[Federal Register Volume 72, Number 83 (Tuesday, May 1, 2007)]
[Proposed Rules]
[Pages 23772-23775]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-8061]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 72, No. 83 / Tuesday, May 1, 2007 / Proposed 
Rules  

[[Page 23772]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 315 and 752

RIN 3206-AL30


Career and Career-Conditional Employment and Adverse Actions

AGENCY: Office of Personnel Management.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Office of Personnel Management (OPM) proposes to amend its 
regulations governing Federal adverse actions. The proposed regulations 
would conform the adverse action rules regarding employee coverage to 
binding judicial decisions interpreting the underlying statute.

DATES: Submit comments on or before July 2, 2007.

ADDRESSES: Send or deliver written comments to Ana A. Mazzi, Deputy 
Associate Director for Workforce Relations and Accountability Policy, 
Office of Personnel Management, 1900 E Street, NW., Room 7H28, 
Washington, DC 20415; by FAX to 202-606-2613; or by e-mail to 
[email protected].

FOR FURTHER INFORMATION CONTACT: Sharon L. Mayhew by telephone at (202) 
606-2930; by FAX at (202) 606-2613; or by e-mail at [email protected].

SUPPLEMENTARY INFORMATION: Section 7514 of title 5, United States Code 
(U.S.C.), provides the statutory authority for OPM to prescribe 
regulations pertaining to adverse actions in the competitive or 
excepted service. In addition, these regulations are found at title 5, 
Code of Federal Regulations (CFR), part 752, subpart D, and are the 
subject of this interim final rule. Corresponding and related 
regulations pertaining to probationary periods are found at 5 CFR part 
315, subpart H, and also are the subject of this proposed rule.

Amendments To Clarify Adverse Action Rules Regarding Employee Coverage

Background--New Interpretation of the Statute--Van Wersch and McCormick

    Two decisions of the U.S. Court of Appeals for the Federal Circuit 
(Federal Circuit or Court), Van Wersch v. Department of Health and 
Human Services, 197 F.3d 1144 (Fed. Cir. 1999) and McCormick v. 
Department of the Air Force, 307 F.3d 1339 (Fed. Cir. 2002), pet. for 
reh'g in banc denied, 329 F.3d 1354 (Fed. Cir. 2003) caused us to 
revise the pre-existing interpretation of 5 U.S.C. 7511(a)(1), and 
invalidated portions of the adverse actions regulations at 5 CFR part 
752. The effect of these Federal Circuit opinions is to provide 
additional procedural and appeal rights to individuals who are working 
in a probationary period in the competitive service and in a trial 
period in the excepted service. OPM is proposing to change its 
regulations to conform to the Court's interpretation of the statute.
    The pertinent statutory text appears below:

    5 U.S.C. Sec. 7511. Definitions; application
    (a) For the purpose of this subchapter--
    (1) ``Employee'' means--
    (A) An individual in the competitive service--
    (i) Who is not serving a probationary or trial period under an 
initial appointment; or
    (ii) Who has completed 1 year of current continuous service 
under other than a temporary appointment limited to 1 year or less;
    (B) A preference eligible in the excepted service who has 
completed 1 year of current continuous service in the same or 
similar positions--
    (i) In an Executive agency; or
    (ii) In the United States Postal Service or Postal Rate 
Commission; and
    (C) An individual in the excepted service (other than a 
preference eligible)--
    (i) Who is not serving a probationary or trial period under an 
initial appointment pending conversion to the competitive service; 
or
    (ii) Who has completed 2 years of current continuous service in 
the same or similar positions in an Executive agency under other 
than a temporary appointment limited to 2 years or less;

    An individual who meets this definition of ``employee'' is entitled 
to certain procedural and appeal rights when he or she is the subject 
of an adverse action (e.g., removal, certain types of suspension, 
reduction in grade, reduction in pay, and furlough of 30 days or less). 
These rights include: (1) At least 30 days' advance written notice of 
the reason for a proposed adverse action; (2) a reasonable time, but 
not less than 7 days, to answer orally and in writing; (3) the right to 
be represented by an attorney or other representative; (4) a written 
decision and the specific reasons for the decision at the earliest 
practicable date; and (5) a right to appeal to the Merit Systems 
Protection Board (MSPB or the Board). Individuals who do not meet this 
definition are not afforded all of these rights.
    Before the Court issued Van Wersch and McCormick, OPM and the MSPB 
interpreted the statute to exclude probationary or trial period 
employees from receiving the same rights as employees who have 
completed their probationary or trial period. Probationary and trial 
periods are essential for management to assess an individual's 
performance prior to granting full employment rights. Specifically, OPM 
regulations did not afford full employment rights to an individual in 
the competitive service who failed to meet one of the conditions of 5 
U.S.C. 7511(a)(1)(A), or an individual in the excepted service who 
failed to meet one of the conditions of 5 U.S.C. 7511(a)(1)(C). Thus, 
for example, an individual in the competitive service serving in a 
probationary period was not an ``employee'' for purposes of 5 CFR part 
752, nor was an individual who did not complete one year of current, 
continuous service under other than a temporary appointment limited to 
one year or less. Likewise, an individual in the excepted service 
serving a probationary or trial period was not an ``employee'' for 
purposes of 5 CFR part 752, nor was a nonpreference eligible who did 
not complete two years of current, continuous service under other than 
a temporary appointment limited to two years or less.
    Contrary to this interpretation, the Federal Circuit in Van Wersch 
held that an individual in the excepted service could meet the 
definition of ``employee'' if he or she met either of the two 
conditions listed at 5 U.S.C. 7511(a)(1)(C). Ms. Van Wersch was removed 
from Federal employment for alleged unacceptable conduct. At the time 
of her removal, she was serving a probationary or trial period under an 
initial excepted service appointment

[[Page 23773]]

pending conversion to the competitive service and therefore was 
excluded from coverage under 5 U.S.C. 7511(a)(1)(C)(i). Ms. Van Wersch 
had been hired as a Clerk-Typist pursuant to 5 CFR 213.3102(u), which 
allowed agencies to appoint severely handicapped persons to excepted 
service positions. Employees hired under this authority may qualify for 
conversion to competitive status after they have completed two years of 
satisfactory service. Ms. Van Wersch served over two years in this 
position but was not converted to competitive status.
    The Federal Circuit addressed the question of whether an 
individual, like Ms. Van Wersch, serving in a probationary or trial 
period and therefore excluded from the definition of ``employee'' under 
5 U.S.C. 7511(a)(1)(C)(i), could still be considered an employee, with 
full adverse action rights, if she met only the criteria of 5 U.S.C. 
7511(a)(1)(C)(ii). The Government argued that Congress had not intended 
to extend employee appeal rights to excepted service personnel, such as 
Ms. Van Wersch, who were serving in probationary or trial positions 
pending conversion to the competitive service. While recognizing that 
the Government made a compelling case for its reading of the statute 
based on the legislative history, the Court rejected the Government's 
argument, holding that Congress had not used language that effectuated 
the putative legislative intent and that courts are not authorized to 
look at Congressional intent when the language of the statute was clear 
and unambiguous. Van Wersch v. Department of Health and Human Services, 
197 F.3d 1144, 1152 (Fed.Cir. 1999). Because Ms. Van Wersch literally 
met what the Court determined was an alternative definition of 
``employee'' in 5 U.S.C. 7511(a)(1)(C)(ii), the Court concluded that 
she was an employee under the statute and therefore had the right to 
appeal her termination to the MSPB. Id. at 1151. The Federal Circuit 
also noted that ``if Congress determines that individuals in Ms. Van 
Wersch's position should not have the right to appeal adverse actions 
to the Board, it can amend Sec.  7511(a)(1)(C) so as to compel a result 
different from the one we reach today.'' Id. at 1152.
    The Federal Circuit applied the Van Wersch analysis to the 
competitive service in McCormick v. Department of the Air Force, 307 
F.3d 1339 (Fed. Cir. 2002), pet. for reh'g denied, 329 F. 3d 1354 (Fed. 
Cir. 2003) and found the appellant qualified as an employee under 5 
U.S.C. 7511(a)(1)(A)(ii) even though she failed to qualify under (i). 
Ms. McCormick previously was a competitive service employee at the 
Department of Health and Human Services (DHHS) before voluntarily 
moving to a new position at the Department of the Air Force. Her new 
competitive service appointment was subject to a one-year probationary 
period. Ms. McCormick was terminated during this probationary period. 
On appeal, Ms. McCormick argued that, while she did not meet the 
definition of an employee under 5 U.S.C. 7511(a)(1)(A)(i), she did meet 
the definition of 5 U.S.C. 7511(a)(1)(A)(ii), based on her DHHS 
employment.
    The Court held that ``[t]he panel is bound by the court's earlier 
decision in Van Wersch.'' Id. at 1342. Thus, the Federal Circuit 
concluded that Ms. McCormick met the definition of ``employee'' under 5 
U.S.C. 7511(a)(1)(A)(ii), having completed more than 1 year of current 
or continuous service under other than a temporary appointment limited 
to 1 year or less, and therefore was to be afforded all the rights of 
an employee. Id. at 1343.

Conforming the Adverse Action Regulations to the New Statutory 
Interpretation

    As yet, Congress has not accepted the Court's invitation to amend 
these provisions. Therefore, to eliminate potential confusion, OPM 
proposes to amend the regulations at 5 CFR part 752 to conform to the 
existing Federal Circuit case law described above.
    [0]We therefore propose to make four amendments to the text of 
paragraphs (c) and (d) of 5 CFR 752.401, to clarify the definition of 
``employee'' for purposes of the adverse action rules. Three amendments 
are required to conform to the holding in McCormick, and one amendment 
is necessary to conform to Van Wersch
    First, to conform with McCormick's holding that an individual 
serving in the competitive service on a probationary period may meet 
the definition of an ``employee,'' we propose to amend paragraph (c)(1) 
at Sec.  752.401, to state that a career or career conditional employee 
in the competitive service who is not serving a probationary or trial 
period is a covered employee. We propose adding the phrase, ``career or 
career conditional'' here to address recent cases in which individuals 
serving in positions not subject to a probationary or trial period have 
attempted to establish that they are ``employees'' within the meaning 
of the statute because they are not serving a probationary or trial 
period under an initial appointment. See e.g., Johnson v. Department of 
Veterans Affairs, 99 MSPR 362 (2005). Such a conclusion would produce 
an unreasonable result in that every temporary appointee would have a 
right to advance notice, an opportunity to respond, and the right of 
appeal, on his or her first day of work. This is contrary to OPM's 
interpretation of the phrase, ``who is not serving a probationary or 
trial period under an initial appointment,'' as applying only to 
individuals serving in positions that are subject to a probationary or 
trial period. The legislative history supports this interpretation and, 
accordingly, OPM explicitly continues its existing interpretation of 
the statute in this respect. We note that the MSPB adopted this 
interpretation in Johnson.
    Second, we propose to add a new Sec.  752.401(d)(13) to clarify 
that a competitive service employee who is serving a probationary or 
trial period does not meet the definition of ``employee'' unless he or 
she has completed one year of current continuous service under other 
than a temporary appointment limited to one year or less.
    The McCormick decision also requires an amendment to paragraph 
(c)(2) of 5 CFR 752.401, which currently identifies as a covered 
employee, an individual ``in the competitive service serving in an 
appointment that requires no probationary or trial period, and who has 
completed one year of current continuous service in the same or similar 
positions under other than a temporary appointment limited to 1 year or 
less.'' We propose to remove the phrase, ``serving in an appointment 
that requires no probationary or trial period, and'' to comport with 
the Court's ruling in McCormick.
    To comply with Van Wersch, the final amendment would add modifying 
language to paragraph (d)(11) to make it clear that a nonpreference 
eligible excepted service employee, who is serving a probationary or 
trial period pending conversion to the competitive service, does not 
meet the definition of ``employee'' unless he or she has completed two 
years of current continuous service under other than a temporary 
appointment limited to two years or less.

Conforming Part 315 to the New Statutory Interpretation

    We are also proposing to change part 315, Career and Career 
Conditional Employment, to make the regulations governing probationary 
periods consistent with the change in the definition of ``covered 
employee.''

[[Page 23774]]

Additional Regulatory Clarification Required by Payano

    OPM is proposing to remove the phrase ``in the same or similar 
positions'' from the regulation at the amended paragraph 5 CFR 
752.401(c)(2), and also from the definition of ``current continuous 
employment'' at 5 CFR 752.402. This change addresses language in the 
current regulations concerning individuals in the competitive service 
that requires that ``continuous service'' be in ``the same or similar 
positions.'' That language is not found in the statute. This issue 
arose in administrative litigation before the MSPB. See Payano v. 
Department of Justice, 100 MSPR 74 (2005). The issue in that case was 
whether an employee could ``tack on'' the time served in another 
competitive service position that was not the same as or similar to the 
position from which he was removed, for the purpose of determining 
whether or not he was an employee. The MSPB held that an agency was 
required to take this time into account in determining whether a person 
in the competitive service was an ``employee.'' OPM has determined that 
this interpretation of the statute is the best one and is proposing to 
change the regulations to reflect that view.

Public Participation

    OPM invites interested persons to participate in this proposed 
rulemaking by submitting written comments, data, or views.
    Before finalizing these proposed amendments, we will consider all 
comments received on or before the closing date for comments. We will 
consider comments filed late if it is possible to do so without 
incurring expense or delay. We may change these proposed amendments in 
light of the comments we receive.

E.O. 12866, Regulatory Review

    The Office of Management and Budget has reviewed this rule in 
accordance with E.O. 12866.

Regulatory Flexibility Act

    OPM has determined these amendments will not have a significant 
economic impact on a substantial number of small entities because they 
will apply only to Federal agencies and employees.

List of Subjects

5 CFR Part 315

    Government employees.

5 CFR Part 752

    Administrative practice and procedure, Government employees.

Office of Personnel Management.
Linda M. Springer,
Director.
    Accordingly, OPM proposes to amend parts 315 and 752 of title 5, 
Code of Federal Regulations, as follows:

PART 315--CAREER AND CAREER CONDITIONAL EMPLOYMENT

    1. The authority for part 315 continues to read:

    Authority: 5 U.S.C. 1302, 3301, and 3302; E.O. 10577, 3 CFR, 
1954-1958 Comp., p. 218, unless otherwise noted; and E.O. 13162; 
secs, 315.601 and 315.609 also issued under 22 U.S.C. 3651 and 3652. 
Secs. 315.602 and 315.604 also issued under 5 U.S.C. 1104. Sec 
315.603 also issued under 5 U.S.C. 8151. Sec 315.605 also issued 
under E.O. 12034, 3 CFR, 1978 Comp., p. 111. Sec 315.606 also issued 
under E.O. 11219, 3 CFR, 1964-1965 Comp., p. 303. Sec 315.607 also 
issued under 22 U.S.C. 2506. Sec 315.608 also issued under E.O. 
12721, 3 CFR, 1990 Comp., p. 293. Sec. 315.610 also issued under 5 
U.S.C. 3304(d). Sec 315.611 also issued under Section 511, Pub. L. 
106-117, 113 Stat. 1575-76. Sec 315.708 also issued under E.O. 
13318. Sec. 315.710 also issued under E.O. 12596, 3 CFR, 1987 Comp., 
p. 229. Subpart I also issued under 5 U.S.C. 3321, E.O. 12107, 3 
CFR, 1978 Comp., p. 264.

    2. Revise Sec.  315.803 to read as follows:


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

    (a) The agency shall utilize the probationary period as fully as 
possible to determine the fitness of the employee and shall terminate 
his services during this period if he fails to demonstrate fully his 
qualifications for continued employment.
    (b) Termination of an individual serving a probationary period must 
be taken in accordance with subpart D of part 752 of this chapter if 
the individual has completed one year of current continuous service 
under other than a temporary appointment limited to 1 year or less and 
is not otherwise excluded by the provisions of that subpart.
    3. Revise Sec.  315.804 (a) to read as follows:


Sec.  315.804  Termination of probationers for unsatisfactory 
performance or conduct.

    (a) Subject to Sec.  315.803(b), when an agency decides to 
terminate an employee serving a probationary or trial period because 
his work performance or conduct during this period fails to demonstrate 
his fitness or his qualifications for continued employment, it shall 
terminate his services by notifying him in writing as to why he is 
being separated and the effective date of the action. The information 
in the notice as to why the employee is being terminated shall, as a 
minimum, consist of the agency's conclusions as to the inadequacies of 
his performance or conduct.
* * * * *
    4. Revise Sec.  315.805 introductory text to read as follows:


Sec.  315.805  Termination of probationers for conditions arising 
before appointment.

    Subject to Sec.  315.803(b), when an agency proposes to terminate 
an employee serving a probationary or trial period for reasons based in 
whole or in part on conditions arising before his appointment, the 
employee is entitled to the following:
* * * * *

PART 752--ADVERSE ACTIONS

    1. The authority for part 752 continues to read:

    Authority: 5 U.S.C. 7504, 7514, and 7543.

    2. Revise Sec.  752.401 (c)(1) and (2), (d)(11) and (12), and add 
(d)(13) to read as follows:


Sec.  752.401  Coverage.

    (a) * * *
    (b) * * *
    (c) * * *
    (1) A career or career conditional employee in the competitive 
service who is not serving a probationary or trial period;
    (2) An employee in the competitive service who has completed 1 year 
of current continuous service under other than a temporary appointment 
limited to 1 year or less;
* * * * *
    (d) * * *
* * * * *
    (11) A nonpreference eligible employee serving a probationary or 
trial period under an initial appointment in the excepted service 
pending conversion to the competitive service, unless they meet the 
requirements of paragraph (c)(5) of this section;
    (12) An employee whose agency or position has been excluded from 
the appointing provisions of title 5, United States Code, by separate 
statutory authority in the absence of any provision to place the 
employee within the coverage of chapter 75 of title 5, United States 
Code; and
    (13) An employee in the competitive service serving a probationary 
or trial period, unless they meet the requirements of paragraph (c)(2) 
of this section.

[[Page 23775]]

    3. Revise Sec.  752.402 (b) to read as follows:


Sec.  752.402  Definitions.

    (a) * * *
    (b) Current continuous employment means a period of employment or 
service immediately preceding an adverse action without a break in 
Federal civilian employment of a workday.
* * * * *
[FR Doc. E7-8061 Filed 4-30-07; 8:45 am]
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