Through a combination of recent executive orders and a forthcoming Office of Personnel Management (OPM) rulemaking, the Administration is proposing to effectively end most executive branch employees’ Merit Systems Protection Board (MSPB) appeal rights in most adverse action cases, through the use of unsuitability actions.
While MSPB appeal rights are statutory, the initiative appears designed to take advantage of an exception to metaphorically eat the rule. Specifically, in Section 1086(f)(6) of the National Defense Authorization Act of 2016, Congress created an exception to MSPB adverse actions jurisdiction for suitability actions taken by OPM, which is codified at 5 U.S.C. § 7512(F). Appeals to the MSPB on unsuitability actions by OPM instead proceeded not based on a statute, but instead on an OPM regulation, 5 C.F.R. 731.501, which provides for a more constrained review than does the general adverse action statute (5 U.S.C. Chapter 75). See, e.g., Odoh v. Office of Personnel Management, 2022 MSPB 5 (2022) at ¶ 16 (citing Folio v. Dept. of Homeland Security, 402 F.3d 1350 (Fed.Cir. 2005). Suitability actions apply to competitive service, Senior Executive Service, and excepted service positions if the incumbent can be noncompetitively converted to competitive service (for example, a disabled employee hired under Schedule A authority). See 5 C.F.R. § 731.101. Suitability rules under 5 C.F.R. Part 731 do not apply to excepted service employees who cannot be noncompetitively converted to competitive service.
At the time Section 7512(F) was enacted, OPM did not have the authority to take unsuitability actions against federal employees for post-appointment reasons; its authority was limited to just taking unsuitability actions based on pre-appointment reasons. This restriction was not fundamentally statutory in nature—it instead derived from a set of MSPB decisions finding that the President had not delegated authority to OPM to take suitability actions for post-appointment reasons. See Scott v. OPM, 116 MSPR 356 (2011), aff’d 117 MSPR 467 (2012). While many think of unsuitability determinations mostly affecting the start of a federal employee’s career (due to the effects of Scott), OPM in fact has the authority to take unsuitability actions against employees even years into their federal career.
Without a statutory impediment, the Administration could then proceed to take advantage of the Section 7512(F) loophole with a combination of executive orders and rulemaking activity. First, the President on March 20, 2025 issued a new executive order (Strengthening the Suitability and Fitness of the Federal Workforce), which now delegates to OPM authority to take suitability actions against federal employees for post-appointment reasons, nullifying Scott, and requiring agencies to remove any employee when directed to do so by OPM in no more than 5 workdays. Second, according to press reports, OPM is preparing to issue a new proposed rule which would not only rewrite the substantive standards for taking an unsuitability action against an employee for post-appointment reasons, but would also eliminate MSPB appeals jurisdiction over any suitability determinations by repealing 5 C.F.R. § 731.501. Possibly to avoid violation of Constitutional due process restrictions under the Supreme Court’s decision in Cleveland Board of Education v. Loudermill, the proposed rule still requires advance notice and an opportunity to respond to the proposed unsuitability action before implementation (albeit by a OPM decisionmaker), and with the added benefit of possibly allowing witnesses to be called “[f]or cases where witness credibility may be in dispute and material to the outcome”—albeit without any of the preparation time and availability of discovery and subpoena mechanisms allowed for in MSPB appeals. Agencies under the draft proposed rule would retain the ability to use other disciplinary authorities against employees, but “OPM retains the right to take a suitability action even in those cases where the agency makes an adjudicative determination under another authority,” meaning that OPM could force an agency to remove an employee on what OPM contends are unsuitability grounds even if the employing agency had opted to not remove the employee under alternate disciplinary procedures, even over the agency’s objection, and meaning that an employee could be subject to ‘double jeopardy’ in this fashion.
An OPM suitability decision would be especially bad for the subject employee, as under 5 C.F.R. § 731.204(a), OPM has the authority to not only fire the employee, but also debar them from federal employment for no less than 3 years.
OPM’s draft proposed rule further implements section 3(d) of a February 11, 2025 executive order previously analyzed in this blog. The draft proposed rule now includes as grounds for an unsuitability determination “misconduct or negligence in employment” (which is now expanded to include employee “Refusal to certify compliance with any applicable non-disclosure obligations […] and failure to adhere to those compliance obligations in the course of Federal employment,” subject to the statutory limitation in 5 U.S.C. 2302(b)(13)), and refusal to furnish testimony or information in various matters), “Criminal conduct,” “Dishonest conduct,” or “Willful failure to comply with generally applicable legal obligations.” These four grounds could potentially cover many if not most forms of misconduct charges cited in Chapter 75 adverse actions, and would allow actions to be taken against employees for conduct that would not normally be subject to discipline under present MSPB precedent (for example, off-site off-duty conduct unrelated to an employee’s duties where no missed work is involved that is a ‘willful failure to comply with generally applicable legal obligations’). These restrictions would further force possible whistleblowers to limit their disclosures to just those entities permitted under 5 U.S.C. 2302(b)(13) (i.e. Congress, the Office of Special Counsel, and Inspector Generals), and would see OPM assuming a role as policing restrictions on federal employees disclosing information to the public.
OPM in the draft proposed rule is candid about its intent to eliminate MSPB appeal rights, anticipating that “a percentage of adverse action appeals that under the current framework are heard by MSPB would now become suitability action cases with no appeal to MSPB,” and calculating financial impacts of the proposed rule on the assumption that at least fifty percent of present Chapter 75 removals would be shifted over to unsuitability actions with no MSPB appeal rights. OPM cited as a further basis for implementing this action a 2016 survey in which “41 percent of Federal supervisors were confident that they could remove a subordinate for serious misconduct.” Comparing the statistics in OPM’s draft proposed rule to the MSPB’s most recent annual report, the number of adverse action appeals reported by the MSPB is only about half the total number of adverse actions per year claimed by OPM showed that a little under a third of Chapter 75 adverse actions were not appealed to the MSPB. The MSPB statistics note that 48.3% of all Chapter 75 adverse action appeals were dismissed and only roughly 19.8% of total Chapter 75 appeals which the MSPB ultimately adjudicated; while the MSPB does not break out case merits outcomes by type of case, overall only roughly 2.75% of all MSPB appeals in the initial hearing stage resulted in a mitigation of penalty, reversal or corrective action. The 3,000 estimated Chapter 75 annual removals cited by OPM in its draft proposed rule further is inconsistent with a 2016 figure of 7,411 removals reported by OPM to the Government Accountability Office, with GAO further noting apparent “weaknesses in OPM’s data on employee misconduct, which is provided by agencies.”
OPM’s revisions do not take effect until the rulemaking process is completed, and OPM may make changes before the proposed rule is issued or in response to comments on the proposed rule after it is published in the Federal Register. Even once issued, the new rules may be subjected to possible litigation, and the interaction between this new unsuitability framework other statues governing federal employees remains unclear. The initiative does not extend to non-disciplinary adverse actions implemented under Chapter 75 (for example, medical inability to perform removals or removals based on certain errors in hiring and selection procedures), or to performance-based actions under Chapter 43 (although those actions may instead be charged as Chapter 75 actions under MSPB precedent)
If you are a federal employee or applicant facing a suitability action or other adverse action, and wish to discuss your rights and options, consider contacting Gilbert Employment Law to request an initial consultation.