OPM Issues New Final Rule Rescinding Trump-Era Regulations that Prohibited Clean-Record Agreements

On November 10, 2022, the Office of Personnel Management (“OPM”) issued a new regulation rescinding various regulations implemented during the Trump Administration pertaining to agencies’ handling of proposed adverse actions, Merit Systems Protection Board (“MSPB”) appeal rights and prohibiting so-called clean record settlements.[1]

Trump Administration regulations

In November 2020, OPM issued regulations implementing President Trump’s May 2018 Executive Order 13839, which purported to streamline discipline and removal of federal employees. The 2020 OPM regulations also barred agencies from entering into clean-record settlements, removed the requirement to utilize progressive discipline, and discouraged use of a table of penalties in disciplinary actions, among other things. Clean-record settlement agreements had been in use for decades by agencies and employees to resolve employment-related disputes.

Biden Administration action

Two days after his inauguration, on January 22, 2021, President Joe Biden issued Executive Order 14003, “Protecting the Federal Workforce,” which rescinded President Trump’s May 2018 Executive Order. After two years preparing for their implementation, OPM issued its final regulations on November 10, 2022, rescinding its November 2020 regulations and implementing the Biden Executive Order. Importantly, OPM’s 2022 regulations, which become effective December 12, 2022, remove the prohibition on clean-record agreements between federal employees and agencies and revise a plethora of other regulations relating to adverse and performance-based actions, as detailed below.

OPM’s November 2022 regulation

The Final Rule issued on November 10 th includes the following changes:

• Removes provisions from previous regulations discouraging use of progressive discipline in proposed adverse actions;
• Removes the requirement that suspensions cannot substitute for removals, resulting in a reinforced emphasis on employees’ right to a reasonable opportunity to improve unsatisfactory performance;
• Removes from regulation the standard applied by the MSPB in Douglas v. Veterans Administration, 5 M.S.P.R. 280 (1981), that the agency considers the employee’s disciplinary record and all prior misconduct when taking a proposed adverse action;
• Removes the 15-day time limit for an agency to make a final decision on a proposed removal after receiving the employee’s response;
• Restates the statutory requirement that an employee has right to a reasonable opportunity to improve unacceptable performance and that agencies are obligated to provide the employee with performance assistance during the opportunity period (note: OPM did not go as far as prescribing a designated time length for an opportunity period. Instead, it acknowledged that agencies are in the best position to determine what a reasonable length of time is for a federal employee to demonstrate acceptable performance); and
• Clarifies that dual status National Guard technicians are not excluded from MSPB appeal rights.

Why OPM’s new regulations matter

OPM’s new Final Rule again makes available useful negotiating tools for agencies and employees to reach settlement before costly litigation ensues and restores flexibilities that focus on rehabilitation rather than removal, including progressive discipline and meaningful opportunities to improve. Expanding the availability of options helps managers address performance issues and helps employees and managers remain accountable to one another.

If you have questions about this matter or another employment-related issue, please request a consultation with one of our experienced attorneys.