Curing Improper Performance Standards for Federal Employees

When Congress totally revised the U.S. Code governing federal employees in 1979, one of the items on its agenda was to make it easier to remove “poor performers,” based on anecdotal examples of agencies lamenting their inability to discipline such employees. Towards this end, Congress created a new Chapter in Title 5 of the Code, Chapter 43, specifically governing performance. While agencies typically are required to support by preponderance of the evidence a decision to discipline an employee for misconduct, agencies are required to support by substantial evidence – a much lower burden of proof – a decision to remove or demote an employee for unsatisfactory performance. 

The lower burden of proof, however, comes at a price. In order to invoke Chapter 43, agencies are required to prove that they have complied with several statutory requirements, which essentially demand that agencies demonstrate they have clearly told employees the metrics by which performance will be measured, and that they have provided the employees with a reasonable opportunity to demonstrate they can perform satisfactorily. If the agency cannot show it has met these requirements, it cannot prevail.

The MSPB has made clear that in an appeal of a performance-based removal under Chapter 43, it must determine that valid performance standards were used and communicated to the employee prior to considering performance deficiencies. Van Pritchard v. Department of Defense, 117 M.S.P.R. 88, ¶ 19 (2011). In June 2015, the MSPB reaffirmed this principle when it  reversed a performance-based removal because the Agency failed to show that it had developed or communicated valid performance standards to the employee. Pace v. Department of Army, 2015 WL 3630885 (MSPB CH-0432-14-0335-I-1), ¶ 13 (June, 2015). The Pace decision is non-precedential, which means the Board does not see it breaking new ground (Pace, note 1), but it nevertheless provides some useful guidance on the components of a valid performance standard.
To remove an employee for performance under Chapter 43 an Agency must first show that  (1) it has an OPM-approved appraisal system; (2) it has communicated to the employee the performance standards and critical elements of his position; (3)  the performance standards are valid under 5 U.S.C. 4302(b)(1); (4) it warned the employee of the inadequacy of the employee’s performance and gave him/her a reasonable opportunity to improve; and (5) the employee’s performance remained  unacceptable in at least one critical element. Pace, ¶ 13; White v. Department of Veterans Affairs, 120 M.S.P.R. 405, ¶ 5 (2013).  

For performance standards to be “valid” they must “allow for reasonably accurate measurement of performance and protect employees against arbitrary treatment.” Wilson v. Department of Health and Human Services, 770 F.2d 1048, 1052 (Fed. Cir. 1985); see 5 U.S.C. § 4302(b)(1). Critically, however, an employee’s performance does not warrant removal if it is “satisfactory”, which includes “minimally” or “marginally” satisfactory. Accordingly, in order for an employee to have a “reasonable opportunity to improve,” the agency must provide the employee with a Performance Improvement Plan (PIP) which communicates “the standards he must meet in order to be evaluated as demonstrating performance sufficient for retention, i.e., minimally successful, or needs improvement.” Donaldson v. Department of Labor, 27 M.S.P.R. 293, 301 (1985).

The Agency may communicate these minimum standards in the PIP itself or through a memorandum or other communications. Donaldson at 299. The written standards may be supplemented with subsequent communications with the employee. Wilson at 1056; Moltzen v. Department of Labor, 504 Fed.Appx. 912, 916 (Fed. Cir. 2013) (affirming Moltzen v. Department of Labor, 2012 WL 11881192 (M.S.P.B) *2  (non-precedential)).

In Pace, the MSPB refused to sustain the removal both because the Army had failed to state the performance standards at the minimum level needed for the employee to retain his job and because it had failed to supplement the standards in subsequent communications. Pace, ¶ ¶ 1, 13 (2015). The Army’s four-tiered performance system rated employees for each objective with the standards of “Excellence,” “Success,” Needs Improvement,” and “Fails.” Id. ¶ 5. The written standards for the employee’s performance objectives were written at the “Success” level and provided no information as to the performance needed for “Needs Improvement.” Id. ¶ 5. For this reason, the MSPB found the performance standards used to remove Mr. Pace could not sustain his removal. Id.; see Donaldson at 299 (performance standards invalid because employee “was consistently told what was required for a satisfactory rating only, and not for the “minimally satisfactory” or “needs improvement” level”).

The Board in Pace next considered whether the agency had cured through subsequent communications its failure to state the minimum standards. Pace, ¶ ¶ 6-12; see Henderson v. Nat’l Aeron. & Space Admin., 116 M.S.P.R. 96, ¶ ¶ 16, 18; Donaldson at 299 (“[W]e hold here than an agency may inform an employee of his requirements other than in the PIP itself”).  In Moltzen, the Federal Circuit affirmed that “Mr. Moltzen’s performance plan, ‘in light of the supervisor’s efforts at instruction, [was] clear, precise, and specific enough to be ‘objective.’” Moltzen, 504 Fed. Appx. at 916.

In Pace, however, the Agency’s efforts failed to cure the deficiencies of the performance standards. Pace, ¶¶ 6-12. Neither in the PIP nor in subsequent communications did the Agency identify the level of performance necessary for Mr. Pace to avoid removal; indeed, the Agency even failed to  notify Mr. Pace that to avoid removal he did not have to achieve at the “fully successful” level but only at the “needs improvement” level.  Id.

A subsequent memorandum provided to Mr. Pace during the PIP period detailed his performance and concluded that although he had been given many opportunities to perform at the “fully successful” level, he had instead demonstrated unacceptable performance. Id. The Board concluded that, “although the agency informed the appellant of the individual tasks he needed to accomplish during the PIP, it failed to adequately explain to the appellant a sufficiently ‘firm benchmark’ for which he should aim his performance.” Id. at ¶ ¶ 26.

In the space between Moltzen and Pace, it seems, lies the line dividing performance standards that are, or are not, rendered valid by sufficient supplementary communication.

For more information about this post or how you can protect your rights, please contact Mary Kuntz.