being directed to 
impose the most severe penalty possible. The union added that agencies 
will impose penalties ``within the bounds of tolerable reasonableness'' 
in a manner that leads to subjective discipline. Another national union 
argued that progressive discipline helps to foster a successful 
workplace by giving employees an opportunity to learn from their 
mistakes and ensuring that discipline is proportionate to mistakes. The 
union went on to say that the rule weakens workplace flexibility and 
eliminates the ability of Federal managers and employees to come 
together to develop fair disciplinary procedures. Yet another national 
union described progressive discipline as an important tool that 
agencies should use in order to avoid ``arbitrary and capricious'' 
penalty determinations. The union expressed concern that a critical 
safeguard against arbitrary and capricious agency action is being taken 
away in favor of ``inconsistent and ad-hoc decision-making.'' Pointing 
to the CSRA, the union said, ``Put simply, jettisoning progressive 
discipline, confusing the use of comparator evidence, and discouraging 
tables of penalties, creates an improper bias toward the most drastic 
penalty an agency thinks it can get away with.'' This national union 
asserted such a ``rule of severity'' is not only counterproductive and 
likely to lead to a greater number of penalty reversals, it is also 
contrary to the text, structure, and purpose of the CSRA. The national 
union stated that the proposed regulations upset this balance and 
asserted that OPM's claim that ``[p]rogressive discipline and tables of 
penalties are inimical to good management principles'' is nothing more 
than a cheap soundbite. This national union insisted that it is not 
based on sound analysis or solid evidence and stated that the proposed 
regulations should therefore be abandoned.
    The fourth national union stated that the rule will have the 
``perverse effect'' of encouraging agencies to terminate an employee 
even where there are no prior disciplinary issues and regardless of the 
seriousness of the infraction at issue. The union went on to say that 
such results would erode the public trust in Federal agencies and 
devalue the contributions of hard-working Federal employees. This 
national union stated that the Federal government invests considerable 
time and money in training Federal employees, and the notion that a 
supervisor could decide to fire an employee over a minor transgression 
and give a written reprimand for the same transgression to another 
employee

[[Page 65973]]

is antithetical to the principles of an unbiased and fair civil service 
system.
    In addition to the comments discussed above that were submitted 
individually by labor organizations, we received a letter signed by 
seven national unions as well as comments via a template letter from 
members of one of the undersigned unions. They discussed that 
progressive discipline is the ``law of the land'' and deemed it 
weakened by the proposed rule. The commenters further stated that the 
proposed rule does nothing but weaken protections for Federal employees 
in an effort to circumvent the ``efficiency of the service'' standard. 
Also, the commenters opined that the proposed changes cannot change an 
agency's obligation to determine an appropriate penalty in accordance 
with Douglas v. Veterans Administration, 5 MSPR 280 (MSPB 1981). The 
commenters stated the proposed change will lead to confusion and the 
unjustified punishment of Federal workers, not to mention disparate 
treatment. One of the union members added that progressive discipline 
is fair and allows employees a chance to improve their performance 
without fear of losing their livelihood. The commenter went on to say 
that progressive discipline prevents favoritism, nepotism and the 
``good ole boy'' networks from forming and flourishing in Federal 
agencies. The commenter is concerned that rules such as this will deter 
``young and new talent'' from applying for Federal jobs and drive 
existing workers to the private sector.
    Via a different template letter, several members of another 
national union also interpreted the proposed rule to mean that 
progressive discipline is abolished. The commenters expressed concern 
that the regulatory changes will lead to widely varying, incoherent, 
and discriminatory discipline for similarly situated employees. One of 
the commenters self-identified as a union steward and asked that their 
workload is lightened, not increased.
    In addition, a national union objected to the proposed rule 
regarding progressive discipline on the basis that a standard of 
``tolerable limits of reasonableness'' is less clear and may result in 
various interpretations by supervisory personnel even within the same 
department of an agency. The union expressed concern that ``mandating'' 
that the threshold for review be at a less clear standard invites 
workplace chaos in which inconsistent penalties and unfair discipline 
is administered without the opportunity for it to be corrected.
    An organization disagreed with the rule because in their view it 
flies in the face of proportionate discipline, due process and 
fairness. The organization commented that the regulation is contrary to 
statutory authority in 5 U.S.C. 7513 and established case law. They 
stated that eliminating progressive discipline and the consideration of 
mitigating factors would essentially eliminate the ``for cause'' 
standard and turn Federal employees into ``at will'' employees. The 
organization observed that this is the type of drastic action that 
would undo, impermissibly, the dictates of title 5 and interpretive 
case law, and is the type of action that can only be taken by Congress.
    An organization opposed the proposed rule to the extent that it 
``undercuts'' progressive discipline. The organization stated that 
progressive discipline is a wise approach and asserted that a 
supervisor can deviate from the guidelines of progressive discipline in 
certain situations if they have a reasoned explanation for doing so.
    Additional commenters expressed concern about potential negative 
consequences of discouraging progressive discipline, calling it a poor 
stewardship of tax dollars, contrary to the public interest and a lead 
up to disparate treatment and retaliation. Some commenters worry that 
agencies will impose discipline arbitrarily, up to and including 
removal, for any offense with no obligation to first correct employee 
behavior. Commenters advocated that agencies give employees an 
opportunity to be made aware of and correct behavior before being 
suspended or terminated, including calling it improper to do otherwise. 
Even a commenter who acknowledged that the rule changes could be 
beneficial expressed concern that managers are being given ``more 
power'' to remove employees without just cause. One asserted that this 
is a clear violation of the CSRA.
    We will not make changes to the final rule based on these comments. 
The final rule does not eliminate progressive discipline. Rather, the 
regulatory language makes clear that an agency ``is not required'' to 
use progressive discipline under this subpart. In fact, progressive 
discipline has never been required by law or OPM regulations. It is not 
the ``law of the land'' as asserted by one commenter. Notwithstanding a 
number of comments submitted, the clarifying language in the amended 
regulations does not set aside or discard progressive discipline but it 
does, consistent with the Principles for Accountability in the Federal 
Workforce contained in Section 2 of E.O. 13839, emphasize that 
penalties for misconduct should be tailored to specific facts and 
circumstances, that a more stringent penalty may be appropriate if 
warranted based on those facts and circumstances, and that a singular 
focus on whether an agency had followed progressive discipline to the 
detriment of a more comprehensive fact-based, contextual assessment 
does not serve to promote accountability nor an effective or efficient 
government. The regulatory changes emphasize principles and policies 
contained in E.O. 13839 but are also supported by well-established 
legal authority: That the penalty for an instance of misconduct should 
be tailored to the facts and circumstances; an agency shall adhere to 
the standard of proposing and imposing a penalty that is within the 
bounds of tolerable reasonableness; employees should be treated 
equitably; and conduct that justifies discipline of one employee at one 
time does not necessarily justify similar discipline of a different 
employee at a different time. Concerns expressed by commenters that the 
``bounds of tolerable reasonableness'' is insufficiently clear appear 
to take issue with the state of the law, not OPM's rule which simply 
incorporates the appropriate legal standard. The rule is also 
consistent with the efficiency of the service standard for imposing 
discipline contained in the CSRA notwithstanding assertions that it 
circumvents this standard. While commenters argued that the changes 
weaken agency flexibility, reliance upon the efficiency of the service 
standard, like reliance upon the bounds of tolerable reasonableness in 
the context of penalty selection in fact provides necessary flexibility 
to encompass the range of facts and circumstances associated with each 
individual adverse action. Agencies remained constrained by law to 
select penalties that conform to these legal requirements and any such 
penalty remains subject to challenge based on alleged failure to do so. 
This is undisturbed by the revised rule. Whether or not agencies choose 
to adopt further, internal constraints beyond these legal standards is 
purely discretionary, and OPM reminding agencies of this fact does not 
direct agencies to issue nor otherwise encourage more stringent 
penalties than are warranted given specific facts and circumstances.
    Federal employees will continue to enjoy the protections enshrined 
in law, including notice, a right to reply, a final written decision, 
and a post-decision review when an agency proposes to

[[Page 65974]]

deprive them of constitutionally protected interests in their 
employment. Although we have made changes to the regulations, due 
process and other legal protections are preserved as required by 
Congress.
    Regarding a commenter's criticism that there is a need to look at 
disciplinary actions before they are taken, the rule does not change 
the requirement for disciplinary actions to be reviewed under the 
current regulatory requirements. The existing regulations at Sec. Sec.  
752.203 and 752.404 require that the employee must be provided an 
opportunity to provide an answer orally and in writing. The agency must 
consider any answer provided by the employee in making its decision. 
Moreover, for appealable adverse actions, Sec.  752.404 provides that 
the agency must designate a deciding official to hear the oral answer 
who has authority to make or recommend a final decision on the proposed 
adverse action. Thus, further review of an agency proposed action is 
required before a decision to take any administrative action.
    Regarding the assertion that the regulations cannot be used to 
circumvent required assessment of the Douglas factors, OPM would 
emphasize that there is no effort to evade any such legal requirement. 
Douglas itself states that the Board will not mitigate a penalty unless 
it is beyond the bounds of tolerable reasonableness. This permits, but 
does not require, agencies to impose the maximum reasonable penalty. 
OPM's regulations on progressive discipline are manifestly in accord 
with longstanding decisional law. Moreover, the analysis pursuant to 
Douglas that each deciding official must make provides a means of 
promoting fairness and discouraging the type of subjectivity and 
disproportionality which some commenters allege the new rule promotes. 
Meanwhile, the Douglas factors ensure consideration of all relevant 
factors that may impact a penalty determination, consistent with the 
language of E.O. 13839 and this rule. This includes consideration of 
whether an employee engaged in previous misconduct or did not engage in 
previous misconduct. While again, OPM is not seeking to prevent 
agencies from imposing less than the maximum reasonable penalty with 
this rule, and the exercise of sole and exclusive discretion is reposed 
in agencies, not OPM, considerations such as this, carefully weighed 
alongside numerous other relevant considerations such as the severity 
of the misconduct and any potential mitigating circumstances provide a 
carefully calibrated assessment of penalty that should not be 
superseded by singular reliance on progressive discipline which may 
artificially constrain a more comprehensive analysis.
    One union noted that the proposed regulations will prevent agencies 
from engaging in any collective bargaining negotiations that allow for 
progressive discipline. They asserted that the regulations are contrary 
to the intent and purpose of the Federal Service Labor-Management 
Relations Statute (the Statute). The union stated an agency's policy on 
disciplinary structure directly affects an employee's conditions of 
employment and is the exact condition that Congress intended to be 
collectively bargained. While recognizing OPM's authority to issue 
regulations in the area of Federal labor relations, the union added 
that OPM may not ``dilute the value of employees' statutory right to 
collectively bargain.'' The union further stated the regulations should 
not be implemented because they would ``diminish the core elements of 
collective bargaining by reducing negotiations over primary conditions 
of employment,'' including discipline.
    We agree that Federal employees have a statutory right to 
collectively bargain over their conditions of employment. However, 
there are certain exceptions outlined in the Statute, including a 
prohibition on substantively bargaining over management rights as 
outlined in 5 U.S.C. 7106(a). This includes management's statutory 
right to suspend, remove, reduce in grade or pay, or otherwise 
discipline employees. Accordingly, bargaining proposals that would 
mandate a specific penalty under certain circumstances or which mandate 
the use of progressive discipline and tables of penalties impermissibly 
interfere with the exercise of a statutory management right to 
discipline employees. In clarifying that a proposed penalty is at the 
sole and exclusive discretion of the proposing official, and the 
penalty decision is at the sole and exclusive discretion of the 
deciding official (subject to appellate or other review procedures 
prescribed by law), the rule further elaborates on what is already 
established by law, management's inherent and non-negotiable right to 
utilize its discretion in this area, it does not enhance those rights 
nor diminish bargaining rights in this area.
    Some commenters focused especially on OPM's adoption by regulation 
of the standard applied by MSPB in Douglas to removals, suspensions and 
demotions, including suspensions of fewer than 15 days. Specifically, 
the final rule adopts the requirement to propose and impose a penalty 
that is within the bounds of tolerable reasonableness. An organization 
discussed that while OPM may issue regulations regarding the procedures 
to be followed in adverse actions, an action against any employee may 
only be taken ``for such cause as will promote the efficiency of the 
service,'' 5 U.S.C. 7513(a). Citing Douglas itself and other case law, 
the organization described as a basic principle of civil service 
disciplinary action that the penalty must be reasonable in light of the 
charges and that the penalty not be grossly disproportionate to the 
offense. The commenter noted that ``efficiency of the service'' is 
colloquially referred to as the ``nexus'' requirement which requires 
the agency to establish a ``clear and direct relationship demonstrated 
between the articulated grounds for an adverse personnel action and 
either the employee's ability to accomplish his or her duties 
satisfactorily or some other legitimate government interest promoting 
the efficiency of the service.''
    The organization objected also to the consideration of ``all prior 
misconduct.'' The organization argued that existing case law allows the 
deciding official to evaluate whether or not prior misconduct should be 
used as an aggravating or mitigating factor, whereas the regulatory 
change appears to ``require'' the deciding official to use the prior 
discipline as an aggravating factor against the employee. They stated 
that it would be ``patently illogical'' for potentially unrelated 
misconduct from years or decades ago to be considered when determining 
a penalty for a current instance of misconduct.
    OPM notes that the amended regulation is intended to ensure that 
the deciding official has the discretion to consider any past incident 
of misconduct that is relevant and applicable while making a penalty 
determination, consistent with law. To that end, OPM will amend the 
regulation to clarify that agencies should consider all applicable 
prior misconduct when taking an action under this subpart.
    A national union declared that OPM is not empowered to ``regulate 
away'' the Douglas factors. The union stated that the proposed rule 
would improperly result in an override of MSPB's longstanding 
determination of what should be considered in assessing potential 
employee discipline. In particular, the union believes the proposed 
rule is at odds with progressive discipline considerations in Douglas 
factors 1, 3, 9 and 12, and penalty consistency considerations in 
Douglas factors 6 and 7.

[[Page 65975]]

    In addition, an agency commented that OPM only explicitly discussed 
certain Douglas factors, thereby giving the impression that agencies 
should only prioritize consideration of these factors over those not 
mentioned. The agency added that ``relevant factors'' is undefined and 
vague. The agency recommends that OPM clarify its intention, so 
agencies and adjudicators have a clear understanding of what standards 
to apply by either including explicit references to all the factors or 
making a reference to Douglas itself.
    OPM disagrees with the commenters and will not make any revisions 
based on these comments. As explicitly described in the proposed rule, 
the standard for action under this subpart remains unchanged. 
Specifically, the final rule at Sec. Sec.  752.202, 752.403, and 
752.603 adopts the requirement to propose and impose a penalty that is 
within the bounds of tolerable reasonableness and make it clear that 
this standard applies not only to those actions taken under 5 U.S.C. 
7513 and 7543 but apply as well to those taken under 5 U.S.C. 7503. As 
to the criticism that the proposed rule does not observe the efficiency 
of the service standard and the nexus requirement, Sec. Sec.  752.202, 
752.403, and 752.603 includes: the penalty for an instance of 
misconduct should be tailored to the facts and circumstances; an agency 
shall adhere to the standard of proposing and imposing a penalty that 
is within the bounds of tolerable reasonableness; employees should be 
treated equitably; and conduct that justifies discipline of one 
employee at one time does not necessarily justify similar discipline of 
a different employee at a different time.
    OPM understands and reiterates that agencies continue to be 
responsible for ensuring that discipline is fair and reasonable, 
including applying the Douglas factors. It is unnecessary to list all 
the Douglas factors in the regulations, but this should not be 
interpreted to place focus on some more than others. The proposed rule 
is not at odds with the Douglas factors. Factors such as the 
seriousness of the misconduct and the clarity of notice remain 
unchanged. The consistency of penalty with a table of penalties would 
only be applicable if an agency has adopted a table of penalties. This 
Douglas factor, however, does not in any way require or compel an 
agency to adopt one (though again, there is nothing in the rule that 
precludes an agency from doing so). Regarding an employee's past 
disciplinary record, the rule incorporates the consideration of all 
applicable prior misconduct. The rule does not require an agency to 
consider all applicable prior discipline but gives agencies the 
discretion to do so. With regard to the consistency of penalty with 
other employees who have engaged in the same or similar conduct, while 
the rule incorporates the current legal standard, which informs this 
analysis, it does nothing to alter the Douglas factor itself. 
Similarly, the Douglas factor addressing the adequacy of alternative 
sanctions to deter conduct remains unaltered, and in fact, this 
consideration provides a further safeguard against the subjective and 
disproportionate penalties some commenters allege will result from the 
changes to the regulation. If a penalty is disproportionate to the 
misconduct or unreasonable, the agency risks having the penalty 
mitigated or reversed. For these reasons, we urge managers to exercise 
thoughtful and careful judgment in applying the broad flexibility and 
discretion they are granted in addressing misconduct and making penalty 
determinations.
    We received many submissions that included significant objections 
to OPM's discussion of the risks of tables of penalties in the 
Supplementary Information section of the proposed rule. Again, as with 
progressive discipline, many commenters, including three national 
unions, had the mistaken impression that the rule somehow eliminated 
tables of penalties. They expressed concern that the amended 
regulations will remove transparency and accountability; create an 
environment of fear, distrust, and resentment; and empower deciding 
officials to mete out discipline arbitrarily, disparately, and 
inequitably. The unions advocated for use of tables of penalties, 
believing that they ensure that discipline is dispensed fairly and 
employees are treated equitably; provide support to employees by 
helping them recognize if a penalty is disproportionate to an 
infraction; and support supervisors by providing readily available and 
clear guidance.
    One of the unions claimed to see in the proposed rule a bias toward 
removal that is ``inconsistent with due process and unjustified.'' In 
support of its position, the union quoted a 2018 U.S. Government 
Accountability Office (GAO) report as saying that ``tables of 
penalties--a list of recommended disciplinary actions for various types 
of misconduct--though not required by statute, case law, or OPM 
regulations, nor used by all agencies, can help ensure the 
appropriateness and consistency of a penalty in relation to an 
infraction.'' The union added that GAO reported that penalty tables can 
help ensure the disciplinary process is aligned with merit principles 
by making the process more transparent, reduce arbitrary or capricious 
penalties and provide guidance to supervisors. The union claimed that 
OPM's citation to Nazelrod v. Department of Justice, 43 F.3d 663 (Fed. 
Cir. 1994) is ``nonsensical'' and added that this will not change the 
requirement that an agency must prove all the elements of a charged 
offense. The union goes on to cite Cleveland Board of Education v. 
Loudermill, 470 U.S. 532, 542 (1985) to make its point that an employee 
against whom an action has been proposed is entitled to notice and an 
opportunity to be heard before the action may become final.
    Another national union commented that the regulatory changes weaken 
rules that forbid disparate treatment for similarly situated employees. 
In the union's view, tables of penalties help ensure equitable 
treatment and guard against discrimination, retribution and favoritism. 
Two unions asserted that agencies with whom they work typically allow 
supervisors to assess the situation and use their discretion in 
determining what action is appropriate rather than using penalty tables 
blindly or rigidly. The unions urged OPM to withdraw or reject the 
proposed rule and consider alternative approaches.
    Via a template letter, several members of a national union observed 
that the proposed rule discourages tables of penalties. The commenters 
expressed concern that the regulatory changes will lead to widely 
varying, incoherent, and discriminatory discipline for similarly 
situated employees, regardless of whether the same or different 
supervisors are involved. They expressed a strong belief that penalties 
should be the same or similar for similar offenses and dispensed of any 
idea that identical or similar offenses could lead to disparate 
discipline as inherently inequitable or invalid. One of the commenters 
added that in the absence of set penalties, sanctions for like 
violations will be unequal and invite litigation and tie up agency 
resources. Others added that the changes are unnecessary and put 
employees at the mercy of supervisors. Another self-identified as a 
retiree and called the regulatory changes ``unAmerican.''
    An agency commented, drawing upon its own experience, that the 
benefits of a table of penalties have outweighed the cons. The agency 
listed as benefits helping supervisors and employees recognize what 
constitutes misconduct, deterring employees from engaging in 
misconduct, and giving all supervisors and employees a general 
understanding of the type and level of disciplinary

[[Page 65976]]

consequences that can arise from committing misconduct. The agency 
stated that its table has always been used as advisory guidance, and it 
requires supervisors to provide an explanation if they want to exceed 
the table of penalties.
    Another agency argued that, when tables of penalties are used 
properly as guidance, the unique facts of each case are taken into 
consideration. The agency notes that one of the Douglas factors is the 
consideration of the agency's table of penalties, if any, and thus it 
is contemplated that such information would be weighed in conjunction 
with the other factors outlined in Douglas. The agency recommends that 
OPM either delete this discussion from the Supplementary Information or 
significantly revise it to stress, as a best practice, that tables of 
penalties, if used, should serve as a guide for disciplinary penalty 
determinations, and ``that offenses contained in such a table of 
penalties should be written broadly enough to address unique offenses 
or misconduct that may have not been contemplated in offense.''
    After expressing general support for incorporation of the Douglas 
factor analysis into the regulations, an organization commented that 
the proposed rule is contradictory in that it states the importance of 
Douglas, but ``undercuts'' Douglas factor 7, ``consistency of the 
penalty with any applicable agency table of penalties.'' The 
organization described tables of penalties as valuable tools that 
provide a measure of uniformity; help avoid real or perceived 
favoritism, disparate treatment, and discrimination; and reduce the 
risk of litigation. The organization is concerned in particular that 
there will be an increase in disparate treatment complaints before the 
EEOC and MSPB. According to the organization, its membership has 
observed that most penalty tables make clear that, in certain 
situations, a supervisor can deviate from the guidelines if there is a 
reasoned explanation for doing so. This sentiment was shared by another 
organization that disputed that agencies adhere to tables of penalties 
in a formulaic manner, as stated by OPM in the proposed rule.
    One commenter wrote that the proposed rule does not acknowledge any 
advantages or benefits of progressive discipline or tables of 
penalties. The commenter suggested that the final rule should state 
that an agency may choose to but is not required to use progressive 
discipline. Another commenter referred to cumulative infractions as 
typically leading to escalating enforcement actions, which the 
commenter described as fair. The person went on to express that 
``[t]his E.O.,'' which we understood to mean E.O. 13839, will allow 
Federal employees to be removed for nearly any perceived infraction and 
stated not to allow the Executive Order to be passed. Yet another 
commenter raised the concern that while it does make sense to take 
disciplinary action for performance reasons or misconduct, there should 
be ``levels'' on which actions are taken. The commenter also stated 
that any ``offense should be looked at before taking any action'' 
because disgruntled employees could be that way due to poor management. 
One person noted that managers actually make more and worse choices 
than bargaining unit staff but are not held accountable. Another person 
characterized the revised regulations as demoralizing to the Federal 
workforce and expressed concern that they will produce a Government 
that is ``fearful, cautious, and incapable of making bold decisions'' 
rather than the ``resourceful, creative, and effective'' Government 
that we need.
    Finally, a management association disagreed with OPM that agencies 
can address misconduct appropriately without a table of penalties, 
though the association did agree that nothing surpasses a manager's 
judgment and independent thinking when determining the best way to 
handle their team.
    The Supplementary Information in the proposed rule identified 
pitfalls agencies may encounter when basing disciplinary decisions on a 
table of penalties. The Supplementary Information reminded agencies 
that penalty consideration requires an individual assessment of all 
relevant facts and circumstances. To promote efficiency and 
accountability, OPM is encouraging agencies to afford their managers 
the flexibility to take actions that are proportional to an offense but 
further the mission of the agency and promote effective stewardship. 
The existence of tables of penalties may create confusion for 
supervisors who believe that only the misconduct explicitly identified 
in the table can be addressed through a chapter 75 process. 
Inappropriate reliance on a table of penalties or progressive 
discipline can prevent management from taking an adverse action that 
would promote the efficiency of the service and survive judicial 
scrutiny. Chapter 75 does not only apply to misconduct. It applies to 
any action an agency may take to promote the efficiency of the service, 
including unacceptable performance and certain furloughs. Further, 
there is no way to define the infinite permutations, combinations and 
variations of possible misconduct through preconceived labels. Many 
types of misconduct or behavior that must be dealt with to promote the 
efficiency of the service fall in the gaps between offenses listed in 
tables of penalties. And some of these labeled charges require an 
agency to meet an elevated standard of proof, such as intent, whereas 
behavior warranting discipline may be merely negligent or careless or 
unintentional. Further, someone charged with a certain type of 
misconduct not enumerated in the table of penalties may argue that he 
was not on notice that what he did was wrong. Tables of penalties are 
rigid, inflexible documents that may cause valid adverse actions to be 
overturned. Further, they promote mechanistic decision-making, which is 
contrary to OPM's policy that proposing and deciding officials exercise 
independent judgment in every case according to its particular facts 
and circumstances in leveling the charge and the appropriate penalty.
    With respect to the GAO report, OPM notes that the report does not 
explain how having a table of penalties will help an agency prevent 
misconduct or respond to it. The mere existence of a table of penalties 
does not necessarily serve as a warning to employees or compel 
supervisors to carry out more disciplinary actions for the conduct 
identified in the table. If anything, it is as likely to de-emphasize 
constructive early intervention in favor of a more punitive approach 
that focuses only on the offenses covered by the table. It may also be 
read or understood to induce or worse, require, managers in some cases 
to impose a lesser penalty where a greater penalty is warranted. The 
GAO report references some of OPM's concerns about tables of penalties, 
but there is no serious discussion of the disadvantages of a table of 
penalties, which we believe are important in assessing their value. It 
is vital for effective workforce management consistent with the CSRA 
and the merit system principles that supervisors use independent 
judgement, take appropriate steps in gathering facts and conduct a 
thorough analysis to decide the appropriate penalty in individual 
cases.
    We reiterate that the creation and use of a table of penalties is 
not required by statute, case law or OPM regulation. These regulations 
do not prohibit an agency from establishing a table of penalties, 
though OPM strongly advises against their use. However, once an agency 
establishes a table of penalties, it will have to live with the

[[Page 65977]]

consequences of a document containing mechanistic and perhaps 
arbitrarily-selected labels, possibly issued years or even decades 
earlier at a safe remove from the realities and variety of day-to-day 
life in the Federal workplace. For that reason, the amendments 
emphasize that the penalty for an instance of misconduct should be 
tailored to the facts and circumstances, in lieu of any formulaic and 
rigid penalty determination. The final rule states that employees 
should be treated equitably and that an agency should consider 
appropriate comparators as the agency evaluates a potential 
disciplinary action, as well as other relevant factors including an 
employee's disciplinary record and past work record, including all 
applicable prior misconduct, when taking an action under this subpart.
    With respect to appropriate comparators, as stated in the proposed 
rule, conduct that justifies discipline of one employee at one time by 
a particular deciding official does not necessarily justify the same or 
a similar disciplinary decision for a different employee at a different 
time. For this reason, we have decided to incorporate the Miskill test. 
The language in the proposed rule reflected important language in 
Miskill v. Social Security Administration, 863 F.3d 1379 (2017), that a 
comparator is an employee that ``was in the same work unit, with the 
same supervisor, and was subjected to the same standards governing 
discipline.'' As explained in detail below and in response to many 
commenters, including national unions, who objected to the definition 
of comparator in the proposed rule, OPM has modified the final rule to 
clarify that appropriate comparators are primarily individuals in the 
same work unit, with the same supervisor, who engaged in the same or 
similar misconduct.
    A management association lauded the Government-wide application of 
Miskill and clarification of the standard for comparators. However, 
other commenters expressed that the adoption of Miskill narrows the 
scope of comparators in a manner that will make it difficult for 
employees to demonstrate inequitable discipline or abuse of discretion 
and easy for managers to engage in arbitrary and capricious conduct. 
Some, including a national union, went so far as to say that OPM 
misinterpreted and misapplied Miskill. The union argued that in 
Miskill, the court merely applied existing law and did not make any 
material change to the evaluation of agency penalties nor adopt any 
manner of new test or bright line rule. The union stated that the 
amended regulation is not responsive to the issue of disparate 
penalties and will lead to confusion and an increase in arbitrary and 
capricious agency conduct. An individual commenter stated that 
incorporating Miskill into the regulations assumes that the case 
overrules Lewis v. Department of Veterans Affairs, which it does not. 
(We interpret this as a citation to 113 M.S.P.R. 657, 660 (2010).)
    Another national union claimed that there is no legal support for 
such a narrow assessment of comparators. In the union's view, 
comparators serve as a safeguard against unfair and arbitrary 
discipline. The union is deeply concerned that their members will be 
improperly disciplined, with minimal avenue for recourse. The union 
advocated for use of comparators in helping supervisors administer 
penalties that align with the offense, with allowances for supervisors 
to use their discretion to deviate from the suggested penalty when 
necessary. An organization asserted that OPM is making a limited, 
mechanical analysis of comparators. The organization's commenter stated 
that this approach ignores significant realities of disciplinary 
actions, agency organizational structures, and actual comparators. As 
an example, the organization offered a scenario in which two employees 
with different supervisors are together involved in one instance of 
misconduct and receive different penalties. The organization asserted 
that these two individuals would not qualify as comparators under the 
OPM regulations and would be unable to challenge their penalties as 
disparate, which undermines the basic principles of fairness that 
undergird the merit system principles. The organization also opined 
that certain charges--``low level charges, AWOL [absence without 
leave], failure to follow instructions, etc.''--should receive the same 
punishment regardless of the supervisor, whereas more egregious conduct 
may require ``a deeper analysis.'' The organization added that the 
regulatory amendments will allow two supervisors with differing 
opinions of discipline to issue disparate penalties to similarly 
situated employees for similar misconduct.
    In a similar scenario, one commenter posited that narrowing the 
scope of comparators also means that employees in different work units 
would be operating under vastly different sets of conduct rules and 
expectations, which does not foster the efficiency and effectiveness of 
Government. In addition, the commenter stated that a consistent set of 
rules for the workforce and a consistent ``conduct of code'' and 
discipline facilitates managers' jobs and helps protect them from 
perceptions of unfairness, favoritism and discrimination.
    An agency commented that OPM should specify that appropriate 
comparators have also engaged in the same or similar offense. The 
agency stated that this is unclear in the current wording. The agency's 
commenter added that including a definition of appropriate comparators 
in the regulation is limiting and recommended deleting the last 
sentence.
    After considering the comments on this regulation, OPM provides the 
following assessment and amplification of the philosophy and approach 
underlying this regulatory change.
    First, as we have previously said regarding progressive discipline 
and tables of penalties, each action stands on its own footing and 
demands careful consideration of facts, circumstances, and, as one 
commenter wrote, context and nuance. It is the proposing and deciding 
official who are conferred the authority and charged with the 
responsibility to make these careful assessments. Second, no proposing 
or deciding official should be forced into a decisional straitjacket 
based on what others in comparable situations have done in the past. 
These prior decisions are not a binding set of precedent, and a 
different assessment is not a deviation from settled principle imposing 
a burden of explanation. However, the officials should explain their 
reasoning, which implicitly or explicitly will distinguish their 
principled reasoning from that of previous proposals and outcomes. If 
previous proposals and decisions were to serve as a body of precedent, 
it logically follows that current proposing and deciding officials 
would be in many cases constrained or impeded from expressing an 
accurate assessment (or view) on the matter at hand. Proposing and 
deciding officials are not administrative agencies or courts. Rather, 
they are executive branch management officials, responsible for 
managing their own workforce.
    Further, mechanistic subservience to what has occurred before could 
bind a new agency official to penalties that he or she believes to have 
been too harsh as well as, in some cases, too lenient. Those commenters 
who have written that this regulation would in some way deprive 
employees of something of value that they had before overlook that what 
occurred before not only might have been of little value to an employee 
against whom an adverse action was taken, but also might have caused 
them

[[Page 65978]]

to be disadvantaged or harmed by rote obedience to what was done 
earlier.
    That said, as the agency endowed with authority conferred by 
Congress and the President to make personnel policy through notice-and-
comment regulation, and after having reviewed and considered the 
comments and decisional law to date, OPM decided to change the proposed 
regulatory text. The better approach is to change the proposed 
regulatory language to recognize that the decisions of similarly 
situated agency officials might be useful to a current decisionmaker, 
though not constraining. Accordingly, we are modifying the regulation 
somewhat to read ``Appropriate comparators `primarily' are individuals 
in the same work unit . . . .'' We are also adding language to clarify 
that proposing and deciding officials are not bound by previous 
decisions, but should consider them, as the proposing and deciding 
officials, in their sole and exclusive discretion. This approach is 
consistent with current decisional law set forth recently in Miskill, 
an outgrowth of earlier decisions. OPM does not intend to and is not 
upending existing decisional law but is filling a regulatory void in 
exercise of its policy and legal authority. We are placing the focus 
where most appropriate. Here, it is management officials who bear the 
burden of managing their workforce and who are solely accountable to 
their superiors and agency heads for effectiveness, efficiency, 
productivity and the morale of their work unit. Along with this 
responsibility, they must be allowed to choose to implement a different 
approach from predecessors or peers to achieve that goal. The rule in 
no way detracts from the rights of or harms employees against whom an 
adverse action is initiated.
    A commenter discussed the 2018 GAO report in reference to guidance 
for agencies on penalty determination. According to the commenter, GAO 
reported that Federal agencies formally discipline approximately 17,000 
employees annually. The commenter stated that agency officials 
interviewed by GAO reported that they were unfamiliar with the 
disciplinary process, had inadequate training, or received inadequate 
support from human resource offices. GAO recommended improved guidance 
to supervisors and human relations staff along with improved quality of 
data on misconduct.
    Note that OPM provides guidance to agencies through its 
accountability toolkit, which includes some of the key practices and 
lessons learned discussed in the GAO report. OPM frequently 
communicates these strategies and approaches to the Federal community 
through the OPM website and ongoing outreach to agencies. As discussed 
above, on October 10, 2019, OPM issued a memorandum to agencies 
entitled ``Guidance on Progressive Discipline and Tables of 
Penalties.'' Regarding data on misconduct, it is not feasible to 
collect instances of misconduct at an enterprise level given the array 
of potential types of misconduct that may form the basis for management 
action. While common types of misconduct exist, such as time-and-
attendance infractions, many unique types of misconduct cannot be 
placed into easily identifiable categories. Instead, agencies should 
address the unique aspects of each instance of misconduct and tailor 
discipline to the specific situation. Moreover, Section 6 of E.O. 13839 
requires agencies to report the frequency or timeliness with which 
various types of penalties for misconduct are imposed (e.g., how many 
written reprimands, how many adverse actions broken down by type, 
including removals, suspensions, and reductions in grade or pay, 
removals, and how many suspensions). OPM believes that agencies will 
find value in collecting such data by providing each agency an 
enterprise-wide view of employee accountability.
    Moreover, the final rule at Sec.  752.202 (f) adds language stating 
that a suspension should not be a substitute for removal in 
circumstances in which removal would be appropriate. Agencies should 
not require that an employee have previously been suspended or demoted 
before a proposing official may propose removal, except as may be 
appropriate under applicable facts. An agency suggested adding ``more'' 
before ``appropriate'' in the first sentence of Sec.  752.202(f). The 
agency stated that as written, the language could be read as requiring 
removal even if suspension would be more appropriate.
    OPM disagrees and will not adopt the recommended revision. The 
language is clear as written. The penalty for an instance of misconduct 
should be tailored to the facts and circumstances of each case. If the 
facts and circumstances of a case warrant removal, an agency should not 
substitute a suspension. We emphasize again that there is no substitute 
for managers thinking independently and carefully about each incident 
as it arises, and, as appropriate, proposing or deciding the best 
penalty to fit the circumstances.

Section 752.203 Procedures

    Section 752.203(b) discusses the requirements for a proposal notice 
issued under this subpart. This section provides that the notice of 
proposed action must state the specific reason(s) for the proposed 
action and inform the employee of his or her right to review the 
material which is relied on to support the reasons for action given in 
the notice. The final rule includes language that the notice must also 
provide detailed information with respect to any right to appeal the 
action pursuant to Public Law 115-91 section 1097(b)(2)(A); 
specifically, the forums in which the employee may file an appeal, and 
any limitations on the rights of the employee that would apply because 
of the forum in which the employee decides to file. This additional 
language implements the requirement within Public Law 115-91 section 
1097(b)(2)(A), which mandates that this information be included in any 
proposal notice provided to an employee under 5 U.S.C. 7503(b)(1), 
7513(b)(1), or 7543(b)(1).
    In relation to this provision of the proposed rule, OPM received 
several comments. A national union recommended that OPM revise Sec.  
752.203(b) to add ``and any other material relevant to the action'' to 
the end of the sentence requiring that agencies inform the employee of 
his or her right to review the material relied upon to support the 
reasons for action given in the notice. To support its recommendation, 
the union gave an example of a scenario wherein there are conflicting 
witness statements in an investigative report and the agency provides 
only the statements that it relied upon to propose action. The union 
believes that in such a scenario, the agency should be obligated to 
provide all witness statements, including those not relied upon to 
propose the action. The union's recommended change does not conform to 
the statute, which requires only that agencies provide employees with 
materials relied upon to support the action upon request.
    A management association provided comments explaining that one of 
their members agrees with including more detailed information with 
respect to appeal rights. The commenting manager cited the benefits to 
an employee becoming aware of available options before the decision 
letter thus enabling them to seek legal counsel at an early stage if 
necessary.
    As noted above in Sec.  752.103, an agency raised a concern about 
including appeal rights information in the notice

[[Page 65979]]

of proposed action. The agency suggested that OPM revise the second 
sentence of Sec.  752.203(b) to read ``. . . provides, pursuant to 
section 1097(b)(2)(A) of Public Law 115-91, notice of any right to 
appeal . . . .'' OPM will not accept the suggested change but will 
offer some clarification.
    The requirement to provide the appeal rights information at the 
proposal notice stage is a statutory requirement under section 
1097(b)(2)(A) of Public Law 115-91. Part 752 is amended in part to 
effectuate the statute, which requires that a notice of proposed action 
under subparts B, D and F include detailed information about any right 
to appeal any action upheld, the forum in which the employee may file 
an appeal, and any limitations on the rights of the employee that would 
apply because of the forum in which the employee decides to file. This 
regulatory change does not confer on an employee a right to seek 
redress at the proposal stage that an employee did not have previously. 
As the above-referenced commenter notes, this information may assist 
employees with regard to decisions such as whether he or she may want 
to seek representation. While there are specific circumstances where 
there may be a cause of action at the proposal stage, such as when an 
employee alleges that a proposed action constitutes retaliation for 
previous whistleblower activity, an employee would generally not have a 
colorable claim under any of the venues discussed in the appeal rights 
section unless and until a decision was issued that conferred such 
rights on the employee.
    OPM would further clarify that the appeal rights language included 
at the proposal stage specifically relating to choice of forum and 
limitations related to an employee's choice of forum will vary 
depending on circumstances, the nature of a claim and the type of 
employee. Appeal rights may include but are not be limited to filing an 
Equal Employment Opportunity complaint with the Equal Employment 
Opportunity Commission; a prohibited personnel practice complaint with 
the U.S. Office of Special Counsel (OSC); a grievance under a 
negotiated grievance procedure; or an appeal with the Merit Systems 
Protection Board. Each process has different requirements and standards 
that must be satisfied. Meanwhile, the extent to which a choice of 
venue may preclude subsequent pursuit of a claim in a different venue 
will be determined by a statutory patchwork that includes 5 U.S.C. 7121 
and 5 U.S.C. 7702.
    OPM does not view the addition of procedural appeal rights language 
in the regulation to constitute a requirement to provide substantive 
legal guidance at the proposal stage or to serve as a substitute for 
the advice from an employee's representative. Given this, as well as 
the divergent circumstances and individualized nature of any particular 
adverse action, agencies are encouraged and advised to consult closely 
with their agency counsel to develop the best course of action for 
implementation of this requirement. Employees are encouraged to consult 
with their representatives to determine the best options available to 
them at the proposal and/or decision stage if an employee believes that 
an agency has taken an action which triggers the right to file a 
complaint, an appeal or a grievance.
    Finally, the language in Sec.  752.203(h) establishes the same 
requirement that is detailed in the final rule changes at Sec.  
432.108, Settlement agreements. See discussion in Sec.  432.108.

Subpart D--Regulatory Requirements for Removal, Suspension for More 
Than 14 Days, Reduction in Grade or Pay, or Furlough for 30 Days or 
Less

    This subpart addresses the procedural requirements for removals, 
suspensions for more than 14 days, including indefinite suspensions, 
reductions in grade, reductions in pay, and furloughs of 30 days or 
less for covered employees.

Section 752.401 Coverage

    Pursuant to the creation of subpart A within the final rule, Sec.  
752.401(b)(14) reflects an exclusion for actions taken under 5 U.S.C. 
7515.
    Section 752.401(c) identifies employees covered by this subpart. 
The final rule at Sec.  752.401(c)(2) updates coverage to include an 
employee in the competitive service who is not serving a probationary 
or trial period under an initial appointment or, except as provided in 
section 1599e of title 10, United States Code, who has completed 1 year 
of current continuous service under other than a temporary appointment 
limited to 1 year or less. This language has been updated to align with 
5 U.S.C. 7511(a)(1)(A)(ii).

Section 752.402 Definitions

    The final rule includes a definition for the term ``business day.'' 
This addition is necessary to implement the 15-business day decision 
period described in E.O. 13839.

Section 752.403 Standard for Action and Penalty Determination

    As with the rule changes finalized for Sec.  752.202, the standard 
for action under this subpart remains unchanged and incorporates a 
penalty determination based on the principles of E.O. 13839.
    One commenter recommended changing Sec.  752.403(d) to add to the 
end ``Differences in penalties between similarly situated employees 
must depend on specific factual difference between those employees. To 
the greatest extent practicable, agencies must document and explain 
these differences in the record to defend against later allegations of 
disparate penalties.'' In support of his position, the commenter cites 
Lewis v. Department of Veterans Affairs, 111 M.S.P.R. 388, 391 (2009) 
and quotes the decision whereby an agency must prove a legitimate 
reason for the difference in treatment by a preponderance of evidence 
if an employee raises an allegation of disparate penalties in 
comparison to specified employees. OPM will not adopt the recommended 
change as it is unnecessary. Please see discussion in Sec.  752.202 for 
further details.
    The final rule at Sec.  752.403 also adds paragraph (f) which 
states that a suspension or a reduction in pay or grade should not be a 
substitute for removal in circumstances in which removal would be 
appropriate. Agencies should not require that an employee have 
previously been suspended or reduced in pay or grade before a proposing 
official may propose removal, except as may be appropriate under 
applicable facts.
    A management association concurred with OPM that a demotion or 
suspension should not be substituted for removal when removal is 
appropriate. The association reasoned that such a substitution will not 
fix the underlying problem. As the association did not recommend any 
changes, none will be made based on this comment.
    An agency suggested adding ``more'' before ``appropriate'' in the 
first sentence of 752.403(f). The agency stated that as written, the 
language could be read as requiring removal even if suspension would be 
more appropriate. For the reasons discussed in Sec.  752.202, OPM will 
not adopt the revision.

Section 752.404 Procedures

    Section 752.404(b) discusses the requirements for a notice of 
proposed action issued under this subpart. In particular, Sec.  
752.404(b)(1) provides that, to the extent an agency, in its sole and 
exclusive discretion deems practicable, agencies should limit written 
notice of adverse actions taken under this subpart to the 30 days 
prescribed in 5 U.S.C.

[[Page 65980]]

7513(b)(1). Any notice period greater than 30 days must be reported to 
OPM.
    In reference to Sec.  752.404(b)(1) regarding notice periods, a 
national union stated that ``OPM cannot unilaterally take a negotiable 
topic off the bargaining table, as this subsection would do.'' We 
disagree. In fact, the Statute recognizes situations where bargaining 
would not extend to matters that are the subject of Federal law or 
Government-wide rule or regulation; see 5 U.S.C. 7117(a)(1). And while 
commenters may disagree, as a matter of policy, with the subjects the 
President has determined are sufficiently important for inclusion in an 
Executive Order and Federal regulation, it is well established that the 
President has the authority to make this determination and that OPM 
regulations issued pursuant to this authority constitute Government-
wide rules under Section 7117(a)(1) for the purpose of foreclosing 
bargaining. See NTEU v. FLRA, 30 F.3d 1510, 1514-16 (D.C. Cir. 1994).
    The final rule also includes the requirement that the notice must 
provide detailed information with respect to any right to appeal the 
action pursuant to Public Law 115-91 section 1097(b)(2)(A); 
specifically, the forums in which the employee may file an appeal, and 
any limitations on the rights of the employee that would apply because 
of the forum in which the employee decides to file. This additional 
language implements the requirement in Public Law 115-91 section 
1097(b)(2)(A), which mandates that this information be included in any 
proposal notice provided to an employee under 5 U.S.C. 7503(b)(1), 
7513(b)(1), or 7543(b)(1).
    As noted above, an agency voiced concern about including appeal 
rights information in the notice of proposed action. The agency 
recommended modifying Sec.  752.404(b)(1) to read ``The notice must 
further include, pursuant to section 1097(b)(2)(A) of Public Law 155-
91, detailed information with respect to any right to appeal . . . .'' 
For the reasons discussed above in Sec.  752.203, OPM will not accept 
the suggested change.
    The final rule at Sec.  752.404(b)(3)(iv) also discusses the 
provisions of 5 U.S.C. 6329b, the Administrative Leave Act of 2016, 
related to placing an employee in a paid non-duty status during the 
advance notice period. An agency stated that the rule is silent on an 
agency's authorization to use administrative leave for the duration of 
the notice period (i.e., 30 days), which would be in excess of the 10 
days per year limitation under 5 U.S.C. 6329a. The agency asked for 
clarification on the authority by which agencies may or may not use 
administrative leave for the duration of the notice period until notice 
leave regulations are implemented.
    Until OPM has published the final regulation for 5 U.S.C. 6329b and 
after the conclusion of the agency implementation period, in those rare 
circumstances where the agency determines that the employee's continued 
presence in the workplace during the notice period may pose a threat to 
the employee or others, result in loss of or damage to Government 
property, or otherwise jeopardize legitimate Government interests, an 
agency will continue to have as an alternative the ability to place an 
employee in a paid non-duty status for such time to effect the action. 
Thereafter, an agency may use the provisions of 5 U.S.C. 6329b as 
applicable.
    An individual commented that the rule appears to be incorrect in 
stating that an agency may place an employee in a notice leave status 
``after conclusion of the agency implementation period.'' The commenter 
stated that the subpart needs to be modified to reflect ``investigative 
leave.'' We note that the rule addresses the notice of proposed action, 
which would be subsequent to the investigation. Investigative leave 
would be an inappropriate status during the notice period. The 
``implementation period'' refers to the statutory requirement that 
agencies, not later than 270 calendar days after the publication date 
of OPM regulations effectuating 5 U.S.C. 6329b, must revise and 
implement the internal policies of the agency to meet the notice leave 
requirements. See 5 U.S.C. 6329b(h)(2).
    Finally, the final rule at Sec.  752.404(g) discusses the 
requirements for an agency decision issued under this subpart. 
Specifically, the final rule at Sec.  752.404(g)(3) includes new 
language that, to the extent practicable, an agency should issue the 
decision on a proposed removal under this subpart within 15 business 
days of the conclusion of the employee's opportunity to respond to 
reflect a key principle of E.O. 13839.
    An agency expressed support for the timely handling of adverse 
actions and added that the regulatory amendments will discourage 
unreasonable delays for both employees and supervisors. The agency 
cautioned that human resources staffs will need to have sufficient 
resources to assist supervisors in meeting the 15-business day limit. 
The agency recommended that OPM clarify in the final rule what will 
happen in the event an agency does not comply with the time limitation 
set by the rule as well as the consequence for the employee and/or 
manager that does not meet the deadline. OPM concurs that the 
regulatory changes will discourage unreasonable delays. OPM believes 
the recommended modification is unnecessary. The regulatory amendment 
states that agencies are to issue decisions on proposed removals within 
15 business days, to the extent practicable. The purpose of the change 
is to facilitate an agency's ability to resolve adverse actions in a 
timely manner. To the extent an agency fails to exercise its authority 
to act promptly, the agency risks retaining a subpar or unfit employee 
longer than necessary.
    Two national unions objected to limiting advance notice of an 
adverse action to 30 days. One of the unions objected further to 
requiring agencies to report to OPM the number of adverse actions for 
which employees receive written notice in excess of 30 days. Claiming 
that the requirements are unsupported by facts and counterproductive, 
the union stated that the regulations will hinder the efficient 
resolution of cases prior to litigation by curtailing the time in which 
an agency and employee might reach an alternative resolution. The union 
called for the limitation to be withdrawn. The other union asserted 
that due process violations could result if agencies rush the time to 
respond or give an employee too little time to respond in such 
circumstances as voluminous materials to review or a personal 
emergency. The union asserted the limited time frame for an employee to 
respond to a proposed disciplinary action is contrary to the due 
process protections of the Constitution. Citing Loudermill and Stone v. 
Federal Deposit Insurance Corporation, 179 F.3d 1368, 1376 (Fed. Cir. 
1999), the union noted that an employee must be given a meaningful 
opportunity to respond and invoke the discretion of the deciding 
official.
    In addition, an organization discussed the various tasks such as 
securing counsel, drafting affidavits and interviewing witnesses that 
may impact an employee's ability or time to respond to a proposed 
action. The organization expressed concern that limiting the written 
notice of an adverse action to the 30 days prescribed in 5 U.S.C. 
7513(b)(1) in turn limits the opportunity for identification of 
evidence and rushes management into hasty decisions. The organization 
objected to a cap on the response period or a limit on an agency's 
discretion to extend the notice period or implement the adverse action. 
The organization believes that agencies should retain discretion to go 
beyond 30 days for a decision when requested by the employee for good 
reason. The organization added that the existing

[[Page 65981]]

system works satisfactorily, and agencies are not prejudiced given that 
they are in control of the length of any extension.
    OPM will not make any revisions based on these comments. The 
regulatory changes effectuate the principles and requirements of E.O. 
13839, including swift and appropriate action when addressing 
misconduct. These changes facilitate timely resolution of adverse 
actions while preserving employee rights provided under the law.

Section 752.407 Settlement Agreements

    The language in this section establishes the same requirement that 
is detailed in the final rule changes at Sec.  432.108, Settlement 
agreements. See discussion regarding Sec.  432.108 above.

Subpart F--Regulatory Requirements for Taking Adverse Actions Under the 
Senior Executive Service

    This subpart addresses the procedural requirements for suspensions 
for more than 14 days and removals from the civil service as set forth 
in 5 U.S.C. 7542.
    A management association commented that it does not see much 
difference between SES and the rest of the workforce in this situation. 
OPM will not adopt any revisions based on this comment as none were 
requested.

Section 752.601 Coverage

    Pursuant to the creation of subpart A within the final rule, Sec.  
752.601(b)(2) reflects an exclusion for actions taken under 5 U.S.C. 
7515.

Section 752.602 Definitions

    The final rule includes a definition for the term ``business day.'' 
This addition is necessary to implement the 15-business day decision 
period described in E.O. 13839.

Section 752.603 Standard for Action and Penalty Determination

    As with the final rule changes for Sec. Sec.  752.202 and 752.403, 
the standard for action under this subpart remains unchanged and 
incorporates a penalty determination based on the principles of E.O. 
13839. In addition, the proposed rule at Sec.  752.603 adds paragraph 
(f) which states that a suspension or a reduction in pay or grade 
should not be a substitute for removal in circumstances in which 
removal would be appropriate. Agencies should not require that an 
employee have previously been suspended or reduced in pay or grade 
before a proposing official may propose removal, except as may be 
appropriate under applicable facts.
    Please see discussion in Sec. Sec.  752.202 and 752.403.

Section 752.604 Procedures

    Section 752.604(b) discusses the requirements for a notice of 
proposed action issued under this subpart. We have revised the language 
in this subpart to be consistent with the advance notice period for 
general schedule employees. Specifically, Sec.  752.604(b)(1) provides 
that, to the extent an agency, in its sole and exclusive discretion 
deems practicable, agencies should limit written notice of adverse 
actions taken under this subpart to the 30 days prescribed in 5 U.S.C. 
7543(b)(1). Any notice period greater than 30 days must be reported to 
OPM.
    The final rule also includes additional language that the notice 
must provide detailed information with respect to any right to appeal 
the action pursuant to Pub. L. 115-91 section 1097(b)(2)(A); 
specifically, the forums in which the employee may file an appeal, and 
any limitations on the rights of the employee that would apply because 
of the forum in which the employee decides to file. This additional 
language implements the requirement within Public Law 115-91 section 
1097(b)(2)(A), which mandates that this information be included in any 
proposal notice provided to an employee under 5 U.S.C. 7503(b)(1), 
7513(b)(1), or 7543(b)(1).
    As previously discussed, an agency recommended modifying the 
regulatory language regarding advance notice of appeal rights 
information at the proposal stage. Specifically, the agency recommended 
changing Sec.  752.604(b)(1) to read ``The notice must further include, 
pursuant to section 1097(b)(2)(A) of Public Law 155-91, detailed 
information with respect to any right to appeal . . .'' For the reasons 
discussed in Sec.  752.203, OPM will not adopt the recommendation.
    The final rule at Sec.  752.604(b)(2)(iv) also discusses the 
provisions of 5 U.S.C. 6329b, the Administrative Leave Act of 2016, 
related to placing an employee in a paid non-duty status during the 
advance notice period. However, as noted above, until OPM has published 
the final regulation for 5 U.S.C. 6329b, and after conclusion of the 
agency implementation period, in those rare circumstances where the 
agency determines that the employee's continued presence in the 
workplace during the notice period may pose a threat to the employee or 
others, result in loss of or damage to Government property, or 
otherwise jeopardize legitimate Government interests, an agency will 
continue to have as an alternative the ability to place an employee in 
a paid, nonduty status for such time to effect the action. Thereafter, 
an agency may use the provisions of 5 U.S.C. 6329b as applicable.
    Finally, the final rule at Sec.  752.604(g) discusses the 
requirements for an agency decision issued under this subpart. 
Specifically, the final rule at Sec.  752.604(g)(3) includes new 
language that, to the extent practicable, an agency should issue the 
decision on a proposed removal under this subpart within 15 business 
days of the conclusion of the employee's opportunity to respond to 
reflect one of the key principles of E.O. 13839.
    Please see also the discussion in Sec. Sec.  752.203 and 752.404.

Section 752.607 Settlement Agreements

    The language in this section establishes the same requirement that 
is detailed in the final rule changes at Sec. Sec.  432.108, 752.203 
and 752.407. Please see discussion regarding Sec.  432.108 above.

Technical Amendment

    This final rule makes ``forum'' plural in Sec.  752.203(b).

Regulatory Flexibility Act

    I certify that this regulation will not have a significant impact 
on a substantial number of small entities because it applies only to 
Federal agencies and employees.

E.O. 13563 and E.O. 12866, Regulatory Review

    Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule has not been designated a ``significant 
regulatory action,'' under Executive Order 12866.

Executive Order 13771, Reducing Regulation and Controlling Regulatory 
Costs

    This proposed rule is not expected to be subject to the 
requirements of E.O. 13771 (82 FR 9339, February 3, 2017)

[[Page 65982]]

because this rule is not significant under 12866.

E.O. 13132, Federalism

    This regulation will not have substantial direct effects on the 
States, on the relationship between the National Government and the 
States, or on distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with Executive 
Order 13132, it is determined that this rule does not have sufficient 
federalism implications to warrant preparation of a Federalism 
Assessment.

E.O. 12988, Civil Justice Reform

    This regulation meets the applicable standard set forth in Section 
3(a) and (b)(2) of Executive Order 12988.

Unfunded Mandates Reform Act of 1995

    This rule will not result in the expenditure by State, local or 
tribal governments of more than $100 million annually. Thus, no written 
assessment of unfunded mandates is required.

Congressional Review Act

    This action pertains to agency management, personnel and 
organization and does not substantially affect the rights or 
obligations of non-agency parties and, accordingly, is not a `rule' as 
that term is used by the Congressional Review Act (Subtitle E of the 
Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)). 
Therefore, the reporting requirement of 5 U.S.C. 801 does not apply.

Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35)

    This regulatory action will not impose any additional reporting or 
recordkeeping requirements under the Paperwork Reduction Act.

List of Subjects in 5 CFR Parts 315, 432 and 752

    Government employees.

Office of Personnel Management.
Alexys Stanley,
Regulatory Affairs Analyst.

    Accordingly, for the reasons stated in the preamble, OPM amends 5 
CFR parts 315, 432, and 752 as follows:

PART 315-CAREER AND CAREER-CONDITIONAL EMPLOYMENT

0
1. Revise the authority citation for part 315 to read as follows:

    Authority:  5 U.S.C. 1302, 2301, 2302, 3301, and 3302; E.O. 
10577, 3 CFR, 1954-1958 Comp. p. 218, unless otherwise noted; E.O. 
13162, and E.O. 13839. Secs. 315.601 and 315.609 also issued under 
22 U.S.C. 3651 and 3652. Secs. 315.602 and 315.604 also issued under 
5 U.S.C. 1104. Sec. 315.603 also issued under 5 U.S.C. 8151. Sec. 
315.605 also issued under E.O. 12034, 3 CFR, 1978 Comp. p.111. Sec. 
315.606 also issued under E.O. 11219, 3 CFR, 1964-1965 Comp. p. 303. 
Sec. 315.607 also issued under 22 U.S.C. 2506. Sec. 315.608 also 
issued under E.O. 12721, 3 CFR, 1990 Comp. p. 293. Sec. 315.610 also 
issued under 5 U.S.C. 3304(c). Sec. 315.611 also issued under 5 
U.S.C. 3304(f). Sec. 315.612 also issued under E.O. 13473. Sec. 
315.708 also issued under E.O.13318, 3 CFR, 2004 Comp. p. 265. Sec. 
315.710 also issued under E.O. 12596, 3 CFR, 1987 Comp. p. 229. 
Subpart I also issued under 5 U.S. C. 3321, E.O. 12107, 3 CFR, 1978 
Comp. p. 264.

Subpart H-Probation on Initial Appointment to a Competitive 
Position

0
2. Revise Sec.  315.803(a) to read as follows:


Sec.  315.803  Agency action during probationary period (general).

    (a) The agency shall utilize the probationary period as fully as 
possible to determine the fitness of the employee and shall terminate 
his or her services during this period if the employee fails to 
demonstrate fully his or her qualifications for continued employment. 
The agency must notify its supervisors that an employee's probationary 
period is ending three months prior to the expiration of an employee's 
probationary period, and then again one month prior to the expiration 
of the probationary period, and advise a supervisor to make an 
affirmative decision regarding an employee's fitness for continued 
employment or otherwise take appropriate action. For example, if an 
employee's probationary period ends on August 15, 2020, the agency must 
notify the employee's supervisor on May 15, 2020, and then again on 
July 15, 2020. If the 3-month and 1-month dates fall on a holiday or 
weekend, agencies must provide notification on the last business day 
before the holiday or weekend.
* * * * *

PART 432--PERFORMANCE BASED REDUCTION IN GRADE AND REMOVAL ACTIONS

0
3. Revise the authority citation for part 432 to read as follows:

    Authority:  5 U.S.C. 4303, 4305.
* * * * *

0
4. Amend Sec.  432.103 by revising paragraph (g) to read as follows:


Sec.  432.103   Definitions.

* * * * *
    (g) Similar positions mean positions in which the duties performed 
are similar in nature and character and require substantially the same 
or similar qualifications, so that the incumbents could be interchanged 
without significant training or undue interruption to the work.
* * * * *

0
5. Revise Sec.  432.104 to read as follows:


Sec.  432.104  Addressing unacceptable performance.

    At any time during the performance appraisal cycle that an 
employee's performance is determined to be unacceptable in one or more 
critical elements, the agency shall notify the employee of the critical 
element(s) for which performance is unacceptable and inform the 
employee of the performance requirement(s) or standard(s) that must be 
attained in order to demonstrate acceptable performance in his or her 
position. The agency should also inform the employee that unless his or 
her performance in the critical element(s) improves to and is sustained 
at an acceptable level, the employee may be reduced in grade or 
removed. For each critical element in which the employee's performance 
is unacceptable, the agency shall afford the employee a reasonable 
opportunity to demonstrate acceptable performance, commensurate with 
the duties and responsibilities of the employee's position. The 
requirement described in 5 U.S.C. 4302(c)(5) refers only to that formal 
assistance provided during the period wherein an employee is provided 
with an opportunity to demonstrate acceptable performance, as 
referenced in 5 U.S.C. 4302(c)(6). The nature of assistance provided is 
in the sole and exclusive discretion of the agency. No additional 
performance assistance period or similar informal period shall be 
provided prior to or in addition to the opportunity period provided 
under this section.

0
6. Amend Sec.  432.105 by revising paragraphs (a)(1), (a)(4)(i)(B)(3) 
and (4) and paragraph (a)(4)(i)(C) to read as follows:


Sec.  432.105  Proposing and taking action based on unacceptable 
performance.

    (a) * * *
    (1) Once an employee has been afforded a reasonable opportunity to 
demonstrate acceptable performance pursuant to Sec.  432.104, an agency 
may propose a reduction-in-grade or removal action if the employee's 
performance during or following the opportunity to demonstrate 
acceptable performance is unacceptable in one or more of the critical 
elements for which the

[[Page 65983]]

employee was afforded an opportunity to demonstrate acceptable 
performance. For the purposes of this section, the agency's obligation 
to provide assistance, under 5 U.S.C. 4302(c)(5), may be discharged 
through measures, such as supervisory assistance, taken prior to the 
beginning of the opportunity period in addition to measures taken 
during the opportunity period. The agency must take some measures to 
provide assistance during the opportunity period in order to both 
comply with section 4302(c)(5) and provide an opportunity to 
demonstrate acceptable performance under 4302(c)(6).
* * * * *
    (4) * * *
    (i) * * *
    (B) * * *
    (3) To consider the employee's answer if an extension to the period 
for an answer has been granted (e.g., because of the employee's illness 
or incapacitation);
    (4) To consider reasonable accommodation of a disability;
* * * * *
    (C) If an agency believes that an extension of the advance notice 
period is necessary for another reason, it may request prior approval 
for such extension from the Manager, Employee Accountability, 
Accountability and Workforce Relations, Employee Services, Office of 
Personnel Management, 1900 E Street NW, Washington, DC 20415.
* * * * *

0
7. Revise Sec.  432.106(b)(1) to read as follows:


Sec.  432.106  Appeal and grievance rights.

* * * * *
    (b) Grievance rights. (1) A bargaining unit employee covered under 
Sec.  432.102(e) who has been removed or reduced in grade under this 
part may file a grievance under an applicable negotiated grievance 
procedure if the removal or reduction in grade action falls within its 
coverage (i.e., is not excluded by the parties to the collective 
bargaining agreement) and the employee is:
* * * * *

0
8. Revise Sec.  432.107(b) to read as follows:


Sec.  432.107  Agency records.

* * * * *
    (b) When the action is not effected. As provided at 5 U.S.C. 
4303(d), if, because of performance improvement by the employee during 
the notice period, the employee is not reduced in grade or removed, and 
the employee's performance continues to be acceptable for one year from 
the date of the advanced written notice provided in accordance with 
Sec.  432.105(a)(4)(i), any entry or other notation of the unacceptable 
performance for which the action was proposed shall be removed from any 
agency record relating to the employee.

0
9. Add Sec.  432.108 to read as follows:


Sec.  432.108  Settlement agreements.

    (a) Agreements to alter personnel records. An agency shall not 
agree to erase, remove, alter, or withhold from another agency any 
information about a civilian employee's performance or conduct in that 
employee's official personnel records, including an employee's Official 
Personnel Folder and Employee Performance File, as part of, or as a 
condition to, resolving a formal or informal complaint by the employee 
or settling an administrative challenge to an adverse action.
    (b) Corrective action based on discovery of agency error. The 
requirements described in paragraph (a) of this section should not be 
construed to prevent agencies from taking corrective action should it 
come to light, including during or after the issuance of an adverse 
personnel action, that the information contained in a personnel record 
is not accurate or records an action taken by the agency illegally or 
in error. In such cases, an agency would have the authority, 
unilaterally or by agreement, to modify an employee's personnel 
record(s) to remove inaccurate information or the record of an 
erroneous or illegal action. An agency may take such action even if an 
appeal/complaint has been filed relating to the information that the 
agency determines to be inaccurate or to reflect an action taken 
illegally or in error. In all events, however, the agency must ensure 
that it removes only information that the agency itself has determined 
to be inaccurate or to reflect an action taken illegally or in error. 
And an agency should report any agreements relating to the removal of 
such information as part of its annual report to the OPM Director 
required by section 6 of E.O. 13839. Documents subject to withdrawal or 
modification could include, for example, an SF-50 issuing a 
disciplinary or performance-based action, a decision memorandum 
accompanying such action, or an employee performance appraisal.
    (c) Corrective action based on discovery of material information 
prior to final agency action. When persuasive evidence comes to light 
prior to the issuance of a final agency decision on an adverse 
personnel action casting doubt on the validity of the action or the 
ability of the agency to sustain the action in litigation, an agency 
may decide to cancel or vacate the proposed action. Additional 
information may come to light at any stage of the process prior to 
final agency decision including during an employee response period. To 
the extent an employee's personnel file or other agency records contain 
a proposed action that is subsequently cancelled, an agency would have 
the authority to remove that action from the employee's personnel file 
or other agency records. The requirements described in paragraph (a) of 
this section would, however, continue to apply to any accurate 
information about the employee's conduct leading up to that proposed 
action or separation from Federal service.

PART 752--ADVERSE ACTIONS

Subpart A--Discipline of Supervisors Based on Retaliation Against 
Whistleblowers
Subpart B--Regulatory Requirements for Suspension for 14 Days or Less
Sec.
752.201 Coverage.
752.202 Standard for action and penalty determination.
752.203 Procedures.
Subpart C [Reserved]
Subpart D--Regulatory Requirements for Removal, Suspension for More 
Than 14 Days, Reduction in Grade or Pay, or Furlough for 30 Days or 
Less
Sec.
752.401 Coverage.
752.402 Definitions.
752.403 Standard for action and penalty determination.
752.404 Procedures.
752.405 Appeal and grievance rights.
752.406 Agency records.
752.407 Settlement agreements.
Subpart E [Reserved]
Subpart F--Regulatory Requirements for Taking Adverse Actions Under the 
Senior Executive Service
Sec.
752.601 Coverage.
752.602 Definitions.
752.603 Standard for action and penalty determination.
752.604 Procedures.
752.605 Appeal rights.
752.606 Agency records.
752.607 Settlement agreements.

0
10. Revise the authority citation for part 752 to read as follows:

    Authority: 5 U.S.C. 7504, 7514, and 7543, Pub. L. 115-91.


0
11. Add subpart A to part 752 to read as follows:

[[Page 65984]]

Subpart A --Discipline of Supervisors Based on Retaliation Against 
Whistleblowers

Sec.
752.101 Coverage.
752.102 Standard for action and penalty determination.
752.103 Procedures.
752.104 Settlement agreements.


Sec.  752.101  Coverage.

    (a) Adverse actions covered. This subpart applies to actions taken 
under 5 U.S.C. 7515.
    (b) Definitions. In this subpart--
    Agency--
    (1) Has the meaning given the term in 5 U.S.C. 2302(a)(2)(C), 
without regard to whether any other provision of this chapter is 
applicable to the entity; and
    (2) Does not include any entity that is an element of the 
intelligence community, as defined in section 3 of the National 
Security Act of 1947 (50 U.S.C. 3003).
    Business day means any day other than a Saturday, Sunday, or legal 
public holiday under 5 U.S.C. 6103(a).
    Day means a calendar day.
    Grade means a level of classification under a position 
classification system.
    Insufficient evidence means evidence that fails to meet the 
substantial evidence standard described in 5 CFR 1201.4(p).
    Pay means the rate of basic pay fixed by law or administrative 
action for the position held by the employee, that is, the rate of pay 
before any deductions and exclusive of additional pay of any kind.
    Prohibited personnel action means taking or failing to take an 
action in violation of paragraph (8), (9), or (14) of 5 U.S.C. 2302(b) 
against an employee of an agency.
    Supervisor means an employee who would be a supervisor, as defined 
in 5 U.S.C. 7103(a)(10), if the entity employing the employee was an 
agency.
    Suspension means the placing of an employee, for disciplinary 
reasons, in a temporary status without duties and pay.


Sec.  752.102  Standard for action and penalty determination.

    (a) Except for actions taken against supervisors covered under 
subchapter V of title 5, an agency may take an action under this 
subpart for such cause as will promote the efficiency of the service as 
described in 5 U.S.C. 7503(a) and 7513(a). For actions taken under this 
subpart against supervisors covered under subchapter V of title 5, an 
agency may take an action based on the standard described in 5 U.S.C. 
7543(a).
    (b) Subject to 5 U.S.C. 1214(f), if the head of the agency in which 
a supervisor is employed, an administrative law judge, the Merit 
Systems Protection Board, the Special Counsel, a judge of the United 
States, or the Inspector General of the agency in which a supervisor is 
employed has determined that the supervisor committed a prohibited 
personnel action, the head of the agency in which the supervisor is 
employed, consistent with the procedures required under this subpart--
    (1) For the first prohibited personnel action committed by the 
supervisor--
    (i) Shall propose suspending the supervisor for a period that is 
not less than 3 days; and
    (ii) May propose an additional action determined appropriate by the 
head of the agency, including a reduction in grade or pay; and
    (2) For the second prohibited personnel action committed by the 
supervisor, shall propose removing the supervisor.


Sec.  752.103  Procedures.

    (a) Non-delegation. If the head of an agency is responsible for 
determining whether a supervisor has committed a prohibited personnel 
action for purposes of Sec.  752.102(b), the head of the agency may not 
delegate that responsibility.
    (b) Scope. An action carried out under this subpart--
    (1) Except as provided in paragraph (b)(2) of this section, shall 
be subject to the same requirements and procedures, including those 
with respect to an appeal, as an action under 5 U.S.C. 7503, 7513, or 
7543; and
    (2) Shall not be subject to--
    (i) Paragraphs (1) and (2) of 5 U.S.C. 7503(b);
    (ii) Paragraphs (1) and (2) of subsection (b) and subsection (c) of 
5 U.S.C. 7513; and
    (iii) Paragraphs (1) and (2) of subsection (b) and subsection (c) 
of 5 U.S.C. 7543.
    (c) Notice. A supervisor against whom an action is proposed to be 
taken under this subpart is entitled to written notice that--
    (1) States the specific reasons for the proposed action;
    (2) Informs the supervisor about the right of the supervisor to 
review the material that is relied on to support the reasons given in 
the notice for the proposed action; and
    (d) Answer and evidence. (1) A supervisor who receives notice under 
paragraph (c) of this section may, not later than 14 days after the 
date on which the supervisor receives the notice, submit an answer and 
furnish evidence in support of that answer.
    (2) If, after the end of the 14-day period described in paragraph 
(d)(1) of this section, a supervisor does not furnish any evidence as 
described in that clause, or if the head of the agency in which the 
supervisor is employed determines that the evidence furnished by the 
supervisor is insufficient, the head of the agency shall carry out the 
action proposed under Sec.  752.102 (b), as applicable.
    (3) To the extent practicable, an agency should issue the decision 
on a proposed removal under this subpart within 15 business days of the 
conclusion of the employee's opportunity to respond under paragraph 
(d)(1) of this section.


Sec.  752.104  Settlement agreements.

    (a) Agreements to alter official personnel records. An agency shall 
not agree to erase, remove, alter, or withhold from another agency any 
information about a civilian employee's performance or conduct in that 
employee's official personnel records, including an employee's Official 
Personnel Folder and Employee Performance File, as part of, or as a 
condition to, resolving a formal or informal complaint by the employee 
or settling an administrative challenge to an adverse action.
    (b) Corrective action based on discovery of agency error. The 
requirements described in paragraph (a) of this section should not be 
construed to prevent agencies from taking corrective action should it 
come to light, including during or after the issuance of an adverse 
personnel action, that the information contained in a personnel record 
is not accurate or records an action taken by the agency illegally or 
in error. In such cases, the agency would have the authority, 
unilaterally or by agreement, to modify an employee's personnel 
record(s) to remove inaccurate information or the record of an 
erroneous or illegal action. An agency may take such action even if an 
appeal/complaint has been filed relating to the information that the 
agency determines to be inaccurate or to reflect an action taken 
illegally or in error. In all events, however, the agency must ensure 
that it removes only information that the agency itself has determined 
to be inaccurate or to reflect an action taken illegally or in error. 
And an agency should report any agreements relating to the removal of 
such information as part of its annual report to the OPM Director 
required by section 6 of E.O. 13839. Documents subject to withdrawal or 
modification could include, for example, an SF-50 issuing a 
disciplinary or performance-based

[[Page 65985]]

action, a decision memorandum accompanying such action or an employee 
performance appraisal.
    (c) Corrective action based on discovery of material information 
prior to final agency action. When persuasive evidence comes to light 
prior to the issuance of a final agency decision on an adverse 
personnel action casting doubt on the validity of the action or the 
ability of the agency to sustain the action in litigation, an agency 
may decide to cancel or vacate the proposed action. Additional 
information may come to light at any stage of the process prior to 
final agency decision including during an employee response period. To 
the extent an employee's personnel file or other agency records contain 
a proposed action that is subsequently cancelled, an agency would have 
the authority to remove that action from the employee's personnel file 
or other agency records. The requirements described in paragraph (a) of 
this section would, however, continue to apply to any accurate 
information about the employee's conduct leading up to that proposed 
action or separation from Federal service.

0
12. In Sec.  752.201, revise paragraphs (c)(4) and (5) and add 
paragraph (c)(6) to read as follows:


Sec.  752.201  Coverage.

* * * * *
    (c) * * *
    (4) Of a re-employed annuitant;
    (5) Of a National Guard Technician; or
    (6) Taken under 5 U.S.C. 7515.
* * * * *

0
13. In Sec.  752.202, revise the section heading and add paragraphs (c) 
through (f) to read as follows:


Sec.  752.202  Standard for action and penalty determination.

* * * * *
    (c) An agency is not required to use progressive discipline under 
this subpart. The penalty for an instance of misconduct should be 
tailored to the facts and circumstances. In making a determination 
regarding the appropriate penalty for an instance of misconduct, an 
agency shall adhere to the standard of proposing and imposing a penalty 
that is within the bounds of tolerable reasonableness. Within the 
agency, a proposed penalty is in the sole and exclusive discretion of a 
proposing official, and a penalty decision is in the sole and exclusive 
discretion of the deciding official. Penalty decisions are subject to 
appellate or other review procedures prescribed in law.
    (d) Employees should be treated equitably. Conduct that justifies 
discipline of one employee at one time does not necessarily justify 
similar discipline of a different employee at a different time. An 
agency should consider appropriate comparators as the agency evaluates 
a potential disciplinary action. Appropriate comparators to be 
considered are primarily individuals in the same work unit, with the 
same supervisor, who engaged in the same or similar misconduct. 
Proposing and deciding officials are not bound by previous decisions in 
earlier similar cases, but should, as they deem appropriate, consider 
such decisions consonant with their own managerial authority and 
responsibilities and independent judgment. For example, a supervisor is 
not bound by his or her predecessor whenever there is similar conduct. 
A minor indiscretion for one supervisor based on a particular set of 
facts can amount to a more serious offense under a different 
supervisor. Nevertheless, they should be able to articulate why a more 
or less severe penalty is appropriate.
    (e) Among other relevant factors, agencies should consider an 
employee's disciplinary record and past work record, including all 
applicable prior misconduct, when taking an action under this subpart.
    (f) A suspension should not be a substitute for removal in 
circumstances in which removal would be appropriate. Agencies should 
not require that an employee have previously been suspended or demoted 
before a proposing official may propose removal, except as may be 
appropriate under applicable facts.

0
14. Amend Sec.  752.203 by revising paragraph (b) and by adding 
paragraph (h) to read as follows:


Sec.  752.203  Procedures.

* * * * *
    (b) Notice of proposed action. The notice must state the specific 
reason(s) for the proposed action, and inform the employee of his or 
her right to review the material which is relied on to support the 
reasons for action given in the notice. The notice must further include 
detailed information with respect to any right to appeal the action 
pursuant to section 1097(b)(2)(A) of Public Law 115-91, the forums in 
which the employee may file an appeal, and any limitations on the 
rights of the employee that would apply because of the forum in which 
the employee decides to file.
* * * * *
    (h) Settlement agreements. (1) An agency shall not agree to erase, 
remove, alter, or withhold from another agency any information about a 
civilian employee's performance or conduct in that employee's official 
personnel records, including an employee's Official Personnel Folder 
and Employee Performance File, as part of, or as a condition to, 
resolving a formal or informal complaint by the employee or settling an 
administrative challenge to an adverse action.
    (2) The requirements described in paragraph (h)(1) of this section 
should not be construed to prevent agencies from taking corrective 
action should it come to light, including during or after the issuance 
of an adverse personnel action that the information contained in a 
personnel record is not accurate or records an action taken by the 
agency illegally or in error. In such cases, an agency would have the 
authority, unilaterally or by agreement, to modify an employee's 
personnel record(s) to remove inaccurate information or the record of 
an erroneous or illegal action. An agency may take such action even if 
an appeal/complaint has been filed relating to the information that the 
agency determines to be inaccurate or to reflect an action taken 
illegally or in error. In all events, however, the agency must ensure 
that it removes only information that the agency itself has determined 
to be inaccurate or to reflect an action taken illegally or in error. 
And an agency should report any agreements relating to the removal of 
such information as part of its annual report to the OPM Director 
required by Section 6 of E.O. 13839. Documents subject to withdrawal or 
modification could include, for example, an SF-50 issuing a 
disciplinary or performance-based action, a decision memorandum 
accompanying such action or an employee performance appraisal.
    (3) Corrective action based on discovery of material information 
prior to final agency action. When persuasive evidence comes to light 
prior to the issuance of a final agency decision on an adverse 
personnel action casting doubt on the validity of the action or the 
ability of the agency to sustain the action in litigation, an agency 
may decide to cancel or vacate the proposed action. Additional 
information may come to light at any stage of the process prior to 
final agency decision including during an employee response period. To 
the extent an employee's personnel file or other agency records contain 
a proposed action that is subsequently cancelled, an agency would have 
the authority to remove that action from the employee's personnel file 
or other agency records. The requirements described in paragraph (h)(1) 
of this section would, however, continue to

[[Page 65986]]

apply to any accurate information about the employee's conduct leading 
up to that proposed action or separation from Federal service.

0
15. In Sec.  752.401, revise paragraphs (b)(14) and (15), add 
paragraphs (b)(16) and revise paragraph (c)(2) to read as follows:


Sec.  752.401  Coverage.

* * * * *
    (b) * * *
    (14) Placement of an employee serving on an intermittent or 
seasonal basis in a temporary nonduty, nonpay status in accordance with 
conditions established at the time of appointment;
    (15) Reduction of an employee's rate of basic pay from a rate that 
is contrary to law or regulation, including a reduction necessary to 
comply with the amendments made by Public Law 108-411, regarding pay-
setting under the General Schedule and Federal Wage System and 
regulations implementing those amendments; or
    (16) An action taken under 5 U.S.C. 7515.
    (c) * * *
    (2) An employee in the competitive service--
    (i) Who is not serving a probationary or trial period under an 
initial appointment; or
    (ii) Except as provided in section 1599e of title 10, United States 
Code, who has completed one year of current continuous service under 
other than a temporary appointment limited to one year or less;
* * * * *

0
16. In Sec.  752.402, add the definition for ``Business day'' in 
alphabetical order to read as follows:


Sec.  752.402  Definitions.

* * * * *
    Business day means any day other than a Saturday, Sunday, or legal 
public holiday under 5 U.S.C. 6103(a).
* * * * *

0
17. In Sec.  752.403, revise the section heading and add paragraphs (c) 
through (f) to read as follows:


Sec.  752.403  Standard for action and penalty determination.

* * * * *
    (c) An agency is not required to use progressive discipline under 
this subpart. The penalty for an instance of misconduct should be 
tailored to the facts and circumstances. In making a determination 
regarding the appropriate penalty for an instance of misconduct, an 
agency shall adhere to the standard of proposing and imposing a penalty 
that is within the bounds of tolerable reasonableness. Within the 
agency, a proposed penalty is in the sole and exclusive discretion of a 
proposing official, and a penalty decision is in the sole and exclusive 
discretion of the deciding official. Penalty decisions are subject to 
appellate or other review procedures prescribed in law.
    (d) Employees should be treated equitably. Conduct that justifies 
discipline of one employee at one time does not necessarily justify 
similar discipline of a different employee at a different time. An 
agency should consider appropriate comparators as the agency evaluates 
a potential disciplinary action. Appropriate comparators to be 
considered are primarily individuals in the same work unit, with the 
same supervisor, who engaged in the same or similar misconduct. 
Proposing and deciding officials are not bound by previous decisions in 
earlier similar cases, but should, as they deem appropriate, consider 
such decisions consonant with their own managerial authority and 
responsibilities and independent judgment. For example, a supervisor is 
not bound by his or her predecessor whenever there is similar conduct. 
A minor indiscretion for one supervisor based on a particular set of 
facts can amount to a more serious offense under a different 
supervisor. Nevertheless, they should be able to articulate why a more 
or less severe penalty is appropriate.
    (e) Among other relevant factors, agencies should consider an 
employee's disciplinary record and past work record, including all 
applicable prior misconduct, when taking an action under this subpart.
    (f) A suspension or a reduction in grade or pay should not be a 
substitute for removal in circumstances in which removal would be 
appropriate. Agencies should not require that an employee have 
previously been suspended or reduced in pay or grade before a proposing 
official may propose removal, except as may be appropriate under 
applicable facts.

0
18. Amend Sec.  752.404 by revising paragraphs (b)(1) and (b)(3)(iv), 
and adding paragraph (g)(3) to read as follows:


Sec.  752.404  Procedures.

* * * * *
    (b) * * *
    (1) An employee against whom an action is proposed is entitled to 
at least 30 days' advance written notice unless there is an exception 
pursuant to paragraph (d) of this section. However, to the extent an 
agency in its sole and exclusive discretion deems practicable, agencies 
should limit a written notice of an adverse action to the 30 days 
prescribed in section 7513(b)(1) of title 5, United States Code. 
Advance notices of greater than 30 days must be reported to the Office 
of Personnel Management. The notice must state the specific reason(s) 
for the proposed action and inform the employee of his or her right to 
review the material which is relied on to support the reasons for 
action given in the notice. The notice must further include detailed 
information with respect to any right to appeal the action pursuant to 
section 1097(b)(2)(A) of Public Law 115-91, the forums in which the 
employee may file an appeal, and any limitations on the rights of the 
employee that would apply because of the forum in which the employee 
decides to file.
* * * * *
    (3) * * *
    (iv) Placing the employee in a paid, nonduty status for such time 
as is necessary to effect the action. After publication of regulations 
for 5 U.S.C. 6329b, and the subsequent agency implementation period in 
accordance with 5 U.S.C. 6329b, an agency may place the employee in a 
notice leave status when applicable.
* * * * *
    (g) * * *
    (3) To the extent practicable, an agency should issue the decision 
on a proposed removal under this subpart within 15 business days of the 
conclusion of the employee's opportunity to respond under paragraph (c) 
of this section.
* * * * *

0
19. Add Sec.  752.407 to read as follows:


Sec.  752.407  Settlement agreements.

    (a) Agreements to alter official personnel records. An agency shall 
not agree to erase, remove, alter, or withhold from another agency any 
information about a civilian employee's performance or conduct in that 
employee's official personnel records, including an employee's Official 
Personnel Folder and Employee Performance File, as part of, or as a 
condition to, resolving a formal or informal complaint by the employee 
or settling an administrative challenge to an adverse action.
    (b) Corrective action based on discovery of agency error. The 
requirements described in paragraph (a) of this section should not be 
construed to prevent agencies from taking corrective action, should it 
come to light, including during or after the issuance of an adverse 
personnel action that the information contained in a

[[Page 65987]]

personnel record is not accurate or records an action taken by the 
agency illegally or in error. In such cases, an agency would have the 
authority, unilaterally or by agreement, to modify an employee's 
personnel record(s) to remove inaccurate information or the record of 
an erroneous or illegal action. An agency may take such action even if 
an appeal/complaint has been filed relating to the information that the 
agency determines to be inaccurate or to reflect an action taken 
illegally or in error. In all events, however, the agency must ensure 
that it removes only information that the agency itself has determined 
to be inaccurate or to reflect an action taken illegally or in error. 
And an agency should report any agreements relating to the removal of 
such information as part of its annual report to the OPM Director 
required by section 6 of E.O. 13839. Documents subject to withdrawal or 
modification could include, for example, an SF-50 issuing a 
disciplinary or performance-based action, a decision memorandum 
accompanying such action or an employee performance appraisal.
    (c) Corrective action based on discovery of material information 
prior to final agency action. When persuasive evidence comes to light 
prior to the issuance of a final agency decision on an adverse 
personnel action casting doubt on the validity of the action or the 
ability of the agency to sustain the action in litigation, an agency 
may decide to cancel or vacate the proposed action. Additional 
information may come to light at any stage of the process prior to 
final agency decision including during an employee response period. To 
the extent an employee's personnel file or other agency records contain 
a proposed action that is subsequently cancelled, an agency would have 
the authority to remove that action from the employee's personnel file 
or other agency records. The requirements described in paragraph (a) of 
this section would, however, continue to apply to any accurate 
information about the employee's conduct leading up to that proposed 
action or separation from Federal service.

0
20. Revise Sec.  752.601(b)(2) to read as follows:


Sec.  752.601  Coverage.

* * * * *
    (b) * * *
    (2) This subpart does not apply to actions taken under 5 U.S.C. 
1215, 3592, 3595, 7532, or 7515.
* * * * *

0
21. Amend Sec.  752.602 by adding a definition for ``Business day'' in 
alphabetical order to read as follows:


Sec.  752.602  Definitions.

* * * * *
    Business day means any day other than a Saturday, Sunday, or legal 
public holiday under 5 U.S.C. 6103(a).
* * * * *

0
22. In Sec.  752.603, revise the section heading and add paragraphs (c) 
through (f) to read as follows:


Sec.  752.603  Standard for action and penalty determination.

* * * * *
    (c) An agency is not required to use progressive discipline under 
this subpart. The penalty for an instance of misconduct should be 
tailored to the facts and circumstances. In making a determination 
regarding the appropriate penalty for an instance of misconduct, an 
agency shall adhere to the standard of proposing and imposing a penalty 
that is within the bounds of tolerable reasonableness.
    (d) Employees should be treated equitably. Conduct that justifies 
discipline of one employee at one time does not necessarily justify 
similar discipline of a different employee at a different time. An 
agency should consider appropriate comparators as the agency evaluates 
a potential disciplinary action. Appropriate comparators to be 
considered are primarily individuals in the same work unit, with the 
same supervisor, who engaged in the same or similar misconduct. 
Proposing and deciding officials are not bound by previous decisions in 
earlier similar cases, but should, as they deem appropriate, consider 
such decisions consonant with their own managerial authority and 
responsibilities and independent judgment. For example, a supervisor is 
not bound by his or her predecessor whenever there is similar conduct. 
A minor indiscretion for one supervisor based on a particular set of 
facts can amount to a more serious offense under a different 
supervisor. Nevertheless, they should be able to articulate why a more 
or less severe penalty is appropriate.
    (e) Among other relevant factors, agencies should consider an 
employee's disciplinary record and past work record, including all 
applicable prior misconduct, when taking an action under this subpart.
    (f) A suspension or reduction in grade or pay should not be a 
substitute for removal in circumstances in which removal would be 
appropriate. Agencies should not require that an employee have 
previously been suspended or reduced in pay or grade before a proposing 
official may propose removal, except as may be appropriate under 
applicable facts.

0
23. Amend Sec.  752.604 by revising paragraphs (b)(1) and (b)(2)(iv), 
and adding paragraph (g)(3) to read as follows:


Sec.  752.604  Procedures.

* * * * *
    (b) * * *
    (1) An appointee against whom an action is proposed is entitled to 
at least 30 days' advance written notice unless there is an exception 
pursuant to paragraph (d) of this section. However, to the extent an 
agency in its sole and exclusive discretion deems practicable, agencies 
should limit a written notice of an adverse action to the 30 days 
prescribed in section 7543(b)(1) of title 5, United States Code. 
Advance notices of greater than 30 days must be reported to the Office 
of Personnel Management. The notice must state the specific reason(s) 
for the proposed action, and inform the appointee of his or her right 
to review the material that is relied on to support the reasons for 
action given in the notice. The notice must further include detailed 
information with respect to any right to appeal the action pursuant to 
section 1097(b) (2) (A) of Public Law 115-91, the forums in which the 
employee may file an appeal, and any limitations on the rights of the 
employee that would apply because of the forum in which the employee 
decides to file.
    (2) * * *
    (iv) Placing the appointee in a paid, no duty status for such time 
as is necessary to effect the action. After publication of regulations 
for 5 U.S.C. 6329b, and the subsequent agency implementation period in 
accordance with 5 U.S.C. 6329b, an agency may place the employee in a 
notice leave status when applicable.
* * * * *
    (g) * * *
    (3) To the extent practicable, an agency should issue the decision 
on a proposed removal under this subpart within 15 business days of the 
conclusion of the employee's opportunity to respond under paragraph (c) 
of this section.
* * * * *

0
24. Add Sec.  752.607 to read as follows:


Sec.  752.607  Settlement agreements.

    (a) Agreements to alter official personnel records. An agency shall 
not agree to erase, remove, alter, or withhold from another agency any

[[Page 65988]]

information about a civilian employee's performance or conduct in that 
employee's official personnel records, including an employee's Official 
Personnel Folder and Employee Performance File, as part of, or as a 
condition to, resolving a formal or informal complaint by the employee 
or settling an administrative challenge to an adverse action.
    (b) Corrective action based on discovery of agency error. The 
requirements described in paragraph (a) of this section should not be 
construed to prevent agencies from taking corrective action, should it 
come to light, including during or after the issuance of an adverse 
personnel action that the information contained in a personnel record 
is not accurate or records an action taken by the agency illegally or 
in error. In such cases, an agency would have the authority, 
unilaterally or by agreement, to modify an employee's personnel 
record(s) to remove inaccurate information or the record of an 
erroneous or illegal action. An agency may take such action even if an 
appeal/complaint has been filed relating to the information that the 
agency determines to be inaccurate or to reflect an action taken 
illegally or in error. In all events, however, the agency must ensure 
that it removes only information that the agency itself has determined 
to be inaccurate or to reflect an action taken illegally or in error. 
And an agency should report any agreements relating to the removal of 
such information as part of its annual report to the OPM Director 
required by Section 6 of E.O. 13839. Documents subject to withdrawal or 
modification could include, for example, an SF-50 issuing a 
disciplinary or performance-based action, a decision memorandum 
accompanying such action or an employee performance appraisal.
    (c) Corrective action based on discovery of material information 
prior to final agency action. When persuasive evidence comes to light 
prior to the issuance of a final agency decision on an adverse 
personnel action casting doubt on the validity of the action or the 
ability of the agency to sustain the action in litigation, an agency 
may decide to cancel or vacate the proposed action. Additional 
information may come to light at any stage of the process prior to 
final agency decision including during an employee response period. To 
the extent an employee's personnel file or other agency records contain 
a proposed action that is subsequently cancelled, an agency would have 
the authority to remove that action from the employee's personnel file 
or other agency records. The requirements described in paragraph (a) of 
this section would, however, continue to apply to any accurate 
information about the employee's conduct leading up to that proposed 
action or separation from Federal service.

[FR Doc. 2020-20427 Filed 10-15-20; 8:45 am]
BILLING CODE 6325-39-P