[Federal Register Volume 87, Number 217 (Thursday, November 10, 2022)]
[Rules and Regulations]
[Pages 67765-67783]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-24309]



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 Rules and Regulations
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 This section of the FEDERAL REGISTER contains regulatory documents 
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  Federal Register / Vol. 87, No. 217 / Thursday, November 10, 2022 / 
Rules and Regulations  

[[Page 67765]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 315, 432, and 752

RIN 3206-AO23


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

AGENCY: Office of Personnel Management.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Office of Personnel Management (OPM) is issuing final 
regulations governing probation on initial appointment to a competitive 
position, performance-based reduction in grade and removal actions, and 
adverse actions. The final rule rescinds certain regulatory changes 
made effective on November 16, 2020, and implements new statutory 
requirements for Merit Systems Protection Board (MSPB) procedural and 
appeal rights for dual status National Guard technicians for certain 
adverse actions. OPM believes the final revisions will support 
implementation of an Executive order to empower agencies to rebuild the 
career Federal workforce and protect the civil service rights of their 
employees, while preserving appropriate mechanisms for pursuing 
personnel actions where warranted.

DATES: Effective December 12, 2022.

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

SUPPLEMENTARY INFORMATION: The Office of Personnel Management (OPM) is 
issuing revised regulations governing probation on initial appointment 
to a competitive position; performance-based reduction in grade and 
removal actions; and adverse actions, mindful of the President's 
expressed policy direction and under its congressionally granted 
authority in 5 U.S.C. 3321, 4305, 4315, 7504, 7514 and 7543. On January 
22, 2021, President Biden issued Executive Order (E.O.) 14003 on 
``Protecting the Federal Workforce'' which, among other things, revoked 
E.O. 13839 and directed agencies to ``as soon as practicable, suspend, 
revise, or rescind, or publish for notice and comment proposed rules 
suspending, revising, or rescinding, the actions'' implementing various 
E.O.s, including E.O. 13839, ``as appropriate and consistent with 
applicable law.'' E.O. 14003 states that ``[c]areer civil servants are 
the backbone of the Federal workforce, providing the expertise and 
experience necessary for the critical functioning of the Federal 
Government. It is the policy of the United States to protect, empower, 
and rebuild the career Federal workforce. It is also the policy of the 
United States to encourage employee organizing and collective 
bargaining. The Federal Government should serve as a model employer.''
    These revisions both effect statutory requirements and support 
agency efforts in implementing E.O. 14003, as well as advance agencies' 
efforts to fulfill their mission and achieve superior results for the 
American people. With respect to statutory requirements, we have made 
changes to be consistent with the requirements for dual status National 
Guard technicians in Public Law 114-328 (Dec. 23, 2016). Additionally, 
we have made regulation changes to be consistent with statutory 
requirements for procedures under the Whistleblower Protection Act. 
Therefore, in accordance with E.O. 14003, OPM issued proposed 
regulations published at 87 FR 200, January 4, 2022, to rescind 
portions of the final rule published at 85 FR 65940, October 16, 2020. 
The proposed regulations provide agencies the necessary tools and 
flexibility to address matters related to unacceptable performance and 
misconduct or other matters contrary to the efficiency of the service, 
by Federal employees when they arise, consistent with the policies of 
E.O. 14003. Pursuant to Public Law 114-328 (Dec. 23, 2016), OPM also 
proposed to revise its regulations on coverage for performance-based 
actions and adverse actions appealable to the MSPB in accordance with 
statutory changes that extend title 5 rights to dual status National 
Guard technicians under certain conditions.
    After consideration of public comments on the proposed regulations, 
OPM is now issuing these revised regulations. These revisions not only 
implement statutory requirements and support agency efforts in 
implementing E.O. 14003 but also facilitate the ability of agencies to 
deliver on their mission and provide the best possible service to the 
American people.

Public Comments

    In response to the proposed rule, OPM received 31 comments during 
the 30-day public comment period from a variety of individuals, 
including current and retired Federal employees, labor organizations, 
Federal agencies, management associations, organizations, a law firm, 
and the general public. At the conclusion of the public comment period, 
OPM reviewed and analyzed the comments. In general, comments ranged 
from enthusiastic support of the proposed regulations to categorical 
rejection. Many commenters expressed support or non-support only on 
particular portions of the regulations without addressing other aspects 
of the rule. Many of those in support of the regulatory changes cited 
the benefit of returning more discretion to agencies to allow them to 
best manage the Federal workforce with efficiency and effectiveness.
    OPM's discussion in the supplementary information of Santos v. Nat 
'l Aeronautics and Space Admin., 990 F.3d 1355 (Fed. Cir. 2021), 
received a significant number of comments. The national unions and 
other commenters except for one agency who specifically mentioned 
Santos voiced objection to OPM's discussion regarding Santos, with a 
national union requesting that the discussion be clarified or 
withdrawn. The agency stated no opinion on OPM's treatment of Santos.
    The clean-record agreement was another issue that received a 
substantial number of comments. Some commenters expressed agreement 
with the clean-record settlement portion of the rule. Other commenters 
vigorously commended the restoration of clean-record agreements but 
disagreed with certain aspects of this provision, and finally there 
were commenters who disagreed with the rescission.
    The commenters who categorically disagreed with the proposed rule 
and those commenters who were silent on the rule overall and only cited

[[Page 67766]]

opposition to particular portions raised various areas of concern such 
as: OPM's position on Santos, clean-record agreements, removal of the 
notification for the end of the probationary period, the rescission of 
the requirements regarding penalty determination, the agency's 
obligation to provide assistance to an employee who has demonstrated 
unacceptable performance, and the lifting of the requirement to issue 
the decision on a proposed removal within 15 business days of the 
conclusion of the employee's opportunity to respond.
    OPM reviewed and carefully considered all comments in support of 
and in opposition to the proposed changes. The significant comments are 
summarized below, along with the suggestions for revisions that we 
considered and did not adopt. In addition to substantive comments, we 
received some comments that were not addressed below because they were 
beyond the scope of the proposed changes to regulations or were vague 
or incomplete. Finally, comments that were received after the due date 
for comments or not identified by the docket number or Regulation 
Identifier Number (RIN) for this proposed rulemaking, as required by 
the notice of proposed rulemaking, were not addressed below.
    In the first section below, we address general or overarching 
comments. In the sections that follow, we address comments related to 
specific portions of the regulations.

General Comments

    National unions, as well as some organizations, Federal employees, 
and members of the public expressed strong support for many of the 
changes. Some national unions urged OPM to issue its final rule 
promptly, notwithstanding their objections to portions of the rule. A 
national union remarked that OPM's adoption of the proposed rule 
changes as written as soon as possible would provide immediate benefit 
to the employees they represent. Another national union declared that 
rescission of certain regulatory changes that implemented E.O. 13839 
and which were made effective on November 16, 2020, was not only 
necessary because of E.O. 14003 but also ``sound policy.'' This 
national union declared that given E.O. 14003's explicit direction, 
OPM's rescission of its November 2020 regulatory changes is 
``appropriate and indeed imperative as a matter of law'' and that 
``[r]escission is also sound policy.'' Further, the national union 
emphasized that E.O. 13839 and OPM's implementing regulations 
``eviscerated federal employees' rights and were grossly unfair to hard 
working civil servants.'' Another national union observed that the 
proposed rule would bring OPM's regulations into better alignment with 
the plain text of chapter 43 and chapter 75 of title 5 of the U.S. 
Code. The national union further asserted that ``Title V does not 
elevate the need for efficient government above the requirement of due 
process and fundamental fairness for federal employees.'' Additionally, 
this national union stated that ``[r]escission would therefore be 
appropriate even in the absence of Executive Order 14003 because the 
changes made by the 2020 Rule were contrary to law.'' A local union 
endorsed the rulemaking action, especially restoring the ability to 
make clean-record agreements.
    Some organizations stated that they generally supported revocation 
of E.O. 13839 through the issuance of E.O. 14003 and as a result 
welcomed OPM's rulemaking. An organization reported that their members 
have observed the damaging effects of the November 2020 rule that this 
organization predicted in their comments at the time. Another 
organization concurred with this observation. These organizations, one 
concurring with the other's comment submissions, welcomed OPM's 
compliance with E.O. 14003 in the present rulemaking and looked forward 
to ``the striking of the harmful provisions of E.O. 13839 from the Code 
of Federal Regulations at the earliest practicable date.''
    A commenter said the proposed rule was a ``necessity'' in certain 
areas of the Federal Government. Another individual voiced support for 
the changes as well and remarked that ``[t]his proposed rule is [a] 
necessity in high flux parts of federal agencies.'' Many commenters in 
support of the regulatory changes noted the benefit of returning more 
discretion to agencies to allow them to best manage the Federal 
workforce with efficiency and effectiveness.
    Pursuant to E.O. 14003, OPM has reviewed the prior regulations, 
which implemented certain requirements of E.O. 13839, and concluded 
that some provisions of the amendments of November 2020 are contrary to 
the current policy of the United States. The final rule effectuates 
E.O. 14003 requirements and allows agencies to implement policies most 
suitable for each respective agency based on its unique circumstances. 
OPM believes the rule establishes procedures and requirements needed to 
support managers in addressing unacceptable performance and misconduct 
and related matters impacting the successful operation of the Federal 
Government while simultaneously preserving employees' rights and 
protections.
    An individual commenter asked ``[t]o what extent will this rule 
affect removal and adverse actions?'' As discussed in each pertinent 
portion of this final rule, this rulemaking affects adverse actions, 
including removals, in several ways. Regarding penalty considerations, 
the rule rescinds these provisions and explains in detail the reasons 
for doing so and OPM's views. They are: an express provision that an 
agency is not required to use progressive discipline; adoption of the 
test for appropriate comparators in Miskill v. Social Security 
Administration, 863 F.3d 1379 (Fed. Cir. 2017); adoption of the 
standard that requires consideration of, among other factors, an 
employee's disciplinary record and past work record as applied by the 
Merit Systems Protection Board (MSPB or the Board) in Douglas v. 
Veterans Administration, 5 M.S.P.R. 280 (1981); and the requirement 
that suspension should not be a substitute for removal. As well, OPM 
removed the express language limiting response and decisional periods 
for adverse actions, including removals. In addition, as discussed 
above, the rule changes the coverage criteria for dual status National 
Guard technicians to be consistent with Public Law 114-328 for certain 
adverse actions.
    Other commenters expressed concerns about the proposed rule. An 
organization commented that ``the wholesale rescinding of these 
commonsense ideas was not only premature, but ill-advised and harmful 
to the overall management of the federal workforce.'' Another 
individual expressed that ``the proposed rules do the exact opposite of 
its stated purpose to empower agencies to rebuild the career Federal 
workforce and protect the civil service rights of their employees.'' 
This commenter went on to state that the proposed rule instead limits 
both an agency's ability to take an action against a Federal employee 
when warranted and the agency's ability to rebuild a productive Federal 
workforce. Also expressing disagreement with the rescissions of certain 
regulatory changes that implemented E.O. 13839 and which were made 
effective on November 16, 2020, an individual said it was ``an attack'' 
on the former administration. Additionally, a commenter stated that the 
November 2020 regulations should remain as they were better suited to 
hold a workforce accountable. Another commenter supported keeping the 
regulations the way they were, except for the rescission of the clean-
record agreement, because ``[s]ome of the

[[Page 67767]]

changes implemented by the subject regulations made it easier to ensure 
good order and discipline within the civilian workforce and to ensure 
that the relevant processes are more streamlined than before them. 
There are certain aspects that should be kept.''
    We disagree with the general assertions contesting promulgation of 
these rules and the characterization that they are ill-considered, 
detrimental, and ineffective. We also do not concur with the 
commenters' depiction that the proposed rules are restrictive and the 
prior rules were better suited for workforce accountability. E.O. 14003 
requires OPM to rescind portions of the OPM final rule which 
implemented certain requirements of E.O. 13839. In fact, E.O. 14003 
directs agencies to ``as soon as practicable, suspend, revise, or 
rescind, or publish for notice and comment proposed rules suspending, 
revising, or rescinding, the actions.'' We believe that the proposed 
revisions retain applicable statutory mandates while continuing to 
provide agencies the necessary tools and flexibility to address matters 
related to unacceptable performance and misconduct or other matters 
contrary to the efficiency of the service by Federal employees when 
they arise, consistent with the policies of E.O. 14003. For example, 
this final rule provides several necessary tools, such as previous 
longstanding flexibilities enjoyed by agencies in how to address 
performance issues with their employees under chapter 43 of title 5 of 
the United States Code regarding decisions on when and how performance 
assistance is provided to employees. The final rule also restores 
agencies' ability to resolve informal and formal complaints at an early 
stage and with minimal costs to the agency.
    A management association stated they are ``[o]verall extremely 
concerned by and confused about the proposed changes to current 
regulations.'' Another management association stated that it was 
``deeply concerned by these proposals and the impact they may have 
across our workforce.'' One of these management associations declared 
with regard to the November 2020 rule: ``where clarity had been 
provided, it has been replaced with opacity and confusion.'' 
Correspondingly, the other management association asserted that the 
clarity of the November 2020 rule ``has been replaced with bureaucratic 
doublespeak.''
    We disagree with the management associations' claim that the 
proposed rule is obscure and confusing. We do not believe that the rule 
is unclear or is difficult to comprehend as these regulatory changes 
restore well-established principles and practices that are familiar to 
Federal agencies and have proven to be successful tools to support 
managers in addressing unacceptable performance and promoting employee 
accountability for performance-based reduction-in-grade, removal 
actions, and adverse actions while recognizing employee rights and 
protections.
    Two management associations expressed that it is ``disconcerting'' 
that the proposed rule is based entirely on a shift in policy rather 
than on well-founded data and evidence which should be the approach 
used by OPM. They emphasized this point by stating that OPM has 
virtually no data on the extent to which adverse actions were pursued 
under the current regulations that are being proposed for rescission, 
and OPM's lack of collection of basic data or discontinuance of data 
collection from agencies on performance-based and adverse actions and 
settlement agreements ``is not a way to run the largest employer in the 
nation.''
    An agency's ability to repeal an existing regulation through 
notice-and-comment rulemaking is well-grounded in the law. The APA 
defines ``rule making'' to mean ``agency process for formulating, 
amending, or repealing a rule.'' 5 U.S.C. 551(5). Agencies ``are free 
to change their existing policies as long as they provide a reasoned 
explanation for the change.'' See Encino Motorcars, LLC v. Navarro, 136 
S. Ct. 2117, 2125 (2016); see also 82 FR 34901; 83 FR 32231. Agencies 
may seek to revise or repeal regulations based on changes in 
circumstance or changes in statutory interpretation or policy 
judgments. See, e.g., FCC v. Fox Television Stations, Inc., 556 U.S. 
502, 514-15 (2009) (``Fox''); Ctr. for Sci. in Pub. Interest v. Dep't 
of Treasury, 797 F.2d 995, 998-99 & n.1 (D.C. Cir. 1986). Indeed, the 
agencies' interpretation of the statutes they administer are not 
``instantly carved in stone''; quite the contrary, the agencies ``must 
consider varying interpretations and the wisdom of [their] policy on a 
continuing basis, . . . for example, in response to . . . a change in 
administrations.'' Nat'l Cable & Telecommunications Ass'n v. Brand X 
Internet Servs., 545 U.S. 967, 981-82 (2005) (``Brand X'') (internal 
quotation marks omitted) (quoting Chevron U.S.A., Inc. v. NRDC, 467 
U.S. 837, 863-64 (1984)) (citing Motor Vehicle Mfrs. Ass'n v. State 
Farm Mut. Auto. Ins. Co., 463 U.S. 29, 59 (1983) (Rehnquist, J., 
concurring in part and dissenting in part)). Revised rulemaking based 
``on a reevaluation of which policy would be better in light of the 
facts'' is ``well within an agency's discretion,'' and ``[a] change in 
administration brought about by the people casting their votes is a 
perfectly reasonable basis for an executive agency's reappraisal'' of 
its regulations and programs. Nat'l Ass'n of Home Builders v. EPA, 682 
F.3d 1032, 1038 & 1043 (D.C. Cir. 2012) (``NAHB'').
    Agencies are free to change their existing policies as long as they 
provide a ``reasoned'' explanation. See, e.g., National Cable & 
Telecommunications Assn., 545 U.S. at 981-982; Chevron, 467 U.S. at 
863-864. This does not require the agency to ``demonstrate to a court's 
satisfaction that the reasons for the new policy are better than the 
reasons for the old one.'' FCC v. Fox Television Stations, Inc., 556 
U.S. 502, 514, (2009). A stronger justification may be required if the 
agency's prior position ``may have engendered serious reliance 
interests that must be taken into account.'' Encino Motorcars, LLC v. 
Navarro, 136 S. Ct. 2117, 2131 (2016) (internal quotation marks and 
citation omitted). Here, however, the 2020 final rule was effective on 
November 16, 2020, and Executive Order 14003 issued just two months 
later, on January 22, 2021. Under the circumstances, OPM does not 
believe that the November 2020 final rule was in effect long enough to 
create significant reliance interests because of the brief time period 
to effect a change in agency policy to conform to any new final OPM 
regulation or for agencies to actually apply any change that may have 
been made. With almost 57% of the Executive Branch workforce 
represented by labor unions in over 1,800 bargaining units, agencies 
also needed to satisfy any applicable collective bargaining obligations 
with unions prior to implementation of the new final OPM regulation and 
related agency policy which conforms to the OPM regulation.

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

    The regulations at subpart H of 5 CFR part 315 provide information 
regarding agency action during a probationary period. The November 2020 
amendment required agencies to notify supervisors, at least three 
months prior to expiration of the probationary period, that an 
employee's probationary period is ending, and then again one month 
prior to expiration of the probationary period, and to advise a 
supervisor to make an affirmative decision regarding the employee's 
fitness for continued employment or otherwise take appropriate action. 
Under its authority at 5 U.S.C. 3321, OPM proposed to rescind its 
November 16, 2020,

[[Page 67768]]

amendment to regulations at Sec.  315.803(a) for two reasons. First, 
E.O. 14003 directs OPM to rescind any regulations effectuated by E.O. 
13839, as appropriate and consistent with applicable law. Second, OPM 
has concluded that the amendment to the regulations at Sec.  
315.803(a), although useful to some agencies that may not have used the 
probationary period to full effect, placed unnecessarily restrictive 
procedural requirements on agencies regarding how agencies administer 
the probationary period. OPM has reconsidered the wisdom of a 
categorical, centralized rule, and has concluded that it is more 
efficacious and eminently reasonable to rescind this provision so that 
agencies feel free to adopt any procedures that work best for them for 
reminding supervisors not to overlook the expiration of employee 
probationary periods.
    Some national unions supported OPM's proposed rescission of the 
probationary period expiration notice requirements with one national 
union describing the current requirements as being ``unnecessary''. 
This national union expounded that these requirements sent the wrong 
message ``that termination should be at the forefront of a supervisor's 
mind.'' Further, this commenter expressed hope that OPM's proposed 
change will reinforce to agencies that supervisors should instead be 
focused on helping probationary employees succeed. Another national 
union commented that OPM is correct to amend this provision. However, 
this national union mischaracterized the change by stating that OPM is 
``eliminating the language requiring an affirmative supervisory 
determination prior to the expiration of the probationary period''. The 
former regulation merely provided for specific points during an 
employee's probationary period (i.e., three months and one month) at 
which agencies must give advance notice to supervisors of expiration of 
probationary periods.
    This commenter further asserted that the current regulation created 
the incorrect impression that an employee must receive an affirmative 
supervisory determination to successfully complete the probationary 
period. This national union added that the probationary period for 
Federal civilian employees, however, is controlled by statute and 
contains no such requirement.
    While OPM recognizes one national union's support of the rescission 
of the November 2020 probationary period amendments, OPM notes that it 
is incorrect to interpret the proposed rule at Sec.  315.803(a) as 
instructing agencies to focus on ``helping probationary employees 
succeed'' during the probationary period rather than termination. The 
probationary period is the final step in the examination process. Thus, 
probationers are candidates for final appointment, and, accordingly, 
the focus of supervisors should be to assess probationers to determine 
whether they should be retained beyond the probationary period. At 
most, the November 2020 regulatory amendment reminded supervisors of 
their responsibility to make an affirmative decision and not allow a 
probationer to become a career employee merely by default; it did not 
alter the decision-making process nor did it in any way alter the 
regulatory structure currently in place that governs the decision-
making process for probationers.
    Another commenter recommended changing the language ``The agency 
shall utilize the probationary period as fully as possible'' to the 
language ``The agency shall utilize the probationary period fully'' in 
the first sentence of Sec.  315.803(a).
    We are not adopting this recommendation because the proposed 
regulatory language better emphasizes that an agency must utilize the 
probationary period to the maximum extent based on the particular facts 
and circumstances, recognizing that the probationary period is the last 
and crucial step in the examination process. Supervisors must determine 
the employee's fitness for continued employment; this can be assessed 
in several ways, including but not limited to, closely monitoring and 
documenting the employee's performance and progress during the 
employee's first year of employment and providing timely and meaningful 
feedback to the employee; providing training that would enable the 
employee to more successfully perform the duties of the position; and 
placing the employee on a performance improvement plan as appropriate.
    Despite some support for the proposed rule, OPM received comments 
from those who expressed opposition and concern. One organization 
expressed that the probationary period has not been effectively used 
and supported the requirement to notify management at the 90-day point. 
This commenter was perplexed by the rescission of the requirement to 
notify management at the 90-day point of an employee's probationary 
period which they viewed as an ``innocuous notice.'' The organization 
stated that they understood the rescission was required by E.O. 14003 
and appreciated that OPM continues to encourage agencies to provide 
managers with notifications when probationary periods are expiring.
    Two management associations also strongly opposed OPM's proposal to 
rescind the requirements at Sec.  315.803(a). In the management 
associations' view, ``[t]his issue is too important to leave up to 
agencies, who have proven themselves incapable of self- regulation and 
proper use of the probationary period.'' The management associations 
stated that probationary periods are a critical tool for effective 
employee onboarding. These commenters discussed ``countless reports'' 
from the MSPB and Government Accountability Office (GAO) that highlight 
the ``government's inconsistent and poor use of the probationary period 
for new hires and for new supervisors.'' These management associations 
also asserted that a core finding of those reports is that managers do 
not properly use the probationary period because managers are not 
reminded when an employee's probationary period is reaching its 
conclusion. They contended that when the probationary period ends, 
employees are automatically deemed fit for service. These commenters 
further maintained that the probationary period ``is meant to be the 
last crucial step in the examination process, yet instead, it is 
largely obsolete and formalistic.'' The management associations stated 
that to improve the practical usefulness of probationary periods, 
agencies need to create systems for providing many advance notices that 
an employee's probationary period is concluding and require supervisors 
to make an affirmative determination regarding the employee's 
completion of their probationary period. The commenters declared that 
when the probationary period is not used appropriately then employees 
are not ``set up for success and may be entrenched in roles they cannot 
perform.'' One association opined that determinations regarding 
probationary periods should be made by permanent managers while another 
association stated that it is imperative that agencies make appropriate 
use of the probationary periods for not only new hires, but also for 
new supervisors and executives.
    OPM will not make any revisions based on these comments. As stated 
earlier, E.O. 14003 directs OPM to rescind any regulations effectuated 
by E.O. 13839, as appropriate and consistent with applicable law. OPM 
has concluded that the amendment to the regulations at Sec.  315.803(a) 
placed centralized categorical procedural requirements on how agencies 
administer the probationary period. OPM believes these requirements

[[Page 67769]]

prevented agencies from implementing policies most suitable for each 
respective agency based on their unique circumstances. While agencies 
are encouraged to notify supervisors that an employee's probationary 
period is ending, OPM believes the frequency and timing of 
notifications should be left up to the discretion of each agency. The 
commenters noted the critical nature of the probationary periods, and 
OPM guidance has stated previously that the probationary period is the 
last and crucial step in the examination process. The probationary 
period is intended to give the agency an opportunity to assess, on the 
job, an employee's overall fitness and qualifications for continued 
employment and permit the termination without chapter 75 procedures of 
an employee whose performance or conduct does not meet acceptable 
standards to deliver on the mission. Thus, it provides an opportunity 
for supervisors to address problems expeditiously, with minimum burden 
to the agency, and avoid long-term problems inhibiting effective 
service to the American people. Employees may be terminated from 
employment during the probationary period for reasons including 
demonstrated inability to perform the duties of the position, lack of 
cooperativeness, or other unacceptable conduct or poor performance. As 
a matter of good administration, agencies should ensure that their 
practices make effective use of the probationary period. While OPM 
proposed to rescind a government-wide requirement to notify supervisors 
at prescribed intervals when an employee's probationary period is 
ending, agencies would not be precluded from providing such 
notifications under their own authorities and are strongly encouraged 
to do so. OPM plans to issue a Chief Human Capital Officers (CHCO) 
Memorandum to encourage agencies to adopt a notification process.

5 CFR Part 432--Performance-Based Reduction in Grade and Removal 
Actions

Section 432.102 Coverage

    Section 432.102 identifies actions and employees covered by this 
part. The final rule at Sec.  432.102 updates coverage to align with 
the National Defense Authorization Act (NDAA) for Fiscal Year 2017, 
Public Law 114-328 (Dec. 23, 2016). Specifically, section 512(a)(1)(C) 
of the 2017 NDAA provides appeal rights under 5 U.S.C. 7511, 7512, and 
7513 to dual status National Guard technicians for certain adverse 
actions. Section 512(c) repealed 5 U.S.C. 7511(b)(5), which excluded 
National Guard technicians from the definition of ``employee.''
    The repeal of 5 U.S.C. 7511(b)(5) and the coverage of National 
Guard technicians under 5 U.S.C. 7511, 7512, and 7513 required that OPM 
review 5 U.S.C. 4303. Section 4303(e) provides that any employee who is 
a preference eligible, in the competitive service, or in the excepted 
service and covered by subchapter II of chapter 75, and who has been 
reduced in grade or removed under this section is entitled to appeal 
the action to the MSPB under section 7701.
    Accordingly, MSPB appeal rights must be extended to National Guard 
technicians who are defined in section 4303(e) for consistency with the 
statutory requirements in Public Law 114-328. OPM will revise 
paragraphs (b) and (f) of Sec.  432.102 to reflect that certain 
performance-based actions against dual status National Guard 
technicians are no longer excluded. Specifically, the final rule adds 
as an exclusion an action against a technician in the National Guard 
concerning any activity under section 709(f)(4) of title 32, United 
States Code, except as provided by section 709(f)(5) of title 32, 
United States Code. In addition, the final rule removes the exclusion 
at Sec.  432.102(f)(12): ``A technician in the National Guard described 
in 5 U.S.C. 8337(h)(1), employed under section 709(b) of title 32.'' 
The impact of the repeal of 5 U.S.C. 7511(b)(5) on adverse actions 
taken under chapter 75 will be further discussed below in the 
Supplementary Information for Sec.  752.401.
    Two organizations, one concurring with the other's comment 
submissions, expressed support for the extension of civil service 
protections to National Guard technicians under Public Law 114-328 as 
well as support for OPM's inclusion of an implementing regulation for 
that statute in this rule.

Section 432.104 Addressing Unacceptable Performance

    This section provides requirements in chapter 43 of title 5 of the 
United States Code for addressing unacceptable performance. While the 
regulatory amendments to part 432 made effective November 16, 2020, are 
within OPM's existing authority under 5 U.S.C. 4303 and 4305, E.O. 
13839 was the catalyst for the changes. OPM proposed to amend the 
regulation at Sec.  432.104 to remove the following language: ``The 
requirement described in 5 U.S.C. 4302(c)(5) refers only to that formal 
assistance provided during the period wherein an employee is provided 
with an opportunity to demonstrate acceptable performance, as 
referenced in 5 U.S.C. 4302(c)(6). The nature of assistance provided is 
in the sole and exclusive discretion of the agency. No additional 
performance assistance period or similar informal period shall be 
provided prior to or in addition to the opportunity period provided 
under this section.'' In addition, OPM will re-insert at Sec.  432.104 
a statement that was in the regulation prior to the November 2020 
amendment: ``As part of the employee's opportunity to demonstrate 
acceptable performance, the agency shall offer assistance to the 
employee in improving unacceptable performance.''
    Some national unions expressed support for OPM's proposed changes 
to Sec.  432.104. One union stated that OPM's November 2020 regulatory 
changes limited the types of assistance and opportunities that agencies 
could offer to employees to help them demonstrate acceptable 
performance. The union added, ``Employees deserve a full and fair 
opportunity to improve their performance with assistance from their 
employer.'' Moreover, this national union stated agencies should have 
the needed flexibility to help employees improve their performance to 
an acceptable level. One of these national unions offered comments of 
support on sections Sec. Sec.  432.104 and 432.105 which were identical 
to each other and are addressed in Sec.  432.105.
    Indeed, this rule reverts to the language in Sec.  432.104 prior to 
the November 2020 amendments regarding the agency's obligation to 
provide assistance to an employee who has demonstrated unacceptable 
performance. The language restates the statutory requirement described 
in 5 U.S.C. 4302(c)(5) that agencies are obligated to provide 
performance assistance during the opportunity period. In the proposed 
rule, OPM emphasized that the employee has a right to a reasonable 
opportunity to improve, which includes assistance from the agency in 
improving unacceptable performance.
    Though two organizations expressed general support for this 
rulemaking, they mischaracterized OPM's November 2020 rulemaking. One 
organization, with which the other concurred, erroneously referred to 
``rules which set fixed durations for Performance Improvement Periods 
(PIPs)'' and stated that such rules ``resulted in arbitrarily 
inflexible PIP timeframes rather than the prior tailoring of PIPs to 
the nature of the work involved''. The organizations credit OPM with 
restoring agencies' discretion in these matters. OPM points out that 
there was no restriction on the duration of PIPs or tailoring of PIPs 
to

[[Page 67770]]

the nature of the work involved in our prior rulemaking. Specifically, 
OPM did not amend the language in Sec.  432.104 that reads, ``For each 
critical element in which the employee's performance is unacceptable, 
the agency shall afford the employee a reasonable opportunity to 
demonstrate acceptable performance, commensurate with the duties and 
responsibilities of the employee's position.''
    Two management associations disagreed with OPM's proposal to amend 
Sec.  432.104. The management associations expressed concern that the 
proposed revisions to Sec.  432.104 would rescind OPM's prior 
regulation governing the process for addressing unacceptable 
performance. The organizations asserted, ``OPM's proposed regulation 
would return performance management to allow for additional processes 
not provided for in the plain language reading'' of 5 U.S.C. 4302 and 
4303, which the organizations also described as ``extra-statutory 
protections'' which would be ``at the expense of taxpayer 
accountability at a time when public trust in government remains 
dangerously low, regardless of political ideology.'' The organizations 
stated that research indicates only about one-quarter of Americans say 
they can trust the government in Washington to do what is right ``just 
about always'' (2%) or ``most of the time'' (22%) and that public 
distrust is deepened each time administrative agencies impose 
additional burdens on a supervisor's capacity to hold employees 
accountable. One of the associations shared that its ``members are 
effectively unable to remove an employee for unacceptable performance. 
Instead, they find themselves hoping to identify misconduct because 
they know those cases are easier to adjudicate and have a clear path to 
removal.'' Both associations stated that employee protections are 
critical to the merit system, and the ``imposition of excessive hurdles 
to successful employee performance management frustrates the effective 
functioning of our government and is not in the public interest.'' In 
further criticism, one of these commenters added that this 
``imposition'' also ``discourages well-qualified candidates from 
joining leadership's ranks.''
    OPM disagrees with the associations' characterization that the 
rescission of the November 2020 changes to Sec.  432.104 allows for 
extra-statutory protections at the expense of taxpayer accountability. 
OPM reiterates that agencies should take swift action to address and 
resolve poor performance, including by communicating clear performance 
standards and expectations to employees; providing periodic feedback on 
performance; making full use of the probationary period for employees; 
and maintaining effective lines of communication with a well-trained 
human resources staff and agency legal counsel. We believe that 
agencies can deliver on their mission and uphold public trust and at 
the same time provide employees assistance and a reasonable opportunity 
to demonstrate acceptable performance through efficient and effective 
use of chapter 43 and amended Sec.  432.104.
    A commenter recommended that OPM edit Sec.  432.104 to read, ``For 
each critical element in which the employee's performance is 
unacceptable, the agency shall afford the employee 120 days to 
demonstrate acceptable performance, commensurate with the duties and 
responsibilities of the employee's position. There's only one year in 
the evaluation period.'' OPM disagrees with the commenter's suggested 
changes to the current regulation. First, OPM is opposed to prescribing 
an opportunity period of any specific length. We note that Sec.  
432.104 requires the agency to ``afford the employee a reasonable 
opportunity to demonstrate acceptable performance, commensurate with 
the duties and responsibilities of the employee's position.'' OPM 
believes the supervisor is in the best position to determine the length 
of the opportunity to demonstrate acceptable performance. The duration 
of the opportunity period should be left to the discretion of each 
agency, to include consultation with human resources staff and any 
applicable collective-bargaining agreement.
    Second, it is unclear why the commenter suggested insertion of the 
sentence ``There's only one year in the evaluation period.'' OPM will 
not adopt the suggestion because it is unnecessary and contrary to 
OPM's performance management regulations in 5 CFR part 430. The length 
of a covered agency's appraisal period must be established in 
accordance with Sec.  430.206 of title 5, Code of Federal Regulations, 
which states, ``The appraisal period generally shall be 12 months so 
that employees are provided a rating of record on an annual basis. A 
program's appraisal period may be longer when work assignments and 
responsibilities so warrant or performance management objectives can be 
achieved more effectively.'' The length of the appraisal period does 
not determine the length of the opportunity period.
    A commenter disagreed with OPM's proposal to amend Sec.  432.104, 
and in particular, OPM's rationale for the change. With regard to the 
statement ``[w]hile the regulatory amendments to part 432 made 
effective November 16, 2020, are within OPM's existing authority under 
5 U.S.C. 4303 and 4305 . . . .'', the commenter asked if the current 
language is within the existing authority, why does it need to be 
changed. Moreover, the commenter explained, ``The current language does 
not place any unnecessary restrictions or limitations on agencies 
regarding their decision on providing assistance, it provides clear 
guidance on what the agency is responsible for in addressing 
performance issues.''
    We disagree with this comment. Although the current language for 
regulatory amendments to part 432 made effective November 16, 2020, is 
within OPM's existing authority under 5 U.S.C. 4303 and 4305, the 
proposed changes also are a reasonable interpretation of the statute 
and within OPM's authority. The provision is being removed from part 
432 through the required regulatory process. In addition, as we 
explained in the proposed rule, E.O. 13839 was the catalyst for the 
changes made effective on November 16, 2020. E.O. 14003, among other 
things, revoked E.O. 13839 and directed agencies to ``as soon as 
practicable, suspend, revise, or rescind, or publish for notice and 
comment proposed rules suspending, revising, or rescinding, the 
actions'' implementing various Executive Orders, including E.O. 13839, 
``as appropriate and consistent with applicable law.'' OPM did not 
require an Executive Order to effect this change.
    As discussed in the proposed rule, OPM believes that the November 
2020 amendments placed restrictions and limitations on agencies 
regarding decisions on when performance assistance is provided to 
employees that, upon further consideration, were unhelpful. These 
constraints removed previous flexibilities enjoyed by agencies in 
addressing performance issues with their employees under chapter 43. By 
placing these restrictions on agencies, OPM believes it was not 
supporting agencies and supervisors in determining the most effective 
assistance for struggling employees.

Section 432.105 Proposing and Taking Action Based on Unacceptable 
Performance

    This section specifies the procedures for proposing and taking 
action based on unacceptable performance once an employee has been 
afforded an opportunity to demonstrate acceptable performance. The 
regulatory amendments to Sec.  432.105(a)(1) that became effective 
November 16, 2020,

[[Page 67771]]

were made for consistency with and promotion of the principles of E.O. 
13839 within the bounds of OPM's regulatory authority conferred by 
Congress. For consistency with and promotion of the principles of E.O. 
14003 and in accordance with its authority under 5 U.S.C. 4302, OPM 
proposed to revise the regulation at Sec.  432.105(a)(1).
    The regulatory change to Sec.  432.105(a)(1) removes the language: 
``For the purposes of this section, the agency's obligation to provide 
assistance, under 5 U.S.C. 4302(c)(5), may be discharged through 
measures, such as supervisory assistance, taken prior to the beginning 
of the opportunity period in addition to measures taken during the 
opportunity period. The agency must take at least some measures to 
provide assistance during the opportunity period in order to both 
comply with section 4302(c)(5) and provide an opportunity to 
demonstrate acceptable performance under 4302(c)(6).''
    OPM believes that the November 2020 amendment to the regulations at 
Sec.  432.105(a)(1) placed too much emphasis on supervisory assistance 
taken prior to the beginning of the opportunity period and placed too 
little emphasis on supervisory assistance taken during the opportunity 
period and could result in some agencies relying too much on 
supervisory assistance outside of the opportunity period to support any 
performance-based action taken against an employee. Two national unions 
support OPM's proposal to rescind the language in 5 CFR 432.105(a)(1) 
that pertains to assistance offered to employees prior to and during an 
opportunity period. One of these national unions agreed with OPM that 
the November 2020 amendments placed too much emphasis on agencies 
providing assistance before the opportunity period and not enough 
emphasis on assistance given during the opportunity period. Similarly, 
another national union stated that OPM is correctly concerned that the 
regulatory language could result in agencies relying too much on 
supervisory assistance offered outside of the opportunity period to 
support a performance-based action against an employee. The union 
stated also, ``Employees are entitled to supervisory assistance and a 
meaningful opportunity to improve, and help offered both prior to and 
during the opportunity period will aid in achieving this.'' (emphasis 
in original)
    After agreeing with OPM's rationale for the decision, a national 
union erroneously asserted that the prior regulatory changes were 
inconsistent with the language and intent of the Civil Service Reform 
Act (CSRA) ``because they failed to ensure that employees were provided 
with a reasonable opportunity to improve during the performance 
improvement period, which is a `substantive guarantee[ ] and may not be 
diminished by regulation.' '' In support of this statement, the union 
cited Sandland v. General Services Admin., 23 M.S.P.R. 583, 589 (1984). 
The union added that rescission of the prior amendments to Sec. Sec.  
432.104 and 432.105 will better enable agencies to effectively utilize 
the Federal workforce by requiring and encouraging agencies to provide 
employees with meaningful opportunities to improve. OPM believes the 
union is in error because the prior regulatory changes were not 
contrary to the language and intent of the CSRA. The changes did not 
inhibit an agency's ability to ensure that employees were provided with 
a reasonable opportunity to improve during the performance improvement 
period.
    A commenter recommended that OPM edit Sec.  432.105(a)(1) to insert 
``120 days'' as the duration of the opportunity to demonstrate 
acceptable performance. The commenter made a similar suggestion to edit 
Sec.  432.104 to require a 120-day opportunity period. As explained 
above under Sec.  432.104, OPM will not prescribe an opportunity period 
of any length. The supervisor is in the best position to determine the 
length of the opportunity to demonstrate acceptable performance. OPM 
believes the duration of the opportunity period should be left to the 
discretion of each agency, to include consultation with human resources 
staff and any applicable provision of a collective-bargaining 
agreement.
    Regardless of the length of the opportunity period, OPM reminds 
agencies that they must provide assistance during the opportunity 
period in accordance with 5 U.S.C. 4302(c)(5). OPM has long encouraged 
agencies to act promptly to address performance concerns as soon as 
they arise. Supervisors should continually monitor performance, provide 
ongoing feedback, and assist employees who exhibit performance issues. 
Agencies should also remain mindful that third parties (for example, 
arbitrators and judges) place a strong emphasis on a supervisor's 
effort to assist the employee in improving the employee's performance. 
Evidence that the supervisor engaged an employee in discussion, 
counseling, training, or the like prior to the opportunity period may 
assist the agency in developing a stronger case before a third party 
that the employee was given a reasonable opportunity to demonstrate 
acceptable performance before a performance-based action is taken.
    Several commenters noted disagreement with OPM's inclusion in the 
supplementary information of a discussion of Santos v. National 
Aeronautics and Space Admin., 990 F.3d 1355 (Fed. Cir. 2021). In 
particular, commenters stated that inclusion was unnecessary for the 
purposes of this regulation and that the Santos court relied on 
statutory language and not on OPM's interpretation in reaching its 
conclusion. In Santos, the court remarked on OPM's statement in prior 
supplementary information, and OPM's discussion of Santos was for the 
sole purpose of clarifying the meaning of that prior supplementary 
information. OPM's reference to Santos did not concern the proposed 
regulation. Accordingly, OPM is not making any changes to the proposed 
regulation in response to these comments. OPM further recognizes that, 
until and unless Santos is revisited, agencies proposing a removal 
under 5 U.S.C. 4302(c)(6) must establish that the employee performed 
unacceptably both prior to and during the performance improvement 
period.
    In addition, Sec.  432.105 addresses notice requirements when an 
agency proposes to take action based on an employee's unacceptable 
performance during or after the opportunity period once the employee 
has been afforded an opportunity to demonstrate acceptable performance. 
An agency must afford the employee a 30-day advance notice of the 
proposed action that identifies both the specific instances of 
unacceptable performance by the employee on which the proposed action 
is based and the critical element(s) of the employee's position 
involved in each instance of unacceptable performance. An agency may 
extend this advance notice period for a period not to exceed 30 days 
under regulations prescribed by the head of the agency. For the reasons 
listed in Sec.  432.105(a)(4)(i)(B), an agency may further extend this 
advance notice period without OPM approval.
    OPM proposed to revise the reason at Sec.  432.105(a)(4)(i)(B)(6), 
which was derived from 5 U.S.C. 1208(b), because the statutory 
provision was repealed by section 3(a)(8) of Public Law 101-12, the 
Whistleblower Protection Act (WPA) of 1989. Section 1208(b) granted 
agencies the authority to extend the advance notice period for a 
performance-based action in order to comply with a stay ordered by a 
member of the MSPB. Concurrent with the repeal of 5 U.S.C. 1208(b), the 
WPA established 5 U.S.C. 1214(b)(1)(A)(i),

[[Page 67772]]

wherein the Office of Special Counsel is granted the authority to 
request any member of the Board to order a stay of any personnel action 
for 45 days if the Special Counsel determines that there are reasonable 
grounds to believe that the personnel action was taken, or is to be 
taken, as a result of a prohibited personnel practice. Further, under 5 
U.S.C. 1214(b)(1)(B), the Board may extend the period of any stay 
granted under subparagraph (A) for any period which the Board considers 
appropriate. If the Board lacks a quorum, any remaining member of the 
Board may, upon request by the Special Counsel, extend the period of 
any stay granted under subparagraph (A). Therefore, OPM proposed to 
change the reason at subparagraph (B)(6) to read as follows: ``[t]o 
comply with a stay ordered by a member of the MSPB under 5 U.S.C. 
1214(b)(1)(A) or (B).'' A national union supports this change.

Section 432.108 Settlement Agreement

    Section 5 of E.O. 13839 established a requirement that an agency 
shall not agree to erase, remove, alter, or withhold from another 
agency any information about a civilian employee's performance or 
conduct in that employee's official personnel records, including an 
employee's Official Personnel Folder and Employee Performance File, as 
part of, or as a condition to, resolving a formal or informal complaint 
by the employee or settling an administrative challenge to an adverse 
personnel action. Such agreements have traditionally been referred to 
as ``clean-record'' agreements. Consistent with the rescission of E.O. 
13839 and pursuant to its authorities under 5 U.S.C. 2951 to maintain 
personnel records and under 5 U.S.C. 1103(a)(5) to execute, administer, 
and enforce the law governing the civil service, OPM proposed to 
rescind Sec.  432.108, Settlement agreements. OPM's proposal to rescind 
the current regulations for settlement agreements applies to actions 
taken under parts 432 and 752. All comments related to settlement 
agreements are addressed here in the Supplementary Information for the 
change at Sec.  432.108, where the change appears first.
    Three national unions, a local union, an organization, and five 
individual commenters expressed explicit support for OPM's proposal to 
rescind the settlement agreement provisions in 5 CFR parts 432 and 752. 
One of the national unions stated that settlements are less costly and 
burdensome than litigation or arbitration, and it is in employees' as 
well as management's interest to encourage resolution of employment 
disputes through settlement. The national union described a clean-
record agreement as a reasonable and frequently used tool that agencies 
and employees should have. One particular benefit this union 
highlighted is the removal of the November 2020 regulations that allow 
an agency to cancel or vacate a personnel action when persuasive 
evidence casts doubt on the validity of the action. The union labeled 
this standard as confusing and said that it appears to wrongly place 
the burden of proof on the employee facing the action. This union 
welcomed OPM's proposed rescission of this language.
    The second national union stated that removal of the regulatory 
provisions barring clean record settlements will lead to more efficient 
government administration while also promoting fairness and the 
effective resolution of employment disputes. This union added that the 
prior regulations created a substantial amount of unnecessary and 
wasteful litigation. Moreover, this union stated that the proposed 
changes will reduce the likelihood of ``arbitrary and capricious'' 
agency action by removing the incentive for agencies to unilaterally 
modify an employee's personnel record to avoid litigation.
    The third national union voiced overall support for the rescission, 
though they objected to a related statement in the proposed rule that 
is discussed below along with other commenters who expressed a similar 
concern. Furthermore, a local union described clean-record agreements 
as an effective labor-management relations tool that benefits workers, 
management, and taxpayers. This local union added that agency and union 
officials at the lowest levels know how best to resolve issues and 
should have maximum flexibility to do so.
    An organization also stated that the prohibition on clean-record 
agreements is harmful to employees and employers because it removes a 
valid and useful tool that promotes productive settlement of employment 
disputes. This organization shared that it has experience with several 
settlements that it reached on behalf of clients that were possible 
``only because of the availability of clean record terms.'' 
Additionally, this organization expressed particular concern for public 
employees who engage in protected whistleblower activity, stating that 
they are often retaliated against with unfounded or exaggerated claims 
of poor performance or misconduct and unwarranted disciplinary actions. 
The organization stated further that the existing rule prevents 
agencies from correcting personnel records that employees allege 
contain false and retaliatory material. The organization also observed 
that in order to avoid lengthy and costly litigation over the accuracy 
and validity of matters reflected in the personnel record, the employee 
and the agency often wish to adopt a clean record as part of a 
settlement. This organization believes this rulemaking ``would 
reestablish a workable standard where agencies and employees can 
negotiate in good faith to provide employees with clean record 
settlements that do not obstruct future employment within or outside 
the federal government.'' Finally, the organization believes this 
rulemaking will conserve agency resources that otherwise would be used 
in protracted litigation and will make it more possible for employees 
who engaged in protected activity to move on after retaliation by 
former supervisors.
    Another commenter discussed ``first-hand knowledge'' that 
regardless of the type or severity of the matter in dispute, or the 
organizational levels of the relevant parties, the prohibition on 
clean-record agreements has adversely impacted agency mission 
accomplishment and degraded the employees' well-being. The commenter 
stated that the prohibition has severely limited opportunities for 
agencies to efficiently and cost-effectively manage employee disputes 
at the lowest possible level in that settlement officials have few, if 
any, alternatives to taxpayer-funded monetary remedies and, 
consequently, have little incentive to resolve conflict early. The 
commenter represented that removing this overly broad restriction is 
greatly appreciated by all in the dispute resolution field, and will 
have significant, measurable positive outcomes throughout the Federal 
Government.
    Several of the supportive commenters observed that the prohibition 
on clean-record agreements impacted settlement of employment 
discrimination or Equal Employment Opportunity (EEO) matters. OPM notes 
that for the purpose of this rule the settlement agreements addressed 
are those arising from agency actions covered by chapter 43 and chapter 
75. One commenter stated that clean-record provisions have made it 
``extraordinarily more difficult'' for employment law practitioners and 
employees to reasonably resolve matters they believe to be unjust 
without resorting to clogging the already taxed MSPB or Equal 
Employment Opportunity Commission systems. The commenter observed, 
``Many matters could have been resolved with, for example[,] a simple 
restoration of leave

[[Page 67773]]

and removal of so-called bad paper or coding a termination as a 
resignation.'' Moreover, the commenter added that considerations ``such 
as job references and the interview process in general may serve to 
root out employees who should not be re-hired as government employees 
without tying the hands of those who are having [to] endure unnecessary 
litigation.''
    Another supportive commenter stated that the courts are currently 
overwhelmed with employment discrimination cases, many of which could 
be resolved with a clean-record agreement. The commenter continued that 
it is costly and inefficient and results in unnecessary court 
congestion, unfair expense to employees and the agency, and backlogs 
cases affecting all subsequent cases. The commenter opined that if it 
takes a court order to remove a record, it should have taken a court 
order to place the record. The commenter asked, ``Why should the 
standard be higher to remove the record than to place the record in the 
first place?'' The commenter added that if the agency has discretion to 
put the record into official personnel files, the agency should have 
the discretion to remove them.
    Yet another commenter stated that in representing several employees 
in Equal Employment Opportunity (EEO) complaints the ban on clean-
record agreements has created incredible harm to many parties, but most 
of all to EEO complainants. The commenter remarked that the prohibition 
resulted in ``a huge waste of time'' in litigation which usually takes 
years when the employee just urgently needs to move on. Further, the 
commenter claimed that a few agency attorneys and judges confided 
privately about the waste of time and backlog. The commenter observed 
that all parties simply would have preferred to move on with little 
interest in litigation.
    OPM recognizes the commenters' support for rescission of the clean-
record provisions in Sec. Sec.  432.108, 752.104, 752.203(h), 752.407, 
and 752.607.
    Three management associations and four individuals disagreed with 
OPM's proposal to rescind the settlement agreement provisions. One 
management association described the prohibition on clean-record 
agreements as one of the most valuable parts of the rule that took 
effect in November 2020. This management association stated that some 
of its members were ``victims'' of clean-record settlements and ``lied 
to by previous supervisors because the agreement had a confidentiality 
clause.'' The management association said this is a practice that 
should be eliminated from the civil service. While another commenter 
discussed seeing clean-record agreements typically accompanied by 
``muzzling supervisors and directing personnel to withhold or destroy 
information.'' This commenter recommended that OPM explicitly prohibit 
clean-record agreements in the regulation.
    We believe that clean-record agreements should be an option for 
agencies to resolve informal and formal complaints when the agency 
deems it is in the best interests of effective and efficient management 
to achieve the agency's mission. OPM believes that alleged anecdotal 
instances of misuse of the discretion to use clean-record agreements 
should not deprive agencies of the option to use clean-record 
agreements to resolve informal and formal complaints and settle 
administrative challenges in a manner that balances the needs of the 
agency and fairness to the employee. In regard to the commenter's 
assertions that supervisors are silenced and personnel are directed to 
withhold or destroy information, we note that merit system principles 
require that Federal employees should maintain high standards of 
integrity, conduct, and concern for the public interest. After a 
settlement agreement is reached, the agency should properly advise 
supervisors on how to adhere to its terms regarding permitted 
disclosures and records management. As noted by supportive commenters, 
there are many disadvantages to prohibiting clean-record agreements: 
reduced likelihood of parties reaching a mutually agreeable resolution 
of informal or formal complaints; increase of costly litigation and 
arbitration; and crowding of the dockets of third-party investigators, 
mediators, and adjudicators. Cases languishing impact the agency's 
credibility, supervisor morale, and efficient execution of the agency's 
mission. OPM's own conclusions as well as the feedback from 
stakeholders weigh in favor of rescission.
    Some commenters asserted that clean-record settlements are wasteful 
of taxpayer dollars while another commenter stated it was unlawful and 
an additional commenter posited that this provision should be 
withdrawn. Some management associations opined that the American 
taxpayer is entitled to an accurate recording of an employee's 
performance. One management association asserted that taxpayers should 
not suffer the results of employees committing the same offenses 
repeatedly across government while another management association 
stated that taxpayers should not endure the consequences of inadequate 
employee job performance or employees committing the same offenses time 
and again across government. Both management associations contended 
that ``flexibility should not be the code word for diminished 
accountability.''
    One commenter posited that ``arbitrary'' rule changes cause undue 
hardship and waste taxpayer dollars by paying employees who need to be 
removed and are not. Similarly, another commenter stated that clean-
record agreements ``perpetuate[] that sense of entitlement that some 
Federal employee[s] have, that the Federal Government somehow owes 
them''. This commenter asserted that this is offensive to the American 
taxpayer and unfair to Federal employees who adhere to the rules and do 
their job. The commenter requested that OPM withdraw the proposal to 
rescind the clean-record provisions. Finally, an individual stated that 
removal of the clean-record rule is unlawful.
    OPM disagrees with the commenters. The purpose of the prohibition 
rescission is to remove a provision that hampers agencies' ability to 
resolve workplace disputes at an early stage and with minimal costs to 
the agency when appropriate. Rather than adverse consequences for 
taxpayers, the numerous benefits of clean-record settlements have been 
detailed by agencies and stakeholders as providing greater efficiency 
and effectiveness. These significant advantages include minimizing the 
burden of the substantial cost of litigation in relation to the issues 
at stake and achieving a result that benefits agencies and taxpayers. 
Further, this rule is not unlawful or arbitrary. E.O. 14003 requires 
that OPM rescind the prohibition, and OPM, pursuant to its authorities 
under 5 U.S.C. 2951 to maintain personnel records and under 5 U.S.C. 
1103(a)(5) to execute, administer, and enforce the law governing the 
civil service, has decided to rescind Sec. Sec.  432.108, 752.104, 
752.203(h), 752.407, and 752.607. We believe this rule will have a 
positive impact on the Federal Government's ability to accomplish its 
mission for the American taxpayers.
    Some commenters remarked that clean records prevent holding 
employees accountable for their performance and conduct. Among these 
commenters, a management association stated that we should all be 
striving to maintain high standards of integrity and accountability, 
not longevity and seniority at all costs. Another commenter expressed 
disagreement

[[Page 67774]]

with the proposed rule by stating that ``too many employees'' are not 
held accountable for issues that warrant discipline and ``it all just 
goes away.'' This commenter recommended, ``Do not change back to the 
way of hiding history of bad employees.'' Yet another individual 
related seeing clean records used as a tool to undermine the agency's 
decision to hold an employee accountable for their actions or lack 
thereof, basically rewarding an employee for their bad behavior or 
performance.
    OPM agrees that all members of the Federal Government should strive 
to maintain high standards and accountability. However, we disagree 
that clean-record agreements are inconsistent with accountability. In 
adhering to the principles of high standards of integrity and 
accountability, each agency decision as to whether and how to settle a 
case should be based on valid considerations, such as litigation risk. 
Further, OPM notes that the statutory and regulatory frameworks for 
addressing poor performance and misconduct and rewarding satisfactory 
or better performance remain intact. Effective utilization of the 
available tools and flexibilities will permit agencies to address poor 
performance and misconduct when they arise, consistent with the 
policies of E.O. 14003.
    Some management associations asserted that the proposed rescission 
overvalues the agencies' ``ability to resolve informal and formal 
complaints at an early stage and with minimal costs to the agency,'' 
while undervaluing the process provided by the merit system.
    OPM disagrees with these comments. Decisions to resolve informal 
and formal complaints at an early stage are at the discretion of the 
agency's authority. Thus, returning this firmly established discretion 
to agencies for resolving informal and formal complaints gives the 
proper value to agencies' authority in this area without imposed 
restrictions. Further, granting agencies a degree of flexibility to 
resolve individual workplace disputes does not undervalue the merit 
system process. Clean-record agreements provide agencies with an 
important tool and flexibility, consistent with the policies of E.O. 
14003.
    Commenters expressed that clean-record agreements have a negative 
impact on hiring practices. A management association asserted that 
clean-record settlements are a favored way to help their constituents 
get re-hired. Other management associations asserted that OPM 
emphasizes ``flexibility'' to resolve disputes, but in reality the 
proposed changes in this rule enable agencies to pass problematic 
employees between one another. In fact, a commenter stated that clean 
records result in a ``vicious cycle'' whereby the employee is allowed 
to pursue employment at another agency, where their behavior/
performance does not improve, and that agency bears the cost, time, and 
effort to hold the employee accountable. A management association added 
that failing to document a reason for removal leads directly to 
``dangerous situations for Federal workers who serve honorably and 
places managers in impossible situations.''
    OPM disagrees with these characterizations of rescinding this 
regulatory provision. We are simply rescinding a rigid regulation that, 
upon reflection and further consideration, we deem impracticable, 
unrealistic, and unhelpful because it absolutely prohibits agencies 
from altering or removing information about performance or misconduct 
as a condition to resolve or settle a complaint or challenge to a 
personnel action, even where doing so furthers the best interests of an 
effective and efficient Government and the interests, voluntarily 
expressed, of both parties to personnel litigation. OPM's rescission 
does not take a position on whether any particular case should be 
settled, and does not prohibit settlements, which through lessening a 
penalty or permitting resignation, may in certain circumstances lessen 
the risk of outright reversal with its high costs without benefit, or 
may otherwise adversely affect governmental interests.
    Some management associations stressed the importance of maintaining 
accurate official personnel records and stated that they are 
``extremely concerned by OPM's proposal to delete Sec.  432.108, 
752.104, 752.407, and 752.607''. They believe the proposed rule lacks 
the balance that existed in the regulations that were effective in 
November 2020 whereby OPM banned clean-record settlements but permitted 
an agency to correct errors, either unilaterally or pursuant to a 
settlement agreement, based on discovery of agency error or illegality. 
To further illustrate their views on the balance that currently exists, 
the management associations quoted OPM's November 2020 final rule, 
which stated that agencies are permitted to ``modify an employee's 
personnel file'' when persuasive evidence comes to light prior to the 
issuance of a final agency decision on adverse action ``casting doubt 
on the validity of the action or the ability of the agency to sustain 
the action in litigation''. These management associations assert that 
the record should reflect what is correct. Another commenter discussed 
seeing a large amount of destruction and altering of official personnel 
records, which the commenter described as ``fraudulent, unethical, and 
demoralizing to the workforce.'' This commenter asserted that there is 
no legitimate reason to alter an official record. The commenter 
believes that 5 CFR 432.108(a) correctly prohibits such dishonesty and 
should be left standing. Regarding correcting errors in records, the 
commenter offered that the proper approach is to add a statement to the 
existing record explaining why it is in error and updating it, thus 
maintaining the correct history of the record. The commenter asserted 
that this standard is ``the only way that ``agencies [c]ould still 
adhere to the principles of promoting high standards of integrity and 
accountability within the Federal workforce.'' The commenter stated 
that the corrective actions currently allowed in 5 CFR 432.108(b) and 
(c) are too open-ended and should be amended to require a correct 
historical record.
    OPM will not make any changes based on these comments. Agencies are 
still permitted to correct errors based on discovery of error or 
illegality, but there are other considerations at play, including 
evolving, unforeseen litigation risks, among others. Nor is OPM 
asserting a general and all-encompassing position that settlement of 
disputes or its opposite is to be commended or favored. Each matter is 
to stand on its own footing. Still less is OPM suggesting that agencies 
should lightly change personnel records, and certainly not in a way 
that undermines Government integrity. Agencies are expected to exercise 
good judgment in determining whether and how to settle a case after due 
consideration of all relevant factors, including litigation risk.
    We also disagree with the comment that there is ``no legitimate 
reason'' to alter an official record. Legitimate reasons include a 
cancellation or correction ordered by a third party or discovery of 
agency error, and such corrections do in fact promote integrity and 
ethical standards. Moreover, the purpose of paragraphs (b) and (c) that 
one commenter asks OPM to retain was to clarify for agencies that the 
prohibition on clean-record agreements did not preclude agencies from 
taking corrective action based on discovery of agency error or 
discovery of material information prior to final agency action. The 
removal of the prohibition on clean-record agreements means that the

[[Page 67775]]

clarifications for corrective action are no longer needed in parts 432 
and 752. These clarifications are rooted in statutes, regulations, and 
policies that are still applicable to Federal agencies, including 
agencies' obligation to maintain accurate personnel records in 
accordance with the Privacy Act, 5 CFR part 293, and OPM's Guide to 
Personnel Recordkeeping. Agencies continue to have the authority to 
modify an employee's personnel file or other agency files to remove 
inaccurate information or the record of an erroneous or illegal action.
    In further disagreement with the change in the clean-record 
agreement requirements, some management associations remarked, ``Even 
OPM's efficiency argument fails.'' They posited that OPM presented ``no 
data or evidence that agencies were impeded in their ability to 
adjudicate employee complaints and disputes'' and simply listened to 
recurring objections from agencies that were required to enforce the 
law and comply with procedures enacted by Congress and implemented 
through OPM regulation.
    OPM disagrees with the commenters' characterization that OPM's 
rulemaking requires data or evidence that agencies were adversely 
impacted in their ability to resolve employee complaints and disputes. 
OPM acknowledged in the Expected Impact section of the proposed rule, 
that OPM has virtually no data on the extent to which adverse actions 
were pursued under the regulations proposed for rescission here. As 
discussed above, agencies ``are free to change their existing policies 
as long as they provide a reasoned explanation for the change.'' See 
Encino Motorcars, LLC v. Navarro. Among other factors, OPM considered 
both opposing and supporting perspectives raised by stakeholders during 
the notice-and-comment period.
    For the reasons discussed above, OPM will rescind Sec. Sec.  
432.108, 752.104, 752.203(h), 752.407, and 752.607 in their entirety.
    While some commenters voiced overall support for rescission of this 
requirement, they opposed the provision related to the obligation to 
speak truthfully to Federal investigators performing background 
investigations. One national union, two organizations, and one 
individual objected to OPM's statement in the January 2022 proposed 
rule that, ``In addition, agencies are advised that, in any such 
[clean-record] agreement, they have an obligation to speak truthfully 
to Federal investigators performing future background investigations 
with respect to the employee and may not agree to withhold information 
about the circumstances of an individual's departure from the agency.''
    Though a national union expressed overall support for rescinding 
the prohibition on clean-record agreements, the union stated that the 
advice in question is vague and could give rise to potential breaches, 
particularly in settlements that contain ``no admission'' and 
confidentiality clauses. The union requested that OPM work with all 
Federal employee unions, and other stakeholders as appropriate, to 
develop a shared understanding of this section of the commentary and to 
advise agencies appropriately thereafter.
    We disagree. OPM believes the language in question is clear and 
consistent with what agencies have always been required to do regarding 
the need to speak truthfully to Federal investigators performing 
background investigations with respect to an employee covered by a 
settlement agreement. On any matters involving employees or former 
employees covered by a settlement agreement, agency officials should 
always consult with agency legal counsel before responding to inquiries 
about these individuals to avoid violating enforceable settlement 
agreements.
    One organization wrote that the statement concerning speaking 
truthfully to Federal investigators in the proposed rule is contrary to 
the President's policy in E.O. 14003 of rescinding restrictions on 
agencies' discretion to enter into clean-record settlements in disputed 
cases. The organization stated that its members have observed that 
agencies are often guilty of giving incomplete information to 
background investigators in a fashion skewed to denigrate targeted 
employees, selectively including information adverse to subject 
employees while materially omitting the employees' counterarguments (in 
particular, if the employee challenged agency actions against them as 
unlawful discrimination, unlawful EEO reprisal or whistleblower 
reprisal, etc.). The organization added that efficiency of the Federal 
service is not promoted by ``giving license to continuing retaliation 
through providing negatively skewed information to future employers; to 
the contrary, doing so represents further retaliatory action in 
violation of 5 U.S.C. 2302(b)(1, 8, 9, 10) and other statutes.'' The 
second organization concurred with this organization's comments.
    OPM's reminder to agencies concerning the need to be truthful to 
Federal investigators is in connection with background investigations. 
Accordingly, agencies may not agree to withhold information about an 
individual's departure from the agency. The requirement for agencies to 
be truthful applies also to suitability determinations and other 
inquiries related to vetting for personnel security. This reminder does 
not give license to retaliate. In fact, the requirement to be truthful 
to background investigators necessarily includes that the agency makes 
full disclosure of information provided by the employee. Full 
disclosure is inherent in speaking truthfully.
    A commenter wrote that it seems inconsistent to withhold agency 
discretion when it comes to divulging the particulars of clean-record 
separation agreements to future Federal employers. The commenter 
asserted that if the agency is mandated to ``adhere to the principles 
of promoting high standards of integrity and accountability within the 
Federal workforce,'' then it should be the agency's responsibility to 
balance that standard against the value of a conflict resolved. The 
commenter raised a concern that an investigator will likely be 
adversely influenced by the revelation of the particulars of a clean-
record agreement. The individual characterized this as a form of 
``backdoor'' retaliation that can have a ``chilling effect'' for 
employees. The commenter offered that a middle ground would be to 
permit agencies to include language that stipulates what will be 
divulged and what will not to any future Federal investigator. The 
commenter added that if this avenue is not widely used, it is a further 
negotiation point that will help parties reach resolution.
    While a different commenter also stated support for the rescission 
of the clean-record prohibition, this individual suggested that the 
final rule should clearly allow clean-record agreements to stipulate 
what will be divulged and what will not be divulged to any future 
Federal investigator. The commenter offered an example: ``if a 
settlement agreement, legally approved by a federal judge, calls for 
permanent and irrevocable removal of a specific personnel action, that 
action should never be represented by either party as ever having 
legitimately occurred.'' The commenter added that ``clean'' should 
truly mean ``clean'' to preserve and avoid undermining the integrity of 
such agreements.
    OPM will not adopt the suggestion that the final rule address any 
stipulation in clean-record agreements as to what will be divulged and 
what will not be divulged to any future Federal investigator. As stated 
earlier, agencies must provide truthful information about the 
circumstances of

[[Page 67776]]

an individual's departure from the agency during the course of 
investigations. These investigations include those conducted for the 
purpose of determining suitability or eligibility for sensitive 
national security positions. OPM will defer to agency officials, 
including agency counsel, with regard to negotiating the specific terms 
of settlement agreements necessary to enable the agency to fulfill any 
disclosure obligation based on the particular facts .
    Additionally, if an agency wishes to maintain an agency policy that 
prohibits clean-record agreements, the agency is reminded that E.O. 
14003 directs heads of affected agencies to, as soon as practicable, 
suspend, revise, or rescind actions arising from E.O. 13839. Given that 
E.O. 13839 was the sole reason for the clean-records prohibition and 
E.O. 13839 has been rescinded by E.O. 14003, it would be contrary to 
the spirit and intent of E.O. 14003 for an agency to broadly prohibit 
clean-record agreements. Instead, OPM strongly encourages each agency 
to make determinations about clean records on a case-by-case basis.
    A Federal agency expressed concern that the proposed rescission of 
the settlement agreement provisions competes with the agency's ability 
to comply with 5 CFR part 731.101 regarding suitability determinations; 
Security Executive Agent Directive 4, which requires a risk assessment 
to make an informed national security determination; and Trusted 
Workforce 2.0 fundamentals such as improving policies, procedures, and 
automation to streamline and enhance the government's posture against 
national security risks. The agency requested that OPM address the 
interplay of these parts of the CFR, and the potential impact that this 
change may have on the ability of agencies to make fully informed 
decisions relative to risk. Additionally, one commenter disagreed with 
OPM's rescission of the settlement agreement provision. This commenter 
asserted that the November 2020 amendments were intended to promote the 
highest standards of integrity and accountability in the Federal 
workforce and were implemented to aid in records being preserved so 
that agencies can make appropriate and informed decisions regarding 
qualifications such as fitness and suitability for future employment.
    OPM disagrees that the rescission of Sec. Sec.  432.108, 752.104, 
752.203(h), 752.407, and 752.607 will compete with an agency's ability 
to comply with 5 CFR 731.101, Security Executive Agent Directive 4, and 
Trusted Workforce 2.0 fundamentals as asserted by the agency. The 
agency did not provide an explanation or examples of how the clean-
record prohibition impacted the agency's ability to make fully informed 
decisions relative to risk. Without additional information, it is 
difficult to address the agency's concern in more detail. Sections 
432.108, 752.104, 752.203(h), 752.407 and 752.607 were in effect for 
less than two months at the time E.O. 14003 rescinded E.O. 13839. 
Consistent with the requirements that existed before and during the 
implementation of the clean-record prohibitions, when negotiating 
settlement agreement terms that involve disclosure of information about 
the employee, agency officials should consult with agency legal 
counsel.
    In conclusion, OPM believes that the prohibition of clean-record 
agreements hampers agencies' ability to resolve informal and formal 
complaints at an early stage and with minimal costs to the agency. The 
removal of the prohibition on clean-record agreements will allow 
agencies discretion to resolve informal and formal complaints and 
settle administrative challenges in a manner that balances the needs of 
the agency and fairness to the employee. In doing so, agencies should 
still adhere to the principles of promoting high standards of integrity 
and accountability within the Federal workforce.

5 CFR Part 752--Adverse Actions

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

    This subpart addresses mandatory procedures for addressing 
retaliation by supervisors for whistleblowing.
    An organization emphasized its support of the requirements for 
whistleblower protection. This organization elaborated on its 
longstanding advocacy in favor of ``robust protection for 
whistleblowers, which necessarily includes disciplinary consequences 
for those federal managers who abuse their authority to retaliate 
against whistleblowers in defiance of federal law.'' The organization 
expressed that thus it supported the policy behind 5 U.S.C. 7515 and 5 
CFR part 752, subpart A, and encouraged OPM to continue in its 
enforcement. A second organization concurred with this commenter.

Section 752.101 Coverage

    This section describes the adverse actions covered and defines key 
terms used throughout the subchapter. Section 752.101 includes a 
definition for the term ``business day.'' Given the revocation of E.O. 
13839 and under its congressionally granted authority to regulate part 
752, OPM rescinds Sec.  752.101, and given that there is no other use 
for the definition of ``business day'' in subpart A, in this rule OPM 
revises the regulation at Sec.  752.101(b) to remove the definition of 
``Business day''.
    We received no comments on this section.

Section 752.103 Procedures

    This section establishes the procedures to be utilized for actions 
taken under this subpart. With the rescission of E.O. 13839 and under 
its congressionally granted authority to regulate chapter 75 adverse 
actions, OPM rescinds the requirement at Sec.  752.103(d)(3) that, to 
the extent practicable, an agency should issue the decision on a 
proposed removal under this subpart within 15 business days of the 
conclusion of the employee's opportunity to respond under paragraph 
(d)(1) of this section. All comments related to the rescission of the 
requirement that an agency issue the decision on a proposed removal 
within 15 business days of the conclusion of the employee's opportunity 
to respond are addressed here in the Supplementary Information for the 
change at Sec.  752.103, where the change appears first.
    Some commenters including national unions voiced support regarding 
the removal of the requirement that an agency must issue the decision 
on a proposed removal within 15 days of the conclusion of the 
employee's opportunity to respond. Two national unions commented that 
the elimination of the 15-day requirement to issue a decision on a 
proposal was warranted and that the deadline imposed by the November 
2020 amendment was arbitrary. In fact, a national union commented that 
the requirement to issue a decision on a proposal within 15 business 
days ``is an arbitrary and unnecessarily short time frame and that it 
might not allow thoughtful well-reasoned disciplinary decisions.'' 
Further, another national union stated that there was no statutory 
antecedent for this requirement and this mandate was counterproductive 
because it forced agencies to rush in issuing decisions ``which in turn 
weakened the agency's action upon review.'' This national union 
commented that agencies must engage in reasoned decision making and 
that a ``decision reached merely to comply with an arbitrary deadline 
is itself arbitrary and capricious and subject to reversal.'' 
Additionally, this national union observed that every proposed adverse 
action is different and

[[Page 67777]]

some proposed adverse actions require more time than others for full 
consideration of the employee's response and the underlying facts. In 
further support of this rescission, the national union commented by 
providing agencies added flexibility the proposed change will ``lead to 
the more efficient and effective resolution of employment disputes.''
    Two organizations, one concurring with the other's comment 
submissions, objected to the 15-day restriction on decisional periods 
for adverse actions and pronounced that these restrictions resulted in 
inferior rushed disciplinary decisions on incomplete information by 
agencies. Moreover, these organizations remarked that E.O. 14003 and 
OPM's rule ``restor[ed] agencies' reasonable discretion'' and 
``bring[s] to a close a misguided policy.''
    While some commenters voiced support, other commenters disagreed 
with this change to the regulations. Two management associations 
erroneously stated that OPM only made a change regarding the 15-day 
requirement to issue the decision on a proposed removal in ``a very 
narrow section of Part 752 focused on whistleblower retaliation.'' 
These commenters also remarked that establishing dissimilar, seemingly 
arbitrary timelines across government appears ``contrary to the policy 
of the United States government, per E.O. 14003.'' The organizations 
commented that the proposed rule does not change the 15-day requirement 
in other portions of the rule. In response to this incorrect assertion, 
we note that OPM proposed to rescind the 15-day requirement to issue a 
decision on a proposal at Sec. Sec.  752.404(g)(3) and 752.604(g)(3), 
not only at Sec.  752.103(d)(3).
    These management associations also raised concerns that removing 
the 15-day requirement ``without offering any guidance on a minimum or 
maximum acceptable timeline . . . agencies may continue practices that 
include abuse of administrative leave and failing to make timely 
decisions.'' Further, these commenters said that lacking OPM guidance, 
including the final regulations for the Administrative Leave Act of 
2016, agencies will be enabled in such practices. The management 
associations remarked that taxpayers rather than employees are 
``ultimately paying for the delayed decision.''
    We disagree with these comments. Regarding the commenters' 
objection that no OPM guidance is provided to agencies as to when a 
decision must be issued, as we stated in the proposed rule, it is good 
practice for agency deciding officials to resolve proposed removals 
promptly. However, some actions present complications that warrant a 
longer period of time to achieve careful crafting of the final 
decision. In executing due diligence concerning the employee's 
performance or alleged misconduct, agencies have an opportunity to 
obtain all of the available relevant information to make an informed 
and defensible decision. This latitude allows agencies to continue 
fact-finding in a deliberate fashion and avoids a rush to judgment. It 
is not in the Government's best interests to force decisions to be 
completed on an arbitrary timetable that may not allow for the deciding 
official to prepare a thoughtful, well-reasoned decision document as 
this may lead to prolonged litigation resulting in unnecessary cost to 
the taxpayer. Further, with respect to the commenters' concern 
regarding agencies' use of administrative leave and failing to make 
timely decisions, we note that while administrative leave may be 
appropriate under various circumstances, administrative leave is an 
option that should be used sparingly. We provide several alternatives 
for an agency to use during the advance notice period, depending on the 
facts and circumstances of the situation. OPM regulations at Sec.  
752.404(b)(3)(i) through (iv) explain that ``[u]nder ordinary 
circumstances, an employee whose removal or suspension, including 
indefinite suspension, has been proposed will remain in a duty status 
in his or her regular position''. In the rare circumstances where the 
employee's continued presence in the workplace during the notice period 
may present ``a threat to the employee or others'' or involve other 
extenuating circumstances as outlined in the regulation, the agency may 
choose one or a combination of options: assigning the employee to other 
duties, granting leave or otherwise carrying the individual in an 
appropriate leave status, shortening the notice period when an agency 
invokes the ``crime provision'', and, finally, placing the employee in 
a paid nonduty status for such time as is necessary to effect the 
action. Until OPM has published the final regulation for 5 U.S.C. 6329b 
and after the conclusion of the agency implementation period, these 
provisions may be used. After publication of 5 U.S.C. 6329b, and the 
subsequent agency implementation period, an agency may place the 
employee in a notice leave status when applicable.

Section 752.104 Settlement Agreements

    The language in this section establishes the same requirements that 
are detailed in Sec. Sec.  432.108, 752.203, 752.407, and 752.607, 
Settlement agreements. This final rule removes Sec.  752.104, 
Settlement agreements. Please see the discussion in Sec.  432.108 
regarding the rescission of OPM requirements related to settlement 
agreements.

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

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

Section 752.202 Standard for Action and Penalty Determination

    Consistent with the rescission of E.O. 13839 and under its 
congressionally granted authority to regulate part 752, OPM amends this 
section to revise the section heading to ``Standard for action'' and 
rescinds paragraphs (c) through (f). These paragraphs address the use 
of progressive discipline; appropriate comparators as the agency 
evaluates a potential disciplinary action; consideration of, among 
other factors, an employee's disciplinary record and past work record; 
and the requirement that a suspension should not be a substitute for 
removal in circumstances in which removal would be appropriate.
    All comments related to the rescission of the requirement for the 
use of progressive discipline; appropriate comparators as the agency 
evaluates a potential disciplinary action; consideration of, among 
other factors, an employee's disciplinary record and past work record; 
and the requirement that a suspension should not be a substitute for 
removal in circumstances in which removal would be appropriate are 
addressed here in the Supplementary Information for the change at Sec.  
752.202 where the change appears first.
    Several commenters, including national unions, voiced support for 
rescission of this section in its entirety, and additional commenters 
endorsed removal of various portions. In fact, one national union 
declared that ``OPM is correct to remove these provisions as they 
existed solely to encourage agencies to remove employees from federal 
service, which is not a purpose expressed or countenanced by the 
controlling statutes.''
    This final rule removes from regulation the provision regarding the 
use of progressive discipline. Describing the November 2020 regulations 
as ``ill-advised provisions discouraging the use of progressive 
discipline,'' a national union commended the removal of this regulatory 
language and lauded progressive discipline as a ``well-

[[Page 67778]]

established and equitable way to ensure employees are treated fairly.''
    In non-support of the rescission, a management association 
articulated that in their view the November 2020 amendments provided 
advantages for management. One member of the association declared this 
section as the best part of the former rule. The management association 
went on to state that ``eliminating the `requirement' for progressive 
discipline and codifying that elimination was a huge management 
benefit.'' The association further noted that the amendments of 
November 2020 also formalized the requirement for a penalty to be 
```within the bounds of tolerable reasonableness,' instead of a cookie-
cutter progression.'' The management association noted that there has 
never been a legal requirement for progressive discipline or 
rehabilitation and viewed progressive discipline as something that 
``has grown within most agencies to the point of being a roadblock in 
many instances to removals or suspensions that would promote the 
efficiency of the service because there was no prior discipline. They 
also commented that ``[f]ar too many union contracts require management 
to utilize progressive discipline, which eliminates a key management 
flexibility when dealing with conduct/performance issues.'' Further, 
the management association asserted that ``[r]estricting an 
arbitrator's ability to mitigate reasonable penalties was good for 
management.'' The management association also viewed the November 2020 
rules favorably because they ``took the penalty out of the bargaining 
arena'' and remarked that ``[i]t never belonged there in the first 
place as 5 U.S.C. 7106 (a)(2) reserved the right (authority) to 
discipline employees to management without bargaining.''
    OPM will not make any modifications based on these comments. OPM 
disagrees with the management association's assessment that the 
requirement in regulation as to agencies' optional use of progressive 
discipline was beneficial to management and that the use of progressive 
discipline is a ``roadblock'' to suspensions and removals. As we have 
previously said each action stands on its own footing and demands 
careful consideration of facts, circumstances, context, and nuance. OPM 
reminds agencies to calibrate discipline to the unique facts and 
circumstances of each case, which is consistent with the flexibility 
afforded agencies under the ``efficiency of the service'' standard for 
imposing discipline contained in the CSRA. Proposing and deciding 
officials should consult with the agency counsel and the agency's human 
resources office to determine the most appropriate penalty. In regard 
to the commenter's statement that there is no requirement in law for 
progressive discipline and progressive discipline provisions in union 
contracts eliminate a management flexibility, bargaining proposals 
involving penalty determinations such as mandatory use of progressive 
discipline impermissibly interfere with the exercise of a statutory 
management right to discipline employees, and are thus contrary to law.
    Moreover, the final rule at Sec.  752.202 rescinds the prior 
regulations' reliance on the test pronounced in Miskill v. Social 
Security Administration, 863 F.3d 1379 (Fed. Cir. 2017). A national 
union applauded OPM's rescission and described the provisions of OPM's 
November 2020 regulations as ``ill-advised provisions'' and ``as 
narrowly defining appropriate comparators''. This national union 
concurred with OPM removing this language and allowing agencies to be 
guided by court precedent on this issue.
    However, some management associations disagreed with the rescission 
saying, ``The proposed changes result in guidance to agencies and 
supervisors that is far less clear and actionable.'' These commenters 
questioned whether human resources specialists clearly understand the 
Miskill test and would be able to apply it ``the same way as peers in 
other agencies.'' They protested that ``in the name of flexibility OPM 
simply continues its history of abdicating its own responsibility'' to 
provide guidance that is ``coherent and useful'' despite responsibility 
for providing government-wide guidance for a vast, robust statutory 
scheme with over 40 years of Congressional amendments and as many years 
of accompanying case law. One of these management associations 
emphasized that absent additional, specific OPM guidance the system is 
not clear at all and will continue to provoke confusion in the 
employing agencies. To illustrate their point of view, the management 
association stated they are seeking additional educational resources to 
help understand regulations, guidance, case law and other resources to 
understand the Civil Service. They asserted that ``OPM should not rely 
on associations like ours to fill in the vast knowledge gaps that it 
and agencies are leaving.''
    OPM will not make any revisions based on these comments. The 
adoption of the Miskill test reinforced the key principle that each 
case stands on its own factual and contextual footing. Federal human 
resources specialists involved in advising management and agency 
counsel routinely apply case law with overwhelmingly successful 
outcomes for agencies. We do not believe the Miskill case is an 
exception to this consistent track record in support of efficient and 
effective disciplinary actions taken by agencies. OPM believes that 
agencies can be sufficiently guided by Miskill and other applicable 
case law without a regulatory amendment. Note that OPM provides 
guidance to agencies through its accountability toolkit, which includes 
some of the key practices and lessons learned as discussed in the GAO 
report. OPM frequently communicates these strategies and approaches to 
the Federal community through the OPM website and ongoing outreach to 
agencies.
    Furthermore, the final rule removes from regulation the standard 
applied by the MSPB in Douglas v. Veterans Administration, 5 M.S.P.R. 
280 (1981). This rule specifically rescinds the requirement that among 
other factors, agencies should consider an employee's disciplinary 
record and past work record, including all applicable prior misconduct, 
when taking an action under this subpart.
    Two organizations, one concurring with the other's comment 
submission, declared that although they previously had supported 
placing the Douglas factor analysis in OPM regulations, these 
organizations understood the necessity to comply with E.O. 14003 to 
rescind this provision. They applauded OPM's recognition of the 
importance of the Douglas standard and expressed the hope that OPM will 
consider future rulemaking activity to re-include the Douglas factor 
analysis in its regulations when the occasion permits. OPM will not 
commit to or rule out any specific future rulemaking activity at this 
time.
    In another rescission to the final rule at Sec.  752.202, OPM 
rescinds the requirement that a suspension may not be a substitute for 
removal. In support of this rescission, a national union commented that 
the November 2020 amendments to OPM's regulations ``contain ill-advised 
provisions'' and commended the rescission of those requirements which 
``promot[ed] removals over suspensions.'' In its endorsement of OPM's 
rescission of this provision, the national union asserted that 
supervisors should exercise their judgment regarding appropriate 
penalties after their consideration of all of the pertinent factors and 
should not be compelled to impose removals over other disciplinary 
alternatives.
    Another national union supported this rescission in Sec. Sec.  
752.202 and 752.403 with comments which were

[[Page 67779]]

identical to each other and are addressed here. This national union 
expounded that ``disproportionate and unreasonable penalties do not 
promote the efficiency of the service. The primary purpose of 
disciplinary actions is to correct misconduct--not to serve as a 
punishment.'' Additionally, the national union posited that removal 
should be limited for ``egregious misconduct'' or when it is evident 
that rehabilitation cannot be achieved. The national union opined that 
each removal results in lost time, effort, and funds invested in 
training that employee and loss of institutional knowledge, which may 
be irreplaceable. In further comment, this national union stated, ``It 
is remarkably inefficient for an agency to remove an employee 
regardless of the offense.'' Also with respect to penalties, the 
national union said that agencies are ``best served'' by taking action 
with the minimum penalty necessary to correct the misconduct which 
improves employee morale and minimizes the disruption to the agency. 
This national union affirmed, ``OPM's proposed changes are consistent 
with the CSRA and will better protect the due process rights of federal 
employees.''
    While some commenters agreed with the rescission concerning the 
requirement that a suspension should not be a substitute for removal, a 
management association disagreed with this change. This management 
association questioned, ``Why keep an unacceptable employee?'' and 
observed that if the issue is conduct, ``a new position isn't going to 
`fix' the underlying problem.'' This commenter stated that it 
understood that ``the rescission of E.O. 13839 led to rescinding this 
section.''
    OPM will not make any changes based on this comment. If agencies 
implement a penalty other than removal, when it is appropriate, it does 
not follow that the employee is reassigned to a new position. The 
concept that suspension should not be a substitute for removal in 
circumstances in which removal would be appropriate is a 
straightforward principle that OPM believes agencies can apply without 
regulation. If a penalty is disproportionate to the alleged violation 
or is unreasonable, it is subject to being reduced or reversed even 
when the charges are sustained. Although OPM has decided to remove the 
provision regarding a suspension should not be a substitute for removal 
and defer to agency management in selecting an appropriate penalty, OPM 
reiterates that imposing a suspension when removal is appropriate may 
adversely impact employee morale and productivity and hamper the 
agency's ability to achieve its mission and promote effective 
stewardship. OPM reminds agencies that supervisors are responsible for 
ensuring that a disciplinary penalty is fair, reasonable, and 
appropriate to the facts and circumstances. In doing so, supervisors 
will address misconduct in a manner that has the greatest potential to 
avert harm to the efficiency of the service.

Section 752.203 Procedures

    This section discusses the requirements for a proposal notice 
issued under this subpart. The language in this section establishes the 
same requirements for settlement agreements in the final rule that are 
detailed in Sec. Sec.  432.108, 752.104, 752.407, and 752.607. Given 
the revocation of E.O. 13839 and under OPM's congressionally granted 
authority to regulate part 752, this final rule removes the requirement 
set forth in Sec.  752.203(h). Please see the discussion in Sec.  
432.108 regarding the rescission of OPM requirements related to 
settlement agreements.

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

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

Section 752.401 Coverage

    This section discusses adverse actions and employees covered under 
this subpart. The National Defense Authorization Act (NDAA) for Fiscal 
Year 2017 added MSPB appeal rights for National Guard technicians for 
certain adverse actions taken against them when they are not in a 
military pay status or when the issue does not involve fitness for duty 
in the reserve component.
    In Sec.  752.401(b), the final rule adds an exclusion for an action 
taken against a technician in the National Guard as provided in section 
709(f)(4) of title 32, United States Code, and in Sec.  752.401(d) 
removes from the list of employees excluded from coverage of this 
subpart ``a technician in the National Guard described in section 
8337(h)(1) of title 5, United States Code, who is employed under 
section 709(a) of title 32, United States Code.''
    An organization supported the extension of civil service 
protections to National Guard technicians under Public Law 114-328, and 
stated that, accordingly, the organization supported OPM's inclusion of 
an implementing regulation for that statute in this proposed rule. 
Another organization concurred with this organization's comments.

Section 752.402 Definitions

    This section defines key terms used throughout the subchapter. With 
the rescission of E.O. 13839 and given that there is no other use for 
the definition of ``business day'' in subpart D, the final rule revises 
the regulation at Sec.  752.402 to remove the definition of ``Business 
day''.
    We did not receive any comments for this section.

Section 752.403 Standard for Action and Penalty Determination

    Given the rescission of E.O. 13839 and under OPM's congressionally 
granted authority to regulate part 752, as with the final rule changes 
for Sec.  752.202, the final regulatory changes to this section revise 
the heading to ``Standard for action'' and, as with Sec. Sec.  
752.202(c), 752.202(d), 752.202(e), and 752.202(f), rescind Sec. Sec.  
752.403(c), 752.403(d), 752.403(e), and 752.403(f). Please see the 
discussion in Sec.  752.202.

Section 752.404 Procedures

    Section 752.404(b) discusses the requirements for a notice of 
proposed action issued under this subpart. In particular, under OPM's 
authority to regulate 5 CFR part 752, the final rule rescinds the 
requirements in Sec.  752.404(b)(1) that, to the extent an agency in 
its sole and exclusive discretion deems practicable, agencies should 
limit written notice of adverse actions taken under this subpart to the 
30 days prescribed in 5 U.S.C. 7513(b)(1), as well as the requirement 
that any notice period greater than 30 days must be reported to OPM. 
All comments related to the rescission of the requirement that an 
agency limit written notice of adverse actions to 30 days, as well as 
the reporting requirement to OPM, are addressed here in the 
Supplementary Information for the change at Sec.  752.404, where the 
change appears first.
    Two organizations, one concurring with the other's comment 
submissions, endorsed the rescission of this regulatory requirement. 
The organizations asserted that the restrictions on response periods 
for adverse actions had an adverse impact on an employee's ability to 
respond appropriately and impaired their ``due process rights,'' as 
well as resulted in substandard and hurried decisions based on 
incomplete information.

[[Page 67780]]

    Two national unions expressed their overall support for rescinding 
the requirements to issue a decision within 30 days of the end of the 
employee's response period. One union further commented that this 
language wrongly took a negotiable topic, notice periods, off the 
bargaining table and the reporting requirement would chill agencies 
from providing notice beyond 30 days. Another national union agreed 
with OPM's assessment that there are many legitimate reasons to provide 
a longer notice period. They commented that the reporting requirement 
was also ``inefficient, inasmuch as it placed an additional and 
unnecessary burden on OPM and on agencies seeking to take an adverse 
action.''
    Additionally, this section discusses the requirements for an agency 
decision issued under Sec.  752.404(g). Under OPM's authority to 
regulate 5 CFR part 752, the final rule rescinds the requirement at 
Sec.  752.404(g)(3) that, to the extent practicable, an agency should 
issue the decision on a proposed removal under this subpart within 15 
business days of the conclusion of the employee's opportunity to 
respond. All comments related to the rescission of the Sec.  
752.404(g)(3) requirement for agencies to issue decisions, to the 
extent practicable, within 15 business days of the conclusion of the 
employee's opportunity to respond under this subpart are addressed in 
the Supplementary Information for the change at Sec.  752.103, where 
the change appears first.

Section 752.407 Settlement Agreements

    The language in this section establishes the same requirement that 
is detailed in the final rule changes at Sec. Sec.  432.108, 752.104, 
752.203, and 752.607, Settlement agreements. This final rule removes 
Sec.  752.407, Settlement agreements. Please see the discussion 
regarding settlement agreements in Sec.  432.108 above.

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

    This subpart addresses the procedural requirements for suspensions 
for more than 14 days and removals from the civil service as set forth 
in 5 U.S.C. 7542.

Section 752.602 Definitions

    This section defines key terms used throughout the subchapter. 
Section 752.602 includes a definition for the term ``business day.'' 
With the rescission of E.O. 13839 and given that there is no other use 
for ``business day'' in subpart F, OPM revises the regulation at Sec.  
752.602 to remove the definition of ``Business day''.
    We did not receive any comments for this section.

Section 752.603 Standard for Action and Penalty Determination

    Given the rescission of E.O. 13839 and under its congressionally 
granted authority to regulate part 752, as with the final rule changes 
for Sec. Sec.  752.202 and 752.403, the final regulatory change to 
Sec.  752.603 revises the heading to ``Standard for action'' and as 
with Sec. Sec.  752.202(c), 752.202(d), 752.202(e), 752.202(f), 
752.403(c), 752.403(d), 752.403(e), and 752.403(f), OPM rescinds 
Sec. Sec.  752.603(c), 752.603(d), 752.603(e), and 752.603(f). Please 
see the discussion in Sec.  752.202.

Section 752.604 Procedures

    This section discusses requirements for a notice of proposed 
action. Due to the revocation of E.O. 13839 and under its 
congressionally granted authority to regulate 5 CFR part 752, as with 
the rule changes made for Sec. Sec.  752.103(d)(3) and 752.404(b)(1), 
and for the same reasons, OPM rescinds the language at Sec.  
752.604(b)(1) that requires, to the extent an agency in its sole and 
exclusive discretion deems practicable, that agencies should limit a 
written notice of an adverse action to the 30 days prescribed in 
section 7543(b)(1) of title 5, United States Code. As well, in this 
rule OPM removes the language in Sec.  752.604(b)(1) that requires that 
advance notices of greater than 30 days must be reported to OPM.
    Additionally, OPM rescinds Sec.  752.604(g)(3), which requires that 
an agency issue the decision on a proposed removal, to the extent 
practicable, within 15 business days of the conclusion of the 
employee's opportunity to respond. As with the discussion concerning 
the 15-day requirement for issuance of decisions in Sec. Sec.  
752.103(d)(3) and 752.404(g)(3), while recognizing it is good practice 
for agency deciding officials to resolve proposed removals promptly, 
some actions present complexities that necessitate a longer period of 
time to prepare the final decision. All comments related to the 
procedural requirements are addressed in the Supplementary Information 
for the changes at Sec. Sec.  752.103 and 752.404, where the changes 
appear first.

Section 752.607 Settlement Agreements

    The language in this section establishes the same requirements that 
are detailed in Sec. Sec.  432.108, 752.104, 752.203 and 752.407, 
Settlement agreements. This final rule removes Sec.  752.607, 
Settlement agreements. Please see the discussion at Sec.  432.108.

Expected Impact of This Rule

    OPM is issuing this final rule to implement requirements of E.O. 
14003 and new statutory requirements for procedural and appeal rights 
for dual status National Guard technicians for certain adverse actions. 
E.O. 14003 requires OPM to rescind portions of the OPM final rule 
published at 85 FR 65940 which implemented certain requirements of E.O. 
13839. In addition, section 512(a)(1)(C) of the 2017 NDAA provides MSPB 
appeal rights under 5 U.S.C. 7511, 7512, and 7513 to dual status 
National Guard technicians for certain adverse actions.
    OPM believes that portions of the final rule which became effective 
on November 16, 2020, and which implemented certain requirements of 
E.O. 13839, are inconsistent with the current policy of the United 
States to protect, empower and rebuild the career Federal workforce as 
well as its current policy to encourage employee organizing and 
collective bargaining. The revisions implement applicable statutory 
mandates and provide agencies the necessary tools and flexibility to 
address matters related to unacceptable performance and misconduct or 
other behavior contrary to the efficiency of the service by Federal 
employees when they arise, consistent with the policies of E.O. 14003.
    Given that the November 16, 2020, regulations OPM rescinds in this 
rule were in effect only for a brief period before E.O. 14003 was 
issued on January 22, 2021, agencies had limited opportunity to 
implement changes under the regulations. With the issuance of E.O. 
14003, OPM discontinued collecting agency data on performance-based 
actions, adverse actions, and settlement agreements as was required by 
Section 5 of E.O. 13839. OPM does not otherwise collect agency data 
about the matters covered by the November 2020 regulatory amendments 
that OPM rescinds in this rule (namely, the timing and frequency of 
probationary period expiration notifications; the timing and nature of 
performance assistance for employees who have demonstrated unacceptable 
performance; penalty determination guidelines; advance notice and 
decision notice timeframes for adverse action; and settlement 
agreements). For these reasons, OPM has virtually no data on the extent 
to which adverse actions were pursued under the regulations for 
rescission

[[Page 67781]]

here. This rule will relieve agencies of the administrative burden of 
implementing the November 2020 regulatory amendments to the extent that 
agencies did not already have such policies and practices in place. Out 
of an abundance of caution, we clarify that OPM still is requiring that 
agencies submit to it arbitration awards taken under 5 U.S.C. 4303 or 5 
U.S.C. 7512 so that OPM can efficiently carry out its authority under 5 
U.S.C. 7703(d) to seek judicial review of any arbitration award that 
the Director of OPM determines is erroneous and would have a 
substantial impact on civil service law, rule, or regulation affecting 
personnel management that will have a substantial impact on a civil 
service law, rule, regulation, or policy directive.

Costs

    This final rule will affect the operations of over 80 Federal 
agencies--ranging from cabinet-level departments to small independent 
agencies. Regarding implementation of E.O. 14003 requirements, we 
estimate that this rule will require individuals employed by these 
agencies to revise and rescind policies and procedures to implement 
certain portions of the OPM final rule published at 85 FR 65940 to the 
extent agencies have not already done so. Section 3(e) of E.O. 14003 
directs heads of agencies whose practices were covered by E.O. 13839 to 
review and identify existing agency actions related to or arising from 
E.O. 13839 and ``as soon as practicable, suspend, revise, or publish 
for notice and comment proposed rules suspending, revising, or 
rescinding, the actions identified in the review'' described in Section 
3(e). On March 5, 2021, OPM issued ``Guidance for Implementation of 
Executive Order 14003--Protecting the Federal Workforce'' to heads of 
agencies. In this guidance, OPM advised that ``agencies should not 
delay in implementing the requirements of Section 3(e) of E.O. 14003 as 
it relates to any changes to agency policies made as a result of OPM's 
regulations.'' Therefore, some agencies may not need to make any 
updates to agency policies as a result of this revised OPM rule. For 
the purpose of this cost analysis, the assumed average salary rate of 
Federal employees performing this work will be the rate in 2022 for GS-
14, step 5, from the Washington, DC, locality pay table ($143,064 
annual locality rate and $68.55 hourly locality rate). We assume that 
the total dollar value of labor, which includes wages, benefits, and 
overhead, is equal to 200 percent of the wage rate, resulting in an 
assumed labor cost of $137.10 per hour.
    In order to comply with the regulatory changes in this final rule, 
affected agencies will need to review the rule and update their 
policies and procedures. We estimate that, in the first year following 
publication of the final rule, this will require an average of 200 
hours of work by employees with an average hourly cost of $137.10. This 
would result in estimated costs in that first year of implementation of 
about $27,420 per agency, and about $2,193,600 in total government-
wide. We do not believe this final rule will substantially increase the 
ongoing administrative costs to agencies.
    Regarding the portion of the rule regarding appeal rights under 5 
U.S.C. 7511, 7512, and 7513 for dual status National Guard technicians 
for certain adverse actions, this only impacts the Army National Guard 
and Air National Guard for dual status National Guard technicians that 
are covered by policies of the National Guard Bureau. Since this 
portion of the final rule reflects statutory changes in the 2017 NDAA 
which have been effective for several years, these statutory 
requirements should already be applied by the National Guard 
notwithstanding any regulatory changes by OPM. However, for the purpose 
of this cost analysis, the assumed average salary rate of Federal 
employees performing this work at the National Guard Bureau will be the 
rate in 2022 for GS-14, step 5, from the Washington, DC, locality pay 
table ($143,064 annual locality rate and $68.55 hourly locality rate). 
We assume that the total dollar value of labor, which includes wages, 
benefits, and overhead, is equal to 200 percent of the wage rate, 
resulting in an assumed labor cost of $137.10 per hour. In order to 
comply with the regulatory changes in this rule, the affected agency 
will need to review the rule and update its policies and procedures. We 
estimate that, in the first year following publication of the final 
rule, this will require an average of 40 hours of work by employees 
with an average hourly cost of $137.10. This would result in estimated 
costs in that first year of implementation of about $5,484 for the 
impacted agency. We do not believe this rule will substantially 
increase the ongoing administrative costs to the National Guard.

Executive Order 12866

    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). In accordance with the 
provisions of Executive Order 12866, this final rule was reviewed by 
the Office of Management and Budget as a significant, but not 
economically significant rule.

Regulatory Flexibility Act

    The Director of the Office of Personnel Management certifies that 
this final rule will not have a significant economic impact on a 
substantial number of small entities.

Federalism

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

Civil Justice Reform

    This regulation meets the applicable standard set forth in 
Executive Order 12988.

Unfunded Mandates Reform Act of 1995

    This final rule will not result in the expenditure by state, local, 
and tribal governments, in the aggregate, or by the private sector, of 
$100 million or more in any year and it will not significantly or 
uniquely affect small governments. Therefore, no actions were deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995.

Congressional Review Act

    Subtitle E of the Small Business Regulatory Enforcement Fairness 
Act of 1996 (known as the Congressional Review Act or CRA) (5 U.S.C. 
801 et seq.) requires rules to be submitted to Congress before taking 
effect. OPM will submit to Congress and the Comptroller General of the 
United States a report regarding the issuance of this final rule before 
its effective date, as required by 5 U.S.C. 801. The Office of 
Information and Regulatory Affairs in the Office of Management and 
Budget has determined that this final rule is not a major rule as 
defined by the CRA (5 U.S.C. 804). The Office of Information and 
Regulatory Affairs in the Office of Management and Budget has 
determined that this final rule is not a major rule as defined by the 
CRA (5 U.S.C. 804).

[[Page 67782]]

Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521)

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

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

    Government employees.

Office of Personnel Management.
Stephen Hickman,
Federal Register Liaison.

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

PART 315--CAREER AND CAREER-CONDITIONAL EMPLOYMENT

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

    Authority:  5 U.S.C. 1302, 2301, 2302, 3301, and 3302; E.O. 
10577, 19 FR 7521, 3 CFR, 1954-1958 Comp., p. 218, unless otherwise 
noted; and E.O. 13162, 65 FR 43211, 3 CFR, 2000 Comp., p. 283. Secs. 
315.601 and 315.609 also issued under 22 U.S.C. 3651 and 365. 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, 43 FR 1917, 3 CFR, 1978 Comp., p. 111. Sec. 315.606 also 
issued under E.O. 11219, 30 FR 6381, 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, 55 FR 31349, 3 CFR, 1990 Comp., p. 293. 
Sec. 315.610 also issued under 5 U.S.C. 3304(c). Sec. 315.611 also 
issued under 5 U.S.C. 3304(f). Sec. 315.612 also issued under E.O. 
13473, 73 FR 56703, 3 CFR, 2008 Comp., p. 241. Sec. 315.708 also 
issued under E.O. 13318, 68 FR 66317, 3 CFR, 2003 Comp., p. 265. 
Sec. 315.710 also issued under E.O. 12596, 52 FR 17537, 3 CFR, 1987 
Comp., p. 229. Subpart I also issued under 5 U.S.C. 3321, E.O. 
12107, 44 FR 1055, 3 CFR, 1978 Comp., p. 264.

Subpart H--Probation on Initial Appointment to a Competitive 
Position

0
2. Amend Sec.  315.803 by revising paragraph (a) to read as follows:


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

    (a) The agency shall utilize the probationary period as fully as 
possible to determine the fitness of the employee and shall terminate 
his or her services during this period if the employee fails to 
demonstrate fully his or her qualifications for continued employment.
* * * * *

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

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

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


0
4. Amend Sec.  432.102 by:
0
a. Revising paragraphs (b)(14) and (15);
0
b. Adding paragraph (b)(16);
0
c. Removing paragraph (f)(12); and
0
d. Redesignating paragraphs (f)(13) and (14) as paragraphs (f)(12) and 
(13).
    The revisions and additions read as follows:


Sec.  432.102  Coverage.

* * * * *
    (b) * * *
    (14) A termination in accordance with terms specified as conditions 
of employment at the time the appointment was made;
    (15) An involuntary retirement because of disability under part 831 
of this chapter; and
    (16) An action against a technician in the National Guard 
concerning any activity under 32 U.S.C. 709(f)(4), except as provided 
by 32 U.S.C. 709(f)(5).
* * * * *

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


Sec.  432.104  Addressing unacceptable performance.

    At any time during the performance appraisal cycle that an 
employee's performance is determined to be unacceptable in one or more 
critical elements, the agency shall notify the employee of the critical 
element(s) for which performance is unacceptable and inform the 
employee of the performance requirement(s) or standard(s) that must be 
attained in order to demonstrate acceptable performance in his or her 
position. The agency should also inform the employee that unless his or 
her performance in the critical element(s) improves to and is sustained 
at an acceptable level, the employee may be reduced in grade or 
removed. For each critical element in which the employee's performance 
is unacceptable, the agency shall afford the employee a reasonable 
opportunity to demonstrate acceptable performance, commensurate with 
the duties and responsibilities of the employee's position. As part of 
the employee's opportunity to demonstrate acceptable performance, the 
agency shall offer assistance to the employee in improving unacceptable 
performance.

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


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

    (a) * * *
    (1) Once an employee has been afforded a reasonable opportunity to 
demonstrate acceptable performance pursuant to Sec.  432.104, an agency 
may propose a reduction-in-grade or removal action if the employee's 
performance during or following the opportunity to demonstrate 
acceptable performance is unacceptable in one or more of the critical 
elements for which the employee was afforded an opportunity to 
demonstrate acceptable performance.
* * * * *
    (4) * * *
    (i) * * *
    (B) * * *
    (6) To comply with a stay ordered by a member of the Merit Systems 
Protection Board under 5 U.S.C. 1214(b)(1)(A) or (B).
* * * * *


Sec.  432.108  [Removed]

0
7. Remove Sec.  432.108.

PART 752--ADVERSE ACTIONS

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

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

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


Sec.  752.101  [Amended]

0
9. Amend Sec.  752.101 in paragraph (b) by removing the definition for 
``Business day''.


Sec.  752.103  [Amended]

0
10. Amend Sec.  752.103 by removing paragraph (d)(3).


Sec.  752.104  [Removed]

0
11. Remove Sec.  752.104.

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

0
12. Amend Sec.  752.202 by:
0
a. Revising the section heading; and
0
b. Removing paragraphs (c) through (f).
    The revision reads as follows:


Sec.  752.202  Standard for action.

* * * * *


Sec.  752.203  [Amended]

0
13. Amend Sec.  752.203 by removing paragraph (h).

[[Page 67783]]

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

0
14. Amend Sec.  752.401 by:
0
a. Revising paragraphs (b)(15) and (16);
0
b. Adding paragraph (b)(17);
0
c. Removing paragraph (d)(5); and
0
d. Redesignating paragraphs (d)(6) through (13) as paragraphs (d)(5) 
through (12).
    The revisions and additions read as follows:


Sec.  752.401  Coverage.

* * * * *
    (b) * * *
    (15) Reduction of an employee's rate of basic pay from a rate that 
is contrary to law or regulation, including a reduction necessary to 
comply with the amendments made by Public Law 108-411, regarding pay-
setting under the General Schedule and Federal Wage System and 
regulations in this subchapter implementing those amendments;
    (16) An action taken under 5 U.S.C. 7515.; or
    (17) An action taken against a technician in the National Guard 
concerning any activity under 32 U.S.C. 709(f)(4), except as provided 
by 32 U.S.C. 709(f)(5).
* * * * *


Sec.  752.402  [Amended]

0
15. Amend Sec.  752.402 by removing the definition for ``Business 
day''.

0
16. Amend Sec.  752.403 by:
0
a. Revising the section heading; and
0
b. Removing paragraphs (c) through (f).
    The revision reads as follows:


Sec.  752.403  Standard for action.

* * * * *

0
17. Amend Sec.  752.404 by:
0
a. Revising paragraph (b)(1); and
0
b. Removing paragraph (g)(3).
    The revision reads as follows:


Sec.  752.404  Procedures.

* * * * *
    (b) * * *
    (1) An employee against whom an action is proposed is entitled to 
at least 30 days' advance written notice unless there is an exception 
pursuant to paragraph (d) of this section. The notice must state the 
specific reason(s) for the proposed action and inform the employee of 
his or her right to review the material which is relied on to support 
the reasons for action given in the notice. The notice must further 
include detailed information with respect to any right to appeal the 
action pursuant to section 1097(b)(2)(A) of Public Law 115-91, the 
forums in which the employee may file an appeal, and any limitations on 
the rights of the employee that would apply because of the forum in 
which the employee decides to file.
* * * * *


Sec.  752.407  [Removed]

0
18. Remove Sec.  752.407.

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

0
19. Amend Sec.  752.602 by removing the definition for ``Business 
day''.
0
20. Amend Sec.  752.603 by:
0
a. Revising the section heading; and
0
b. Removing paragraphs (c) through (f).
    The revision reads as follows:


Sec.  752.603  Standard for action.

* * * * *

0
21. Amend Sec.  752.604 by:
0
a. Revising paragraph (b)(1); and
0
b. Removing paragraph (g)(3).
    The revision reads as follows:


Sec.  752.604  Procedures.

* * * * *
    (b) * * *
    (1) An appointee against whom an action is proposed is entitled to 
at least 30 days' advance written notice unless there is an exception 
pursuant to paragraph (d) of this section. The notice must state the 
specific reason(s) for the proposed action and inform the appointee of 
his or her right to review the material that is relied on to support 
the reasons for action given in the notice. The notice must further 
include detailed information with respect to any right to appeal the 
action pursuant to section 1097(b)(2)(A) of Public Law 115-91, the 
forums in which the employee may file an appeal, and any limitations on 
the rights of the employee that would apply because of the forum in 
which the employee decides to file.
* * * * *


Sec.  752.607  [Removed]

0
22. Remove Sec.  752.607.

[FR Doc. 2022-24309 Filed 11-9-22; 8:45 am]
BILLING CODE 6325-38-P