OPM Proposes to Rescind Trump Era Regulations Barring Clean Record Agreements

In May 2018, then-President Trump issued Executive Order (EO) 13839, which made it more difficult for agencies and federal sector employees to settle EEO complaints, MSPB appeals, and other disciplinary or performance actions once the SF-50 had been formalized or the adverse personnel action had taken effect, resulting in unnecessary litigation and costs. On January 22, 2021, two days after his inauguration, President Biden issued EO 14003, “Protecting the Federal Workforce,” which, among other things, revoked EO 13839. We discussed President Biden’s Executive Order shortly thereafter.

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.”

While the Biden administration’s rescission of EO 13839 was welcome news, many federal sector employees have not seen any real relief: on November 16, 2020, after the election, the Office of Personnel Management (“OPM”) issued 5 C.F.R. §§ 432.108 and 752.203(h), which implemented Section 5 of EO 13839. Although OPM issued Guidance instructing agencies not to comply with EO 13839 (see our blog), several agencies did not believe they had the authority to ignore a duly enacted regulation. Stakeholders, including federal employees, have waited patiently for OPM to take the necessary steps to revoke the regulations that codified EO 13839.

On January 4, 2022, OPM finally issued proposed regulations that would rescind Sections 432.108 and 752.203(h). OPM correctly observed that the regulations’ 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.” OPM explains that by removing the prohibition on clean record agreements, agencies will once again have discretion in resolving “informal and formal complaints and settle administrative challenges in a manner that balances the needs of the agency and fairness to the employee.”

In many instances, employees who have filed an EEO complaint or an MSPB appeal seek only the removal or modification of a document in their personnel file, e.g., changing a removal to a resignation; removing a reprimand, a suspension, or an unsatisfactory rating.  The agency’s inability to grant that relief frequently results in a far more expensive (to both sides) proceeding, and may require the agency to provide more relief than was originally sought. In some instances, KCNF has been able to negotiate settlements agreeing to these changes if OPM were to rescind the regulations.  That rescission is now at hand.

The burning question now is how quickly federal employees will see relief, i.e., when will they be able to enter into clean record agreements. This could take some time: the period in which interested parties may comment on the regulations is 30 days after January 4, 2022, when the proposed regulations were published. OPM may extend or re-open the comment period, if necessary or appropriate. After considering the comments, OPM will publish a final rule in the Federal Register. At that point, while agencies will not be required to amend personnel files as part of a settlement, they may no longer point to the rescinded regulations as justification.

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.