[Senate Hearing 105-522]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 105-522

 
                  MERIT SYSTEM PROTECTION ACT OF 1997

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

                                HEARING

                               before the

  SUBCOMMITTEE ON INTERNATIONAL SECURITY, PROLIFERATION, AND FEDERAL 
                                SERVICES

                                 of the

                              COMMITTEE ON
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED FIFTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 26, 1998

                               __________

      Printed for the use of the Committee on Governmental Affairs


                     U.S. GOVERNMENT PRINTING OFFICE
46-900 cc                    WASHINGTON : 1998

_______________________________________________________________________
For sale by the Superintendent of Documents, Congressional Sales Office
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                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   FRED THOMPSON, Tennessee, Chairman
SUSAN M. COLLINS, Maine              JOHN GLENN, Ohio
SAM BROWNBACK, Kansas                CARL LEVIN, Michigan
PETE V. DOMENICI, New Mexico         JOSEPH I. LIEBERMAN, Connecticut
THAD COCHRAN, Mississippi            DANIEL K. AKAKA, Hawaii
DON NICKLES, Oklahoma                RICHARD J. DURBIN, Illinois
ARLEN SPECTER, Pennsylvania          ROBERT G. TORRICELLI, New Jersey
BOB SMITH, New Hampshire             MAX CLELAND, Georgia
ROBERT F. BENNETT, Utah
             Hannah S. Sistare, Staff Director and Counsel
               Ann C. Rehfuss, Professional Staff Member
                 Leonard Weiss, Minority Staff Director
                       Lynn L. Baker, Chief Clerk

                                 ------                                

                                 ------                                

   SUBCOMMITTEE ON INTERNATIONAL SECURITY, PROLIFERATION AND FEDERAL 
                                SERVICES

                  THAD COCHRAN, Mississippi, Chairman
SUSAN M. COLLINS, Maine              CARL LEVIN, Michigan
PETE V. DOMENICI, New Mexico         DANIEL K. AKAKA, Hawaii
DON NICKLES, Oklahoma                RICHARD J. DURBIN, Illinois
ARLEN SPECTER, Pennsylvania          ROBERT G. TORRICELLI, New Jersey
BOB SMITH, New Hampshire             MAX CLELAND, Georgia
                   Mitchel B. Kugler, Staff Director
               Linda J. Gustitus, Minority Staff Director
                      Julie A. Sander, Chief Clerk


                            C O N T E N T S

                                 ------                                
                                                                   Page

Opening statement:

    Senator Cochran..............................................     1
    Senator Levin................................................     2

                               WITNESSES
                      Thursday, February 26, 1998

Lorraine Lewis, General Counsel, Office of Personnel Management..     2
David M. Cohen, Director, Commercial Litigation Branch, Civil 
  Division, U.S. Department of Justice...........................     6
Robert M. Tobias, National President, National Treasury Employees 
  Union..........................................................    16
Mark D. Roth, General Counsel, American Federation of Government 
  Employees, AFL-CIO.............................................    21

                     Alphabetical List of Witnesses

Cohen, David M.:
    Testimony....................................................     6
    Prepared statement...........................................     8
Lewis, Lorraine:
    Testimony....................................................     2
    Prepared statement with attached charts......................     4
Roth, Mark D.:
    Testimony....................................................    21
    Prepared statement...........................................    23
Tobias, Robert M.:
    Testimony....................................................    16
    Prepared statement with attachments..........................    17

                                APPENDIX

Additional prepared statements submitted for the record:
    Ralph Bledsoe, Chairman, Standing Panel on the Public 
      Service, National Academy of Public Administration.........    31
    Albert Schmidt, Acting National President, National 
      Federation of Federal Employees............................    33
Letter submitted by Lorraine Lewis to Senator Cochran............    34
Erickson decision submitted by Ms. Lewis.........................    37
Arsics brief submitted by Ms. Lewis..............................    42




                  MERIT SYSTEM PROTECTION ACT OF 1997

                              ----------                              


                      THURSDAY, FEBRUARY 26, 1998

                                     U.S. Senate,  
                Subcommittee on International Security,    
                      Proliferation and Federal Services,  
                  of the Committee on Governmental Affairs,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:07 p.m., in 
SD-342, Dirksen Senate Office Building, Hon. Thad Cochran, 
Chairman of the Subcommittee, presiding.
    Present: Senators Cochran and Levin.

              OPENING STATEMENT OF SENATOR COCHRAN

    Senator Cochran. The Subcommittee will come to order.
    Today we welcome our witnesses and others who are attending 
this hearing on the subject of the Merit System Protection Act 
of 1997, specifically, S. 1495, which was introduced at the 
request of the administration by my distinguished friend, 
Senator Levin from Michigan, the Ranking Member of this 
Subcommittee.
    The bill proposes two changes to the Civil Service Reform 
Act of 1978 relating to the authority of the Office of 
Personnel Management to seek and obtain judicial review of 
Federal personnel management decisions issued by the Merit 
Systems Protection Board and by arbitrators.

    [The prepared statement of Senator Cochran follows:]

             PREPARED OPENING STATEMENT OF SENATOR COCHRAN

    I would like to welcome our witnesses and others who are attending 
this hearing on the Merit System Protection Act of 1997, S. 1495, which 
was introduced by Senator Levin, the ranking Member of this 
Subcommittee.
    The Merit System Protection Act proposes two changes to the Civil 
Service Reform Act of 1978. The two changes relate to the authority of 
the Office of Personnel Management (OPM) to seek, judicial review of 
Federal personnel management decisions issued by the Merit System 
Protection Board (MSPB) and by arbitrators.
    First, the current law (Section 7703 to Title 5, U.S. Code) gives 
OPM 30 days to file a petition for review of an MSPB final decision to 
the U.S. Court of Appeals for the Federal Circuit. S. 1495 proposes 
extending OPM's appeal period to 60 days after receiving a notice of a 
final order or decision.
    Second, the current law gives the Court of Appeals the discretion 
to decide whether or not to hear OPM petitions for review of MSPB 
decisions. S. 1495 would strengthen the ability of OPM to obtain 
judicial review by requiring the Federal circuit to hear every appeal 
from a final MSPB decision brought by OPM.
    We will hear first from Lorraine Lewis, General Counsel of the 
Office of Personnel Management, and David M. Cohen, Director of the 
Commercial Litigation Branch of the Civil Division, Department of 
Justice. Ms. Lewis and Mr. Cohen will be followed by a second panel 
consisting of Robert M. Tobias, National President of the National 
Treasury Employees Union (NTEU) and Mark Roth, General Counsel of the 
American Federation of Government Employees (AFGE). We will also make 
statements submitted by R. Scott Fosler, President of the National 
Academy of Public Administration, and Albert Schmidt, Acting National 
President of the National Federation of Federal Employees, part of the 
hearing record, without objection.

    Senator Cochran. I will leave it to the witnesses to 
explain the proposal and the practical implications and how it 
will affect the process of judicial review of these decisions 
and why the Office of Personnel Management thinks these are 
changes that ought to be made in the law.
    Our first witness will be the General Counsel of the Office 
of Personnel Management, Lorraine Lewis, who is accompanied by 
David Cohen, Director of the Commercial Litigation Branch of 
the Civil Division of the Department of Justice.
    There will be a second panel consisting of the President of 
the National Treasury Employees Union, Robert Tobias, and the 
General Counsel of the American Federation of Government 
Employees, Mark Roth.
    We have statements that have been submitted to the 
Subcommittee which will be made a part of the record. They come 
from the Chairman, Standing Panel on the Public Service, 
National Academy of Public Administration, Ralph Bledsoe, and 
the Acting National President, National Federation of Federal 
Employees, Albert Schmidt.\1\
---------------------------------------------------------------------------
    \1\ The prepared statements of Messrs. Bledsoe and Schmidt appear 
in the Appendix on pages 31 and 33 respectively.
---------------------------------------------------------------------------
    At this point, before we turn to our witnesses, I am happy 
to yield to my distinguished friend from Michigan, Senator 
Levin.

               OPENING STATEMENT OF SENATOR LEVIN

    Senator Levin. Mr. Chairman, just very briefly, because you 
have laid out the issues. As you have indicated, this bill was 
introduced at the request of the administration, and there are 
many questions that we will be asking of the witnesses, but I 
just want to thank you for scheduling this hearing. It is an 
accommodation to the request of the administration, and it is 
nice of you to take the time to schedule this hearing so we can 
learn more about the issue and reach a decision as to what we 
think are the appropriate steps to take, if any.
    Senator Cochran. Thank you very much.
    Ms. Lewis, if you would come forward, and Mr. Cohen. We 
have copies of statements that you have provided to the 
Subcommittee. We thank you for those, and they will be made a 
part of the record in their entirety, so we encourage you to 
make summary comments and give the Subcommittee whatever 
information you think will be helpful to us.
    You may proceed.

    TESTIMONY OF LORRAINE LEWIS, GENERAL COUNSEL, OFFICE OF 
                      PERSONNEL MANAGEMENT

    Ms. Lewis. Thank you, Mr. Chairman, Mr. Levin.
    First, on behalf of the administration, thank you very 
much, Senator Levin, for introducing the bill at our request, 
and thank you, Mr. Chairman and Senator Levin, for scheduling 
this hearing.
    Last month, the Supreme Court ruled that a Federal employee 
has no right to lie when questioned by the agency about alleged 
misconduct. The Court reversed the Federal Circuit's finding 
that the Constitution prohibited agencies from disciplining 
employees for telling certain lies. This case, Lachance v. 
Erickson, was pursued by the Office of Personnel Management 
under the authority that brings us here today, the authority 
Congress conferred solely upon the Director of OPM 20 years ago 
to appeal erroneous final decisions that have a substantial 
impact on Civil Service law.
    At the same time that Congress vested this responsibility 
in the Director of OPM, it also granted discretion in the 
Federal Circuit to reject an appeal despite OPM's ``substantial 
impact'' determination. It is time to eliminate this unique 
discretion in the Federal Circuit.
    We are aware of no other instance in which a Federal Court 
of Appeals possesses the discretionary authority to decline to 
hear appeals by the Executive Branch from final decisions. In 
fact, when Congress recently provided for Federal Circuit 
review of appeals by legislative employing offices, Congress 
did not empower the Federal Circuit with such authority. The 
House and Senate Employment Offices may appeal as a matter of 
right, thereby obtaining decisions on the merits of the legal 
issues presented.
    OPM, as the personnel expert for the Executive Branch, 
should be afforded the same treatment. With all due respect, 
OPM is in a better position than the Court to judge the impact 
of erroneous MSPB and arbitration decisions. While the Federal 
Circuit has much experience adjudicating Civil Service law, OPM 
deals regularly with the Federal personnel community which puts 
that law into practice. This front-line position gives OPM 
better perspective to assess how decisions will be interpreted 
and knowledge of the problems that arise.
    After 20 years in this position, OPM has acquired a broad 
perspective on the issues facing the Civil Service, both today 
and tomorrow. A court simply cannot be expected to possess this 
expertise which is critical to measuring the substantial impact 
of decisions.
    Instead, we want the court's efforts to be focused upon 
deciding the merits of the cases that the Director of OPM and 
the Solicitor General have decided warrant appeal. Everyone--
agencies, employees and their representatives--benefits from 
the resolution of important legal issues. There is no reason to 
believe that the number of appeals by OPM would increase if the 
Federal Circuit's discretion were eliminated.
    Each appeal filed by OPM is subject to extensive review by 
several offices within the Department of Justice and ultimately 
must be authorized by the Solicitor General, the government's 
very selective gatekeeper for all appeals.
    As the charts included with my written statement 
demonstrate, during the last 18 years, OPM has appealed only 57 
cases; that is an average of 3 or 4 a year. Clearly, the law's 
continuing ``substantial impact'' requirement and this multi-
level review process have ensured and will continue to ensure 
that only the most important Civil Service cases are appealed.
    Despite this prudent track record, the Federal Circuit has 
refused to hear one out of four of these cases. This has 
prevented the Executive Branch from securing clarity and 
understanding of the law. It has also led to inevitable, costly 
and time-consuming disagreements between OPM, the MSPB and 
individuals as to what cases are important enough for the Court 
to hear. This system is rife with inefficiencies.
    Our proposal to eliminate the Court's discretion is also 
fundamentally fair to the Federal worker. An employee's right 
to appeal to the Federal Circuit remains absolutely unchanged 
by our proposal. Further, the law provides that the employee 
and the MSPB may participate in OPM's cases in the Federal 
Circuit.
    Finally, we are also asking that OPM and the Department of 
Justice be permitted 60 days in which to file a pro forma 
petition for review. This is the same time limit pertaining to 
government appeals from the Federal Labor Relations Authority, 
the other adjudicatory body in addition to the MSPB created by 
the Civil Service Reform Act of 1978.
    Moreover, pursuant to recent law, legislative employing 
offices are permitted 90 days to appeal to the Federal Circuit. 
This is in stark contrast to the 30-day fire drill that OPM and 
the Department of Justice now run to obtain the required 
approvals and prepare a petition equivalent to a full brief on 
the merits.
    S. 1495 will help OPM carry out the leadership role that 
Congress and the President require. It will give us the tools 
we need to ensure that cases of the magnitude of Erickson will 
be considered on their merits.
    We are particularly pleased that our proposal has gained 
the support of the Chairman of the Standing Panel on the Public 
Service of the National Academy of Public Administration.
    Thank you for the opportunity to discuss this proposal with 
you today and to be on this panel with David M. Cohen from the 
Department of Justice.
    Senator Cochran. Thank you, Ms. Lewis for your statement.

    [The prepared statement of Ms. Lewis follows:]


                  PREPARED STATEMENT OF LORRAINE LEWIS

    Mr. Chairman, Senator Levin, and Members of the Subcommittee: Last 
month, the Supreme Court ruled that a Federal employee has no right to 
lie when questioned by the agency about alleged misconduct. The Court 
reversed the United States Court of Appeals for the Federal Circuit 
which found that the Constitution prohibited agencies from disciplining 
employees for telling certain lies. This pivotal case, Lachance v. 
Erickson, was pursued by the Office of Personnel Management (OPM) under 
the authority that brings us here today--the authority of the OPM 
director to appeal erroneous decisions that raise substantial issues of 
Civil Service law.
    The Erickson decision means that all of us sitting here today--
Congress, Executive agencies, and employees--know an important standard 
in the framework governing Federal employees. When such principles are 
unsettled, no one in the system is benefited.
    This decision illustrates the significance of OPM's central role in 
our Civil Service--a role Congress assigned to us 20 years ago--to seek 
judicial review of only the most important Merit Systems Protection 
Board (MSPB) and arbitration decisions--those that would have a 
``substantial impact'' upon Civil Service law. To that end, Congress 
specifically assigned OPM the role of the President's ``Chief 
Lieutenant'' in matters of personnel administration.
    OPM has steadfastly adhered to Congress's directive. By our count, 
during the past 18 years, OPM has sought to appeal only 57 cases--
approximately four cases on average each year--to the appropriate Court 
of Appeals. (Attachment A is a graph which illustrates the few number 
of petitions filed by OPM each year).
    Through judicious use of its authority to seek judicial review, OPM 
has established a number of important legal principles affecting the 
entire government. For example, cases like Hillen and Frazier have 
established the strict legal standards by which allegations of sexual 
harassment are judged in the Federal workplace.
    Fortunately, while the system established 20 years ago worked in 
Erickson, in our experience, it has proven to be defective in two key 
respects. S. 1495, OPM's Legislative proposal, seeks to correct those 
defects and, most importantly, the proposed changes are fundamentally 
fair to Federal employees.
    The first problem with the current system is the Federal Circuit's 
authority to reject a petition for review despite OPM's ``substantial 
impact'' determination. This has prevented OPM from performing its core 
function of obtaining expeditious judicial review of significant final 
decisions without needless litigation over which cases are important 
enough for the Court to hear. Second, there is a burdensome set of 
constraints by which the government must file a petition for review 
that is the equivalent of a full-blown brief on the merits of the case 
within 30 days of receipt of the final MSPB or arbitral decision. Our 
research has revealed that no other governmental appellant at any Court 
of Appeals is so constrained.

Substantial Impact Determination

    The authority of the Federal Circuit to review and substitute its 
judgment for that of the Director of OPM is unnecessary. Since the 
creation of the Federal Circuit, the 50 or so appeals that OPM has 
filed in that Court must be viewed against the backdrop of the Federal 
Circuit's overall caseload, which exceeds 22,000 filings for that time 
period. Thus, OPM's petitions have constituted only \1/5\ of 1 percent 
of the Federal Circuit's entire docket. Clearly, we have not exercised 
our authority in a manner that burdens the Court.
    Each appeal filed by OPM is subject to extensive review by several 
offices within the Justice Department, and ultimately must be 
authorized by the Solicitor General. While OPM is the President's 
``Chief Lieutenant'' for personnel administration, there is no question 
who is the President's General for authorizing government appeals--and 
the Solicitor General is a very selective gatekeeper. We are unaware of 
any other instance in which a Federal Court of Appeals possesses the 
discretionary authority to decline to hear appeals from final 
decisions. No governmental appellant faces these consequences other 
than OPM.
    In fact, recently Congress provided for Judicial review in the 
Federal Circuit of employment decisions adverse to Legislative 
employing offices. However, Congress specifically allowed the House and 
Senate employment offices to appeal such decisions as a matter of 
right. This enables those offices to obtain decisions on the merits of 
the legal issues presented. Since 1978, OPM has proven that its 
performance as the President's ``Chief Lieutenant'' in selecting those 
few cases with substantial impact is deserving of the same treatment.
    Unfortunately, in exercising its anomalous authority, the Federal 
Circuit has declined to hear a significant portion of the cases that 
OPM and the Solicitor General have determined meet the exacting 
standards of the law.
    For example, in Avalos, the Bureau of Prisons found that an 
employee sexually harassed a female inmate. The arbitrator reversed the 
agency's discipline against him. In doing so, the arbitrator 
misinterpreted the Constitution in this Civil Service context and 
relied on his own invidious ethnic generalizations about witnesses who 
appeared. The Federal Circuit refused to address these issues even 
though they were of comparable significance to those in Erickson.
    In all, since the Court's inception, the Federal Circuit has 
declined to hear the merits of OPM's cases in one of every four that 
OPM has filed with the Court. (Attachment B is a graph which 
illustrates that the Court has rejected OPM's petitions more often than 
OPM has actually lost cases on their merits). This has prevented OPM 
from securing clarity and understanding of the law and has led to 
inevitable, costly and time-consuming disagreements between OPM, the 
MSPB and individuals as to what cases are important enough for the 
Court to hear.
    S. 1495 would eliminate the discretion of the Federal Circuit to 
decide whether to hear the director's petition for review, thus 
permitting OPM to discharge fully the responsibility that Congress 
conferred upon it nearly 20 years ago.
    The elimination of that authority would in no way cause a marked 
increase in the Federal Circuit's docket. As mentioned, 18 years of 
OPM's and the Solicitor General's demonstrated restraint dispels that 
fear. The numbers speak for themselves.
    This bill is fundamentally fair to the Federal worker. An 
employee's ability to appeal an adverse decision to the Federal 
Circuit, as a matter of right, is left absolutely unchanged by this 
proposal. A decision on the merits from the Federal Circuit on OPM's 
petition for review will create certainty in legal principles and will 
establish repose for agencies, managers, employees, and those who 
represent them.

Extending the 30-Day Time Limit to 60 Days

    The Court has also required OPM to file a full-blown substantive 
appellate brief only 30 calendar days after the receipt of an 
arbitrator or MSPB decision. No other agency is required to perform 
under such strict constraints in their appeals to the Federal Circuit. 
For example, Congress provided that appeals of decisions (filed by 
either the Senate or House employment offices) issued by the Board of 
the Office of Compliance may be perfected by merely filing pro forma 
notices of appeal with the Federal Circuit within 90 days. Of course, 
neither the Senate nor House employment offices must obtain the 
Solicitor General's approval prior to filing their appeal.
    S. 1495 would remove this anomaly, and allow it to file a pro forma 
petition for review 60 days after an adverse decision has been 
received. This would then be the same as the time limit pertaining to 
government appeals from the Federal Labor Relations Authority, the 
other adjudicatory body created by the Civil Service Reform Act in 
1978.
    This 60-day time frame would ensure that OPM and the Justice 
Department have the necessary time to draft the required 
recommendations and to confer, coordinate and prepare the petition.
Conclusion
    S. 1495 would ensure that OPM can carry out the leadership role 
that Congress and the President require of it. It would give us the 
tools we need to ensure that cases of the magnitude of Erickson will be 
considered on their merits.
    Thank you for the opportunity to discuss the bill with you today, 
and to be on this panel with Mr. David M. Cohen from the Department of 
Justice.\1\

---------------------------------------------------------------------------
    \1\ Charts referred to appear in the Appendix on page 36.
---------------------------------------------------------------------------

    Senator Cochran. Mr. Cohen, you may proceed.

 TESTIMONY OF DAVID M. COHEN, DIRECTOR, COMMERCIAL LITIGATION 
       BRANCH, CIVIL DIVISION, U.S. DEPARTMENT OF JUSTICE

    Mr. Cohen. Thank you, Mr. Chairman, Mr. Levin.
    The United States is involved in more cases in the Federal 
courts than any other litigant. If the United States were to 
appeal every case that it lost, the Courts of Appeal would be 
overwhelmed. Moreover, it would not be correct for the 
government to appeal a case simply because it lost a case at 
the trial level.
    Accordingly, an elaborate procedure has been established in 
order to control the number of cases and the type of cases 
which the United States may appeal, and that procedure involves 
centralizing authority to authorize appeals in the Solicitor 
General.
    In order to exercise his authority, the Solicitor has also 
established an internal Department of Justice procedure, which 
I have described in my statement, which involves at least seven 
different levels of review before an appeal is authorized. This 
is the normal procedure that we follow in every case when the 
government is considering an appeal from a lower tribunal.
    However, unlike the situation we are talking about today, 
there are two differences. In the normal procedure, we have 60 
days in which to make this determination, 60 days in which to 
prepare the recommendations, to conduct meetings if it is 
necessary to resolve disputes, and finally, to file the notice 
of appeal. And that is the second difference--once it is 
decided by the Solicitor to authorize an appeal, that appeal is 
initiated by the filing of a notice.
    The differences in the current procedure involving OPM are, 
first, that we only have 30 days to complete this extensive 
review, and second, instead of filing a notice of appeal upon 
conclusion of the Solicitor to authorize an appeal, we have to 
file a substantive petition.
    The last thing I would mention on this point is that we 
never know when a decision is going to be issued by the Merit 
Systems Protection Board or when the Director of OPM, after 
considering the matter, will recommend to the Department of 
Justice that an appeal be taken.
    Given that fact and given the fact that we only have 30 
days, the procedure places an extreme burden upon our 
resources. When the Director sends over a recommendation, our 
attorneys have to drop everything that they are doing at the 
moment in order to review the record, review the decision, 
prepare a recommendation that will be forwarded up the chain, 
and at the same time, they have to prepare a substantive 
petition for review. And the 30-day period is simply not long 
enough to enable us to thoroughly consider these matters and to 
do our other work--in other words, our other work has to suffer 
whenever we have one of these recommendations from the Director 
that we appeal.
    So for these reasons, we support the provision of the bill 
that would extend the time for OPM, or the government, to 
appeal a decision for 60 days, the normal period allowed in 
every other appeal.
    The other aspect of this bill also deals with an unusual 
procedure. In every other appeal, as I have mentioned, we go 
through exactly the same process in preparing recommendations 
for the Solicitor General to make a decision as to whether or 
not an appeal should be authorized. Once the Solicitor makes 
that decision and we file a notice of appeal, then the appeal 
proceeds in the normal course of events. However, under the 
current procedure, once the Solicitor General makes a 
determination that an appeal should be taken, even though the 
Solicitor has taken into account and given weight to, although 
not dispositive weight, to the Director's determination that 
the case involved will have a substantial impact on the 
administration of the Civil Service laws, once the Solicitor 
makes that decision, then the court under this procedure--an 
unusual procedure--has an opportunity to make a decision itself 
as to whether or not the decision will have a substantial 
impact on the administration of the Civil Service laws.
    Now, the problem that this causes is that the court, in our 
view, is not in as good a position as the Solicitor General and 
OPM to make a determination as to whether or not a particular 
decision will affect the administration of the laws. Just to 
give two examples, in one situation, the court declined to 
permit an appeal because the decision that the government 
wished to appeal was unpublished, and in another case, the 
court declined to give the government permission to appeal 
because the court felt that the decision that the government 
wished to appeal was so wrong that no one would possibly follow 
the decision, and therefore, it could not have a substantial 
effect upon the Civil Service law.
    The point here is that those may be reasons that the court 
believes are reasons to deny the government the right to 
appeal, but it involves a guess on the part of the court, that 
is, that personnel specialists will not be influenced by an 
unpublished decision, or they will not be influenced by a 
decision that is so clearly wrong.
    In fact, OPM and the Solicitor General are much closer to 
the operations of personnel specialists throughout the 
government, and we think they are in a much better position to 
make a determination as to whether or not in fact a decision, 
even if it is unpublished, or a decision even if the court 
thinks is clearly wrong, will affect the ability of personnel 
specialists to perform their jobs.
    For this reason, we support the second provision of this 
bill which would restore the normal procedure and allow OPM and 
the Solicitor General to make the determination as to whether 
or not a decision should be appealed because if left standing, 
it will have an adverse impact upon the administration of the 
Civil Service laws.
    Thank you, Mr. Chairman.
    Senator Cochran. Thank you very much.

    [The prepared statement of Mr. Cohen follows:]

                  PREPARED STATEMENT OF DAVID M. COHEN

    Mr. Chairman and Members of the Subcommittee, I am pleased to 
testify today on behalf of the Department of Justice regarding S. 1495, 
``The Merit System Protection Act of 1997.'' This bill would make two 
changes in the process by which the Office of Personnel Management 
seeks review of adverse decisions of the Merit Systems Protection Board 
or arbitrators. First, it would lengthen the time for filing a petition 
for review from 30 days to 60 days. Second, it would eliminate the 
discretion of the United States Court of Appeals for the Federal 
Circuit to reject a petition for review once the Director of the Office 
of Personnel Management has made the requisite statutory determination 
that a particular case would have a 'substantial impact on a Civil 
Service law, rule, regulation, or policy directive.'' The Department of 
Justice fully supports the bill.
    Currently, pursuant to 5 U.S.C. Sec. 7703(d), a petition for review 
must be filed within 30 days after notice of the final decision of the 
Merit Systems Protection Board or the arbitrator is received. Moreover, 
unlike more traditional notices of appeal, the petition for review must 
contain a full statement regarding the board's alleged error in 
interpreting relevant Civil Service law and a description of the 
substantial impact the error will have upon the Civil Service laws. 
After receiving the petition for review and any responses to it, the 
Federal Circuit then determines whether it will entertain the appeal.
    This bill would lengthen the time for the government to file a 
petition for review from 30 days to 60 days. This proposal is 
appropriate and necessary for several reasons. The additional time 
would provide the Office of Personnel Management and the Department of 
Justice a more adequate amount of time to assess the appropriateness of 
a petition for review. Any final decision to file a petition for review 
is made by the Solicitor General. Before that final decision is 
reached, however, several extensive reviews and recommendations are 
made within the Office of Personnel Management and the Department of 
Justice. First, the Office of Personnel Management must determine 
whether the alleged error by the board meets the statutory 
``substantial impact'' standard required for a petition for review. If 
so, the Office of Personnel Management must fully analyze the Board or 
arbitrator's final decision and transmit an appeal to the Commercial 
Litigation Branch of the Civil Division of the Department of Justice, 
which independently evaluates whether a petition for review is 
appropriate. The Commercial Litigation Branch's recommendation is 
forwarded to the Civil Division's Appellate Staff which, in turn, 
reviews the matter and forwards the recommendation to the Assistant 
Attorney General or his Deputy, who makes a recommendation to the 
Solicitor General. Once the Civil Division's recommendation is received 
by the Office of the Solicitor General, additional reviews are 
conducted by an Assistant to the Solicitor General and a Deputy 
Solicitor General before a final decision is made by the Solicitor 
General whether to authorize the petition for review.
    This extensive internal review process is similar to the procedures 
employed for all appeals upon behalf of Federal agencies and it is a 
necessary process to ensure that these appeals are appropriate and our 
arguments are sound. The process is highly effective in identifying 
only the most significant cases for appeal by the government. Indeed, 
as a result of this process, the Office of Personnel Management has 
appealed only about four per year of the approximately 2,000 decisions 
issued by the Merit Systems Protection Board annually.
    Pursuant to the Federal Circuit's current procedures, this entire 
decisionmaking process must be completed within 30 days. Moreover, a 
substantive document containing our jurisdictional and substantial 
impact arguments and evidence also must be prepared and filed within 
this same time period. Although the current bill would eliminate the 
Federal Circuit's discretion to entertain a petition for review, hence, 
eliminating the need for a substantive brief at the time the initial 
petition for review is filed, the additional time to appeal is still 
necessary to ensure that both the Office of Personnel Management and 
the Department of Justice have an adequate amount of time to assess the 
appropriateness of further review. The present time constraints impose 
an undue burden upon both the Office of Personnel Management and the 
Department of Justice and limit the government's ability to seek 
effective review of board decisions which we believe are erroneous and 
have a substantial impact upon Civil Service law. In addition, the 
limited time period in which to petition for review is even more 
burdensome in those instances when the Office of Personnel Management 
and the Department of Justice disagree as to whether a petition for 
review should be filed or what specific arguments should be presented. 
The extremely short period to seek review of these complex and 
significant cases simply does not provide sufficient time for adequate 
consultation and reflection regarding cases of substantial 
governmentwide importance. The 60-day period for filing a petition for 
review envisioned by this bill is consistent with the time period for 
appeal in other cases involving the United States. For instance, in 
appeals from district courts in which the United States or an officer 
or agency thereof is a party, the appeal period is 60 days. More 
directly, in appeals to the Federal Circuit from the Court of 
International Trade or the Court of Federal Claims, the period for 
appeal also is 60 days. Indeed, the period for appealing the 
administrative determination of a board of contract appeals is even 
longer in that the time within which an appeal must be filed is 120 
days from the date the adverse decision is received. The 60-day period 
allowed by the bill will provide an adequate amount of time for 
assessment of each case and ensure that petitions for review are filed 
only when bath the Office of Personnel Management and the Department of 
Justice have determined that further review is warranted.
    The second part of this bill would eliminate the discretion of the 
Federal Circuit to entertain the petition for review and require the 
court to entertain all such appeals when the Office of Personnel 
Management has made the requisite statutory determination and the 
Solicitor General has concurred with the recommendation to seek further 
review. Pursuant to the current statutory scheme, even if the Director 
of the Office of Personnel Management has made the required 
determination that the Merit Systems Protection Board or the arbitrator 
has erred in a way that will have a substantial impact upon the Civil 
Service laws and the Department of Justice has approved the filing of a 
petition for review, the Federal Circuit still can decide not to 
entertain the appeal. In essence, this discretion permits the Federal 
Circuit, instead of the Executive Branch, as is the case with all other 
appeals involving government agencies, to determine when it is 
appropriate for the government to obtain judicial review of a final 
decision of the board or arbitrator.
    Although there are other instances where a court may refuse to 
entertain an appeal, that discretion results from the court's expertise 
and special ability. For instance, an interlocutory appeal from a non-
final order will be allowed only when ``it involves a controlling 
question of law as to which there is substantial ground for difference 
of opinion'' and when ``an immediate appeal . . . may materially 
advance the ultimate termination of the litigation. . . .'' This 
decision is left firmly to the discretion of the courts. The important 
distinction is that the Merit Systems Protection Board and arbitrators' 
decisions are final--there are no disruptions in the proceedings below. 
Likewise, the Supreme Court has the discretion to reject petitions for 
a writ of certiorari unless ``compelling reasons'' such as a conflict 
among the circuit courts or an important Federal question exist. In 
both of these instances, however, it is appropriate for the court to 
make the final determination to entertain an appeal because whether an 
interlocutory appeal will materially advance a case or whether an 
important conflict needs to be resolved are questions that are firmly 
within the courts' expertise and are best left to the courts.
    Conversely, in the case of a petition for review, the Federal 
Circuit has no special expertise in the Federal Civil Service or in 
deciding the specific question of whether a decision of the Merit 
Systems Protection Board or arbitrator has a ``substantial impact'' on 
a Civil Service law, rule or regulation. Instead, it is the Director of 
the Office of Personnel Management who is statutorily charged with the 
administration and oversight of the Federal Civil Service. Moreover, as 
part of this responsibility, the Director has been given the specific 
authority to determine when to seek review of an adverse decision of 
the Merit Systems Protection Board or arbitrator. Given this statutory 
role of the Director and the fact that the decision to appeal is 
traditionally and appropriately lodged with the Executive Branch, and 
more specifically with the Solicitor General, we believe it is 
inappropriate for the Federal Circuit to be able to substitute its 
judgment regarding the appropriateness of a petition for review for the 
judgment of the Executive Branch. Rather, because of the special 
expertise the Director of the Office of Personnel Management possesses 
in personnel matters, the decision to petition for review should belong 
to the Director, with the approval of the Solicitor General.
    There is no evidence that the Office of Personnel Management would 
abuse its authority or pursue unnecessary petition for reviews if the 
Federal Circuit's discretion were eliminated as proposed by the bill. 
Indeed, to date, the Director has exercised his or her authority to 
appeal in a limited and appropriate manner. As noted, we have appealed 
only about four cases per year from the approximately 2,000 decisions 
issued by the Merit Systems Protection Board annually. Yet, despite the 
limited number of petitions for review sought by the government, the 
Federal Circuit has refused to hear petitions for review in a number of 
instances in which both the Office of Personnel Management and the 
Department of Justice have determined that a significant issue of Civil 
Service law is implicated.
    Moreover, as we have described, once the Office of Personnel 
Management has made its recommendation, a lengthy and detailed review 
is performed by the Department of Justice. The nature of this review 
requires a number of individual attorneys and components of the 
Department to agree with the Director's substantial impact 
determination. Accordingly, this review process provides substantial 
additional assurance that petitions for review will be sought in only 
the most important and significant cases. Because appeals of decisions 
from the Merit Systems Protection Board will be taken only when both 
the Office of Personnel Management and the Department of Justice 
conclude a petition for review is appropriate, any further 
discretionary review by the Federal Circuit is unnecessary and 
encroaches upon the traditional prerogative of the Executive Branch.
    Through the judicious use of its authority, the Office of Personnel 
Management has established a number of important legal principles for 
Civil Service law such as the proper test for establishing sexual 
harassment in the Federal workplace and the rule that Federal 
arbitrators in personnel cases must apply the same substantive law as 
the Board. In other cases, however, the Executive Branch has been 
frustrated in its efforts to obtain judicial review of what it believes 
were significant Civil Service issues because the Federal Circuit 
declined to hear the appeals. This bill would eliminate the unnecessary 
discretionary review of the Federal Circuit and place the decision to 
appeal in the appropriate province of the Executive Branch.
    For these reasons, the Department of Justice strongly supports 
enactment of S. 1495, the ``Merit Systems Protection Act oF 1997.'' 
That concludes my prepared remarks. I would be happy to attempt to 
answer any questions that you may have.

    Senator Cochran. Let me ask you this. Is there any way that 
you can think of that one or the other parties to an appeal 
would be disadvantaged if the period of time were to be 
extended, as this bill suggests it should, from 30 days to 60 
days in order to file that required appeal?
    Mr. Cohen. I do not believe they would be disadvantaged in 
the sense that, for example, if the government has lost--let me 
back up. Suppose an employee has been discharged, and then the 
Merit Systems Protection Board overturns that discharge. The 
Solicitor General and the Director of OPM have decided that 
that decision should be appealed. There is no automatic stay 
simply because the government has decided to appeal, so the 
employee would be reinstated during the pendency of the appeal, 
so it is hard to see how the employee would be disadvantaged by 
that process.
    It is true that the government could move for a stay, but 
it rarely does so; in fact, I do not recall an instance in 
which we have done so, or certainly, if we have, it is very, 
very rare. So the employee would be reinstated during the 
pendency of the appeal.
    Ms. Lewis. There is also the issue of attorneys' fees. At 
both the MSPB and the court level, the party may move for 
collection of fees, and there is an ``interest of justice'' 
standard that that body reviews to determine if fees are 
appropriate. So both of our answers are no, we do not see that 
there is a harm or a cost. Ultimately, we see a great benefit 
in those cases in being able to expeditiously get to the merits 
of the legal issues that have been identified in the 
government's appeal. Currently, there are two different panels 
of the Federal Circuit that review the matter. There is an 
initial panel that looks at the brief filed to determine if the 
case has substantial impact, and then, upon concurring or 
agreeing to take the case, there is another panel that is 
established, a panel with three judges, to see another set of 
briefs that is filed and then to hear the oral argument. 
Therefore, in three out of four cases over the last 20 years, 
this system has basically doubled the work of all of the 
parties and cost resources in order to do that.
    Senator Cochran. Looking at the statistics that were given 
to the Subcommittee in preparation for the hearing, I see that 
there are close to 10,000 decisions made each year by the Merit 
Systems Protection Board and arbitrators. Is that correct?
    Ms. Lewis. My recollection is that there have been about 
10,000 cases appealed to the Federal Circuit from the MSPB; 
that each year since the MSPB was created, there ranges from 
1,000 to 2,500 or so, final MSPB cases, decided each year, and 
from that number, 10,000 of those cases have been appealed to 
the Federal Circuit.
    Senator Cochran. My information here was from the Court of 
Appeals for the Federal Circuit in the last 5 years, OPM only 
submitted 17 cases to the court, and the court agreed to hear 
10 of them. Is that not right?
    Ms. Lewis. Since 1993, I believe we have submitted 23; from 
1993 until to date, we have petitioned 23 times, and we have 
been rejected 6.
    Senator Cochran. OK. That does not seem to me to be many 
appeals.
    Ms. Lewis. Many appeals by OPM?
    Senator Cochran. Yes, right.
    Ms. Lewis. Yes, that is correct.
    Senator Cochran. The appeals have come from the other side; 
is that what you are saying?
    Ms. Lewis. That is correct; that is exactly right. The 
individuals in those cases have an appeal as of right to the 
Federal Circuit, and that aspect of the law is untouched by 
this proposal.
    Senator Cochran. OK. That will not be affected.
    Ms. Lewis. Correct.
    Senator Cochran. So the only thing that would be affected 
would be to give the OPM an opportunity to have appeal as a 
matter of right rather than discretion. Is that correct?
    Ms. Lewis. With one qualifier, Mr. Chairman. The 
requirement in the law that, in the discretion of the OPM 
Director, the cases will have a substantial impact on Civil 
Service law, will remain.
    Senator Cochran. Yes. You will still have to make that 
determination.
    Ms. Lewis. And we will still be required----
    Senator Cochran. But the court takes your word for it?
    Ms. Lewis. With all due respect to the court, the decision 
as to whether a case will have substantial impact on 
administration of the Civil Service laws will lie with the OPM 
Director, the President's Chief Lieutenant in Personnel 
Administration, as the Civil Service Reform Act spelled out for 
the Director of our agency 20 years ago, requiring the approval 
of the Solicitor General and the checks and balances in the 
Department of Justice.
    So to contrast in cases that are appealed from the Board of 
Compliance, a board of the Office of Compliance here in the 
Legislative Branch, there are two fundamental differences. 
There is no requirement on the employing office here in the 
Legislative Branch that the matter have a substantial impact on 
a law, and second, there is no requirement to seek the approval 
of the Solicitor General. So there will continue to be very few 
cases.
    Senator Cochran. OK. In your opinion--and you can both 
answer this--would there be any appreciable increase in the 
number of appeals and therefore the work load of the Federal 
Circuit if this bill is passed?
    Mr. Cohen. I do not believe so. The government appeals very 
few cases to begin with. For example, in my area of 
responsibility, we represent every Federal agency in the Court 
of Federal Claims, and last year, we had 36 cases that we lost, 
and we only appealed 6 of them. In the normal course, we 
rarely--we do not appeal every case, and we appeal very few 
cases. I do not believe the number of cases would increase 
substantially.
    Senator Cochran. Ms. Lewis, do you agree with that?
    Ms. Lewis. I agree, absolutely.
    Senator Cochran. Senator Levin.
    Senator Levin. Thank you, Mr. Chairman.
    I would like to get these numbers straight--by the way, 
welcome back. This is a room with which you are very familiar. 
You were counsel to Senator Glenn when he was the Chairman 
here, and you performed admirably then, and you are performing 
very capably now, representing your agency, so welcome--I will 
not say ``home''; God forbid, this is no one's home--but 
welcome back.
    Ms. Lewis. Thank you, Senator Levin.
    Senator Levin. Let me get the numbers straight. The number 
in your testimony was 57 efforts to appeal since 1978?
    Ms. Lewis. Yes, sir. The first three cases of the 57 were 
brought before the U.S. Court of Appeals for the District of 
Columbia. It was not until the last 54 after the Federal 
Circuit was created that these cases, both from the MSPB and 
arbitrators standing in the shoes of the MSPB, have been taken 
to the Federal Circuit.
    Senator Levin. So that is since roughly 1980, or----
    Ms. Lewis. Nineteen eight-two, I believe, is when the 
Federal Circuit----
    Senator Levin. OK. So 54 efforts to appeal since 1982, of 
which how many have been granted--applications to appeal?
    Ms. Lewis. We have had 14 denials, so we have had----
    Senator Levin. So 40 of 54. And then, when the Chairman 
asked you, you said that since 1993, the figure you used was--
--
    Ms. Lewis. Twenty-three.
    Senator Levin [continuing]. Twenty-three attempts, of which 
how many were denied?
    Ms. Lewis. Six were denied.
    Senator Levin. So you had 17 successful. OK.
    Ms. Lewis. We have had 17 cases taken, and then----
    Senator Levin. Taken; I meant taken, right.
    Ms. Lewis [continuing]. Right.
    Senator Levin. And then, of those 17, you won some and you 
lost some, I assume.
    Ms. Lewis. We win about two-thirds of the cases on the 
merits.
    Senator Levin. How many cases a year are decided by the 
MSPB, approximately?
    Ms. Lewis. The number varies.
    Senator Levin. Oh, give me a range.
    Ms. Lewis. The range is about 1,100; the high was 5,223 
back in 1984. In 1996, the number of final MSPB decisions was 
1,329----
    Senator Levin. OK, that is good enough. So typically, maybe 
1,500 cases a year or something like that. And of those, in how 
many does the government prevail, roughly?
    Ms. Lewis. I have not been able to get that determination. 
I have sought, but I have not been able to get it.
    Senator Levin. Would you guess it is somewhere even-steven, 
or----
    Ms. Lewis. No. The government generally, I think, has a 
significant win record at the MSPB; but I do not have the exact 
number.
    Senator Levin. And then, how many employee appeals were 
there, say, since 1993, or give me an ``apples and apples'' 
figure--or, last year, how many----
    Ms. Lewis. In 1997, there were 545; in 1996, 789; almost 
1,000 the year before.
    Senator Levin. OK. So you have roughly 500 to 1,000 appeals 
a year by employees from MSPB decisions or arbitrators' 
decisions.
    Ms. Lewis. Somewhere between 500 to 800 in the last 4 or 5 
years.
    Senator Levin. Now, in answer to the Chairman's question 
about whether there would be additional appeals if you were 
given the right to appeal as the employee has, you said you 
have significant hurdles to jump inside your process, so you 
did not think there would be a significant additional number. 
But I assume there would be additional appeals, otherwise you 
would not be here.
    Ms. Lewis. I respectfully disagree.
    Senator Levin. You do not think there would be any 
additional appeals?
    Ms. Lewis. There is no quota.
    Senator Levin. I am not saying that. Your own testimony 
says ``There is a burdensome set of constraints by which the 
government must file a petition that is the equivalent of a 
fullblown brief.'' That sounds to me like it deters you from 
appealing cases that you would like to appeal.
    Ms. Lewis. Senator, Congress expects no less of Janice 
Lachance, the Director of OPM--and I am sure the same is true 
of the Solicitor General--than to do the job that we have to do 
within the system that we have. We make sound decisions under 
the current constraints.
    Senator Levin. But don't those constraints deter you from 
filing at least some efforts to appeal?
    Ms. Lewis. The answer is no.
    Senator Levin. OK.
    Ms. Lewis. When we identify a case that meets the statutory 
test--and Senator Levin, I can assure you that from the day I 
walked in the door of the General Counsel's Office at OPM and 
saw that this was no way to run a railroad, I have done the 
absolute best that I can representing our Director and working 
with the Justice Department, but each of the cases that we have 
identified and the cases that I have researched among my 
predecessors indicates that the government had a sound reason 
and had an issue of law that required judicial review. And 
unfortunately, we did not have a decision on the merits.
    The Erickson case that I pointed out in my opening 
statement----
    Senator Levin. That is not my question. My question is are 
there cases where you think you have a sound case where you now 
do not appeal because of the hoops and constraints where you 
would appeal if you had a right to? That is really my question.
    Ms. Lewis. I think the answer is there is nothing about the 
current system that helps the decisionmaking process.
    Senator Levin. Well, I do not think that is my question, 
either.
    Ms. Lewis. But we----
    Senator Levin. Let me try it again. Do those constraints 
deter you now because you have to go through the extra process 
of going through this application process? Does that not, as a 
matter of fact, use up some resources so that as an obvious 
practical matter, there would be some more appeals where you 
now are constrained from appealing even though you have a 
meritorious position just from the fact that resources are used 
in this two-step process?
    Ms. Lewis. I definitely have sufficient resources in my 
office to do the job I need to do. I am also assisted very 
greatly by the officials who work in our program--the employee 
relations specialists, the labor relations specialists--and day 
in and day out, it is those employees in addition to the 
lawyers in my office who receive the phone calls, who receive 
inquiries from other agencies and bring cases to our attention. 
And very frequently--and I think it is well-understood in the 
personnel community--very, very frequently, we say no to those 
other agencies; their cases do not meet the statutory test.
    I basically look to be undeterred in carrying out the job 
that must be done.
    Senator Levin. You are saying that every case that now 
meets the statutory test--every case, you are now applying for 
an appeal that meets the statutory test. That is what you are 
saying? That is a straightforward question.
    Ms. Lewis. Yes.
    Senator Levin. OK. Under the old Civil Service system, was 
the application process the same to get to a court? Was there 
an appeal as of right before it was split up in 1978?
    Ms. Lewis. No.
    Senator Levin. It was the same application process?
    Ms. Lewis. No, I do not believe that there was an appeal.
    Senator Levin. There was no appeal.
    Ms. Lewis. Yes.
    Senator Levin. By the employee or by the government?
    Ms. Lewis. Basically, it stopped at the Civil Service 
Commission is my understanding.
    Senator Levin. I would be curious about that. Maybe our 
staff can find that out for us.
    My last question--is there an appeal from the Court of 
Appeals now if they deny you an application to appeal? Is there 
an appeal to the Supreme Court--like in the Erickson case, did 
you go to the Supreme Court and say, Gee, the Court of 
Appeals----
    Ms. Lewis. No. In Erickson, the Federal Circuit did agree 
to take the case.
    Senator Levin. In any case, then, where they refuse to 
appeal the case--I had the wrong one--can you appeal the 
refusal of the Court of Appeals to the Supreme Court?
    Mr. Cohen. Actually, no. The only----
    Senator Levin. I think my time ran out. [Laughter.]
    We used to have a light system around here. We are a lot 
more direct now. It is about time; I am all for the change.
    Anyway, that is obviously my last question.
    Mr. Cohen. We would not take to the Supreme Court, I do not 
think, the question of whether the Federal Circuit incorrectly 
denied the government permission to appeal. But there is a 
quasi-appellate process, and that is if a three-judge panel of 
the Court of Appeals denies us permission to take an appeal, we 
can move for re-hearing en banc, and we have done that in one 
case, and successfully, where the en banc court, the full 
court, overruled the panel and granted the government's 
petition for review.
    Senator Levin. Thank you.
    Thank you, Mr. Chairman.
    Senator Cochran. Thank you very much, Senator Levin.
    Thank you, Ms. Lewis and Mr. Cohen. We appreciate your 
being here and helping us understand this proposal.
    Ms. Lewis. I appreciate it. If I could just add two items 
to the record, Senator.
    Senator Cochran. Certainly.
    Ms. Lewis. One is the Erickson decision itself, which is 
now a published decision of the Supreme Court; and the second 
is a brief that the government filed in the Federal Circuit in 
a case called Arsics, which is in fact mentioned in one of the 
pieces of testimony.
    Senator Cochran. Do you want us to read those?
    Ms. Lewis. I would just like to point out that the very 
issue that was resolved in the Erickson case which was first 
addressed by the Federal Circuit on the merits in 1996 and 
ultimately resolved by the Supreme Court in 1998, the issue 
that arose in that case first arose in 1988 in a case called 
Grubka. In 1991, in the Arsics case, the Justice Department put 
in its brief to the Federal Circuit the very arguments that 
ended up winning the day at the Supreme Court, that 
fundamentally, there is no right to lie.
    The Erickson decision ultimately clarified an important 
aspect of Federal employee law. Unfortunately, because of the 
system that we have in the statute, that issue did not get 
resolved in 1991. The system invites litigation over whether 
these cases are important enough, and ultimately, the Director 
and the Solicitor General's determination in 1991 that there 
was a substantial impact on personnel administration was 
vindicated, and not until 1996, when the Federal Circuit first 
took up the issue and addressed it squarely on the merits, and 
then ultimately, in one of our only two cases that have gone to 
the Federal Circuit out of these 57. That did not need to be; 
that was an unnecessary aspect. What we are asking is that as 
policymakers, we can all sit and argue the nitty-gritty details 
of any of these individual cases, but we are simply proposing 
as policymakers that the policy that was established in 1978 by 
granting the Federal Court the discretion to reject these cases 
be changed, and we have demonstrated and will continue to 
demonstrate our ability to pick only the important cases for 
judicial review.
    So I have those documents to offer for the record.\1\

---------------------------------------------------------------------------
    \1\Documents referred to appears in the Appendix on page 37.
---------------------------------------------------------------------------

    Senator Cochran. Thank you. Senator Levin.
    Senator Levin. I just want to ask one more question. In 
that original effort to get that decision resolved in 1991, 
that was a three-judge panel saying no appeal?
    Ms. Lewis. Right.
    Senator Levin. Was it unanimous?
    Ms. Lewis. Yes.
    Senator Levin. And was there an en banc----
    Ms. Lewis. An en banc petition was filed and rejected.
    Senator Levin. Unanimously?
    Ms. Lewis. The indication on the case is the suggestion for 
en banc was denied.
    Senator Levin. Oh--you did not get the en banc----
    Ms. Lewis. No; right.
    Senator Levin. I see. I misheard you. Thank you.
    Thank you, Mr. Chairman.
    Senator Cochran. Thank you very much.
    Ms. Lewis. Thank you.
    Senator Cochran. Mr. Tobias and Mr. Roth, if you would 
please come to the witness table.
    Mr. Robert M. Tobias is with the National Treasury 
Employees Union, and Mr. Roth is with the American Federation 
of Government Employees.
    We have your statements, and we thank you for those. We 
will print them in the record in full, and we encourage you to 
make whatever comments by way of summary or explanation that 
you think would be helpful to the Subcommittee.
    Mr. Tobias, you may proceed first.

  TESTIMONY OF ROBERT M. TOBIAS, NATIONAL PRESIDENT, NATIONAL 
                    TREASURY EMPLOYEES UNION

    Mr. Tobias. Thank you very much, Mr. Chairman, for inviting 
NTEU to testify on S. 1495. As you point out, it contains two 
very important amendments to the existing process for appealing 
MSPB decisions to the U.S. Court of Appeals for the Federal 
Circuit.
    First, S. 1495 would take away the Federal Circuit's 
discretion to decline to review decisions of the MSPB. We urge 
rejection of this proposed amendment.
    The primary congressional intent in creating the existing 
limited judicial review was to create finality in the process. 
Congress wanted to allow appeals only when the OPM Director 
believes the MSPB or arbitrator ``erred in interpreting a Civil 
Service law, rule or regulation affecting personnel 
management'' and that the decision ``will have a substantial 
impact on a Civil Service law, rule, regulation or policy 
direction,'' and it gave the court the discretion to reject the 
appeal because it failed to meet the test.
    Congress wanted appeals only in exceptional circumstances. 
The congressional policy was fashioned on the longstanding 
private sector law providing deference to arbitral decisions. 
Congress reaffirmed the policy for arbitrators and applied it 
to the MSPB.
    In seeking the elimination of the court's discretion to 
reject an appeal, MSPB argues that it will create several 
layers of review to ensure appeals only in exceptional 
circumstances, and that it has more maturity and experience 
since the passage of the CSRA.
    I do not believe personal assurances can or should be the 
basis for public policy. Personal assurances cannot survive the 
person making the assurance.
    Further, the court has granted discretion to appeal in, our 
number is 10 of 17 cases, and attached to our testimony is a 
document that the clerk of the court certified, that since 
1993, 17 cases have been appealed, 10 have been granted, and 7 
denied. This, even an administration which states it will 
exercise discretion only in limited circumstances, has been 
rebuffed by the court 41 percent of the time.
    We believe current language puts a natural brake on the 
predisposition of management representatives to appeal adverse 
decisions and provides needed finality to the process.
    Second, S. 1495 would allow the OPM Director 60 days to 
appeal rather than the 30 days given to everybody else. If the 
MSPB stays its order reinstating an employee, an additional 
time period adds to the harm and creates even more uncertainty 
for the adversely impacted employee. We believe 30 days is 
ample time.
    First, the initial OPM brief is limited to 25 pages and 
must go only to the reason why the court should grant review. 
This is not a brief on the merits. This is a brief on whether 
or not the court should exercise its discretion to allow an 
appeal. It is a brief supporting the OPM proposition of why the 
case is extraordinarily important, and I believe that the OPM 
lawyers and the Justice Department lawyers, notwithstanding 
what was previously testified to, are sufficiently articulate 
and skilled to provide a rationale that the court can consider. 
I do not think this knowledge is knowledge that cannot be 
communicated to the court.
    Second, OPM has already been involved in the case before 
the MSPB as an intervenor or in filing a request for 
reconsideration. It already knows the case; it has the 
information, it has the issues.
    And third, the proposal is unfair because other parties are 
left with 30 days to file their appeal.
    This proposed legislation is both unwise and unneeded, and 
we urge its rejection.
    Thank you, Mr. Chairman.
    Senator Cochran. Thank you, Mr. Tobias.

    [The prepared statement of Mr. Tobias follows:]

                 PREPARED STATEMENT OF ROBERT M. TOBIAS

    I thank the Committee for this opportunity to testify on a proposed 
amendment to 5 U.S.C. 7703. I appear here on behalf of the 
approximately 155,000 Federal employees represented by the National 
Treasury Employees Union. The interests of these Federal employees--and 
Federal sector labor relations generally--would be ill-served by the 
passage of this proposed amendment.
    The bill introduced at the request of the Office of Personnel 
Management (OPM) is benignly, but obscurely, labeled a measure ``to 
protect the merit system and for other purposes.'' In fact, S. 1495 
would make two important changes in the judicial review provisions of 
the Civil Service Reform Act of 1978 (CSRA) First, and most 
significantly, it would eliminate the discretion of the U.S. Court of 
Appeals for the Federal Circuit to decline to review certain decisions 
of the Merit Systems Protection Board (MSPB) and arbitral awards. 
Second, it would double the time allotted for OPM to file a petition 
for review, without altering the statutory time limits for other 
parties.
    These changes would upset the carefully crafted limitations on the 
availability of judicial review, contravening Congress' clearly 
expressed goal of limiting review and assuring finality of 
decisionmaking. In addition, the introduction of an inequality in time 
frames would violate the original legislative intent that OPM be 
treated ``like any other petitioner.'' I urge the Committee to reject 
this amendment.

I. OPM's Proposed Elimination of Federal Court Discretion To Decline 
        Review

  A. The Design and Purpose of the Current Limitations on Appeals

    The Civil Service Reform Act now provides for very limited judicial 
review by agencies of adverse decisions of the MSPB. Agencies 
themselves do not have a right of appeal of adverse decisions; under 5 
U.S.C. 7703(d), only the Director of OPM may petition for review of 
final MSPB decisions, and only then in certain very limited 
circumstances: The Director must first determine that the Board ``erred 
in interpreting a Civil Service law, rule, or regulation affecting 
personnel management,'' and then, that the Board's decision ``will have 
a substantial impact on a Civil Service law, rule, regulation, or 
policy directive.''
    These same requirements apply to petitions for review of arbitral 
awards. Under 5 U.S.C. 7121(f), the procedures set forth in 5 U.S.C. 
7703 pertaining to judicial review apply ``in the same manner and under 
the same conditions'' to the award of an arbitrator. Thus, here, as 
with decisions of the MSPB, OPM must demonstrate an error with wide 
impact on the Civil Service system in general before it may obtain 
judicial review. Absent such a showing, the award of the arbitrator--
like the decision of the MSPB--is final.
    These limited review provisions were of considerable importance to 
the designers of the CSRA. The Senate report accompanying the version 
of the legislation that was ultimately accepted ``emphasize[d]'' that 
OPM was to seek review only in ``exceptional'' cases. S. Rep. No. 95-
969, 95th Cong. 2d Sess. 64, reprinted in 1978 U.S. Code Cong. & Admin. 
News 2723, 2786. The goal of avoidance of unnecessary appeals was so 
important that the drafters crafted an external safeguard: They 
``specifie[dl'' that ``judicial review shall be at the discretion of 
the court.'' Id.
    The reviewing court was thus vested with the authority to conduct 
an independent review of the OPM Director's determinations. See Devine 
v. Sutermeister, 724 F.2d 1558, 1562 (Fed. Cir. 1983); Devine v. White, 
697 F.2d 421, 434 (D.C. Cir. 1983) (reviewing the legislative history 
and statutory language) The court was not required to accept at face 
value OPM's assessment of the importance of the issue. Instead, 
Congress intended that the reviewing court act like the Supreme Court 
on writ of certiorari; it empowered that court to decline to hear a 
case if it determined, contrary to the submissions of OPM, that ``the 
issues raised will not have a substantial impact on the administration 
of Civil Service laws,'' or if there were other countervailing factors, 
such as where ``a separate review proceeding in the same case has been 
brought by the employee in a different circuit. . . .'' 1978 U.S. Code 
Cong. & Admin. News at 2786.
    This scheme of limited judicial review is consistent with the 
traditional policy of deference to arbitrators' decisions in the 
private sector. Arbitration is recognized as ``faster, cheaper, less 
formal, more responsive to industrial needs, and more conducive to the 
preservation of ongoing employment relations than is litigation.'' 
Devine v. White, 697 F.2d at 435. To protect these advantages, judicial 
review of arbitral awards has traditionally been ``extremely limited'' 
in the private sector. Id. at 436, citing United Steelworkers v. 
Enterprise Wheel & Car Corp., 363 U.S. 593 (1960). Parallel 
considerations underlie the policy of limited review in the public 
sector. Id. at 434-440. See also, Devine v. Sutermeister, 724 F.2d at 
1562; Devine v. Nutt, 718 F.2d 1048, 1052 (Fed. Cir. 1983), rev'd on 
other grounds sub nom. Cornelius v. Nutt, 472 U.S. 648 (1985) (also 
referencing the traditional policy of judicial deference to 
arbitrators' decisions).
    Just as limited review of arbitral awards furthers important goals, 
so too does limited review of MSPB decisions. As Congress concluded in 
enacting the CSRA, the public interest is best served by prohibiting 
routine agency appeals of adverse decisions. In this manner, employees 
receive the relief mandated by the MSPB more promptly. An employee's 
interest in faster, surer remedies and an end to the stress of 
litigation must outweigh minor agency objections to a given decision of 
local impact only. Only where the MSPB has allegedly made an error with 
a substantial governmentwide impact is the employee's interest in 
finality subordinated to the agency's interest in further appeals.
    While the private sector policy of deference to arbitral awards is 
a creation of judicial interpretation, Congress chose to expand and 
codify the public sector policy within the CSRA. This codification 
represents the clearest possible expression of congressional intent 
that there be the most stringent limitations on OPM's ability to seek 
review of MSPB and arbitral decisions. Only when it can satisfy an 
external body--the reviewing court--that the adverse decision will have 
a broad impact on Civil Service laws and regulations may OPM raise a 
challenge to the finality of that decision.

  B. OPM's Proposed Elimination of the External Safeguard

    S. 1495 proposes a deletion of the last sentence of 5 U.S.C. 
7703(d), which states that ``[t]he granting of the petition for 
judicial review shall be at the discretion of the Court of Appeals.'' 
By this means, OPM intends to eliminate the external check designed to 
assure that the Director seeks review only in ``exceptional'' cases. 
This amendment would fundamentally alter the careful balance struck by 
Congress.
    It is our understanding that OPM is not seeking a formal change in 
the underlying policy restricting the right of agency appeals to 
certain narrow categories. Despite this acquiescence in the concept of 
limited review, it nevertheless would remove the enforcement mechanism. 
Based on conversations with OPM officials, we understand that OPM 
claims an external monitor is no longer necessary for two main reasons: 
(1) the existence of other administrative layers of review within OPM 
and the Department of Justice; and (2) OPM's alleged growth in 
``maturity'' and ``experience'' since the passage of the CSRA. This 
internal review process and its own added maturity, it contends, are a 
sufficient guard against wasteful or abusive appeals.
    In our considered opinion, however, neither of these conditions 
provides the necessary institutional assurances that review will only 
be sought in the most ``exceptional'' cases. Only an independent body--
the reviewing court--can exercise the oversight necessary to guarantee 
that OPM limits its petitions for review to the most important, far-
reaching cases.
    The statutory requirement for an independent exercise of 
discretionary review by the court stands as a bulwark against the 
fluctuating interpretations of succeeding administrations. Even if this 
Director intends to be selective in her choice of appeals, there is no 
guarantee that subsequent Directors will exercise similar restraint. 
There is, after all, an inherent institutional bias in favor of seeking 
reversal of adverse decisions. Should future Directors pursue a more 
activist agenda, there would be no effective or enforceable way to curb 
those Directors if this amendment passed.
    The need for caution here is highlighted by statistics provided by 
the Clerk of the U.S. Court of Appeals for the Federal Sector. As 
indicated in the attached letter, the court has granted only 10 of the 
17 petitions for review filed by OPM in the last 5 years. In other 
words, in seven cases over the last 5 years, the court disagreed with 
the Director that the Board or the arbitrator had erred and that the 
case would have a ``substantial impact'' on Civil Service law or 
regulation. Thus, even an administration, such as the present one, 
which is concerned with exercising restraint in the filing of petitions 
for review is rebuffed by the court about 41 percent of the time.
    Although OPM chafes at this so-called ``judicial secondguessing,'' 
suggesting that review is denied in significant cases, NTEU's 
experience is that the court exercises its review function wisely. For 
example, in Newman v. Arsics, Misc. No. 301 (Fed. Cir. Mar. 26, 1991) 
(attached), OPM sought judicial review of an arbitrator's decision 
that, on reconsideration, involved nothing more than the proper 
application of factors relevant to mitigation of penalty. In refusing 
to hear the case, the court correctly pointed out that the issue of 
mitigation is ``precisely the type of issue which OPM should not 
petition for review.'' If the court had not had the discretion to 
decline to hear the case, an arbitrator's decision on a fact-bound 
matter of no importance beyond the immediate parties would have become 
``a Federal case,'' consuming time and resources. Just as the court has 
in the past curbed demonstrable overreaching by OPM, so too can it be 
expected to play such a role in the future.
    The price of this oversight is modest, contrary to OPM's claims, 
and is more than outweighed by the benefits flowing from the avoidance 
of unnecessary litigation. While OPM may not be successful in obtaining 
review of a given issue immediately, that issue--if sufficiently 
important--will arise again in another, perhaps cleaner context. 
Moreover, the burden on OPM of preparing a petition for discretionary 
review cannot be great, given the limited number of such petitions 
filed a year.
    In sum, the current statutory provision for discretionary review is 
not an anachronistic and unnecessarily onerous procedural hurdle for 
OPM, as it might argue. Instead, the provision performs an important 
function of curbing the natural tendency of the management 
representative to seek to reverse findings favorable to employees and 
brings finality to the litigation process. The elimination of the 
discretion of an independent body to decline to hear an appeal would 
fundamentally alter the balance crafted by Congress, destroy the 
finality of decisions, and run counter to the broad policy of limited 
review. I urge the Committee to reject that course.

II. OPM's Proposed Change to the Statutory Time Frames

    OPM's proposed change to the statutory time frames of Section 7703, 
although of less magnitude than the substantive changes proposed, is 
also significant. Thus, it proposes amending the statute to provide the 
Director of OPM with 60 days for filing a petition for review, while 
leaving unchanged the 30-day time frame for other parties.

  A. The Lack of Justification for the Additional Time

    This amendment would double the period of uncertainty for 
employees. If the MSPB has stayed its order, the employee may be 
unemployed; even without a stay, the added delay in bringing the matter 
to a close compounds the harm already incurred. The justification for 
such added delay is unclear.
    As an initial matter, the proscribed 30-day time period is not 
unprecedented for governmental appeals, as OPM suggests. See 31 U.S.C. 
755, requiring petitions for review of final decisions of the General 
Accounting Office Personnel Appeals Board-including GAO petitions--to 
be filed within 30 days. NTEU does not believe that OPM has made out a 
sufficiently strong case to justify a legislative change in this 
context.
    OPM argues that it needs the additional time because local court 
rules require it to file a ``substantive'' brief within 30 days, 
instead of a pro forma petition for review.\1\ That brief, however, is 
limited to a maximum of 25 pages and addresses only the issue of the 
appropriateness of review. Rule 47.9 of the Federal Circuit Rules of 
Practice.

---------------------------------------------------------------------------
    \1\ This justification vanishes if the statute were modified to 
eliminate the court's discretion to decline review, as OPM seeks. If 
review were nondiscretionary, we assume that OPM would have to file 
only a pro forma petition, a task easily accomplished within the 
allotted 30 days. As we urged above, however, the Committee should not 
solve a perceived OPM problem in that fashion. In NTEU's view, it would 
be far preferable to extend the time limits for filing a petition than 
to amend the statute to eliminate discretionary review.
---------------------------------------------------------------------------

    It is, moreover, significant that OPM is required to file that 
mini-brief within 30 days of its receipt of notice of the MSPB's 
decision only if it had intervened in the matter before the MSPB. In 
that event, it would be thoroughly familiar with the issues and may 
have already briefed them. When OPM has not intervened below, its time 
for filing the petition does not begin to run until after it has filed 
a request for reconsideration with the MSPB, and the MSPB has denied 
that request. 5 U.S.C. 7703(d). We therefore believe that OPM has ample 
time to prepare the supporting argument for its petition under the 
current statutory scheme.

  B. The Inequality of OPM's Proposal

    OPM's proposed language is seriously troubling for another reason, 
as well: It introduces an inequality in the procedural time frames. Its 
proposal leaves all other parties with 30 days for filing a petition, 
which would give OPM a special status and, perhaps, an unfair 
advantage.
    The legislative history shows that Congress affirmatively intended 
that the Director of OPM be treated ``like any other petitioner.'' 1978 
U.S. Code Cong. & Admin. News at 2786. An enlarged time frame 
applicable only to OPM petitions would breach the fundamental principle 
of equality. There is no reason why a modified time frame should not 
apply to all litigants, as it does in other contexts. Indeed, we are 
aware of no statutory scheme that grants a governmental party more time 
for filing a petition or appeal than a nongovernmental party in that 
same matter. See, e.g., Fed. R. App. Proc. 4(a)(1) (granting all 
parties 60 days for filing a notice of appeal in any case where the 
United States is a party).
    Accordingly, should the Committee agree that OPM has set forth 
sufficient reasons to justify an enlargement of the statutory time 
frame for filing petitions for review, NTEU urges it to amend Section 
7703(b)(1) to apply that time frame to all parties. Such an action 
would assure that the Director of OPM is treated ``like any other 
petitioner,'' as Congress had originally intended.
    I thank the Committee for this opportunity to present NTEU's views 
on the proposed changes to 5 U.S.C. 7703.\1\

---------------------------------------------------------------------------
    \1\ Additional information appears in the appendix on page 68.
---------------------------------------------------------------------------

    Senator Cochran. Mr. Roth.

TESTIMONY OF MARK D. ROTH, GENERAL COUNSEL, AMERICAN FEDERATION 
                OF GOVERNMENT EMPLOYEES, AFL-CIO

    Mr. Roth. Mr. Chairman, Senator Levin, AFGE represents 
600,000 employees who work in virtually every Executive Branch 
agency and also the District of Columbia, and we appreciate 
this opportunity to appear before you and explain our vigorous 
opposition to S. 1495, a bill to remove the current 
longstanding standards that govern the Office of Personnel 
Management when it seeks to obtain judicial review of 
arbitration awards and MSPB decisions.
    Our first reading of OPM's proposal prompted us to 
immediately ask the questions, Why in the world is this being 
sought? Why is this bill necessary or even helpful to the 
integrity of the Civil Service system? What problems have 
arisen during the last two decades that have prompted a request 
for this unprecedented expansion of OPM's right to seek court 
intervention into what are essentially personnel decisions, 
day-to-day cases, from an agency?
    After reading OPM's statement citing one adverse 
arbitration award and a few appeals rejected by the Federal 
Circuit over 20 years, we still have no answers.
    As was pointed out by this Subcommittee's report on the 
Civil Service Reform Act back in 1978, the statutory scheme 
intentionally did not give OPM the unfettered right to mandate 
court intervention into every personnel decision. Rather, the 
statute sets out sensible standards that protect the integrity 
of the Civil Service system in limiting the occasions in which 
OPM can intervene in personnel cases between agency employers 
and individual employees.
    With respect to OPM's right to seek judicial review of 
arbitrators' awards and MSPB decisions, the report's comments, 
I think, are particularly noteworthy: ``The OPM should seek 
judicial review only in those exceptional cases where it finds 
that the Board has erred as a matter of law in interpreting the 
Civil Service laws and that the erroneous decision will have a 
substantial impact on how aspects of the Civil Service rules 
are interpreted in the future.''
    ``Judicial review shall be at the discretion of the 
court,'' and ``the court may decline the petition for review.''
    The statute and the accompanying legislative report 
demonstrate very clearly that a delicate but necessary balance 
was meant to be struck between obtaining an expeditious end to 
day-to-day personnel decisions and appeals, while yet 
preserving OPM's right to outside intervention only in 
exceptional cases that have a substantial impact on Civil 
Service laws.
    We would submit that this statutory scheme has worked 
exceptionally well for the agencies, employees, the judiciary 
and the public. Indeed, nothing has occurred during the last 20 
years that would support such a broad expansion and a removal 
of these standards on OPM and taking away the court's 
discretion.
    OPM is provided with an opportunity to challenge those 
decisions it believes would substantially impact upon the 
overall interpretation and administration of Civil Service 
laws. This opportunity is fair, and its fairness is ensured by 
the statutory provisions which create a system of checks and 
balances.
    Further, rather than tying up what are essentially 
individual misconduct and performance cases in the courts for 
years, once a petition is filed and briefed, the court itself 
must make an early determination that the case is one which 
would have a substantial impact on the administration of the 
Civil Service system.
    S. 1495 would remove this well-designed system of checks 
and balances. OPM would then be allowed judicial review as a 
matter of right of any MSPB decision or decision by an 
arbitrator.
    We just need to tell you that this drastic change is 
particularly disturbing when you look at the foreseeable 
adverse effect it would have on the grievance/arbitration 
system. First of all, it is a 180-degree move away from how 
most employers are now seeking to resolve personnel 
litigation--through alternative dispute resolution, ADR. 
Volumes have been written by human resource management experts 
on how an informal ADR mechanism that seeks to mediate disputes 
saves time and money and cuts down on litigation. Rather than 
coming before you and seeking intelligent reforms of the Civil 
Service Reform Act that promote ADR, however, OPM, the 
government's alleged management guru, is asking the Congress to 
drastically expand its right to mandate court intervention in 
these personnel cases and thereby add hundreds of thousands of 
dollars and years of litigation to the process.
    Mr. Cohen was flat-out wrong in our view. In the case of an 
employee who has been put back to work by an arbitrator, there 
is no scheme in the statute right now to get that employee back 
before the decision is final, and by filing an appeal, the 
arbitrator's award is not final. We had that exact case with 
OPM. They cited it in their brief and in their testimony: 
Avalos. We went to OPM, and we asked, while you are filing this 
appeal, can the employee be put back? They can do it before the 
MSPB--it is called ``interim relief''--but what about in the 
arbitration context?
    They told us no, and Mr. Avalos was out 7 more months, I 
believe it was. When he finally came back to work, of course, 
he got his back pay, and the government had paid 7 months for 
another employee to do his job, so it was a double payment.
    But this would be the case for every appealed arbitration 
award, because there is no built-in statutory mechanism to get 
these people back to work while OPM is appealing an 
arbitrator's award.
    Second, OPM's attempt here is in our view truly misleading 
in the arbitration context. Arbitration decisions are by their 
nature virtually never precedential--we cannot think of a case 
where they would be. An arbitrator reviewing a contract 
provision or a personnel decision cannot bind the next 
arbitrator, and they are not bound by a previous arbitrator. 
So, viewed in this context, we think it is very disingenuous 
for OPM to seek an automatic right to court intervention in 
these nonprecedential cases.
    By removing the current standards, OPM is actually asking 
the Congress to give them the unfettered right to judicial 
review of cases it believes a court will not find significant; 
cases that will either have an insubstantial impact on Civil 
Service laws or cases that the court will find are truly 
unexceptional. This is an absurd request.
    We believe that this is a case where OPM perhaps has more 
of a self-interest in winning than in having the public's 
interest in its eyes. OPM will surely argue that it has used 
its authority to seek judicial review wisely, and I think the 
facts do bear that out. However, we believe that that is 
because they do have some sensible standards and cannot run off 
to court; they know that a court will be reviewing the 
standards, and in fact, they have lost about 40 percent of the 
cases where they have not convinced the court that the issues 
are important. And in the context of arbitration awards, that 
is because they are not that important, other than to the 
individual.
    So we would say that OPM's limited exercise of its 
discretion to petition for judicial review shows only that the 
statute is working well. But once the standards for seeking 
judicial review are lifted, then who knows--it could be 
``Katie, bar the door.'' In any event, OPM has made no showing 
that it should have this drastically expanded right to court 
review.
    Mr. Chairman, I think that when looked at in its bare 
essence, this is a plea where OPM is saying ``It ain't broke, 
so why don't you break it?'' We do not think the system is 
``broke,'' and we would ask you not to break it.
    We thank you.

    [The prepared statement of Mr. Roth follows:]

                   PREPARED STATEMENT OF MARK D. ROTH

    Mr. Chairman and Members of the Subcommittee: My name is Mark D. 
Roth, and I am the General Counsel for the American Federation of 
Government Employees, AFL-CIO (AFGE). AFGE represents 600,000 employees 
who work in virtually every agency within the Executive Branch and the 
District of Columbia. We appreciate this opportunity to appear before 
you and provide our views on S. 1495, a bill to remove the current 
longstanding standards that govern the Office of Personnel Management 
when it seeks to obtain judicial review of arbitration awards and Merit 
Systems Protection Board (MSPB) decisions.
    Our first reading of S. 1495 prompted us to immediately pose the 
question of why is this being sought? Why is this bill necessary or 
even helpful to the integrity of the Civil Service system? What 
problems have arisen during the last two decades that have prompted a 
request for this unprecedented expansion of OPM's right to seek court 
intervention into personnel decisions? We have no answers.
    Further research led us to review the legislative history of the 
Civil Service Reform Act to see if that would shed some light on the 
possible reasons which could be articulated in support of this measure.
    The report of this Committee (No. 95-969, July 10, 1978) contains a 
good explanation of the purpose for creating the Office of Personnel 
Management at page 5:

          ``The (Civil Service Commission) must now simultaneously 
        serve as a management agent for a President elected through a 
        partisan political process as well as the protection of the 
        merit system from partisan abuse. The Commission serves, too, 
        as the provider of services to agency management in 
        implementing personnel programs, while maintaining sufficient 
        neutrality to adjudicate disputes between agency managers and 
        their employees. As a result, the Commission's performance of 
        its conflicting functions has suffered. `Expected to be all 
        things to all parties--Presidential counsellor, merit 
        ``watchdog.'' employee protector, and agency advisory--the 
        Commission has become progressively less credible in all of its 
        roles.' (Personnel Management Project, Final Staff Report, Vol. 
        I, p. 233.)
          ``(The Civil Service Reform Act) would abolish the Civil 
        Service Commission. In its place two new agencies would be 
        created: (1) the Office of Personnel Management, charged with 
        personnel management and agency advisory functions, and (2) the 
        Merit Systems Protection Board, charged with insuring adherence 
        to merit system principles and laws.''

    The report goes on to state that OPM ``will have central 
responsibility for executing, administering, and enforcing Civil 
Service rules and regulations . . . without the demands generated by a 
heavy day-to-day workload of individual personnel actions, OPM should 
provide the President, the Civil Service, and the Nation with 
imaginative public personnel administration.'' (emphasis supplied).
    With this background in mind, it is not at all surprising that the 
Civil Service Reform Act which created OPM, addressed its right to seek 
review of decisions in adverse actions. Again, as is pointed out in 
this Committee's Report on the CSRA, the statutory scheme does not give 
OPM the unfettered right to mandate court intervention into every 
personnel decision. Rather the statute sets out sensible standards that 
protect the integrity of the Civil Service system in limiting the 
occasions in which OPM can intervene in personnel cases between agency 
employers and individual employees. In this regard, it can petition the 
MSPB (or an arbitrator pursuant to 5 U.S.C. 7121), for review of its 
decisions only in:

          ``. . . those instances where the Director of OPM determines 
        that the decision is erroneous and that, if allowed to stand, 
        the decision would have a substantial impact on the 
        administration of the Civil Service laws within OPM's 
        jurisdiction. The OPM should limit the cases in which it seeks 
        the review by the Board to those that are exceptionally 
        important.'' (emphasis supplied).

    With respect to OPM's right to seek judicial review of arbitrator's 
awards and/or MSPB decisions, the same type of limitation is included. 
The report's comment on this limitation is particularly noteworthy:

          ``. . . the OPM should seek judicial review only in those 
        exceptional cases where it finds that the Board erred, as a 
        matter of law, in interpreting the Civil Service laws, and that 
        the erroneous decision will have a substantial impact on how 
        aspects of the Civil Service rules are interpreted in the 
        future. The Director of OPM should not seek judicial review if 
        the potential effect of the decision will be limited to the 
        facts of that case. In order to avoid unnecessary appeals by 
        the Director, the provision also requires the Director to 
        petition the Board for reconsideration of its decision in those 
        cases where the Director was not involved in the case at the 
        Board level. This will make sure the Board has an opportunity 
        to consider the concerns of OPM before suit is brought. . . . 
        While an employee or applicant . . . is entitled as a matter of 
        right to judicial review, this will not be the case when the 
        Director seeks review . . . judicial review shall be at the 
        discretion of the Court. If it determines, for example, that 
        the issues raised will not have a substantial impact on the 
        administration of Civil Service laws . . . the court may 
        decline to accept the petition for review.'' (emphasis 
        supplied).
    The statute and the accompanying legislative report demonstrate 
very clearly that a delicate but necessary balance was meant to be 
struck between obtaining an expeditious end to day-to-day personnel 
appeals and preserving OPM's right to outside intervention only in 
exceptional cases that have substantial impact on Civil Service laws.
    We would submit that this statutory scheme has worked exceptionally 
well for the agencies and employees, the judiciary and the public. 
Indeed, nothing has occurred during the course of the last 20 years 
that would support a need for removal of these standards. The CSRA 
designed a statutory scheme where the MSPB and arbitrators undertake 
the hearing or adjudicatory role previously performed by the Civil 
Service Commission and OPM undertakes the functions of personnel 
administration.
    Notwithstanding this, OPM is provided with an opportunity to 
challenge those decisions it believes would adversely impact the 
overall interpretation and administration of Civil Service laws. This 
opportunity is fair and its fairness is insured by the statutory 
provisions which create a system of checks and balances.
    First, the administrative forums, either MSPB or an arbitrator, 
must be afforded an opportunity to reconsider or perhaps, to correct a 
mistake. In other words, if OPM believes a decision is erroneous, then 
rather than going directly to Court, it must bring the matter to the 
attention of the decision maker by way of a motion for reconsideration. 
Further, rather than tying these individual misconduct and performance 
cases up in the court for years, once a petition is filed and briefed, 
the Court itself must make an early determination that the case is one 
which is of particular import to the administration of the Civil 
Service system because it must take action to either grant or deny 
OPM's petition for review. If not, the court dismisses the petition.
    S. 1495 would remove this well-designed system of checks and 
balances by permitting OPM to seek judicial review as a matter of right 
of any MSPB decision or decision by an arbitrator. This drastic change 
is particularly disturbing where you look at the foreseeable adverse 
affect it would have on the grievance/arbitration process. First of 
all, it is a 180 degree move away from how most employers are now 
seeking to resolve personnel litigation--through Alternative Dispute 
Resolution (ADR). Volumes have been written by human resource 
management experts on how an informal ADR mechanism that seeks to 
mediate disputes saves money and cuts down on litigation. Rather than 
seeking reforms of the CSRA that promote ADR, however, OPM--the 
government's management guru--is asking the Congress to drastically 
expand OPM's right to mandate court intervention in these personnel 
cases and thereby add hundreds of thousands of dollars and years of 
litigation to the process.
    Second, OPM's attempt here is truly misleading. Arbitration 
decisions are, by their nature, legally not precedential. An arbitrator 
reviewing a contract provision or a personnel decision is clearly not 
clearly bound by a previous arbitrator's award. Viewed in its proper 
context, therefore, it is disingenuous for OPM to seek an automatic 
right to court intervention in these non-precedential cases. One might 
well argue that, for OPM, this is a case of self-interest at the 
expense of the public's interest! By removing the current standards, 
OPM is, in effect, asking for the unfettered right to judicial review 
of cases it believes a court will not find significant; cases that will 
have either: (1) an ``insubstantial impact'' on Civil Service laws; or 
(2) are ``unexceptional.'' Truly, this is an absurd request.
    OPM will surely argue that it has used its authority to seek 
judicial review wisely and in a very limited manner. The facts will 
mostly bear this out, we agree. Our research led us to find that in the 
past 18 years, OPM has only petitioned for review 57 times or roughly 
three times per year. OPM would argue that its limited exercise of its 
5 U.S.C. 7703 discretion shows it would not abuse an expanded mandate. 
We would argue, quite to the contrary, that OPM's limited exercise of 
its discretion to petition for judicial review in these cases shows 
only that the statute is working well and as intended, but once the 
standards for seeking judicial review are lifted--``Katy bar the 
door!'' In either event, there simply has been no showing that OPM 
should have an expanded opportunity to mandate judicial review in these 
nonprecedential personnel decisions.
    During the last half decade, both the Executive and the Legislative 
branches of government have focused attention on streamlining the day-
to-day operations of the Federal Government. This includes eliminating 
duplicative functions and processes. S. 1495 appears to go in the exact 
opposite direction. It opens the door to even more litigation. Surely a 
scholar of modern management techniques would not recommend paving the 
way for court intervention in matters not substantially important to 
OPM's mission. Why should it? OPM already has the right to petition for 
review in any case wherein it believes the very heart of the Civil 
Service system has been compromised. That right is directly related to 
the performance of OPM's mission and we support it wholeheartedly. And, 
where the court agrees, OPM's appeal is fully heard and decided.
    In sum, Mr. Chairman, OPM has all of the tools to seek review of 
the decisions which could affect its carrying out its mission of 
personnel administration. Evidence shows that it has not sought to use 
those tools very often. Thus, there is simply no basis for removing the 
existing system of checks and balances. In point of fact, this is a 
case where OPM's plea, boiled down to its bare essence, amounts to a 
case of ``where it ain't broke, break it.'' We urge the Committee not 
to take further action with respect to S. 1495.
    Again, we thank you for this opportunity to appear today. That 
concludes my remarks. I am happy to answer any questions.

                                APPENDIX

    AFGE has no grants or contracts to declare.

    Senator Cochran. Thank you, Mr. Roth.
    Mr. Tobias, in your statement, you made the point that you 
do not think it is fair to give OPM 60 days to file a brief 
when everybody else is given 30 days. What if you gave 
everybody 60 days; what would be wrong with that?
    Mr. Tobias. Well, you could do that, and we point out in 
the testimony that that is a possibility. But I think that the 
focus of Congress in enacting this legislation was to really 
provide finality to the process.
    We often hear OPM and other folks say that the appeal 
process for these disciplinary actions and other actions is 
endless. The premium should be on ending these and not taking 
them to court. That is where the premium should be. So if it is 
more onerous, if it is difficult, that is what Congress' intent 
was--keep it out of the courts, put people back to work or not 
as the case may be, but get it completed.
    Senator Cochran. I asked the first panel, as you probably 
heard, whether or not the passage of this bill would result in 
more appeals and a heavier workload for the Federal Circuit. 
What is your response to that question, Mr. Roth?
    Mr. Roth. Well, I have the same problem. I do not see why 
they would be here unless they wanted to bring more appeals and 
felt constrained under the current system. Again, it is just 
the totally wrong direction in personnel cases.
    In the case of the MSPB, this is one Federal agency suing 
another Federal agency. This does not make much sense. In the 
case of arbitration, you have arbitrators' decisions that are 
not precedential being thrown into the court system for another 
year or two. And of course, it is all being litigated at 
taxpayer expense. When the employee wins, all the attorneys' 
fees are reimbursed, and the attorneys' fees could be, in some 
of the cases we have handled, $50,000 or more. It really makes 
no sense.
    Mr. Tobias. The answer, Mr. Chairman, is that even if 
nothing else changed, there are 17 cases that were appealed by 
our numbers and 7 denied, so there would be 7 additional cases 
that the court would have to consider if nothing else changed.
    Senator Cochran. Do you think there would be other kinds of 
cases presented to the Federal Circuit other than those that 
are being appealed now? Would this open, as the courts 
sometimes say, a floodgate of new appeals or new kinds of 
appeals? Do you expect that that will be the result?
    Mr. Roth. We expect that there would be more each year, and 
that would strain the current system, and of course, it would 
strain the poor employees who have not yet been put back on the 
job.
    The other point I want to make is that I am not sure that a 
political appointee who stays an average of 18 months can make 
a better decision than a Federal judge who has been reviewing 
these cases for 20 years. The Federal Circuit is the only court 
that hears these. It is not like you are going to get one 
appeal in one court and one in another where they are not 
familiar with the issues. The whole point of putting all the 
appeals in the Federal Circuit was to give that Court the 
expertise. And we do not always like their result--they affirm 
the government 90 percent of the time--we cannot argue that 
they do not have the expertise. And, we cannot argue that the 
OPM Director--who comes and goes--has more knowledge and 
ability to determine the importance of the case than a Federal 
Circuit Judge.
    Senator Cochran. I heard in the testimony of the first 
panel that there were thousands of cases appealed by employees; 
is that correct? Is that consistent with what you heard, or did 
I hear that wrong?
    Mr. Roth. That cannot possibly be right. Our union is the 
largest, and we appeal a handful a year. I cannot imagine 
thousands a year.
    Senator Cochran. How many have you appealed?
    Mr. Roth. I am not sure, but I would say that each year, it 
would be under 10.
    Senator Cochran. How about your group, Mr. Tobias?
    Mr. Tobias. We go for many years with no appeals
    Senator Cochran. OK.
    Senator Levin.
    Senator Levin. That was the 1,500 figure?
    Senator Cochran. Yes. I still have not gotten that 
straight.
    Senator Levin. Well, yes. Either I did not ask the question 
straight, or he did not hear it straight, because that is a 
pretty big difference between 10 and 1,500. We might just ask 
our staff to find that out for us--what took you so long? 
[Laughter.]
    Mr. Tobias. Senator, there are lots of individual employees 
not represented by unions who might appeal to the Federal 
Circuit.
    Mr. Roth. There are also a lot of employee appeals that 
involve retirement issues, disability, and things like that, 
that we do not normally get involved in
    Senator Cochran. Well, we can find that out.
    Are there a lot of situations like this where one party has 
a right to appeal, and the other party has to seek leave?
    Mr. Tobias. Everybody seeks leave with the Supreme Court.
    Senator Levin. That is what I mean.
    Mr. Tobias. Well, everybody does; both sides do.
    Senator Levin. Right, but in this case, apparently, the 
employee has a right to appeal; is that correct?
    Mr. Tobias. Correct.
    Senator Levin. But the government does not?
    Mr. Tobias. That is correct.
    Senator Levin. And my question is are there other 
situations where one party of the litigation has a right to 
appeal, and the other one must seek leave?
    Mr. Roth. I would like to ask if there are many situations 
where one Federal agency is suing another Federal agency? I 
think that is what is messed up about this system.
    Senator Levin. Well, if there were a third panel, we would 
ask that panel to answer that.
    Mr. Tobias. I am unaware of any, Senator Levin.
    Senator Levin. The number of Federal Circuit decision, 
according to this chart, looks like about 600 a year, roughly.
    Mr. Tobias. Is that decisions from the MSPB?
    Senator Levin. This is the first time I have seen it--
``Judicial Review of MSPB Decisions fiscal years 1992-1996''--
and then the percentage of MSPB decisions unchanged. And it 
looks like----
    Senator Cochran. High 90's.
    Senator Levin. Unchanged is in the 90's, yes, but it looks 
like----
    Mr. Roth. Well, Senator, I also want to point out that our 
primary fear is in the area of the arbitration award. If the 
MSPB issues a decision, that would be precedential, so it is 
only a question of whether it is important. But opening this up 
and having the same standards for arbitration awards, which are 
never precedential and normally not important beyond that 
arbitrator and employee for that occasion, I think would be a 
drastic change.
    Senator Levin. What percentage of the employee appeals come 
from arbitrators compared with the MSPB; do you know?
    Mr. Roth. Very few, because I believe the arbitrator's 
award is normally dealt with through the union context, and in 
our union, they normally have to come through our office. I do 
not think there are many, but maybe OPM has that figure.
    Senator Levin. Is there an agreement that that arbitration 
is final and unappealable?
    Mr. Tobias. We do not appeal arbitration awards to the 
court.
    Senator Levin. Well, do employees, without you?
    Mr. Tobias. No, they do not.
    Senator Levin. So the appeals--whatever the right number of 
them is--per year, 99 percent of those would be from MSPB 
decision, not from arbitrators?
    Mr. Tobias. Yes.
    Mr. Roth. I would think so.
    Senator Levin. How much finality is there in this process--
I think both of you have talked about that--and how much 
deference is there to the MSPB, and how expeditious is it if we 
got 600 to 700 appeals a year?
    Mr. Tobias. Well, if the 600 to 700 appeals are those who 
are already off the rolls and seeking to get back on the rolls, 
so it is final as it impacts on them--I mean, they are off the 
rolls, so there is no impact.
    What we are talking about is where the government loses and 
appeals and keeps them off the rolls. That is the issue that is 
important.
    Senator Levin. And you are saying that during the appeal 
from the MSPB, the employee is off the rolls where the 
government is doing the appealing--not the arbitrator--where 
the appeal is from the MSPB, was he wrong?
    Mr. Roth. No. When an employee wins in front of an 
administrative judge, which is the hearing level, or afterwards 
at the MSPB level, the employee is put back. The problem is 
that that is not true with an arbitrator's award.
    Senator Levin. But you said 99 percent of the appeals to 
the Court of Appeals are not from arbitrators but are from 
MSPB, so it would be true 99 percent of the time, the employee 
is working.
    Mr. Roth. Well, if you take the standards off, we are 
afraid that there will be----
    Senator Levin. No--before you get to that argument, right 
now, if 99 percent of the cases are from MSPB and not from 
arbitrators that go to the Court of Appeals, then in 99 percent 
of the cases where the employees are doing the appealing, that 
would mean that they are working----
    Mr. Tobias. No; they are off the rolls.
    Senator Levin [continuing]. Excuse me, that in all the 
cases where the government is appealing, if all of those cases 
come from MSPB and not from arbitrators, the employees are all 
working during the government appeal. Is that correct?
    Mr. Roth. That is correct, I believe, when it is an MSPB 
case.
    Mr. Tobias. Unless the government seeks a stay.
    Senator Levin. Which, apparently, they rarely do.
    Mr. Tobias. They rarely do, but they can.
    Senator Levin. On the old Civil Service Commission, what 
was the process--both of you guys are too young to remember, 
but if you read the history books----
    Mr. Roth. I nod to my elder, though.
    Mr. Tobias. They could file appeals. The government could 
appeal to the courts.
    Senator Levin. Without----
    Mr. Tobias. Without leave.
    Senator Levin. Under the old Civil Service Commission.
    Mr. Tobias. Yes, which is one of the reasons why the 
discretion was included in the Act.
    Senator Levin. The only other question I have, Mr. 
Chairman, has to do with the House and Senate Employment 
Offices. Do either of your unions represent House or Senate 
employees?
    Mr. Tobias. Not NETU.
    Mr. Roth. No.
    Senator Levin. Apparently, our offices can appeal as of 
right. [Laughter.]
    This sounds a little bit like that bill we just passed, 
saying that if that small business person out there has to put 
in a lift or whatever, we have got to put in a lift, and if he 
has got to pay overtime, we have got to pay overtime. But 
apparently, we have a rule here where our appeals are as a 
matter of right, but that is not true with OPM's appeals.
    Mr. Tobias. Well, we would suggest that you might make 
yourself like OPM instead of OPM like you.
    Senator Levin. I think that is a fair argument, but I do 
think we have to face that argument, because we are putting 
ourselves in a different position than other entities of the 
government. We are in a better position to appeal decisions 
that go against us that our employees win than other agencies 
are, and it does smack a bit of putting ourselves in a better 
position. None of us personally would probably even have any 
awareness of these cases, but it sure does not look good, I do 
not think, for Congress to be in a better position. And if we 
are not going to do this, then maybe we ought to tell ourselves 
that, OK, then, we ought to seek leave, too.
    I am not sure there is a justification for having two 
different rules, in any event, but you folks do not represent 
any of the employees, so we cannot press that.
    I think that is all I have, Mr. Chairman. Thank you.
    Senator Cochran. Thank you very much, Senator Levin.
    Thank you, Mr. Roth and Mr. Tobias, for being helpful to 
the Subcommittee.
    Mr. Tobias. Thank you for asking us
    Senator Cochran. There are no further witnesses to be 
called before this hearing. We appreciate the attendance of all 
witnesses and the receipt of all statements.
    The Subcommittee will stand in recess.
    [Whereupon, at 3:08 p.m., the Subcommittee was adjourned.]



                            A P P E N D I X

                              ----------                              


 PREPARED STATEMENT OF RALPH BLEDSOE, CHAIRMAN, STANDING PANEL ON THE 
       PUBLIC SERVICE, NATIONAL ACADEMY OF PUBLIC ADMINISTRATION

Introduction

    It is with pleasure that I provide this statement to the 
Subcommittee in support of S. 1495, ``The Merit System Protection Act 
of 1997.'' I believe the provisions of this bill would improve the 
system for resolving disputes between employees and their employers, 
Federal agencies, by facilitating final determination of the correct 
interpretation of significant matters of Civil Service law which have a 
substantial governmentwide impact. Achieving final determinations of 
disputed interpretations of Civil Service law will promote consistency, 
clarity and stability regarding employment relationships and discipline 
which will benefit both the employee and employer.
    The Standing Panel on the Public Service, of which I am Chair, is 
an arm of the National Academy of Public Administration, an 
independent, nonprofit, nonpartisan membership organization of 400 
Fellows, chartered by Congress to identify emerging issues of 
governance and provide practical assistance to Federal, State, and 
local governments on how to improve their performance. A major 
dimension of the Academy's program is that of human resources 
management, where through its Center for Human Resources Management, 
the Academy provides assistance to Executive, Legislative, and Judicial 
agencies on matters related to personnel management and Civil Service 
issues.

Previous Testimony

    Over the past three years, the Academy has provided on several 
occasions Congressional testimony on workplace issues. Most recently, I 
provided a statement on April 23, 1996, to the House subcommittee on 
Treasury, Postal Service and General Government on the subject of 
resolving workplace disputes. In that testimony I noted that ``. . . 
how the Federal Government might improve the manner in which workplace 
issues are resolved is one of its most important tasks as a major 
employer.''
    The emphasis in that testimony, as with most commentators on the 
Federal Government's dispute resolution system, was on fully utilizing 
alternative dispute resolution mechanisms so that a minimum number of 
disputes required using a formal process. I believe this remains a 
sound, basic approach. At the same time, it is recognized that certain 
workplace disputes, especially those involving employee discipline, 
will come before formal dispute resolution authorities such as 
arbitrators, the Merit Systems Protection Board (MSPB), and the courts. 
Some of these cases involve significant interpretations of Civil 
Service law and regulation. When such cases are decided by the MSPB and 
the courts, their interpretations of law and regulation affect the 
entire system for resolving disputes in the Federal Civil Service and 
the manner and standards by which agencies and employees are held 
accountable for workforce conduct and performance.

The CSRA Appeals Provisions

    In passing the Civil Service Reform Act (CSRA), Congress recognized 
the need for a system for dealing with the small number of employee 
discipline cases which involve disputed interpretations of Civil 
Service law. For the employee, it provided the ability to appeal an 
MSPB decision or arbitration award to a higher level within MSPB and 
ultimately to the Federal Circuit Court of Appeals (Federal Circuit), 
with no restrictions on the grounds for such an appeal. For the 
government, it provided the employing agency a limited right to request 
the MSPB to review its initial decision, with no right to appeal an 
arbitrator's award, and no right to seek judicial review. Rather, the 
CSRA provided that only OPM, as the Executive Branch's central 
personnel agency, could seek judicial review of an arbitrator's award 
or a final MSPB decision. Further, such appeals to the court could only 
be made if the Director of OPM and the Department of Justice determined 
that an arbitrator's award or MSPB decision contained an erroneous 
interpretation of Civil Service law which would have a substantial 
impact on the continuing interpretation and application of Civil 
Service laws, rules, regulations and policy directives.
    The basic purposes of the provision for judicial review are to (1) 
ensure that interpretations of Civil Service law that affect the entire 
Civil Service and its operations are fully considered and weighed by 
the parties and the dispute resolution authorities, including, if 
necessary, the U.S. Supreme Court, and (2) achieve a final resolution 
to disputed interpretations of Civil Service law so there is 
consistency, clarity and stability with respect to workplace 
relationships and discipline. For the most part, it has worked well 
with numerous significant issues resolved--sometimes in favor of the 
government and sometimes in favor of the employee.

Recent Experience

    Although the number of cases reaching the Federal Circuit for 
review is small, their impact is substantial and extensive. According 
to data from the Office of Personnel Management (OPM), the government 
has asked the appropriate appellate court to review an MSPB or 
arbitration decision only 57 times in the 18 years since the passage of 
the Civil Service Reform Act (CSRA), during which time there were over 
22,000 final MSPB decisions as well as thousands of arbitration awards. 
The significance of these few cases is best demonstrated by the most 
recent outcome of the system--the Supreme Court's decision in Lachance 
v. Erickson which held that no Federal employee has a constitutional or 
statutory right to lie.

Shortcomings of the Current System and How S. 1495 Would Correct Them

    In our view, however, there are two serious shortcomings of the 
current system which are contrary to its objectives: (1) the Federal 
Circuit's discretion not to accept the OPM Director's determination 
that the decision was erroneous and would have a substantial impact and 
thus not address and resolve the contested interpretation of law; and 
(2) the requirement that OPM must file a petition for review within 30 
days of its receipt of the MSPB or arbitration decision that is in the 
form of a complete brief on the merits. We believe these shortcomings 
could be successfully addressed by S. 1495 without affecting an 
employee's right to appeal and without placing additional burdens on 
the court or the appeals system.

Authority of the Federal Circuit

    With respect to the first shortcoming, it is our understanding that 
the authority of the Federal Circuit to reject the OPM Director's 
substantial impact determination is perhaps unique in that OPM is 
unaware of any other instance in which a court of appeals possesses the 
authority to decline to hear agency appeals from final decisions. More 
importantly, this authority has prevented OPM from fulfilling its role 
as the Executive Branch's representative in seeking judicial resolution 
of disputed interpretations of law. According to OPM, the Federal 
Circuit has declined to hear 14 of the 54 total cases that OPM, along 
with the Department of Justice, have determined to be erroneous and 
substantially impact the Civil Service. Although neither the Academy 
nor I are in a position to offer an opinion on the specifics of these 
14 cases, it seems clear that purposes of the CSRA in this regard would 
be better served if the Federal Circuit agreed to accept the OPM and 
Justice Department judgment and considered these infrequent but 
critical cases on the basis of their merits.
    In refusing to fully consider all such cases, the court leaves 
unsettled differing interpretations of law which will continue to exist 
and probably emerge again as disputes in new cases. On the other hand, 
S. 1495 by permitting a full review of these cases would help achieve 
clarity and uniformity of legal principles affecting Civil Service 
employees throughout the Executive Branch. It would also ultimately 
reduce rather than add to the number of cases litigated because 
employees and employers would have a clearer understanding of the law's 
meaning and application.

30 Day Limit on Substantive Appellate Brief

    The second shortcoming concerns the Federal Circuit's requirement 
that OPM file a full-blown substantive appellate brief 30 days after 
the date of an arbitrator or MSPB decision. S. 1495 would allow it to 
file a pro forma petition for review 60 days after a decision has been 
made which OPM believe is erroneous. I believe this proposed change 
would also contribute to a more effective use of the judicial review 
provision. First, it would remove what we understand is a condition 
which no other Executive Branch agency is required to meet, thereby 
allowing OPM appeals to be treated like other agency appeals of an 
administrative decision are. Second, it would ensure that OPM and the 
Justice Department have sufficient time to better analyze the case in 
question, and prepare a petition which frames the issues in ways most 
helpful to the court. It should also be noted that this change should 
not affect in any way an employee's present appeal rights. In 
conclusion, I believe that S. 1495 would significantly perfect an 
aspect of the Executive Branch's appeals system that is often unnoticed 
but which has an impact far beyond the number of cases involved. If 
enacted, the bill would help bring to closure significant disputes over 
the meaning and application of Civil Service law. By doing so, it would 
benefit both employees and employers by providing clarity, consistency 
and stability in employment law and policy. Given the small number of 
cases which rise to this level of review and the judicious use OPM and 
the Department of Justice have made of the provision for judicial 
review, it is unlikely that the changes in S. 1495 will result in an 
increased judicial workload. Rather, it seems more likely that the 
issue resolution that should occur will result in less litigation in 
the future. For these reasons, I recommend favorable consideration of 
S. 1495, and thank you for requesting our views.
                               __________


   PREPARED STATEMENT OF ALBERT SCHMIDT, ACTING NATIONAL PRESIDENT, 
                NATIONAL FEDERATION OF FEDERAL EMPLOYEES

Introduction

    Mr. Chairman and distinguished Members of the Subcommittee: My name 
is Albert Schmidt, and I am the Acting National President of the 
National Federation of Federal Employees (NFFE), the oldest independent 
Federal union in the United States. On behalf of the 150,000 Federal 
employees our union represents I appreciate the opportunity to present 
this position paper to the Subcommittee and offer you the views of 
NFFE's membership concerning strengthening the ability of the Office of 
Personnel Management (OPM) to obtain judicial review of decisions of 
the Merit Systems Protection Board (MSPB or Board).
Discussion
    NFFE strongly opposes the legislation proposed to strengthen OPM's 
ability to obtain judicial review of MSPB decisions (S. 1495 or the 
bill). S. 1495 centralizes power in OPM by removing the current, 
important checks on that power. As a result, the bill jeopardizes the 
finality of Federal employment law decisions to the detriment of 
Federal employees. The bill also threatens to clog the courts with 
cases that are not appropriate for court judgment. For these reasons, 
S. 1495 should not be enacted.
    The current statutory check is found in 5 U.S.C. Sec. 7703(d) which 
gives discretion to the United States Court of Appeals for the Federal 
Circuit to grant a petition for review by OPM. The intent of the check 
was to ``avoid excessive centralization in a personnel agency of the 
responsibility for implementing personnel laws.'' Civil Service Reform 
Act of 1978, P.L. No. 95-454, 1978 U.S.C.C.A.N. (91 Stat. 1111) 2723, 
2768.
    Removing the statutory check and centralizing power in OPM would 
harm Federal employees by inserting bias into the merit system. 
Currently the courts apply the ``substantial impact'' standard as a 
test for review. If instead of the courts OPM had the power to 
determine what that standard meant, the interpretation would change 
along with each new OPM director and the political forces to which that 
person is subject. Standards and interpretations vary from 
administration to administration. While OPM claims it is trying to 
establish consistency in Federal employment law, allowing each new 
administration to determine what that law will be will achieve just the 
opposite.
    In its defense, OPM claims it is a good watchdog of itself. OPM 
asserts that it thoroughly evaluates each case an agency brings to it, 
rejects most of those cases, and petitions for review of only those 
most legally important. OPM's claims are laudable. However, even if OPM 
can keep itself in check now, that may not always be the case. OPM's 
leadership may not be so self-controlled in the future. Once OPM loses 
that self-control, no check whatsoever will exist on its power to take 
MSPB cases up for review.
    Such flux in Federal personnel law harms Federal employees because 
it corrodes merit system principles. Those merit principles exist to 
ensure fairness and equity in Federal employment. Under S. 1495, 
however, just the opposite will occur because the system will be 
unpredictable. Federal employees will not know from one administration 
to another how their performance will be judged, for example. or what 
their rights will be in a disciplinary situation.
    Federal employees also will suffer because any relief they obtain 
through MSPB will be delayed. These employees' livelihoods are at 
stake. Any delay in obtaining their relief is a delay in backpay and 
benefits as well as in future earnings. The delay affects the 
employees' promotion potential, as well, since a tarnished record 
affects their ability to compete in the merit promotion process. These 
employees may suffer great hardship if OPM delays their relief. One 
employee may be the sole or major wage earner in the family. Another 
may have large medical expenses due to a disability or illness. Yet 
another may have other large expenses such as college tuition. 
Obtaining relief as soon as possible is vital to these employees' 
economic security.
    Vesting discretion in the courts over OPM petitions continues to be 
an appropriate check on the agency. This discretion makes the courts 
gatekeepers and is akin to the concept of standing to sue. Under that 
concept, a court decides whether a petitioner has a legal right to have 
his or her case heard in court. The concept of standing is a tenet of 
civil procedure that courts automatically apply. In the context of the 
proposed legislation, the ``substantial impact'' standard is a test to 
determine whether OPM has standing to bring MSPB decisions up for 
review.
    OPM claims that in making this determination, courts substitute 
their judgment for OPM on which cases will have a substantial impact, 
and that OPM should retain that judgment because the agency is vested 
with the authority to guide Federal personnel law. This argument does 
not hold water. Courts make these threshold determinations in every 
case. As such, they are eminently qualified to do so. The legal 
community accepts their authority to do so. Again, removing this 
threshold determination is likely to clog the courts with cases that 
are not appropriate for review.
    Another argument OPM makes is that the courts have not established 
clear standards for determining whether the substantial impact standard 
is met. A simple solution to that concern is to define more clearly 
what the substantial impact standard means. To remove entirely the 
courts' watchdog role over OPM eliminates what OPM perceives as the 
problem rather than solves it. In the process, OPM creates problems for 
Federal employees and the court system as discussed above.
Conclusion
    In sum, NFFE opposes S. 1495 because it will centralize power in 
OPM to the detriment of Federal employees. While OPM claims the 
legislative change will solidify Federal personnel law, the change will 
have the exact opposite effect because different OPM administrations 
will have different standards and interpretations of the substantial 
impact standard. As such, OPM cannot be an effective watchdog role 
itself. The courts are best suited for this watchdog role because they 
are eminently qualified to do so and the legal community accepts them 
as gatekeepers. Thus, a better solution to the perceived problem is to 
clarify the substantial impact standard. Thank you, Mr. Chairman and 
distinguished Members of the Subcommittee, for your attention to NFFE's 
position on S. 1495.
                               __________


            LETTER FROM LORRAINE LEWIS, GENERAL COUNSEL, OPM
                     Office of Personnel Management

                                                      March 5, 1998

The Honorable Thad Cochran, Chairman
Subcommittee on International Security,
Proliferation, and Federal Services
Committee on Governmental Affairs
United States Senate
Washington, D.C. 20510-6250

    Dear Chairman Cochran: I am writing to clarify an answer that I 
gave in reply to a question from Senator Levin at the Subcommittee's 
hearing entitled ``An Overview of the Merit System Protection Act of 
1997,'' which took place on Feb. 26, 1998.
    I understood Senator Levin to have asked if the current law had 
caused OPM not to file appeals in cases OPM otherwise would have filed 
to the detriment of the government. I am not sure that my answer fully 
responded to the sense of his question or was as enlightening as it 
could have been.
    The harm that has arisen from the current law is not that it has 
prevented or deterred OPM from filing either more appeals or appeals on 
different issues of law. Rather, the harm in the current system is that 
it has permitted the Federal Circuit to reject petitions that OPM has 
filed over the years in exceptionally important cases to further the 
Congressional objective of achieving clarity and understanding of Civil 
Service law.
    These cases, though few in number--14 cases since enactment of the 
Civil Service Reform Act of 1978, and 5 cases since 1993--have 
prevented OPM from furthering this important objective.
    The benefit to amending the law to eliminate Federal Circuit 
discretion is that it will require the Federal Circuit to decide on the 
merits the small number of appeals that OPM files. There is no reason 
to believe that the number of appeals by OPM would increase if the 
Federal Circuit's discretion were eliminated.
    I hope that this clarification will allay any confusion that might 
have been created by my response to Senator Levin's question. I 
respectfully request that this letter be made a part of the hearing 
record.
    I also request to supplement the record with the enclosed chart 
that shows filings in the MSPB and Federal Circuit as of Feb. 26, 1998, 
and a paragraph on the system in place prior to enactment of the Civil 
Service Reform Act.

                                                 Sincerely,
                                    Lorraine Lewis, General Counsel
    Feb. 26, 1998 Chart follows:

                                     FILINGS IN THE MSPB AND FEDERAL CIRCUIT                                    
----------------------------------------------------------------------------------------------------------------
                                        MERIT SYSTEMS                                                           
                                      PROTECTION BOARD                    TOTAL APPEALS FROM   TOTAL FILINGS  IN
                YEAR                  FINAL  DECISIONS    OPM  PETITIONS    MSPB TO FEDERAL       THE FEDERAL   
                                      ON  PETITIONS FOR   FOR REVIEW \1\        CIRCUIT             CIRCUIT     
                                           REVIEW                                                               
----------------------------------------------------------------------------------------------------------------
                1980                               893                0             No data             No data 
                1981                             1,153                0             No data             No data 
                1982                             1,192                1             No data             No data 
                1983                             3,881                2                 242                 694 
                1984                             5,223                8                 524               1,126 
                1987                             1,619                6                 683               1,351 
                1988                             1,385                0                 537               1,296 
                1989                             1,240                6                 590               1,417 
                1990                             1,443                1                 687               1,466 
                1991                             1,850                6                 676               1,484 
                1992                             1,910                1                 789               1,702 
                1993                             1,613                3                 713               1,708 
                1994                             2,106                6                 810               1,705 
                1995                             2,275                6                 970               1,847 
                1996                             1,329                7                 789               1,338 
                1997                           No Data                1                 545               1,462 
----------------------------------------------------------------------------------------------------------------
                Totals                          32,649               57              10,897              22,231 
----------------------------------------------------------------------------------------------------------------
\1\ OPM's 57 petitions for review include appeals from MSPB and arbitrator final decisions. Three of these      
  petitions were filed in and decided by the United States Court of Appeals for the District of Columbia. In    
  total, fourteen (14) of OPM's petitions were rejected by the Federal Circuit. Since 1993, OPM has petitioned  
  for review on 23 occasions. Five (5) of these 23 petitions were rejected by the Federal Circuit.              

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    PRIOR TO THE ENACTMENT OF THE CIVIL SERVICE REFORM ACT OF 1978 
(CSRA), EMPLOYEES APPEALED ADVERSE DECISIONS OF THE CIVIL SERVICE 
COMMISSION TO THE VARIOUS UNITED STATES DISTRICT COURTS AND THE COURT 
OF CLAIMS. THE GOVERNMENT HAD NO RIGHT TO JUDICIAL REVIEW OF COMMISSION 
DECISIONS ADVERSE TO THE GOVERNMENT PRIOR TO THE ENACTMENT OF THE CSRA. 
ARBITRATORS WERE NOT PERMITTED TO HEAR SUBJECTS COVERED BY A STATUTORY 
PROCEDURE, SUCH AS ADVERSE ACTIONS. THE CSRA PERMITTED EMPLOYEES TO 
CHOOSE BETWEEN MSPB AND ARBITRATORS, BUT PROVIDED THAT JUDICIAL REVIEW 
APPLIED TO ARBITRAL AWARDS IN THE SAME MANNER AND UNDER THE SAME 
CONDITIONS AS IF THE CASE HAD BEEN HEARD BY THE BOARD. THIS WAS TO 
PROVIDE FOR CONSISTENCY AND TO DISCOURAGE FORUM-SHOPPING. IN CORNELIUS 
V. NUTT, THE SUPREME COURT HELD THAT ARBITRATORS MUST FOLLOW THE SAME 
SUBSTANTIVE LAW AS THE BOARD.

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