Can We Again Settle EEOC and MSPB Cases?

President Biden’s first week in office has proven to be quite promising for federal sector employees and their representatives, who are eager for relief from three particularly pernicious Executive Orders (“EO”) former President Trump signed in 2018, including EO 13839, which loosened protections for federal workers and made it more difficult for them to settle EEO complaints and disciplinary or performance actions. On January 22, 2021, President Biden issued an EO on “Protecting the Federal Workforce,” which not only revokes all three of those EOs, but directs the heads of agencies, whose practices were covered by EO 13839, to “review and identify existing agency actions related to or arising from” the order, make “revisions to discipline and unacceptable performance policies,” and roll back regulations that were codified as a result of the order.

Section 5 of EO 13839 has been particularly problematic for federal sector employees because it prohibited agencies from agreeing “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…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.” Because virtually all settlements of these actions involve removing or revising a document contained in an official file, this language essentially eliminated the possibility of settling cases involving disciplinary or performance actions, especially once the document was formalized or the adverse personnel action had taken effect, resulting in unnecessary litigation and costs.

While the Biden administration’s rescission of EO 13839 is undeniably a step in the right direction, federal sector employees may not see any immediate relief because a key section of the EO has already been codified into a regulation. On November 16, 2020, the Office of Personnel Management (“OPM”) issued 5 C.F.R. §§ 432.108 and 752.203(h), which implemented section 5 of EO 13839. Executive orders, unlike regulations, can be easily revoked by a new president. However, rolling back regulations that codify an executive order can be a much more complex and cumbersome process.

In order to roll back regulations, agencies are generally required to publish a notice of proposed rulemaking in the Federal Register and allow interested persons an opportunity to comment on the proposed rule, and, after considering those comments, publish the final rule. In fact, President Biden’s EO clearly directs the head of OPM to, “as soon as practicable, suspend, revise, or rescind, or publish for notice and comment proposed rules suspending, revising, or rescinding” the revisions to discipline and unacceptable performance policies issued pursuant to section 7(b) of EO 13839. There is no similar provision in the EO concerning section 5. However, it may be the case that agencies can no longer enforce the regulations because, when it issued 5 C.F.R.  §§ 432.108 and 752.203(h), OPM explicitly stated that they were “new requirements” based on the authority granted by section 5 of EO 13839, which is no longer in effect.

Alternatively, President Biden, with Congress’ help, may be able to overturn the regulation more expeditiously by using the Congressional Review Act (CRA), an oversight tool that Congress may use to negate a regulation promulgated during the final 60 legislative days of the outgoing Congress with a simple majority vote in the House and Senate and President Biden’s signature. Based on how “legislative days” are calculated, regulations dating to August 21, 2020 or later could fall under the CRA. The CRA essentially gives congressional control over agency rulemaking by establishing a special set of expedited or “fast track” legislative procedures for this purpose, primarily in the Senate. With Democrats now in control of both the House and Senate, this could be a viable alternative to rolling back the regulation through the rulemaking process. If the President signs the disapproval resolution, the regulation would no longer have effect and would be treated as though it had never been in effect. This process, in contrast to the rulemaking process, could be accomplished in a matter of months.

While it is possible agencies may be more inclined to concede they erred in order to modify personnel records and settle cases in light of Biden’s EO, this remains to be seen. We will continue to provide updates on this topic as developments arise. In the meantime, if you have any questions, please contact the employment lawyers at Kalijarvi, Chuzi, Newman & Fitch.