Upholding Civil Service Protections and Merit System Principles, 63862-63885 [2023-19806]

Download as PDF 63862 Proposed Rules Federal Register Vol. 88, No. 179 Monday, September 18, 2023 This section of the FEDERAL REGISTER contains notices to the public of the proposed issuance of rules and regulations. The purpose of these notices is to give interested persons an opportunity to participate in the rule making prior to the adoption of the final rules. OFFICE OF PERSONNEL MANAGEMENT 5 CFR Parts 210, 212, 213, 302, 432, 451, and 752 [Docket ID: OPM–2023–0013] RIN 3206–AO56 Upholding Civil Service Protections and Merit System Principles Office of Personnel Management. ACTION: Proposed rule. AGENCY: The Office of Personnel Management (OPM) is proposing a rule to reinforce and clarify longstanding civil service protections and merit system principles, codified in law, as they relate to the movement of Federal employees and positions from the competitive service to the excepted service, or from one excepted service schedule to another. First, it clarifies that, upon such a move, an employee retains the status and civil service protections they had already accrued by law, unless the employee relinquishes such rights or status by voluntarily encumbering a position that explicitly results in a loss of, or different, rights. Second, it interprets ‘‘confidential, policy-determining, policy-making, or policy-advocating’’ and ‘‘confidential or policy-determining’’ to describe positions, generally excepted from civil service protections, in accordance with statutory text, legislative history for that text, and congressional intent, to reinforce the interpretation that this term was intended to mean noncareer, political appointments. Third, it provides specific additional procedures that apply when moving positions from the competitive service to the excepted service, or from one excepted service schedule to another, for the purposes of good administration, to add transparency, and to provide employees with a right of appeal to the Merit Systems Protection Board (MSPB or Board) to the extent any such move lotter on DSK11XQN23PROD with PROPOSALS1 SUMMARY: VerDate Sep<11>2014 17:00 Sep 15, 2023 Jkt 259001 purportedly strips employees of their civil service status and protections. DATES: Comments must be received on or before November 17, 2023. ADDRESSES: You may submit comments, identified by the docket number or Regulation Identifier Number (RIN) for this proposed rulemaking, by the following method: Federal eRulemaking Portal: https:// www.regulations.gov. Follow the instructions for sending comments. All submissions must include the agency name and docket number or RIN for this rulemaking. Please arrange and identify your comments on the regulatory text by subpart and section number; if your comments relate to the supplementary information, please refer to the heading and page number. All comments received will be posted without change, including any personal information provided. To ensure that your comments will be considered, you must submit them within the specified open comment period. Before finalizing this rule, OPM will consider all comments within the scope of the regulations received on or before the closing date for comments. OPM may make changes to the final rule after considering the comments received. FOR FURTHER INFORMATION CONTACT: Timothy Curry by email at employeeaccountability@opm.gov or by phone at (202) 606–2930. SUPPLEMENTARY INFORMATION: OPM proposes this rule to clarify and reinforce longstanding civil service protections and merit system principles, which started with the passage of the Pendleton Act of 1883. The Act ended the patronage, or ‘‘spoils,’’ system for Federal employment and created the competitive civil service. For the past 140 years, Congress has enacted statutes, and agencies have promulgated rules, that govern actions by Federal agencies and employees, beginning with laws that limited political influence in employment decisions and growing over the years to establish comprehensive laws regulating many areas of Federal employment. These changes were designed to further good government. Subsequent statutes, including, among others, the Veterans’ Preference Act of 1944, as amended, and the Civil Service Reform Act of 1978 (CSRA), extended and updated these civil service provisions. PO 00000 Frm 00001 Fmt 4702 Sfmt 4702 The CSRA, as discussed throughout this rulemaking, was monumental. It ‘‘overhauled the civil service system,’’ 1 creating an elaborate ‘‘new framework’’ 2 of the modern civil service, protecting career Federal employees from undue partisan political influence so that the business of government can be carried out efficiently and effectively, in compliance with the law. The 2.2 million career civil servants active today are the backbone of the Federal workforce. They are dedicated and talented professionals who provide the continuity of expertise and experience necessary for the Federal Government to function optimally across Presidents and their administrations. These employees take an oath to uphold the Constitution and are accountable to agency leaders and managers who, in turn, are accountable to the President, Congress, and the American people for their agency’s performance. At the same time, these civil servants must carry out critical tasks requiring that their expertise be applied objectively (performing data analysis, conducting scientific research, implementing existing laws, etc.). If a Federal employee refuses to implement lawful direction from leadership, there are appropriate vehicles for agencies to respond through discipline and, ultimately, removal under chapter 75 or, alternatively, if performance related, chapter 43 of title 5, U.S. Code, and other authorities. Under the law, however, mere disagreement with leadership—without defiance of lawful orders—does not qualify as misconduct or unacceptable performance or otherwise implicate the efficiency of the service in a manner that would warrant an adverse action. Career civil servants generally have a level of institutional experience, subject matter expertise, and technical knowledge that incoming political appointees may lack. Their ability to offer their objective analyses and views in carrying out their duties, without fear of reprisal or loss of employment, contribute to the reasoned consideration of policy options and thus the successful functioning of incoming administrations and our democracy. These rights and abilities must continue to be protected and preserved, as 1 See Lindahl v. OPM, 470 U.S. 768, 773 (1985). at 774; see United States v. Fausto, 484 U.S. 439, 443 (1988). 2 Id. E:\FR\FM\18SEP1.SGM 18SEP1 Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Proposed Rules envisioned by Congress when it enacted the CSRA—and strengthened those protections through other actions, such as the Civil Service Due Process Amendments Act of 1990.3 The OPM Director is generally charged with executing, administering, and enforcing the laws governing the civil service.4 In chapter 75, Congress provided Federal employees with certain procedural rights and provided OPM with broad authority to prescribe regulations to carry out the chapter’s purposes.5 Moreover, OPM regulations, promulgated via delegated authority from the President, govern the movement of positions from the competitive service to the excepted service, or from one excepted service schedule to another.6 Accordingly, OPM proposes this rule to clarify and reinforce longstanding civil service protections and merit system principles as codified in the CSRA. OPM proposes amending its regulations in 5 CFR chapter I, subchapter B, as follows: 1. Amending 5 CFR part 752 (Adverse Actions) to clarify that employees who are moved from the competitive service to a position in the excepted service, or from one excepted service schedule to another, retain the status and civil service protections they had already accrued unless the employee relinquishes such rights or status by voluntarily encumbering a position that explicitly results in a loss of, or different, rights.7 The proposed regulation also conforms part 752 to Federal Circuit precedent regarding the employees eligible for appeal and grievance rights for removal actions and suspensions. 2. Amending 5 CFR part 210 (Basic Concepts and Definitions (General)) to define ‘‘confidential, policydetermining, policy-making, or policyadvocating,’’ and ‘‘confidential or policy-determining’’ 8 in 5 CFR 210.102—which would apply throughout OPM’s Civil Service lotter on DSK11XQN23PROD with PROPOSALS1 3 Public Law 101–376, 104 Stat. 461, H.R. 3086 (Aug. 17, 1990); see also H.R. Rep. 101–328 (Nov. 3. 1989). 4 See 5 U.S.C. 1103(a)(5)(A). 5 See 5 U.S.C. 7504, 7514. 6 See, e.g., 5 CFR part 212. 7 As explained further infra, an individual can voluntarily relinquish rights when moving to a position that explicitly results int the loss of, or different, rights. An agency’s failure to inform an employee of the consequences of a voluntary transfer cannot confer appeal rights to an employee in a position which has no appeal rights by statute. This is distinguishable from situations where the individual was coerced or deceived into taking the new position different rights. See Williams v. Merit Systems Protection Board, 892 F.3d 1156 (Fed. Cir. 2018). 8 See 5 CFR 213.3301, 302.101, 432.102, 451.302, 752.202, 752.401. VerDate Sep<11>2014 17:00 Sep 15, 2023 Jkt 259001 Regulations in 5 CFR chapter I, subchapter B 9—to describe positions generally excepted from chapter 75’s protections to reinforce the longstanding interpretation that, in creating this exception to 5 U.S.C. 7511(b), Congress intended to except noncareer,10 political appointees from the civil service protections. 3. Amending 5 CFR part 302, for the purposes of good administration and transparency, to provide specific additional procedures that apply when moving positions from the competitive service to the excepted service, or from one excepted service schedule to another, and to provide employees encumbering such positions with a right of appeal to the MSPB to the extent any such move purportedly strips employees of their civil service status and protections. The proposed regulation also amends 5 CFR part 212 (Competitive Service and Competitive Status) to further clarify a competitive service employee’s status in the event the employee’s position is moved to the excepted service. As further detailed infra, this rulemaking will enhance the efficiency of the Federal civil service and promote good administration and systematic application of merit system principles.11 9 The relevant regulatory language currently varies slightly. For instance, 5 CFR part 752 describes them as positions ‘‘of a confidential, policy-determining, policy making, or policy advocating character.’’ But 5 CFR part 213 describes these positions as being ‘‘of a confidential or policydetermining character,’’ 5 CFR part 302 uses ‘‘of a confidential, policy-determining, or policyadvocating nature,’’ and 5 CFR part 451 uses ‘‘of a confidential or policy-making character.’’ In this proposed rule, OPM adopts ‘‘confidential, policydetermining, policy making, or policy advocating’’ and ‘‘confidential or policy-determining’’ as two, interchangeable alternatives to describe these positions. 10 The term ‘‘career employee,’’ as used here, refers to appointees to competitive service permanent or excepted service permanent positions. The terms ‘‘noncareer, political appointee’’ and ‘‘political appointee,’’ as used here, refer to individuals appointed by the President or his appointees pursuant to Schedule C (or similar authorities) who serve at the pleasure of the current President or his political appointees and who have no expectation of continuing into a new administration. 11 OPM’s authorities to issue regulations only extend to title 5, U.S. Code. A position may be placed in the excepted service by presidential action, under 5 U.S.C. 3302, by OPM action, under authority delegated by the President pursuant to 5 U.S.C. 1104, or by Congress. These proposed regulations apply to any situation where an agency moves positions from the competitive service to the excepted service, or between excepted services, whether pursuant to statute, Executive order, or an OPM issuance, to the extent that these provisions are not inconsistent with applicable statutory provisions. For example, to the extent that a position is placed in the excepted service by an act of Congress, an OPM regulation will not supersede a statutory provision to the contrary. Similarly, these provisions also apply where positions PO 00000 Frm 00002 Fmt 4702 Sfmt 4702 63863 OPM requests comments on this proposed rule, including on its potential impacts and implementation, to better understand the potential effects of these proposed regulations and to be in a position to consider any possible modifications. OPM may set forth policies, procedures, standards, and supplementary guidance for the implementation of any final rule. I. Background A. The Career Civil Service, Merit System Principles, and Civil Service Protections Prior to the Pendleton Act of 1883,12 Federal employees were generally appointed, retained, and terminated or removed based on their political affiliations and support for the political party in power rather than their capabilities or competence.13 A change in administration often triggered the widespread removal of Federal employees to provide jobs for the supporters of the new President, his party, and party leaders.14 This patronage, or ‘‘spoils,’’ system often resulted in party managers ‘‘pass[ing] over educated, qualified candidates and distribut[ing] offices to ‘hacks’ and ward-heelers who had done their bidding during campaigns and would continue to serve them in government.’’ 15 Theodore Roosevelt, who served as a Civil Service Commissioner before his presidency, described the spoils system as ‘‘more fruitful of degradation in our political life than any other that could possibly have been invented. The spoilsmonger, the man who peddled patronage, inevitably bred the vote-buyer, the voteseller, and the man guilty of misfeasance in office.’’ 16 George William Curtis, a proponent of a meritbased civil service, described that, under the spoils system, ‘‘[t]he country seethe[d] with intrigue and corruption. Economy, patriotism, honesty, honor, previously governed by title 5 will be governed by another title going forward, unless the statute governing the exception provides otherwise. 12 Public Law 16; Civil Service Act of 1883, (Jan. 16, 1883) (22 Stat. 403). 13 U.S. Merit System Protections Board, ‘‘What is Due Process in Federal Civil Service,’’ p. 4. (May 2015), https://www.mspb.gov/studies/studies/ What_is_Due_Process_in_Federal_Civil_Service_ Employment_1166935.pdf. 14 U.S. Office of Personnel Management, ‘‘Biography of an Ideal,’’ p. 83 (2003), OPMBiography-of-an-Ideal-History-of-Civil-Service2003.pdf (armywarcollege.edu). 15 See Anthony J. Gaughan, ‘‘Chester Arthur’s Ghost: A Cautionary Tale of Campaign Finance Reform,’’ 71 Mercer L. Rev. 779, at pp. 787–78 (2020), https://digitalcomons.law.mercer.edu/cgi/ viewcontent.cgi?article=1313&context=jour_mlr. 16 U.S. Office of Personnel Management, supra note 14 at pp. 182–83. E:\FR\FM\18SEP1.SGM 18SEP1 63864 Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS1 seem[ed] to have become words of no meaning.’’ 17 Ethical standards for Federal employees were at a low ebb under this system. ‘‘Not only incompetence, but also graft, corruption, and outright theft were common.’’ 18 Civil service advocates and then Congress, therefore, sought to establish a Federal nonpartisan career civil service that would be selected based on merit rather than political affiliation.19 Such a workforce would reinvigorate government, making it more efficient and competent.20 This reform movement came to a head in 1881 when President James Garfield was shot by a disappointed office seeker who believed he was entitled to a Federal job based on the work he had done for Garfield and his political party.21 The Pendleton Act of 1883 reformed the patronage system by requiring agencies to appoint Federal employees covered by the Act based on competency and merit.22 The Act also established the Civil Service Commission (CSC) to help implement and enforce the government’s adherence to merit-based principles.23 While the Pendleton Act focused on hiring, bases for removals continued to vary depending on the preferences of the President in office.24 In 1897, President William McKinley addressed removals by issuing Executive Order 101, which mandated that ‘‘[n]o removal shall be made from any position subject to competitive examination except for just cause and upon written charges filed with the head of the Department, or other appointing officer, and of which the accused shall have full notice and an opportunity to make defense.’’ 25 Congress later codified these requirements in the Lloyd-La Follette Act of 1912 26 to establish that covered 17 Id. at p. 182. In 1871, Curtis was appointed by President Ulysses S. Grant to chair the first Civil Service Commission. See id. at p. 196. 18 Id. at pp. 183–84. 19 See Gaughan, supra note 15 at p. 787; U.S. Merit System Protections Board, supra note 13 at pp. 3–5. 20 See Gaughan, supra note 15 at p. 787. 21 See U.S. Merit System Protections Board, supra note 13 at pp. 4–5; U.S. Office of Personnel Management, supra note 14 at pp. 198–201. 22 22 Stat. 403–04 (stating that hiring should be based on an ‘‘open, competitive examination’’ of the employee’s ‘‘relative capacity and fitness . . . to discharge the duties of the service into which they seek to be appointed.’’). 23 Id. at 403. 24 The Act does specify that ‘‘no person in the public service is . . . under any obligations to contribute to any political fund, or to render any political service, and that he will not be removed or otherwise prejudiced for refusing to do so.’’ Id at 404. 25 U.S. Merit System Protections Board, supra note 13 at p. 5. 26 37 Stat. 555 (1912). VerDate Sep<11>2014 17:00 Sep 15, 2023 Jkt 259001 Federal employees were to be both hired and removed based on merit. Specifically, section 6 of the Act provided: that no person in the classified civil service[27] of the United States shall be removed therefrom except for such cause as will promote the efficiency of said service and for reasons given in writing, and the person whose removal is sought shall have notice of the same and of any charges [proffered] against him, and be furnished with a copy thereof, and also be allowed a reasonable time for personally answering the same in writing; and affidavits in support thereof. Thereafter, Congress enacted further requirements and reforms. In 1944, Congress enacted the Veterans’ Preference Act,28 which, among other things, granted federally-employed veterans extensive rights to challenge adverse employment actions, including the right to file an appeal with the CSC and provide the CSC with documentation to support the appeal. Based on the evidence presented, the CSC would issue findings and recommendations regarding the adverse employment action. In short, the Veterans’ Preference Act provided eligible veterans with adverse action protections and access to an appeals process.29 Then, in 1962, President John F. Kennedy issued Executive Order 10988 to extend adverse action rights to the broader civil service.30 B. Conduct and Performance Under the Civil Service Reform Act of 1978 To synthesize, expand upon, and further codify the patchwork of processes that had developed over almost a century, and to protect civil servants and govern personnel actions, Congress passed the Civil Service Reform Act (CSRA) of 1978 31—the most comprehensive Federal civil service reform since the Pendleton Act. 27 The ‘‘classified civil service’’ refers to the competitive service. See 5 U.S.C. 2102. 28 58 Stat. 387 (1944). 29 Agencies initially were not required to comply with the CSC’s recommendations in adverse action appeals, but Congress amended the Veterans’ Preference Act in 1948 to require compliance. See 67 Stat. 581 (1948); see also U.S. Merit System Protections Board, supra note 13 at pp. 7–8. 30 E.O. No. 10988, 27 FR 551 (Jan. 19, 1962) (‘‘The head of each agency, in accordance with the provisions of this order and regulations prescribed by the Civil Service Commission, shall extend to all employees in the competitive civil service rights identical in adverse action cases to those provided preference eligibles under section 14 of the Veterans’ Preference Act of 1944, as amended.’’) (Emphasis added). 31 92 Stat. 1111 (1978); see. Fausto, 484 U.S. at 455 (‘‘The CSRA established a comprehensive system for reviewing personnel action taken against federal employees.’’). PO 00000 Frm 00003 Fmt 4702 Sfmt 4702 The CSRA made significant organizational changes to civil service management, adjudications, and oversight. It abolished the CSC and divided its duties among OPM 32 and the MSPB, which initially encompassed the Office of Special Counsel (OSC). OSC later became a separate agency to which specific duties were assigned.33 OPM inherited the CSC’s policy, managerial, and administrative duties, including the obligation to establish standards, oversee compliance, and conduct examinations as required or requested.34 OPM was also obligated to, among other things, advise the President regarding appropriate changes to the civil service rules, administer retirement benefits, adjudicate employees’ entitlement to these benefits, and defend adjudications at the Board.35 MSPB adjudicates challenges to personnel actions taken under the civil service laws,36 among other things, and OSC investigates and prosecutes prohibited personnel practices.37 Other, more specific enactments confer upon these entities the obligations or authorities to promulgate regulations on specific topics. The CSRA codified fundamental merit system principles, which had developed since 1883.38 These principles are summarized here: Merit System Principles 39 1. Recruit, select, and advance on merit after fair and open competition. 2. Treat employees and applicants fairly and equitably. 3. Provide equal pay for equal work and reward excellent performance. 4. Maintain high standards of integrity, conduct, and concern for the public interest. 5. Manage employees efficiently and effectively. 6. Retain or separate employees on the basis of their performance. 32 Congress envisioned that: ‘‘OPM would be the administrative arm of Federal personnel management, serve as Presidential policy advisor, . . . promulgate regulations, set policy, run research and development programs, implement rules and regulations, and would manage a centralized, innovative Federal personnel program.’’ 124 Cong. Rec. S27538 (daily ed. Aug. 24, 1978) (bill summary of the CSRA of 1978, S. 2540). 33 U.S. Government Accountability Office, ‘‘Civil Service Reform—Where it Stands Today,’’ at p. 2 (May 13, 1980), https://www.gao.gov/assets/fpcd80-38.pdf. The Equal Employment Opportunity Commission and Office of Government Ethics also handle duties previously covered by the CSC. 34 See 5 U.S.C. 1103(a)(5), (a)(7). 35 Id.; see 5 U.S.C. 8461. 36 See 5 U.S.C. 1204. 37 See 5 U.S.C. 1212. 38 See 47 Cong. Ch. 27 (Jan. 16, 1883), 22 Stat. 403. 39 See 5 U.S.C. 2301. E:\FR\FM\18SEP1.SGM 18SEP1 Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS1 7. Educate and train employees if it will result in better organizational or individual performance. 8. Protect employees from improper political influence. 9. Protect employees against reprisal for the lawful disclosure of illegality and other covered wrongdoing. Under the CSRA’s ‘‘elaborate new framework,’’ challenges to nonappealable adverse actions, appealable adverse actions, and ‘‘prohibited personnel practices’’ are channeled into separate procedural tracks.40 The procedures an agency must follow in taking an adverse action and whether the agency’s action is appealable to MSPB depend on the action the agency seeks to impose. Suspensions of 14 days or less are not directly appealable to MSPB.41 But an employee against whom such a suspension is proposed is entitled to certain procedural protections, including notice, an opportunity to respond, representation by an attorney or other representative, and a written decision.42 More rigorous procedures apply before agencies may pursue removals, demotions, suspensions for more than 14 days, reductions in grade and pay, and furloughs for 30 days or less, assuming the subject of the contemplated action meets the definition of an ‘‘employee’’ under 5 U.S.C. 7511.43 Incumbents, other than those who are statutorily excepted from chapter 75’s protections, receive the full panoply of civil service protections in 5 U.S.C. 7513 after they satisfy the length of service conditions in 5 U.S.C. 7511.44 Under section 7511(a)(1), ‘‘employee’’ refers to an individual who falls within one of three groups: (1) an individual in the competitive service who either (a) is not serving a probationary or trial period 45 under an initial appointment; 40 See Fausto, 484 U.S. at 443, 445–47; see 5 U.S.C. 1212, 1214, 2301, 2302, 7502, 7503, 7512, 7513; see also 5 U.S.C. 4303 (review of actions based on unacceptable performance). 41 5 U.S.C. 7503; Fausto, 484 U.S. at 446. 42 5 U.S.C. 7503(b)(1)-(4); 5 CFR part 752, subpart B. 43 See 5 CFR 752.401, 404, 1201.3; see also 5 U.S.C. 7504, 7512(1)-(5); Fausto, 484 U.S. at 446– 47. 44 5 U.S.C. 7513(d), 7701(a). 45 The term ‘‘probationary period’’ generally applies to employees in the competitive service. ‘‘Trial period’’ applies to employees in the excepted service and some appointments in the competitive service, such as term appointments, which have a 1-year trial period set by OPM. A fundamental difference between the two is the duration in which employees must serve. The probationary period is set by law to last 1 year. When the trial period is set by individual agencies, it can last up to 2 years. See 5 CFR 315.801 through 806; see also U.S. Merit System Protections Board, Navigating the Probationary Period After Van Wersch and VerDate Sep<11>2014 17:00 Sep 15, 2023 Jkt 259001 or (b) has completed 1 year of current continuous service under other than a temporary appointment limited to 1 year or less; (2) a preference eligible 46 in the excepted service who has completed 1 year of current continuous service in the same or similar positions in an Executive agency; or in the United States Postal Service or Postal Rate Commission; or (3) an individual in the excepted service (other than a preference eligible) who either (a) is not serving a probationary or trial period under an initial appointment pending conversion to the competitive service; or (b) has completed 2 years of current continuous service in the same or similar positions in an Executive agency under other than a temporary appointment limited to 2 years or less.47 In the event of a final MSPB decision adverse to the employee, employees may petition the United States Court of Appeals for the Federal Circuit or another appropriate judicial forum to review MSPB’s final orders and decisions.48 Excepted from these procedural entitlements and rights to appeal conferred on other employees under chapter 75 are employees ‘‘whose position has been determined to be of a confidential, policy-determining, policy-making, or policy-advocating character.’’ 49 This is true regardless of veterans’ preference or length of service in the position. As detailed further infra, it is evident that Congress, in using this and similar language in various parts of title 5, U.S. Code, intended this exception to apply only to noncareer, political appointments that carry no expectation of continued employment beyond the presidential administration during which the appointment occurred.50 The unique responsibilities McCormick, (Sept. 2006), https://www.mspb.gov/ studies/studies/Navigating_the_Probationary_ Period_After_Van_Wersch_and_McCormick_ 276106.pdf. 46 The term ‘‘preference eligible’’ refers to specified military veterans and family members with derived preference pursuant to statute, such as an unmarried widow, and the wife or husband of a service-connected disabled veteran. See 5 U.S.C. 2108(3) for additional explanation. 47 5 U.S.C. 7511(a)(1). Under Federal Circuit case law, as explained further infra, whether an employee has completed a probationary or trial period is immaterial to this analysis if in fact the employee has completed the requisite period of continuous employment under subparagraphs (A)(ii) and (C)(ii). 48 5 U.S.C. 7503, 7513, 7701–7703, 7703(a)(1), (b)(1)(A). 49 5 U.S.C. 7511(b)(2)(b). 50 See infra, Sec. II. Proposed Amendments; 5 CFR 6.2 (‘‘Positions of a confidential or policydetermining character shall be listed in Schedule C’’); 213.3301 Schedule C (‘‘positions which are policy-determining or which involve a close and confidential working relationship with the head of PO 00000 Frm 00004 Fmt 4702 Sfmt 4702 63865 of political appointees, typically listed under excepted service Schedule C, allow hiring and termination to be done purely at the discretion of the President or the President’s political appointees. This is a narrow, specific exception from the competitive service, and each position listed in Schedule C is revoked immediately upon the position becoming vacant.51 Agencies may terminate political appointees at any time, often whenever the relationship between the incumbent and the political appointee to whom the incumbent reports ends. This also means that, absent any unique circumstance provided in law or a request to stay by an incoming administration, these positions are vacated following a presidential transition. Prior to the CSRA, agencies relied only on provisions codified at chapter 75 to remove Federal employees or to change an employee to a lower grade, even if the reason for removal was for unacceptable performance. The CSRA created chapter 43 as an additional, and, in Congress’ view, potentially improved process for empowering supervisors to address performance concerns.52 Accordingly, in addition to using the provisions of chapter 75, agencies can now address performance concerns under chapter 43 of title 5, U.S. Code. Through various enactments now reflected in chapters 43 and 75, Congress has created conditions under which certain employees (i.e., those with the requisite tenure in continued employment) may gain a property interest in continued employment. Congress has mandated that removal and the other actions described in subchapter II of chapter 75 may be taken only ‘‘for such cause as will promote the an agency or other key appointed officials’’). Political appointees serve at the pleasure of the President or other appointing official and may be asked to resign or be dismissed at any time. They are not covered by civil service removal procedures, have no adverse action rights, and generally have no right to appeal terminations. See e.g. 5 U.S.C. 7511(b)(2) (excluding noncareer, political appointees from definition of ‘‘employees’’ eligible for adverse action protections); 5 CFR 317.605 (‘‘An agency may terminate a noncareer or limited appointment at any time, unless a limited appointee is covered under 5 CFR 752.601(c)(2).’’); 734.104 (listing employees who are appointed by the President, noncareer SES members, and Schedule C employees as ‘‘employees who serve at the pleasure of the President.’’); 752.401(d)(2) (excluding noncareer, political appointees under Schedule C from adverse action protections). 51 See 5 CFR 213.3301. 52 U.S. Merit System Protections Board, ‘‘Addressing Poor Performers and the Law,’’ p. 4. (Sept. 2009), https://www.mspb.gov/studies/ studies/Addressing_Poor_Performers_and_the_ Law_445841.pdf. E:\FR\FM\18SEP1.SGM 18SEP1 63866 Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Proposed Rules efficiency of the service.’’ 53 This property interest in continued employment has been a feature of the Federal civil service since at least 1912, when the Lloyd-La Follette Act required just cause to remove a Federal employee. The Supreme Court in Board of Regents of State Colleges v. Roth, recognized that restrictions on loss of employment, such as tenure, can create a property right.54 In Cleveland Board of Education v. Loudermill,55 the Court also held: Property cannot be defined by the procedures provided for its deprivation any more than can life or liberty. The right to due process is conferred, not by legislative grace, but by constitutional guarantee. While the legislature may elect not to confer a property interest in public employment, it may not constitutionally authorize the deprivation of such an interest once conferred, without appropriate procedural safeguards.56 lotter on DSK11XQN23PROD with PROPOSALS1 In short, once a government requires cause for removals, constitutional due process protection will attach to that property interest and determine the minimum procedures by which a removal may be carried out. Any new law addressing the removal of a Federal employee with a vested property interest in the employee’s continued employment must, at a minimum, comport with the constitutional concept of due process. This obligation drives some of the procedures in both chapters 43 and 75, while others have been developed in accordance with Congress’s assessments of what is good policy.57 As a matter of law, agencies must follow the procedures specified by Congress, in the circumstances described, to effectuate a removal under those chapters. Finally, in addition to establishing the requirements and procedures for challenging adverse actions and performance-based actions, the CSRA includes a mechanism for employees in a ‘‘covered position’’ to challenge a ‘‘personnel action’’ that constitutes a ‘‘prohibited personnel practice’’ because it has been taken for a prohibited reason.58 ‘‘Covered position’’ means any position in the competitive service, a 53 See 5 U.S.C. 7503(a), 7513(a); 5 CFR 752.102(a), 752.202(a). 54 408 U.S. 564, 576–77 (1972). The Court described three earlier decisions—Slochower v. Board of Education, 350 U.S. 551 (1956), Wieman v. Updegraff, 344 U.S. 183 (1952), and Connell v. Higginbotham, 403 U.S. 207 (1971)—where the Court held that due process rights applied to public employment. 55 470 U.S. 532 (1985). 56 Id. at 541. 57 The exact procedures required will turn on the factual situation and may be different from instance to instance. 58 5 U.S.C. 2302(a)(1), (a)(2), (b). VerDate Sep<11>2014 17:00 Sep 15, 2023 Jkt 259001 career appointee in the Senior Executive Service, or a position in the excepted service unless ‘‘conditions of good administration warrant’’ a necessary exception on the basis that the position is of a ‘‘confidential, policydetermining, policy-making, or policyadvocating character.’’ 59 At 5 U.S.C. 2302(a)(2)(A), Congress lists twelve types of personnel actions that can form the basis of a prohibited personnel practice under 5 U.S.C. 2302(b). Generally, these personnel actions include (1) an appointment; (2) a promotion; (3) an adverse personnel action for disciplinary or nondisciplinary reasons; (4) a detail, transfer, or reassignment; (5) a reinstatement; (6) a restoration; (7) a reemployment; (8) a performance evaluation; (9) a decision concerning pay, benefits, or awards, or concerning education or training if the education or training may reasonably be expected to lead to an appointment, promotion, performance evaluation; (10) a decision to order psychiatric testing or examination; (11) the implementation or enforcement of any nondisclosure policy, form, or agreement; and (12) any other significant change in duties, responsibilities, or working conditions.60 The CSRA codified a comprehensive list of prohibited personnel practices, summarized here: Prohibited Personnel Practices 61 1. Illegally discriminate for or against any employee or applicant, including on the basis of marital status or political affiliation. 2. Solicit or consider improper employment recommendations. 3. Coerce political activity or take action against an employee or applicant for any person’s refusal to engage in political activity. 4. Willfully obstruct a person’s right to compete for employment. 5. Improperly influence any person to withdraw from competition for a position. 6. Give unauthorized preference or improper advantage to improve or injure a particular person’s employment prospects. 7. Employ or promote a relative. 8. Act against a whistleblower, whether an employee or applicant. 9. Act against employees or applicants for filing or assisting with an appeal, or cooperating with the Inspector General or Special Counsel. 59 5 U.S.C. 2302(a)(2)(B), 3302. U.S.C. 2302(a)(2)(A). 61 5 U.S.C. 2302(b). 60 5 PO 00000 Frm 00005 Fmt 4702 Sfmt 4702 10. Discriminate on the basis of conduct that does not affect performance. 11. Knowingly violate veterans’ preference requirements. 12. Take or fail to take a personnel action where the action or omission violates any law, rule, or regulation that implements or directly concerns the merit system principles. 13. Implement or enforce an unlawful nondisclosure agreement. 14. Access the medical record of another employee or an applicant in furtherance of a prohibited personnel practice. OSC investigates allegations of prohibited personnel practices brought by an individual and may investigate in the absence of such an allegation to determine if corrective action is warranted.62 If OSC concludes that corrective action is, in fact, warranted, and if OSC is unable to obtain a satisfactory correction of the practice from the corresponding agency, it may petition MSPB to grant corrective action, and, if OSC proves its claim, MSPB may order the corrective action it deems appropriate.63 C. The Competitive, Excepted, and Senior Executive Services The Federal civil service consists of three services: the competitive service, the excepted service, and Senior Executive Service.64 In the competitive service, individuals must complete a competitive hiring process before being appointed. This process may include a written test or an equivalent evaluation of the individual’s relative level of knowledge, skills, and abilities necessary for successful performance in the position to be filled.65 While most government employees are in the competitive service, about one-third are in the excepted service.66 The excepted service includes all positions in the Executive Branch that are specifically excepted from the 62 5 U.S.C. 1214(a)(1)(A), (a)(5). 5 U.S.C. 1214(b)(2)(B), (C), (b)(4)(A). But note that, by statute, OSC cannot request corrective action as to 5 U.S.C. 2302(b)(11). See 5 U.S.C. 2302(e)(2). 64 5 U.S.C. 2102(a)(1) (competitive service); 5 U.S.C. 2103(a) (excepted service); 5 U.S.C. 3132(a)(2) (Senior Executive Service). 65 See 5 U.S.C. 3304 (‘‘An individual may be appointed in the competitive service only if he has passed an examination or is specifically excepted from examination under section 3302 of this title.’’); see also U.S. Office of Personnel Management, ‘‘Competitive Hiring,’’ https://www.opm.gov/policydata-oversight/hiring-information/competitivehiring/. 66 See Congressional Research Service, ‘‘Categories of Federal Civil Service Employment; A Snapshot,’’ at p. 4 (May 26, 2019), https:// sgp.fas.org/crs/misc/R45635.pdf. 63 See E:\FR\FM\18SEP1.SGM 18SEP1 Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Proposed Rules competitive service by statute, Executive order, or by OPM regulation.67 For positions excepted from the competitive service by statute, selection must be made pursuant to the provisions Congress enacted. Applicants for excepted service positions under title 5, U.S. Code, like applicants for the competitive service, are to be selected ‘‘solely on the basis of relative ability, knowledge, and skills, after fair and open competition which assures that all receive equal opportunity.’’ 68 Agencies filling positions in the excepted service ‘‘shall select . . . from the qualified applicants in the same manner and under the same conditions required for the competitive service.’’ 69 This means that agencies should generally afford preference in the same manner they would have for the competitive service, though, in a few situations 70 where the reason for the exception makes this essentially impossible, OPM (or the President) has exempted the position from regulatory requirements and imposed a less stringent standard.71 The President is authorized by statute to provide for ‘‘necessary exceptions of positions from the competitive service’’ when warranted by ‘‘conditions of good administration.’’ 72 The President has delegated to OPM—and, before that, to its predecessor, the CSC—concurrent authority to except positions from the competitive service when it determines that appointments thereto through competitive examination are not practicable.73 The President has further delegated authority to OPM to ‘‘decide whether the duties of any particular position are such that it may be filled as an excepted position under the appropriate schedule.’’ 74 OPM has exercised its delegated authority, and implemented exercises of presidential authority, by prescribing five schedules for positions in the excepted service, which are currently listed in 5 CFR part 213: • Schedule A—Includes positions that are not of a confidential or policydetermining character for which it is not 67 See 5 U.S.C. 2103; 5 CFR parts 213, 302. U.S.C. 2301(b)(1). 69 5 U.S.C. 3320. 70 See infra notes 139–142. 71 5 CFR 302.101(c). 72 5 U.S.C. 3302. 73 E.O. 10577, sec. 6.1(a) (1954); 5 CFR 6.1(a) (1988) (‘‘The Commission is authorized to except positions for the competitive service whenever it determines that appointments thereto through competitive examination are not practicable’’ and that ‘‘[u]pon the recommendation of the agency concerned, it may also except positions which are of a confidential or policy-determining character.’’). 74 E.O. 10577 sec. 6.1(b); 5 CFR 6.1(b); see 28 FR 10025 (Sept. 14, 1963) (reorganizing the civil service rules). lotter on DSK11XQN23PROD with PROPOSALS1 68 5 VerDate Sep<11>2014 17:00 Sep 15, 2023 Jkt 259001 practicable to examine applicants, such as attorneys, chaplains, and short-term positions for which there is a critical hiring need. • Schedule B—Includes positions that are not of a confidential or policydetermining character for which it is not practicable to examine applicants. Unlike Schedule A positions, Schedule B positions require an applicant to satisfy basic qualification standards established by OPM for the relevant occupation and grade level. Schedule B positions engage in a variety of activities, including policy analysis, teaching, and technical assistance. • Schedule C—Includes positions that are policy-determining or which involve a close and confidential working relationship with the head of an agency or other key appointed officials. These positions include most political appointees below the cabinet and subcabinet levels. • Schedule D—Includes positions that are not of a confidential or policydetermining character for which competitive examination makes it difficult to recruit certain students or recent graduates. Schedule D positions generally require an applicant to satisfy basic qualification standards established by OPM for the relevant occupation and grade level. Positions include those in the Pathways Programs. • Schedule E—Includes positions of administrative law judges.75 As described supra, competitive and excepted service incumbents, except those in Schedule C, become ‘‘employees’’ for purpose of civil service protections after they satisfy the length of service conditions in 5 U.S.C. 7511. Excepted service employees, except those in Schedule C and some employees in certain Federal agencies excepted by statute, maintain the same notice and appeal rights for adverse actions and performance-based actions as competitive service employees.76 75 5 CFR 6.2. 76 See 5 U.S.C. 4303, 7513(d). There are, however, some notable differences between non-removal protections afforded to competitive service and excepted service employees, such as assignment rights in the event of a reduction in force. See 5 CFR 351.501 and 502. Employees who are reached for release from the competitive service during a reduction in force are entitled to an offer of assignment if they have ‘‘bump’’ or ‘‘retreat’’ rights to an available position in the same competitive area. ‘‘Bumping’’ means displacement of an employee in a lower tenure group or a lower subgroup within the same tenure group. ‘‘Retreating’’ means displacement of an employee in the same tenure group and subgroup. Meaning, they are entitled to the positions of employees with fewer assignment rights. Employees in excepted service positions have no assignment rights to other positions unless their agency, at the agency’s discretion, chooses to offer these rights to positions. Even with these differences, merit system PO 00000 Frm 00006 Fmt 4702 Sfmt 4702 63867 However, and as noted here, excepted service employees must satisfy different durational requirements before these rights become available. So-called ‘‘preference eligibles’’—specified military veterans and family members with derived preference pursuant to statute 77—in an executive agency, the Postal Service, or the Postal Rate Commission must complete one year of current continuous service to avail themselves of the relevant notice and appeal rights.78 Employees in the excepted service who are not preference eligibles and (1) are not serving a probationary or trial period under an initial appointment pending conversion to the competitive service, or (2) have completed two years of current or continuous service in the same or similar position, have the same notice and appeal rights as qualifying employees in the competitive service.79 Likewise, any employee who is (1) a preference eligible; (2) in the competitive service; or (3) in the excepted service and covered by subchapter II of chapter 75, and who has been reduced in grade or removed under chapter 43, is entitled to appeal the action to MSPB.80 However, these appeal rights do not apply to (1) the reduction to the grade previously held of a supervisor or manager who has not completed the probationary period under 5 U.S.C 3321(a)(2); (2) the reduction in grade or removal of an employee in the competitive service who is serving a probationary or trial period under an initial appointment or who has not completed one year of current continuous employment under other than a temporary appointment limited to one year or less; or (3) the reduction in grade or removal of an employee in the excepted service who has not completed one year of current continuous employment in the same or similar positions.81 D. The Prior Schedule F On October 21, 2020, President Donald Trump, through Executive Order 13957, ‘‘Creating Schedule F in the Excepted Service,’’ sought to alter the carefully crafted legislative balance that Congress struck in the CSRA.82 That Executive order, if fully implemented, could have transformed the civil service principles are at the core of civil service protections relating to hiring, conduct, and performance matters as applied to both career competitive and excepted service employees. 77 See 5 U.S.C. 2108(3). 78 See 5 U.S.C. 7511(a)(1)(B). 79 See 5 U.S.C. 7511(a)(1)(C). 80 See 5 U.S.C. 4303(e). 81 See 5 U.S.C. 4303(f). 82 85 FR 67631 (Oct. 21, 2020). E:\FR\FM\18SEP1.SGM 18SEP1 63868 Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Proposed Rules by purportedly stripping adverse action rights under chapter 75, performancebased action rights under chapter 43, and appeal rights from large swaths of the Federal workforce—thereby turning them into at-will employees—and by eliminating statutory requirements built into the Federal hiring process intended to promote the objective of merit-based hiring decisions. It would have upended the longstanding principle that a career Federal employee’s tenure should be linked to their performance, rather than to the nature of the position that the employee encumbers. It also could have reversed longstanding requirements that, among other things, prevent political appointees from ‘‘burrowing in’’ to career civil service jobs in violation of merit system principles. Executive Order 13957 was revoked, and Schedule F was abolished, by President Joseph Biden through Executive Order 14003, ‘‘Protecting the Federal Workforce.’’ 83 lotter on DSK11XQN23PROD with PROPOSALS1 1. Adverse Action Rights, PerformanceBased Action Rights, and Appeals Section 5 of Executive Order 13957 directed agency heads to review their entire workforces to identify any employees covered by chapter 75’s adverse action rules (which apply broadly to employees in the competitive and excepted service) who occupied positions of a ‘‘confidential, policydetermining, policy-making, or policyadvocating character’’—including positions the agency assessed, for the first time, to arguably include these characteristics—and to petition OPM for its approval to place them in Schedule F, a newly-created category of positions excepted from the competitive service. If these positions had, in fact, been placed in Schedule F, the employees encumbering them would purportedly have been stripped of the adverse action procedural rights under chapter 75 and MSPB appeal rights discussed supra, thus allowing them to be terminated at will, by virtue of the placement of the positions they occupied in this new schedule (and regardless of any rights they had already accrued).84 An express rationale of this action was to make it easier for agencies to ‘‘expeditiously remove poorly performing employees from these positions without facing extensive 83 86 FR 7231 (Jan. 22, 2021). performance-based actions under 5 U.S.C. 4303 are tied, in part, to subchapter II of chapter 75, employees would purportedly have also been stripped of performance-based action procedural rights and MSPB appeal rights, had an agency chosen to proceed with an action under chapter 43. 84 Since VerDate Sep<11>2014 17:00 Sep 15, 2023 Jkt 259001 delays or litigation.’’ 85 This new sweeping authority was purportedly necessary for the President to have ‘‘appropriate management oversight regarding’’ the career civil servants working in positions deemed to be of a ‘‘confidential, policy-determining, policy-making or policy-advocating character,’’ and to incentivize employees in these positions to display what presidential appointees at an agency would deem to be ‘‘appropriate temperament, acumen, impartiality, and sound judgment,’’ in light of the importance of these functions.86 Executive Order 13957 did not acknowledge existing mechanisms to provide ‘‘appropriate management oversight,’’ such as chapter 43 and chapter 75 procedures, or the multiple management controls that agencies have in place to escalate matters of importance to agency administrators.87 Executive Order 13957 instructed agency heads to review existing positions to determine which, if any, should be placed into Schedule F. The Executive order also instructed that, after agency heads conducted their initial review, they were to move quickly and petition OPM by January 19, 2021—the day before Inauguration Day—to place positions within Schedule F. After that, agency heads had another 120 days to petition OPM to place additional positions in Schedule F. In contrast to past excepted service schedules designed to address unique hiring needs upon a 85 E.O. 13957, sec. 1. Executive order provided that ‘‘[c]onditions of good administration . . . make necessary excepting such positions from the adverse action procedures set forth in chapter 75 of title 5, United States Code.’’ E.O. 13957, sec. 1. We note that the ‘‘conditions of good administration’’ language appears in 5 U.S.C. 3302. Section 3302 relates only to exclusions of positions from the competitive service when conditions of good administration warrant and does not purport to confer authority on the President to except positions from the provisions of chapter 75. Similarly, chapter 75 itself does not itself purport to confer authority on the President to except positions from the scope of chapter 75. President Trump appeared to be attempting to effectuate the exception by requiring agencies to identify career positions in the competitive or excepted service that are ‘‘not normally subject to change as a result of a Presidential transition’’ (and thus not encompassed by Schedule C) but that are nevertheless of a ‘‘confidential, policy-determining, policy-making, or policy advocating character,’’ to facilitate the movement of such positions to a new Schedule F. In essence, President Trump thought to separate this phrase from its historical context, which was to describe positions normally placed in Schedule C, which positions normally are subject to change as a result of a presidential transition. 87 Matters of importance can be raised to agency administrators in various ways, such as by filing a complaint with an agency’s Inspector General, raising concerns with an agency’s human resources office, and filing a grievance. 86 The PO 00000 Frm 00007 Fmt 4702 Sfmt 4702 determination that appointments through the competitive service was ‘‘not practicable,’’ 88 movement into Schedule F was designed to be broad and numerically unlimited, potentially affecting a substantial number of jobs across all Federal agencies. For example, according to the Government Accountability Office, the Office of Management and Budget petitioned to place 68 percent of its workforce, more than 400 employees, within Schedule F.89 2. Hiring Section 3 of Executive Order 13957 provided that ‘‘[a]ppointments of individuals to positions of a confidential, policy-determining, policy-making, or policy-advocating character that are not normally subject to change as a result of a presidential transition shall be made under Schedule F.’’ 90 The stated rationale for removing these positions from the competitive hiring process (or from other excepted service schedules in which some of these positions were previously placed) was, again, said to be because of the importance of their corresponding duties, and the need to have employees in these positions that display ‘‘appropriate temperament, acumen, impartiality, and sound judgment.’’ 91 The stated purpose was to ‘‘provide agency heads with additional flexibility to assess prospective appointees without the limitations imposed by competitive service selection procedures’’ 92 or, presumably, for positions already in the excepted service, without the constraints imposed by 5 CFR part 302. Executive Order 13957 indicated that this change was intended to ‘‘mitigate undue limitations on their selection’’ and relieve agencies of ‘‘complicated and elaborate competitive service processes or rating procedures that do not necessarily reflect their particular needs.’’ 93 These changes were to give agencies ‘‘greater ability and discretion to assess critical qualities in applicants to fill these positions, such as work ethic, judgment, 88 See infra notes 137–141. Accountability Office, ‘‘Civil Service—Agency Responses and Perspectives on Former Executive Order to Create a New Schedule F Category for Federal Positions,’’ (Sept. 2022), https://www.gao.gov/assets/gao-22-105504.pdf. 90 85 FR 67632. 91 85 FR 67631. 92 85 FR 67631. 93 85 FR 67632. The procedures Congress has adopted for hiring in the competitive service were designed, in part, to implement the stated congressional policy of veterans’ preference. See 5 U.S.C. 1302. How this congressional mandate would be realized in these circumstances was not addressed. 89 Government E:\FR\FM\18SEP1.SGM 18SEP1 Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Proposed Rules and ability to meet the particular needs of the agency.’’ 94 Executive Order 13957 failed to address the fact that the competitive hiring process permits agencies to assess all competencies that are related to successful performance of the job, including appropriate temperament, acumen, impartiality, and sound judgment and fulfill the congressional policy to confer a preference on eligible veterans or their family members entitled to derived preference. The qualifications requirements, specialized experience, interview process and other assessment methodologies available to hiring managers facilitate an agency’s ability to identify the best candidate. Executive Order 13957 also failed to address the existence of longstanding rules, grounded in the need to establish lack of unlawful bias in proceedings under Federal anti-discrimination statutes, that require assessment of any such competencies.95 The summary imposition of new competencies without validating them would be contrary to existing statutory requirements and could potentially be discriminatory in application, even if that were not the agency’s intent. 3. Political Appointees in Career Civil Service Positions An additional concern relating to Executive Order 13957 was that it could have facilitated burrowing. ‘‘Burrowing’’ occurs when a current (or recently departed) political appointee is hired into a permanent competitive service, nonpolitical excepted service, or career Senior Executive Service position without having to compete for that position or having been appropriately selected in accordance with merit system principles and the normal competitive or excepted service procedures applicable to the position under civil service law. OPM has long required that ‘‘politics play no role when agencies hire political appointees for career Federal jobs.’’ 96 Indeed, OPM adopted procedures to review appointments of such individuals for compliance, and Congress has now essentially codified that procedure by requiring OPM to submit periodic 94 85 FR 67632. 5 CFR part 300. Validation generally requires that the criteria and methods by which job applicants are evaluated have a rational relationship to performance in the position to be filled. 96 OPM, ‘‘Guidelines on Processing Certain Appointments and Awards During the 2020 Election Period,’’ https://chcoc.gov/sites/default/ files/2020%20Appointments%20and %20Awards%20Guidance%20Attachments_ 508.pdf. lotter on DSK11XQN23PROD with PROPOSALS1 95 See VerDate Sep<11>2014 17:00 Sep 15, 2023 Jkt 259001 reports of its findings.97 Executive Order 13957 potentially would have allowed agency heads to move current political appointees into new Schedule F positions, or vacancies in existing positions transferred to Schedule F, without competition and in a manner not based on merit system principles— in effect, allowing political appointees on Schedule C appointments, who would normally expect to depart upon a presidential transition, to ‘‘burrow’’ into permanent civil service appointments. Ultimately, Executive Order 13957 was rescinded before any positions could be placed into Schedule F. As noted above, on January 22, 2021, President Joseph Biden issued Executive Order 14003, ‘‘Protecting the Federal Workforce,’’ stating that ‘‘it is the policy of the United States to protect, empower, and rebuild the career Federal workforce,’’ and that the Schedule F policy ‘‘undermined the foundations of the civil service and its merit system principles.’’ 98 Executive Order 14003 rescinded Executive Order 13957 and abolished Schedule F.99 E. OPM’s Authority To Regulate The OPM Director has direct statutory authority to execute, administer, and enforce all civil service rules and regulations as well as the laws governing the civil service. 100 The Director also has authorities Presidents have conferred on OPM pursuant to the President’s statutory authority.101 As explained here, in enacting the CSRA, Congress conveyed broad regulatory authority over Federal employment directly to OPM throughout title 5.102 In addition, many of these specific statutory enactments, including chapter 75, expressly confer on OPM authority to regulate. Pursuant to 5 U.S.C. 7514, OPM may issue regulations to carry out the purpose of subchapter II of chapter 75, and 97 See The Edward ‘‘Ted’’ Kaufman and Michael Leavitt Presidential Transitions Improvement Act of 2015. Pub. L. 114–136 (Mar. 18, 2016), which requires OPM to submit these reports to Congress. 98 E.O. 14003, 86 FR 7231, 7231 (Jan. 22, 2021) https://www.federalregister.gov/documents/2021/ 01/27/2021-01924/protecting-the-federal-workforce. 100 See 5 U.S.C. 1103(a)(5)(A). This authority does not include functions for which either MSPB or OSC is primarily responsible. Among other authorities, MSPB has specific adjudicative and enforcement authority upon the satisfaction of threshold showings that an employee has established appeal rights. It also has authority to administer statutory provisions relating to adjudication of adverse action appeals. OSC has specific and limited investigative and prosecutorial authority. See 5 U.S.C. 1213–1216. 101 See Presidential rules codified at 5 CFR parts 1 through 10. 102 See, e.g., 5 U.S.C. 1103, 1302, 3308, 3317, 3318, 3320; Chapters 43, 53, 55, 75. PO 00000 Frm 00008 Fmt 4702 Sfmt 4702 63869 pursuant to 5 U.S.C. 7504, OPM may issue regulations to carry out the purpose of subchapter I of chapter 75. The same is true with respect to chapter 43. Pursuant to 5 U.S.C. 4305, OPM may issue regulations to carry out subchapter I of chapter 43. Prior to the reorganization proposal 103 approved by Congress that created OPM, the CSC exercised its broad authorities, in part, to establish rules and procedures concerning the terms of being appointed in the competitive or excepted service and of moving between the competitive and excepted service. Since its inception in 1978, OPM has leveraged that same authority—including from Executive Order 10577,104 as amended, as well as from statutory authorities such as 5 U.S.C. 1103(a)(5) and 5 U.S.C. 1302—to establish rules and procedures concerning the effects on an employee of being appointed in the competitive or excepted service and of moving between the competitive and excepted service. OPM has used these authorities to create government-wide rules for Federal employees regarding a wide range of topics, such as hiring, promotion, performance assessment, pay, leave, political activity, retirement, and health benefits.105 For instance: • 5 CFR part 6 requires OPM to publish in the Federal Register on a regular basis the list of positions that are in the excepted service.106 • 5 CFR 212.401(b), promulgated in 1968,107 well before the CSRA, provides that ‘‘[a]n employee in the competitive service at the time his position is first listed under Schedule A, B, or C remains in the competitive service while he occupies that position.’’ This regulation was intended to preserve competitive service status and rights for employees who were initially appointed to positions in the competitive service and whose positions were subsequently moved into the excepted service (such as administrative law judges).108 103 President Jimmy Carter, Reorganization Plan No. 2, sec. 101 and 102 (May 23, 1978). The plan specifies in section 102 that ‘‘Except as otherwise specified in this Plan, all functions vested by statute in the United States Civil Service Commission, or the Chairman of said Commission, or the Boards of Examiners established by 5 U.S.C. 1105 are hereby transferred to the Director of the Office of Personnel Management.’’ 104 87 FR 7521 (Nov. 22, 1954). 105 See, e.g., 5 CFR parts 2, 6, 212, 213, 335, 430, 550, 630, 733, 734, 831, 890. 106 5 CFR 6.1(c), 6.2; see 28 FR 10025 (Sept. 14, 1963), as amended by E.O. 11315; E.O. 12043, 43 FR 9773 (Mar. 10, 1978); E.O. 13562, 75 FR 82587 (Dec. 30, 2010); see also E.O. 14029, 86 FR 27025 (May 19, 2021). 107 See 33 FR 12408 (Sept. 4, 1968). 108 Id. E:\FR\FM\18SEP1.SGM 18SEP1 63870 Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS1 • 5 CFR 302.102, promulgated in part to implement 5 U.S.C. 3320, provides that when an agency wishes to move an employee from a position in the competitive service to one in the excepted service, the agency must: ‘‘(1) Inform the employee that, because the position is in the excepted service, it may not be filled by a competitive appointment, and that acceptance of the proposed appointment will take him/ her out of the competitive service while he/she occupies the position; and (2) Obtain from the employee a written statement that he/she understands he/ she is leaving the competitive service voluntarily to accept an appointment in the excepted service.’’ 109 • 5 CFR part 432 sets forth the procedures to be followed, if an agency opts to pursue a performance-based action against an employee under chapter 43 of title 5, U.S. Code. As with the adverse action rules in part 752, the rules applicable to performance-based actions apply broadly to employees in the competitive and excepted service, with narrowly defined exceptions that include political appointees.110 • 5 CFR part 752 implements chapter 75 of title 5, U.S. Code and establishes the procedural rights that apply when an agency commences the process for taking an adverse action against an ‘‘employee,’’ as defined in 5 U.S.C. 7511. These regulations apply broadly to employees in the competitive and excepted service meeting the section 7511 criteria.111 Moreover, the President, pursuant to his own authorities under the CSRA, as codified at 5 U.S.C. 3301 and 3302, has explicitly delegated a variety of these authorities to OPM concerning execution, administration, and enforcement of the competitive and excepted services. For example, under Civil Service Rule 6.1(a), ‘‘OPM may except positions from the competitive service when it determines that . . . appointments thereto through competitive examination are not practicable.’’ 112 And under Civil Service Rule 6.1(b), ‘‘OPM shall decide whether the duties of any particular position are such that it may be filled as an excepted position under the appropriate schedule.’’ 113 109 See 55 FR 9407 (Mar. 14, 1990), as amended at 58 FR 58261 (Nov. 1, 1993). 110 See 54 FR 26179 (June 21, 1989), redesignated and amended at 54 FR 49076 (Nov. 29, 1989), redesignated and amended at 58 FR 65534 (Dec. 15, 1993); 85 FR 65982 (Oct. 16, 2020); 87 FR 67782 (Nov. 10, 2022). 111 See 74 FR 63532 (Dec. 4, 2009), as amended at 85 FR 65985 (Oct. 16, 2020); 87 FR 67782 (Nov. 10, 2022). 112 5 CFR 6.1(a). 113 5 CFR 6.1(b). VerDate Sep<11>2014 17:00 Sep 15, 2023 Jkt 259001 OPM has other regulatory authority, for example, under 5 CFR parts 5 and 10, to oversee the Federal personnel system and agency compliance with merit system principles and supporting laws, rules, regulations, Executive orders, and OPM standards. OPM also administers the statutory provisions governing the rights of Federal employees in connection to adverse agency actions.114 II. Proposed Amendments OPM proposes amending its regulations in 5 CFR chapter I, subchapter B, as summarized below to clarify and reinforce longstanding civil service protections and merit system principles. A. Civil Service Protections Adverse action protections and related eligibility and procedures are covered in 5 U.S.C. chapter 75. subchapter I covers suspensions for 14 days or less and 5 U.S.C. 7501 defines ‘‘employee’’ for the purposes of adverse action procedures for suspensions of this duration. Under 5 U.S.C. 7504, OPM may prescribe regulations to carry out the purpose of subchapter I. Subchapter II covers removals, suspensions for more than 14 days, reductions in grade or pay, or furloughs for 30 days or less. In this subchapter, 5 U.S.C. 7511 defines ‘‘employee’’ for the purposes of entitlement to adverse action procedures. Under 5 U.S.C. 7514, OPM may prescribe regulations to carry out the purposes of subchapter II except as it concerns any matter where MSPB may prescribe regulations. OPM proposes amending 5 CFR part 752 (Adverse Actions) to reflect OPM’s longstanding interpretation of 5 U.S.C. 7501 and 5 U.S.C 7511 and the congressional intent underlying the statutes, including exceptions to civil service protections outlined in 5 U.S.C. 7511(b). OPM proposes to clarify that employees who are moved from the competitive to the excepted service, or from one excepted service schedule to another, retain the status and civil service protections they had already accrued. On the other hand, an employee may relinquish such rights or status by voluntarily applying for, accepting, and then encumbering a position that explicitly results in the loss of, or different, rights. OPM also proposes revising its regulations at subpart B of 5 CFR part 752 (Regulatory Requirements for Suspension for 14 Days or Less) to 114 See 5 U.S.C. 7514 (granting OPM the authority to ‘‘prescribe regulations to carry out the purpose of’’ subchapter II of chapter 75 of title 5); see also 5 U.S.C. 7511(c), 7513(a), see also infra, Sec. II.A. PO 00000 Frm 00009 Fmt 4702 Sfmt 4702 conform this subpart with statutory language in 5 U.S.C. 7501. The proposed revisions are intended to reinforce which employees are covered by subpart B when an agency decides to take an action under this subpart for such cause as will promote the efficiency of the service. OPM proposes revising subpart D of 5 CFR part 752 (Regulatory Requirements for Removal, Suspension for More Than 14 Days, Reduction in Grade or Pay, or Furlough for 30 Days or Less) to clarify that employees in the competitive and excepted services (except for positions in Schedule C) who have fulfilled their probationary or trial period requirement or the durational requirements under 5 U.S.C. 7511 will retain the rights conferred by subchapter II if moved from the competitive service to the excepted service or from within excepted service to a new excepted service schedule, except in the case where an employee relinquishes such rights or status by voluntarily seeking, accepting, and encumbering a position that explicitly results in a loss of, or different, rights. Performance-based actions under chapter 43 and related eligibility and processes are covered in 5 U.S.C. 4303. Section 4303(e) defines when an employee is entitled to appeal rights to MSPB. Notably, chapter 43 crossreferences chapter 75, providing that any employee who is a preference eligible, in the competitive service, or covered by subchapter II of chapter 75, and who has been reduced in grade or removed under section 4303 is entitled to appeal the action to MSPB under 5 U.S.C. 7701. Under 5 U.S.C. 4305, OPM may issue regulations to carry out subchapter I of chapter 43. OPM proposes the following changes to 5 CFR part 752: Part 752—Adverse Actions, Subpart B As a preliminary matter, subpart B of part 752 applies to suspensions for 14 days or less. Chapter 75 of title 5, U.S. Code, provides a straightforward process for agencies to use in adverse actions involving suspensions of this duration. The proposed changes conform this subpart with statutory language to clarify which employees are covered by subpart B when an agency decides to take an action under this subpart for such cause as will promote the efficiency of the service. Section 752.201 Coverage. Section 752.201(b) outlines which employees are covered by subpart B. OPM is proposing to modify the language in § 752.201(b) to further clarify when an employee has or retains E:\FR\FM\18SEP1.SGM 18SEP1 lotter on DSK11XQN23PROD with PROPOSALS1 Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Proposed Rules coverage under the procedures of this subpart. OPM proposes to revise subpart B of part 752 to conform to the decisions of the Federal Circuit in Van Wersch v. Department of Health & Human Services, 197 F.3d 1144 (Fed. Cir. 1999), and McCormick v. Department of the Air Force, 307 F.3d 1339 (Fed. Cir. 2002). These cases now guide the way MSPB applies 5 U.S.C. 7511(a)(1), which defines employees who have the right to appeal major adverse actions, such as removals, to MSPB. Van Wersch addressed the definition of ‘‘employee’’ for purposes of nonpreference eligibles in the excepted service and, a few years later, McCormick addressed the meaning of ‘‘employee’’ for purposes of the competitive service. As explained supra, section 7511(a)(1) states that ‘‘employees’’ include individuals who meet specified conditions relating to the duration of their service or, for nonpreference eligibles, relating to their probationary or trial period status. The Federal Circuit explained that the word ‘‘or,’’ here, refers to alternatives: some individuals who traditionally had been considered probationers with limited rights are actually entitled to the same appeal rights afforded to nonprobationers if the individuals meet the other requirements of section 7511(a)(1), namely (1) their prior service is ‘‘current continuous service,’’ (2) the current continuous service is in the ‘‘same or similar positions’’ for purposes of nonpreference eligibles in the excepted service, and (3) the total amount of such service meets a one or two-year requirement, and was not in a temporary appointment limited to one or two years, depending on the service.115 In a prior rulemaking,116 OPM modified its regulations for appealable adverse actions in 5 CFR part 752, subpart D, to align with Van Wersch and McCormick and statutory language. OPM has consistently advised agencies regarding 5 U.S.C. 7501 in light of the Federal Circuit’s interpretation of similar statutory language in 5 U.S.C. 7511. In this rule, OPM proposes to modify language in 5 CFR 752.201(b)(1) to conform with the statutory language in 5 U.S.C. 7501. OPM’s proposed revision to § 752.201(b)(1) prescribes that, even if an employee in the competitive service who has been suspended for 14 days or less is serving a probationary or trial period, the 115 See McCormick, 307 F.3d at 1341–43; Van Wersch, 197 F.3d at 1151–52. 116 OPM, ‘‘Career and Career-Conditional Employment and Adverse Actions,’’ 73 FR 7187 (Feb. 7, 2008). VerDate Sep<11>2014 17:00 Sep 15, 2023 Jkt 259001 employee retains the procedural rights provided under 5 U.S.C. 7503 if the individual has completed one year of current continuous employment in the same or similar position under other than a temporary appointment limited to one year or less. OPM also proposes to amend § 752.201(b)(1) through (b)(6) to clarify that individuals retain their status as covered employees if they are moved involuntarily from the competitive service to the excepted service, unless specifically prohibited by law. Finally, OPM proposes to add a new 5 CFR 752.201(c)(7) to further clarify that employees in positions determined to be of a confidential policydetermining, policy-making, or policyadvocating character as defined in 5 CFR 210.102 are excluded from coverage under subpart B of part 752 because, as explained infra, Congress intended these positions to mean noncareer, political appointments. Part 752—Adverse Actions, Subpart D Subpart D of part 752 applies to removal, suspension for more than 14 days, reduction in grade or pay, or furlough for 30 days or less. This includes, but is not limited to, adverse actions based on misconduct or unacceptable performance. The proposed changes are intended to reinforce the civil service protections that apply when an agency pursues certain adverse actions for the efficiency of the service, under chapter 75. Section 752.401 Coverage. Section 752.401(c) outlines which employees are covered by subpart D. OPM is proposing to modify the language in § 752.401(c) to further clarify when an employee has or retains coverage under the procedures of this subpart. The proposed changes add language to provide that an employee who occupies a position that is moved from the competitive service into the excepted service, or from one excepted service schedule to another, is covered by the regulatory requirements for removal, suspension for more than 14 days, reduction in grade or pay, or furlough for 30 days or less. The proposed changes to § 752.401 reflect the impact of statutory requirements—namely, that once an employee meets certain conditions, the individual gains certain statutory procedural rights and civil service protections which cannot be taken away from the individual by simply moving the employee’s position into the excepted service, or within the excepted service, as long as the employee continues to occupy the same or similar PO 00000 Frm 00010 Fmt 4702 Sfmt 4702 63871 position. These proposed regulatory changes are consistent with how similar statutory rights have been interpreted by Federal courts and MSPB when employees change jobs by moving to a different Federal agency.117 In addition, OPM proposes to update § 752.401(c)(2)(ii) to reflect the repeal of 10 U.S.C. 1599e, effected December 31, 2022.118 Prior to the repeal, certain individuals hired at the Department of Defense were subject to a two-year probationary period. The repeal restores a one-year probationary period for covered Department of Defense employees. Finally, OPM proposes to modify 5 CFR 752.401(d)(2) to further clarify that political appointees intended to work on matters of a confidential policydetermining, policy-making, or policyadvocating character, as defined in § 210.102, are excluded from coverage under subpart D of part 752. B. Positions of a Confidential, PolicyDetermining, Policy-Making, or PolicyAdvocating Character OPM proposes to amend 5 CFR part 210 (Basic Concepts and Definitions (General)), to add a definition for the terms ‘‘confidential, policy-determining, policy-making, or policy-advocating’’ and ‘‘confidential or policydetermining.’’ Positions of this nature are excepted from the chapter 75 protections described above. OPM proposes to define these terms to make explicit OPM’s interpretation of this exception in 5 U.S.C. 7511(b), which is that Congress intended to except from chapter 75’s civil service protections individuals in positions of a character exclusively associated with a noncareer, political appointment that is both (a) identified by its close working relationship with the President, head of an agency, or other key appointed officials who are responsible for furthering the goals and policies of the President and the Administration, and (b) that carries no expectation of continued employment beyond the presidential administration during which the appointment occurred. Specifically, OPM proposes to add this definition for ‘‘confidential, policydetermining, policy-making, or policyadvocating’’ and ‘‘confidential or policydetermining’’ to 5 CFR 210.102, which applies throughout OPM’s Civil Service Regulations in 5 CFR chapter I, subchapter B. OPM is proposing to define these terms as descriptors for the 117 See, e.g., McCormick, 307 F.3d at 1341–43; Greene v. Def. Intel. Agency, 100 M.S.P.R. 447 (2005). 118 See Public Law 117–81, Sec. 1106(a)(1). E:\FR\FM\18SEP1.SGM 18SEP1 lotter on DSK11XQN23PROD with PROPOSALS1 63872 Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Proposed Rules positions held by noncareer, political employees because the terms are currently used in the regulations to describe, among other things, a ‘‘position’’ or the ‘‘character’’ of a position. OPM is also proposing conforming changes to 5 CFR 213.3301, 302.101, 432.101, 451.302, 752.201, and 752.401 to standardize the phrasing used to describe this type of position. As explained more fully later in this section, Congress has been careful to strike a balance between career employees—who are covered by civil service protections under chapter 75 because of the need for a professional civil service no matter whether they are in the competitive or excepted service— and political appointees who serve as confidential assistants and advisors to the President and to key appointed officials who have direct responsibility for carrying out the Administration’s political objectives. These political appointees are not required to compete for their positions in the same manner as career employees, serve at the pleasure of their superiors, and have no expectation of continued employment beyond the presidential administration during which their appointment occurred. When Congress created the adverse action protections under chapter 75, it excluded employees appointed by the President, with or without Senate confirmation, and employees in the excepted service ‘‘whose position has been determined to be of a confidential, policy-determining, policy-making or policy-advocating character.’’ 119 Likewise, Congress specifically excluded from the positions safeguarded against prohibited personnel practices under 5 U.S.C. 2302(a)(2)(B)(i) any position that is ‘‘excepted from the competitive service because of its confidential, policy-determining, policy-making, or policy-advocating character.’’ As explained infra, these narrow exceptions have long been interpreted to apply to noncareer, political appointees typically listed in Schedule C. Political appointees have long been considered a powerful, but narrow, cross section of Executive Branch leadership. These positions ‘‘are relatively few in number’’ and consist ‘‘of only the highest positions,’’ 120 and, in practice, a limited number of confidential staff to support the work of the individuals in such positions. 119 See 5 U.S.C. 7511(b)(2). ‘‘Report of the President’s Committee, Administrative Management in the Government of the United States,’’ p. 8 (Jan. 1937). 120 See VerDate Sep<11>2014 17:00 Sep 15, 2023 Jkt 259001 The context in which the CSRA was enacted bolsters the interpretation that ‘‘confidential, policy-determining, policy-making, or policy-advocating’’ positions, and their exclusion from civil service protections, refers to political appointees and not career civil servants. Congress revised parts of the CSRA immediately following the Supreme Court’s decision in Elrod v. Burns,121 where the Court addressed the constitutionality of political patronagebased dismissals from government employment under the First Amendment. The Court explained that ‘‘a nonpolicymaking, nonconfidential government employee’’ cannot be ‘‘discharged or threatened with discharge from a job that he is satisfactorily performing upon the sole ground of his political beliefs.’’ 122 Consistent with this background, the CSRA’s legislative history explains the exclusion for ‘‘confidential, policydetermining, policy-making, or policyadvocating’’ employees from section 7511 as ‘‘an extension of the exception for appointments confirmed by the Senate’’ and covering political appointee positions, i.e., those currently placed in Schedule C (positions at GS– 15 and below) or filled by Non-career Executive Assignment (GS–16, –17, and –18).123 It states that ‘‘[t]he concept of tenure and protection against dismissal is contrary to the confidential relationship of incumbent and supervising official, and the commitment to Administration policy objectives required by those filling such positions.’’ 124 Congress made significant amendments to section 7511 through the Civil Service Due Process Amendments Act of 1990, which expanded MSPB jurisdiction to excepted service employees who historically were not entitled to adverse action rights. The legislative history of the 1990 Act confirms that the intent was to expand appeal rights for excepted service employees but retain the exclusion for political appointees. It states: 121 427 U.S. 347, 354 (1976) (explaining that ‘‘strong discontent with the corruption and inefficiency of the patronage system of public employment eventuated in the Pendleton Act’’). 122 Id. at 375 (1975) (Stewart and Blackmun, JJ., concurring in the judgment); see, e.g., Carver v. Dennis, 104 F.3d 847, 850 n.5 (6th Cir. 1997) (explaining that ‘‘[t]he three-justice plurality opinion and two-justice concurrence in Elrod’’ so held). 123 S. Rep. No. 95–969, at 48 (1978), reprinted in 1978 U.S.C.C.A.N. 2723, 2770. 124 Legislative History of the Civil Service Reform Act of 1978, Committee on Post Office and Civil Service, House of Representatives, Volume No. II, Committee Print No. 96–2, 96th Congress, 1st Session (Mar. 17, 1979). PO 00000 Frm 00011 Fmt 4702 Sfmt 4702 The bill generally extends procedural rights to attorneys, teachers, chaplains, and scientists, but not to presidential appointees. . . . [T]he key to the distinction between those to whom appeal rights are extended and those to whom such rights are not extended is the expectation of continuing employment with the Federal Government. Lawyers, teachers, chaplains, and scientists have such expectations; presidential appointees and temporary workers do not. . . . Schedule C, positions of a confidential or policy-determining character. . . . are political appointees who are specifically excluded from coverage under section 7511(b) of title 5. H.R. 3086 does not change the fact that these individuals do not have appeal rights. The bill explicitly denies procedural protections to presidential appointees, individuals in Schedule C positions and individuals appointed by the President and confirmed by the Senate. Employees in each of these categories have little expectation of continuing employment beyond the administration during which they were appointed. They explicitly serve at the pleasure of the President or the presidential appointee who appointed them.125 In a case concerning the application of 5 U.S.C. 2302(a)(2)(B)(i) (related to prohibited personnel practices), which also contains an exception for positions of a ‘‘confidential, policy-determining, policy-making, or policy-advocating character,’’ MSPB interpreted this legislative history to indicate that the exclusion of civil service protections at section 2302(a)(2)(B)(i) was intended to cover ‘‘political appointees,’’ as is the case with section 7511(b)(2). In O’Brien v. Office of Independent Counsel, 74 M.S.P.R. 192 (1997), the Board stated: Schedule C, the only category to include positions of a confidential or policydetermining character, authorizes appointments to positions ‘‘which are policydetermining or which involve a close and confidential working relationship with the head of the agency or other key appointed officials.’’ 5 CFR 213.3301. This regulation, while using the same language as 5 U.S.C. 2302(a)(2)(B), adopts a narrow definition of a position of ‘‘a confidential or policydetermining nature,’’ i.e., involving ‘‘a close and confidential working relationship with the head of an agency or other key appointed officials.’’ 5 CFR 213.3301(a). The word ‘‘confidential’’ in that regulation does not necessarily refer to matters that are to be kept secret but instead to the nature of the relationship between the employee and the head of the agency or other key appointed officials. Further support for the notion that the terms of the exception found at 5 U.S.C. 2302(a)(2)(B)(i) are a shorthand way of describing ‘‘political appointee’’ positions can be found in the legislative history of the 1990 Civil Service Due Process Amendments 125 H.R. Rep. No. 101–328, 4–5 (1989), reprinted in 1990 U.S.C.C.A.N. 695, 698–99. E:\FR\FM\18SEP1.SGM 18SEP1 Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS1 to the CSRA, which extended adverse action appeal rights to a broader class of excepted service employees than had previously been covered. 5 U.S.C. 7511. The Act retained the exclusions found at 5 U.S.C. 7511(b), however, and the legislative history describes excepted service employees as those in either Schedule A, Schedule B, or Schedule C and states that Schedule C positions of a confidential or policy-determining character are ‘‘political appointees who are specifically excluded from coverage under 5 U.S.C. 7511(b).’’ H.R.Rep. No. 328, 101st Cong., 2d Sess. 4–5 (1989), reprinted in 1990 U.S.C.C.A.N. 698–99. Although the Board in certain cases has considered the question of who is excluded under 5 U.S.C. 7511(b) as a ‘‘confidential, policy-determining, policymaking or policy-advocating’’ employee, it did not resolve those cases on that issue. See Thompson v. Department of Justice, 61 M.S.P.R. 364, 368 (1994); Briggs v. National Council on Disability, 60 M.S.P.R. 331, 333– 36 (1994). Both 5 U.S.C. 2302(a)(2)(B)(i) and 5 U.S.C. 7511(b) use the phrase ‘‘confidential, policy-determining, policy-making, or policyadvocating’’ to exclude certain positions. We know of no reason why Congress would intend that it be interpreted differently in each of the two parts of Title 5.126 Improperly applying the term ‘‘of a confidential, policy-determining, policy-making, or policy-advocating character’’ to describe positions held by career employees, who have an expectation of continuing employment beyond the presidential administration during which they were appointed, and to strip them of civil service protections, would be contrary to congressional intent and decades of applicable case law and practice. Congress carefully balanced the need for long-term employees who have knowledge of the history, mission, and operations of their agencies with the need of the President for individuals in positions who will ensure that the specific policies of the Administration will be pursued. An ‘‘excessive preoccupation with the meaning of [this] term in isolation distorts the purpose of the exception.’’ 127 The term has long been interpreted as ‘‘a shorthand way of describing positions to be filled by political appointees,’’ including any appointment required or authorized to be made by the President, or by an agency head when there are ‘‘indications that the appointment was intended to be, or in fact was, made with any political considerations in mind.’’ 128 In this proposed rule, therefore, OPM is making explicit this longtime, 126 74 M.S.P.R. at 207–08. 127 Special Counsel v. Peace Corps, 31 M.S.P.R. 225, 231–32 (1986). 128 O’Brien v. Off. of Indep. Counsel, 74 M.S.P.R. 192, 206 (1997) (quoting Special Counsel, 31 M.S.P.R. at 231). VerDate Sep<11>2014 17:00 Sep 15, 2023 Jkt 259001 consistent understanding that positions of a ‘‘confidential, policy-determining, policy-making, or policy-advocating character’’ refer to noncareer, political appointments. Specifically, OPM is proposing to modify 5 CFR 210.102 to define the terms ‘‘Confidential, policydetermining, policy-making, or policyadvocating’’ and ‘‘Confidential or policy determining’’ as they are used through the Civil Service Regulations in 5 CFR chapter I, subchapter B, to describe positions that are: ‘‘of a character exclusively associated with a noncareer, political appointment that is identified by its close working relationship with the President, head of an agency, or other key appointed officials who are responsible for furthering the goals and policies of the President and the Administration, and that carries no expectation of continued employment beyond the presidential administration during which the appointment occurred.’’ C. Agency Procedures for Moving Employees OPM proposes revising 5 CFR part 302 (Employment in the Excepted Service) to require that Federal agencies follow specific procedures upon moving positions from the competitive service to the excepted service or, if the position is already in the excepted service, to a different excepted service schedule following a direction from the President, Congress, OPM, or their designees.129 This proposed rule describes the procedures an agency must follow before taking these actions and outlines the notice requirements that apply when the positions are encumbered. Further, and consistent with the civil service protections outlined supra, OPM proposes to modify 5 CFR part 212 (Competitive Service and Competitive Status) regarding the effect of an employee’s competitive service status when the employee’s position is moved to the excepted service. 1. Procedures for Moving Positions In enacting the CSRA, Congress made certain findings relevant to the proposed changes discussed here. It noted that the merit system principles, many of which 129 There are only three possible sources of a direction to move a position from the competitive service to the excepted service or from one schedule of the excepted service to another. The direction may come from the President, 5 U.S.C. 3302; from OPM, id.; see 5 CFR part 6.1(a); or from Congress, via an enactment that creates an exception to the default rules established under 5 U.S.C. 3301 and 3302. If an agency purported to act at its own initiative, that effort would be unauthorized and thus contrary to law. PO 00000 Frm 00012 Fmt 4702 Sfmt 4702 63873 have existed since 1883,130 ‘‘shall govern in the competitive service’’ and that these principles, and the prohibited personnel practices should be ‘‘expressly stated’’ in statute to ‘‘furnish guidance to Federal agencies.’’ 131 As explained previously, it then proceeded to divide functions previously performed by the CSC among OPM, MSPB, and OSC. It found that the function of filling positions in the Executive Branch should be delegated to agencies ‘‘in appropriate cases’’ but that OPM should maintain control and oversight ‘‘to protect against prohibited personnel practices and the use of unsound management practices by the agencies.’’ 132 As noted in section I.E., the CSRA, as codified, imposed upon OPM both authority and an obligation to, among other things, ‘‘execut[e], administer[ ], and enforce[ ] . . . the civil service rules and regulations of the President and the Office and the laws governing the civil service.’’ 133 The President, pursuant to his own authorities under the CSRA, as codified at 5 U.S.C. 3301 and 3302, has also delegated a variety of these authorities to OPM concerning execution, administration, and enforcement of the competitive and excepted services. Among other things, the President has authorized OPM to ‘‘promulgate and enforce regulations necessary to carry out the provisions of the Civil Service Act and the Veterans’ Preference Act, as reenacted in title 5, United States Code, the Civil Service Rules, and all other statutes and Executive orders imposing responsibilities on the Office,’’ 134 and to collect information and records regarding matters falling within the civil service laws, rules, and regulations.135 OPM has concluded that imposing additional safeguards when agencies move positions from one service to another, or one excepted service schedule to another, will help OPM determine whether appointments to the competitive service are ‘‘not practicable,’’ 136 protect against prohibited personnel practices, secure appropriate enforcement of the law governing the civil service, and avoid unsound management practices with respect to the civil service. It is important to the effective administration of the civil service that exceptions from the competitive service norm be 130 See supra note 38. Law 95–454, sec. 3.2. 132 Id. at sec. 3.5 133 5 U.S.C. 1103(a)(5). 134 5 CFR 5.1, 6.1, 6.2. 135 5 CFR 5.4. 136 5 CFR 6.1. 131 Public E:\FR\FM\18SEP1.SGM 18SEP1 63874 Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS1 enforced within the terms of the specific authority creating them and that employees who are said to have voluntarily accepted positions that affect their rights both understand that the move is, in fact, voluntary and that they are aware of the potential consequences of those moves. Some background demonstrates why these proposed changes are important. Positions in the Federal Government are, by default, placed in the competitive service. As noted by the D.C. Circuit, 5 U.S.C. 3301 and 3302 ‘‘make it clear . . . that ‘competitive service [is] the norm rather than the exception.’ ’’ 137 The President, however, is authorized by Congress to provide for ‘‘necessary exceptions of positions from the competitive service’’ whenever warranted by ‘‘conditions of good administration.’’ 138 The President, in turn, has delegated to OPM the authority to except positions from the competitive service, which means either the President or OPM may except positions, as situations warrant.139 It has been a long-standing practice under these authorities for the President, and for OPM exercising its delegated authority, to permit positions that would otherwise be in the competitive service to be filled through excepted service appointments where conditions of good administration warrant exceptions from competitive examining procedures (e.g., for people with disabilities and students). In some cases, positions have been placed in the excepted service because it is not practicable to examine in light of the position itself. For example, a perennial rider to OPM appropriations prohibits OPM—and before that, its predecessor CSC—from examining for attorney positions.140 This appropriations bar 137 Nat’l Treasury Employees Union v. Horner, 854 F.2d 490, 493 (D.C. Cir. 1988); accord, Dean v. Off. of Personnel Mgmt., 115 M.S.P.R. 157, ¶ 15 (2010). 138 5 U.S.C. 3302. 139 5 CFR 6.1(a). 140 See e.g., Treasury, Postal Service and General Appropriation Act, 1982, H.R. 4121, 97th Cong., 1st Sess. (1981); Fiorentino v. United States, 607 F.2d 963, 965–66 (Ct. Cl. 1979) (‘‘It has long been known . . . that the Congress has been always opposed to Civil Service Commission (CSC) testing and examining of attorney positions in the Executive branch under the competitive system. . . . Defendant cites as the enacted expression of this [opposition] the annual prohibition against appropriated funds of the CSC being used for the Commission’s Legal Examining Unit. An unbroken series of such clauses runs from the Act of June 26, 1943, Pub. L. 90, 57 Stat. 169, 173, to the Act of October 10, 1978, Pub. L. 95–429, 92 Stat. 1001, 1007. The President had set up a Board of Legal Examiners (Legal Examining Unit), by E.O. 9358, July 1, 1943. By E.O. 9830, 12 FR 1259 (1947), the President in s 6.1 provided that positions in Schedule A and B should be excepted from the VerDate Sep<11>2014 17:00 Sep 15, 2023 Jkt 259001 makes examinations not practicable, and attorney positions have been placed in Schedule A of the excepted service since at least 1947.141 In all these cases, OPM is subject to the standard that any departure from the competitive norm must be warranted by conditions of good administration. Traditionally, the President has exercised this authority through Executive order.142 OPM has also authorized excepted service hiring to address urgent needs of agencies,143 such as the need to bring on staff quickly to respond to the COVID–19 pandemic.144 When OPM exercises such authority, it determines the characteristics of the position make it impracticable to use the processes associated with conducting a competitive examination.145 For example, the qualification requirements established for competitive service positions cannot be used because the series has been newly created. In other instances, OPM determines a full-blown open competition is not conducive to filling certain positions because the applicant pool is very narrow. Sometimes, excepted service determinations are prescriptive, and agencies need only execute the operational tasks necessary to implement the direction of the President or OPM (for example, Schedule A attorneys, Schedule E administrative law judges, or any number of other positions specifically identified for excepted service status, such as through Executive Orders 5560 and 6655). In other circumstances, either the President or OPM establishes standards and conditions for agencies to apply in deciding which positions should be moved into the excepted service (for example, Schedule D appointments for students and recent graduates and competitive service. Section 6.4 is Schedule A. Item IV therein is ‘attorneys.’ Whether the legislative intent is obvious to ‘outsiders,’ it certainly has been to the Executive branch, which has never, since May 1, 1947, put attorney positions anywhere but in the excepted service.’’). 141 Fiorentino, 607 F.2d at 965–66. 142 See, e.g., E.O. 13562, 75 FR 82583 (Dec. 30, 2010) (establishing Schedule D for the Pathways program); E.O. 13843, 83 FR 32755 (July 10, 2018) (establishing Schedule E for administrative law judges). 143 5 CFR part 213. 144 See OPM Memorandum, ‘‘Coronavirus (COVID–19) Schedule A Hiring Authority,’’ (March 20, 2020). 145 Even in those cases, however, OPM has provided that ‘‘the principle of veteran preference’’ must be followed ‘‘as far as administratively feasible.’’ 5 CFR 302.101(c). In practice, this standard has been held to be satisfied by using veterans’ preference as a plus factor, and thus a tiebreaker, in comparing candidates at similar levels of knowledge, skills, and abilities. See Patterson v. Dep’t of Interior, 424 F.3d 1151 (Fed. Cir. 2005). PO 00000 Frm 00013 Fmt 4702 Sfmt 4702 Schedule A appointments related to the COVID–19 pandemic). In the latter category, the determination of whether to place a position in the excepted service has typically occurred prior to the position being filled. In other words, with the notable exceptions of Schedule E, established by Executive Order 13843,146 and of the prior Schedule F established by the now revoked Executive Order 13957, these are intended to be used as hiring authorities. It is notable that, in the case of the creation of Schedule E, the President noted the exigency presented by pending litigation as one of the motivations, and expressly provided that incumbents who were in the competitive service as of the date of enactment, would remain in their current positions.147 When the President or OPM has chosen to establish standards for agencies to apply in creating new positions or moving existing positions into the excepted service (rather than specifically directing that certain positions be excepted service positions), they have also routinely required agencies to follow certain procedures subject to OPM oversight. With respect to the now-revoked Schedule F, Executive Order 13957 required agencies to petition OPM to move positions into Schedule F, and provided for the petition to ‘‘include a written explanation documenting the basis for the agency head’s determination that such position should be placed in Schedule F.’’ 148 Section 6 of that Executive order directed agencies to ‘‘establish rules to prohibit the same personnel practices prohibited by section 2302(b) of title 5, United States Code, with respect to any employee or applicant for employment in Schedule F of the excepted service.’’ 149 The rules for the Pathways programs,150 established by President Barack Obama in Executive Order 13562, are more prescriptive. For example, under 5 CFR part 362, agencies seeking to use the Pathways programs to hire students and recent graduates into excepted service positions must adhere to various policies and procedures. Among other things, agencies must enter into a memorandum of understanding with OPM that addresses several obligations and procedures that are conditions of the agency’s authority to use the 146 83 FR 32755 (July 10, 2018). FR 32755–56. FR 67633. 149 85 FR 67634 150 OPM has proposed revisions to the rules governing the Pathways programs. 88 FR 55586 (Aug. 16, 2023). 147 83 148 85 E:\FR\FM\18SEP1.SGM 18SEP1 Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Proposed Rules programs. There are rules governing how agencies must use the Pathways programs as part of a larger workforce planning effort, the procedures that are conditions of the agency’s use of the programs, how Pathways positions are to be announced, and various other rules applying to eligibility for the program.151 OPM has the authority to cap Pathways hiring 152 and can even shut down an agency’s ability to use Pathways altogether.153 Based on this history and experience, OPM is proposing to establish appropriate safeguards—i.e., a floor of procedures—that would apply whenever an agency is executing discretion to move any position or positions from the competitive service to the excepted service, or from one excepted service schedule to another, under authority executed by the President or OPM. In each instance, the agency would have to adhere to the following procedures: 1. Identify the types, numbers, and locations of positions that the agency proposes to move into or within the excepted service; 2. Document the basis for its determination that movement of the position or positions is consistent with the standards set forth by the President, Congress, OPM, or their designees, as applicable; 3. Obtain certification from the agency’s Chief Human Capital Officer (CHCO) 154 that the documentation is sufficient and movement of the position or positions is both consistent with the standards set forth by the President, Congress, OPM, or their designees, as applicable, and advances sound merit system principles; 4. Submit the CHCO certification and supporting documentation to OPM (to 151 See 5 CFR 362.105. 5 CFR 362.108. 153 See 5 CFR 362.104(b). 154 The Chief Human Capital Officers Act of 2002, enacted as part of the Homeland Security Act of 2002, established the role of the CHCO in the Federal Government. CHCOs advise and assist in carrying out agencies’ responsibilities for selecting, developing, training, and managing a high-quality, productive workforce in accordance with merit system principles. See 5 U.S.C. 1401–02. They are also responsible for ‘‘implement[ing] the rules and regulations of the President, the Office of Personnel Management (OPM), and the laws governing the civil service within an agency.’’ 5 CFR 250.202. OPM has delegated various responsibilities directly to CHCOs. See e.g., OPM, ‘‘Personnel Management in Agencies’’ 81 FR 89357 (Dec. 12, 2016) (tasking CHCOs with developing a Human Capital Operating Plan); OPM, ‘‘Human Resources Management in Agencies,’’ 73 FR 23012 (Apr. 28, 2008) (implementing regulations for agencies and CHCOs regarding the strategic management of the Federal workforce); 5 CFR 337.201 (giving CHCOs the ability to request direct-hire authority when OPM determines there is a hiring need). lotter on DSK11XQN23PROD with PROPOSALS1 152 See VerDate Sep<11>2014 17:00 Sep 15, 2023 Jkt 259001 include the types, numbers, and locations of positions) in advance of using the excepted service authority; 5. Use the excepted service authority only after obtaining written approval from the OPM Director to do so; and 6. Initiate any hiring actions under the excepted service authority only after OPM publishes any such authorizations in the Federal Register, to include the types, numbers, and locations of the positions moved to the excepted service. Specifically, OPM proposes the following regulatory changes to 5 CFR parts 212 and 302: Part 302—Employment in the Excepted Service, Subpart F OPM is proposing a new subpart F titled, ‘‘Moving Positions into and Within the Excepted Service.’’ In the event of a direction by the President, Congress, OPM, or their designees, to move a position from the competitive service to the excepted service, or from one excepted service schedule to the same or similar position in another, this new subpart would describe the processes and procedures an agency must follow to carry out such a move. Section 302.601 ‘‘Scope.’’ Proposed 5 CFR 302.601 Scope would describe the scope of the positions that would be subject to the new procedures in subpart F. Section 302.602(a) ‘‘Basic Requirements.’’ Proposed 5 CFR 302.602(a) Basic Requirements would require an agency to take certain steps after a direction from the President, Congress, OPM or their designees (hereafter ‘‘the directive’’) to move a position from the competitive service to the excepted service, or from one excepted service schedule to the same or similar position in another. Proposed § 302.602(a)(1) states that, if the directive explicitly delineates the specific positions that are covered, the agency need only list the positions moved in accordance with that list, and their location within the organization. Proposed § 302.602(a)(2) states that, if the directive requires the agency to select the positions to be moved pursuant to criteria articulated in the directive, then the agency must, upon OPM’s request, provide a list of the positions to be moved in accordance with those criteria, those positions’ location in the organization, and an explanation of how these criteria are relevant. Proposed § 302.602(a)(3) states that, if the directive confers discretion on the agency to establish objective criteria for identifying the positions to be covered, or which specific slots of a particular PO 00000 Frm 00014 Fmt 4702 Sfmt 4702 63875 type of position the agency intends to move, then the agency, in addition to supplying a list and the locations in the organization, must supply the objective criteria to be used and an explanation of how they were developed. Proposed § 302.602(b) describes the steps agency management must take, independent of the impacted employees, with respect to such moves. Proposed § 302.602(b)(1) requires an agency to identify the types, numbers, and locations of positions that the agency proposes to move into the excepted service. Proposed § 302.602(b)(2) requires the agency to document the basis for its determination that movement of the position or positions is consistent with the standards set forth by the President, Congress, OPM, or their designees as applicable. Proposed § 302.602(b)(3) requires the agency to obtain certification from the agency’s CHCO that the documentation is sufficient and movement of the position or positions is both consistent with the standards set forth by the President, Congress, OPM, or their designees as applicable, and with merit system principles. Proposed § 302.602(b)(4) requires the agency to submit the CHCO certification and supporting documentation to OPM (to include the types, numbers, and locations of positions) in advance of using the excepted service authority. Proposed § 302.602(b)(5) specifies that OPM shall then review the CHCO certification and supporting documentation, and the agency shall be able to use the excepted service authority only after obtaining written approval from the OPM Director to do so. Proposed § 302.602(b)(6) specifies that OPM shall publish any such authorizations in the Federal Register, to include the types, numbers, and locations of the positions moved to the excepted service and that the agency is not permitted to initiate any hiring actions under the excepted service authority until such publication occurs. 2. Notice Rights for Encumbered Positions OPM is proposing that additional rules would apply when one or more of the positions the agency wishes to move from the competitive service to the excepted service, or from one excepted service schedule to another, is encumbered by an employee. In that case, no less than 30 days prior to moving the position, the agency must provide written notification to the employee of the intent to move the position. The notice must provide the E:\FR\FM\18SEP1.SGM 18SEP1 63876 Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS1 employee with the following information: (1) the authority for moving the position; (2) the rationale for moving the position; (3) the proposed timing of moving the position; and (4) a representation that the employee maintains their civil service status and any accrued protections notwithstanding the movement of the position. Proposed § 302.602(c) describes the interactions and communication an agency must have with an employee whose position is being moved from the competitive service and placed in the excepted service, other than in Schedules D or E, or with an excepted service employee whose position is moved to another excepted service schedule, other than Schedules D or E.155 Proposed § 302.602(c)(1) requires that, 30 days prior to the effective date an agency intends to move a position, the agency must provide written notification to the employee of the intent to move the position. Proposed § 302.602(c)(2) requires that the written notification required by § 302.602(c)(1) inform the employee that the employee maintains their civil service status and any accrued protections notwithstanding the movement of the position. 155 OPM is omitting Schedules D and E from this proposed regulatory change because these schedules, for the Pathways programs participants and Administrative Law Judges (ALJs), see 5 CFR 6.2, respectively, have specific and unique requirements regarding eligibility and entrance into these positions. In particular, the Pathways programs, which were created by the President, not OPM, already have highly reticulated schemes for conversion of the appointee from the excepted service to the competitive service following the successful conclusion of the initial excepted service appointment. It is unlikely that the initial timelimited appointments to the excepted service would be appropriate vehicles for conversion to a different excepted service position, and, in any event, the incumbent would likely not yet have accrued adverse action rights in the excepted service positions they encumbered. Even if such rights had accrued, these appointees would enjoy such rights only for the balance of the original time-limited appointment. ALJ appointments were changed in light of ALJs’ significant responsibilities in ‘‘taking testimony,’’ ‘‘conducting trials,’’ ‘‘enforcing compliance with their orders,’’ and in some cases issuing ‘‘the final word [for] the agencies they serve.’’ See E.O. 13843. Those specific duties, carried out with ‘‘significant discretion,’’ combined with a desire to eliminate any constitutional concerns regarding the method of ALJ appointments, were the reasons that ALJs were placed in the excepted service by the President as a matter of ‘‘sound policy,’’ which allowed agencies to ‘‘assess critical qualities in ALJs candidates’’ to ‘‘meet the particular needs of the agency,’’ such as subject matter expertise relevant to the agency’s work. Id. In addition, special chapter 75 procedures apply to incumbent ALJs, and they can be removed from ALJ positions only by the employing agency at the conclusion of a specified proceeding at MSPB. VerDate Sep<11>2014 17:00 Sep 15, 2023 Jkt 259001 Of course, employees who are in the competitive service—and who the agency is not planning to move—may wish to apply for a new position in the excepted service and potentially relinquish accrued rights (such as a voluntary move from a competitive service position to a position as a Schedule C political appointee). In that situation, agencies must continue to comply with longstanding rules— codified at 5 CFR 302.102(b)—providing for employees to be given notice that they are leaving the competitive service and requiring that employees provide acknowledgment that they understand that they are voluntarily leaving the competitive service to accept an appointment in the excepted service.156 3. Appeal Rights for Encumbered Positions OPM proposes further amending 5 CFR part 302 to establish that a competitive service employee whose position is moved into the excepted service, or an excepted service employee whose position is moved into a different schedule of the excepted service, may directly appeal to MSPB if the entity perpetuating the move purports, contrary to these regulations, to strip the employee of the status and civil service protections they had already accrued. This rulemaking would not apply to situations where the employee applies for, and is selected for the new position, knowing that acceptance of the position voluntarily relinquishes such rights. As explained previously in section I.E., under 5 U.S.C. 1103(a)(5), OPM has broad authority to execute, administer, and enforce civil service rules and regulations. Pursuant to its statutory authority, including under 5 U.S.C. 7701, 7511(c), and the President’s delegation of authority, OPM is authorized to create a right of appeal to MSPB by regulation. MSPB, in turn, has the responsibility to ‘‘hear, adjudicate, or provide for the hearing or adjudication, of all matters within the jurisdiction of the Board under . . . law, rule or regulation,’’ and an employee may appeal to the Board ‘‘from any 156 Under 5 CFR 302.102(b), when an employee serving under a temporary appointment in the competitive service is selected for an excepted appointment, the agency must: 1. Inform the employee that, because the position is in the excepted service, it may not be filled by a competitive appointment, and that acceptance of the proposed appointment will take him/her out of the competitive service while he/she occupies the position; and 2. Obtain from the employee a written statement that he/she understands he/she is leaving the competitive service voluntarily to accept an appointment in the excepted service. PO 00000 Frm 00015 Fmt 4702 Sfmt 4702 action which is appealable to the Board under any law, rule, or regulation.’’ 157 Both the Federal Circuit and MSPB have consistently affirmed the principle that MSPB’s enabling statute gives it appellate jurisdiction over actions that are made appealable to the Board by OPM regulation and that where an appeal is solely by regulation, the regulation circumscribes the scope of the appeal.158 OPM, pursuant to its authority, has long conferred MSPB appeal rights via regulations under title 5, Code of Federal Regulations. For instance: 1. Section 300.104—A job candidate who believes that an employment practice which was applied to the candidate by OPM violates a basic requirement in § 300.103 is entitled to appeal to MSPB under the provisions of the Board’s regulations. 2. Section 302.501—An individual who is covered by 5 U.S.C. 8101(1) and is entitled to priority consideration under 5 CFR part 302 may appeal a violation of the individual’s restoration rights to MSPB under the provisions of the Board’s regulations by presenting factual information that the individual was denied restoration rights because of the employment of another person. 3. Section 315.806—An employee may appeal to MSPB in writing an agency’s decision to terminate the employee during their probationary period, if the employee alleges the termination was based on partisan political reasons, marital status, or improper procedure. 4. Section 315.908—An employee who alleges that an agency action demoting an employee for not satisfactorily completing their supervisory probationary period may appeal to MSPB if the employee alleges the agency action was based on partisan political affiliation or marital status. 5. Section 351.901—An employee who has been furloughed for more than 30 days, separated, or demoted by a reduction in force action may appeal to MSPB. 6. Section 352.209—When an agency denies reemployment to a person claiming reemployment rights under subpart B of part 352, the agency shall inform the person of that denial by a written notice. In the same notice, the agency shall inform the person of the right to appeal to MSPB under the provisions of the Board’s regulations. 157 5 U.S.C. 1204(a)(1), 7701(a). Roberto v. Dep’t of the Navy, 440 F.3d 1341, 1350 (Fed. Cir. 2006); Folio v. Dep’t of Homeland Sec., 402 F.3d 1350, 1355 (Fed. Cir. 2005); Dowd v. United States, 713 F.2d 720, 722– 23 (Fed. Cir. 1983); Gaxiola v. Dep’t of the Air Force, 6 M.S.P.R. 515, 519 (1981). 158 See E:\FR\FM\18SEP1.SGM 18SEP1 lotter on DSK11XQN23PROD with PROPOSALS1 Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Proposed Rules 7. Section 352.313—An employee may submit an appeal to MSPB alleging the agency has failed to comply with certain reemployment rights. 8. Section 352.508—An employee may submit an appeal to MSPB alleging the agency has failed to comply with certain reinstatement rights. 9. Section 352.707—If an agency denies reemployment to a person claiming reemployment rights under subpart I of part 352, the agency shall inform the individual of that denial and of the reasons therefor by a written notice. In the same notice, the agency shall inform the employee of the right to appeal to MSPB under the provisions of the Board’s regulations. 10. Section 352.807—An employee may appeal to MSPB, under the provisions of the Board’s regulations, an agency’s decision on the employee’s request for reemployment which the employee believes is in violation of subpart H of part 352. 11. Section 352.909—An applicant or an employee may submit an appeal to MSPB alleging the agency has not complied with certain reemployment rights under subpart I of part 352. 12. Section 731.501—When OPM or an agency acting under delegated authority under part 731 takes a suitability action against a person, that person may appeal the action to MSPB. Upon appeal, the Board may review the suitability determination itself, but may not review the suitability action specified as a result of that determination.159 Section 302.603 ‘‘Appeals.’’ In these proposed regulations, OPM is prescribing an MSPB appeal right for an employee whose position in the competitive service is moved to the excepted service, or whose position in the excepted service is moved into a different schedule of the excepted service, and when any such move, contrary to these regulations, purportedly strips the employee of the status and civil service protections they had already accrued. This proposed provision would not apply when the employee voluntarily relinquishes such rights by applying for and accepting a new position with different rights. Such an appeal right would, however, cover the allegation that an agency coerced the employee to voluntarily move to a new position that would require the employee to relinquish their competitive status or civil service protections. The employee may file an appeal with MSPB to have their competitive status and civil service protections reinstated, as applicable. 159 See part 731, subpart E. VerDate Sep<11>2014 17:00 Sep 15, 2023 Jkt 259001 OPM notes that an employee may choose to assert in any appeal to MSPB that the agency committed procedural error, if applicable, by failing to act in accordance with the procedural requirements of § 302.602 while effecting any placement from the competitive service into the excepted service or from the excepted service to a different schedule of the excepted service. In cases where an employee asserts procedural error by the agency, MSPB typically will determine whether the procedural error was harmful as a pre-requisite for any reversal of the agency’s action. MSPB will find that an agency error is harmful only when the record shows that it was likely to have caused the agency to reach a different conclusion.160 Part 212—Competitive Service and Competitive Status, Subpart D Section 212.401 Effect of competitive status on position. OPM is also proposing to revise the regulations in 5 CFR part 212, subpart D, § 212.401(b) regarding the effect of an employee’s competitive status on the employee’s position. As described throughout this proposed rule, OPM’s longstanding view is that Federal employees maintain the civil service status and protections that they have accrued. Indeed, since 1968, OPM has provided by rule that an employee with competitive service status (i.e., in the competitive service), at the time the employee’s position is first listed (i.e., moved) under Schedule A, B, or C of the excepted service, remains in the competitive service as long as the employee continues to occupy the position.161 OPM is proposing to update 5 CFR 212.401(b) consistent with this proposed rule, to establish that a competitive service employee whose position is first listed under any future excepted service schedule remains in the competitive service as long as the employee continues to occupy the position. OPM is proposing this update to account for the possibility of new excepted service schedules which may be established after promulgation of this 160 See 5 CFR 1201.3 (Appellate Jurisdiction); 1201.4(r) (Definitions, MSPB Practices and Procedures), 1205 (Powers and functions of the Merit Systems Protection Board); Ramey v. U.S. Postal Service, 70 M.S.P.R. 463, 467 (1996) (‘‘An [MSPB] administrative judge’s adjudication of an action not only embraces the provisions of law giving the Board jurisdiction over the action, but includes review of any other relevant provision of law, regulation or negotiated procedures as circumstances warrant.’’); Adakai v. Dep’t of Interior, 20 M.S.P.R. 196, 201 (1984) (‘‘There is no question that an agency is obligated to conform to procedures and regulations it adopts, and the Board is required to enforce such procedures.’’). 161 33 FR 12402, 12408 (Sept. 4, 1968). PO 00000 Frm 00016 Fmt 4702 Sfmt 4702 63877 rule or other efforts to move positions from the competitive service or within the excepted service. III. Regulatory Analysis A. Statement of Need On December 12, 2022, OPM received a petition from the National Treasury Employees Union (NTEU), which represents Federal workers in 34 agencies and departments,162 to amend OPM regulations in a manner that would ensure compliance with civil service protections and merit system principles for competitive service positions moved to the excepted service.163 NTEU contends in its petition that Congress has established protections for ‘‘employees’’ under chapter 75 in the competitive service and these protections create a constitutionally protected property interest in continued Federal employment. NTEU argues that no President can take away these rights, once accrued, without due process. On May 23, 2023, the Federal Workers Alliance, a coalition of 13 labor unions representing over 550,000 Federal and postal workers, wrote OPM in support of the rulemaking changes proposed by NTEU. On May 26, 2023, the American Federation of Government Employees, AFL–CIO, the largest union of Federal employees representing more than 750,000 Federal and District of Columbia workers, did the same. As discussed throughout this proposed rule, by operation of law, certain tenured Federal employees accrue a property interest in their continued employment and are entitled to adverse action rights under chapter 75 before they may be removed from career positions. Agencies are statutorily obligated to extend the specific protections codified at chapter 75 to eligible employees as defined in 5 U.S.C. 7511. OPM does not interpret chapter 75 as allowing the President, OPM, or an agency to waive these statutory requirements and OPM notes that it interprets section 7511 to preclude noncareer, political appointees under Schedule C and other statutorily specified categories of employees from accruing these procedural rights. These rules are proposed to clarify and reinforce that point. OPM has the delegated authority to exempt employees from the competitive 162 See NTEU, ‘‘Our Agencies,’’ https:// www.nteu.org/who-we-are/our-agencies. 163 See NTEU, Petition for Regulations to Ensure Compliance with Civil Service Protections and Merit System Principles for Excepted Service Positions, (Dec. 12. 2022), https://www.nteu.org/∼/ media/Files/nteu/docs/public/opm/nteupetition.pdf?la=en. E:\FR\FM\18SEP1.SGM 18SEP1 63878 Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Proposed Rules service only when ‘‘necessary’’ and warranted by ‘‘conditions of good administration.’’ 164 The rationale for creating positions in the excepted service is driven largely by specific hiring needs and a determination that appointment through the competitive service is ‘‘not practicable,’’ 165 i.e., not by considerations of stripping career employees of civil service rights. As stated above, President Trump, in the now-revoked Executive Order 13957, introduced a new conception of the scope of the phrase ‘‘confidential, policy-determining, policy-making, or policy-advocating character,’’ and sought to employ that conception to expand the category of employees excluded from adverse action procedural rights under section 7511.166 This language was derived from the description of Schedule C of the excepted service, and using that language in the way Executive Order 13957 did departed from the longstanding understanding that this exception applied only to noncareer, political appointees under Schedule C. OPM has therefore determined that a regulation interpreting this provision is warranted. The CSRA and merit system principles have informed OPM’s regulations regarding the competitive and excepted service, and employee movement between them. One of those principles is that the creation of new positions in—and movement of existing positions into—the excepted service is meant to be an exception to the normal procedure for filling positions through the procedures prescribed for the competitive service and maintaining the positions in that service thereafter. Accordingly, OPM has maintained for decades several safeguards and transparency measures associated with any such movements. These safeguards and measures may include agency reporting to OPM,167 such as in 164 5 U.S.C. 3302; 5 CFR 6.1. 5 CFR 6.1. 166 85 FR 67361–62. 167 See 5 CFR 5.1 (‘‘The Director, Office of Personnel Management, shall promulgate and enforce regulations necessary to carry out the provisions of the Civil Service Act and the Veterans’ Preference Act, as reenacted in title 5, United States Code, the Civil Service Rules, and all other statutes and Executive orders imposing responsibilities on the Office.’’); id. 5.4 (‘‘When required by the Office, the Merit Systems Protection Board, or the Special Counsel of the Merit Systems Protection Board, or by authorized representatives of these bodies, agencies shall make available to them, or to their authorized representatives, employees to testify in regard to matters inquired of under the civil service laws, rules, and regulations, and records pertinent to these matters’’); id. 10.2 (OPM authority to set up accountability systems); id. 10.3 (OPM authority to lotter on DSK11XQN23PROD with PROPOSALS1 165 See VerDate Sep<11>2014 17:00 Sep 15, 2023 Jkt 259001 situations where positions are placed temporarily in the excepted service for the purpose of a trial period leading to a permanent appointment in the competitive service; 168 OPM authorization of the creation of certain new positions in—or moving of certain existing positions into—the excepted service; 169 publication in the Federal Register; 170 and an acknowledgment of the consent of affected employees when an existing employee obtains a different position in another service or schedule.171 The now-revoked directions to agencies contained in Executive Order 13957, for implementing the now-defunct Schedule F, created ambiguity as to the continued vitality of these longstanding principles with respect to employees who had accrued adverse action appeal rights. We seek to confirm these principles through the proposed modifications to the regulations. Finally, these proposed revisions would also further the objectives of Executive Order 14003. In the findings underpinning that Executive order, President Biden observed that the foundations of the civil service and its merit system principles were essential to the Pendleton Civil Service Reform Act of 1883’s repudiation of the spoils system.172 The President further noted that revoking Schedule F was necessary ‘‘to enhance the efficiency of the civil service and to promote good administration and systematic application of merit system principles.’’ 173 The changes proposed here would support the civil service and merit system principles for career Federal employees by clarifying and reinforcing the rights that accrue to tenured employees. B. Regulatory Alternatives An alternative to this rulemaking is to not issue a regulation. OPM has determined this is not a viable option. The risks of not issuing this proposed rulemaking are many and include both fiscal as well as non-fiscal consequences. As noted in the preamble, this rulemaking is needed to preserve the integrity of the Federal career workforce as an independent entity free of political influence or personal loyalties to political leaders, consistent with merit system principles. Preserving the integrity of the Federal review agency personnel management programs and practices). 168 See, e.g., 5 CFR part 362. 169 5 CFR 6.1. 170 Id. 171 5 CFR 302.102(b). 172 E.O 14003, sec. 2. 173 Id. PO 00000 Frm 00017 Fmt 4702 Sfmt 4702 career workforce ensures career employees keep the status and rights they have attained and to which they are therefore entitled by law. This in turn preserves if not promotes employee morale, minimizes workforce disruptions by preventing potential losses of seasoned or experienced personnel, and contributes to a positive impact on agencies’ ability to meet mission requirements. Finally, these changes will promote compliance with statutory enactments. This rulemaking is expected to create an incentive for agency recruitment efforts, enhancing agencies’ ability to fulfill important merit system principles—that recruitment should be from qualified individuals from appropriate sources in an endeavor to achieve a workforce from all segments of society—and that selection and advancement should be determined solely on the basis of relative ability, knowledge, and skills, after fair and open competition which assures that all receive equal opportunity,174 and also promotes compliance with the congressional policy to confer a preference on eligible veterans or family members with entitled to derived preference. In a more pragmatic sense, diminishing or eliminating civil service protections from entire categories of career employees would destabilize the civil service—potentially repeatedly, each time there is a change in administration—and eliminate a competitive advantage Federal agencies have long enjoyed when competing with other sectors for needed talent: stable, fair, merit-based employment. Failure to protect adverse action rights and other civil service protections risks a loss of experienced staff, leading to a disruption, if not interruption, of agency mission operations. This is an especially important consideration given the many challenges facing our nation and requiring a response by the Executive branch. These challenges include threats to our nation’s economy (writ large as well as those impacting small businesses and emerging markets and technologies), public health, climate (both the private property and businesses impacted by droughts, floods, wildfires, etc.), data security, and emerging foreign powers on the international geo-political landscape, among others. The option of not regulating in this area carries with it fiscal costs as well. These costs include that of recruiting and replacing staff who separate before or after their positions are moved to the excepted service in a manner that 174 See E:\FR\FM\18SEP1.SGM 5 U.S.C. 2301(b)(1). 18SEP1 Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Proposed Rules purportedly strips them of their civil service protections, as well as the loss of or delay in services, benefits, and entitlements owed to many of our nation’s citizens. Many of the citizens receiving these entitlements depend on them to meet their basic living expenses. Regarding 5 CFR part 752, OPM’s proposed changes to the implementing regulations for adverse actions are consistent with statute and cannot be further simplified. OPM proposes to conform part 752 with Federal Circuit precedent 175 and statutory language.176 In addition, OPM proposes to make plain that an employee who is moved from the competitive service to a position in the excepted service, or from one excepted service schedule to the same or similar position in another excepted service schedule, retains the status and civil service protections the employee had already accrued. One regulatory alternative to conforming part 752 is to forgo changes to the regulation and allow Federal agencies to continue relying upon 5 U.S.C. 7511 for a more complete understanding of eligibility for procedural and appeal rights. However, as MSPB observed in urging OPM to update 5 CFR 752.401: lotter on DSK11XQN23PROD with PROPOSALS1 Retaining out-of-date information in a Government regulation can confuse agencies, managers, and employees and produce unintended outcomes. Human resources specialists or managers who are not experts in employee discipline may inadvertently rely on these particular regulations. Agencies may fail to use proper procedures and fail to notify employees of appeal rights. Terminations may be reversed.177 Given that agency practitioners are more likely to turn first to regulations rather than statute or case law for guidance on performance-based and adverse actions, OPM’s current regulations need updating. OPM’s preferred option is to amend the coverage-related provisions in part 752 to close the unnecessary gap between current regulations and relevant precedent by adding clarity and specific guidance to implement the statute. Having regulations that are congruent to statute may mitigate cases in which an agency is unclear on whether to provide procedural rights to an employee. In turn, this promotes efficiency in removing or disciplining employees and addresses complaints that the Federal removal process is too cumbersome. Through this rulemaking, 175 See Van Wersch, 197 F.3d at 1151–52; McCormick, 307 F.3d at 1341–43. 176 See 5 U.S.C. 7501. 177 U.S. Merit Systems Protection Board, supra note #45. VerDate Sep<11>2014 17:00 Sep 15, 2023 Jkt 259001 OPM is providing essential statutory requirements that have not been previously reflected in OPM’s regulations. OPM is proposing these regulations in the least burdensome way possible. Fundamentally, the amendments to part 752 do not impose any requirements on agencies that are not already in place through statute or case law. This includes the provisions that an employee retains accrued rights when the employee is moved from the competitive service to the excepted service or placed in a new schedule within the excepted service. With respect to 5 CFR part 210, OPM considered not defining ‘‘confidential, policy-determining, policy-making, policy-advocating’’ and ‘‘confidential or policy-determining’’ positions but, as stated supra, believes that doing so adds important clarity. To alleviate any ambiguity as to the scope of the exception in 5 U.S.C. 7511, including any confusion that may have been introduced by the promulgation of the now-revoked Executive Order 13957, this rule proposes to more explicitly define the employees and positions that are excluded from civil service protections to align with congressional intent as expressed in H.R. Rep. 101– 328. Accordingly, OPM proposes to add a definition for ‘‘Confidential, policydetermining, policy-making, or policyadvocating’’ and ‘‘confidential or policydetermining’’ to clarify that it means a noncareer, political appointment that is identified by its close working relationship with the President, head of an agency, or other key appointed officials who are directly responsible for furthering the goals and policies of the President and the Administration, and that carries no expectation of continued employment beyond the presidential administration during which the appointment occurred. This definition is consistent with legislative history and codifies longstanding practice. Finally, OPM’s proposed addition of 5 CFR 302.602 to establish minimum requirements for moving employees and positions into and within the excepted service necessitates the creation of a new guardrail to reinforce merit system principles. Therefore, OPM proposes to confer in § 302.603 a narrow MSPB appeal right to an employee whose position is placed into the excepted service or an excepted service employee whose position is placed into a different schedule of the excepted service and when any such move, in violation of these regulations, purportedly strips the employee of the status and civil service protections they had already accrued. PO 00000 Frm 00018 Fmt 4702 Sfmt 4702 63879 OPM weighed the alternative of not conferring a right of appeal to MSPB. As stated in 5 CFR 1201.3, MSPB’s ‘‘appellate jurisdiction is limited to those matters over which it has been given jurisdiction by law, rule, or regulation.’’ Currently, for personnel actions for which there is no MSPB appellate coverage, an aggrieved Federal employee may have multiple other options for contesting a personnel decision, including filing an Equal Employment Opportunity (EEO) complaint, OSC complaint, administrative grievance, or if applicable, a negotiated grievance procedure. However, with regard to an allegation that a move purportedly strips the employee of the status and civil service protections the employee has already accrued, or that an agency coerced the employee to voluntarily move to a new position that would require the employee to relinquish their competitive status or civil service protections, OPM concluded that the current scheme of avenues for redress is less preferable to safeguard against actions brought against employees for reasons stated above. Such actions would have an adverse impact on employee morale across Federal agencies and a corrosive effect on the American public’s confidence in equitable administrative processes of Federal civilian service. OPM also considered not conferring a right of appeal directly to MSPB. The omission of § 302.603 would leave open the possibility that an agency could move an employee in a manner that is unlawful, arbitrary, or capricious without any accountability. Alternatively, OPM could have broadened § 302.603 to cover an appeal based on the underlying reasons for the movement. However, if an agency follows the robust procedures in § 302.602 for movement, MSPB’s review of an appeal brought under § 302.603 should be limited to paragraphs (b) and (c) as an agency should be given deference in determining the appropriate placement of its workforce. Currently, if an employee alleges that an agency has taken a prohibited personnel practice, the employee can file a complaint with OSC, or if the employee is contesting an otherwise appealable action, the employee can file an MSPB appeal of the appealable personnel action and claim as an affirmative defense that the agency committed a prohibited personnel practice. OPM’s preferred option—the addition of § 302.603 as proposed— reinforces that affected employees are deserving of fair and equitable treatment in all aspects of their employment as it E:\FR\FM\18SEP1.SGM 18SEP1 lotter on DSK11XQN23PROD with PROPOSALS1 63880 Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Proposed Rules relates to movement to and within the excepted service. service positions align with those with which OPM already must comply. C. Impact D. Costs If finalized, the proposed rule would require agencies to update internal policies and procedures to ensure compliance with proposed §§ 210.102(b), 212.401, 213.3301, 302.101, 302.603, 451.302 and with the regulatory amendments to parts 432 and 752 as well as resolve any appeals that may arise from contested moves covered by part 302. Regarding the procedural requirements for moving positions, the rule would affect the operations of more than 80 Federal agencies, ranging from cabinet-level departments to small independent agencies. OPM cannot estimate these costs with great specificity because they will vary depending on the specific number of positions an agency would seek to move. The cost analysis to update policies and procedures and resolve appeals assumes an average salary rate of Federal employees performing this work at the 2023 rate for a GS–14, step 5, from the Washington, DC, locality pay table ($150,016 annual locality rate and $71.88 hourly locality rate). We assume the total dollar value of labor, which includes wages, benefits, and overhead, is equal to 200 percent of the wage rate, resulting in an assumed labor cost of $143.76 per hour. We estimate that the cost to comply with updating policies and procedures in the first year would require an average of 40 hours of work by employees with an average hourly cost of $143.76 per hour. Upon publication of the final rule, this would result in first-year estimated costs of about $5,750 per agency, and about $460,000 governmentwide. There are ongoing costs associated with routinely reviewing and updating internal policies and procedures, but not necessarily a measurable increase in costs for agencies. To comply with the regulatory requirements in this proposed rule, affected agencies would need to resolve any appeals that may arise pursuant to § 302.603. We estimate that, in the first year following publication of a final rule, this would require an average of 120 hours of work by employees with an average hourly cost of $143.76 per hour. This would result in estimated costs in that first year of implementation of about $17,250 per agency, and about $1.38 million governmentwide. In subsequent years, we assume a decreased need for appeal resolution as agencies further refine their processes under § 302.603, resulting in less staff OPM is proposing these revisions to clarify and reinforce existing protections that exist for many Federal employees and to add procedures that agencies must follow to further advance merit system principles. Congress enacted procedural rules to provide an adequate opportunity to hear from the tenured employee and appropriately explore the underlying facts and law before adverse actions are taken and thus help ensure that such actions are taken for proper cause.178 The procedural protections enacted by Congress are for all tenured employees, not only for the few employees who will inevitably present problems in a workforce of more than two million individuals. And procedural protections exist for the whistleblower, the employee who belongs to the ‘‘wrong’’ political party, the reservist whose periods of military service are inconvenient to superiors, the scapegoat, and the person who has been misjudged based on faulty information. As explained above, where Congress has created a property interest in a position for tenured employees,179 due process considerations protect employees from an unlawful deprivation of that interest. The procedural protections enacted by Congress are a small price to pay to deliver to the American people a meritbased civil service rather than a system based on political patronage.180 Therefore, to the extent these rules as finalized will reinforce procedural requirements that exist already for most Federal employees, OPM believes that those portions of the rules will not change any existing requirements for agencies covered by the rules and the impact on agencies is expected to be negligible. The procedural requirements for moving an employee from the competitive service to the excepted service or within the excepted service are no more rigorous than the many other regulations promulgated by OPM for the administration of the civil service, especially those reticulated regulations related to the excepted service under Schedules D and E (as described above). The reporting requirements relating to excepted 178 U.S. Merit System Protections Board, supra note 13 at p. ii. 179 See supra, Sec. I.B.; Loudermill, 470 U.S. at 541. 180 U.S. Merit System Protections Board, supra note 13 at pp. ii–iii. VerDate Sep<11>2014 17:00 Sep 15, 2023 Jkt 259001 PO 00000 Frm 00019 Fmt 4702 Sfmt 4702 time. Accordingly, in subsequent years, we estimate an average of 80 hours of work by employees with an average hourly cost of $143.76 per hour. This would result in estimated costs of about $11,500 per agency annually, and about $920,000 governmentwide annually in the years after the first year of implementation. In sum, OPM estimates the first-year cost to be approximately $23,000 per agency, and about $1.84 million governmentwide. For subsequent years, we estimate annual costs to be $11,500 for agencies, and about $920,000 governmentwide. E. Benefits OPM is proposing to clarify the Federal civil service protections that are critical to balancing an effective, experienced, and objective bureaucracy with Executive branch control. These regulations benefit the American people not only by shoring up civil service protections, but also, by so doing, strengthening our republican form of government, and thus promoting good government. As stated in Executive Order 14003, it is this Administration’s policy to ‘‘protect, empower, and rebuild the career Federal workforce.’’ This rulemaking benefits the career Federal workforce by reinforcing that it is deserving of the trust and confidence of the American people. OPM stated in its Fiscal Year 2019 Human Capital Review Summary Report that ‘‘Agencies face different challenges depending on their mission and the current state of their organizations; but there is little debate that effectively managing human capital is at the forefront of leadership’s greatest priorities.’’ 181 Among the top trends that surfaced during OPM’s review were (1) identifying and closing skills gaps and (2) recruiting and retaining employees. For example, agencies raised concerns around attrition rates for scientific and technical positions as well as an inability to hire fast enough to meet demands. The ongoing challenge with recruitment and retention for IT and cyber positions is due to the ever-changing landscape, competition with the private sector and other Federal agencies, and difficulty retaining talent. This proposed rule has several important benefits. First, it supports the retention of Federal career professionals who provide the continuity of institutional knowledge and subject181 U.S. Office of Personnel Management, ‘‘Fiscal Year 2019 Human Capital Reviews Report,’’ p. 1 (Mar. 2020), https://www.chcoc.gov/sites/default/ files/2019%20Human%20Capital %20Review%20Summary%20Report.pdf. E:\FR\FM\18SEP1.SGM 18SEP1 Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS1 matter expertise necessary for the critical functioning of the Federal Government.182 ‘‘A vast body of research’’ shows ‘‘public service motivation as a central factor in public employment’’ and that civil servants ‘‘invest effort and develop expertise precisely because a stable public job provides an environment where they can pursue their motivation to make a difference.’’ 183 The rights and protections afforded to career Federal employees offer a more stable alternative to comparable private and non-government sector positions.184 These professionals play an integral role in transferring knowledge, not just as part of their official duties, but also by training and mentoring newer and less experienced Federal employees, interns, contractors, etc. A related benefit of this rulemaking is that it will mitigate costs associated with recruitment of personnel needed to replace staff who leave or are subsequently removed following placement in the excepted service. ‘‘Instability and politization makes public service less attractive, leading to higher turnover of experienced civil servants and giving public officials less reason to develop expertise.’’ 185 OPM cannot estimate the exact value of this benefit to taxpayers because it would depend on the specific number of positions moved by an agency. Nevertheless, the proposed rule will protect agencies’ abilities to meet mission requirements by mitigating disruptions caused by upheavals within an agency’s workforce, the result of which could have a negative impact on an agency’s ability to meet mission requirements and use its resources (including taxpayer-funded resources) in a timely and efficient manner. There is little evidence to support the notion that a more politicized civil service, or that allowing for the firing of career civil servants without appropriate process that permits such employees to probe the agency’s reasons and provide a response, will increase governmental performance.186 This proposed rule will 182 Donald P. Moynihan, ‘‘Public Management for Populists: Trump’s Schedule F Executive Order and the Future of the Civil Service,’’ Public Administration Review, p. 174, 177 (Jan.–Feb. 2022). 183 Id. 184 Id. 185 Id. 186 See id.; see also Donald P. Moynihan, ‘‘Populism and the Deep State: the Attack on Public Service under Trump,’’ Liberal-Democratic Backsliding and Public Administration, (May 21, 2020), https://papers.ssrn.com/sol3/papers. cfm?abstract_id=3607309 (‘‘If political appointees offer responsiveness to elected officials through their loyalty, this responsiveness comes at a cost. VerDate Sep<11>2014 17:52 Sep 15, 2023 Jkt 259001 reduce the risks associated with misapplying the CSRA, depriving civil service protections to those who have rightfully earned them, and needlessly politicizing our nation’s nonpartisan career civil service. Finally, agency counsel and employee relations practitioners will benefit from the clarifications in this proposed rule that address current inconsistencies between OPM regulations and statute. After MSPB recommended that OPM update its regulations to reflect the Federal Circuit’s decisions in Van Wersch and McCormick,187 OPM revised 5 CFR part 752, subpart D to conform to the court’s interpretation of 5 U.S.C. 7511 as it pertains to appealable suspensions, removals, and furloughs. However, OPM elected at that time not to update subpart B of part 752 for suspensions of 14 days or less. In addition to closing regulatory gaps in part 752 by conforming the regulations to case law and statute, OPM proposes to clarify that an employee moved to or within the excepted service retains accrued procedural and appeal rights. The cumulative effect of these changes will be a comprehensive and robust regulatory framework on which agency practitioners can rely for understanding and applying the protections available to Federal employees. IV. Request for Comments OPM requests comments on the implementation and impacts of this proposed rule in general. Such information will be useful for better understanding the effect of these proposed revisions on civil service protections, merit system principles, and the effective and efficient business of government, in compliance with the law. The type of information in which OPM is interested includes, but is not limited to, the following: • Throughout the preamble, OPM provides examples of civil service protections since the Pendleton Act of 1883. OPM seeks comment on whether The best evidence we have is that appointees generate poorer organizational performance relative to career officials.’’) (citation omitted); David E. Lewis, ‘‘Testing Pendleton’s Premise: Do Political Appointees Make Worse Bureaucrats?’’ The Journal of Politics, Vol. 69, No. 4 (Nov. 2007), https:// www.jstor.org/stable/10.1111/j.1468-2508. 2007.00608.x (‘‘This analysis demonstrates that appointees get systematically lower performance grades than careerists. Previous bureau experience and longer tenure in management positions explain why careerist-run programs get higher grades. . . . These results add weight to what civil service reformers like George Pendleton believed, namely that a merit-based civil service system would lead to lower turnover in the Federal workforce and the cultivation of useful administrative expertise.’’). 187 U.S. Merit Systems Protection Board, supra note 45. PO 00000 Frm 00020 Fmt 4702 Sfmt 4702 63881 more examples would be helpful and, if so, the authority for those protections. • Whether the regulatory changes proposed under part 752 are sufficiently protective of employees’ rights in their continued employment. • Whether the proposed definition for the terms ‘‘confidential, policydetermining, policy-marking, or policyadvocating’’ and ‘‘confidential or policydetermining’’ is appropriate or whether it should be expanded or limited with the understanding that it should satisfy the aims of the CSRA (including congressional intent), civil service protections, and merit system principles. • Whether the procedures for moving positions from the competitive service to the excepted service or from one excepted service schedule to another are appropriate or whether they should be expanded or limited with the understanding that they should satisfy the aims of the CSRA (including congressional intent), civil service protections, and merit system principles. • Whether the proposed MSPB appeal rights under part 302 are needed and, if so, whether they are is sufficiently protective of employees’ rights. • Whether this rulemaking should include additional mechanisms for enforcing the protections set forth in this proposal, and if so, what those mechanisms should be. • Comments on the initial cost and benefit analysis, including the identification of data and studies that would inform OPM’s analysis. • Comments on whether discrete provisions of this proposal could be severed from the proposed rule in the event a provision was held to be invalid or unenforceable by its terms. V. Procedural Issues and Regulatory Review A. Severability OPM proposes that, if any of the provisions of this proposed rule as finalized is held to be invalid or unenforceable by its terms, or as applied to any person or circumstance, it shall be severable from its respective section(s) and shall not affect the remainder thereof or the application of the provision to other persons not similarly situated or to other dissimilar circumstances. For example, if a court were to invalidate any portions of this proposed rule as finalized imposing procedural requirements on agencies before moving positions from the competitive service to the excepted service, the other portions of the rule— including the portions providing that E:\FR\FM\18SEP1.SGM 18SEP1 63882 Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Proposed Rules employees in the competitive service maintain their protections even if their positions are moved to the excepted service—would independently remain workable and valuable. Similarly, the portions of this proposed rule defining ‘‘confidential, policy-determining, policy-making, or policy-advocating position’’ and ‘‘confidential and policydetermining’’ can and would function independently of any of the other portions of this proposed rule. In enforcing civil service protections and merit system principles, OPM will comply with all applicable legal requirements. B. Regulatory Flexibility Act The Director of the Office of Personnel Management certifies that this rulemaking will not have a significant economic impact on a substantial number of small entities because the rule will apply only to Federal agencies and employees. lotter on DSK11XQN23PROD with PROPOSALS1 G. Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35) This regulatory action will not impose any reporting or recordkeeping requirements under the Paperwork Reduction Act. Government employees. 5 CFR Part 213 E. Executive Order 12988, Civil Justice Reform This regulation meets the applicable standards set forth in section 3(a) and Jkt 259001 This rulemaking will not result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of more than $100 million annually. Thus, no written assessment of unfunded mandates is required. 5 CFR Parts 210 and 212 D. Executive Order 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 (Aug. 10, 1999), it is determined that this proposed rule does not have sufficient federalism implications to warrant preparation of a Federalism Assessment. 17:00 Sep 15, 2023 F. Unfunded Mandates Reform Act of 1995 List of Subjects C. Regulatory Review OPM has examined the impact of this rulemaking as required by Executive Orders 12866 (Sept. 30, 1993), 13563 (Jan. 18, 2011), and 14094 (Apr. 6, 2023), which 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). A regulatory impact analysis must be prepared for major rules with effects of $200 million or more in any one year. This rulemaking does not reach that threshold but has otherwise been designated as a ‘‘significant regulatory action’’ under section 3(f) of Executive Order 12866, as supplemented by Executive Orders 13563 and 14094. VerDate Sep<11>2014 (b)(2) of Executive Order 12988 (Feb. 7, 1996). Government employees, Reporting and recordkeeping requirements. PART 212—COMPETITIVE SERVICE AND COMPETITIVE STATUS 5 CFR Parts 302 and 432 Government employees. 3. The authority citation for part 212 continues to read as follows: ■ 5 CFR Part 451 Decorations, Government employees. 5 CFR Part 752 Government employees. 4. Amend § 212.401 by revising paragraph (b) to read as follows: ■ Accordingly, OPM is proposing to amend 5 CFR parts 210, 212, 213, 302, 432, 451, and 752 as follows: PART 210—BASIC CONCEPTS AND DEFINITIONS (GENERAL) 1. The authority citation for part 210 continues to read as follows: ■ Authority: 5 U.S.C. 1302, 3301, 3302; E.O. 10577, 3 CFR, 1954–1958 Comp., p. 218. Subpart A—Applicability of Regulations; Definitions Definitions * * * * (b) * * * (3) Confidential, policy-determining, policy-making, or policy-advocating means of a character exclusively associated with a noncareer, political PO 00000 Frm 00021 Fmt 4702 Sfmt 4702 § 212.401 position. Effect of competitive status on * * * * * (b) An employee in the competitive service at the time his position is first listed under Schedule A, B, or C, or whose position is otherwise moved from the competitive service and listed under a schedule created subsequent to [effective date of final rule], remains in the competitive service while he occupies that position. PART 213—EXCEPTED SERVICE 2. Amend § 210.102 by: a. Redesignating paragraphs (b)(3) through (18) as paragraphs (b)(5) through (20); and ■ b. Adding new paragraphs (b)(3) and (4). The additions read as follows: ■ ■ * Authority: 5 U.S.C. 1302, 3301, 3302; E.O. 10577, 3 CFR, 1954–1958 Comp., p. 218. Subpart D—Effect of Competitive Status on Promotion Office of Personnel Management. Kayyonne Marston, Federal Register Liaison. § 210.102 appointment that is identified by its close working relationship with the President, head of an agency, or other key appointed officials who are responsible for furthering the goals and policies of the President and the Administration, and that carries no expectation of continued employment beyond the presidential administration during which the appointment occurred. (4) Confidential or policy determining means of a character exclusively associated with a noncareer, political appointment that is identified by its close working relationship with the President, head of an agency, or other key appointed officials who are responsible for furthering the goals and policies of the President and the Administration, and that carries no expectation of continued employment beyond the presidential administration during which the appointment occurred. * * * * * 5. The authority citation for part 213 continues to read as follows: ■ Authority: 5 U.S.C. 3161, 3301 and 3302; E.O. 10577, 3 CFR 1954–1958 Comp., p. 218; Sec. 213.101 also issued under 5 U.S.C. 2103. Sec. 213.3102 also issued under 5 U.S.C. 3301, 3302, 3307, 8337(h), and 8456; E.O. 13318, 3 CFR 1982 Comp., p. 185; 38 U.S.C. 4301 et seq.; Pub. L. 105–339, 112 Stat 3182– 83; E.O. 13162; E.O. 12125, 3 CFR 1979 Comp., p. 16879; and E.O. 13124, 3 CFR 1999 Comp., p. 31103; and Presidential Memorandum—Improving the Federal Recruitment and Hiring Process (May 11, 2010). E:\FR\FM\18SEP1.SGM 18SEP1 Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Proposed Rules Sec. 213.101 also issued under 5 U.S.C. 2103. Sec. 213.3102 also issued under 5 U.S.C. 3301, 3302, 3307, 8337(h), and 8456; 38 U.S.C. 4301 et seq.; and Public Law 105–339, 112 Stat. 3182–83. Subpart C—Excepted Schedules 6. Amend § 213.3301 by revising the section heading and paragraph (a) to read as follows: ■ § 213.3301 Positions of a confidential or policy-determining character. (a) Upon specific authorization by OPM, agencies may make appointments under this section to positions that are of a confidential or policy determining character as defined in § 210.102 of this chapter. Positions filled under this authority are excepted from the competitive service and constitute Schedule C. Each position will be assigned a number from §§ 213.3302 through 213.3999, or other appropriate number, to be used by the agency in recording appointments made under that authorization. * * * * * PART 302—EMPLOYMENT IN THE EXCEPTED SERVICE 7. The authority citation for part 302 continues to read as follows: ■ Authority: 5 U.S.C. 1302, 3301, 3302, 8151, E.O. 10577 (3 CFR 1954–1958 Comp., p. 218); § 302.105 also issued under 5 U.S.C. 1104, Pub. L. 95–454, sec. 3(5); § 302.501 also issued under 5 U.S.C. 7701 et seq. Subpart A—General Provisions 8. Amend § 302.101 by revising paragraph (c)(7) to read as follows: ■ § 302.101 Positions covered by regulations. * * * * (c) * * * (7) Positions included in Schedule C (see subpart C of part 213 of this chapter) and positions excepted by statute which are of a confidential, policy-determining, policy-making, or policy-advocating nature; * * * * * ■ 9. Add subpart F consisting of §§ 302.601 through 302.603, to read as follows. lotter on DSK11XQN23PROD with PROPOSALS1 * Subpart F—Moving Employees and Positions into and Within the Excepted Service Sec. 302.601 302.602 302.603 Scope. Basic requirements. Appeals. VerDate Sep<11>2014 17:00 Sep 15, 2023 Jkt 259001 § 302.601 Scope. This subpart applies to any situation where an agency moves a position from the competitive service to the excepted service, or between excepted services, whether pursuant to statute, Executive order, or an OPM issuance, to the extent that this subpart is not inconsistent with applicable statutory provisions. This subpart also applies in situations where a position previously governed by title 5 of the U.S. Code will be governed by another title of the U.S. Code going forward, unless the statute governing the exception provides otherwise. § 302.602 Basic requirements. (a) In the event the President, Congress, OPM, or their designees direct agencies to move positions from the competitive service for placement in the excepted service under Schedule A, B, or C, or any Schedule in the excepted service created after [effective date of final rule], or to move positions from a schedule in the excepted service to a different schedule in the excepted service, the following requirements must be met, as relevant: (1) If the directive explicitly delineates the specific positions that are covered, the agency need only list the positions moved in accordance with that list, and their location within the organization. (2) If the directive requires the agency to select the positions to be moved pursuant to criteria articulated in the directive, then the agency must provide a list of the positions to be moved in accordance with those criteria, denote their location in the organization, and explain, upon request from OPM, why the agency believes the positions met those criteria. (3) If the directive confers discretion on the agency to establish objective criteria for identifying the positions to be covered, or which specific slots of a particular type of position the agency intends to move, then the agency must, in addition to supplying a list and the locations in the organization, supply the objective criteria to be used and an explanation of how these criteria are relevant. (b) An agency is also required to— (1) Identify the types, numbers, and locations of positions that the agency proposes to move into the excepted service. (2) Document the basis for its determination that movement of the position or positions is consistent with the standards set forth by the President, Congress, OPM, or their designees as applicable. (3) Obtain certification from the agency’s Chief Human Capital Officer PO 00000 Frm 00022 Fmt 4702 Sfmt 4702 63883 (CHCO) that the documentation is sufficient and movement of the position or positions is both consistent with the standards set forth by the directive, as applicable, and with merit system principles. (4) Submit the CHCO certification and supporting documentation to OPM (to include the types, numbers, and locations of positions) in advance of using the excepted service authority, which OPM will then review. (5) For exceptions effectuated by the President or OPM, list positions to the appropriate schedule of the excepted service only after obtaining written approval from the OPM Director to do so. For exceptions effectuated by Congress, inform OPM of the positions excepted either before the effective date of the provision, if the statutory provisions are not immediately effective, or within 30 days thereafter. (6) For exceptions created by the President or OPM, initiate any hiring actions under the excepted service authority only after OPM publishes any such authorizations in the Federal Register, to include the types, numbers, and locations of the positions moved to the excepted service. (c) In accordance with the requirements provided in paragraphs (a) and (b) of this section— (1) An agency that seeks to move an encumbered position from the competitive service to the excepted service, or from one excepted service schedule to another, must provide written notification to the employee of the intent to move the position 30 days prior to the effective date of the position being moved. (2) The written notification required by paragraph (c)(1) of this section must inform the employee that the employee maintains their civil service status and protections notwithstanding the movement of the position. § 302.603 Appeals. (a) A competitive service employee whose position is placed into the excepted service or who is otherwise moved to the excepted service, or an excepted service employee whose position is placed into a different schedule of the excepted service or who is otherwise moved to a different schedule of the excepted service, may directly appeal to the Merit Systems Protection Board, as provided in paragraphs (b) and (c) of this section, to have their competitive status and civil service protections reinstated, as applicable. (b) An employee whose position is moved into the excepted service or into a different schedule of the excepted E:\FR\FM\18SEP1.SGM 18SEP1 63884 Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Proposed Rules service may appeal to the extent that such move purportedly strips the employee of the status and civil service protections the employee has already accrued. (c) An employee whose move to a new position that would require the employee to relinquish their competitive status or civil service protections is facially voluntary may appeal if the employee believes that such move was coerced. PART 432—PERFORMANCE BASED REDUCTION IN GRADE AND REMOVAL ACTIONS Authority: 5 U.S.C. 4303, 4305. 11. Amend § 432.102 by revising paragraph (f)(10) to read as follows: ■ Coverage. * * * * * (f) * * * (10) An employee whose position has been determined to be of a confidential, policy-determining, policy-making, or policy advocating character, as defined in § 210.102 of this chapter by— (i) The President for a position that the President has excepted from the competitive service; (ii) The Office of Personnel Management for a position that the Office has excepted from the competitive service (Schedule C); or (iii) The President or the head of an agency for a position excepted from the competitive service by statute. * * * * * PART 451—AWARDS 12. The authority citation for part 451 continues to read as follows: ■ Authority: 5 U.S.C. 4302, 4501–4509; E.O. 11438, 33 FR 18085, 3 CFR, 1966–1970 Comp., p. 755; E.O. 12828, 58 FR 2965, 3 CFR, 1993 Comp., p. 569. Subpart C—Presidential Rank Awards 13. Amend § 451.302 by revising paragraph (b)(3)(ii) to read as follows: ■ lotter on DSK11XQN23PROD with PROPOSALS1 § 451.302 Ranks for senior career employees. * * * * (b) * * * (3) * * * (ii) To positions that are excepted from the competitive service because of their confidential or policy-determining character. * * * * * VerDate Sep<11>2014 17:00 Sep 15, 2023 Jkt 259001 Authority: 5 U.S.C. 7504, 7514, and 7543, Pub. L. 115–91, 131 Stat. 1283, and Pub. L. 114–328, 130 Stat. 2000. Subpart B—Regulatory Requirements for Suspension for 14 Days or Less 15. Amend § 752.201 by revising paragraphs (b)(1) through (6) and (c)(5) and (6) and adding paragraph (c)(7) to read as follows: ■ Coverage. * 10. The authority citation for part 432 continues to read as follows: * 14. The authority citation for part 752 continues to read as follows: ■ § 752.201 ■ § 432.102 PART 752—ADVERSE ACTIONS * * * * (b) * * * (1) An employee in the competitive service who has completed a probationary or trial period, or who has completed 1 year of current continuous employment in the same or similar positions under other than a temporary appointment limited to 1 year or less, including such an employee who is moved involuntarily into the excepted service and still occupies that position or a similar position; (2) An employee in the competitive service serving in an appointment which requires no probationary or trial period, and who has completed 1 year of current continuous employment in the same or similar positions under other than a temporary appointment limited to 1 year or less, including such an employee who is moved involuntarily into the excepted service and still occupies that position or a similar position; (3) An employee with competitive status who occupies a position under Schedule B of part 213 of this chapter, including such an employee who is moved involuntarily into a different schedule of the excepted service and still occupies that position; (4) An employee who was in the competitive service and had competitive status as defined in § 212.301 of this chapter at the time the employee’s position was first listed under any schedule of the excepted service and still occupies that position; (5) An employee of the Department of Veterans Affairs appointed under 38 U.S.C. 7401(3), including such an employee who is moved involuntarily into a different schedule of the excepted service and still occupies that position; and (6) An employee of the Government Publishing Office, including such an employee who is moved involuntarily into the excepted service and still occupies that position or a similar position. (c) * * * PO 00000 Frm 00023 Fmt 4702 Sfmt 4702 (5) Of a National Guard Technician; (6) Taken under 5 U.S.C. 7515; or (7) Of an employee whose position has been determined to be of a confidential, policy-determining, policy-making, or policy-advocating character, as defined in § 210.102 of this subchapter by— (i) The President for a position that the President has excepted from the competitive service; (ii) The Office of Personnel Management for a position that the Office has excepted from the competitive service; or (iii) The President or the head of an agency for a position excepted from the competitive service by statute. * * * * * Subpart D—Regulatory Requirements for Removal, Suspension for More Than 14 Days, Reduction in Grade or Pay, or Furlough for 30 Days or Less 16. Amend § 752.401 by revising paragraphs (c)(1), (c)(2)(i) and (ii), (c)(3) through (9), and (d)(2) to read as follows: ■ § 752.401 Coverage. * * * * * (c) * * * (1) A career or career conditional employee in the competitive service who is not serving a probationary or trial period, including such an employee who is moved involuntarily into the excepted service; (2) * * * (i) Who is not serving a probationary or trial period under an initial appointment, including such an employee who is moved involuntarily into the excepted service; or (ii) Except as provided under section 1105 of Public Law 114–92 (as repealed by section 1106(a)(1) of Public Law 117– 81), who has completed 1 year of current continuous service under other than a temporary appointment limited to 1 year or less, including such an employee who is moved involuntarily into the excepted service; (3) An employee in the excepted service who is a preference eligible in an Executive agency as defined at section 105, United States Code, the U.S. Postal Service, or the Postal Regulatory Commission and who has completed 1 year of current continuous service in the same or similar positions, including such an employee who is moved involuntarily into a different schedule of the excepted service and still occupies that position or a similar position; (4) A Postal Service employee covered by Public Law 100–90 who has E:\FR\FM\18SEP1.SGM 18SEP1 lotter on DSK11XQN23PROD with PROPOSALS1 Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Proposed Rules completed 1 year of current continuous service in the same or similar positions and who is either a supervisory or management employee or an employee engaged in personnel work in other than a purely nonconfidential clerical capacity, including such an employee who is moved involuntarily into a different schedule of the excepted service and still occupies that position or a similar position; (5) An employee in the excepted service who is a nonpreference eligible in an Executive agency as defined at 5 U.S.C. 105, and who has completed 2 years of current continuous service in the same or similar positions under other than a temporary appointment limited to 2 years or less, including such an employee who is moved involuntarily into a different schedule of the excepted service and still occupies that position or a similar position; (6) An employee with competitive status who occupies a position in Schedule B of part 213 of this chapter, including such an employee whose position is moved involuntarily into a different schedule of the excepted service and still occupies that position; (7) An employee who was in the competitive service and had competitive status as defined in § 212.301 of this chapter at the time the employee’s position was first listed under any schedule of the excepted service and who still occupies that position; (8) An employee of the Department of Veterans Affairs appointed under 38 U.S.C. 7401(3), including such an employee who is moved involuntarily into a different schedule of the excepted service and still occupies that position or a similar position; and (9) An employee of the Government Publishing Office, including such an employee who is moved involuntarily into the excepted service. (d) * * * (2) An employee whose position has been determined to be of a confidential, policy-determining, policy-making, or policy-advocating character, as defined in § 210.102 of this chapter by— (i) The President for a position that the President has excepted from the competitive service; (ii) The Office of Personnel Management for a position that the Office has excepted from the competitive service; or (iii) The President or the head of an agency for a position excepted from the competitive service by statute. * * * * * [FR Doc. 2023–19806 Filed 9–15–23; 8:45 am] BILLING CODE 6325–39–P VerDate Sep<11>2014 17:00 Sep 15, 2023 Jkt 259001 DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA–2023–1881; Project Identifier MCAI–2023–00738–E] RIN 2120–AA64 Airworthiness Directives; Rolls-Royce Deutschland Ltd & Co KG Engines Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed rulemaking (NPRM). AGENCY: The FAA proposes to supersede Airworthiness Directive (AD) 2021–25–04, which applies to certain Rolls-Royce Deutschland Ltd & Co KG (RRD) Model Trent 1000 engines. AD 2021–25–04 requires operators to revise the airworthiness limitations section (ALS) of their existing approved continuous airworthiness maintenance program by incorporating the revised tasks of the applicable time limits manual (TLM) for each affected model turbofan engine. Since the FAA issued AD 2021–25–04, the manufacturer revised the TLM to introduce new or more restrictive tasks and limitations and associated thresholds and intervals for life-limited parts, which prompted this proposed AD. This proposed AD would require revising the ALS of the operator’s existing approved engine maintenance or inspection program, as applicable, to incorporate new or more restrictive tasks and limitations and associated thresholds and intervals for life-limited parts, as specified in a European Union Aviation Safety Agency (EASA) AD, which is proposed for incorporation by reference (IBR). The FAA is proposing this AD to address the unsafe condition on these products. DATES: The FAA must receive comments on this NPRM by November 2, 2023. ADDRESSES: You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods: • Federal eRulemaking Portal: Go to regulations.gov. Follow the instructions for submitting comments. • Fax: (202) 493–2251. • Mail: U.S. Department of Transportation, Docket Operations, M– 30, West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue SE, Washington, DC 20590. • Hand Delivery: Deliver to Mail address above between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. AD Docket: You may examine the AD docket at regulations.gov under Docket SUMMARY: PO 00000 Frm 00024 Fmt 4702 Sfmt 4702 63885 No. FAA–2023–1881; or in person at Docket Operations between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this NPRM, the mandatory continuing airworthiness information (MCAI) any comments received, and other information. The street address for Docket Operations is listed above. Material Incorporated by Reference: • For service information that is identified in this NPRM, contact EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; phone: +49 221 8999 000; email: ADs@easa.europa.eu; website: easa.europa.eu. You may find this material on the EASA website at ad.easa.europa.eu. It is also available at regulations.gov under Docket No. FAA– 2023–1881. • You may view this service information at the FAA, Airworthiness Products Section, Operational Safety Branch, 1200 District Avenue, Burlington, MA 01803. For information on the availability of this material at the FAA, call (817) 222–5110. FOR FURTHER INFORMATION CONTACT: Sungmo Cho, Aviation Safety Engineer, FAA, 2200 South 216th Street, Des Moines, WA 98198; phone: (781) 238– 7241; email: sungmo.d.cho@faa.gov. SUPPLEMENTARY INFORMATION: Comments Invited The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under ADDRESSES. Include ‘‘Docket No. FAA–2023–1881; Project Identifier MCAI–2023–00738–E’’ at the beginning of your comments. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend the proposal because of those comments. Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to regulations.gov, including any personal information you provide. The agency will also post a report summarizing each substantive verbal contact received about this NPRM. Confidential Business Information CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt E:\FR\FM\18SEP1.SGM 18SEP1

Agencies

Office of Personnel Management

[Federal Register Volume 88, Number 179 (Monday, September 18, 2023)]
[Proposed Rules]
[Pages 63862-63885]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-19806]


========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

========================================================================


Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / 
Proposed Rules

[[Page 63862]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 210, 212, 213, 302, 432, 451, and 752

[Docket ID: OPM-2023-0013]
RIN 3206-AO56


Upholding Civil Service Protections and Merit System Principles

AGENCY: Office of Personnel Management.

ACTION: Proposed rule.

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SUMMARY: The Office of Personnel Management (OPM) is proposing a rule 
to reinforce and clarify longstanding civil service protections and 
merit system principles, codified in law, as they relate to the 
movement of Federal employees and positions from the competitive 
service to the excepted service, or from one excepted service schedule 
to another. First, it clarifies that, upon such a move, an employee 
retains the status and civil service protections they had already 
accrued by law, unless the employee relinquishes such rights or status 
by voluntarily encumbering a position that explicitly results in a loss 
of, or different, rights. Second, it interprets ``confidential, policy-
determining, policy-making, or policy-advocating'' and ``confidential 
or policy-determining'' to describe positions, generally excepted from 
civil service protections, in accordance with statutory text, 
legislative history for that text, and congressional intent, to 
reinforce the interpretation that this term was intended to mean 
noncareer, political appointments. Third, it provides specific 
additional procedures that apply when moving positions from the 
competitive service to the excepted service, or from one excepted 
service schedule to another, for the purposes of good administration, 
to add transparency, and to provide employees with a right of appeal to 
the Merit Systems Protection Board (MSPB or Board) to the extent any 
such move purportedly strips employees of their civil service status 
and protections.

DATES: Comments must be received on or before November 17, 2023.

ADDRESSES: You may submit comments, identified by the docket number or 
Regulation Identifier Number (RIN) for this proposed rulemaking, by the 
following method:
    Federal eRulemaking Portal: https://www.regulations.gov. Follow the 
instructions for sending comments.
    All submissions must include the agency name and docket number or 
RIN for this rulemaking. Please arrange and identify your comments on 
the regulatory text by subpart and section number; if your comments 
relate to the supplementary information, please refer to the heading 
and page number. All comments received will be posted without change, 
including any personal information provided. To ensure that your 
comments will be considered, you must submit them within the specified 
open comment period. Before finalizing this rule, OPM will consider all 
comments within the scope of the regulations received on or before the 
closing date for comments. OPM may make changes to the final rule after 
considering the comments received.

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

SUPPLEMENTARY INFORMATION: OPM proposes this rule to clarify and 
reinforce longstanding civil service protections and merit system 
principles, which started with the passage of the Pendleton Act of 
1883. The Act ended the patronage, or ``spoils,'' system for Federal 
employment and created the competitive civil service. For the past 140 
years, Congress has enacted statutes, and agencies have promulgated 
rules, that govern actions by Federal agencies and employees, beginning 
with laws that limited political influence in employment decisions and 
growing over the years to establish comprehensive laws regulating many 
areas of Federal employment. These changes were designed to further 
good government. Subsequent statutes, including, among others, the 
Veterans' Preference Act of 1944, as amended, and the Civil Service 
Reform Act of 1978 (CSRA), extended and updated these civil service 
provisions.
    The CSRA, as discussed throughout this rulemaking, was monumental. 
It ``overhauled the civil service system,'' \1\ creating an elaborate 
``new framework'' \2\ of the modern civil service, protecting career 
Federal employees from undue partisan political influence so that the 
business of government can be carried out efficiently and effectively, 
in compliance with the law.
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    \1\ See Lindahl v. OPM, 470 U.S. 768, 773 (1985).
    \2\ Id. at 774; see United States v. Fausto, 484 U.S. 439, 443 
(1988).
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    The 2.2 million career civil servants active today are the backbone 
of the Federal workforce. They are dedicated and talented professionals 
who provide the continuity of expertise and experience necessary for 
the Federal Government to function optimally across Presidents and 
their administrations. These employees take an oath to uphold the 
Constitution and are accountable to agency leaders and managers who, in 
turn, are accountable to the President, Congress, and the American 
people for their agency's performance. At the same time, these civil 
servants must carry out critical tasks requiring that their expertise 
be applied objectively (performing data analysis, conducting scientific 
research, implementing existing laws, etc.).
    If a Federal employee refuses to implement lawful direction from 
leadership, there are appropriate vehicles for agencies to respond 
through discipline and, ultimately, removal under chapter 75 or, 
alternatively, if performance related, chapter 43 of title 5, U.S. 
Code, and other authorities. Under the law, however, mere disagreement 
with leadership--without defiance of lawful orders--does not qualify as 
misconduct or unacceptable performance or otherwise implicate the 
efficiency of the service in a manner that would warrant an adverse 
action.
    Career civil servants generally have a level of institutional 
experience, subject matter expertise, and technical knowledge that 
incoming political appointees may lack. Their ability to offer their 
objective analyses and views in carrying out their duties, without fear 
of reprisal or loss of employment, contribute to the reasoned 
consideration of policy options and thus the successful functioning of 
incoming administrations and our democracy. These rights and abilities 
must continue to be protected and preserved, as

[[Page 63863]]

envisioned by Congress when it enacted the CSRA--and strengthened those 
protections through other actions, such as the Civil Service Due 
Process Amendments Act of 1990.\3\
---------------------------------------------------------------------------

    \3\ Public Law 101-376, 104 Stat. 461, H.R. 3086 (Aug. 17, 
1990); see also H.R. Rep. 101-328 (Nov. 3. 1989).
---------------------------------------------------------------------------

    The OPM Director is generally charged with executing, 
administering, and enforcing the laws governing the civil service.\4\ 
In chapter 75, Congress provided Federal employees with certain 
procedural rights and provided OPM with broad authority to prescribe 
regulations to carry out the chapter's purposes.\5\ Moreover, OPM 
regulations, promulgated via delegated authority from the President, 
govern the movement of positions from the competitive service to the 
excepted service, or from one excepted service schedule to another.\6\ 
Accordingly, OPM proposes this rule to clarify and reinforce 
longstanding civil service protections and merit system principles as 
codified in the CSRA. OPM proposes amending its regulations in 5 CFR 
chapter I, subchapter B, as follows:
---------------------------------------------------------------------------

    \4\ See 5 U.S.C. 1103(a)(5)(A).
    \5\ See 5 U.S.C. 7504, 7514.
    \6\ See, e.g., 5 CFR part 212.
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    1. Amending 5 CFR part 752 (Adverse Actions) to clarify that 
employees who are moved from the competitive service to a position in 
the excepted service, or from one excepted service schedule to another, 
retain the status and civil service protections they had already 
accrued unless the employee relinquishes such rights or status by 
voluntarily encumbering a position that explicitly results in a loss 
of, or different, rights.\7\ The proposed regulation also conforms part 
752 to Federal Circuit precedent regarding the employees eligible for 
appeal and grievance rights for removal actions and suspensions.
---------------------------------------------------------------------------

    \7\ As explained further infra, an individual can voluntarily 
relinquish rights when moving to a position that explicitly results 
int the loss of, or different, rights. An agency's failure to inform 
an employee of the consequences of a voluntary transfer cannot 
confer appeal rights to an employee in a position which has no 
appeal rights by statute. This is distinguishable from situations 
where the individual was coerced or deceived into taking the new 
position different rights. See Williams v. Merit Systems Protection 
Board, 892 F.3d 1156 (Fed. Cir. 2018).
---------------------------------------------------------------------------

    2. Amending 5 CFR part 210 (Basic Concepts and Definitions 
(General)) to define ``confidential, policy-determining, policy-making, 
or policy-advocating,'' and ``confidential or policy-determining'' \8\ 
in 5 CFR 210.102--which would apply throughout OPM's Civil Service 
Regulations in 5 CFR chapter I, subchapter B \9\--to describe positions 
generally excepted from chapter 75's protections to reinforce the 
longstanding interpretation that, in creating this exception to 5 
U.S.C. 7511(b), Congress intended to except noncareer,\10\ political 
appointees from the civil service protections.
---------------------------------------------------------------------------

    \8\ See 5 CFR 213.3301, 302.101, 432.102, 451.302, 752.202, 
752.401.
    \9\ The relevant regulatory language currently varies slightly. 
For instance, 5 CFR part 752 describes them as positions ``of a 
confidential, policy-determining, policy making, or policy 
advocating character.'' But 5 CFR part 213 describes these positions 
as being ``of a confidential or policy-determining character,'' 5 
CFR part 302 uses ``of a confidential, policy-determining, or 
policy-advocating nature,'' and 5 CFR part 451 uses ``of a 
confidential or policy-making character.'' In this proposed rule, 
OPM adopts ``confidential, policy-determining, policy making, or 
policy advocating'' and ``confidential or policy-determining'' as 
two, interchangeable alternatives to describe these positions.
    \10\ The term ``career employee,'' as used here, refers to 
appointees to competitive service permanent or excepted service 
permanent positions. The terms ``noncareer, political appointee'' 
and ``political appointee,'' as used here, refer to individuals 
appointed by the President or his appointees pursuant to Schedule C 
(or similar authorities) who serve at the pleasure of the current 
President or his political appointees and who have no expectation of 
continuing into a new administration.
---------------------------------------------------------------------------

    3. Amending 5 CFR part 302, for the purposes of good administration 
and transparency, to provide specific additional procedures that apply 
when moving positions from the competitive service to the excepted 
service, or from one excepted service schedule to another, and to 
provide employees encumbering such positions with a right of appeal to 
the MSPB to the extent any such move purportedly strips employees of 
their civil service status and protections. The proposed regulation 
also amends 5 CFR part 212 (Competitive Service and Competitive Status) 
to further clarify a competitive service employee's status in the event 
the employee's position is moved to the excepted service.
    As further detailed infra, this rulemaking will enhance the 
efficiency of the Federal civil service and promote good administration 
and systematic application of merit system principles.\11\ OPM requests 
comments on this proposed rule, including on its potential impacts and 
implementation, to better understand the potential effects of these 
proposed regulations and to be in a position to consider any possible 
modifications. OPM may set forth policies, procedures, standards, and 
supplementary guidance for the implementation of any final rule.
---------------------------------------------------------------------------

    \11\ OPM's authorities to issue regulations only extend to title 
5, U.S. Code. A position may be placed in the excepted service by 
presidential action, under 5 U.S.C. 3302, by OPM action, under 
authority delegated by the President pursuant to 5 U.S.C. 1104, or 
by Congress. These proposed regulations apply to any situation where 
an agency moves positions from the competitive service to the 
excepted service, or between excepted services, whether pursuant to 
statute, Executive order, or an OPM issuance, to the extent that 
these provisions are not inconsistent with applicable statutory 
provisions. For example, to the extent that a position is placed in 
the excepted service by an act of Congress, an OPM regulation will 
not supersede a statutory provision to the contrary. Similarly, 
these provisions also apply where positions previously governed by 
title 5 will be governed by another title going forward, unless the 
statute governing the exception provides otherwise.
---------------------------------------------------------------------------

I. Background

A. The Career Civil Service, Merit System Principles, and Civil Service 
Protections

    Prior to the Pendleton Act of 1883,\12\ Federal employees were 
generally appointed, retained, and terminated or removed based on their 
political affiliations and support for the political party in power 
rather than their capabilities or competence.\13\ A change in 
administration often triggered the widespread removal of Federal 
employees to provide jobs for the supporters of the new President, his 
party, and party leaders.\14\ This patronage, or ``spoils,'' system 
often resulted in party managers ``pass[ing] over educated, qualified 
candidates and distribut[ing] offices to `hacks' and ward-heelers who 
had done their bidding during campaigns and would continue to serve 
them in government.'' \15\ Theodore Roosevelt, who served as a Civil 
Service Commissioner before his presidency, described the spoils system 
as ``more fruitful of degradation in our political life than any other 
that could possibly have been invented. The spoilsmonger, the man who 
peddled patronage, inevitably bred the vote-buyer, the vote-seller, and 
the man guilty of misfeasance in office.'' \16\ George William Curtis, 
a proponent of a merit-based civil service, described that, under the 
spoils system, ``[t]he country seethe[d] with intrigue and corruption. 
Economy, patriotism, honesty, honor,

[[Page 63864]]

seem[ed] to have become words of no meaning.'' \17\ Ethical standards 
for Federal employees were at a low ebb under this system. ``Not only 
incompetence, but also graft, corruption, and outright theft were 
common.'' \18\
---------------------------------------------------------------------------

    \12\ Public Law 16; Civil Service Act of 1883, (Jan. 16, 1883) 
(22 Stat. 403).
    \13\ U.S. Merit System Protections Board, ``What is Due Process 
in Federal Civil Service,'' p. 4. (May 2015), https://www.mspb.gov/studies/studies/What_is_Due_Process_in_Federal_Civil_Service_Employment_1166935.pdf.
    \14\ U.S. Office of Personnel Management, ``Biography of an 
Ideal,'' p. 83 (2003), OPM-Biography-of-an-Ideal-History-of-Civil-
Service-2003.pdf (armywarcollege.edu).
    \15\ See Anthony J. Gaughan, ``Chester Arthur's Ghost: A 
Cautionary Tale of Campaign Finance Reform,'' 71 Mercer L. Rev. 779, 
at pp. 787-78 (2020), https://digitalcomons.law.mercer.edu/cgi/viewcontent.cgi?article=1313&context=jour_mlr.
    \16\ U.S. Office of Personnel Management, supra note 14 at pp. 
182-83.
    \17\ Id. at p. 182. In 1871, Curtis was appointed by President 
Ulysses S. Grant to chair the first Civil Service Commission. See 
id. at p. 196.
    \18\ Id. at pp. 183-84.
---------------------------------------------------------------------------

    Civil service advocates and then Congress, therefore, sought to 
establish a Federal nonpartisan career civil service that would be 
selected based on merit rather than political affiliation.\19\ Such a 
workforce would reinvigorate government, making it more efficient and 
competent.\20\ This reform movement came to a head in 1881 when 
President James Garfield was shot by a disappointed office seeker who 
believed he was entitled to a Federal job based on the work he had done 
for Garfield and his political party.\21\
---------------------------------------------------------------------------

    \19\ See Gaughan, supra note 15 at p. 787; U.S. Merit System 
Protections Board, supra note 13 at pp. 3-5.
    \20\ See Gaughan, supra note 15 at p. 787.
    \21\ See U.S. Merit System Protections Board, supra note 13 at 
pp. 4-5; U.S. Office of Personnel Management, supra note 14 at pp. 
198-201.
---------------------------------------------------------------------------

    The Pendleton Act of 1883 reformed the patronage system by 
requiring agencies to appoint Federal employees covered by the Act 
based on competency and merit.\22\ The Act also established the Civil 
Service Commission (CSC) to help implement and enforce the government's 
adherence to merit-based principles.\23\
---------------------------------------------------------------------------

    \22\ 22 Stat. 403-04 (stating that hiring should be based on an 
``open, competitive examination'' of the employee's ``relative 
capacity and fitness . . . to discharge the duties of the service 
into which they seek to be appointed.'').
    \23\ Id. at 403.
---------------------------------------------------------------------------

    While the Pendleton Act focused on hiring, bases for removals 
continued to vary depending on the preferences of the President in 
office.\24\ In 1897, President William McKinley addressed removals by 
issuing Executive Order 101, which mandated that ``[n]o removal shall 
be made from any position subject to competitive examination except for 
just cause and upon written charges filed with the head of the 
Department, or other appointing officer, and of which the accused shall 
have full notice and an opportunity to make defense.'' \25\ Congress 
later codified these requirements in the Lloyd-La Follette Act of 1912 
\26\ to establish that covered Federal employees were to be both hired 
and removed based on merit. Specifically, section 6 of the Act 
provided:
---------------------------------------------------------------------------

    \24\ The Act does specify that ``no person in the public service 
is . . . under any obligations to contribute to any political fund, 
or to render any political service, and that he will not be removed 
or otherwise prejudiced for refusing to do so.'' Id at 404.
    \25\ U.S. Merit System Protections Board, supra note 13 at p. 5.
    \26\ 37 Stat. 555 (1912).

that no person in the classified civil service[\27\] of the United 
States shall be removed therefrom except for such cause as will 
promote the efficiency of said service and for reasons given in 
writing, and the person whose removal is sought shall have notice of 
the same and of any charges [proffered] against him, and be 
furnished with a copy thereof, and also be allowed a reasonable time 
for personally answering the same in writing; and affidavits in 
support thereof.
---------------------------------------------------------------------------

    \27\ The ``classified civil service'' refers to the competitive 
service. See 5 U.S.C. 2102.

    Thereafter, Congress enacted further requirements and reforms. In 
1944, Congress enacted the Veterans' Preference Act,\28\ which, among 
other things, granted federally-employed veterans extensive rights to 
challenge adverse employment actions, including the right to file an 
appeal with the CSC and provide the CSC with documentation to support 
the appeal. Based on the evidence presented, the CSC would issue 
findings and recommendations regarding the adverse employment action. 
In short, the Veterans' Preference Act provided eligible veterans with 
adverse action protections and access to an appeals process.\29\ Then, 
in 1962, President John F. Kennedy issued Executive Order 10988 to 
extend adverse action rights to the broader civil service.\30\
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    \28\ 58 Stat. 387 (1944).
    \29\ Agencies initially were not required to comply with the 
CSC's recommendations in adverse action appeals, but Congress 
amended the Veterans' Preference Act in 1948 to require compliance. 
See 67 Stat. 581 (1948); see also U.S. Merit System Protections 
Board, supra note 13 at pp. 7-8.
    \30\ E.O. No. 10988, 27 FR 551 (Jan. 19, 1962) (``The head of 
each agency, in accordance with the provisions of this order and 
regulations prescribed by the Civil Service Commission, shall extend 
to all employees in the competitive civil service rights identical 
in adverse action cases to those provided preference eligibles under 
section 14 of the Veterans' Preference Act of 1944, as amended.'') 
(Emphasis added).
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B. Conduct and Performance Under the Civil Service Reform Act of 1978

    To synthesize, expand upon, and further codify the patchwork of 
processes that had developed over almost a century, and to protect 
civil servants and govern personnel actions, Congress passed the Civil 
Service Reform Act (CSRA) of 1978 \31\--the most comprehensive Federal 
civil service reform since the Pendleton Act.
---------------------------------------------------------------------------

    \31\ 92 Stat. 1111 (1978); see. Fausto, 484 U.S. at 455 (``The 
CSRA established a comprehensive system for reviewing personnel 
action taken against federal employees.'').
---------------------------------------------------------------------------

    The CSRA made significant organizational changes to civil service 
management, adjudications, and oversight. It abolished the CSC and 
divided its duties among OPM \32\ and the MSPB, which initially 
encompassed the Office of Special Counsel (OSC). OSC later became a 
separate agency to which specific duties were assigned.\33\ OPM 
inherited the CSC's policy, managerial, and administrative duties, 
including the obligation to establish standards, oversee compliance, 
and conduct examinations as required or requested.\34\ OPM was also 
obligated to, among other things, advise the President regarding 
appropriate changes to the civil service rules, administer retirement 
benefits, adjudicate employees' entitlement to these benefits, and 
defend adjudications at the Board.\35\ MSPB adjudicates challenges to 
personnel actions taken under the civil service laws,\36\ among other 
things, and OSC investigates and prosecutes prohibited personnel 
practices.\37\ Other, more specific enactments confer upon these 
entities the obligations or authorities to promulgate regulations on 
specific topics.
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    \32\ Congress envisioned that: ``OPM would be the administrative 
arm of Federal personnel management, serve as Presidential policy 
advisor, . . . promulgate regulations, set policy, run research and 
development programs, implement rules and regulations, and would 
manage a centralized, innovative Federal personnel program.'' 124 
Cong. Rec. S27538 (daily ed. Aug. 24, 1978) (bill summary of the 
CSRA of 1978, S. 2540).
    \33\ U.S. Government Accountability Office, ``Civil Service 
Reform--Where it Stands Today,'' at p. 2 (May 13, 1980), https://www.gao.gov/assets/fpcd-80-38.pdf. The Equal Employment Opportunity 
Commission and Office of Government Ethics also handle duties 
previously covered by the CSC.
    \34\ See 5 U.S.C. 1103(a)(5), (a)(7).
    \35\ Id.; see 5 U.S.C. 8461.
    \36\ See 5 U.S.C. 1204.
    \37\ See 5 U.S.C. 1212.
---------------------------------------------------------------------------

    The CSRA codified fundamental merit system principles, which had 
developed since 1883.\38\ These principles are summarized here:
---------------------------------------------------------------------------

    \38\ See 47 Cong. Ch. 27 (Jan. 16, 1883), 22 Stat. 403.
---------------------------------------------------------------------------

Merit System Principles \39\
---------------------------------------------------------------------------

    \39\ See 5 U.S.C. 2301.
---------------------------------------------------------------------------

    1. Recruit, select, and advance on merit after fair and open 
competition.
    2. Treat employees and applicants fairly and equitably.
    3. Provide equal pay for equal work and reward excellent 
performance.
    4. Maintain high standards of integrity, conduct, and concern for 
the public interest.
    5. Manage employees efficiently and effectively.
    6. Retain or separate employees on the basis of their performance.

[[Page 63865]]

    7. Educate and train employees if it will result in better 
organizational or individual performance.
    8. Protect employees from improper political influence.
    9. Protect employees against reprisal for the lawful disclosure of 
illegality and other covered wrongdoing.
    Under the CSRA's ``elaborate new framework,'' challenges to non-
appealable adverse actions, appealable adverse actions, and 
``prohibited personnel practices'' are channeled into separate 
procedural tracks.\40\ The procedures an agency must follow in taking 
an adverse action and whether the agency's action is appealable to MSPB 
depend on the action the agency seeks to impose.
---------------------------------------------------------------------------

    \40\ See Fausto, 484 U.S. at 443, 445-47; see 5 U.S.C. 1212, 
1214, 2301, 2302, 7502, 7503, 7512, 7513; see also 5 U.S.C. 4303 
(review of actions based on unacceptable performance).
---------------------------------------------------------------------------

    Suspensions of 14 days or less are not directly appealable to 
MSPB.\41\ But an employee against whom such a suspension is proposed is 
entitled to certain procedural protections, including notice, an 
opportunity to respond, representation by an attorney or other 
representative, and a written decision.\42\
---------------------------------------------------------------------------

    \41\ 5 U.S.C. 7503; Fausto, 484 U.S. at 446.
    \42\ 5 U.S.C. 7503(b)(1)-(4); 5 CFR part 752, subpart B.
---------------------------------------------------------------------------

    More rigorous procedures apply before agencies may pursue removals, 
demotions, suspensions for more than 14 days, reductions in grade and 
pay, and furloughs for 30 days or less, assuming the subject of the 
contemplated action meets the definition of an ``employee'' under 5 
U.S.C. 7511.\43\ Incumbents, other than those who are statutorily 
excepted from chapter 75's protections, receive the full panoply of 
civil service protections in 5 U.S.C. 7513 after they satisfy the 
length of service conditions in 5 U.S.C. 7511.\44\ Under section 
7511(a)(1), ``employee'' refers to an individual who falls within one 
of three groups: (1) an individual in the competitive service who 
either (a) is not serving a probationary or trial period \45\ under an 
initial appointment; or (b) has completed 1 year of current continuous 
service under other than a temporary appointment limited to 1 year or 
less; (2) a preference eligible \46\ in the excepted service who has 
completed 1 year of current continuous service in the same or similar 
positions in an Executive agency; or in the United States Postal 
Service or Postal Rate Commission; or (3) an individual in the excepted 
service (other than a preference eligible) who either (a) is not 
serving a probationary or trial period under an initial appointment 
pending conversion to the competitive service; or (b) has completed 2 
years of current continuous service in the same or similar positions in 
an Executive agency under other than a temporary appointment limited to 
2 years or less.\47\
---------------------------------------------------------------------------

    \43\ See 5 CFR 752.401, 404, 1201.3; see also 5 U.S.C. 7504, 
7512(1)-(5); Fausto, 484 U.S. at 446-47.
    \44\ 5 U.S.C. 7513(d), 7701(a).
    \45\ The term ``probationary period'' generally applies to 
employees in the competitive service. ``Trial period'' applies to 
employees in the excepted service and some appointments in the 
competitive service, such as term appointments, which have a 1-year 
trial period set by OPM. A fundamental difference between the two is 
the duration in which employees must serve. The probationary period 
is set by law to last 1 year. When the trial period is set by 
individual agencies, it can last up to 2 years. See 5 CFR 315.801 
through 806; see also U.S. Merit System Protections Board, 
Navigating the Probationary Period After Van Wersch and McCormick, 
(Sept. 2006), https://www.mspb.gov/studies/studies/Navigating_the_Probationary_Period_After_Van_Wersch_and_McCormick_276106.pdf.
    \46\ The term ``preference eligible'' refers to specified 
military veterans and family members with derived preference 
pursuant to statute, such as an unmarried widow, and the wife or 
husband of a service-connected disabled veteran. See 5 U.S.C. 
2108(3) for additional explanation.
    \47\ 5 U.S.C. 7511(a)(1). Under Federal Circuit case law, as 
explained further infra, whether an employee has completed a 
probationary or trial period is immaterial to this analysis if in 
fact the employee has completed the requisite period of continuous 
employment under subparagraphs (A)(ii) and (C)(ii).
---------------------------------------------------------------------------

    In the event of a final MSPB decision adverse to the employee, 
employees may petition the United States Court of Appeals for the 
Federal Circuit or another appropriate judicial forum to review MSPB's 
final orders and decisions.\48\
---------------------------------------------------------------------------

    \48\ 5 U.S.C. 7503, 7513, 7701-7703, 7703(a)(1), (b)(1)(A).
---------------------------------------------------------------------------

    Excepted from these procedural entitlements and rights to appeal 
conferred on other employees under chapter 75 are employees ``whose 
position has been determined to be of a confidential, policy-
determining, policy-making, or policy-advocating character.'' \49\ This 
is true regardless of veterans' preference or length of service in the 
position. As detailed further infra, it is evident that Congress, in 
using this and similar language in various parts of title 5, U.S. Code, 
intended this exception to apply only to noncareer, political 
appointments that carry no expectation of continued employment beyond 
the presidential administration during which the appointment 
occurred.\50\ The unique responsibilities of political appointees, 
typically listed under excepted service Schedule C, allow hiring and 
termination to be done purely at the discretion of the President or the 
President's political appointees. This is a narrow, specific exception 
from the competitive service, and each position listed in Schedule C is 
revoked immediately upon the position becoming vacant.\51\ Agencies may 
terminate political appointees at any time, often whenever the 
relationship between the incumbent and the political appointee to whom 
the incumbent reports ends. This also means that, absent any unique 
circumstance provided in law or a request to stay by an incoming 
administration, these positions are vacated following a presidential 
transition.
---------------------------------------------------------------------------

    \49\ 5 U.S.C. 7511(b)(2)(b).
    \50\ See infra, Sec. II. Proposed Amendments; 5 CFR 6.2 
(``Positions of a confidential or policy-determining character shall 
be listed in Schedule C''); 213.3301 Schedule C (``positions which 
are policy-determining or which involve a close and confidential 
working relationship with the head of an agency or other key 
appointed officials''). Political appointees serve at the pleasure 
of the President or other appointing official and may be asked to 
resign or be dismissed at any time. They are not covered by civil 
service removal procedures, have no adverse action rights, and 
generally have no right to appeal terminations. See e.g. 5 U.S.C. 
7511(b)(2) (excluding noncareer, political appointees from 
definition of ``employees'' eligible for adverse action 
protections); 5 CFR 317.605 (``An agency may terminate a noncareer 
or limited appointment at any time, unless a limited appointee is 
covered under 5 CFR 752.601(c)(2).''); 734.104 (listing employees 
who are appointed by the President, noncareer SES members, and 
Schedule C employees as ``employees who serve at the pleasure of the 
President.''); 752.401(d)(2) (excluding noncareer, political 
appointees under Schedule C from adverse action protections).
    \51\ See 5 CFR 213.3301.
---------------------------------------------------------------------------

    Prior to the CSRA, agencies relied only on provisions codified at 
chapter 75 to remove Federal employees or to change an employee to a 
lower grade, even if the reason for removal was for unacceptable 
performance. The CSRA created chapter 43 as an additional, and, in 
Congress' view, potentially improved process for empowering supervisors 
to address performance concerns.\52\ Accordingly, in addition to using 
the provisions of chapter 75, agencies can now address performance 
concerns under chapter 43 of title 5, U.S. Code.
---------------------------------------------------------------------------

    \52\ U.S. Merit System Protections Board, ``Addressing Poor 
Performers and the Law,'' p. 4. (Sept. 2009), https://www.mspb.gov/studies/studies/Addressing_Poor_Performers_and_the_Law_445841.pdf.
---------------------------------------------------------------------------

    Through various enactments now reflected in chapters 43 and 75, 
Congress has created conditions under which certain employees (i.e., 
those with the requisite tenure in continued employment) may gain a 
property interest in continued employment. Congress has mandated that 
removal and the other actions described in subchapter II of chapter 75 
may be taken only ``for such cause as will promote the

[[Page 63866]]

efficiency of the service.'' \53\ This property interest in continued 
employment has been a feature of the Federal civil service since at 
least 1912, when the Lloyd-La Follette Act required just cause to 
remove a Federal employee. The Supreme Court in Board of Regents of 
State Colleges v. Roth, recognized that restrictions on loss of 
employment, such as tenure, can create a property right.\54\ In 
Cleveland Board of Education v. Loudermill,\55\ the Court also held:
---------------------------------------------------------------------------

    \53\ See 5 U.S.C. 7503(a), 7513(a); 5 CFR 752.102(a), 
752.202(a).
    \54\ 408 U.S. 564, 576-77 (1972). The Court described three 
earlier decisions--Slochower v. Board of Education, 350 U.S. 551 
(1956), Wieman v. Updegraff, 344 U.S. 183 (1952), and Connell v. 
Higginbotham, 403 U.S. 207 (1971)--where the Court held that due 
process rights applied to public employment.
    \55\ 470 U.S. 532 (1985).

    Property cannot be defined by the procedures provided for its 
deprivation any more than can life or liberty. The right to due 
process is conferred, not by legislative grace, but by 
constitutional guarantee. While the legislature may elect not to 
confer a property interest in public employment, it may not 
constitutionally authorize the deprivation of such an interest once 
conferred, without appropriate procedural safeguards.\56\
---------------------------------------------------------------------------

    \56\ Id. at 541.

    In short, once a government requires cause for removals, 
constitutional due process protection will attach to that property 
interest and determine the minimum procedures by which a removal may be 
carried out. Any new law addressing the removal of a Federal employee 
with a vested property interest in the employee's continued employment 
must, at a minimum, comport with the constitutional concept of due 
process. This obligation drives some of the procedures in both chapters 
43 and 75, while others have been developed in accordance with 
Congress's assessments of what is good policy.\57\ As a matter of law, 
agencies must follow the procedures specified by Congress, in the 
circumstances described, to effectuate a removal under those chapters.
---------------------------------------------------------------------------

    \57\ The exact procedures required will turn on the factual 
situation and may be different from instance to instance.
---------------------------------------------------------------------------

    Finally, in addition to establishing the requirements and 
procedures for challenging adverse actions and performance-based 
actions, the CSRA includes a mechanism for employees in a ``covered 
position'' to challenge a ``personnel action'' that constitutes a 
``prohibited personnel practice'' because it has been taken for a 
prohibited reason.\58\ ``Covered position'' means any position in the 
competitive service, a career appointee in the Senior Executive 
Service, or a position in the excepted service unless ``conditions of 
good administration warrant'' a necessary exception on the basis that 
the position is of a ``confidential, policy-determining, policy-making, 
or policy-advocating character.'' \59\
---------------------------------------------------------------------------

    \58\ 5 U.S.C. 2302(a)(1), (a)(2), (b).
    \59\ 5 U.S.C. 2302(a)(2)(B), 3302.
---------------------------------------------------------------------------

    At 5 U.S.C. 2302(a)(2)(A), Congress lists twelve types of personnel 
actions that can form the basis of a prohibited personnel practice 
under 5 U.S.C. 2302(b). Generally, these personnel actions include (1) 
an appointment; (2) a promotion; (3) an adverse personnel action for 
disciplinary or non-disciplinary reasons; (4) a detail, transfer, or 
reassignment; (5) a reinstatement; (6) a restoration; (7) a 
reemployment; (8) a performance evaluation; (9) a decision concerning 
pay, benefits, or awards, or concerning education or training if the 
education or training may reasonably be expected to lead to an 
appointment, promotion, performance evaluation; (10) a decision to 
order psychiatric testing or examination; (11) the implementation or 
enforcement of any nondisclosure policy, form, or agreement; and (12) 
any other significant change in duties, responsibilities, or working 
conditions.\60\
---------------------------------------------------------------------------

    \60\ 5 U.S.C. 2302(a)(2)(A).
---------------------------------------------------------------------------

    The CSRA codified a comprehensive list of prohibited personnel 
practices, summarized here:
Prohibited Personnel Practices \61\
---------------------------------------------------------------------------

    \61\ 5 U.S.C. 2302(b).
---------------------------------------------------------------------------

    1. Illegally discriminate for or against any employee or applicant, 
including on the basis of marital status or political affiliation.
    2. Solicit or consider improper employment recommendations.
    3. Coerce political activity or take action against an employee or 
applicant for any person's refusal to engage in political activity.
    4. Willfully obstruct a person's right to compete for employment.
    5. Improperly influence any person to withdraw from competition for 
a position.
    6. Give unauthorized preference or improper advantage to improve or 
injure a particular person's employment prospects.
    7. Employ or promote a relative.
    8. Act against a whistleblower, whether an employee or applicant.
    9. Act against employees or applicants for filing or assisting with 
an appeal, or cooperating with the Inspector General or Special 
Counsel.
    10. Discriminate on the basis of conduct that does not affect 
performance.
    11. Knowingly violate veterans' preference requirements.
    12. Take or fail to take a personnel action where the action or 
omission violates any law, rule, or regulation that implements or 
directly concerns the merit system principles.
    13. Implement or enforce an unlawful nondisclosure agreement.
    14. Access the medical record of another employee or an applicant 
in furtherance of a prohibited personnel practice.
    OSC investigates allegations of prohibited personnel practices 
brought by an individual and may investigate in the absence of such an 
allegation to determine if corrective action is warranted.\62\ If OSC 
concludes that corrective action is, in fact, warranted, and if OSC is 
unable to obtain a satisfactory correction of the practice from the 
corresponding agency, it may petition MSPB to grant corrective action, 
and, if OSC proves its claim, MSPB may order the corrective action it 
deems appropriate.\63\
---------------------------------------------------------------------------

    \62\ 5 U.S.C. 1214(a)(1)(A), (a)(5).
    \63\ See 5 U.S.C. 1214(b)(2)(B), (C), (b)(4)(A). But note that, 
by statute, OSC cannot request corrective action as to 5 U.S.C. 
2302(b)(11). See 5 U.S.C. 2302(e)(2).
---------------------------------------------------------------------------

C. The Competitive, Excepted, and Senior Executive Services

    The Federal civil service consists of three services: the 
competitive service, the excepted service, and Senior Executive 
Service.\64\ In the competitive service, individuals must complete a 
competitive hiring process before being appointed. This process may 
include a written test or an equivalent evaluation of the individual's 
relative level of knowledge, skills, and abilities necessary for 
successful performance in the position to be filled.\65\
---------------------------------------------------------------------------

    \64\ 5 U.S.C. 2102(a)(1) (competitive service); 5 U.S.C. 2103(a) 
(excepted service); 5 U.S.C. 3132(a)(2) (Senior Executive Service).
    \65\ See 5 U.S.C. 3304 (``An individual may be appointed in the 
competitive service only if he has passed an examination or is 
specifically excepted from examination under section 3302 of this 
title.''); see also U.S. Office of Personnel Management, 
``Competitive Hiring,'' https://www.opm.gov/policy-data-oversight/hiring-information/competitive-hiring/.
---------------------------------------------------------------------------

    While most government employees are in the competitive service, 
about one-third are in the excepted service.\66\ The excepted service 
includes all positions in the Executive Branch that are specifically 
excepted from the

[[Page 63867]]

competitive service by statute, Executive order, or by OPM 
regulation.\67\ For positions excepted from the competitive service by 
statute, selection must be made pursuant to the provisions Congress 
enacted. Applicants for excepted service positions under title 5, U.S. 
Code, like applicants for the competitive service, are to be selected 
``solely on the basis of relative ability, knowledge, and skills, after 
fair and open competition which assures that all receive equal 
opportunity.'' \68\ Agencies filling positions in the excepted service 
``shall select . . . from the qualified applicants in the same manner 
and under the same conditions required for the competitive service.'' 
\69\ This means that agencies should generally afford preference in the 
same manner they would have for the competitive service, though, in a 
few situations \70\ where the reason for the exception makes this 
essentially impossible, OPM (or the President) has exempted the 
position from regulatory requirements and imposed a less stringent 
standard.\71\
---------------------------------------------------------------------------

    \66\ See Congressional Research Service, ``Categories of Federal 
Civil Service Employment; A Snapshot,'' at p. 4 (May 26, 2019), 
https://sgp.fas.org/crs/misc/R45635.pdf.
    \67\ See 5 U.S.C. 2103; 5 CFR parts 213, 302.
    \68\ 5 U.S.C. 2301(b)(1).
    \69\ 5 U.S.C. 3320.
    \70\ See infra notes 139-142.
    \71\ 5 CFR 302.101(c).
---------------------------------------------------------------------------

    The President is authorized by statute to provide for ``necessary 
exceptions of positions from the competitive service'' when warranted 
by ``conditions of good administration.'' \72\ The President has 
delegated to OPM--and, before that, to its predecessor, the CSC--
concurrent authority to except positions from the competitive service 
when it determines that appointments thereto through competitive 
examination are not practicable.\73\ The President has further 
delegated authority to OPM to ``decide whether the duties of any 
particular position are such that it may be filled as an excepted 
position under the appropriate schedule.'' \74\
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    \72\ 5 U.S.C. 3302.
    \73\ E.O. 10577, sec. 6.1(a) (1954); 5 CFR 6.1(a) (1988) (``The 
Commission is authorized to except positions for the competitive 
service whenever it determines that appointments thereto through 
competitive examination are not practicable'' and that ``[u]pon the 
recommendation of the agency concerned, it may also except positions 
which are of a confidential or policy-determining character.'').
    \74\ E.O. 10577 sec. 6.1(b); 5 CFR 6.1(b); see 28 FR 10025 
(Sept. 14, 1963) (reorganizing the civil service rules).
---------------------------------------------------------------------------

    OPM has exercised its delegated authority, and implemented 
exercises of presidential authority, by prescribing five schedules for 
positions in the excepted service, which are currently listed in 5 CFR 
part 213:
     Schedule A--Includes positions that are not of a 
confidential or policy-determining character for which it is not 
practicable to examine applicants, such as attorneys, chaplains, and 
short-term positions for which there is a critical hiring need.
     Schedule B--Includes positions that are not of a 
confidential or policy-determining character for which it is not 
practicable to examine applicants. Unlike Schedule A positions, 
Schedule B positions require an applicant to satisfy basic 
qualification standards established by OPM for the relevant occupation 
and grade level. Schedule B positions engage in a variety of 
activities, including policy analysis, teaching, and technical 
assistance.
     Schedule C--Includes positions that are policy-determining 
or which involve a close and confidential working relationship with the 
head of an agency or other key appointed officials. These positions 
include most political appointees below the cabinet and subcabinet 
levels.
     Schedule D--Includes positions that are not of a 
confidential or policy-determining character for which competitive 
examination makes it difficult to recruit certain students or recent 
graduates. Schedule D positions generally require an applicant to 
satisfy basic qualification standards established by OPM for the 
relevant occupation and grade level. Positions include those in the 
Pathways Programs.
     Schedule E--Includes positions of administrative law 
judges.\75\
---------------------------------------------------------------------------

    \75\ 5 CFR 6.2.
---------------------------------------------------------------------------

    As described supra, competitive and excepted service incumbents, 
except those in Schedule C, become ``employees'' for purpose of civil 
service protections after they satisfy the length of service conditions 
in 5 U.S.C. 7511. Excepted service employees, except those in Schedule 
C and some employees in certain Federal agencies excepted by statute, 
maintain the same notice and appeal rights for adverse actions and 
performance-based actions as competitive service employees.\76\ 
However, and as noted here, excepted service employees must satisfy 
different durational requirements before these rights become available. 
So-called ``preference eligibles''--specified military veterans and 
family members with derived preference pursuant to statute \77\--in an 
executive agency, the Postal Service, or the Postal Rate Commission 
must complete one year of current continuous service to avail 
themselves of the relevant notice and appeal rights.\78\ Employees in 
the excepted service who are not preference eligibles and (1) are not 
serving a probationary or trial period under an initial appointment 
pending conversion to the competitive service, or (2) have completed 
two years of current or continuous service in the same or similar 
position, have the same notice and appeal rights as qualifying 
employees in the competitive service.\79\
---------------------------------------------------------------------------

    \76\ See 5 U.S.C. 4303, 7513(d). There are, however, some 
notable differences between non-removal protections afforded to 
competitive service and excepted service employees, such as 
assignment rights in the event of a reduction in force. See 5 CFR 
351.501 and 502. Employees who are reached for release from the 
competitive service during a reduction in force are entitled to an 
offer of assignment if they have ``bump'' or ``retreat'' rights to 
an available position in the same competitive area. ``Bumping'' 
means displacement of an employee in a lower tenure group or a lower 
subgroup within the same tenure group. ``Retreating'' means 
displacement of an employee in the same tenure group and subgroup. 
Meaning, they are entitled to the positions of employees with fewer 
assignment rights. Employees in excepted service positions have no 
assignment rights to other positions unless their agency, at the 
agency's discretion, chooses to offer these rights to positions. 
Even with these differences, merit system principles are at the core 
of civil service protections relating to hiring, conduct, and 
performance matters as applied to both career competitive and 
excepted service employees.
    \77\ See 5 U.S.C. 2108(3).
    \78\ See 5 U.S.C. 7511(a)(1)(B).
    \79\ See 5 U.S.C. 7511(a)(1)(C).
---------------------------------------------------------------------------

    Likewise, any employee who is (1) a preference eligible; (2) in the 
competitive service; or (3) in the excepted service and covered by 
subchapter II of chapter 75, and who has been reduced in grade or 
removed under chapter 43, is entitled to appeal the action to MSPB.\80\ 
However, these appeal rights do not apply to (1) the reduction to the 
grade previously held of a supervisor or manager who has not completed 
the probationary period under 5 U.S.C 3321(a)(2); (2) the reduction in 
grade or removal of an employee in the competitive service who is 
serving a probationary or trial period under an initial appointment or 
who has not completed one year of current continuous employment under 
other than a temporary appointment limited to one year or less; or (3) 
the reduction in grade or removal of an employee in the excepted 
service who has not completed one year of current continuous employment 
in the same or similar positions.\81\
---------------------------------------------------------------------------

    \80\ See 5 U.S.C. 4303(e).
    \81\ See 5 U.S.C. 4303(f).
---------------------------------------------------------------------------

D. The Prior Schedule F

    On October 21, 2020, President Donald Trump, through Executive 
Order 13957, ``Creating Schedule F in the Excepted Service,'' sought to 
alter the carefully crafted legislative balance that Congress struck in 
the CSRA.\82\ That Executive order, if fully implemented, could have 
transformed the civil service

[[Page 63868]]

by purportedly stripping adverse action rights under chapter 75, 
performance-based action rights under chapter 43, and appeal rights 
from large swaths of the Federal workforce--thereby turning them into 
at-will employees--and by eliminating statutory requirements built into 
the Federal hiring process intended to promote the objective of merit-
based hiring decisions. It would have upended the longstanding 
principle that a career Federal employee's tenure should be linked to 
their performance, rather than to the nature of the position that the 
employee encumbers. It also could have reversed longstanding 
requirements that, among other things, prevent political appointees 
from ``burrowing in'' to career civil service jobs in violation of 
merit system principles. Executive Order 13957 was revoked, and 
Schedule F was abolished, by President Joseph Biden through Executive 
Order 14003, ``Protecting the Federal Workforce.'' \83\
---------------------------------------------------------------------------

    \82\ 85 FR 67631 (Oct. 21, 2020).
    \83\ 86 FR 7231 (Jan. 22, 2021).
---------------------------------------------------------------------------

1. Adverse Action Rights, Performance-Based Action Rights, and Appeals
    Section 5 of Executive Order 13957 directed agency heads to review 
their entire workforces to identify any employees covered by chapter 
75's adverse action rules (which apply broadly to employees in the 
competitive and excepted service) who occupied positions of a 
``confidential, policy-determining, policy-making, or policy-advocating 
character''--including positions the agency assessed, for the first 
time, to arguably include these characteristics--and to petition OPM 
for its approval to place them in Schedule F, a newly-created category 
of positions excepted from the competitive service. If these positions 
had, in fact, been placed in Schedule F, the employees encumbering them 
would purportedly have been stripped of the adverse action procedural 
rights under chapter 75 and MSPB appeal rights discussed supra, thus 
allowing them to be terminated at will, by virtue of the placement of 
the positions they occupied in this new schedule (and regardless of any 
rights they had already accrued).\84\
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    \84\ Since performance-based actions under 5 U.S.C. 4303 are 
tied, in part, to subchapter II of chapter 75, employees would 
purportedly have also been stripped of performance-based action 
procedural rights and MSPB appeal rights, had an agency chosen to 
proceed with an action under chapter 43.
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    An express rationale of this action was to make it easier for 
agencies to ``expeditiously remove poorly performing employees from 
these positions without facing extensive delays or litigation.'' \85\ 
This new sweeping authority was purportedly necessary for the President 
to have ``appropriate management oversight regarding'' the career civil 
servants working in positions deemed to be of a ``confidential, policy-
determining, policy-making or policy-advocating character,'' and to 
incentivize employees in these positions to display what presidential 
appointees at an agency would deem to be ``appropriate temperament, 
acumen, impartiality, and sound judgment,'' in light of the importance 
of these functions.\86\ Executive Order 13957 did not acknowledge 
existing mechanisms to provide ``appropriate management oversight,'' 
such as chapter 43 and chapter 75 procedures, or the multiple 
management controls that agencies have in place to escalate matters of 
importance to agency administrators.\87\
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    \85\ E.O. 13957, sec. 1.
    \86\ The Executive order provided that ``[c]onditions of good 
administration . . . make necessary excepting such positions from 
the adverse action procedures set forth in chapter 75 of title 5, 
United States Code.'' E.O. 13957, sec. 1. We note that the 
``conditions of good administration'' language appears in 5 U.S.C. 
3302. Section 3302 relates only to exclusions of positions from the 
competitive service when conditions of good administration warrant 
and does not purport to confer authority on the President to except 
positions from the provisions of chapter 75. Similarly, chapter 75 
itself does not itself purport to confer authority on the President 
to except positions from the scope of chapter 75. President Trump 
appeared to be attempting to effectuate the exception by requiring 
agencies to identify career positions in the competitive or excepted 
service that are ``not normally subject to change as a result of a 
Presidential transition'' (and thus not encompassed by Schedule C) 
but that are nevertheless of a ``confidential, policy-determining, 
policy-making, or policy advocating character,'' to facilitate the 
movement of such positions to a new Schedule F. In essence, 
President Trump thought to separate this phrase from its historical 
context, which was to describe positions normally placed in Schedule 
C, which positions normally are subject to change as a result of a 
presidential transition.
    \87\ Matters of importance can be raised to agency 
administrators in various ways, such as by filing a complaint with 
an agency's Inspector General, raising concerns with an agency's 
human resources office, and filing a grievance.
---------------------------------------------------------------------------

    Executive Order 13957 instructed agency heads to review existing 
positions to determine which, if any, should be placed into Schedule F. 
The Executive order also instructed that, after agency heads conducted 
their initial review, they were to move quickly and petition OPM by 
January 19, 2021--the day before Inauguration Day--to place positions 
within Schedule F. After that, agency heads had another 120 days to 
petition OPM to place additional positions in Schedule F. In contrast 
to past excepted service schedules designed to address unique hiring 
needs upon a determination that appointments through the competitive 
service was ``not practicable,'' \88\ movement into Schedule F was 
designed to be broad and numerically unlimited, potentially affecting a 
substantial number of jobs across all Federal agencies. For example, 
according to the Government Accountability Office, the Office of 
Management and Budget petitioned to place 68 percent of its workforce, 
more than 400 employees, within Schedule F.\89\
---------------------------------------------------------------------------

    \88\ See infra notes 137-141.
    \89\ Government Accountability Office, ``Civil Service--Agency 
Responses and Perspectives on Former Executive Order to Create a New 
Schedule F Category for Federal Positions,'' (Sept. 2022), https://www.gao.gov/assets/gao-22-105504.pdf.
---------------------------------------------------------------------------

2. Hiring
    Section 3 of Executive Order 13957 provided that ``[a]ppointments 
of individuals to positions of a confidential, policy-determining, 
policy-making, or policy-advocating character that are not normally 
subject to change as a result of a presidential transition shall be 
made under Schedule F.'' \90\ The stated rationale for removing these 
positions from the competitive hiring process (or from other excepted 
service schedules in which some of these positions were previously 
placed) was, again, said to be because of the importance of their 
corresponding duties, and the need to have employees in these positions 
that display ``appropriate temperament, acumen, impartiality, and sound 
judgment.'' \91\ The stated purpose was to ``provide agency heads with 
additional flexibility to assess prospective appointees without the 
limitations imposed by competitive service selection procedures'' \92\ 
or, presumably, for positions already in the excepted service, without 
the constraints imposed by 5 CFR part 302. Executive Order 13957 
indicated that this change was intended to ``mitigate undue limitations 
on their selection'' and relieve agencies of ``complicated and 
elaborate competitive service processes or rating procedures that do 
not necessarily reflect their particular needs.'' \93\ These changes 
were to give agencies ``greater ability and discretion to assess 
critical qualities in applicants to fill these positions, such as work 
ethic, judgment,

[[Page 63869]]

and ability to meet the particular needs of the agency.'' \94\
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    \90\ 85 FR 67632.
    \91\ 85 FR 67631.
    \92\ 85 FR 67631.
    \93\ 85 FR 67632. The procedures Congress has adopted for hiring 
in the competitive service were designed, in part, to implement the 
stated congressional policy of veterans' preference. See 5 U.S.C. 
1302. How this congressional mandate would be realized in these 
circumstances was not addressed.
    \94\ 85 FR 67632.
---------------------------------------------------------------------------

    Executive Order 13957 failed to address the fact that the 
competitive hiring process permits agencies to assess all competencies 
that are related to successful performance of the job, including 
appropriate temperament, acumen, impartiality, and sound judgment and 
fulfill the congressional policy to confer a preference on eligible 
veterans or their family members entitled to derived preference. The 
qualifications requirements, specialized experience, interview process 
and other assessment methodologies available to hiring managers 
facilitate an agency's ability to identify the best candidate. 
Executive Order 13957 also failed to address the existence of 
longstanding rules, grounded in the need to establish lack of unlawful 
bias in proceedings under Federal anti-discrimination statutes, that 
require assessment of any such competencies.\95\ The summary imposition 
of new competencies without validating them would be contrary to 
existing statutory requirements and could potentially be discriminatory 
in application, even if that were not the agency's intent.
---------------------------------------------------------------------------

    \95\ See 5 CFR part 300. Validation generally requires that the 
criteria and methods by which job applicants are evaluated have a 
rational relationship to performance in the position to be filled.
---------------------------------------------------------------------------

3. Political Appointees in Career Civil Service Positions
    An additional concern relating to Executive Order 13957 was that it 
could have facilitated burrowing. ``Burrowing'' occurs when a current 
(or recently departed) political appointee is hired into a permanent 
competitive service, nonpolitical excepted service, or career Senior 
Executive Service position without having to compete for that position 
or having been appropriately selected in accordance with merit system 
principles and the normal competitive or excepted service procedures 
applicable to the position under civil service law. OPM has long 
required that ``politics play no role when agencies hire political 
appointees for career Federal jobs.'' \96\ Indeed, OPM adopted 
procedures to review appointments of such individuals for compliance, 
and Congress has now essentially codified that procedure by requiring 
OPM to submit periodic reports of its findings.\97\ Executive Order 
13957 potentially would have allowed agency heads to move current 
political appointees into new Schedule F positions, or vacancies in 
existing positions transferred to Schedule F, without competition and 
in a manner not based on merit system principles--in effect, allowing 
political appointees on Schedule C appointments, who would normally 
expect to depart upon a presidential transition, to ``burrow'' into 
permanent civil service appointments.
---------------------------------------------------------------------------

    \96\ OPM, ``Guidelines on Processing Certain Appointments and 
Awards During the 2020 Election Period,'' https://chcoc.gov/sites/default/files/2020%20Appointments%20and%20Awards%20Guidance%20Attachments_508.pdf.
    \97\ See The Edward ``Ted'' Kaufman and Michael Leavitt 
Presidential Transitions Improvement Act of 2015. Pub. L. 114-136 
(Mar. 18, 2016), which requires OPM to submit these reports to 
Congress.
---------------------------------------------------------------------------

    Ultimately, Executive Order 13957 was rescinded before any 
positions could be placed into Schedule F. As noted above, on January 
22, 2021, President Joseph Biden issued Executive Order 14003, 
``Protecting the Federal Workforce,'' stating that ``it is the policy 
of the United States to protect, empower, and rebuild the career 
Federal workforce,'' and that the Schedule F policy ``undermined the 
foundations of the civil service and its merit system principles.'' 
\98\ Executive Order 14003 rescinded Executive Order 13957 and 
abolished Schedule F.\99\
---------------------------------------------------------------------------

    \98\ E.O. 14003, 86 FR 7231, 7231 (Jan. 22, 2021) https://www.federalregister.gov/documents/2021/01/27/2021-01924/protecting-the-federal-workforce.
---------------------------------------------------------------------------

E. OPM's Authority To Regulate
    The OPM Director has direct statutory authority to execute, 
administer, and enforce all civil service rules and regulations as well 
as the laws governing the civil service. \100\ The Director also has 
authorities Presidents have conferred on OPM pursuant to the 
President's statutory authority.\101\
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    \100\ See 5 U.S.C. 1103(a)(5)(A). This authority does not 
include functions for which either MSPB or OSC is primarily 
responsible. Among other authorities, MSPB has specific adjudicative 
and enforcement authority upon the satisfaction of threshold 
showings that an employee has established appeal rights. It also has 
authority to administer statutory provisions relating to 
adjudication of adverse action appeals. OSC has specific and limited 
investigative and prosecutorial authority. See 5 U.S.C. 1213-1216.
    \101\ See Presidential rules codified at 5 CFR parts 1 through 
10.
---------------------------------------------------------------------------

    As explained here, in enacting the CSRA, Congress conveyed broad 
regulatory authority over Federal employment directly to OPM throughout 
title 5.\102\ In addition, many of these specific statutory enactments, 
including chapter 75, expressly confer on OPM authority to regulate. 
Pursuant to 5 U.S.C. 7514, OPM may issue regulations to carry out the 
purpose of subchapter II of chapter 75, and pursuant to 5 U.S.C. 7504, 
OPM may issue regulations to carry out the purpose of subchapter I of 
chapter 75.
---------------------------------------------------------------------------

    \102\ See, e.g., 5 U.S.C. 1103, 1302, 3308, 3317, 3318, 3320; 
Chapters 43, 53, 55, 75.
---------------------------------------------------------------------------

    The same is true with respect to chapter 43. Pursuant to 5 U.S.C. 
4305, OPM may issue regulations to carry out subchapter I of chapter 
43.
    Prior to the reorganization proposal \103\ approved by Congress 
that created OPM, the CSC exercised its broad authorities, in part, to 
establish rules and procedures concerning the terms of being appointed 
in the competitive or excepted service and of moving between the 
competitive and excepted service. Since its inception in 1978, OPM has 
leveraged that same authority--including from Executive Order 
10577,\104\ as amended, as well as from statutory authorities such as 5 
U.S.C. 1103(a)(5) and 5 U.S.C. 1302--to establish rules and procedures 
concerning the effects on an employee of being appointed in the 
competitive or excepted service and of moving between the competitive 
and excepted service. OPM has used these authorities to create 
government-wide rules for Federal employees regarding a wide range of 
topics, such as hiring, promotion, performance assessment, pay, leave, 
political activity, retirement, and health benefits.\105\ For instance:
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    \103\ President Jimmy Carter, Reorganization Plan No. 2, sec. 
101 and 102 (May 23, 1978). The plan specifies in section 102 that 
``Except as otherwise specified in this Plan, all functions vested 
by statute in the United States Civil Service Commission, or the 
Chairman of said Commission, or the Boards of Examiners established 
by 5 U.S.C. 1105 are hereby transferred to the Director of the 
Office of Personnel Management.''
    \104\ 87 FR 7521 (Nov. 22, 1954).
    \105\ See, e.g., 5 CFR parts 2, 6, 212, 213, 335, 430, 550, 630, 
733, 734, 831, 890.
---------------------------------------------------------------------------

     5 CFR part 6 requires OPM to publish in the Federal 
Register on a regular basis the list of positions that are in the 
excepted service.\106\
---------------------------------------------------------------------------

    \106\ 5 CFR 6.1(c), 6.2; see 28 FR 10025 (Sept. 14, 1963), as 
amended by E.O. 11315; E.O. 12043, 43 FR 9773 (Mar. 10, 1978); E.O. 
13562, 75 FR 82587 (Dec. 30, 2010); see also E.O. 14029, 86 FR 27025 
(May 19, 2021).
---------------------------------------------------------------------------

     5 CFR 212.401(b), promulgated in 1968,\107\ well before 
the CSRA, provides that ``[a]n employee in the competitive service at 
the time his position is first listed under Schedule A, B, or C remains 
in the competitive service while he occupies that position.'' This 
regulation was intended to preserve competitive service status and 
rights for employees who were initially appointed to positions in the 
competitive service and whose positions were subsequently moved into 
the excepted service (such as administrative law judges).\108\
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    \107\ See 33 FR 12408 (Sept. 4, 1968).
    \108\ Id.

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[[Page 63870]]

     5 CFR 302.102, promulgated in part to implement 5 U.S.C. 
3320, provides that when an agency wishes to move an employee from a 
position in the competitive service to one in the excepted service, the 
agency must: ``(1) Inform the employee that, because the position is in 
the excepted service, it may not be filled by a competitive 
appointment, and that acceptance of the proposed appointment will take 
him/her out of the competitive service while he/she occupies the 
position; and (2) Obtain from the employee a written statement that he/
she understands he/she is leaving the competitive service voluntarily 
to accept an appointment in the excepted service.'' \109\
---------------------------------------------------------------------------

    \109\ See 55 FR 9407 (Mar. 14, 1990), as amended at 58 FR 58261 
(Nov. 1, 1993).
---------------------------------------------------------------------------

     5 CFR part 432 sets forth the procedures to be followed, 
if an agency opts to pursue a performance-based action against an 
employee under chapter 43 of title 5, U.S. Code. As with the adverse 
action rules in part 752, the rules applicable to performance-based 
actions apply broadly to employees in the competitive and excepted 
service, with narrowly defined exceptions that include political 
appointees.\110\
---------------------------------------------------------------------------

    \110\ See 54 FR 26179 (June 21, 1989), redesignated and amended 
at 54 FR 49076 (Nov. 29, 1989), redesignated and amended at 58 FR 
65534 (Dec. 15, 1993); 85 FR 65982 (Oct. 16, 2020); 87 FR 67782 
(Nov. 10, 2022).
---------------------------------------------------------------------------

     5 CFR part 752 implements chapter 75 of title 5, U.S. Code 
and establishes the procedural rights that apply when an agency 
commences the process for taking an adverse action against an 
``employee,'' as defined in 5 U.S.C. 7511. These regulations apply 
broadly to employees in the competitive and excepted service meeting 
the section 7511 criteria.\111\
---------------------------------------------------------------------------

    \111\ See 74 FR 63532 (Dec. 4, 2009), as amended at 85 FR 65985 
(Oct. 16, 2020); 87 FR 67782 (Nov. 10, 2022).
---------------------------------------------------------------------------

    Moreover, the President, pursuant to his own authorities under the 
CSRA, as codified at 5 U.S.C. 3301 and 3302, has explicitly delegated a 
variety of these authorities to OPM concerning execution, 
administration, and enforcement of the competitive and excepted 
services. For example, under Civil Service Rule 6.1(a), ``OPM may 
except positions from the competitive service when it determines that . 
. . appointments thereto through competitive examination are not 
practicable.'' \112\ And under Civil Service Rule 6.1(b), ``OPM shall 
decide whether the duties of any particular position are such that it 
may be filled as an excepted position under the appropriate schedule.'' 
\113\
---------------------------------------------------------------------------

    \112\ 5 CFR 6.1(a).
    \113\ 5 CFR 6.1(b).
---------------------------------------------------------------------------

    OPM has other regulatory authority, for example, under 5 CFR parts 
5 and 10, to oversee the Federal personnel system and agency compliance 
with merit system principles and supporting laws, rules, regulations, 
Executive orders, and OPM standards. OPM also administers the statutory 
provisions governing the rights of Federal employees in connection to 
adverse agency actions.\114\
---------------------------------------------------------------------------

    \114\ See 5 U.S.C. 7514 (granting OPM the authority to 
``prescribe regulations to carry out the purpose of'' subchapter II 
of chapter 75 of title 5); see also 5 U.S.C. 7511(c), 7513(a), see 
also infra, Sec. II.A.
---------------------------------------------------------------------------

II. Proposed Amendments

    OPM proposes amending its regulations in 5 CFR chapter I, 
subchapter B, as summarized below to clarify and reinforce longstanding 
civil service protections and merit system principles.

A. Civil Service Protections

    Adverse action protections and related eligibility and procedures 
are covered in 5 U.S.C. chapter 75. subchapter I covers suspensions for 
14 days or less and 5 U.S.C. 7501 defines ``employee'' for the purposes 
of adverse action procedures for suspensions of this duration. Under 5 
U.S.C. 7504, OPM may prescribe regulations to carry out the purpose of 
subchapter I. Subchapter II covers removals, suspensions for more than 
14 days, reductions in grade or pay, or furloughs for 30 days or less. 
In this subchapter, 5 U.S.C. 7511 defines ``employee'' for the purposes 
of entitlement to adverse action procedures. Under 5 U.S.C. 7514, OPM 
may prescribe regulations to carry out the purposes of subchapter II 
except as it concerns any matter where MSPB may prescribe regulations.
    OPM proposes amending 5 CFR part 752 (Adverse Actions) to reflect 
OPM's longstanding interpretation of 5 U.S.C. 7501 and 5 U.S.C 7511 and 
the congressional intent underlying the statutes, including exceptions 
to civil service protections outlined in 5 U.S.C. 7511(b). OPM proposes 
to clarify that employees who are moved from the competitive to the 
excepted service, or from one excepted service schedule to another, 
retain the status and civil service protections they had already 
accrued. On the other hand, an employee may relinquish such rights or 
status by voluntarily applying for, accepting, and then encumbering a 
position that explicitly results in the loss of, or different, rights.
    OPM also proposes revising its regulations at subpart B of 5 CFR 
part 752 (Regulatory Requirements for Suspension for 14 Days or Less) 
to conform this subpart with statutory language in 5 U.S.C. 7501. The 
proposed revisions are intended to reinforce which employees are 
covered by subpart B when an agency decides to take an action under 
this subpart for such cause as will promote the efficiency of the 
service.
    OPM proposes revising subpart D of 5 CFR part 752 (Regulatory 
Requirements for Removal, Suspension for More Than 14 Days, Reduction 
in Grade or Pay, or Furlough for 30 Days or Less) to clarify that 
employees in the competitive and excepted services (except for 
positions in Schedule C) who have fulfilled their probationary or trial 
period requirement or the durational requirements under 5 U.S.C. 7511 
will retain the rights conferred by subchapter II if moved from the 
competitive service to the excepted service or from within excepted 
service to a new excepted service schedule, except in the case where an 
employee relinquishes such rights or status by voluntarily seeking, 
accepting, and encumbering a position that explicitly results in a loss 
of, or different, rights.
    Performance-based actions under chapter 43 and related eligibility 
and processes are covered in 5 U.S.C. 4303. Section 4303(e) defines 
when an employee is entitled to appeal rights to MSPB. Notably, chapter 
43 cross-references chapter 75, providing that any employee who is a 
preference eligible, in the competitive service, or covered by 
subchapter II of chapter 75, and who has been reduced in grade or 
removed under section 4303 is entitled to appeal the action to MSPB 
under 5 U.S.C. 7701. Under 5 U.S.C. 4305, OPM may issue regulations to 
carry out subchapter I of chapter 43.
    OPM proposes the following changes to 5 CFR part 752:
Part 752--Adverse Actions, Subpart B
    As a preliminary matter, subpart B of part 752 applies to 
suspensions for 14 days or less. Chapter 75 of title 5, U.S. Code, 
provides a straightforward process for agencies to use in adverse 
actions involving suspensions of this duration. The proposed changes 
conform this subpart with statutory language to clarify which employees 
are covered by subpart B when an agency decides to take an action under 
this subpart for such cause as will promote the efficiency of the 
service.
    Section 752.201 Coverage.
    Section 752.201(b) outlines which employees are covered by subpart 
B. OPM is proposing to modify the language in Sec.  752.201(b) to 
further clarify when an employee has or retains

[[Page 63871]]

coverage under the procedures of this subpart.
    OPM proposes to revise subpart B of part 752 to conform to the 
decisions of the Federal Circuit in Van Wersch v. Department of Health 
& Human Services, 197 F.3d 1144 (Fed. Cir. 1999), and McCormick v. 
Department of the Air Force, 307 F.3d 1339 (Fed. Cir. 2002). These 
cases now guide the way MSPB applies 5 U.S.C. 7511(a)(1), which defines 
employees who have the right to appeal major adverse actions, such as 
removals, to MSPB. Van Wersch addressed the definition of ``employee'' 
for purposes of nonpreference eligibles in the excepted service and, a 
few years later, McCormick addressed the meaning of ``employee'' for 
purposes of the competitive service. As explained supra, section 
7511(a)(1) states that ``employees'' include individuals who meet 
specified conditions relating to the duration of their service or, for 
nonpreference eligibles, relating to their probationary or trial period 
status. The Federal Circuit explained that the word ``or,'' here, 
refers to alternatives: some individuals who traditionally had been 
considered probationers with limited rights are actually entitled to 
the same appeal rights afforded to non-probationers if the individuals 
meet the other requirements of section 7511(a)(1), namely (1) their 
prior service is ``current continuous service,'' (2) the current 
continuous service is in the ``same or similar positions'' for purposes 
of nonpreference eligibles in the excepted service, and (3) the total 
amount of such service meets a one or two-year requirement, and was not 
in a temporary appointment limited to one or two years, depending on 
the service.\115\
---------------------------------------------------------------------------

    \115\ See McCormick, 307 F.3d at 1341-43; Van Wersch, 197 F.3d 
at 1151-52.
---------------------------------------------------------------------------

    In a prior rulemaking,\116\ OPM modified its regulations for 
appealable adverse actions in 5 CFR part 752, subpart D, to align with 
Van Wersch and McCormick and statutory language. OPM has consistently 
advised agencies regarding 5 U.S.C. 7501 in light of the Federal 
Circuit's interpretation of similar statutory language in 5 U.S.C. 
7511. In this rule, OPM proposes to modify language in 5 CFR 
752.201(b)(1) to conform with the statutory language in 5 U.S.C. 7501. 
OPM's proposed revision to Sec.  752.201(b)(1) prescribes that, even if 
an employee in the competitive service who has been suspended for 14 
days or less is serving a probationary or trial period, the employee 
retains the procedural rights provided under 5 U.S.C. 7503 if the 
individual has completed one year of current continuous employment in 
the same or similar position under other than a temporary appointment 
limited to one year or less.
---------------------------------------------------------------------------

    \116\ OPM, ``Career and Career-Conditional Employment and 
Adverse Actions,'' 73 FR 7187 (Feb. 7, 2008).
---------------------------------------------------------------------------

    OPM also proposes to amend Sec.  752.201(b)(1) through (b)(6) to 
clarify that individuals retain their status as covered employees if 
they are moved involuntarily from the competitive service to the 
excepted service, unless specifically prohibited by law.
    Finally, OPM proposes to add a new 5 CFR 752.201(c)(7) to further 
clarify that employees in positions determined to be of a confidential 
policy-determining, policy-making, or policy-advocating character as 
defined in 5 CFR 210.102 are excluded from coverage under subpart B of 
part 752 because, as explained infra, Congress intended these positions 
to mean noncareer, political appointments.
Part 752--Adverse Actions, Subpart D
    Subpart D of part 752 applies to removal, suspension for more than 
14 days, reduction in grade or pay, or furlough for 30 days or less. 
This includes, but is not limited to, adverse actions based on 
misconduct or unacceptable performance. The proposed changes are 
intended to reinforce the civil service protections that apply when an 
agency pursues certain adverse actions for the efficiency of the 
service, under chapter 75.
    Section 752.401 Coverage.
    Section 752.401(c) outlines which employees are covered by subpart 
D. OPM is proposing to modify the language in Sec.  752.401(c) to 
further clarify when an employee has or retains coverage under the 
procedures of this subpart.
    The proposed changes add language to provide that an employee who 
occupies a position that is moved from the competitive service into the 
excepted service, or from one excepted service schedule to another, is 
covered by the regulatory requirements for removal, suspension for more 
than 14 days, reduction in grade or pay, or furlough for 30 days or 
less.
    The proposed changes to Sec.  752.401 reflect the impact of 
statutory requirements--namely, that once an employee meets certain 
conditions, the individual gains certain statutory procedural rights 
and civil service protections which cannot be taken away from the 
individual by simply moving the employee's position into the excepted 
service, or within the excepted service, as long as the employee 
continues to occupy the same or similar position. These proposed 
regulatory changes are consistent with how similar statutory rights 
have been interpreted by Federal courts and MSPB when employees change 
jobs by moving to a different Federal agency.\117\
---------------------------------------------------------------------------

    \117\ See, e.g., McCormick, 307 F.3d at 1341-43; Greene v. Def. 
Intel. Agency, 100 M.S.P.R. 447 (2005).
---------------------------------------------------------------------------

    In addition, OPM proposes to update Sec.  752.401(c)(2)(ii) to 
reflect the repeal of 10 U.S.C. 1599e, effected December 31, 2022.\118\ 
Prior to the repeal, certain individuals hired at the Department of 
Defense were subject to a two-year probationary period. The repeal 
restores a one-year probationary period for covered Department of 
Defense employees.
---------------------------------------------------------------------------

    \118\ See Public Law 117-81, Sec. 1106(a)(1).
---------------------------------------------------------------------------

    Finally, OPM proposes to modify 5 CFR 752.401(d)(2) to further 
clarify that political appointees intended to work on matters of a 
confidential policy-determining, policy-making, or policy-advocating 
character, as defined in Sec.  210.102, are excluded from coverage 
under subpart D of part 752.

B. Positions of a Confidential, Policy-Determining, Policy-Making, or 
Policy-Advocating Character

    OPM proposes to amend 5 CFR part 210 (Basic Concepts and 
Definitions (General)), to add a definition for the terms 
``confidential, policy-determining, policy-making, or policy-
advocating'' and ``confidential or policy-determining.'' Positions of 
this nature are excepted from the chapter 75 protections described 
above. OPM proposes to define these terms to make explicit OPM's 
interpretation of this exception in 5 U.S.C. 7511(b), which is that 
Congress intended to except from chapter 75's civil service protections 
individuals in positions of a character exclusively associated with a 
noncareer, political appointment that is both (a) identified by its 
close working relationship with the President, head of an agency, or 
other key appointed officials who are responsible for furthering the 
goals and policies of the President and the Administration, and (b) 
that carries no expectation of continued employment beyond the 
presidential administration during which the appointment occurred.
    Specifically, OPM proposes to add this definition for 
``confidential, policy-determining, policy-making, or policy-
advocating'' and ``confidential or policy-determining'' to 5 CFR 
210.102, which applies throughout OPM's Civil Service Regulations in 5 
CFR chapter I, subchapter B. OPM is proposing to define these terms as 
descriptors for the

[[Page 63872]]

positions held by noncareer, political employees because the terms are 
currently used in the regulations to describe, among other things, a 
``position'' or the ``character'' of a position. OPM is also proposing 
conforming changes to 5 CFR 213.3301, 302.101, 432.101, 451.302, 
752.201, and 752.401 to standardize the phrasing used to describe this 
type of position.
    As explained more fully later in this section, Congress has been 
careful to strike a balance between career employees--who are covered 
by civil service protections under chapter 75 because of the need for a 
professional civil service no matter whether they are in the 
competitive or excepted service--and political appointees who serve as 
confidential assistants and advisors to the President and to key 
appointed officials who have direct responsibility for carrying out the 
Administration's political objectives. These political appointees are 
not required to compete for their positions in the same manner as 
career employees, serve at the pleasure of their superiors, and have no 
expectation of continued employment beyond the presidential 
administration during which their appointment occurred.
    When Congress created the adverse action protections under chapter 
75, it excluded employees appointed by the President, with or without 
Senate confirmation, and employees in the excepted service ``whose 
position has been determined to be of a confidential, policy-
determining, policy-making or policy-advocating character.'' \119\ 
Likewise, Congress specifically excluded from the positions safeguarded 
against prohibited personnel practices under 5 U.S.C. 2302(a)(2)(B)(i) 
any position that is ``excepted from the competitive service because of 
its confidential, policy-determining, policy-making, or policy-
advocating character.''
---------------------------------------------------------------------------

    \119\ See 5 U.S.C. 7511(b)(2).
---------------------------------------------------------------------------

    As explained infra, these narrow exceptions have long been 
interpreted to apply to noncareer, political appointees typically 
listed in Schedule C. Political appointees have long been considered a 
powerful, but narrow, cross section of Executive Branch leadership. 
These positions ``are relatively few in number'' and consist ``of only 
the highest positions,'' \120\ and, in practice, a limited number of 
confidential staff to support the work of the individuals in such 
positions.
---------------------------------------------------------------------------

    \120\ See ``Report of the President's Committee, Administrative 
Management in the Government of the United States,'' p. 8 (Jan. 
1937).
---------------------------------------------------------------------------

    The context in which the CSRA was enacted bolsters the 
interpretation that ``confidential, policy-determining, policy-making, 
or policy-advocating'' positions, and their exclusion from civil 
service protections, refers to political appointees and not career 
civil servants. Congress revised parts of the CSRA immediately 
following the Supreme Court's decision in Elrod v. Burns,\121\ where 
the Court addressed the constitutionality of political patronage-based 
dismissals from government employment under the First Amendment. The 
Court explained that ``a nonpolicymaking, nonconfidential government 
employee'' cannot be ``discharged or threatened with discharge from a 
job that he is satisfactorily performing upon the sole ground of his 
political beliefs.'' \122\
---------------------------------------------------------------------------

    \121\ 427 U.S. 347, 354 (1976) (explaining that ``strong 
discontent with the corruption and inefficiency of the patronage 
system of public employment eventuated in the Pendleton Act'').
    \122\ Id. at 375 (1975) (Stewart and Blackmun, JJ., concurring 
in the judgment); see, e.g., Carver v. Dennis, 104 F.3d 847, 850 n.5 
(6th Cir. 1997) (explaining that ``[t]he three-justice plurality 
opinion and two-justice concurrence in Elrod'' so held).
---------------------------------------------------------------------------

    Consistent with this background, the CSRA's legislative history 
explains the exclusion for ``confidential, policy-determining, policy-
making, or policy-advocating'' employees from section 7511 as ``an 
extension of the exception for appointments confirmed by the Senate'' 
and covering political appointee positions, i.e., those currently 
placed in Schedule C (positions at GS-15 and below) or filled by Non-
career Executive Assignment (GS-16, -17, and -18).\123\ It states that 
``[t]he concept of tenure and protection against dismissal is contrary 
to the confidential relationship of incumbent and supervising official, 
and the commitment to Administration policy objectives required by 
those filling such positions.'' \124\
---------------------------------------------------------------------------

    \123\ S. Rep. No. 95-969, at 48 (1978), reprinted in 1978 
U.S.C.C.A.N. 2723, 2770.
    \124\ Legislative History of the Civil Service Reform Act of 
1978, Committee on Post Office and Civil Service, House of 
Representatives, Volume No. II, Committee Print No. 96-2, 96th 
Congress, 1st Session (Mar. 17, 1979).
---------------------------------------------------------------------------

    Congress made significant amendments to section 7511 through the 
Civil Service Due Process Amendments Act of 1990, which expanded MSPB 
jurisdiction to excepted service employees who historically were not 
entitled to adverse action rights. The legislative history of the 1990 
Act confirms that the intent was to expand appeal rights for excepted 
service employees but retain the exclusion for political appointees. It 
states:

    The bill generally extends procedural rights to attorneys, 
teachers, chaplains, and scientists, but not to presidential 
appointees. . . . [T]he key to the distinction between those to whom 
appeal rights are extended and those to whom such rights are not 
extended is the expectation of continuing employment with the 
Federal Government. Lawyers, teachers, chaplains, and scientists 
have such expectations; presidential appointees and temporary 
workers do not.
    . . .
    Schedule C, positions of a confidential or policy-determining 
character. . . . are political appointees who are specifically 
excluded from coverage under section 7511(b) of title 5. H.R. 3086 
does not change the fact that these individuals do not have appeal 
rights.
    The bill explicitly denies procedural protections to 
presidential appointees, individuals in Schedule C positions and 
individuals appointed by the President and confirmed by the Senate. 
Employees in each of these categories have little expectation of 
continuing employment beyond the administration during which they 
were appointed. They explicitly serve at the pleasure of the 
President or the presidential appointee who appointed them.\125\
---------------------------------------------------------------------------

    \125\ H.R. Rep. No. 101-328, 4-5 (1989), reprinted in 1990 
U.S.C.C.A.N. 695, 698-99.

    In a case concerning the application of 5 U.S.C. 2302(a)(2)(B)(i) 
(related to prohibited personnel practices), which also contains an 
exception for positions of a ``confidential, policy-determining, 
policy-making, or policy-advocating character,'' MSPB interpreted this 
legislative history to indicate that the exclusion of civil service 
protections at section 2302(a)(2)(B)(i) was intended to cover 
``political appointees,'' as is the case with section 7511(b)(2). In 
O'Brien v. Office of Independent Counsel, 74 M.S.P.R. 192 (1997), the 
---------------------------------------------------------------------------
Board stated:

    Schedule C, the only category to include positions of a 
confidential or policy-determining character, authorizes 
appointments to positions ``which are policy-determining or which 
involve a close and confidential working relationship with the head 
of the agency or other key appointed officials.'' 5 CFR 213.3301. 
This regulation, while using the same language as 5 U.S.C. 
2302(a)(2)(B), adopts a narrow definition of a position of ``a 
confidential or policy-determining nature,'' i.e., involving ``a 
close and confidential working relationship with the head of an 
agency or other key appointed officials.'' 5 CFR 213.3301(a). The 
word ``confidential'' in that regulation does not necessarily refer 
to matters that are to be kept secret but instead to the nature of 
the relationship between the employee and the head of the agency or 
other key appointed officials.
    Further support for the notion that the terms of the exception 
found at 5 U.S.C. 2302(a)(2)(B)(i) are a shorthand way of describing 
``political appointee'' positions can be found in the legislative 
history of the 1990 Civil Service Due Process Amendments

[[Page 63873]]

to the CSRA, which extended adverse action appeal rights to a 
broader class of excepted service employees than had previously been 
covered. 5 U.S.C. 7511. The Act retained the exclusions found at 5 
U.S.C. 7511(b), however, and the legislative history describes 
excepted service employees as those in either Schedule A, Schedule 
B, or Schedule C and states that Schedule C positions of a 
confidential or policy-determining character are ``political 
appointees who are specifically excluded from coverage under 5 
U.S.C. 7511(b).'' H.R.Rep. No. 328, 101st Cong., 2d Sess. 4-5 
(1989), reprinted in 1990 U.S.C.C.A.N. 698-99. Although the Board in 
certain cases has considered the question of who is excluded under 5 
U.S.C. 7511(b) as a ``confidential, policy-determining, policy-
making or policy-advocating'' employee, it did not resolve those 
cases on that issue. See Thompson v. Department of Justice, 61 
M.S.P.R. 364, 368 (1994); Briggs v. National Council on Disability, 
60 M.S.P.R. 331, 333-36 (1994). Both 5 U.S.C. 2302(a)(2)(B)(i) and 5 
U.S.C. 7511(b) use the phrase ``confidential, policy-determining, 
policy-making, or policy-advocating'' to exclude certain positions. 
We know of no reason why Congress would intend that it be 
interpreted differently in each of the two parts of Title 5.\126\
---------------------------------------------------------------------------

    \126\ 74 M.S.P.R. at 207-08.

    Improperly applying the term ``of a confidential, policy-
determining, policy-making, or policy-advocating character'' to 
describe positions held by career employees, who have an expectation of 
continuing employment beyond the presidential administration during 
which they were appointed, and to strip them of civil service 
protections, would be contrary to congressional intent and decades of 
applicable case law and practice. Congress carefully balanced the need 
for long-term employees who have knowledge of the history, mission, and 
operations of their agencies with the need of the President for 
individuals in positions who will ensure that the specific policies of 
the Administration will be pursued. An ``excessive preoccupation with 
the meaning of [this] term in isolation distorts the purpose of the 
exception.'' \127\ The term has long been interpreted as ``a shorthand 
way of describing positions to be filled by political appointees,'' 
including any appointment required or authorized to be made by the 
President, or by an agency head when there are ``indications that the 
appointment was intended to be, or in fact was, made with any political 
considerations in mind.'' \128\
---------------------------------------------------------------------------

    \127\ Special Counsel v. Peace Corps, 31 M.S.P.R. 225, 231-32 
(1986).
    \128\ O'Brien v. Off. of Indep. Counsel, 74 M.S.P.R. 192, 206 
(1997) (quoting Special Counsel, 31 M.S.P.R. at 231).
---------------------------------------------------------------------------

    In this proposed rule, therefore, OPM is making explicit this 
longtime, consistent understanding that positions of a ``confidential, 
policy-determining, policy-making, or policy-advocating character'' 
refer to noncareer, political appointments. Specifically, OPM is 
proposing to modify 5 CFR 210.102 to define the terms ``Confidential, 
policy-determining, policy-making, or policy-advocating'' and 
``Confidential or policy determining'' as they are used through the 
Civil Service Regulations in 5 CFR chapter I, subchapter B, to describe 
positions that are: ``of a character exclusively associated with a 
noncareer, political appointment that is identified by its close 
working relationship with the President, head of an agency, or other 
key appointed officials who are responsible for furthering the goals 
and policies of the President and the Administration, and that carries 
no expectation of continued employment beyond the presidential 
administration during which the appointment occurred.''

C. Agency Procedures for Moving Employees

    OPM proposes revising 5 CFR part 302 (Employment in the Excepted 
Service) to require that Federal agencies follow specific procedures 
upon moving positions from the competitive service to the excepted 
service or, if the position is already in the excepted service, to a 
different excepted service schedule following a direction from the 
President, Congress, OPM, or their designees.\129\ This proposed rule 
describes the procedures an agency must follow before taking these 
actions and outlines the notice requirements that apply when the 
positions are encumbered. Further, and consistent with the civil 
service protections outlined supra, OPM proposes to modify 5 CFR part 
212 (Competitive Service and Competitive Status) regarding the effect 
of an employee's competitive service status when the employee's 
position is moved to the excepted service.
---------------------------------------------------------------------------

    \129\ There are only three possible sources of a direction to 
move a position from the competitive service to the excepted service 
or from one schedule of the excepted service to another. The 
direction may come from the President, 5 U.S.C. 3302; from OPM, id.; 
see 5 CFR part 6.1(a); or from Congress, via an enactment that 
creates an exception to the default rules established under 5 U.S.C. 
3301 and 3302. If an agency purported to act at its own initiative, 
that effort would be unauthorized and thus contrary to law.
---------------------------------------------------------------------------

1. Procedures for Moving Positions
    In enacting the CSRA, Congress made certain findings relevant to 
the proposed changes discussed here. It noted that the merit system 
principles, many of which have existed since 1883,\130\ ``shall govern 
in the competitive service'' and that these principles, and the 
prohibited personnel practices should be ``expressly stated'' in 
statute to ``furnish guidance to Federal agencies.'' \131\ As explained 
previously, it then proceeded to divide functions previously performed 
by the CSC among OPM, MSPB, and OSC. It found that the function of 
filling positions in the Executive Branch should be delegated to 
agencies ``in appropriate cases'' but that OPM should maintain control 
and oversight ``to protect against prohibited personnel practices and 
the use of unsound management practices by the agencies.'' \132\
---------------------------------------------------------------------------

    \130\ See supra note 38.
    \131\ Public Law 95-454, sec. 3.2.
    \132\ Id. at sec. 3.5
---------------------------------------------------------------------------

    As noted in section I.E., the CSRA, as codified, imposed upon OPM 
both authority and an obligation to, among other things, ``execut[e], 
administer[ ], and enforce[ ] . . . the civil service rules and 
regulations of the President and the Office and the laws governing the 
civil service.'' \133\ The President, pursuant to his own authorities 
under the CSRA, as codified at 5 U.S.C. 3301 and 3302, has also 
delegated a variety of these authorities to OPM concerning execution, 
administration, and enforcement of the competitive and excepted 
services. Among other things, the President has authorized OPM to 
``promulgate and enforce regulations necessary to carry out the 
provisions of the Civil Service Act and the Veterans' Preference Act, 
as reenacted in title 5, United States Code, the Civil Service Rules, 
and all other statutes and Executive orders imposing responsibilities 
on the Office,'' \134\ and to collect information and records regarding 
matters falling within the civil service laws, rules, and 
regulations.\135\
---------------------------------------------------------------------------

    \133\ 5 U.S.C. 1103(a)(5).
    \134\ 5 CFR 5.1, 6.1, 6.2.
    \135\ 5 CFR 5.4.
---------------------------------------------------------------------------

    OPM has concluded that imposing additional safeguards when agencies 
move positions from one service to another, or one excepted service 
schedule to another, will help OPM determine whether appointments to 
the competitive service are ``not practicable,'' \136\ protect against 
prohibited personnel practices, secure appropriate enforcement of the 
law governing the civil service, and avoid unsound management practices 
with respect to the civil service. It is important to the effective 
administration of the civil service that exceptions from the 
competitive service norm be

[[Page 63874]]

enforced within the terms of the specific authority creating them and 
that employees who are said to have voluntarily accepted positions that 
affect their rights both understand that the move is, in fact, 
voluntary and that they are aware of the potential consequences of 
those moves.
---------------------------------------------------------------------------

    \136\ 5 CFR 6.1.
---------------------------------------------------------------------------

    Some background demonstrates why these proposed changes are 
important. Positions in the Federal Government are, by default, placed 
in the competitive service. As noted by the D.C. Circuit, 5 U.S.C. 3301 
and 3302 ``make it clear . . . that `competitive service [is] the norm 
rather than the exception.' '' \137\ The President, however, is 
authorized by Congress to provide for ``necessary exceptions of 
positions from the competitive service'' whenever warranted by 
``conditions of good administration.'' \138\ The President, in turn, 
has delegated to OPM the authority to except positions from the 
competitive service, which means either the President or OPM may except 
positions, as situations warrant.\139\ It has been a long-standing 
practice under these authorities for the President, and for OPM 
exercising its delegated authority, to permit positions that would 
otherwise be in the competitive service to be filled through excepted 
service appointments where conditions of good administration warrant 
exceptions from competitive examining procedures (e.g., for people with 
disabilities and students). In some cases, positions have been placed 
in the excepted service because it is not practicable to examine in 
light of the position itself. For example, a perennial rider to OPM 
appropriations prohibits OPM--and before that, its predecessor CSC--
from examining for attorney positions.\140\ This appropriations bar 
makes examinations not practicable, and attorney positions have been 
placed in Schedule A of the excepted service since at least 1947.\141\ 
In all these cases, OPM is subject to the standard that any departure 
from the competitive norm must be warranted by conditions of good 
administration.
---------------------------------------------------------------------------

    \137\ Nat'l Treasury Employees Union v. Horner, 854 F.2d 490, 
493 (D.C. Cir. 1988); accord, Dean v. Off. of Personnel Mgmt., 115 
M.S.P.R. 157, ] 15 (2010).
    \138\ 5 U.S.C. 3302.
    \139\ 5 CFR 6.1(a).
    \140\ See e.g., Treasury, Postal Service and General 
Appropriation Act, 1982, H.R. 4121, 97th Cong., 1st Sess. (1981); 
Fiorentino v. United States, 607 F.2d 963, 965-66 (Ct. Cl. 1979) 
(``It has long been known . . . that the Congress has been always 
opposed to Civil Service Commission (CSC) testing and examining of 
attorney positions in the Executive branch under the competitive 
system. . . . Defendant cites as the enacted expression of this 
[opposition] the annual prohibition against appropriated funds of 
the CSC being used for the Commission's Legal Examining Unit. An 
unbroken series of such clauses runs from the Act of June 26, 1943, 
Pub. L. 90, 57 Stat. 169, 173, to the Act of October 10, 1978, Pub. 
L. 95-429, 92 Stat. 1001, 1007. The President had set up a Board of 
Legal Examiners (Legal Examining Unit), by E.O. 9358, July 1, 1943. 
By E.O. 9830, 12 FR 1259 (1947), the President in s 6.1 provided 
that positions in Schedule A and B should be excepted from the 
competitive service. Section 6.4 is Schedule A. Item IV therein is 
`attorneys.' Whether the legislative intent is obvious to 
`outsiders,' it certainly has been to the Executive branch, which 
has never, since May 1, 1947, put attorney positions anywhere but in 
the excepted service.'').
    \141\ Fiorentino, 607 F.2d at 965-66.
---------------------------------------------------------------------------

    Traditionally, the President has exercised this authority through 
Executive order.\142\ OPM has also authorized excepted service hiring 
to address urgent needs of agencies,\143\ such as the need to bring on 
staff quickly to respond to the COVID-19 pandemic.\144\ When OPM 
exercises such authority, it determines the characteristics of the 
position make it impracticable to use the processes associated with 
conducting a competitive examination.\145\ For example, the 
qualification requirements established for competitive service 
positions cannot be used because the series has been newly created. In 
other instances, OPM determines a full-blown open competition is not 
conducive to filling certain positions because the applicant pool is 
very narrow.
---------------------------------------------------------------------------

    \142\ See, e.g., E.O. 13562, 75 FR 82583 (Dec. 30, 2010) 
(establishing Schedule D for the Pathways program); E.O. 13843, 83 
FR 32755 (July 10, 2018) (establishing Schedule E for administrative 
law judges).
    \143\ 5 CFR part 213.
    \144\ See OPM Memorandum, ``Coronavirus (COVID-19) Schedule A 
Hiring Authority,'' (March 20, 2020).
    \145\ Even in those cases, however, OPM has provided that ``the 
principle of veteran preference'' must be followed ``as far as 
administratively feasible.'' 5 CFR 302.101(c). In practice, this 
standard has been held to be satisfied by using veterans' preference 
as a plus factor, and thus a tie-breaker, in comparing candidates at 
similar levels of knowledge, skills, and abilities. See Patterson v. 
Dep't of Interior, 424 F.3d 1151 (Fed. Cir. 2005).
---------------------------------------------------------------------------

    Sometimes, excepted service determinations are prescriptive, and 
agencies need only execute the operational tasks necessary to implement 
the direction of the President or OPM (for example, Schedule A 
attorneys, Schedule E administrative law judges, or any number of other 
positions specifically identified for excepted service status, such as 
through Executive Orders 5560 and 6655). In other circumstances, either 
the President or OPM establishes standards and conditions for agencies 
to apply in deciding which positions should be moved into the excepted 
service (for example, Schedule D appointments for students and recent 
graduates and Schedule A appointments related to the COVID-19 
pandemic). In the latter category, the determination of whether to 
place a position in the excepted service has typically occurred prior 
to the position being filled. In other words, with the notable 
exceptions of Schedule E, established by Executive Order 13843,\146\ 
and of the prior Schedule F established by the now revoked Executive 
Order 13957, these are intended to be used as hiring authorities. It is 
notable that, in the case of the creation of Schedule E, the President 
noted the exigency presented by pending litigation as one of the 
motivations, and expressly provided that incumbents who were in the 
competitive service as of the date of enactment, would remain in their 
current positions.\147\
---------------------------------------------------------------------------

    \146\ 83 FR 32755 (July 10, 2018).
    \147\ 83 FR 32755-56.
---------------------------------------------------------------------------

    When the President or OPM has chosen to establish standards for 
agencies to apply in creating new positions or moving existing 
positions into the excepted service (rather than specifically directing 
that certain positions be excepted service positions), they have also 
routinely required agencies to follow certain procedures subject to OPM 
oversight. With respect to the now-revoked Schedule F, Executive Order 
13957 required agencies to petition OPM to move positions into Schedule 
F, and provided for the petition to ``include a written explanation 
documenting the basis for the agency head's determination that such 
position should be placed in Schedule F.'' \148\ Section 6 of that 
Executive order directed agencies to ``establish rules to prohibit the 
same personnel practices prohibited by section 2302(b) of title 5, 
United States Code, with respect to any employee or applicant for 
employment in Schedule F of the excepted service.'' \149\
---------------------------------------------------------------------------

    \148\ 85 FR 67633.
    \149\ 85 FR 67634
---------------------------------------------------------------------------

    The rules for the Pathways programs,\150\ established by President 
Barack Obama in Executive Order 13562, are more prescriptive. For 
example, under 5 CFR part 362, agencies seeking to use the Pathways 
programs to hire students and recent graduates into excepted service 
positions must adhere to various policies and procedures. Among other 
things, agencies must enter into a memorandum of understanding with OPM 
that addresses several obligations and procedures that are conditions 
of the agency's authority to use the

[[Page 63875]]

programs. There are rules governing how agencies must use the Pathways 
programs as part of a larger workforce planning effort, the procedures 
that are conditions of the agency's use of the programs, how Pathways 
positions are to be announced, and various other rules applying to 
eligibility for the program.\151\ OPM has the authority to cap Pathways 
hiring \152\ and can even shut down an agency's ability to use Pathways 
altogether.\153\
---------------------------------------------------------------------------

    \150\ OPM has proposed revisions to the rules governing the 
Pathways programs. 88 FR 55586 (Aug. 16, 2023).
    \151\ See 5 CFR 362.105.
    \152\ See 5 CFR 362.108.
    \153\ See 5 CFR 362.104(b).
---------------------------------------------------------------------------

    Based on this history and experience, OPM is proposing to establish 
appropriate safeguards--i.e., a floor of procedures--that would apply 
whenever an agency is executing discretion to move any position or 
positions from the competitive service to the excepted service, or from 
one excepted service schedule to another, under authority executed by 
the President or OPM. In each instance, the agency would have to adhere 
to the following procedures:
    1. Identify the types, numbers, and locations of positions that the 
agency proposes to move into or within the excepted service;
    2. Document the basis for its determination that movement of the 
position or positions is consistent with the standards set forth by the 
President, Congress, OPM, or their designees, as applicable;
    3. Obtain certification from the agency's Chief Human Capital 
Officer (CHCO) \154\ that the documentation is sufficient and movement 
of the position or positions is both consistent with the standards set 
forth by the President, Congress, OPM, or their designees, as 
applicable, and advances sound merit system principles;
---------------------------------------------------------------------------

    \154\ The Chief Human Capital Officers Act of 2002, enacted as 
part of the Homeland Security Act of 2002, established the role of 
the CHCO in the Federal Government. CHCOs advise and assist in 
carrying out agencies' responsibilities for selecting, developing, 
training, and managing a high-quality, productive workforce in 
accordance with merit system principles. See 5 U.S.C. 1401-02. They 
are also responsible for ``implement[ing] the rules and regulations 
of the President, the Office of Personnel Management (OPM), and the 
laws governing the civil service within an agency.'' 5 CFR 250.202. 
OPM has delegated various responsibilities directly to CHCOs. See 
e.g., OPM, ``Personnel Management in Agencies'' 81 FR 89357 (Dec. 
12, 2016) (tasking CHCOs with developing a Human Capital Operating 
Plan); OPM, ``Human Resources Management in Agencies,'' 73 FR 23012 
(Apr. 28, 2008) (implementing regulations for agencies and CHCOs 
regarding the strategic management of the Federal workforce); 5 CFR 
337.201 (giving CHCOs the ability to request direct-hire authority 
when OPM determines there is a hiring need).
---------------------------------------------------------------------------

    4. Submit the CHCO certification and supporting documentation to 
OPM (to include the types, numbers, and locations of positions) in 
advance of using the excepted service authority;
    5. Use the excepted service authority only after obtaining written 
approval from the OPM Director to do so; and
    6. Initiate any hiring actions under the excepted service authority 
only after OPM publishes any such authorizations in the Federal 
Register, to include the types, numbers, and locations of the positions 
moved to the excepted service.
    Specifically, OPM proposes the following regulatory changes to 5 
CFR parts 212 and 302:
Part 302--Employment in the Excepted Service, Subpart F
    OPM is proposing a new subpart F titled, ``Moving Positions into 
and Within the Excepted Service.'' In the event of a direction by the 
President, Congress, OPM, or their designees, to move a position from 
the competitive service to the excepted service, or from one excepted 
service schedule to the same or similar position in another, this new 
subpart would describe the processes and procedures an agency must 
follow to carry out such a move.
    Section 302.601 ``Scope.''
    Proposed 5 CFR 302.601 Scope would describe the scope of the 
positions that would be subject to the new procedures in subpart F.
    Section 302.602(a) ``Basic Requirements.''
    Proposed 5 CFR 302.602(a) Basic Requirements would require an 
agency to take certain steps after a direction from the President, 
Congress, OPM or their designees (hereafter ``the directive'') to move 
a position from the competitive service to the excepted service, or 
from one excepted service schedule to the same or similar position in 
another.
    Proposed Sec.  302.602(a)(1) states that, if the directive 
explicitly delineates the specific positions that are covered, the 
agency need only list the positions moved in accordance with that list, 
and their location within the organization.
    Proposed Sec.  302.602(a)(2) states that, if the directive requires 
the agency to select the positions to be moved pursuant to criteria 
articulated in the directive, then the agency must, upon OPM's request, 
provide a list of the positions to be moved in accordance with those 
criteria, those positions' location in the organization, and an 
explanation of how these criteria are relevant.
    Proposed Sec.  302.602(a)(3) states that, if the directive confers 
discretion on the agency to establish objective criteria for 
identifying the positions to be covered, or which specific slots of a 
particular type of position the agency intends to move, then the 
agency, in addition to supplying a list and the locations in the 
organization, must supply the objective criteria to be used and an 
explanation of how they were developed.
    Proposed Sec.  302.602(b) describes the steps agency management 
must take, independent of the impacted employees, with respect to such 
moves.
    Proposed Sec.  302.602(b)(1) requires an agency to identify the 
types, numbers, and locations of positions that the agency proposes to 
move into the excepted service.
    Proposed Sec.  302.602(b)(2) requires the agency to document the 
basis for its determination that movement of the position or positions 
is consistent with the standards set forth by the President, Congress, 
OPM, or their designees as applicable.
    Proposed Sec.  302.602(b)(3) requires the agency to obtain 
certification from the agency's CHCO that the documentation is 
sufficient and movement of the position or positions is both consistent 
with the standards set forth by the President, Congress, OPM, or their 
designees as applicable, and with merit system principles.
    Proposed Sec.  302.602(b)(4) requires the agency to submit the CHCO 
certification and supporting documentation to OPM (to include the 
types, numbers, and locations of positions) in advance of using the 
excepted service authority.
    Proposed Sec.  302.602(b)(5) specifies that OPM shall then review 
the CHCO certification and supporting documentation, and the agency 
shall be able to use the excepted service authority only after 
obtaining written approval from the OPM Director to do so.
    Proposed Sec.  302.602(b)(6) specifies that OPM shall publish any 
such authorizations in the Federal Register, to include the types, 
numbers, and locations of the positions moved to the excepted service 
and that the agency is not permitted to initiate any hiring actions 
under the excepted service authority until such publication occurs.
2. Notice Rights for Encumbered Positions
    OPM is proposing that additional rules would apply when one or more 
of the positions the agency wishes to move from the competitive service 
to the excepted service, or from one excepted service schedule to 
another, is encumbered by an employee. In that case, no less than 30 
days prior to moving the position, the agency must provide written 
notification to the employee of the intent to move the position. The 
notice must provide the

[[Page 63876]]

employee with the following information: (1) the authority for moving 
the position; (2) the rationale for moving the position; (3) the 
proposed timing of moving the position; and (4) a representation that 
the employee maintains their civil service status and any accrued 
protections notwithstanding the movement of the position.
    Proposed Sec.  302.602(c) describes the interactions and 
communication an agency must have with an employee whose position is 
being moved from the competitive service and placed in the excepted 
service, other than in Schedules D or E, or with an excepted service 
employee whose position is moved to another excepted service schedule, 
other than Schedules D or E.\155\
---------------------------------------------------------------------------

    \155\ OPM is omitting Schedules D and E from this proposed 
regulatory change because these schedules, for the Pathways programs 
participants and Administrative Law Judges (ALJs), see 5 CFR 6.2, 
respectively, have specific and unique requirements regarding 
eligibility and entrance into these positions. In particular, the 
Pathways programs, which were created by the President, not OPM, 
already have highly reticulated schemes for conversion of the 
appointee from the excepted service to the competitive service 
following the successful conclusion of the initial excepted service 
appointment. It is unlikely that the initial time-limited 
appointments to the excepted service would be appropriate vehicles 
for conversion to a different excepted service position, and, in any 
event, the incumbent would likely not yet have accrued adverse 
action rights in the excepted service positions they encumbered. 
Even if such rights had accrued, these appointees would enjoy such 
rights only for the balance of the original time-limited 
appointment. ALJ appointments were changed in light of ALJs' 
significant responsibilities in ``taking testimony,'' ``conducting 
trials,'' ``enforcing compliance with their orders,'' and in some 
cases issuing ``the final word [for] the agencies they serve.'' See 
E.O. 13843. Those specific duties, carried out with ``significant 
discretion,'' combined with a desire to eliminate any constitutional 
concerns regarding the method of ALJ appointments, were the reasons 
that ALJs were placed in the excepted service by the President as a 
matter of ``sound policy,'' which allowed agencies to ``assess 
critical qualities in ALJs candidates'' to ``meet the particular 
needs of the agency,'' such as subject matter expertise relevant to 
the agency's work. Id. In addition, special chapter 75 procedures 
apply to incumbent ALJs, and they can be removed from ALJ positions 
only by the employing agency at the conclusion of a specified 
proceeding at MSPB.
---------------------------------------------------------------------------

    Proposed Sec.  302.602(c)(1) requires that, 30 days prior to the 
effective date an agency intends to move a position, the agency must 
provide written notification to the employee of the intent to move the 
position.
    Proposed Sec.  302.602(c)(2) requires that the written notification 
required by Sec.  302.602(c)(1) inform the employee that the employee 
maintains their civil service status and any accrued protections 
notwithstanding the movement of the position.
    Of course, employees who are in the competitive service--and who 
the agency is not planning to move--may wish to apply for a new 
position in the excepted service and potentially relinquish accrued 
rights (such as a voluntary move from a competitive service position to 
a position as a Schedule C political appointee). In that situation, 
agencies must continue to comply with longstanding rules--codified at 5 
CFR 302.102(b)--providing for employees to be given notice that they 
are leaving the competitive service and requiring that employees 
provide acknowledgment that they understand that they are voluntarily 
leaving the competitive service to accept an appointment in the 
excepted service.\156\
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    \156\ Under 5 CFR 302.102(b), when an employee serving under a 
temporary appointment in the competitive service is selected for an 
excepted appointment, the agency must:
    1. Inform the employee that, because the position is in the 
excepted service, it may not be filled by a competitive appointment, 
and that acceptance of the proposed appointment will take him/her 
out of the competitive service while he/she occupies the position; 
and
    2. Obtain from the employee a written statement that he/she 
understands he/she is leaving the competitive service voluntarily to 
accept an appointment in the excepted service.
---------------------------------------------------------------------------

3. Appeal Rights for Encumbered Positions
    OPM proposes further amending 5 CFR part 302 to establish that a 
competitive service employee whose position is moved into the excepted 
service, or an excepted service employee whose position is moved into a 
different schedule of the excepted service, may directly appeal to MSPB 
if the entity perpetuating the move purports, contrary to these 
regulations, to strip the employee of the status and civil service 
protections they had already accrued. This rulemaking would not apply 
to situations where the employee applies for, and is selected for the 
new position, knowing that acceptance of the position voluntarily 
relinquishes such rights.
    As explained previously in section I.E., under 5 U.S.C. 1103(a)(5), 
OPM has broad authority to execute, administer, and enforce civil 
service rules and regulations. Pursuant to its statutory authority, 
including under 5 U.S.C. 7701, 7511(c), and the President's delegation 
of authority, OPM is authorized to create a right of appeal to MSPB by 
regulation. MSPB, in turn, has the responsibility to ``hear, 
adjudicate, or provide for the hearing or adjudication, of all matters 
within the jurisdiction of the Board under . . . law, rule or 
regulation,'' and an employee may appeal to the Board ``from any action 
which is appealable to the Board under any law, rule, or regulation.'' 
\157\ Both the Federal Circuit and MSPB have consistently affirmed the 
principle that MSPB's enabling statute gives it appellate jurisdiction 
over actions that are made appealable to the Board by OPM regulation 
and that where an appeal is solely by regulation, the regulation 
circumscribes the scope of the appeal.\158\
---------------------------------------------------------------------------

    \157\ 5 U.S.C. 1204(a)(1), 7701(a).
    \158\ See Roberto v. Dep't of the Navy, 440 F.3d 1341, 1350 
(Fed. Cir. 2006); Folio v. Dep't of Homeland Sec., 402 F.3d 1350, 
1355 (Fed. Cir. 2005); Dowd v. United States, 713 F.2d 720, 722-23 
(Fed. Cir. 1983); Gaxiola v. Dep't of the Air Force, 6 M.S.P.R. 515, 
519 (1981).
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    OPM, pursuant to its authority, has long conferred MSPB appeal 
rights via regulations under title 5, Code of Federal Regulations. For 
instance:
    1. Section 300.104--A job candidate who believes that an employment 
practice which was applied to the candidate by OPM violates a basic 
requirement in Sec.  300.103 is entitled to appeal to MSPB under the 
provisions of the Board's regulations.
    2. Section 302.501--An individual who is covered by 5 U.S.C. 
8101(1) and is entitled to priority consideration under 5 CFR part 302 
may appeal a violation of the individual's restoration rights to MSPB 
under the provisions of the Board's regulations by presenting factual 
information that the individual was denied restoration rights because 
of the employment of another person.
    3. Section 315.806--An employee may appeal to MSPB in writing an 
agency's decision to terminate the employee during their probationary 
period, if the employee alleges the termination was based on partisan 
political reasons, marital status, or improper procedure.
    4. Section 315.908--An employee who alleges that an agency action 
demoting an employee for not satisfactorily completing their 
supervisory probationary period may appeal to MSPB if the employee 
alleges the agency action was based on partisan political affiliation 
or marital status.
    5. Section 351.901--An employee who has been furloughed for more 
than 30 days, separated, or demoted by a reduction in force action may 
appeal to MSPB.
    6. Section 352.209--When an agency denies reemployment to a person 
claiming reemployment rights under subpart B of part 352, the agency 
shall inform the person of that denial by a written notice. In the same 
notice, the agency shall inform the person of the right to appeal to 
MSPB under the provisions of the Board's regulations.

[[Page 63877]]

    7. Section 352.313--An employee may submit an appeal to MSPB 
alleging the agency has failed to comply with certain reemployment 
rights.
    8. Section 352.508--An employee may submit an appeal to MSPB 
alleging the agency has failed to comply with certain reinstatement 
rights.
    9. Section 352.707--If an agency denies reemployment to a person 
claiming reemployment rights under subpart I of part 352, the agency 
shall inform the individual of that denial and of the reasons therefor 
by a written notice. In the same notice, the agency shall inform the 
employee of the right to appeal to MSPB under the provisions of the 
Board's regulations.
    10. Section 352.807--An employee may appeal to MSPB, under the 
provisions of the Board's regulations, an agency's decision on the 
employee's request for reemployment which the employee believes is in 
violation of subpart H of part 352.
    11. Section 352.909--An applicant or an employee may submit an 
appeal to MSPB alleging the agency has not complied with certain 
reemployment rights under subpart I of part 352.
    12. Section 731.501--When OPM or an agency acting under delegated 
authority under part 731 takes a suitability action against a person, 
that person may appeal the action to MSPB. Upon appeal, the Board may 
review the suitability determination itself, but may not review the 
suitability action specified as a result of that determination.\159\
---------------------------------------------------------------------------

    \159\ See part 731, subpart E.
---------------------------------------------------------------------------

    Section 302.603 ``Appeals.''
    In these proposed regulations, OPM is prescribing an MSPB appeal 
right for an employee whose position in the competitive service is 
moved to the excepted service, or whose position in the excepted 
service is moved into a different schedule of the excepted service, and 
when any such move, contrary to these regulations, purportedly strips 
the employee of the status and civil service protections they had 
already accrued. This proposed provision would not apply when the 
employee voluntarily relinquishes such rights by applying for and 
accepting a new position with different rights. Such an appeal right 
would, however, cover the allegation that an agency coerced the 
employee to voluntarily move to a new position that would require the 
employee to relinquish their competitive status or civil service 
protections. The employee may file an appeal with MSPB to have their 
competitive status and civil service protections reinstated, as 
applicable. OPM notes that an employee may choose to assert in any 
appeal to MSPB that the agency committed procedural error, if 
applicable, by failing to act in accordance with the procedural 
requirements of Sec.  302.602 while effecting any placement from the 
competitive service into the excepted service or from the excepted 
service to a different schedule of the excepted service. In cases where 
an employee asserts procedural error by the agency, MSPB typically will 
determine whether the procedural error was harmful as a pre-requisite 
for any reversal of the agency's action. MSPB will find that an agency 
error is harmful only when the record shows that it was likely to have 
caused the agency to reach a different conclusion.\160\
---------------------------------------------------------------------------

    \160\ See 5 CFR 1201.3 (Appellate Jurisdiction); 1201.4(r) 
(Definitions, MSPB Practices and Procedures), 1205 (Powers and 
functions of the Merit Systems Protection Board); Ramey v. U.S. 
Postal Service, 70 M.S.P.R. 463, 467 (1996) (``An [MSPB] 
administrative judge's adjudication of an action not only embraces 
the provisions of law giving the Board jurisdiction over the action, 
but includes review of any other relevant provision of law, 
regulation or negotiated procedures as circumstances warrant.''); 
Adakai v. Dep't of Interior, 20 M.S.P.R. 196, 201 (1984) (``There is 
no question that an agency is obligated to conform to procedures and 
regulations it adopts, and the Board is required to enforce such 
procedures.'').
---------------------------------------------------------------------------

Part 212--Competitive Service and Competitive Status, Subpart D
    Section 212.401 Effect of competitive status on position.
    OPM is also proposing to revise the regulations in 5 CFR part 212, 
subpart D, Sec.  212.401(b) regarding the effect of an employee's 
competitive status on the employee's position. As described throughout 
this proposed rule, OPM's longstanding view is that Federal employees 
maintain the civil service status and protections that they have 
accrued. Indeed, since 1968, OPM has provided by rule that an employee 
with competitive service status (i.e., in the competitive service), at 
the time the employee's position is first listed (i.e., moved) under 
Schedule A, B, or C of the excepted service, remains in the competitive 
service as long as the employee continues to occupy the position.\161\ 
OPM is proposing to update 5 CFR 212.401(b) consistent with this 
proposed rule, to establish that a competitive service employee whose 
position is first listed under any future excepted service schedule 
remains in the competitive service as long as the employee continues to 
occupy the position. OPM is proposing this update to account for the 
possibility of new excepted service schedules which may be established 
after promulgation of this rule or other efforts to move positions from 
the competitive service or within the excepted service.
---------------------------------------------------------------------------

    \161\ 33 FR 12402, 12408 (Sept. 4, 1968).
---------------------------------------------------------------------------

III. Regulatory Analysis

A. Statement of Need

    On December 12, 2022, OPM received a petition from the National 
Treasury Employees Union (NTEU), which represents Federal workers in 34 
agencies and departments,\162\ to amend OPM regulations in a manner 
that would ensure compliance with civil service protections and merit 
system principles for competitive service positions moved to the 
excepted service.\163\ NTEU contends in its petition that Congress has 
established protections for ``employees'' under chapter 75 in the 
competitive service and these protections create a constitutionally 
protected property interest in continued Federal employment. NTEU 
argues that no President can take away these rights, once accrued, 
without due process.
---------------------------------------------------------------------------

    \162\ See NTEU, ``Our Agencies,'' https://www.nteu.org/who-we-are/our-agencies.
    \163\ See NTEU, Petition for Regulations to Ensure Compliance 
with Civil Service Protections and Merit System Principles for 
Excepted Service Positions, (Dec. 12. 2022), https://www.nteu.org/~/
media/Files/nteu/docs/public/opm/nteu-petition.pdf?la=en.
---------------------------------------------------------------------------

    On May 23, 2023, the Federal Workers Alliance, a coalition of 13 
labor unions representing over 550,000 Federal and postal workers, 
wrote OPM in support of the rulemaking changes proposed by NTEU. On May 
26, 2023, the American Federation of Government Employees, AFL-CIO, the 
largest union of Federal employees representing more than 750,000 
Federal and District of Columbia workers, did the same.
    As discussed throughout this proposed rule, by operation of law, 
certain tenured Federal employees accrue a property interest in their 
continued employment and are entitled to adverse action rights under 
chapter 75 before they may be removed from career positions. Agencies 
are statutorily obligated to extend the specific protections codified 
at chapter 75 to eligible employees as defined in 5 U.S.C. 7511. OPM 
does not interpret chapter 75 as allowing the President, OPM, or an 
agency to waive these statutory requirements and OPM notes that it 
interprets section 7511 to preclude noncareer, political appointees 
under Schedule C and other statutorily specified categories of 
employees from accruing these procedural rights. These rules are 
proposed to clarify and reinforce that point.
    OPM has the delegated authority to exempt employees from the 
competitive

[[Page 63878]]

service only when ``necessary'' and warranted by ``conditions of good 
administration.'' \164\ The rationale for creating positions in the 
excepted service is driven largely by specific hiring needs and a 
determination that appointment through the competitive service is ``not 
practicable,'' \165\ i.e., not by considerations of stripping career 
employees of civil service rights.
---------------------------------------------------------------------------

    \164\ 5 U.S.C. 3302; 5 CFR 6.1.
    \165\ See 5 CFR 6.1.
---------------------------------------------------------------------------

    As stated above, President Trump, in the now-revoked Executive 
Order 13957, introduced a new conception of the scope of the phrase 
``confidential, policy-determining, policy-making, or policy-advocating 
character,'' and sought to employ that conception to expand the 
category of employees excluded from adverse action procedural rights 
under section 7511.\166\ This language was derived from the description 
of Schedule C of the excepted service, and using that language in the 
way Executive Order 13957 did departed from the long-standing 
understanding that this exception applied only to noncareer, political 
appointees under Schedule C. OPM has therefore determined that a 
regulation interpreting this provision is warranted.
---------------------------------------------------------------------------

    \166\ 85 FR 67361-62.
---------------------------------------------------------------------------

    The CSRA and merit system principles have informed OPM's 
regulations regarding the competitive and excepted service, and 
employee movement between them. One of those principles is that the 
creation of new positions in--and movement of existing positions into--
the excepted service is meant to be an exception to the normal 
procedure for filling positions through the procedures prescribed for 
the competitive service and maintaining the positions in that service 
thereafter. Accordingly, OPM has maintained for decades several 
safeguards and transparency measures associated with any such 
movements. These safeguards and measures may include agency reporting 
to OPM,\167\ such as in situations where positions are placed 
temporarily in the excepted service for the purpose of a trial period 
leading to a permanent appointment in the competitive service; \168\ 
OPM authorization of the creation of certain new positions in--or 
moving of certain existing positions into--the excepted service; \169\ 
publication in the Federal Register; \170\ and an acknowledgment of the 
consent of affected employees when an existing employee obtains a 
different position in another service or schedule.\171\ The now-revoked 
directions to agencies contained in Executive Order 13957, for 
implementing the now-defunct Schedule F, created ambiguity as to the 
continued vitality of these longstanding principles with respect to 
employees who had accrued adverse action appeal rights. We seek to 
confirm these principles through the proposed modifications to the 
regulations.
---------------------------------------------------------------------------

    \167\ See 5 CFR 5.1 (``The Director, Office of Personnel 
Management, shall promulgate and enforce regulations necessary to 
carry out the provisions of the Civil Service Act and the Veterans' 
Preference Act, as reenacted in title 5, United States Code, the 
Civil Service Rules, and all other statutes and Executive orders 
imposing responsibilities on the Office.''); id. 5.4 (``When 
required by the Office, the Merit Systems Protection Board, or the 
Special Counsel of the Merit Systems Protection Board, or by 
authorized representatives of these bodies, agencies shall make 
available to them, or to their authorized representatives, employees 
to testify in regard to matters inquired of under the civil service 
laws, rules, and regulations, and records pertinent to these 
matters''); id. 10.2 (OPM authority to set up accountability 
systems); id. 10.3 (OPM authority to review agency personnel 
management programs and practices).
    \168\ See, e.g., 5 CFR part 362.
    \169\ 5 CFR 6.1.
    \170\ Id.
    \171\ 5 CFR 302.102(b).
---------------------------------------------------------------------------

    Finally, these proposed revisions would also further the objectives 
of Executive Order 14003. In the findings underpinning that Executive 
order, President Biden observed that the foundations of the civil 
service and its merit system principles were essential to the Pendleton 
Civil Service Reform Act of 1883's repudiation of the spoils 
system.\172\ The President further noted that revoking Schedule F was 
necessary ``to enhance the efficiency of the civil service and to 
promote good administration and systematic application of merit system 
principles.'' \173\ The changes proposed here would support the civil 
service and merit system principles for career Federal employees by 
clarifying and reinforcing the rights that accrue to tenured employees.
---------------------------------------------------------------------------

    \172\ E.O 14003, sec. 2.
    \173\ Id.
---------------------------------------------------------------------------

B. Regulatory Alternatives

    An alternative to this rulemaking is to not issue a regulation. OPM 
has determined this is not a viable option. The risks of not issuing 
this proposed rulemaking are many and include both fiscal as well as 
non-fiscal consequences. As noted in the preamble, this rulemaking is 
needed to preserve the integrity of the Federal career workforce as an 
independent entity free of political influence or personal loyalties to 
political leaders, consistent with merit system principles. Preserving 
the integrity of the Federal career workforce ensures career employees 
keep the status and rights they have attained and to which they are 
therefore entitled by law. This in turn preserves if not promotes 
employee morale, minimizes workforce disruptions by preventing 
potential losses of seasoned or experienced personnel, and contributes 
to a positive impact on agencies' ability to meet mission requirements. 
Finally, these changes will promote compliance with statutory 
enactments.
    This rulemaking is expected to create an incentive for agency 
recruitment efforts, enhancing agencies' ability to fulfill important 
merit system principles--that recruitment should be from qualified 
individuals from appropriate sources in an endeavor to achieve a 
workforce from all segments of society--and that selection and 
advancement should be determined solely on the basis of relative 
ability, knowledge, and skills, after fair and open competition which 
assures that all receive equal opportunity,\174\ and also promotes 
compliance with the congressional policy to confer a preference on 
eligible veterans or family members with entitled to derived 
preference. In a more pragmatic sense, diminishing or eliminating civil 
service protections from entire categories of career employees would 
destabilize the civil service--potentially repeatedly, each time there 
is a change in administration--and eliminate a competitive advantage 
Federal agencies have long enjoyed when competing with other sectors 
for needed talent: stable, fair, merit-based employment.
---------------------------------------------------------------------------

    \174\ See 5 U.S.C. 2301(b)(1).
---------------------------------------------------------------------------

    Failure to protect adverse action rights and other civil service 
protections risks a loss of experienced staff, leading to a disruption, 
if not interruption, of agency mission operations. This is an 
especially important consideration given the many challenges facing our 
nation and requiring a response by the Executive branch. These 
challenges include threats to our nation's economy (writ large as well 
as those impacting small businesses and emerging markets and 
technologies), public health, climate (both the private property and 
businesses impacted by droughts, floods, wildfires, etc.), data 
security, and emerging foreign powers on the international geo-
political landscape, among others.
    The option of not regulating in this area carries with it fiscal 
costs as well. These costs include that of recruiting and replacing 
staff who separate before or after their positions are moved to the 
excepted service in a manner that

[[Page 63879]]

purportedly strips them of their civil service protections, as well as 
the loss of or delay in services, benefits, and entitlements owed to 
many of our nation's citizens. Many of the citizens receiving these 
entitlements depend on them to meet their basic living expenses.
    Regarding 5 CFR part 752, OPM's proposed changes to the 
implementing regulations for adverse actions are consistent with 
statute and cannot be further simplified. OPM proposes to conform part 
752 with Federal Circuit precedent \175\ and statutory language.\176\ 
In addition, OPM proposes to make plain that an employee who is moved 
from the competitive service to a position in the excepted service, or 
from one excepted service schedule to the same or similar position in 
another excepted service schedule, retains the status and civil service 
protections the employee had already accrued.
---------------------------------------------------------------------------

    \175\ See Van Wersch, 197 F.3d at 1151-52; McCormick, 307 F.3d 
at 1341-43.
    \176\ See 5 U.S.C. 7501.
---------------------------------------------------------------------------

    One regulatory alternative to conforming part 752 is to forgo 
changes to the regulation and allow Federal agencies to continue 
relying upon 5 U.S.C. 7511 for a more complete understanding of 
eligibility for procedural and appeal rights. However, as MSPB observed 
in urging OPM to update 5 CFR 752.401:

    Retaining out-of-date information in a Government regulation can 
confuse agencies, managers, and employees and produce unintended 
outcomes. Human resources specialists or managers who are not 
experts in employee discipline may inadvertently rely on these 
particular regulations. Agencies may fail to use proper procedures 
and fail to notify employees of appeal rights. Terminations may be 
reversed.\177\
---------------------------------------------------------------------------

    \177\ U.S. Merit Systems Protection Board, supra note #45.

    Given that agency practitioners are more likely to turn first to 
regulations rather than statute or case law for guidance on 
performance-based and adverse actions, OPM's current regulations need 
updating.
    OPM's preferred option is to amend the coverage-related provisions 
in part 752 to close the unnecessary gap between current regulations 
and relevant precedent by adding clarity and specific guidance to 
implement the statute. Having regulations that are congruent to statute 
may mitigate cases in which an agency is unclear on whether to provide 
procedural rights to an employee. In turn, this promotes efficiency in 
removing or disciplining employees and addresses complaints that the 
Federal removal process is too cumbersome. Through this rulemaking, OPM 
is providing essential statutory requirements that have not been 
previously reflected in OPM's regulations.
    OPM is proposing these regulations in the least burdensome way 
possible. Fundamentally, the amendments to part 752 do not impose any 
requirements on agencies that are not already in place through statute 
or case law. This includes the provisions that an employee retains 
accrued rights when the employee is moved from the competitive service 
to the excepted service or placed in a new schedule within the excepted 
service.
    With respect to 5 CFR part 210, OPM considered not defining 
``confidential, policy-determining, policy-making, policy-advocating'' 
and ``confidential or policy-determining'' positions but, as stated 
supra, believes that doing so adds important clarity. To alleviate any 
ambiguity as to the scope of the exception in 5 U.S.C. 7511, including 
any confusion that may have been introduced by the promulgation of the 
now-revoked Executive Order 13957, this rule proposes to more 
explicitly define the employees and positions that are excluded from 
civil service protections to align with congressional intent as 
expressed in H.R. Rep. 101-328. Accordingly, OPM proposes to add a 
definition for ``Confidential, policy-determining, policy-making, or 
policy-advocating'' and ``confidential or policy-determining'' to 
clarify that it means a noncareer, political appointment that is 
identified by its close working relationship with the President, head 
of an agency, or other key appointed officials who are directly 
responsible for furthering the goals and policies of the President and 
the Administration, and that carries no expectation of continued 
employment beyond the presidential administration during which the 
appointment occurred. This definition is consistent with legislative 
history and codifies longstanding practice.
    Finally, OPM's proposed addition of 5 CFR 302.602 to establish 
minimum requirements for moving employees and positions into and within 
the excepted service necessitates the creation of a new guardrail to 
reinforce merit system principles. Therefore, OPM proposes to confer in 
Sec.  302.603 a narrow MSPB appeal right to an employee whose position 
is placed into the excepted service or an excepted service employee 
whose position is placed into a different schedule of the excepted 
service and when any such move, in violation of these regulations, 
purportedly strips the employee of the status and civil service 
protections they had already accrued.
    OPM weighed the alternative of not conferring a right of appeal to 
MSPB. As stated in 5 CFR 1201.3, MSPB's ``appellate jurisdiction is 
limited to those matters over which it has been given jurisdiction by 
law, rule, or regulation.'' Currently, for personnel actions for which 
there is no MSPB appellate coverage, an aggrieved Federal employee may 
have multiple other options for contesting a personnel decision, 
including filing an Equal Employment Opportunity (EEO) complaint, OSC 
complaint, administrative grievance, or if applicable, a negotiated 
grievance procedure. However, with regard to an allegation that a move 
purportedly strips the employee of the status and civil service 
protections the employee has already accrued, or that an agency coerced 
the employee to voluntarily move to a new position that would require 
the employee to relinquish their competitive status or civil service 
protections, OPM concluded that the current scheme of avenues for 
redress is less preferable to safeguard against actions brought against 
employees for reasons stated above. Such actions would have an adverse 
impact on employee morale across Federal agencies and a corrosive 
effect on the American public's confidence in equitable administrative 
processes of Federal civilian service.
    OPM also considered not conferring a right of appeal directly to 
MSPB. The omission of Sec.  302.603 would leave open the possibility 
that an agency could move an employee in a manner that is unlawful, 
arbitrary, or capricious without any accountability. Alternatively, OPM 
could have broadened Sec.  302.603 to cover an appeal based on the 
underlying reasons for the movement. However, if an agency follows the 
robust procedures in Sec.  302.602 for movement, MSPB's review of an 
appeal brought under Sec.  302.603 should be limited to paragraphs (b) 
and (c) as an agency should be given deference in determining the 
appropriate placement of its workforce.
    Currently, if an employee alleges that an agency has taken a 
prohibited personnel practice, the employee can file a complaint with 
OSC, or if the employee is contesting an otherwise appealable action, 
the employee can file an MSPB appeal of the appealable personnel action 
and claim as an affirmative defense that the agency committed a 
prohibited personnel practice. OPM's preferred option--the addition of 
Sec.  302.603 as proposed--reinforces that affected employees are 
deserving of fair and equitable treatment in all aspects of their 
employment as it

[[Page 63880]]

relates to movement to and within the excepted service.

C. Impact

    OPM is proposing these revisions to clarify and reinforce existing 
protections that exist for many Federal employees and to add procedures 
that agencies must follow to further advance merit system principles. 
Congress enacted procedural rules to provide an adequate opportunity to 
hear from the tenured employee and appropriately explore the underlying 
facts and law before adverse actions are taken and thus help ensure 
that such actions are taken for proper cause.\178\ The procedural 
protections enacted by Congress are for all tenured employees, not only 
for the few employees who will inevitably present problems in a 
workforce of more than two million individuals. And procedural 
protections exist for the whistleblower, the employee who belongs to 
the ``wrong'' political party, the reservist whose periods of military 
service are inconvenient to superiors, the scapegoat, and the person 
who has been misjudged based on faulty information.
---------------------------------------------------------------------------

    \178\ U.S. Merit System Protections Board, supra note 13 at p. 
ii.
---------------------------------------------------------------------------

    As explained above, where Congress has created a property interest 
in a position for tenured employees,\179\ due process considerations 
protect employees from an unlawful deprivation of that interest. The 
procedural protections enacted by Congress are a small price to pay to 
deliver to the American people a merit-based civil service rather than 
a system based on political patronage.\180\
---------------------------------------------------------------------------

    \179\ See supra, Sec. I.B.; Loudermill, 470 U.S. at 541.
    \180\ U.S. Merit System Protections Board, supra note 13 at pp. 
ii-iii.
---------------------------------------------------------------------------

    Therefore, to the extent these rules as finalized will reinforce 
procedural requirements that exist already for most Federal employees, 
OPM believes that those portions of the rules will not change any 
existing requirements for agencies covered by the rules and the impact 
on agencies is expected to be negligible.
    The procedural requirements for moving an employee from the 
competitive service to the excepted service or within the excepted 
service are no more rigorous than the many other regulations 
promulgated by OPM for the administration of the civil service, 
especially those reticulated regulations related to the excepted 
service under Schedules D and E (as described above). The reporting 
requirements relating to excepted service positions align with those 
with which OPM already must comply.

D. Costs

    If finalized, the proposed rule would require agencies to update 
internal policies and procedures to ensure compliance with proposed 
Sec. Sec.  210.102(b), 212.401, 213.3301, 302.101, 302.603, 451.302 and 
with the regulatory amendments to parts 432 and 752 as well as resolve 
any appeals that may arise from contested moves covered by part 302. 
Regarding the procedural requirements for moving positions, the rule 
would affect the operations of more than 80 Federal agencies, ranging 
from cabinet-level departments to small independent agencies. OPM 
cannot estimate these costs with great specificity because they will 
vary depending on the specific number of positions an agency would seek 
to move.
    The cost analysis to update policies and procedures and resolve 
appeals assumes an average salary rate of Federal employees performing 
this work at the 2023 rate for a GS-14, step 5, from the Washington, 
DC, locality pay table ($150,016 annual locality rate and $71.88 hourly 
locality rate). We assume the total dollar value of labor, which 
includes wages, benefits, and overhead, is equal to 200 percent of the 
wage rate, resulting in an assumed labor cost of $143.76 per hour.
    We estimate that the cost to comply with updating policies and 
procedures in the first year would require an average of 40 hours of 
work by employees with an average hourly cost of $143.76 per hour. Upon 
publication of the final rule, this would result in first-year 
estimated costs of about $5,750 per agency, and about $460,000 
governmentwide. There are ongoing costs associated with routinely 
reviewing and updating internal policies and procedures, but not 
necessarily a measurable increase in costs for agencies.
    To comply with the regulatory requirements in this proposed rule, 
affected agencies would need to resolve any appeals that may arise 
pursuant to Sec.  302.603. We estimate that, in the first year 
following publication of a final rule, this would require an average of 
120 hours of work by employees with an average hourly cost of $143.76 
per hour. This would result in estimated costs in that first year of 
implementation of about $17,250 per agency, and about $1.38 million 
governmentwide. In subsequent years, we assume a decreased need for 
appeal resolution as agencies further refine their processes under 
Sec.  302.603, resulting in less staff time. Accordingly, in subsequent 
years, we estimate an average of 80 hours of work by employees with an 
average hourly cost of $143.76 per hour. This would result in estimated 
costs of about $11,500 per agency annually, and about $920,000 
governmentwide annually in the years after the first year of 
implementation.
    In sum, OPM estimates the first-year cost to be approximately 
$23,000 per agency, and about $1.84 million governmentwide. For 
subsequent years, we estimate annual costs to be $11,500 for agencies, 
and about $920,000 governmentwide.

E. Benefits

    OPM is proposing to clarify the Federal civil service protections 
that are critical to balancing an effective, experienced, and objective 
bureaucracy with Executive branch control. These regulations benefit 
the American people not only by shoring up civil service protections, 
but also, by so doing, strengthening our republican form of government, 
and thus promoting good government. As stated in Executive Order 14003, 
it is this Administration's policy to ``protect, empower, and rebuild 
the career Federal workforce.'' This rulemaking benefits the career 
Federal workforce by reinforcing that it is deserving of the trust and 
confidence of the American people.
    OPM stated in its Fiscal Year 2019 Human Capital Review Summary 
Report that ``Agencies face different challenges depending on their 
mission and the current state of their organizations; but there is 
little debate that effectively managing human capital is at the 
forefront of leadership's greatest priorities.'' \181\ Among the top 
trends that surfaced during OPM's review were (1) identifying and 
closing skills gaps and (2) recruiting and retaining employees. For 
example, agencies raised concerns around attrition rates for scientific 
and technical positions as well as an inability to hire fast enough to 
meet demands. The ongoing challenge with recruitment and retention for 
IT and cyber positions is due to the ever-changing landscape, 
competition with the private sector and other Federal agencies, and 
difficulty retaining talent.
---------------------------------------------------------------------------

    \181\ U.S. Office of Personnel Management, ``Fiscal Year 2019 
Human Capital Reviews Report,'' p. 1 (Mar. 2020), https://www.chcoc.gov/sites/default/files/2019%20Human%20Capital%20Review%20Summary%20Report.pdf.
---------------------------------------------------------------------------

    This proposed rule has several important benefits. First, it 
supports the retention of Federal career professionals who provide the 
continuity of institutional knowledge and subject-

[[Page 63881]]

matter expertise necessary for the critical functioning of the Federal 
Government.\182\ ``A vast body of research'' shows ``public service 
motivation as a central factor in public employment'' and that civil 
servants ``invest effort and develop expertise precisely because a 
stable public job provides an environment where they can pursue their 
motivation to make a difference.'' \183\ The rights and protections 
afforded to career Federal employees offer a more stable alternative to 
comparable private and non-government sector positions.\184\ These 
professionals play an integral role in transferring knowledge, not just 
as part of their official duties, but also by training and mentoring 
newer and less experienced Federal employees, interns, contractors, 
etc.
---------------------------------------------------------------------------

    \182\ Donald P. Moynihan, ``Public Management for Populists: 
Trump's Schedule F Executive Order and the Future of the Civil 
Service,'' Public Administration Review, p. 174, 177 (Jan.-Feb. 
2022).
    \183\ Id.
    \184\ Id.
---------------------------------------------------------------------------

    A related benefit of this rulemaking is that it will mitigate costs 
associated with recruitment of personnel needed to replace staff who 
leave or are subsequently removed following placement in the excepted 
service. ``Instability and politization makes public service less 
attractive, leading to higher turnover of experienced civil servants 
and giving public officials less reason to develop expertise.'' \185\ 
OPM cannot estimate the exact value of this benefit to taxpayers 
because it would depend on the specific number of positions moved by an 
agency. Nevertheless, the proposed rule will protect agencies' 
abilities to meet mission requirements by mitigating disruptions caused 
by upheavals within an agency's workforce, the result of which could 
have a negative impact on an agency's ability to meet mission 
requirements and use its resources (including taxpayer-funded 
resources) in a timely and efficient manner.
---------------------------------------------------------------------------

    \185\ Id.
---------------------------------------------------------------------------

    There is little evidence to support the notion that a more 
politicized civil service, or that allowing for the firing of career 
civil servants without appropriate process that permits such employees 
to probe the agency's reasons and provide a response, will increase 
governmental performance.\186\ This proposed rule will reduce the risks 
associated with misapplying the CSRA, depriving civil service 
protections to those who have rightfully earned them, and needlessly 
politicizing our nation's nonpartisan career civil service.
---------------------------------------------------------------------------

    \186\ See id.; see also Donald P. Moynihan, ``Populism and the 
Deep State: the Attack on Public Service under Trump,'' Liberal-
Democratic Backsliding and Public Administration, (May 21, 2020), 
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3607309 (``If 
political appointees offer responsiveness to elected officials 
through their loyalty, this responsiveness comes at a cost. The best 
evidence we have is that appointees generate poorer organizational 
performance relative to career officials.'') (citation omitted); 
David E. Lewis, ``Testing Pendleton's Premise: Do Political 
Appointees Make Worse Bureaucrats?'' The Journal of Politics, Vol. 
69, No. 4 (Nov. 2007), https://www.jstor.org/stable/10.1111/j.1468-2508.2007.00608.x (``This analysis demonstrates that appointees get 
systematically lower performance grades than careerists. Previous 
bureau experience and longer tenure in management positions explain 
why careerist-run programs get higher grades. . . . These results 
add weight to what civil service reformers like George Pendleton 
believed, namely that a merit-based civil service system would lead 
to lower turnover in the Federal workforce and the cultivation of 
useful administrative expertise.'').
---------------------------------------------------------------------------

    Finally, agency counsel and employee relations practitioners will 
benefit from the clarifications in this proposed rule that address 
current inconsistencies between OPM regulations and statute. After MSPB 
recommended that OPM update its regulations to reflect the Federal 
Circuit's decisions in Van Wersch and McCormick,\187\ OPM revised 5 CFR 
part 752, subpart D to conform to the court's interpretation of 5 
U.S.C. 7511 as it pertains to appealable suspensions, removals, and 
furloughs. However, OPM elected at that time not to update subpart B of 
part 752 for suspensions of 14 days or less. In addition to closing 
regulatory gaps in part 752 by conforming the regulations to case law 
and statute, OPM proposes to clarify that an employee moved to or 
within the excepted service retains accrued procedural and appeal 
rights. The cumulative effect of these changes will be a comprehensive 
and robust regulatory framework on which agency practitioners can rely 
for understanding and applying the protections available to Federal 
employees.
---------------------------------------------------------------------------

    \187\ U.S. Merit Systems Protection Board, supra note 45.
---------------------------------------------------------------------------

IV. Request for Comments

    OPM requests comments on the implementation and impacts of this 
proposed rule in general. Such information will be useful for better 
understanding the effect of these proposed revisions on civil service 
protections, merit system principles, and the effective and efficient 
business of government, in compliance with the law. The type of 
information in which OPM is interested includes, but is not limited to, 
the following:
     Throughout the preamble, OPM provides examples of civil 
service protections since the Pendleton Act of 1883. OPM seeks comment 
on whether more examples would be helpful and, if so, the authority for 
those protections.
     Whether the regulatory changes proposed under part 752 are 
sufficiently protective of employees' rights in their continued 
employment.
     Whether the proposed definition for the terms 
``confidential, policy-determining, policy-marking, or policy-
advocating'' and ``confidential or policy-determining'' is appropriate 
or whether it should be expanded or limited with the understanding that 
it should satisfy the aims of the CSRA (including congressional 
intent), civil service protections, and merit system principles.
     Whether the procedures for moving positions from the 
competitive service to the excepted service or from one excepted 
service schedule to another are appropriate or whether they should be 
expanded or limited with the understanding that they should satisfy the 
aims of the CSRA (including congressional intent), civil service 
protections, and merit system principles.
     Whether the proposed MSPB appeal rights under part 302 are 
needed and, if so, whether they are is sufficiently protective of 
employees' rights.
     Whether this rulemaking should include additional 
mechanisms for enforcing the protections set forth in this proposal, 
and if so, what those mechanisms should be.
     Comments on the initial cost and benefit analysis, 
including the identification of data and studies that would inform 
OPM's analysis.
     Comments on whether discrete provisions of this proposal 
could be severed from the proposed rule in the event a provision was 
held to be invalid or unenforceable by its terms.

V. Procedural Issues and Regulatory Review

A. Severability

    OPM proposes that, if any of the provisions of this proposed rule 
as finalized is held to be invalid or unenforceable by its terms, or as 
applied to any person or circumstance, it shall be severable from its 
respective section(s) and shall not affect the remainder thereof or the 
application of the provision to other persons not similarly situated or 
to other dissimilar circumstances. For example, if a court were to 
invalidate any portions of this proposed rule as finalized imposing 
procedural requirements on agencies before moving positions from the 
competitive service to the excepted service, the other portions of the 
rule--including the portions providing that

[[Page 63882]]

employees in the competitive service maintain their protections even if 
their positions are moved to the excepted service--would independently 
remain workable and valuable. Similarly, the portions of this proposed 
rule defining ``confidential, policy-determining, policy-making, or 
policy-advocating position'' and ``confidential and policy-
determining'' can and would function independently of any of the other 
portions of this proposed rule. In enforcing civil service protections 
and merit system principles, OPM will comply with all applicable legal 
requirements.

B. Regulatory Flexibility Act

    The Director of the Office of Personnel Management certifies that 
this rulemaking will not have a significant economic impact on a 
substantial number of small entities because the rule will apply only 
to Federal agencies and employees.

C. Regulatory Review

    OPM has examined the impact of this rulemaking as required by 
Executive Orders 12866 (Sept. 30, 1993), 13563 (Jan. 18, 2011), and 
14094 (Apr. 6, 2023), which 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). A regulatory impact 
analysis must be prepared for major rules with effects of $200 million 
or more in any one year. This rulemaking does not reach that threshold 
but has otherwise been designated as a ``significant regulatory 
action'' under section 3(f) of Executive Order 12866, as supplemented 
by Executive Orders 13563 and 14094.

D. Executive Order 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 (Aug. 10, 1999), it is determined that this proposed rule 
does not have sufficient federalism implications to warrant preparation 
of a Federalism Assessment.

E. Executive Order 12988, Civil Justice Reform

    This regulation meets the applicable standards set forth in section 
3(a) and (b)(2) of Executive Order 12988 (Feb. 7, 1996).

F. Unfunded Mandates Reform Act of 1995

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

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

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

List of Subjects

5 CFR Parts 210 and 212

    Government employees.

5 CFR Part 213

    Government employees, Reporting and recordkeeping requirements.

5 CFR Parts 302 and 432

    Government employees.

5 CFR Part 451

    Decorations, Government employees.

5 CFR Part 752

    Government employees.

Office of Personnel Management.
Kayyonne Marston,
Federal Register Liaison.

    Accordingly, OPM is proposing to amend 5 CFR parts 210, 212, 213, 
302, 432, 451, and 752 as follows:

PART 210--BASIC CONCEPTS AND DEFINITIONS (GENERAL)

0
1. The authority citation for part 210 continues to read as follows:

    Authority:  5 U.S.C. 1302, 3301, 3302; E.O. 10577, 3 CFR, 1954-
1958 Comp., p. 218.

Subpart A--Applicability of Regulations; Definitions

0
2. Amend Sec.  210.102 by:
0
a. Redesignating paragraphs (b)(3) through (18) as paragraphs (b)(5) 
through (20); and
0
b. Adding new paragraphs (b)(3) and (4).
    The additions read as follows:


Sec.  210.102  Definitions

* * * * *
    (b) * * *
    (3) Confidential, policy-determining, policy-making, or policy-
advocating means of a character exclusively associated with a 
noncareer, political appointment that is identified by its close 
working relationship with the President, head of an agency, or other 
key appointed officials who are responsible for furthering the goals 
and policies of the President and the Administration, and that carries 
no expectation of continued employment beyond the presidential 
administration during which the appointment occurred.
    (4) Confidential or policy determining means of a character 
exclusively associated with a noncareer, political appointment that is 
identified by its close working relationship with the President, head 
of an agency, or other key appointed officials who are responsible for 
furthering the goals and policies of the President and the 
Administration, and that carries no expectation of continued employment 
beyond the presidential administration during which the appointment 
occurred.
* * * * *

PART 212--COMPETITIVE SERVICE AND COMPETITIVE STATUS

0
3. The authority citation for part 212 continues to read as follows:

    Authority: 5 U.S.C. 1302, 3301, 3302; E.O. 10577, 3 CFR, 1954-
1958 Comp., p. 218.

Subpart D--Effect of Competitive Status on Promotion

0
4. Amend Sec.  212.401 by revising paragraph (b) to read as follows:


Sec.  212.401  Effect of competitive status on position.

* * * * *
    (b) An employee in the competitive service at the time his position 
is first listed under Schedule A, B, or C, or whose position is 
otherwise moved from the competitive service and listed under a 
schedule created subsequent to [effective date of final rule], remains 
in the competitive service while he occupies that position.

PART 213--EXCEPTED SERVICE

0
5. The authority citation for part 213 continues to read as follows:

    Authority:  5 U.S.C. 3161, 3301 and 3302; E.O. 10577, 3 CFR 
1954-1958 Comp., p. 218; Sec. 213.101 also issued under 5 U.S.C. 
2103. Sec. 213.3102 also issued under 5 U.S.C. 3301, 3302, 3307, 
8337(h), and 8456; E.O. 13318, 3 CFR 1982 Comp., p. 185; 38 U.S.C. 
4301 et seq.; Pub. L. 105-339, 112 Stat 3182-83; E.O. 13162; E.O. 
12125, 3 CFR 1979 Comp., p. 16879; and E.O. 13124, 3 CFR 1999 Comp., 
p. 31103; and Presidential Memorandum--Improving the Federal 
Recruitment and Hiring Process (May 11, 2010).


[[Page 63883]]


    Sec. 213.101 also issued under 5 U.S.C. 2103.
    Sec. 213.3102 also issued under 5 U.S.C. 3301, 3302, 3307, 
8337(h), and 8456; 38 U.S.C. 4301 et seq.; and Public Law 105-339, 
112 Stat. 3182-83.

Subpart C--Excepted Schedules

0
6. Amend Sec.  213.3301 by revising the section heading and paragraph 
(a) to read as follows:


Sec.  213.3301  Positions of a confidential or policy-determining 
character.

    (a) Upon specific authorization by OPM, agencies may make 
appointments under this section to positions that are of a confidential 
or policy determining character as defined in Sec.  210.102 of this 
chapter. Positions filled under this authority are excepted from the 
competitive service and constitute Schedule C. Each position will be 
assigned a number from Sec. Sec.  213.3302 through 213.3999, or other 
appropriate number, to be used by the agency in recording appointments 
made under that authorization.
* * * * *

PART 302--EMPLOYMENT IN THE EXCEPTED SERVICE

0
7. The authority citation for part 302 continues to read as follows:

    Authority: 5 U.S.C. 1302, 3301, 3302, 8151, E.O. 10577 (3 CFR 
1954-1958 Comp., p. 218); Sec.  302.105 also issued under 5 U.S.C. 
1104, Pub. L. 95-454, sec. 3(5); Sec.  302.501 also issued under 5 
U.S.C. 7701 et seq.

Subpart A--General Provisions

0
8. Amend Sec.  302.101 by revising paragraph (c)(7) to read as follows:


Sec.  302.101  Positions covered by regulations.

* * * * *
    (c) * * *
    (7) Positions included in Schedule C (see subpart C of part 213 of 
this chapter) and positions excepted by statute which are of a 
confidential, policy-determining, policy-making, or policy-advocating 
nature;
* * * * *
0
9. Add subpart F consisting of Sec. Sec.  302.601 through 302.603, to 
read as follows.

Subpart F--Moving Employees and Positions into and Within the 
Excepted Service

Sec.
302.601 Scope.
302.602 Basic requirements.
302.603 Appeals.


Sec.  302.601  Scope.

    This subpart applies to any situation where an agency moves a 
position from the competitive service to the excepted service, or 
between excepted services, whether pursuant to statute, Executive 
order, or an OPM issuance, to the extent that this subpart is not 
inconsistent with applicable statutory provisions. This subpart also 
applies in situations where a position previously governed by title 5 
of the U.S. Code will be governed by another title of the U.S. Code 
going forward, unless the statute governing the exception provides 
otherwise.


Sec.  302.602  Basic requirements.

    (a) In the event the President, Congress, OPM, or their designees 
direct agencies to move positions from the competitive service for 
placement in the excepted service under Schedule A, B, or C, or any 
Schedule in the excepted service created after [effective date of final 
rule], or to move positions from a schedule in the excepted service to 
a different schedule in the excepted service, the following 
requirements must be met, as relevant:
    (1) If the directive explicitly delineates the specific positions 
that are covered, the agency need only list the positions moved in 
accordance with that list, and their location within the organization.
    (2) If the directive requires the agency to select the positions to 
be moved pursuant to criteria articulated in the directive, then the 
agency must provide a list of the positions to be moved in accordance 
with those criteria, denote their location in the organization, and 
explain, upon request from OPM, why the agency believes the positions 
met those criteria.
    (3) If the directive confers discretion on the agency to establish 
objective criteria for identifying the positions to be covered, or 
which specific slots of a particular type of position the agency 
intends to move, then the agency must, in addition to supplying a list 
and the locations in the organization, supply the objective criteria to 
be used and an explanation of how these criteria are relevant.
    (b) An agency is also required to--
    (1) Identify the types, numbers, and locations of positions that 
the agency proposes to move into the excepted service.
    (2) Document the basis for its determination that movement of the 
position or positions is consistent with the standards set forth by the 
President, Congress, OPM, or their designees as applicable.
    (3) Obtain certification from the agency's Chief Human Capital 
Officer (CHCO) that the documentation is sufficient and movement of the 
position or positions is both consistent with the standards set forth 
by the directive, as applicable, and with merit system principles.
    (4) Submit the CHCO certification and supporting documentation to 
OPM (to include the types, numbers, and locations of positions) in 
advance of using the excepted service authority, which OPM will then 
review.
    (5) For exceptions effectuated by the President or OPM, list 
positions to the appropriate schedule of the excepted service only 
after obtaining written approval from the OPM Director to do so. For 
exceptions effectuated by Congress, inform OPM of the positions 
excepted either before the effective date of the provision, if the 
statutory provisions are not immediately effective, or within 30 days 
thereafter.
    (6) For exceptions created by the President or OPM, initiate any 
hiring actions under the excepted service authority only after OPM 
publishes any such authorizations in the Federal Register, to include 
the types, numbers, and locations of the positions moved to the 
excepted service.
    (c) In accordance with the requirements provided in paragraphs (a) 
and (b) of this section--
    (1) An agency that seeks to move an encumbered position from the 
competitive service to the excepted service, or from one excepted 
service schedule to another, must provide written notification to the 
employee of the intent to move the position 30 days prior to the 
effective date of the position being moved.
    (2) The written notification required by paragraph (c)(1) of this 
section must inform the employee that the employee maintains their 
civil service status and protections notwithstanding the movement of 
the position.


Sec.  302.603  Appeals.

    (a) A competitive service employee whose position is placed into 
the excepted service or who is otherwise moved to the excepted service, 
or an excepted service employee whose position is placed into a 
different schedule of the excepted service or who is otherwise moved to 
a different schedule of the excepted service, may directly appeal to 
the Merit Systems Protection Board, as provided in paragraphs (b) and 
(c) of this section, to have their competitive status and civil service 
protections reinstated, as applicable.
    (b) An employee whose position is moved into the excepted service 
or into a different schedule of the excepted

[[Page 63884]]

service may appeal to the extent that such move purportedly strips the 
employee of the status and civil service protections the employee has 
already accrued.
    (c) An employee whose move to a new position that would require the 
employee to relinquish their competitive status or civil service 
protections is facially voluntary may appeal if the employee believes 
that such move was coerced.

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

0
10. The authority citation for part 432 continues to read as follows:

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

0
11. Amend Sec.  432.102 by revising paragraph (f)(10) to read as 
follows:


Sec.  432.102  Coverage.

* * * * *
    (f) * * *
    (10) An employee whose position has been determined to be of a 
confidential, policy-determining, policy-making, or policy advocating 
character, as defined in Sec.  210.102 of this chapter by--
    (i) The President for a position that the President has excepted 
from the competitive service;
    (ii) The Office of Personnel Management for a position that the 
Office has excepted from the competitive service (Schedule C); or
    (iii) The President or the head of an agency for a position 
excepted from the competitive service by statute.
* * * * *

PART 451--AWARDS

0
12. The authority citation for part 451 continues to read as follows:

    Authority:  5 U.S.C. 4302, 4501-4509; E.O. 11438, 33 FR 18085, 3 
CFR, 1966-1970 Comp., p. 755; E.O. 12828, 58 FR 2965, 3 CFR, 1993 
Comp., p. 569.

Subpart C--Presidential Rank Awards

0
13. Amend Sec.  451.302 by revising paragraph (b)(3)(ii) to read as 
follows:


Sec.  451.302  Ranks for senior career employees.

* * * * *
    (b) * * *
    (3) * * *
    (ii) To positions that are excepted from the competitive service 
because of their confidential or policy-determining character.
* * * * *

PART 752--ADVERSE ACTIONS

0
14. The authority citation for part 752 continues to read as follows:

    Authority:  5 U.S.C. 7504, 7514, and 7543, Pub. L. 115-91, 131 
Stat. 1283, and Pub. L. 114-328, 130 Stat. 2000.

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

0
15. Amend Sec.  752.201 by revising paragraphs (b)(1) through (6) and 
(c)(5) and (6) and adding paragraph (c)(7) to read as follows:


Sec.  752.201  Coverage.

* * * * *
    (b) * * *
    (1) An employee in the competitive service who has completed a 
probationary or trial period, or who has completed 1 year of current 
continuous employment in the same or similar positions under other than 
a temporary appointment limited to 1 year or less, including such an 
employee who is moved involuntarily into the excepted service and still 
occupies that position or a similar position;
    (2) An employee in the competitive service serving in an 
appointment which requires no probationary or trial period, and who has 
completed 1 year of current continuous employment in the same or 
similar positions under other than a temporary appointment limited to 1 
year or less, including such an employee who is moved involuntarily 
into the excepted service and still occupies that position or a similar 
position;
    (3) An employee with competitive status who occupies a position 
under Schedule B of part 213 of this chapter, including such an 
employee who is moved involuntarily into a different schedule of the 
excepted service and still occupies that position;
    (4) An employee who was in the competitive service and had 
competitive status as defined in Sec.  212.301 of this chapter at the 
time the employee's position was first listed under any schedule of the 
excepted service and still occupies that position;
    (5) An employee of the Department of Veterans Affairs appointed 
under 38 U.S.C. 7401(3), including such an employee who is moved 
involuntarily into a different schedule of the excepted service and 
still occupies that position; and
    (6) An employee of the Government Publishing Office, including such 
an employee who is moved involuntarily into the excepted service and 
still occupies that position or a similar position.
    (c) * * *
    (5) Of a National Guard Technician;
    (6) Taken under 5 U.S.C. 7515; or
    (7) Of an employee whose position has been determined to be of a 
confidential, policy-determining, policy-making, or policy-advocating 
character, as defined in Sec.  210.102 of this subchapter by--
    (i) The President for a position that the President has excepted 
from the competitive service;
    (ii) The Office of Personnel Management for a position that the 
Office has excepted from the competitive service; or
    (iii) The President or the head of an agency for a position 
excepted from the competitive service by statute.
* * * * *

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

0
16. Amend Sec.  752.401 by revising paragraphs (c)(1), (c)(2)(i) and 
(ii), (c)(3) through (9), and (d)(2) to read as follows:


Sec.  752.401  Coverage.

* * * * *
    (c) * * *
    (1) A career or career conditional employee in the competitive 
service who is not serving a probationary or trial period, including 
such an employee who is moved involuntarily into the excepted service;
    (2) * * *
    (i) Who is not serving a probationary or trial period under an 
initial appointment, including such an employee who is moved 
involuntarily into the excepted service; or
    (ii) Except as provided under section 1105 of Public Law 114-92 (as 
repealed by section 1106(a)(1) of Public Law 117-81), who has completed 
1 year of current continuous service under other than a temporary 
appointment limited to 1 year or less, including such an employee who 
is moved involuntarily into the excepted service;
    (3) An employee in the excepted service who is a preference 
eligible in an Executive agency as defined at section 105, United 
States Code, the U.S. Postal Service, or the Postal Regulatory 
Commission and who has completed 1 year of current continuous service 
in the same or similar positions, including such an employee who is 
moved involuntarily into a different schedule of the excepted service 
and still occupies that position or a similar position;
    (4) A Postal Service employee covered by Public Law 100-90 who has

[[Page 63885]]

completed 1 year of current continuous service in the same or similar 
positions and who is either a supervisory or management employee or an 
employee engaged in personnel work in other than a purely 
nonconfidential clerical capacity, including such an employee who is 
moved involuntarily into a different schedule of the excepted service 
and still occupies that position or a similar position;
    (5) An employee in the excepted service who is a nonpreference 
eligible in an Executive agency as defined at 5 U.S.C. 105, and who has 
completed 2 years of current continuous service in the same or similar 
positions under other than a temporary appointment limited to 2 years 
or less, including such an employee who is moved involuntarily into a 
different schedule of the excepted service and still occupies that 
position or a similar position;
    (6) An employee with competitive status who occupies a position in 
Schedule B of part 213 of this chapter, including such an employee 
whose position is moved involuntarily into a different schedule of the 
excepted service and still occupies that position;
    (7) An employee who was in the competitive service and had 
competitive status as defined in Sec.  212.301 of this chapter at the 
time the employee's position was first listed under any schedule of the 
excepted service and who still occupies that position;
    (8) An employee of the Department of Veterans Affairs appointed 
under 38 U.S.C. 7401(3), including such an employee who is moved 
involuntarily into a different schedule of the excepted service and 
still occupies that position or a similar position; and
    (9) An employee of the Government Publishing Office, including such 
an employee who is moved involuntarily into the excepted service.
    (d) * * *
    (2) An employee whose position has been determined to be of a 
confidential, policy-determining, policy-making, or policy-advocating 
character, as defined in Sec.  210.102 of this chapter by--
    (i) The President for a position that the President has excepted 
from the competitive service;
    (ii) The Office of Personnel Management for a position that the 
Office has excepted from the competitive service; or
    (iii) The President or the head of an agency for a position 
excepted from the competitive service by statute.
* * * * *
[FR Doc. 2023-19806 Filed 9-15-23; 8:45 am]
BILLING CODE 6325-39-P

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