LEGISLATIVE HISTORY OF THE CIVIL SERVICE REFORM ACT OF 1978

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85-00003R000300090001-1
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 739
• Document Creation Date: December 20, 2016
• Document Release Date: May 14, 2007
• Sequence Number: 1
• Publication Date: March 27, 1979
• Content Type: OPEN SOURCE

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96th Congress l
1st Session I
COMMITTEE
1 PRINT No. 96-2
LEGISLATIVE HISTORY OF THE CIVIL
SERVICE REFORM ACT OF 1978
COMMITTEE ON
POST OFFICE AND CIVIL SERVICE
HOUSE OF REPRESENTATIVES
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96th Congress
1st Session
COMMITTEE PRINT
COMMITTEE
PRINT No. 96-2
LEGISLATIVE HISTORY OF THE CIVIL
SERVICE REFORM ACT OF 1978
COMMITTEE ON
POST OFFICE AND CIVIL SERVICE
HOUSE OF REPRESENTATIVES
VOLUME NO. II
Printed for the use of the Committee on Post Office and Civil Service'
U.S. GOVERNMENT PRINTING OFFICE
33-782 O WASHINGTON : 1979
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JAMES M. HANLEY, New York, Chairman
MORRIS K. UDALL, Arizona, Vice Chairman
CHARLES H. WILSON, California
WILLIAM D. FORD, Michigan
WILLIAM (BILL) CLAY, Missouri
PATRICIA SCHROEDER, Colorado
GLADYS NOON SPELLMAN, Maryland
HERBERT E. HARRIS II, Virginia
ROBERT GARCIA, New York .
GEORGE THOMAS (MICKEY) LELAND,
Texas
GERALDINE A. FERRARO, New York
CHARLES W. STENHOLM, Texas
DONALD JOSEPH ALBOSTA, Michigan
EDWARD J. DERWINSKI, Illinois
GENE TAYLOR, Missouri
BENJAMIN A. GILMAN, New York
JIM LEACH, Iowa
TOM CORCORAN, Illinois
JAMES A. COURTER, New Jersey
CHARLES PASHAYAN, JR., California
WILLIAM E. DANNEMEYER, California
DANIEL B. CRANE, Illinois
DAVID MINTON, Executive Director and General Counsel
THEODORE J. KAZY, Minority Staff Director
ROBERT E. LOCKHART, Deputy General Counsel
J. PIERCE MYERS, Assistant General Counsel
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CONTENTS
VOLUME NO. II
S. 2640, as introduced in the Senate, March 3, 1978. (Note: Page 1 of the
bill is reproduced at this point in the 2-volume publication. See pages 1-64
of volume No. I for the identical language which appears in the House
bill) -----------------------------------------------------------
Committee print amendment No. 2084 containing Senate committee
amendments to S.2640___________________________________________
Committee print dated June 1, 1978 (an amendment in the nature of a
substitute), to S. 2640, in the Senate committee_____________________
S. 2640 as reported by the Committee on Governmental Affairs, July 10,
1978 -----------------------------------------------------------
Senate Report No. 95-969, of the Committee on Governmental Affairs on S.
2640, July 10, 1978----------------------------------------------
Debate on the Senate floor during consideration of S. 2640, August 24, 1978_
Debate on the Senate floor during consideration of the conference report on
S. 2640, the Civil Service Reform Act of 1978, October 4, 1978________
S. 2640, as passed by the Senate, August 24, 1978_____________________
Conference report on S. 2640, the Civil Service Reform Act of 1978______
Page
1279
1280
1306
1363
1461
1605
1725
1729
1843
STATEMENTS ON THE HOUSE FLOOR ON CIVIL SERVICE REFORM ACT OF 1978
Statement by-
Hon. William D. Ford of Michigan______________________________ 2003
Hon. William (Bill) Clay of Missouri_____________________________ 2015
Hon. Patricia Schroeder of Colorado__________________________ 2016
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1279
95TH CONGRESS
2D SESSION
S. 2640
IN THE SENATE OF THE UNITED STATES
MARCH 3 (legislative day, FEBRUARY 6) 1978
Mr. Risicorr (for himself, Mr. PERCY, Mr. SASSER, and Mr. JAvrrs) introduced
the following bill; which was read twice-and referred to the Committee on
Governmental Affairs
A BILL
To reform the civil service laws.
1 Be it enacted by the Senate and House of. Representa-
2 tines of the United States of America in Congress assembled,
SHORT TITLE
4 SECTION 1. This Act may be cited as the "Civil Service
5 Reform Act of 1978".
6 SEC. 2. The table of contents is as follows :
TABLE OF CONTENTS
Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Findings and statement of purpose. _
TITLE I-MERIT SYSTEM PRINCIPLES
Sec. 101. Merit system principles; prohibited personnel practices.
.(See pages 1-64 of volume I--identical language
as that contained in S. 2640.)
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4 PERFORMANCE RATING
5 SEC. 405. (a) Chapter 43 of title 5, United State Code,
6 is amen" by adding at the end thereof the following now
7 subchapter-
8
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"SUBCHAPTER 11-PERFORMANCE APPRAISAL
IN THE SENIOR EXECUTIVE SERVICE
4311. Senior Executive Service performance a 1,e iwl
ariwemr
"(a) Each agency shall, in accordance with standards
established by the Oftce of Personnel Management, develop
one or more performance appraisal systems designed to-
"(1) provide for systematic appraisals of job per-
formance of individuals in the Senior Executive Service;
"(2) encourage excellence in performance for'nn-
dividmals in the Senior Executive Service; and
"(3) link the performance of wad individual in
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"(2) take place at least annually, except that no
evaluation of a career employee shall be initiated within
120 days after the beginning of a new administ olion,
and permit the assignment of an unsatisfactory rating
at any time during the performance appraisal period;
"(3) not be appealable to the Merit Systems Pro.
tedion Board, and
(4) have the following resuits-
"(d) ca eer appointees receiving ratings at
any of the fully awaea/ul levels may be given per.
formanoe awards as prearibed its section 5384 of
ship at,
"(B) an unsatisfactory rating requires venues-
five action by removal of the employee from the
current position through reassignment, transfer , or
separation from the Senior Executive Service except
that employees who naive 2 unsatisfactory annual
ratings in 5 oonsecutive years shall be separated
from the Senior Executive Service, and
"(C) employees who ,twice in any 3-year period
naive a less than fully successful annual rating
shall be separated from the Senior Executive Service.
"(c)(1) In aondueding as appraisal of an executive
94 under this section, a performance review board shall receive
990
1 from the supervising official an initial appraisal. The execs-
9 tine may respond in writing to such appraisal. The board
3 shall review the initial appraisal and the executive's response,
4 conduct such further review at it finds neowary, and advise
5 the appointing authority in writing of i s appraisal of the
8 MONISM
7 "(2) Members of performance review boards shall be
8 appointed. in such a manner at to aware oonsisency, stability
.9 and objectivity in performance appraisal and the appointment
10 of an individual to serve as such a member shall be published
11 in the Federal Register.
19 "(3) In the can of an appraisal of a career executive
18 a majority of the members of the performance review board
14 shall consist of career executives.
15 "(d) The Offla of Personnel Management shill each
18 year report to Congress on the performance of the psrfosw.
17 once review boards established under subsection (b) of this
18 section, the number of individuals removed from the Senior
19 Executive Service under subchapter V of chapter 85 of this
20 tide for unsuccessful .performance ratings, and the number
21 of performance awards under section 5384 of this title.
98 4314. Definitions
9a "For purposes of this subchapter, the terms 'agency/,
24 'executive, ? and 'career appointee' shall have the same mean-
95 imp as such terns are used in section 8132 of this title.
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Calendar No. 900
96TH CONGRESS
td 8"Sion
SENATE
REPORT
1 No. 86-989
CIVIL SERVICE REFORM ACT OF 1978
REPORT-
COMMITTEE ON GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
TO ACCOMPANY
S. 2640
TO REFORM THE CIVIL SERVICE LAWS
together with
ADDITIONAL AND MINORITY VIEWS
U.S. GOVERNMENT PRINTING OFFICE
X717 WASHINGTON : 1978
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1462.
COMMITTEE ON GOVERNMENTAL. AFFAIRS
ABRAHAM RIBICOFF, Connecticut, Chairman
HENRY M. JACKSON, Washington CHARLES H. PERCY, Illinois
EDMUND S. MUSKIE, Maine JACOB K. JAVITS, New York
THOMAS F. EAGLETON, Missouri WILLIAM V. ROTH, JR., Delaware
LAWTON CHILES, Florida TED STEVENS, Alaska
SAM NUNN, Georgia CHARLES McC. MATHIAS, JR., Maryland
JOHN GLENN, Ohio JOHN C. DANFORTH, Missouri
JIM SASSER, Tennessee H. JOHN HEINZ III, Pennsylvania
MURIEL HUMPHREY, Minnesota,
RICHARD A. WEOMAN, Chief Counsel and Staff Director
JOHN B.' CHILDERs Minority Staff Director
ELISABETH A. PREART, Chief Clerk
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CONTENTS
Pace
1. Background------ ~df ------------------------------------------- 1
II. Brief summary of ----------------------------------------- 2
III. The need for reform------------------------------------------ 2
IV. Major provisions------------------------------------------ -- 4
V. History of legislation______________________________________ 13
VI. Section-by-section analysis------------------------------------ 17
Title I-Merit system principles___________________________ 18
Title II-Civil service functions; performance appraisals; ad-
verse actions--------------------------------- 24
Title Ill-Staffing--------------------------------------- 65
Title IV-Senior executive service-------------------------- 67
Title V-Merit pa -------------------------------------- 88
Title VI-Research, demonstration, and other programs------ 92
Title VII-Labor-management relations____________________ 96
Title VIII-Miscellaneous-------------------------------- 115
VII. Evaluation of Regulatory impact______________________________ 117
VIII. Cost estimate---- --------------------- 117..
IX. Record vote of committee_____________________________________ 124
X. Additional and minority views_________________________________ 126
XI. Changes in. existing law---.------------------------------------ 139.
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CIVIL SERVICE REFORM ACT OF 1978
Juvr 10 (legislative day MAY 17), 1978.-Ordered to be printed
REPORT
together with
ADDITIONAL AND MINORITY VIEWS
[To accompany s. 28401
The Committee on Governmental Affairs,.to which was referred the
bill (S. 2640) to reform the civil service laws having considered the
same, reports favorably thereon with an amendment in the nature of a
substitute and recommends that the bill as amended do pass.
L BACKGROUND
The changes in law which. are proposed in S. 2640 will constitute the
most comprehensive reform of the Federal. work force since passage of
the Pendleton Act in 1883. Since that time total civilian employment
has increased from approximately '131,000 to almost 2.9 million em-
ployees, of whom almost 93 percent woik, .under a merit system. In
1977, the Federal civilian payroll -amounted to, over $46 billion, more
than 11 percent of Federal outlays for that year. Despite the enormous
growth in Federal employment and the accompanying increase in the
laws and regulations governing the civil service, no systematic con-
gressional review or revision of the system has been attempted in close
to 100 years. S. 2640, as amended, is that long overdue, comprehensive
reform. '
S..2640 is based on many of the recommendations by the President's
Personnel Management Project. That exhaustive study took 5 months
to complete and involved thousands of experts and members of the
public. Building on the comprehensive' work of the President and his
staff, the Governmental Affairs Committee held 12 days of public
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hearings and heard from 86 witnesses, representing 55 organizations.
The committee held seven markup sessions before ordering the bill
reported. S. 2640 is the centerpiece of the President's efforts to make
the Government more efficient and accountable. The committee believes
that, as amended, S. 2640 will promote a more efficient civil service
while preserving the merit principle in Federal employment.
II. BRIEF SUMMARY OF THE BILL
The following is a brief listing of the principal changes that S. 2640
makes in the civil service system." The bill :
Codifies merit system principles and subjects employees who
commit prohibited personnel practices to disciplinary action;
Provides for an independent Merit Systems.Protection Board
and Special Counsel to adjudicate employee appeals and protect
the merit system ;
- Provides new protections for employees who disclose illegal
or improper Government conduct;
Empowers a new Office of Personel Management to supervise
personnel management in the executive branch and delegate cer-
tain personnel authority to the agencies;
Establishes a new performance appraisal system and new stand-
ard for dismissal based on unacceptable performance;
Streamlines the processes for dismissing and disciplining Fed-
eral employees; -
Creates a Senior Executive Service which embodies a new
structure for selecting, developing, and managing top-level Fed-
eral executives;
Provides a merit pay system for GS-13 to 15 managers, so
that increases in pay are linked to the quality of the employees'
performance;
Authorizes the Office of Personnel Management to conduct
research in public management and carry out demonstration
projects that test new approaches to Federal personnel admin-
istration; and
Creates a statutory .base for the the improvement of labor-man-
agement relations, including the establishment in law of the Fed-
eral Labor Relations Authority.
-III. THE "NEED FOR REFORM.
Both the public and those in government have a right to the most
effective possible civil service; .that is, one in which employees are hired
and removed on the' basis of merit and one : which is accountable to
the public through its elected leaders.
The civil service system is the product of an earlier reform, which,
in protest against _the 19th century spoils system, promised a work
force in which employees: were selected. and advanced on the basis of
1 During its consideration of s. 2640; the committee has also had under consideration
Reorganisation Plan No. 2 of 1978, which provides for the creation of the Office of
Personnel Management, the Merit Systems Protection Board, the Office of special Counsel.
and the Federal Labor Relations-Authority. The plan, which was submitted to Congress on
May 23. 1978. is aeheduled to become effective 80 days after submission, if not disapproved
by either House of Congress during the interim.
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competence rather than politica.lL or personal favoritism. Protection
of the merit principle in Federal employment has been accomplished
through the enactment of numerous laws, rules, and regulations. Al-
though the civil service system has largely succeeded in safeguarding
merit principles, there have been frequent attempts to circumvent
them, some of which have been successful
Assaults on the merit system have taken place despite, and in some
instances because of, the complicated rules and procedures that have
developed over the last century. The welter of inflexible strictures
that have developed over the years threatens to asphyxiate the merit
principle itself.
The complex rules and procedures have2 with their resultant delays
and paperwork, undermined confidence in the merit system. Many
managers and personnel officers complain that the existing procedures
intended to assure merit and protect employees from arbitrary man-
agement actions have too often become the refuge of the incompe-
tent employee. When incompetent and inefficient employees are al-
lowed to stay on the work rolls, it is the dedicated and competent em-
ployee who must increase his workload so that the public may be bene-
fitted. The morale of even the best motivated employee is bound to ?
suffer under such a system. Moreover, the system's rigid procedures--
providing almost automatic pay increases for all employees-makes
it as difficult to reward the outstanding public servant as it is to
remove an incompetent employee.
The committee agrees with President Carter that "most civil service
employees perform with spirit and integrity." Unfortunately, the ex-
isting civil service system is more of a hindrance than a help to dedi-
cated Federal employees.
The civil service system is an outdated patchwork of statutes and
rules built up over almost a century. Federal management practices
are antiquated in comparison with the current state of the managerial'
art. Research and experimentation concerning management practices
is virtually nonexistent.
The public ,is ill served by the existing civil service system. As the
President's Personnel Management Project put it :
It is the public which suffers from a system which neither
permits managers to manage nor which provides assurance
against political abuse. Valuable resources are lost to the pub-
lic service by a -system increasingly too cumbersome to com-
pete for talent. The opportunity for more effective ... service
to the public is denied by a system so tortuous that managers
regard it as almost impossible to remove those who are not
performing. (Final Staff Report, Vol.1, p. vi.)
When programs fail or are damaged by mismanagement and incom-
petence, both the taxpayer and the program beneficiary suffer.
For this reason, civil service reform has been described as a "para-
mount consumer issue."
.. millions of consumers look to federal civil servants to
protect them from cancerous additives, in food, filth in meat
products, defects in cars, radiation in television- sets, flam-
mability in clothes, poisons in air and water, and monopoly
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prices in all goods and services. Consumers look to federal
civil servants to wisely spend the.twenty or thirty percent
of their income which they pay to the federal government in
taxes. Consumers look to federal civil servants to see that
their mail is promptly delivered, their bank deposits insured,
their energy needs met. In short, effective, efficient, honest,
patriotic, committed and hard-working federal employees
are a basic consumer interest. (Testimony of Ralph Nader be-
fore Senate Governmental Affairs Committee, April 10, 1978.)
Government executives and managers are vital to the success of pub-
lic programs. The existing civil service' system, however, has failed
to adequately recruit and develop government managers. Too little
emphasis has been placed on training and experience when hiring or
promoting executives who will run programs worth billions of dol-
lars and have a tremendous impact on the lives of millions of people.
Throughout this country's, history-and- especially since 1883-
there has been a tension between protections established to insure that
employees are hired and fired solely on the basis of their ability, and
the need of managers and policymakers to have flexibility to perform
their jobs. Frequently, this tension is characterized as the "rights of
employees" versus the "need for management flexibility." Although
it has recognized this tension,, the Committee has viewed civil service
reform from the standpoint of the public, rather than the more limited
perspective of either the employee or manager. The "ri hts of em-
ployees" to be selected and removed only on the . basis of their com-
petence are concomitant with the public's need to have its business
conducted competently. Similarly, the need for Federal executives to
manage their personnel responsibilities effectively can only be justified
by the benefit derived by the public from such management flexibility.
An employee has no right to be incompetent; a manager has no right
to hire political bed fellows.
The public has a right to an efficient and effective Government, which
is responsive to their needs as perceived by elected officials. At the
same time, the public has a right to'a Government which is impartially
administered. One of the central tasks of the civil service reform bill
is simple to express but difficult to achieve : Allow civil servants to be
able to be hired and fired more easily, but for the right reasons. This
balanced bill should help to accomplish that objective. It is an im-
portant step toward making the _ Government more efficient and more
accountable to the American people.
IV. MAJOR PROVISIONS IN S. 2640
Separation of Civil Service Commission functions
When the Civil Service Commission was created in 1883, Congress
did not intend to create a central personnel agency, but rather to police
patronage. The President was authorized to appoint, with the advice
and consent of the Senate, a Commission to be composed of three
members, not more than two of whom were. from the same party, re-
movable at the will of the President. The Commission's job was to
screen, examine, and present a choice of applicants to fill jobs in the
agencies in the competitive service. General issues of personnel man-
4
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agement and employee concerns played a minimal role in Commission
duties until the early 1900's. It was not until 1932, when the Commis-
sion assumed full responsibility for position classification, supervision
of efficiency ratings, and operations created by the Retirement Act
that the CSC moved beyond patronage control to modern personae'
administration in the Federal Government.
At the present time the Civil Service Commission has a variety .of
functions. Many of the studies of the civil service, as well as many of
the witnesses who testified before the Governmental Affairs Committee,
have pointed out the role conflicts inherent in the responsibilities and
authority assigned to the Civil. Service Commission. The CSC must
now simultaneously serve as a management agent for. a President
elected through a partisan political process as well as the protection of
the merit system from partisan abuse. The Commission serves, too, as
the provider of services to agency management in implementing per-
sonnel programs, while maintaining sufficient neutrality to adjudicate
disputes between agency managers and their employees. As a result,
the Commission's performance of its conflicting functions has suffered.
"Expected to be all things to all parties-Presidential counsellor, merit
"watchdog," employee protector, and ncy advisory-the Commis-
sion has become progressively less credible in all of its roles." (Person-
nel Management Pro7'ect, Final Staff Report, vol. I32 .)
S. 2640, along with Reorganization Plan No 2 , would abol-
ish the Civil Service Commission. In its place two new agencies would
be created : (1) The Office of Personnel Management, charged with
personnel mans, Protection and agency advisory functions, and (2) the
Merit Systems Protection Board, charged with insuring adherence
to merit system principles and laws
Leadership in personnel management
The multimember bipartisan Commission structure, adopted when
the Civil Service Commission's only role was to prevent improper se-
lection of employees, has not served particularly well as the Federal
Government's need for a personnel management agency has emerged.
There has been a lack of an appropriate staff organization to assist the
President in managing the executive branch. Numerous efforts to sup-
ply the President witTi a personnel advisor have been short lived and
generally unsuccessful.
S. 2640 provides that an Office of Personnel Management (OPM),
as an agency within the executive branch, will have central responsi-.
bility for executing,. administering, and enforcing civil service rules
and, regulations other than those under the jurisdiction of the Merit
Systems Protection Board. The Director of OPM will be the Presi-
dent's chief lieutenant in matters of personnel administration. S.
2640 provides that the Director will have the power to delegate any
functions vested in that office, including the authority to conduct
competitive examinations, to individual agencies that employ per-
sons in the competitive service..In cases of delegation, agencies will
be prohibited from taking personnel actions that are contrary to any
law or OPM'regulations.
Delegation of individual personnel actions to the affected. depart-
ments and agencies will serve to make the system more effective. For
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example, examining for jobs in the career service is now carried out
almost exclusively by the CSC. Although centralization is the most
economical way to handle many examinations, it results in an inability
to meet highly varied staffing needs. Further, the Commission staff
has limited knowledge of agency programs and occupations.
Decentralization will eliminate unnecessary bureaucratic proce-
dures. Individual agencies will be more. efficient and speedy at per-
forming functions now shared with the Civil Service Commission. The
specific needs of the Government's diverse agencies will be met under
general OPM guidance. Decentralization is in keeping with the dele-
gation practices that private companies use, allowing the decisionmak-
ing process to work at the level where decisions are most effectively
made. Authority for personnel management will be fixed at the level
responsible for the effectiveness of programs and accomplishment of
missions. OPM will monitor and evaluate the agencies' performance
in personnel administration.
The civil service system envisaged in S. 2640 gives the Office of Per-
sonnel Management the opportunity to exercise leadership in Federal
personnel administration. The Merit Systems Protection Board will
assume principal nsibility for safeguarding merit principles and
employee rights; in ividual personnel actions will be delegated to the
departments and agencies. As a result, OPM will be able to concentrate
its efforts on planning and administering an effective Government-
wide program of personnel management. This includes a responsibility
to see that agencies are performing properly under civil service laws,
regulations, and delegated authorities. OPM will have the.opportunity
for innovative planning for the future needs of the Federal work
force executive and employee development, and pilot projects to test
the ehicacy of various administrative practices. Without the demands
generated by a heavy day-to-day workload of individual personnel
actions, OPM should provide the President, the civil service, and the
Nation with imaginative public personnel administration.
Protection of merit system principles
S. 2640 codifies for the fist time merit system principles, and re=
quires agencies and employees to adhere to those principles Viola-
tion of a merit system principle or commission of a prohibited person-
nel practice will subject an employee to disciplinary. action.
The Merit Systems Protection Board, along with its Special Coun-
sel, is made responsible for safeguarding the effective operation of the
merit principles in practice. Composed of three members nominated
by the President and confirmed by the Senate for single nonrenew-
able terms and removable only for cause, the bipartisan Board will
adjudicate cases of alleged violation of the merit system, enforce
compliance with its decisions and orders, order stays of personnel
actions in.cases where it determines that such relief is justified, and
conduct studies of the civil service and other merit systems. The Special
Counsel, nominated by the President subject to Senate approval and
removable only for cause, will receive and investigate allegations of
prohibited personnel practices in violation of the merit system, and
bring violators before the Board for appropriate remedial action.
There is little doubt that a vigorous protector of the merit system
is needed. The lack of adequate protection was painfully obvious dur-
 Approved For Release 2007/05/14: CIA-RDP85-00003R000300090001-1
ing the civil service abuses only a few -years ago. Establishment of a
strong and independent Board and Special Counsel will discourage
subversions of merit principles. Dwight Ink, Executive Director of
the President's Personnel Management Study, called the independent
and strong Merit Board "the cornerstone" of civil service reform.
The bill provides for an independent Board and Special Coun-
sel. By statute, no more than two members of the Board will be of the
same political party. Its members' terms will last 7 years, with re-
moval only for cause. The Special Counsel will serve a term cotermi-
nous with that of the President. Board Members will not be eligible
to serve more than one term. As a result of this structure, the Board
should be insulated from the kind of political pressures that have led
to violations of merit principles in the past. Both the Board and the
Special Counsel will exercise statutory responsibilities independent of
any Presidential directives. Absent. such a mandate for independence
for the Merit Board, it is unlikely that the committee would have
granted the Office of Personnel Management the power it has or_ the
latitude to delegate personnel authority to the agencies.
In addition, S. 2640 gives the Board and the Special Counsel new
powers to protect the merit system more effectively. Unlike the Civil
Service Commission, the Board will have subpena authority for ob-
taining evidence that is essential in conducting investigations and
adjudicating appeals by Federal workers. The Special Counsel, will
have power to initiate disciplinary action against those who know-
ingly and willfully violate the merit principles by engaging in pro-
hibited personnel practices. In addition to simple reprimand, these
sanctions include removal, suspension, demotion, exclusion from Fed-
eral employment for up to 5 years, and fines up to $1,000. S. 2640
requires the Board to direct agencies, in certain cases, to pay em-
ployees' attorneys' fees.
Creation of statutory labor-management relations'authority
A major aspect of Federal personnel management under S. 2640
will be carried out by a new Federal Labor Relations Authority. At
present,.: this. responsibility is shared.by the Assistant Secretary of
Labor for Labor-Management Relations and the part-time Federal
Labor-Relations Council. The Assistant Secretary is charged with
decisionmaking regarding unfair labor practices, and the Council
serves as an appellate body. S. 2640 provides for consolidation of this
authority in a single administrative organization, which is impartial
by virtue of its independence from any direct responsibility to the in-
cumbent administration, and which has a statutory mandate to govern
Federal labor-management activities and procedures.
Consolidating responsibility in FLRA should eliminate what is per-
ceived by Federal employee unions and others as a conflict of interest
in the existing Council. Its members consist' of the Chairman of the
Civil Service Commission, the Director of the Office of Manage-
ment and Budget, and the Secretary of Labor-policym'akers who
are responsible primarily as top managers in the incumbent admin-
istration. S. 2640 will assure impartial adjudication of labor-manage-
ment cases by providing for a new Board whose members are selected
independently-nominated by the President and confirmed by the
 Approved For Release 2007/05/14: CIA-RDP85-000038000300090001-1
Senate-rather than by virtue of their service as Federal managers.
Creation of the FLRA also will eliminate the existing fragmentation
of authority between the Assistant Secretary of Labor for Labor-
Management Relations and the Federal Labor Relations Council. The
FLRA will have comprehensive jurisdiction in Federal labor-manage-
ment relations. Merging the responsibility into a single agency will
eliminate the need for continuous coordination between two separate
agencies with differing and at least potentiallyy conflicting mandates.
This change should result in more effective policymaking and admin-
istration in this area of vital importance to both Federal employees
and Federal managers, as well as the public at large.
S. 2640 also provides explicit statutory responsibilities for FLRA.
The- part-time Federal Labor Relations Council was established by'
Executive order. With approval of S. 2640, the intent of Congress re-
garding the functions and operations of Federal labor-management
relations will be clearly established.
Whistle blowers
S.. 2640 gives the Merit Systems Protection Board and the Special
Counsel explicit authority to protect whistle blowers-Federal em-
ployees who disclose illegal or improper government activities. Often,
the whistle blower's reward for dedication to the highest moral prin-
ciples is harassment and abuse. Whistle blowers frequently encounter
severe damage to their careers and substantial economic loss.
Protecting employees who disclose government illegality, waste,
and corruption is a major step toward a more effective civil service.
In the vast Federal bureaucracy it is not difficult to conceal wrongdo-
ing provided that 'no one summons the courage to disclose the truth.
Whenever misdeeds take place in a Federal agency, there are employees
who know that it has occurred, and who are outraged by it. What is
needed is a means to assure them that they will not suffer if they help
uncover and correct administrative abuses. What is needed is a means
to protect the Pentagon employee who discloses billions of dollars in
cost overruns, the GSA employee who discloses widespread fraud,
and the nuclear engineer who questions the safety of certain nuclear
plants. These conscientious civil servants deserve statutory protection
rather than bureaucratic harassment and intimidation.
S. 2640 will establish significant protections for whistle blowers. For
,the first time, and by statute, the Federal Government is given the
mandate=through the Special Counsel of the Merit Systems Pro-
tection Board-to protect whistle blowers from improper reprisals.
The Special Counsel may petition the Merit Board to suspend retalia-
tory actions against whistle blowers. Disciplinary action against viola-
tors of whistle blowers' rights also may be initiated by the Special
Counsel. In addition, S. 2640 establishes a mechanism by which the
allegations made by whistle blowers can be reviewed by responsible
government officials. At the same time, S. 2640 will not protect em-
ployees who disclose information which is classified or prohibited
by statute from disclosure. Nor would the bill -protect employees who
claim to be whistle blowers in order to avoid adverse action based on
inadequate performance.
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1473
Diami88als
A widely held impression is that a government employee cannot be
fired, regardless of unacceptable conduct or work performance. Al-
though this is untrue enough bad examples are available to give it
credibility. But while it is technically possible to fire unsatisfactory
employees, appeals processes are so lengthy and complicated that man-
agers often avoid taking disciplinary action. An employee may be
taken off an agency's rolls 30 days after he has been notified of his
supervisor's intent to remove him, yet if the employee decides to app-
peal the action the process may take. much longer. For example,
removal actions appealed by employees of 18 surveyed agencies took
48 days to process within the agency. Delays of over one year are not
unknown, though. In addition, the Federal Employees Appeals Au-
thority (FEAA) took 152 days on average to reach decisions on re-
moval actions. Thus, an average of 61/2 months are. required to
complete an action for removal which an employee appeals. If the
appeal is taken beyond the FEAA, the process may take much longer.
It is relatively easy to discharge an unsatisfactory employee during
the first.year of service (probationary period). After an employee has
completed the first year of service, though, existing law provides that
an individual may be removed only for such cause as will promote the
.efficiency of the service; 17,157 Federal employees were dismissed in
calendar year 1976. This figure includes :
Separated for inefficiency based on. unsatisfactory performance of duties__ 220
Resigned in lieu of adverse action, some of whom may have done so be-
cause of poor performance------------------------------------------ 2,287
Terminated during their probationary periods__________________________ 4,261
Removed because of some condition that existed before they were hired-- 240
Dismissed for some form of misconduct------------------------------ 8,164
Separated for suitability reasons-------------------------------------- 418
Separated under the Foreign Service system___________________________ 4
Discharged for a variety of additional reasons that the data do not
differentiate. (These were not subject to appeal to the Civil Service
Commission.) ----------------------------------------------------- 6,557
As the figures indicate, the number of employees actually removed,
because of unsatisfactory job performance as distinguished from mis-
conduct is relatively small, even when one considers those who resigned
in lieu of adverse action or were terminated during their probationary
periods. Although it is difficult to pinpoint the reasons why these
figures are low, given the size of the Federal work force, among the
reasons are:
Performance evaluation 'procedures do 'not work well enough
to distinguish employees whose performance is below an accept-
able level to make the charges stick.
Fear of employee appeals, grievances and the protracted prob-
lems they create for the employee, the manager and the work unit
involved.
Natural reluctance on the part of managers to fire an employee,
especially when the manager's performance is not directly linked
to that of his subordinates.
The lengthy ' and complex appeals processes adversely affect em-
ployees and managers alike. The procedures are so confusing they
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often discourage the proper exercise of employee rights. The manager
in an appeal may come under severe attack no matter how fairly the
manager has proceeded. Managers embroiled in appeals often find
that these processes consume all of their time and attention.Some
managers simply avoid taking necessary steps to discipline or dis-
charge employees in the first place. They find ways to work around
unsatisfactory employees, or they hope the employees will go else-
where to work.
S. 2640 will accelerate the personnel action process while protecting
employees' rights to fair treatment. The bill will simplify and expe-
dite procedures for dismissals of Federal employees whose perform-
ance is below the acceptable level within a comprehensive framework
for performance evaluation. The bill requires that performance eval-
uation be used as a basis for all decisions about rewarding, promoting,
and retaining Federal employees. Statutory adverse action procedures
and rights will be extended to additional categories of workers.
S. 2640 will streamline the appeals process, eliminating unnecessary
layers of appeal. It will also for the first time specify the standards
to be used in deciding whether an agency action Eagainst an employee
is justified. As an alternative to the appeals process the bill provides
for bargaining by members of bargaining units to establish arbitration
procedures for the handling of adverse actions.
The appeals procedures outlined in S. 2640 should also improve the
handling of discrimination complaints by Federal employees. The
bill provides for a cooperative arrangement between the Equal Em-
ployment Opportunity Commission and the Merit Systems Protection
Board on questions involving merit principles and discrimination,
with disagreements between the two agencies being certified to the
Federal courts. .
Senior Executive Service
Despite the critical need to recruit and develop the highest quality
Federal executive, no fully, effective governmentwide system exists
today for selecting, preparing, advancing, and managing the men
and women who administer the programs that affect every person in
the Nation. At present neither the Congress nor the President has
effective control over the size and distribution of executive level em-
ployees. In addition, the existing system for designating career and
noncareer positions fails to provide adequate protection against polit-
icization of the career service, yet it is so rigid that it fails to provide
agency heads with -sufficient flexibility to fill critical positions with
executives of their own choosing. The current rank-in-position sys-
tem of classifying jobs limits rotation and reassignment oppprtunities
for career employees and prevents the best use of executive talent.
Moreover, it is difficult to reward executives whose work is outstand-
ing, and to reassign or remove executives whose performance is un-
acceptable. Finally, even with the rigid strictures governing executive
employees, there is inadequate protection against political abuse and
incompetence.
S. 2640 addresses these and other problems in the staAng and man-
agement of senior executive positions by creating a new Senior Execu-
tive Service -(SES). Most senior positions in grades GS-16 through
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Executive Level IV will be assigned to SES. They will be subject to
removal for inadequate performance, with a guaranteed right to a
career position as at least a GS-15 without a loss in pay unless they
were removed for misconduct, neglect of duty, or malfeasance. By
statute, no more than 10 percent of the positions in the SES may be
filled by noncareer executives. This statutory cap on noncareer
appointments is an important check against politicization of the
SES. Career- appointments will be made by the agencies strictly on the
basis of managerial merit. Newly appointed SES executives will serve
a probationary appointment of one year. Each agency will develop
annual performance aplraisal systems for SES executives, with
written appraisals based on established requirements. Executives will
be shown the performance appraisal and rating and given an oppor-
tunity to respond in writing and have the rating reviewed at a higher
managerial level. SES executives will be eligible for annual cash
performance awards not to exceed 20 percent of their base pay, as well
as awards for sustained excellence or sustanied extraordinary
accomplishments.
In the SES, rank will be based on an executive's individual talent's
and performance, not the position. Assignments in the SES will be
made according to the overall needs of the government, thereby. pro-
moting its efficiency. This pattern also will permit more lateral mo-
bility for executives than most presently enjoy. Increased mobility
among Federal,' State and local agencies and the private sector in
turn, will mean decreased parochialism of outlook in the government's
top managers.
Evaluation of. executives in the SES will be based on their actual
performance. Those whose work is exceptional will be eligible for
performance awards. In addition, the psychic rewards will be consider-
able; serving in the SES will be an honor because it will be earned on
merit. Those executives who cannot or do not live up to its standards
will be removed, but their rights will be protected in a variety of ways.
Ina removal for misconduct they may appeal to the Merit Systems
Protection Board. In unacceptable performance cases there is a de-
tailed process required in the agency. In performance cases they can
revert to the regular civil service as a GS-15.
This provision of S. 2640 should foster the development and effective
use of senior executives in the Federal service. It is the kind of system
that has been highly successful in the private sector, as well. It is an
idea that public administrators have been advocating for decades,
most notably in the second Hoover Commission report in 1955.
Pay for performance
Rewarding excellence and discouraging lackluster performance is
very difficult under the present system. Performance appraisals now
are virtually meaningless, with almost every employee receiving a
"satisfactory" rating. Pay increases are awarded almost automatically.
In addition to the Senior Executive Service provisions, the bill con-
tains a merit pay system for managers in grades GS-13 through GS-
15. Under the bill, meaningful performance appraisals would be re-
quired, with an employe's pay tied to the result of the appraisal. Rather
than granting automatic entitlement to progress through the pay
 Approved For Release 2007/05/14: CIA-RDP85-00003R000300090001-1
range, advancement would, at least in part, be based on the quality
of the work of the employees covered by this provision. Full compar-
ability adjustments would not be given to all employees covered by the
provision. The .money saved would- be used to compensate employees
whose performance merited an additional pay increase.
Research and demonstration Projects
In recog~nnition of changing public needs. Title VI of S. 2640 author-
izes the (Mee of Personnel Management to conduct research in public
management and carry out demonstration projects that test new ap-
proaches to Federal personnel administration. Certain sections of the
Federal personnel laws would be waived for purposes of small-scale
experiments. Among the subjects of possible projects are appeals mech-
anisms, alternative forms of discipline, security and suitability investi-
gations, labor-management relations, pay systems, productivity, per-
formance evaluation, and employee development and training.
Expanded knowledge in organizational management is always use-
ful, and pilot projects provide one of the best sources of information.
Through experimentation, it is possible to avoid both excessive rigidifi-
cation in the personnel system and comprehensive change with exten-
sive unanticipated consequences. Researchers are able to get the facts
about the likely results of proposed new procedures by applying them
on a small scale rather than throughout the entire organization. If
successful, a proposed change can then be extended; if not, it can be
eliminated more easily; if the results are mixed, the new system can
be adjusted.
Experimentation of this kind should permit responsiveness to Chang-
ing public needs as reflected in the Federal personnel system. It may
mean less need for reform in future years. It permits flexibility and
the foresight to meet emerging issues.
This provision of S. 2640 also will provide a statutory basis for the
Office of Personnel Management to conduct demonstration projects.
It embodies the intent of Congress that continuing review of personnel
techniques and systems is a vital aspect of civil. service reform.
Labor management relations
S. 2640 incorporates into law the existing Federal employee relations
pro gram. At the same time, S. 2640 recognizes the special requirements
of the Federal government and the paramount public interest in the
effective conduct of the public's business. It insures to Federal agencies
the right to manage government operations efficiently and effectively.
The basic, well-tested provisions, policies and approaches of Execu-
tive Order 11491, as amended, have provided a sound and balanced
basis for cooperative and constructive relationships between labor or-
ganizations and management officials. Supplemented by the Federal
Labor Relations Authority to administer the program, and expanded
arbitration procedures for resolving individual appeals, these measures
will promote effective labor-management relationships in Federal
operations.
The bill permits unions to bargain collectively on personnel policies
and practices, and other matters affecting working conditions within
the authority of agency managers. It specifies areas for decision which
are reserved to the President and heads of agencies, which are not sub-
 Approved For Release 2007/05/14: CIA-RDP85-00003R000300090001-1
ject to the collective bargaining process. It excludes bargaining on
economic matters and on nonvoluntary payments to unions by em-
ployees. Strikes by Federal employees are prohibited; bargaining im-
passes are resolved through the Federal Mediation and Conciliation
Service and the Federal Service Impasses Panel; and employees are
protected in their rights to join, or refrain from joining, labor organi-
zations.
Intergovernmental Personnel Act Amendment8
Title VI also provides for the use of a single set of merit system
standards to be applied to state and local governments in those pro-
grams which receive Federal funding. This change is designed to aid
state and local officials who now must meet several sometimes conflict-
ing requirements.
V. HISTORY OF LEGISLATION
S. 2640 had its genesis early in 1977 when officials of the Civil Service
Commission, the Office of.Management and Budget and other execu-
tive branch agencies met in preparation for the President's Personnel
Management Project. The Project was officially begun in June 1977,
and took 5 months to complete.
The Project involved 110 staff members, the great majority. of
whom were career employees, assigned to 9 different task forces. These
110 people were from numerous agencies and commissions within the
executive branch, as well as Congress and the private sector. Alan H.
Campbell, Chairman of the Civil Service Commission, served as Chair-
man of the Project, and Wayne G. Granquist, Associate Director of
OMB, as Vice Chairman.
The project staff held 17 public hearings throughout the United
States in which approximately 7,000' individuals participated as part
of the consultation process. Also, 800 organizations were contacted for
comments on option papers. Although the, staff carrying' out the
project were largely from the public service, people were drawn from
outside Government into the study process on an extensive scale. Each
of the project task forces studying separate as of the personnel
system developed detailed option papers which discussed the problems
and suggested a wide range of recommendations.
After completion of the three volume report, the Carter administra-
tration developed S. 2640, which embodies many of the recommenda-
tions contained in the President's study. In March of 1978, the Presi-
dent submitted S. 2640 to Congress.
In March of, 1978, the President submitted S. 2640 to Congress.
The Governmental Affairs Committee held 12 days of hearings
during which 86 individuals, representing 55 organizations; testified.
In addition, Senators Ribicoff and Percy wrote to almost 90 experts
in public administration and personnel management requesting their
views on this legislation and the proposed Civil Service Reorganiza-
tion Plan. The vast majority of the respondents expressed support for
the reforms. Most of the witnesses who testified also voiced support
for S. 2640.
The following is a list of the witnesses who testified at the hearings,
in order of their
appearance:
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Apri16,1978
Mr. James T. McIntyre, Jr., Director, Office of Management and
Budget.
Mr: Wayne Granquist, Associate Director OMB.
Mr. Alan Campbell, Chairman, Civil Service Commission.
Mr. Jule Sugarman Commissioner CSC.
Mrs. Ersa Poston, Commissioner, (SC.
April 7,1978
Mr. David Cohen, President of Common Cause.
Mr. Rocco Siciliano, Chairman, Ticor and Vice-Chairman, Com-
mittee for Economic Development.
Panel : National Academy of Public Administration :
Mr. James L. Sundqquist.
Mr. Bernard L. Gladieux.
Mr. Richard L. Chapman.
Mr. George S. Maharay.
April 10, 1978
Mr. Ralph Nader.
Mr. Bertrand Harding-National Civil Service League.
Mr. Norman B. Hartnett-National Service Director, Disabled
American Veterans.
Mr. Donald H. Schwab-Director, National Legislative Service
Veterans of Foreign Wars.
Mr. Austin E. Kerby-Director for Economics, the American
Legion.
Mr. Edward J. Lord-Assistant Director for Legislative Com-
mission.
April 12,1978
Mr. Elmer B. Staat omptroller General of the United States.
Mr. Clifford Gould-Deputy Director, Federal Personnel and Com-
pensation Division.
Mr. Henry Barclay-Attorney, Office of General Counsel.
Mr. Jack Carlson-Vice President and Chief Economist for the
Chamber of Commerce.
Mr. Robert T. Thompson--of Thompson, Mann and Hutson, At-.
lanta, Ga.
April 13,1978
Mr. Gene Raymond-Executive Director, National Federation of
Federal Employees.
Mr. Ervin Geller-General Counsel
Mr. Tom Trabucco-Legislative Assistant.
Mr.: Robert L. White-National President-National Alliance of
Postal and Federal Employees.
Mr. Johnnie. Landon-Special Counsel to the The National Presi-
dent.. .
Ms. Mae M. Walterhouse-National President, Federally Employed
Women.
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Ms. Marylouise Uhlig-Regional Coordinator, D.C. Metropolitan
Region, Federally Employed Women.
Ms. Clelia Steele-Member, Coordinating Commission, Coalition
for Women's Appointments.
Ms. Christine Candela-Vice President, Women's Equity Action
League.
Ms. Leslie Gladstone-W.E.A.L., Legislative Coordinator.
Ms. Daisy B. Fields=Commission for Women in Public Adminis-
tration of the American Society for Public Administration.
Ms. Joanne HayesVice President-League of Women Voters.
Mr. Richard Snelling-Governor of Vermont.
April 19, 1978
Mr. William A. Hammill-International. Personnel Management
Association.
Mr. Donald K. Tischner-Executive Director.
Mr. Rod Murray-National President, National Association of
Supervisors.
Mr. Bun B. Bray, Jr.-Executive Director.
Mr. James L. Hatcher-Assistant Executive Director.
Mr. Ralph Stavins-Institute for Policy Studies.
Mr. Louis Clark-Staff Counsel.
April 20, 1978
Ms. Florence Isbell-Chairperson, Government Employees Rights
Commission, A.C.L.U.
Mr. Patrick J. Leahy-U.S. Senator from Vermont.
Mr. Ernest Firzgerald.
Mr. Robert Sullivan.
Mr. Anthony Morris.
Mr. Frank Snepp.
April 27, 1978
Mr. Kenneth A. Meikeljohn-Legislative Representative, AFL-
CIO.
Mr. John A. McCart-Executive Director, Public Employee Depart-
ment AFL-CIO.
Mr. Sol Stein-Metal Trades Department AFL-CIO.
Mr. Kenneth Blaylock-President American Federation of Govern-
ment Employees.
Mr. Lou Pellerzi-General Counsel, American Federation of Gov-
ernment Employees.
May 3, 1978
Mr. -Dwight A. Ink-Executive Director, Federal Personnel Man-
agement Project, U.S.C.S.C.
Mr. Benjamen Neufeld-American Veterans. Committee Chairman,
National Affairs Commission.
Mr. Otto Lukert-Vice President, National Association of Con-
cerned Veterans.
Mr. George Frederickson-Immediate Past President American
Society of Public Administration.
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Ms. Judith Vandergriff-Chairman Permanent Standing Commit-
tee of Legislation, National Association of Commissions for Women.
May 4, 1978
Mr. Michael Pertschuk-Chairman, Federal Trade Commission.
Mr. Harry Kefauver-Director of Personnel.
Ms. Barbara Blum-Deputy Administrator, Environmental Pro-
tectionAgency..
Mr. William Drayton-Associate Administrator for Planning and
Management, Environmental Protection Agency.
Mr. William Carter-Senior Project Manager.
Mr. Kenneth T. Lyons-President National Association of Gov-
ernment Employees.
Mr. Alan J. Whitney-Executive Vice President, N.A.G.E.
Ms. Anne Sullivan-Legislative Director.
Mr. Edward Gildea-Assistant General Counsel.
Mr. Albert A. Grant-Chairman, Commision on Civil Engineers in
Government.
Mr. Louis L. Meier-Assistant Secretary and Washington Counsel,
Society of Civil Engineers.'
Mr. Steve Ralston-Representing the NAACP Legal.Defense and
Educational Fund, Inc.
Mr. George Perry-President, Ethnic Employees of the Library of
Congress.
Mr. Howard Cook-Executive Director,. Black Employees of the
Library of Congress.
May 5, 1978
Mr. Vincent L. Connery-National President, National Treasury
Employees Union.
Mr. Jerry D. Klepner-Director of Communications. . -
Mr. Robert M. Tobias-General Counsel.
Mr. Rudolph H. Weber-Immediate Past President, The American
Society for Personnel Administrators.
Mr. Leonard R. Brice-Executive Vice President.
Mr. James Ferguson-Vice President, Government Affairs.
Mr. Raymond Nathan-Washington 'Representative, American
Ethical Union.
May 9, 1978
Mr. James D. Hill-Executive Director, National Federation of
Professional Organizations. .
Mr. Wayne A. Nagee-Association of Scientists and Engineers.
Mr. William Pryor-National Association of Government Engi-
neers.
Mr. Thomas Bruderls-National Society of Professional Engineers.
Mr. Walter W. John-Organization of Professional Employees of
the Department.of Agriculture.
Mr. Vincent J. Paterno-National President, Association of Civilian
Technicians.
Mr. John Chapman-Executive Assistant.
16
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Mr. George Auman-President, Federated Professional Association.
Mr. Ed MacCutchen-Member, Executive Committee.
Mr. Lionel Murphy-Member, Executive.Committee and Legisla-
tive Research Director.
Following the completion of these hearings the Committee met on
May 22, June 7, June 8, June 12, June 13, June 14, and June 29 to
consider this legislation. On June "29 the Committee voted 11-2 to re-
port favorably S. 2640, as amended.
VI. SECTION-BY-SECTION ANALYSIS
This section provides that the Act is to be known as the "Civil
Service Reform Act of 1978."
This section sets forth the table of contents for the eight titles of
.the statute. They are : Title I-Merit System Principles; Title II-
Civil Service Functions, Performance Appraisal, Adverse Actions;
Title III-Staffing; Title IV-Senior Executive Service; Title V-
Merit Pay ; Title VI-Research, Demonstration, and Other Pro-
grams; Title VII-Labor-Management Relations; and Title VIII-
Miscellaneous.
This section establishes as policy of the United States that the
merit system principles governing the Federal civil service be ex-
pressly stated and that the personnel practices which are prohibited
in the Federal service be statutorily defined. It provides that the au-
thority and powers of the independent Merit Systems Protection
Board and Special Counsel to enable the Board to handle hearings
and appeals involving Federal employees, to enable the Special Coun-
sel to investigate prohibited personnel practices and protect Federal
employees from reprisals arising out of the disclosure of information,
exercise of an appeal right, or conduct involving political activity. It
provides that certain personnel functions, including the function.of
filling positions in the competitive service, may be delegated from the
Office of Personnel Management to agencies, with oversi it of the
delegation retained by the Office of Personnel Management. It calls for
the establishment of a Senior Executive Service to provide additional
flexibility for executive agencies in recruitment and management ef-
forts, and provides that pay increases should be based on quality of
performance rather than length of service. It provides that a research
and demonstration program should be authorized to enable Federal
agencies to utilize new and different personnel management concepts
and to provide for greater productivity in the Federal civil service.
Finally, it codifies in statute the rights previously granted by Execu-
tive Order 11491 to Federal employees to organize, bargain collectively,
and participate through labor organizations in decisions which affect
their working conditions.
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TITLE I-MERIT SYSTEM PRINCIPLES
Title I establishes in law the merit principles of the Federal per-
sonnel system and the specific personnel practices prohibited in the
system. The title establishes the President's responsibility to ensure
that personnel management in the Executive Branch is based upon
merit system principles. The title specifies that agency heads, and those
to whom personnel management authority is delegated, are responsible
for preventing prohibited personnel practices.
As far as the Committee is aware, this represents the first across-the-
board codification of merit system principles, and of prohibited per-
sonnel practices, for the Federal civil service system. Unlike the Code
of Ethics for Government Service, the merit principles in S. 2640 will
become part of the statutory law. The Code, however, is in no way
affected by the enactment of S. 2640.
The merit system principles are designed to protect career employees
against improper political influences or personal favoritism in the re-
cruiting, hiring, promotion, or dismissal processes, to assure that per-
sonnel management is conducted without discrimination,-and to pro-
tect individuals who speak out about government wrongdoing from
reprisals. Managers who commit prohibited personnel practices are
made specifically accountable for their actions, and are subject to'
disciplinary actions ranging from reprimand and fine through
dismissal.
Section 101(a) of this title provides that a new Chapter 23, en-
titled "Merit System Principles," is added to Title V of the United
States Code. Chapter 23 is subdivided as follows : Section 2301-
Merit System' Principles; Section 2302-Prohibited Personnel Prac-
tices; Section 2303-Responsibility of the General Accounting Office.
Section 3301. Merit system principles
Subsection (a) (1) provides that the merit system principles, and
the prohibitions against certain personnel practices set forth in Sec-
tion 2302, apply to departments and agencies in the Executive branch,
including independent regulatory agencies-and the Smithsonian Insti-
tution. The chapter also applies to the Administrative Office of the
United States Courts, and to the Government Printing Office.
Subsection (a) (2) excludes from the coverage of the chapter a gov-
ernment corporation, the General Accounting Office, the Central In-
telligence Agency, the Defense Intelligence Agency and the National
Security Agency, and any agency or unit which the President finds
is principally engaged in foreign intelligence or counterintelligence
activities. In addition, an amendment adopted by the Committee
added the Federal Bureau of Investigation and individuals in the
Drug Enforcement Agency at grade.levels of GS-16 and above to the
list of exclusions. Such exclusions from this chapter are not intended
to limit in any way any other obligation or responsibility imposed
on these agencies, or on agency officials, by any other law, rule, or
regulation. Nor is the approval by the committee of these exclusions
intended to prejudge the comprehensive review of the laws govern-
ing the intelligence agencies now being conducted by the Senate Se-
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lect Committee on Intelligence. That committee may have further
recommendations for changes in the way the personnel laws apply
to the intelligence agencies.
In addition, the President is authorized to exclude specific con-
fidential, policy-making, policy-determining or policy-advocating
positions from the coverage of the chapter, or any other position if
he finds that such an exclusion is necessary and warranted by condi-
tions of good administration. In the case of such Presidential exclu-
sions, however, the exclusion applies only to the position-holder's
rights as an.employee; the prohibitions in Section 2302 against com-
mitting certain personnel practices apply to individuals who hold
such positions, and the exclusion does not affect these prohibitions.
Subsection (b) sets forth the merit system principles which govern
Federal personnel management. The committee revised the introduc-
tory wording to subsection (b) to specifically require. Federal agen-
cies to adhere to merit system principles. This places on Federal agen-
cies for the first time an affirmative mandate to adhere to merit sys-
tem principles.
The merit system principles set forth by this subsection are as fol-
lows :
Recruitment of the Federal work force is to be from qualified can-
didates. Selection and advancement of employees is to be based solely
on the relative ability, knowledge, and skills of the individual, after
fair and open competition which assures equal opportunity.
Discrimination against applicants or employees, based on political
affiliation, race, color, religion, national origin, sex, marital status,
age, or handicapping condition, is to be eliminated from Federal
personnel administration.
The privacy and constitutional rights of applicants and employees
are to be protected. Thus, applicants and employees are to be pro-
tected against inquiries into, or actions based upon, non-job-related
conduct. An applicant or employee is also to be protected against any
infringement of due process, self-incrimination, or other constitu-
tional rights.
Employees are to be compensated equitably, with consideration
given to both national and local rates paid by employers outside the
Federal Government. No change in current law in this regard is in-
tended. Appropriate incentives and recognition for outstanding per-
formance are to be provided. Employees are to maintain high stand-
ards of integrity and. conduct, including the avoidance of conflicts of
interest. The workforce is to be efficiently used.
Employees are to be retained on the basis of their performance,
and those who cannot or do not meet the required standards should
be separated. Training is to be provided to employees to improve or-
ganizational and individual performance.
Employees are to be protected against arbitrary action, personal
favoritism, and from partisan political coercion. Employees are pro-
hibited from using official authority to interfere with or affect the
result of an election or nomination.
Subsection (c) provides the President broad authority to issue
rules, regulations, or directives in order to assure that Federal per-
sonnel management in the Executive Branch is conducted according
to the merit system principles set forth in this section.
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Section . Prohibited personnel practices
This section sets forth the list of prohibited personnel practices. A
prohibited personnel practice is a personnel action which is taken for
a prohibited purpose. Employees who commit a prohibited personnel
practice are subject to disciplinary action by the Merit Systems Pro-
tection Board or, in certain cases, by the President.
Subsection (a) defines the term "personnel action." The term in-
cludes.-an appointment or ppromotion; a removal, suspension of pay,
or any other adverse action falling within Chapter 75; any other disci-
plinary or corrective action; a detail, transfer, or reassignment; a
reinstatement, restoration, or re-employment; a performance evalua-
tion issued under a performance rating plan; a decision concerning
pay, benefits, or awards; a decision concerning education or training if
it may lead to some other personnel action.
In addition, the committee added as an additional category of per-
sonnel action any other significant change in duties or responsibilities'
inconsistent with the employee's salary or grade level. Thus, for ex-
ample, if an individual with professional training or qualifications is
employed and assigned duties or responsibilities consistent with the
individual's training or qualifications, it would constitute a personnel
action if the individual were detailed, transferred, or reassigned so
that the employee's overall duties or responsibilities are inconsistent
with the individual's professional training or qualifications. Or, if an
individual holding decision-making responsibilities or supervisory au-
thority found that such responsibilities or authority were significantly
reduced, such an action could constitute a personnel action within the
meaning of this subsection.
However, it is the overall nature of the individual's responsibilities
and duties that is the critical factor. The mere fact that a particular
aspect of an individual's job assignment has been changed would not
constitute a personnel action, without some showing that there has
been a significant impact on the overall nature or quality of his job.
An action which would otherwise constitute a personnel action
within the meaning of this section, that is taken against an individual
holding a position which has been excepted from the competitive
service because of its confidential, policy-making or policy advocacy
character, is exempt from the coverage of this section.
Subparagraph (b) sets forth certain personnel practices, and
makes them unlawful.
Paragraph (1) makes it unlawful to discriminate, either in favor
of any employee or applicant, or against any employee or applicant,
based on race, color, religion, sex, national origin, age, handicapping
condition, marital status, or political affiliation, as set forth in appli-
cable statutes, civil service rules, and Executive Orders.
Paragraph (2) restates and expands 5 U.S.C. 3303, which currently
prohibits consideration of recommendations submitted by senators
or representatives, except as to character or residence. The para-
graph adds a prohibition against soliciting any such recommendation.
An exception is made for recommendations based on personal knowl-
edge or personal records, where it consists of an evaluation of work
performance, ability, aptitude, character, loyalty, or suitability.
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Paragraph (3) summarizes the Hatch Act prohibitions. Essentially,
it prohibits the use of official authority to coerce political activity or
to obligate any political contribution or political service. It also pro-
hibits any reprisal against an individual who refuses to engage in
political activities.
Paragraphs (4) and (5) prohibit deliberate deceit or obstruction
with respect to an individual's right to compete for Federal employ-
ment, and prohibit influencing a person to withdraw from competi-
tion in order to assist or injure another's_prospects.
Paragraph (6) prohibits the granting of any unauthorized prefer-
ence or advantage to an employee or applicant for the purpose of
improving or injuring the prospects of any particular individual,
or any category of individuals."This paragraph should be read in con-
junction with the provisions of subsection (d) regarding equal em-
plovment opportunity efforts.
Paragraph (7) prohibits nepotism in appointments or promotions.
This paragraph is a restatement of the- restriction contained in 5
U.S.C. 3110.
Paragraph (8) prohibits reprisals against "whistle blowers."
S. 2640, as originally introduced, made it a prohibited personnel
practice to take any reprisal action against an employee who publicly
disclosed P. violation of a law, rule, or regulation, as long as the
disclosure itself was not prohibited by any law, rule, or regulation.
The committee broadened the whistle blower protection in three
significant respects. First, the categories of protected disclosures are
broadened. In addition to violations of law, rule, or regulation, an
employee or applicant is protected against the disclosure of any
information which he reasonably believes constitutes mismanagement,
gross waste of funds, abuse of authority, or a substantial and specific
danger to the public health or safety. With respect to the latter cate-
gory, the committee intends that only disclosures of public health or
safety dangers which are both Substantial and apeci fic are to be pro-
tected. Thus, for example, general criticism by an employee of the
Environmental Protection Agency that the agency is not doing enough
to protect the environment would not be protected under this subsec-
tion. However, an allegation by a Nuclear Regulatory Commission en-
gineer that the cooling system of a nuclear reactor is inadequate would
fall within the whistle blower protections.
Second, the committee narrowed the proviso for those disclosures
not protected. There was concern that the limitation of protection in
S. 2640 to those disclosures "not prohibited by law, rule, or regula-
tion," would encourage the adoption of internal procedural regula-
t.ions against disclosure, and thereby enable an agency to discourage
an employee from coming forward with allegations of wrongdoing. As
modified, the limitation has been narrowed. Those disclosures which
are specifically exempted from disclosure by a statute which requires
that matters be withheld from the public in such a manner as to leave
no discretion on the issue, or by a statute which establishes particular
criteria for withholding or refers to particular types of matters to be
withheld, are not subject to the protections of this section. It is the
Committee's understanding that section 102(d) (3) of the National
Security Act of 1947, which authorizes protection of national intel-
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ligence sources and. methods, has been held to be such a statute. In
addition, disclosures which are specifically prohibited by Executive
Order 11652 (relating to classified material) are exempted from the
coverage of this section.
Third, the committee'included threatened reprisals, as well as ac-
tual reprisals, within the coverage of this section. The purpose of the
section is to encourage employees to disclose agency wrongdoing or
abuse, and threatened reprisals can. be just as effective in frustrating
this purpose.
An employee should not be protected, however, for making a dis-.
closure which he knows to be false. The criminal code, 18 U.S.C. 1001,
makes it unlawful to make false statements to an agency on a govern-
ment matter. In addition, it would be within the Office of Personnel
Management's authority to specify by regulation that deliberately
making such false charges could constitute grounds for disciplinary
action.
Nor should the provisions of this section be construed to override
any protections against disclosure of confidential communications be-
tween political appointees and the President accorded by current law.
This section does not constitute authority for the employee who makes
such a communication, or for any other employee, to disclose the con-
tent of such a communication. If, however, a report containing evi-
dence of violation of law, or gross waste of funds, or other information
falling within the section, is prepared by or for an agency, the fact
that the report is transmitted to the President along with a confiden-
tial communication would not make the substance of the report im-
mune from disclosure.
Finally, it should be noted that this section is a prohibition against
-.reprisals. The section should, not be construed as protecting an em-
ployee who is otherwise engaged in misconduct, or who is incompetent,
from appropriate disciplinary action. If, for example, an employee
has had several years of inadequate performance, or unsatisfactory
performance ratings, or if an employee has engaged. in action which
would constitute dismissal for cause; the fact that the employee "blows
the whistle" on his agency after, the agency. has begun to initiate disci-
plinary action against the employee will not protect the employee
against such disciplinary action. Whether the disciplinary action is a
result of the individual's performance on the job, or whether it is a
reprisal because the employee chose to criticize the agency, is a matter
for judgment to be determined in the first instance by the agency, and
ultimately by the Special Counsel and the Merit Systems Protection
Board.
Paragraph (9) prohibits a reprisal against any employee or appli-
cant who exercises any legitimate appeal right. As with whistle blow-
ing reprisals under paragraph (8), the prohibited action is the reprisal
itself ; the mere fact that an employee, who is otherwise incompetent or
guilty of misconduct, exercises an appeal right, does not automatically
protect the employee against appropriate disciplinary action.
Paragraph (10) -states that any other action which violates any law
rule, or regulation implementing, or relating to, the merit system
principles constitutes a prohibited personnel practice. This pro-
vision was, added by the committee in order to. make unlawful
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those actions which are inconsistent with merit system principles, but
which do not fall within the first 9 categories of personnel practices.
Such actions may lead to appropriate discipline. For example, should a
supervisor take action against an employee or applicant, without hav-
ing proper regard for the individual's privacy or constitutional rights,
such an action could result in dismissal, fine, reprimand, or other
discipline for the supervisor.
At -the conclusion of subsection (b), the committee added a provi-
sion to ensure that nothing in the section will authorize the withholding
of any information from Congress, or will sanction any personnel ac-
tion against an employee who discloses any information to a Member
of Congress or its staff, either in public session or through private
communications. Neither Title I nor any other provision if this bill
should not be construed as limiting in any way the rights of employees
to communicate with or testify before Congress, such as is provided in
5 U.S.C. 7102 (right to furnish information protected), or in .18
U.S.C. 1505 (right to testify protected).
Subsection (c) specifically designates the head of each Executive
Agency as the individual responsible for preventing prohibited person-
nel practices, and for insuring that applicable civil service laws, rules,
and regulations, including the merit system principles, are complied
with. The same duty and responsibility is placed on any individual
within the agency who is given authority for personnel management.
Thus, to the extent that managerial or supervisory authority is dele-
gated, this section means that responsibility for insuring compliance
with the merit system, and potential disciplinary liability for failing
to ensure compliance, will follow such a delegation. The delegation
will not, however, relieve the head of the executive agency or other top
officials for ultimate responsibility for personnel actions and policies
within the agency, to the extent that such officials have knowledge
or should have knowledge of the actions taken or policies implemented.
Subsection (d) states that nothing in this section is to be construed
as extinguishing or lessening any effort to bring about equal employ-
ment opportunity. through lawful affirmative action or programs,
through the exercise of any right or remedy available under the Civil
Rights Act of 1964, the Age Discrimination in-Employment Act of
1976, section 501 of.the Rehabilitation Act of 1973, the Equal Pay Act,
or under any other statute or regulations prohibiting discrimination
on the basis of marital status or political affiliation.
Section 2303. Responsibility of the General Accounting Office
This section provides express authority to the General Accounting
Office to conduct audits and reviews' in order to determine compliance
with laws and regulations governing employment. in Federal agencies,
and to assess the effectiveness of Federal personnel. management. The
audits and reviews -may be in response to a request from Congress
or a committee thereof, or on GAO's own initiative. The provision
authorizes broad scale reviews of the personnel system, as well as
discrete functional audits, and is designed to improve the ability
of Congress to carry out its oversight responsibilities with respect to _
the Federal personnel system.
Subsection 101(b) contains the conforming amendments to Title V,.
United States Code.
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TrrLE II--Cwn.1 SERVICE FUNCTIONS : PERFORMANCE APPRAISAL;
ADVERSE ACTIONS
The first part of Title II sets forth the authority and functions of the
three new agencies and units which form the cornerstone of Civil Serv-
ice reform, the Office of Personnel Management, the Merit Systems
Protection Board, and the Special Counsel.
Under current law, the responsibility for personnel management is
combined with the responsibility for overseeing and protecting the
merit system; both responsibilities are vested in the Civil Service
Commission. This legislation provides for the separation of functions
now administered by the Civil Service Commission into two agencies,
the Office of Personnel Management and the Merit Systems Protection
Board, in order to insure that those who are responsible for administer-
ing the civil service system will not have the primary responsibility of
determining whether that system is free from abuse.
The Office of Personnel Management is the arm of the President in
matters of personnel administration. The Office will have central re-
sponsibility for adopting and administering civil service rules for
the Executive branch. The Office will have broad power to delegate
to Executive branch agencies any functions vested in the Office, includ-
ing the authority to conduct competitive examinations. However, the
Office will retain overall responsibility for management of the civil
service system.
The Merit Systems Protection Board is charged with protecting the
merit system. It will act in most respects as a quasi-judicial body,
empowered to determine when abuses or violations of law have
occurred, and to order corrective action. It will also be empowered to
discipline employees who commit abuses. The Board is to be a three-
member bipartisan body, and is to be independent of the President.
The Special Counsel will receive and investigate allegations of
prohibited personnel practices in violation of the merit system. The
Counsel will also have a particular mandate to investigate and take
action to prevent reprisals against government "whistle blowers"-
individuals who disclose agency wrongdoing or improper activities.
The Special Counsel is authorized to seek remedial action from the
Board to' prevent abuses of the merit system, and to initiate discipli-
nary. action against government officials who commit prohibited per-
sonnel practices. As with the Board, the Special Counsel is independent
of any control or direction by the President.
Title II also. establishes new, procedures.to govern the process of
personnel actions and to protect employees' rights to fair treatment.
The procedures are designed to expedite dismissals of Federal em- .
loyees whose performance is below an acceptable level established
me a comprehensive framework of performance evaluation, while at
the same time fully protecting the due process rights of employees.
-The performance evaluation framework is designed to insure that
employees will not be downgraded or dismissed from the Civil
Service for reasons other than actual performance.
.
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1489
SECTION 201
This section strikes the existing language of Chapter 11, Title V,
United States Code (pertaining to establishment and structure of
the Civil Service Commission), and substitutes a 'new Chapter 11
setting forth the organization, structure, and functions of the Office
of Personnel Management. Chapter 11 is subdivided as follows:
Section " 1101-Office of Personnel Management- Section 1102-Di-
rector; Deputy Director; Associate Directors; Aection 1103-Func-
tions of the Director; Section 1104-Delegation of Authority, for
Personnel Management.
Section 1101.Ofce of Personnel Management
This section provides that the Office of Personnel Management is
to be an independent establishment in the Executive branch. It pro-
vides for an official seal for the office which is to be judicially
noticed. The principal office of the Office of Personnel Management
is to be in the District of Columbia, but it may have field offices in
other locations.
Section 1102. Director; Deputy Director; Associate Directors
Subsection (a) provides that there is to be a Director at the head
of the Office of Personnel Management, appointed by the President
and confirmed by the Senate. The Director is to have a term of four
years, coterminous with the term of the President, and is to be
subject to removal by the President only for cause.
Subsection (b) provides for a Deputy Director for the Office of
Personnel Management, appointed by the President and confirmed
by the Senate. The Deputy Director is authorized to perform such
functions as the Director determines, and is authorized to act for
the Director during his absence or disability or in the event of a
vacancy in the Director's position.
Subsection (c) provides that neither the Director nor the Deputy
Director may serve in any other position in the government of ;the
United States during their incumbency, except as provided by law
or by the President. In order to insure that they administer the
Civil Service system in as fair and as evenhanded a manner as
possible, and not become involved in recommending particular indi-
viduals for particular appointments in Executive branch agencies,
the Committee added a provision prohibiting the Director or Deputy
Director from advising the President, directly or indirectly on any
specific political appointment. This proviso is not intended to pro-
hibit the Director from consulting with the President about the selec-
tion of an individual to serve as Deputy Director of OPM.
Subsection (d) provides for the Director to, appoint up to five
Associate Directors. The Associate Directors are to be in the Senior
Executive Service.
Section 1103. Functions of the Director
Subsection (a) enumerates functions of. the Director. The func-
tions are to be performed by the Director or by his designees within
the Office. They are: (1) assisting the President in preparing civil
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service rules, and advising the President in promoting an efficient
civil service and providing protection for merit system principles;
(2) executing, administering, and enforcing the civil service statutes
and regulations. (including classification and retirement activities),
except to the extent that the Merit Systems Protection Board or the
Special Counsel is responsible for exercising these functions; (3) se-
curing accuracy, uniformity and justice in the functions of the Office;
(4) appointing employees of the Office; (5) directing and supervising
employees of the Office, assigning work to employees and organiza-
tional units, and directing the internal management of the Office;
(6) directing the preparation of Office budget requests and the use of
funds; (7) reviewing operations under the insurance provisions of
this title ; and (8) conducting or arranging for research into improved
methods of personnel management.
Subsection (b) provides that the Director of the Office of Personnel
Management, in issuing rules and regulations, is subject to the pro-
visions of the Administrative Procedure Act, which provide for notice
and comment rule-making, with full opportunity for interested per-
sons to participate in the process. Subsection (b) was adopted by the
committee in response to concern expressed that the Office of Personnel
Management might not be subject to the procedural safeguards of the
Administrative Procedure Act that currently apply to administrative
agencies. It does not require OPM to follow the notice and comment
provisions of section 553 of the Administrative Procedure Act when
it is issuing internal personnel rules or procedures applicable just to
OPM employees.
Subsection (c) provides the Director with the right to intervene
in any proceeding before the Equal Employment Opportunity Com-
mission (other than those heard by the Merit Board), whenever the
Director finds that the matter at issue may substantially affect the
interpretation or administration of the civil service laws, or if he
has relevant information which he wishes to present to the Commis-
sion. Thus, in any grievance proceeding brought under Title VII of
the Civil Rights Act of 1964 before the Equal Employment Oppor-
tunity Commission, the Director will have the opportunity to be-
come a full party if he determines that the case may have an im-
pact on the administration of the civil service merit system.
Section 1104. Delegation of authority for personnel and management
Subsection (a) authorizes the President to delegate authority for
personnel management functions to the Director of the Office of
Personnel Management, and provides that the Director may dele-
gate any functions vested in him to the heads of Executive branch
agencies and to other agencies employing individuals in the com-
petitive service. The delegation includes authority to conduct com-
petitive examinations.
Under present law, examining authority is vested in the Civil
Service Commission. This provision will permit the Director to dele-
gate examining authority. directly to employing agencies, thereby
creating greater flexibility in the examining process.
The committee added subsections (b), (c), and (d) to this section
to provide safeguards against abuse by the individual agencies of
delegated authority.
26
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1491
Subsection (b) provides that the delegated authority to conduct
competitive examinations must be in accord with any standards issued
by the Office of Personnel Management, to insure that the merit sys-
tem principles apply fully to such examinations and any subsequent
selections of employees.
Subsection (c) provides that any personnel action taken by an
agency pursuant to delegated authority is subject to cancellation by the
Office of Personnel Management if contrary to any law, regulation, or
standard issued. by the Office.
Subsection (d) specifies that any delegation by the Office does not
relieve the Director of his responsibility to assure compliance with civil
service laws and regulations.
Subsection 201(b) amends pertinent sections of Title V, United
States Code, to provide that the Director of the Office of Personnel
Management is to be compensated at Level II of the Executive Sched-
ule, the Deputy Director at Level III, and Associate Directors at
Level IV.
Subsection 201(c) conforms the provisions of Title V, United States
Code, to the provisions of this section.
SECTION 202
This section adds a new Chapter 12 to Title V, United States Code,
entitled "Merit Systems Protection Board and Special Counsel."
Chapter 12 is subdivided as follows : Section 1201-Appointment of
Members of the Merit Systems Protection Board; Section 1202-T4~rm
of Office; Filling Vacancies; Removal; Section 1203-Chairman; Vice
Chairman; Section 1204-Special Counsel; Appointment and Re-
moval ; Section 1205-Powers and Functions of the Merit Systems Pro-
tection Board; Subpenas; Section 1206-Authority and Responsibili-
ties of the Special Counsel; Section 1207-Hearings and Decisions on
Complaints Filed by the Special.Counsel.
Section 1901. Appointment of members of the Merit System Protection
Board
This section provides that the Merit System Protection Board is to
be a bipartisan body, consisting of three members appointed by the
President and confirmed by the Senate. To assure their independence,
the section prohibits the members of the Board from holding other
offices or position in the U.S. Government. This prohibition is intended
to apply only to civilian offices. It does not bar a Board member from
retaining positions in the military reserves. The Board is to have an
official seal, and have its principal office in the District of Columbia
metropolitan area, with field offices in other appropriate locations.
In order to insure that the members of the Board are fully qualified
to carry out the functions and duties of, the Board, the Committee
added a provision requiring that persons appointed to the Board be
individuals having background, training, experience, or demonstrated
ability that makes them particularly qualified to carry out the Board's
function of. protecting the civil service merit system from abuse. This
requirement that Board members be affirmatively qualified for their
positions is consistent with recent actions by Congress with respect
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to independent ,agencies. A similar provision was adopted last year
by Congress for the newly-created Federal Energy Regulatory Com-
mission (PL 95-91).
Section 1202. Term of office; filling vacancies; removal
Subsection (a) provides for a seven year term for members of the
Merit Systems Protection Board.
Subsection (b) provides that in the event of any vacancy on the
Board, a member appointed to fill the vacancy serves only until the
expiration of the term remaining. Any appointment to fill a vacancy is
subject to the provisions of section 1201.
Subsection (c) provides that Board members may not be reap-
pointed if they have been appointed to a full term, but may serve for
up to one year beyond the expiration of the term if a successor has
not been appointed and qualified.
Subsection (d) provides that a board member may only be removed
b the President for inefficiency, neglect of duty, or malfeasance in
ofce. This provision, which applies to membership on most inde-
pendent regulatory agencies, ensures that the Merit Systems Protec-
tion Board will be independent of the direction and control of the
President.
Subsection (e) provides that individuals currently serving on the
Civil Service Commission, who will become members of the Merit Sys-
tems Protection Board by virtue of Reorganization Plan No. 2 of 1978,
will continue to hold their positions on the Board until their terms
would otherwise have expired as members of the Civil Service Com-
mission (commissioners currently serve for six .year terms). If an in-
dividual now serving as a Civil Service Commissioner does not serve
out the remainder of his present term, an individual appointed to fill
the vacancy will. only serve for the remainder of the six-year .term
established under the old law. Since the present terms of the Commis-
sion are staggered, this procedure will assure that the new terms of
the members of the Board will continue to be staggered.
Section 1203. Chairman; Vice Chairman
Subsection (a) authorizes the President to appoint one of the mem-
bers of the Board as Chairman. Appointment as Chairman is subject
to Senate confirmation.
The Chairman is to be the chief executive and administrative officer
of the Board, and may continue to serve as Chairman until a successor
is appointed and qualified.
Subsection (b) authorizes the President to designate one of the
Board members as Vice Chairman. The Vice Chairman is authorized
to perform the functions of the Chairman whenever the Chairman is
absent or disabled, or whenever the office of Chairman is vacant.
Subsection (c) authorizes the remaining Board member to perform
the functions of the Chairman whenever both the Chairman and Vice
Chairman are absent or disabled, or whenever both offices are vacant.
Section 1204. Special Counsel; appointment and removal
Subsection (a) provides that the Special Counsel of the Merit Sys-
tems Protection Board is to be appointed by the President, subject to
.Senate confirmation. The Special Counsel is to be an attorney.
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Because the Special Counsel may be called upon to investigate pro-
hibited personnel practices in the Executive branch and to bring dis-
ciplinary actions against Executive branch oflici is, the Committee
believed it is essential that the Special Counsel independent of
.Presidential- direction and control. Accordingly, subsection (b) was
added by the Committee to provide that the Special Counsel may be
removed by the President only for inefficiency, neglect of duty, or mal-
feasance in office.
The Committee believed, however, that a term of . seven years for
the Special Counsel, as provided in the original version of S. 2640, was
too long. Accordingly, subsection (a) has been amended to provide
that the term of the Special Counsel is to be four years, and is to be
coterminous with that of the President.
It is expected that the Special Counsel will have regional representa-
tives to enable him to carry out his function.
Section 120,6. Rowers and fwnctione of the Merit System Protection
Board; aubpena8
Subsection (a) sets forth, the general authority of the Merit. Sys-
tems Protection Board to hear and adjudicate matters within its
jurisdiction, to enforce its orders, to conduct special studies, and to
issue stays.
Paragraph (1), of the subsection authorizes the Board to hear and
adjudicate all matters within the jurisdiction of the Board, including
matters faillinp under this title, under Section 2023 of Title 38 (relat=
ing to veterans reemployment rights), and under any other law, rule,
or regulation. Action by the Merit Systems Protection Board, follow-
ing any hearing or adjudication on any matter falling within its
jurisdiction, constitutes final agency action for the purposes of judicial
review.
The committee included a provision (in subparagraph (B) of this
subsection) making explicit the Board's enforcement authority. The
Board is authorized to order any Federal agency or employee to comply
with any order or decision issued by the Board pursuant to any matter
within its jurisdiction, and to take appropriate steps to enforce com-
pliance with its order.
The Board is also authorized to conduct special studies relating to
the civil service and other merit systems in the Executive Branch, and
to report to the President and the Congress on the conduct of the
merit system, and on whether the civil -service is being adequately
protected against prohibited personnel practices.
In paragraph (a) (2), the Committee adopted a provision authoriz-
ing the Board to stay certain agency personnel actions. The stay is
authorized whenever an employee complains of a reprisal arising out
of whistle blowing, exercise of an appeal right or political activity
(under Section 2302(b) (8) or (3) ), or arising out of the exercise
of a legitimate appeal right (under Section 2302(b) (9) ), and the
Special Counsel demonstrates! that there is a reasonable basis for the
complaint. Under subparagraph (a) (2) (A), the stay may be issued
by a member of the Board for up to 15 days. The proceeding may take
place on an ex parte basis, and the agency is not required to either be
notified or given an opportunity to present its views.
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The Board is further authorized to extend the stay for an
additional 30 days whenever the Special Counsel asks it to do so and
demonstrates that a reprisal arising out of whistleblowing or political
activity, or the exercise of an appeal right, has probably occurred or
probably will occur. Before the extension may be issued, however,
the agency must be given an opportunity to oppose the extension.
If the agency demands a hearing, the-Board is required to provide one.
The Board is authorized to. issue a permanent stay of the agency
personnel action when requested to do so by the pecial Counsel,
after a hearing in .which the Special Counsel, the employee involved,
and the agency have an opportunity to present all relevant and material
evidence. The hearing may take place before the Board, or before an
employee whom the Board designates to conduct the hearing. On a
showing that the personnel action resulted from a reprisal arising out
of whistleblowing or political activity, or the exercise of an appeal
right, the Board is authorized to grant a permanent stay of the agency
personnel action.
The Board is also authorized to grant appropriate interim relief
during the period of time that the request for a permanent stay is
pending.
S. 2640, as introduced, had provided that the Special Counsel would
have the authority to issue a stay of agency personnel actions in whistle
blowing cases. The Committee believes that this function is inappro-
priate for the Special Counsel, since the Special Counsel is primarily
an investigative and enforcement officer. The power to issue a stay is
more appropriately vested in the Board, since this power is consistent
with the Board's quasi-judicial role. It is expected, however, that the
Board will give great weight to the decision by the Special Counsel,
after conducting whatever preliminary investigation the Special Coun-
sel determines is appropriate, to apply to the Board for a stay in such
cases.
Paragraph (a) (3) provides that in conducting any hearing or ad-
judication on any matter falling within its jurisdiction,' or in the
course of rendering any decision on any matter falling within its juris-
diction, any member of the Board may request from the Director of the
Office of Personnel Management an advisory opinion on the interpreta-.
tion of any OPM rule, regulation, or policy directive. Whenever an
Office rule, regulation, or policy directive is an issue in such a proceed-
ing, the Board is required to notify promptly the Director, and he
-is authorized to intervene in such a proceeding, as long as he does so as
early in the proceeding as practicable.
Paragraph (a) (4) provides that as one means of enforcing its orders,
the Board is authorized to designate an employee to be responsible for
carrying out the order, and-to direct where an employee (other than a
Presidential appointee as described in Section 1206(i)) is in noncom-
pliance with an order of the Board, he is not entitled to receive any
salary until the order is complied with. The Board is authorized to
certify its order to the Comptroller General. Once such a certification
is made, no payment may be made from the Treasury to the employee
while the order is pending. Before certifying the matter to the Comp-
troller General the Board should provide the employ ee some oppor-
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tuhity to be heard on whether he has failed to comply with the order
of the Board.
Paragraph (a) (5) provides that in conducting any studies on the
merit system or on the protections against prohibited personnel prac-
tices, the Board will determine which inquiries are necessary and shall
have full access, unless otherwise prohibited by law, to the personnel
records, or information collected by the Office of Personnel Manage-
ment: In addition, the Board may require whatever additional reports
from Executive Branch agencies it determines are needed.
Subsection (b) authorizes the Chairman of the Merit Systems Pro-
tection Board to designate individuals to chair boards of review estab-
lished under Section 3383(b) of this title (relating to involuntary
separation of air traffic controllers).
Subsection (c) authorizes the Board to delegate performance of
any of its administrative functions to any officer or employee of the
Board..
Subsection (d) authorizes the Board to issue whatever rules and
regulations it deems necessary to perform its functions. The regula
tions may include rules which define the Board's review procedures,
may set time limits during which an appeal may be filed, and may
define the rights and responsibilities of parties to an appeal. Any such
regulations issued under this subsection are required to be published in
the Federal Register. The Board is not authorized to issue advisory
opinions.
Subsection (e) provides that the Board is to be represented by its
own attorneys whenever the Board is a party to any proceeding in
court, except that the Board is, to be represented by the Solicitor
General of the United States in any proceeding before the Supreme
Court. This will include instances where the Board is involved in court
proceeding, under any provision of this title, including defending dis-
ciplinary actions it has taken under section 1207, intervening in appel-
late proceedings brought by the Board or other parties pursuant to
section 7702, or any enforcement actions it brings under sections 1205
(a) (1).or 1205(i).
This subsection is consistent with similar provisions adopted, for
other recently-created independent commisions, such as the Federal
Energy Regulatory Commission (Public Law 95-91).
Subsection (f) authorizes the Chairman to appoint whatever per-
sonnel are necessary to perform the Board's functions. Any appoint-
ment to a position in the Senior Executive Service, or to a confidential
or policy-making position, must comply with .the provisions-of-this
title. '.However, such ' appointments are not subject to the specific
approval or general supervision of the Office .of Personnel Manage-
ment or the Executive Office of the President.
Subsection (g) requires the Board. to prepare an annual budget,
which is to be submitted simultaneously to the President and to the
appropriate' committees' of Congress. In any subsequent budget sub-
mitted by the President to the Congress. the President is required to
list is revised proposed budget for the Board as a separate item.
Subsection (h) provides that any recommendation on legislation
that the Board. may have shall be simulaneously transmitted to. the
appropriate committees of Congress and to the President.
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The Board is also required to submit an annual report to the Presi-
dent and to Congress on its activities, including a description of all
significant actions taken by the Board in connection with carrying out
its functions. The annual report will also include a review and analysis
of the actions of the Office of Personnel Management, as to whether or
not the actions taken by the Office during the year covered by the report
are in accord with merit system principles, and whether the Office is
adequately preventing prohibited personnel practices. The type of re-
port on OPM activities intended by this subsection is a general review
of the policies and effectiveness of OPM. It is not expected that the
Board will, in connection with each annual report, conduct an investi-
gation of the internal operation of the OPM and its employees.
Subsection (i) authorizes the Board, the Special Counsel, an Admin-
istrative Law Judge appointed to the Board, or any member or em-
ployee of the Board designated by the Board, to issue subpenas,
administer oaths, take or order the taking of depositions, issue inter-
rogatories, examine witnesses, and receive evidence, in connection with
any matter within the Board's jurisdiction. In the event that the
Board or Special Counsel finds it necessary to issue a subpena to a
cabinet officer or other high-ranking Executive Branch official, the
Board or Counsel should make every effort to minimize any potential
disruption to the functioning of the agency which is involved.
Subpenas are to be enforced by the Board or the Special Counse
in the United States District Court for the judicial district in whic:
the person to whom the-subpena is addressed either resides or is served.
Any failure to obey an order of the court is punishable by contempt.
Any witnesses appearing under, this subsection are to be paid the same
fee and mileage allowances paid to subpenaed witnesses in the Federal
courts.
Section 1206. Authority and responsibilities of the Special Counsel
Section 1206 specifies the authority and responsibilities of the. Spe-
cial Counsel. Subsection (a) authorizes the Special Counsel to receive
and investigate allegations of prohibited personnel practices. The
Snecial Counsel may, on his own, initiate such investigations as well.
The Special Counsel should'not passively await employee complaints,
but rather, vigorously pursue merit system abuses on a systematic
basis. He should seek action by the Merit Board to eliminate both
individual instances of merit abuse and patterns of prohibited per-
sonnel practices.
Subsection (b) requires the Special Counsel to conduct an investiga-
tion requested by any person if the Special Counsel has reason to
believe that a personnel action was taken, or, is to be taken, ss a result
of a prohibited personnel practice. The Special Counsel need not con-
duct an investigation of a charge which appears nroundless or frivo-
lous on its face. Some nreli!rnina.rv inquiry will likely be necessary,
thoueh, to determine whether a charge warrants a thorough inquiry.
The Special Counsel would not renuire information amounting to
"probable cause" to conduct an investigation. Only a reasonable belief
that a violation has occurred or will occur is sufficient basis for an
investigation.
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It is expected that the Special Counsel will develop a systematic
means of. screening. employee complaints and allegations. Investiga-
tion and resolution of these complaints should be made on a timely
basis.
Subsection (c) specifies certain procedures for the Special Counsel
to follow in cases involving alleged reprisal or threat of reprisal for
the disclosure of information described in section 2302(b) (8) or exer-
cise of an- appeal right under 2302(b) (9) of the title. In addition, an
amendment by the Committee makes this subsection applicable to
Hatch Act-type violations prohibited under section 2302(b) (3). Para-
graph (1) prohibits the Secial Counsel from disclosing the identity
of the complainant without the consent of the complainant. Protection
of the complainant's identity is essential not only to prevent retalia-
tion against the employee, but to assure a free flow of information to
the Special Councel. The Special Counsel may only disclose the iden-
tity. of the complainant without the complainant's consent if such
disclosure is unavoidable. It is expected that disclosure of a com-
plainant's identity will be necessary only in the rarest of circumstances.
Paragraph (2) authorizes the Special Counsel to seek a stay of a
personnel action. As discussed earlier, this is a change from S. 2640,
as introduced, which would have permitted the Special Counsel to
issue a stay on his own initiative. The duration of the stay and the
conditions for obtaining a stay are set forth in -section 1205(.a) (2) of
this title. This subsection makes it clear that refusal by an agency offi-
cial to comply with any stay ordered by the Board or a member of the
Board is cause for disciplinary action under subsection (j).
Subsection (d) requires a report -by the Special Counsel, containing
findings and recommendations, based on his determination that there
are prohibited personnel practices which require corrective action.
The report must be made to the Merit Systems Protection Board, the
agency affected, and the Office of Personnel Management. The Special
Counsel 'may, at his discretion, report his findings to, the President
and Congress. The reports outlined in this `subsection are not required
where the Special Counsel initiates an action before the Board to cor-
rect or remedy the prohibited personnel practice since the Special
Counsel's findings and recommendations would presumably be con-
tained in any complaint the Special Counsel pursued before the Board.
Even in these cases, however, the Special Counsel would still be au-
thorized to report to the Office of Personnel Management, the agency
affected, the President, and Congress.
. Although the Special Counsel may in suggestions as to what
corrective action should be taken, the final decision on the corrective
action to be taken in those cases. which are not before the Merit Board
will be made by the agency involved, subject to guidance and instruc-
tion from the Office of Personnel Management. It is expected that the
agency decision on what corrective action to be taken will be made
on a timely basis with notification to all interested parties, including
the Special Counsel.
Subsection (e) sets forth the procedures to be followed if, during the
course of an investigation authorized by the bill or transferred to the
Board or Special Counsel by Reorganization Plan No. 2 of 1978, the
Special Counsel determines that there is reasonable cause to believe a
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law has been violated. If the Special Counsel determines that there is
reasonable cause to believe a criminal law has been violated, he must
report that determination to the Attorney General and to the head of
the agency involved. The Special Counsel must also submit a copy
of such report to, the Director of the Office of Personnel Management
and the Director of the Office of Management and Budget.
If the Special Counsel determines that there is reason to believe a
violation of a civil statute, or a rule or regulation has occurred, the
Special Counsel must report that determination to the head of the
agency involved.
This subsection differs from subsection (f) because the latter sub-
section is specifically intended to provide a channel for allegations con-
cerning improper government activity. Referral of a report under sub-
section (e) is at the Special Counsel's initiative, based on a determina-
tion made by the Special Counsel. Subsection (e) differs from sub-
section (d) in that reports made under subsection (d) involve only
personnel matters. Reports under subsection (e) may involve violations
of any criminal or civil .law. This provision does not authorize the
Special Counsel to conduct investigations of non-personnel related
laws. It provides for an appropriate referral System for further in-
vestigation of possible non-personnel or criminal violations which
the Special Counsel may discover during the course of his authorized
investigations.
The Special Counsel may require an agency head who receives a
report by the Special Counsel to. certify in writing that (1) the agency
head has personally reviewed the report, and (2) what action has
been, or is to be taken, and when such action will be completed. Only
a good faith estimate'of when the action will be completed is required,
but some estimate should be made. The certification should be in
writing and must be completed and referred to the Special Counsel
within 30 days of receipt of the Special Counsel's report.
This subsection requires the Special Counsel to maintain and make
available to the public a list of noncriminal matters referred to agency
heads under the subsection as well as the agency head's certifications
of actions taken. The requirement that the Special Counsel maintain
a public list of noncriminal matters referred to him is not intended
to authorize the Special Counsel to disclose information that is classi-
fied or protected against disclosure by statute. If the Special Counsel
has reason to believe .that information that could be contained in 'A
public list might be classified or protected against disclosure by statute,
the Special Counsel, prior to including such information in a public
list, should consult with the head of the agency involved to determine
if any classified or protected information is involved. He shall accept
the determination of the agency head as to whether the information
is classified. In exercising his responsibilities under this subsection,
-the Special Counsel should also consider the extent to which it is neces-
sary in the public interest to disclose the name of any individual-em-
ployee involved.
Subsection (f) is an amendment adopted by the Committee to ad-
dress another problem faced by whistleblowers. Often, after an em-
ployee discloses an illegal or improper activity he becomes enmeshed
in a personnel controversy : what should be done about him l The
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underlying substantive allegation made by the employee, however,
is frequently ignored or forgotten. This subsection is intended to
provide a mechanism to ensure that responsible government officials
are made aware of, and given the opportunity to act upon, the em-
ployee's allegation of government misconduct.
Paragraph (1) requires the Special Counsel to transmit informa-
tion concerning any improper or illegal conduct as described in sub-
section 2302(b) (2) of this title to the appropriate agency head. It is
assumed, however that before such allegations are brought to the at-
tention of the Special Counsel, an employee will first exhaust whatever
internal procedures are available for bringing such allegations to
the attention of agency officials. In addition, the Special Counsel is
not authorized to receive information which is protected from dis-'
closure by subsection 2302 (b) (8), and he need not transmit such in-
formation if he does come into possession of such information.
The Special Counsel is required to transmit all related mat-
ters to the agency head, such as documents supporting the allega-
tion. In contrast to subsection (e), the information received by the
Special Counsel under this subsection need not be obtained during
the course of an investigation into a personnel matter. Moreover, in
referring the information, the Special Counsel is to make no deter-
mination concerning the substance of the charge. The Special Counsel
must refer the information to the appropriate agency head, who will
in most cases be the head of the agency which the information
involves.
An agency head who receives information referred to him by the
Special Counsel is not required to fully investigate the allegations.
Nevertheless, if the agency head determines that the allegations are
clearly substantial and he, or another appropriate official in the agency,
conducts an investigation, the agency head must report the findings of
the investigation along with the reasons supporting those findings to
the Comptroller General. The subsection makes clear that the agency
head is under no obligation to conduct an investigation concerning
.allegations made by an employee of another agency. Of course, the
agency head has the discretion to conduct such an investigation if it
is deemed desirable. The special obligation of an agency to consider
allegations mode by its own employees is intended to include allega-
tions made by any one who has been an employee of the agency at
some time within the past several years, but who subsequently resigned
or-left the agency for any reason.
Paragraph (2) requires the agency head to provide a summary of
his activities in connection with the allegations to the Special Coun-
sel. The summary, which should be transmitted on a- periodic basis,
should provide sufficient detail to enable the Special Counsel to inform
the individual who brought the matter to the Special Counsel about
the disposition of his allegation.
Paragraph (3) authorizes the Comptroller General to examine the
agency s findings to determine whether the agency investigation is
adequate and whether any corrective action taken by the agency is
adequate. The Comptroller General has discretion to make as complete
an investigation as he deems necessary to determine the adequacy
of the agency action. The Comptroller General may report his exami-
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nation of the agency action to the Congress if the agency investigation
or its proposed corrective action is inadequate. That the Comptroller
General may also inform Congress when an agency investigation or
corrective action is inadequate.
Paragraph (4) requires the Special Counsel to keep confidential the
identity of the person who discloses information under this subsection,
in accordance with the provision in subsection (c) (1).
Under paragraph (5), the General Accounting Office and the Spe-
cial Counsel are required to report to Congress on their experience in
handling disclosures under section 2302(b) (8) and investigations au-
thorized by this subsection. The reports should include but not be
limited to, an evaluation of the procedures established in this section.
In addition to the Special Counsel's power to conduct investiga-
tions under subsections (a) and (b), to bring disciplinary actions un-
der subsection (i), and to institute corrective actions under subsection
(j), subsection (g) (1) provides authority to conduct investigations in
other areas. The Special Counsel is specifically authorized to inves-
tigate certain other practices as specified below :
(A) Political activity which is prohibited under subchapter
III of Chapter 73 of this title (Hatch Act violations) ;
(B) Political activity by any state or local officer or employee
which is prohibited under chapter 15 of this title:
(C) Arbitrary or capricious withholding of information under
section 552 of this title (the Freedom of Information Act) ; and
(D) Involvement by any employee in any prohibited discrim-
ination found by any court or appropriate administrative author-
ity to have occurred in the course of any personnel action.
Clause (C) refers to 5 U.S.C. 552(a) (4) (F) which relates to court
findings that information may have been withheld arbitarily or capri-
ciously. The Special Connsel may investigate on the basis of such find-
ings, and make recommendations to the opening involved, but it not
given independent authority under this subparagraph to review the
basis for withholding information from disclosure under the Freedom
of Information Act. The Special Counsel has the authority under sec-
tion 552(a) (4) (f) to investigate and enforce the law against an em;
ployee who has withheld information arbitrarily or capriciously.
Clause.(D) authorizes the Special Copnsel to investigate, prelimi-
nary to bringing disciplinary action, employees who have been found
to be involved in any prohibited discrimination. In acting under this
provision, disciplinary action against an individual employee should
not take place until there has been an appropriate finding by an ad-
ministrative agency or court.
Paragraph (2) provides that the Special Counsel shall not make an
investigation of any allegation involving Hatch Act violations, or dis-
crimination under paragraph (1) if the Special Counsel determines
that the allegation may be more appropriately resolved under an ad-
ministrative appeals procedure.
Subsection (h) provides that no disciplinary action may be taken
by an acy against any employee for any alleged prohibited activity
when, Ni thaactivity or related activity is under investigation by the
Special Counsel, unless the Special Counsel approves such disciplinary
action. This subsection will assure that the Special Counsel's investi-
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1501
gations may not be short-circuited by agency disciplinary action, and
that the employee will be afforded all rights available through a com-
plete investigation by the Special Counsel.
Subsection (i) authorizes the Special Counsel to bring a disci-
plinary action against an employee-who commits a prohibited person-?
nel practice. If the Special Counsel determines, after an investigation
under this section, that disciplinary action should be taken against an
employee because the employee has allegedly committed a prohibited
personnel practice, the Special Counsel must prepare a written com-
plaint against the employee. The complaint must contain a determina-
tion by the Special Counsel that the employee may have committed
a prohibited personnel practice. The Special Counsel must present the
complaint containing the determination, together with a statement
of supporting facts, to the Merit Systems Protection Board or to an
administrative law judge appointed under section 3105, of this title,
and designated by the Board, for hearing and decision pursuant to sec-
tion 1207. Under subsection (i) (2), this provision does not apply to an
employee in a confidential policy-making, policy-determining, or
policy advocating position who was appointed by the President by and
with the advice and consent of the Senate. If the Special Counsel
makes a determination that disciplinary action should be taken against
such a presidential appointee because of a prohibited personnel practice
by the employee, the Special Counsel must present a complaint and
statement, includin the Special Counsel's determination that discipli-
nary action should taken, to the President in lieu of the Board or
administrative law judge. This statement and complaint should also
include any response by the employee who is the subject of such com-
plaint.
Subsection (j), paragraph (1), authorizes the Special Counsel to
bring disciplinary action against any employee who knowingly and
willfully refuses or fails to comply
n with an order of the Merit stems
Protection Board. I case involving an employee described in sub-
section (i) ((2), the Special Counsel must submit to the President,
in lieu of the Board a report on the actions of the employee which
must include the information described in subsection (i) (2). Any
disciplinary action taken under this subsection must be in accordance
with the procedures set forth in section 1207 of this title.
Paragraph (2) of subsection (j) is a Committee amendment which
authorizes the Special Counsel to seek corrective action of any pattern
of prohibited personnel pract
(b) ice arising out of any of the subpara-
graphs under section 2302, which is committed by an agency or
employee or permitted by an agency or employee to occur. Such cor-
rective action would be initiated by filing a written complaint with the
Board against the agency or such employee. Typically, this kind? of
complaint would be made if the practice involved matters which are
not otherwise appealable to the Board under this title. For exam-
ple, there may be hiring or promotion practices which violate merit
system principles but which may not give rise to an appealable action
under this title. Similarly, competitive examinations may be ad-
ministered in such a way as to constitute a violation of section 2302.
Under this paragraph, the Special Counsel would have authority to
seek corrective action, and the Board is empowered to order such cor-
rective action as it finds necessary.
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An amendment in Committee added subsection (k) which authorizes
the Special Counsel to intervene as a matter of right or otherwise par-
ticipate in any proceeding before the Merit Systems Protection Board.
In doing so, the Special Counsel is required to comply with the rules
of the Board. The Special Counsel will not have any right of appeal
to the courts in connection with his intervention before the Board.
Under subsection (1), the Special Counsel is authorized to appoint
legal, administrative and support personnel to perform the functions
of the Special Counsel. The Committee added a provision excluding
the qualifications of a part icular individual for any appointment made
under this subsection from the approval or supervision of the Office of
Personnel Management or the Executive Office of the President.
Subsection (m) authorizes the Special Counsel to prescribe such
regulations as may be necessary for investigations under this section.
Those regulations must be published in the Federal Register.
Subsection (n) prohibits the Special Counsel from issuing any ad-
visory opinion concerning any law, rule or regulation. The prohibition
does not apply to chapter 15 and subchapter 3 of chapter 73 of this
title (political activity provisions) or any rule or regulation issued
under those provisions.
Subsection (o) requires the Special Counsel to submit an annual
report to Congress concerning his activities. The annual report must
describe the work of the Special Counsel, including the number, types,
and disposition of allegations of prohibited personnel practices filed
with him, investigations conducted by him, and actions initiated by
him before the Board. The report must also describe the recommenda-
tions and reports made by the Special Counsel to other agencies pursu-
ant to subsections (d) and (e) of this section, and the actions taken by
the agencies as a result of the reports or recommendations. It will simi-
larly include a discussion of reports and recommendations concerning
presidential appointees under subsections (i) and (j). The report will
also include recommendations for legislation or other action by Con-
gress-the Special Counsel deems appropriate.
Section 1207. Hearings and decision on complaints filed by the special
counsel
Section 1207 sets forth the hearing procedures for complaints pre-
sented under section 1206 of this title. It provides that any employee
against whom a complaint has been presented to the Merit Systems
Protection Board or to an administrative law judge under section 1206
is entitled to a hearing. That hearing will be on the record before the
Board or before an administrative law judge appointed under section
3105 and designated by the Board. Hearings involving a state or local
officer or employee under chapter 15, of this title (political activity
,provisions) must be conducted in accordance with section 1505. There
may be no administrative appeal from a final order of the Board.
A final order of the Board may impose disciplinary action including
removal, demotion, debarment from Federal employment for not to ex-
ceed 5 years, reprimand, suspension, or a civil penalty not to exceed
$1,000. In the case of a state or local officer or employee under chapter
15 of this title, the Board is required to act in accordance with section
1506. An employee subject to a final disciplinary order may obtain
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judicial review in the United States Court of Appeals for the circuit
in which the employee was employed at the time the disciplinary action
was initiated.
Section 201(b) of the bill contains various conforming and technical
amendments. Paragraph (1) amends section 5314 of title 5 of the
United States Code to include the Chairman of the Merit Systems
Protection Board in the list of positions at level III of the Executive
Schedule. Paragraph (2) similarly sets the members of the MSPB
at level IV of the Executive Schedule. The positions of Chairman and
Commissioners of the Civil Service Commission are deleted from the
Executive Schedule. The Special Counsel of the MSPB also is to be
compensated at level IV of the Executive Schedule. Paragraph (4)
deletes the position of Executive Director of the Civil Service Com-
mission from the Executive Schedule.
Section 201(c) of the bill provides that the term of office of the
first individual appointed and confirmed as the Special Counsel shall
expire on the last day of the term of the President during which he
was appointed. This section will allow each subsequent term of a
Special Counsel to be coterminous with that of the President, in
keeping with the Committee's amendment to section 1204(a) of this
title.
Section 201(d) conforms the table of chapters to include a provision
for the Merit Systems Protection Board and the Special Counsel.
SECTION 203. PERFORMANCE APPRAISAL AND ACTIONS BASED ON
UNACCEPTABLE PERFORMANCE
The purpose of section 203 is to provide for new systems of apprais-
ing employee work performance. The principal changes it makes in
chapter 43 of title 5, United States Code, are the following :
-Abolishment of present requirements for summary adjective
ratings and appeals for performance ratings;
-Establishment of revised performance appraisal system to be
used as a basis for developing, rewarding, reassigning, de-
moting, promoting, retaining and removing employees; and
-Establihsment of new procedures for taking actions based on
unacceptable performance.
Under present law, all employees are rated under plans which pro-
vide for at least three summary adjective ratings-satisfactory, un-
satisfactory, and outstanding. The present performance appraisal
system is the source of frequent complaints by both managers and
employees. The complaints concern 1) the requirement for assign-
ment of summary adjective ratings, 2) the procedures for appeal of
ratings, and 3) the lack of importance attached to the ratings since
they are not used as the basis for administrative action.
Since 1950, a number of changes have occurred which have
diminished the importance of the summary adjective performance
rating. Entitlement to within-grade increases for General Schedule
employees is now based on a separate acceptable level of competence
determination. As a result of court decisions, an agency must follow
adverse action procedures if an employee with an unsatisfactory rat-
ing is to be reduced in grade, rank, or pay, or removed from the service.
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These two changes greatly diminished the importance of the summary
ad'ective rating.
in addition, few outstanding ratings are assigned because the
statutory criterion requires outstanding performance in all aspects of
the job. a criterion that extremely few individuals can meet. The
unsatisfactory rating is little-used because the assignment of such a
rating can have a useful purpose only with follow-on action which is
usually time-consuming, expensive, and aggravating for all parties
concerned. Under the provisions of 5 U.S.C. 4305, an employee is
now entitled to an impartial review of the rating within the agency
as well as a hearing before a board of review chaired by a member
designated by the Civil Service Commission. This review and hearing
process relates only to the rating itself. If an unsatisfactory rating
is sustained through this process, and it is decided to remove the em-
ployee, such action must then be initiated and processed under the
adverse action procedures. Thus, the entire process for taking action
on the basis of unsatisfactory performance is slow. It serves as a
deterrent to taking action that might otherwise be appropriate.
The bill repeals the requirement for assignment of summary adjec-
tive ratings and the provision for appeals of ratings.
The bill provides that appraisals of performance for all purposes
shall be made within a single, interrelated system.
Finally, the bill makes the performance ratings given under the
system more meaningful than in the past.The rating an employee re-
receives should be a consideration in rewarding or promoting an em-
ployee and in decisions about demotion or removal from the Federal
service. Salary increases under the merit pay system proposed by title
V of the bill will be based on the performance ratings system provided
by this section.
Section 203 of the bill also establishes new procedures to govern
personnel action taken against an employee by an.agency because of
unacceptable performance, and for the appeal of these actions to the
Merit System Protection Board. The provisions are designed to
remedy the widespread criticism of the present system. Inordinate
procedural requirements and unreasonable standards have been
repeatedly identified as some of the chief reasons why managers cur-
rently are reluctant to take action against employees on the grounds of
unacceptable performance. Figures supplied the Committee by the
Civil Service Commission illustrate the problem. In 1976, the Civil
Service Commission remanded 41% of all the cases appealed to it
where an agency sought to remove an employee for incompetence.
The prospect of successfully dealing with the appeals process, to
ensure that the person is not returned to the rolls, causes managers to go
through a long process of preparation that can take months or longer.
Often the manager's conclusion is that the task is too formidable and
he abandons the effort. At the least, the process is excessively delayed,
and far more time of the managers must be devoted to the process
than is justified.
The bill adopts new procedures to remedy this problem.
These new procedures will make it possible to act against ineffective
employees with reasonable dispatch, while still providing the employee
his due process rights.
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Section 4301. De fcnition8
. Section 4301 defines the coverage of this subchapter. It provides that
this subchapter applies to executive agencies as well as the Adminis-
trative Office of the United States Courts and the Government Printing
Office. This continues existing coverage. Section 4301 terminates cur-
rent statutory exclusions of the Nuclear Regulatory Commission and
a civilian officer or member of a crew of a vessel operated by the De-
partment of the Army or the Department of the Navy.
This section specifically excludes a government corporation and the
General Accounting Office. It also excludes the Central Intelligence
Agency, the Defense Intelligence Agency, the National Security
Agency, and such other agencies or units thereof whose principal
function is the conduct of foreign intelligence or counter-intelligence
if the President, in his discretion, determines such exemption is
required.
. Certain employees of other specified agencies are expressly excluded
from the subchapter, in large part because they are already governed
by other appraisal systems or because they are in a special status.
This includes Foreign Service officers, members of the Senior Execu-
tive Service esablished by title V of the bill, presidential aTeo intees,
and administrative law judges. This section also authorizes Office
of Personnel Management to exclude an agency or positions not in
the competitive service from this subchapter. This authorization gives
OPM the flexibility to make exceptions to the coverage of this sub-
chapter whenever it determines that an exception is in the interest of
good administration, and to revoke an administrative exception when
no longer warranted. It is expected that this authority to exempt agen-
cies or positions will be used sparingly.
Finally, "unacceptable performance" is defined as performance
which fails to meet established requirements in one or more critical
elements of this job. This definition is currently contained in
regulation.
Section 4302. E8tabliRhment of Performance Appraisal Systems
. Section 4302 (a) details the objectives of the performance appraisal
systems, and requires agencies to develop and establish one or more
performance appraisal systems which will encourage superior per-
formance. Any system established by an agency must meet the criteria
established by this section. The provision requires "periodic appraisals"
of job performance. Under current regulations, ratings are required
at least annually. The Civil Service Commission has informed the
Committee that it anticipates that a similar requirement will be
established under this provision.
The section specifically encourages employee participation in estab-
lishing performance objectives. Experience has shown that doing so
motivates employees to accomplish the objectives. Management will
have the ultimate responsibility under this section, however, to es-
tablish the performance standards.
Section 4302(a) specifically provides that the ratings derived from
the performance appraisal system will be used as a basis for a wide
variety of personnel actions.
Section 4302(b) sets forth the basic requirement that performance
appraisal systems conform to regulations issued by the Office of Per-
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sonnel Management and the basic requirements for appraisal sys-
tems. The Office of Personnel Management will issue guidelines and
make technical assistance available for performance appraisal, but
agencies will have great flexibility to choose or develop their own
systems.. Agencies should determine what type of performance ap-
praisal methods best suit their needs. This may range from a tradi-
tional system to a management by objectives type of system, with
more than one system used for different groups of employees. For ex-
ample, within the same agency, a management-by-objectives system
might be used for ,professional and managerial employees and a tradi-
tional system might be used for clerical or wage employees.
Any performance appraisal system should put primary emphasis on
the quality of the employee's work. Moreover. a performance evalua-
tion of a supervisor or manager should consider the performance of
that employee's subordinates. These tailored systems should not be
more complex than necessary to meet an agency's particular needs.
Unnecessary paperwork burdens should be avoided. Performance ap-
praisal is an integral part of management, however, and any time
which may be required to implement the system should be more than
fully justified by improved employee performance.
Agencies are required to establish performance requirements and
standards of performance at the beginning of the rating period and
to communicate them-though not necessarily in written form-to
employees. Employees' performance appraisals must be based on
these previously established performance standards.
Agencies are required to take action, based on performance ap-
praisals, to :
(1) recognize and reward employees whose performance
warrants it;
(2) assist employees whose performance is unacceptable to im-
prove; and
(3) reassign, demote, or separate employees whose perform-
ancq continues to be unacceptable.
Section 4302(b) (4) specifies that an adverse action should be taken
against an employee with an unacceptable performance rating only
after the employee has had an adequate opportunity to improve his
job performance. The bill does not require, however, that the agency's
decision whether to take action against an employee must, in each in-
stance, be governed by the performance of an employee during the
specific 30- or 60-day notice period afforded him under section 4303.
Section 4303(a)-(e). Action Ba8ed on Unacceptable Performance
The section specifies the specific procedures applicable at both the
agency level and on appeal to the Merit Systems Protection Board.
An employee may be removed or demoted at any time during the per-
formance appraisal cycle that performance becomes unacceptable. The
actions primarily contemplated are reduction in grade or dismissal
from the service. In accordance with current practice, it is not intended
that the term "demote" entitles an employee to the bill's procedural
protection when the employee is reduced in rank.
Under the procedures specified by section 4303(b) an employee is
entitled at the agency level to :
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1. At least 30 days written advance warning of the action pro-
posed which states the expected standard of performance, and
the areas in which the employee's performance is not acceptable;
2. Be accompanied by an attorney or other representative;
3. Reply orally and in writing to the proposed action;
4. A written decision which states the reasons for the decision.
The decision must be concurred in by a higher level official than
the official who proposed the action, except when the action was
proposed by the head of the agency.
The purpose of this procedure is to provide the employee with
notice that his.performance is not acceptable, to permit the employee to
reply to the proposed action and the reasons for the action, and to
give a decision, whether favorable or unfavorable, to the employee. The
employee may not be represented by an individual whose activities as
representative would cause a conflict of interest. The requirement for
concurrence in the decision by a higher level official is a safeguard
against taking unwarranted or ill-considered actions.
The provisions do not authorize an agency to conduct a full pre-
termination hearing in lieu of the procedures outlined in the bill. Such
hearings are not permitted by this section.
The Committee added to section 4303(b), as proposed in the orig-
inal- bill, the requirement that the advance notice to the employee
must specifically cite any failure by the employee during the past year
which the agency may consider when making a decision on the pro-
posed action. An agency may consider, for example, a previous pro-
posal to remove that was not carried out because of short-term im-
provement in performance. Unless the particular failure to perform
acceptably is cited in the advance notice, the agency may not rely upon
it as a grounds for demoting or removing the employee.
One of the chief differences between the procedures currently appli
cable at the agency level and the proposed procedures concerns the
standard governing the agency's action. Under current law, an em-
ployee.may be dismissed- for unacceptable performance only if dis-
missal would improve the efficiency of the service. As a practical
matter, agencies have found it very difficult to prove this to. the degree
required by courts through a series of judicial decisions. Section 4303
(a) imposes a new standard.. It. is "performance which fails to meet
established requirements in one or more critical elements of the job."
The Committee intends that this new standard should not be governed
by the existing case law defining the present standard, "such cause as
will promote the efficiency of the service."
Section 4303 places two restrictions on agencies to assure prompt
decisions on proposed demotions and removals. First, subsection (c)
states that an agency may provide the employee with a notice period of
more than 60 days only in accordance with regulations issued by the
Office of Personnel Management. Second, an agency has a maximum
of 30 days from the date the notice period' expires in which to issue a
decision'to retain, remove, or demote an employee.
Subsection (d) provides that when no action is taken against the
employee following the notice, and the employee's performance con-
tinues to be acceptable for one year. from the date of the advance warn-
ing, any record of the unacceptable performance must be removed
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from the employee's official records. The purpose of this subsection
is to provide that when an employee improves his performance to an
acceptable level and maintains that improved level of performance, he
not be adversely affected by a record of previously unacceptable
performance.
Subsection (e) grants a right of appeal to the Merit Systems Pro-
tection Board to employees who are preference eligibles or in the com-
petitive service and who are demoted or removed for unacceptable
performance. Up until now, non-preference eligibles have been af-
forded the right to appeal adverse actions only through Executive
Order. This provision establishes this statutory right of appeal for
the first time.
Section 4303(f). Appellate procedures
Subsection (f) specifies that before the Board such appeal will be
governed in part by the same procedures as employee appeals filed
with-the Merit Systems Protection Board from agency actions taken
on other grounds. However, there are some important differences
mandated by the special nature of actions taken for unacceptable per-
formance. An agency's assessment of an employee's overall perform-
ance in light of its needs and standards may be the most important
part.of the case. Yet it may be less susceptible to proof through
traditional trial-type procedure than when the agency takes an adverse
action on the basis of employee misconduct which is linked to specific,
provable offenses.
As a result, the provision adopts procedures which will protect the
right of employees, while also taking into account the needs of the
agency to assure an efficient and productive work force. The provision
was adopted only after the original wording was amended to assure
that these goals were in fact achieved.
The most important part of the procedure is the way it allocates
the burden of proof, and the standard of proof it adopts.
Under the provision, as amended, the agency will have the initial
burden before the Board of going forward with- its case. The bill, as
introduced, did not put this initial burden expressly on the agency.
The agency action cannot be ultimately upheld under any circum-
stances unless the agency first makes a prima facie case justifying its
action. Once the agency meets this initial burden, the employee will
be expected to introduce his own evidence, discredit the record made
by the agency, or present whatever arguments he` wishes. Following
the submissions by both the employee and the agency, the Board will
decide the case. At such point, the burden of persuasion, or the risk of
nonpersuasion, will be on the employee.
When deciding the case on appeal, the agency will be upheld by
the Board unless-
"(A) the agency's procedures contained error that sub-
stantially impaired the rights of the employee;
"(B) the agency's decision was based on discrimina-
tion . ;
"`(C) there is no reasonable basis on the record for the
agency's decision; or
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?44 (D) the agency's decision involved a prohibited personnel
practice, or was otherwise contrary to law."
Under this standard the Board must find that there is reasonable
basis for the agency's decision whenever it concludes that a reasonable
man could--ten the basis of the record-have acted as the agency did,
even if it is also possible to conclude that another course of action
would also have been reasonable. In reviewing agency action taken
under this section, both the Board and the courts should give deference
to the .judgment by each agency of the employee's performance in
light of the agency's assessment of its own personnel needs and
standards.
The additional procedures governing appeals to the Board from
actions taken for unacceptable performance, such as the availability
of summary judgment procedures, are otherwise identical to those
applicable to other Board appeals. The provisions are discussed below
in connection with the bill's amendments to section 7701.
Under the provisions of Section 1206 (b) the Special Counsel will be
free to participate in any appeals proceeding involving the demotion
or removal of an employee. The Special Counsel will be able to present
such evidence, .and make such points, that he considers desirable to
further the elimination of prohibited personnel procedures and com-
pliance with the civil service laws.
Section 4303 (g) -Coverage of procedures
New section 4303 (g) provides that the procedural protections gov-
erning actions based on unacceptable performance do not apply in
certain probationary periods. Consistent with the bill's amendments
to section 3321 (a) (2) of title V (section 301 of the'bill), the provi-
sions do not apply to an employee serving a probationary period in
an initial supervisory or managerial position, even if he had previ-
ously completed his probationary period of service in connection
with another position which was not supervisory or managerial in
nature.
Subsection (g) further .provides that the procedures in this section
do not'apply generally to the separation or demotion of an individual
in the competitive service who has not completed either a probationary
or trial period, or if there is no formal probationary period, one year
of current continuous service (other than under a temporary ap-
pointment limited to one year or less). Nor does it apply to an indi-
vidual in the excepted service who has not completed one Year of cur-
rent continuous employment in the same or similar positions. The
language of this provision is parallel to that for adverse action cover-
age under chapter 75 of title 5, U.S.C. The probationary or trial
period, or the first year of service under an appointment for which
there is no probationary or trial period, is an extension of the exam-
ining process to determine an employee's ability to actually perform
the duties of the position. It is inappropriate to restrict an agency's
authority to separate an employee who does not perform acceptably
during this period.
Section 4304. Responsibilities of the Ofwe of Personnel Management
This section identifies the responsibilities of the Office of Personnel
Management in providing technical assistance to agencies in develop-
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ing performance appraisal systems and requiring corrective action
when a system does not meet the requirements of law and implement-
ing regulations. The present requirement for prior approval of plans
is not continued in this proposed revision. This is consistent with the
intent of the bill to avoid excessive centralization in a personnel
agency of'the responsibility for implementing the personnel laws.
Section 4305. Regulations
This section authorizes the Office of Personnel Management to
issue regulations to carry out the purposes of this subchapter on
performance appraisal systems. The bill specifically provides, how-
ever; that in doing so the OPM does not have the authority to issue
regulations which directly or indirectly undercut the authority and
jurisdiction of the Board to regulate the procedures governing ap-
peals from an agency's action based on unacceptable performance, or
the responsibility of the Board to decide such cases on the basis of its
own interpretation of applicable law.
The first part of section 204 amends the current provisions in chapter
75 of title V governing adverse actions not appealable from the agency
to the Board. In addition to conforming changes, the amendments add
several additional procedural protections, such as the right of an
employee to submit additional kinds of documentary evidence to the
agency, and to reply- orally as well as in writing to the charges. The bill
does not substantially alter, however, the basic nature of the procedures
applicable to adverse actions not appealable to the Board.
Section 204 (a) of the bill also substantially amends subchapter II
of chapter 75, governing personnel actions that result in removals, sus-
pensions for more than 30 days, reductions in grade or pay, and fur-
loughs without pay. The actions covered in subchapter II may be
appealed by the employee to the Board. These provisions govern any
such action where the basis of the agency action is misconduct or any
other cause besides unacceptable performance. Actions based on un-
acceptable performance are governed by chapter 43, as added by sec-
tion 203 of the bill.
,The bill amends the subchapter in a number of different ways which
increase the procedural protections afforded employees, while also
protecting the right of agencies to be able to maintain the most efficient
workforce possible.
Among the more important procedural changes made by this por-
tion of the bill are the following :
-Statutory due process rights in adverse actions are extended to
all competitive service employees, not just veteran preference
eligibles;
-OPM is authorized to extend adverse action and appeals cover-
age to positions excepted from the competitive service;
-Reduction in rank is eliminated as an appealable adverse action;
-The procedural protections afforded employees at the agency
level are increased or codified in statute for the first time.
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SUBCHAPTER I-SUSPENSION FOR 30 DAYS OR LESS.
Section 7501. Definitions
Section 7501 defines the employee coverage of this subchapter and
the term "suspension." This subchapter applies to competitive service
employees who are serving under career, career-conditional, and other
non-temporary appointments, and who have completed a probationary
or trial period. This definition of employee would include all com-
petitive service employees who are currently -covered by these pro-
cedural protections. It does not apply to members of the Senior Execu-
tive Service, employees not in the competitive service who are excluded
from coverage by OPM regulation, or an employee in an agency or
unit of an agency engaged in foreign intelligence or counter-intelli-
gence excluded from the application of the merit systems principles
by section 2301.
For the first time, the term suspension is defined in statutory lan-
guage as a disciplinary action temporarily denying an employee. his
duties or pay. The bill follows the definition of the term previously
adopted by the Civil Service Commission in its policy issuances.
Section 7502. Actions Covered
Section 7502 specifies that this subchapter covers suspensions of
30 days or less.
The provisions of this subchapter do not apply to the suspension of
an employee under present section 7532 of this title, which outlines
the procedures to be followed when such an action is taken in the
interest of national security; nor do they apply to disciplinary actions
taken by the Board under section 1207 upon a complaint filed with
it by the Special Counsel pursuant to section 1206.
Section 7503. Cause and Procedure
Subsection (a) provides that an action to suspend an employee must
be taken in accordance with regulations prescribed by the Office of
Personnel Management, As in current law the agency may take such
action only "for' such cause as will promote the efficiency of the
service."
Subsection (b) defines the rights of an employee against whom a
suspension of 30 days or less is proposed. These include the rights
currently provided by statute. In addition, the right to furnish mate-
rial in support of the answer is expanded to include, in addition- to
affidavits, other documentary evidence which the employee may wish
to submit. The employee is also accorded the right to reply orally and
to be accompanied by an attorney or other representative. It is expe' t ed
that, by regulation, OPM will provide employees the right to review
material on which the agency has relied in proposing an action.
An employee who is suspended for 30 days or less is entitled to have
the action reviewed by the employing agency, but has no right of
appeal to the Merit Systems Protection Board. In the alternative, this
type of action may be the subject of grievance procedures established
by labor-management agreements under title VII of this bill.
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Section 7504. Regulations
Section 7504 authorizes the Office of Personnel Management to issue
regulations to carry out the purposes of this subchapter.
SUBCHAPTER II-REMOVAL, SUSPENSION FOR MORE THAN 30 DAYS,
REDUCTION IN GRADE OR PAY, OR FURLOUGH FOR 30 DAYS OR LESS
Section 7511. Definitions; application.
Subsection (a) provides a statutory basis for the procedural pro-
tections and appeal rights now granted employees in the competitive
service who are serving under career, career-conditional, or certain
other non-temporary appointments, and who have completed a proba-
tionary or trial period. Protections against arbitrary or capricious
actions have become established by practice and Executive Order-but
not by statute-as a basic right of competitive service employees. It is
appropriate that the rights extended to nonpreference eligibles be
made statutory rights.. It also continues the present coverage of em-
ployees serving ,under certain other appointments, for which there is
no probationary or trial period, after they complete one year of cur-
rent continuous employment. The changes in the wording of this sub-
section from existing law provide coverage to employees serving under
several kinds of appointments not in existence at the time the present
law was enacted.
Subparagraph (1) (B) of subsection (a) reaffirms procedural pro-
tections and appeals rights of preference eligibles in the excepted serv-
ice. This subsection does not, however, repeal specific exceptions to the
provisions of this subchapter which are contained in the organic legis-
lation of certain agencies, such as the Central Intelligence Agency,
whose employees are excepted from the competitive service by statute.
The phrase "one year of current continuous service in the same or
similar positions," which defines the extent of coverage of employees
in the excepted service, is intended to be the same as that currently
used in civil service regulations.
Definitions (2), (3), (4) and (5) are defined elsewhere in title 5
or in civil service regulations or policy issuances and are added for
uniformity and clarity.
Subsection (b) identifies the three groups of positions to which this.
subchapter does not apply. The first exception is for positions which
require Senate confirmation. The exception is continued from current
law.
The second, a new exception for positions of a confidential, policy-
determining, policy-making or policy advocating character, is an
extension of the exception for appointments confirmed by the Senate.
These positions are currently placed in Schedule C (positions at
GS-15 and below), or filled by Non-Career Executive Assignment
(GS-16, -17, and -18). The concept of tenure and protection against
dismissal is contrary to the confidential relationship between incum-
bent and supervising official, and the commitment to Administration
policy objectives, required by those filling such positions.
Positions excepted from the competitive service will not automati-
cally be exempted from the procedures governing adverse actions. A
further determination must be made that a position meets the confi-
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dential or policy-making criteria established by the section. This ex-
clusionary authority must be read in conjunction with section 7511(c),
discussed below, which authorizes OPM to include within the sub-
chapter's procedural protections other employees outside the competi-
tive service who are not in such confidential or policy-making jobs.
In the case of a position excepted from the competitive service by
administrative action rather than statute, the determination to exclude
the position shall be made by the Office of Personnel Management.
A determination that a position in the statutorily excepted service is
of comparable confidential, policy-determining, policy advocacy or
policy-making character shall be primarily made by the head of the
agency, under criteria established by OPM regulation.
The third exception is for positions in'the Senior Executive Service.
Procedures for taking disciplinary action against an individual in the
SES are contained in title IV of this bill.
The fourth exception tracks the exemption for foreign intelligence
and counterintelligence agencies, similarly provided for in section
2301. -
Subsection (c) provides that the Office of Personnel Management
may by regulation extend the provisions which it administratively
excepted from the competitive service. These positions are now ex-
cepted under Schedules A and B because competitive examinations
cannot be administered. Although many positions in the administra-
tively excepted service are career positions in the sense that em-
ployees spend their careers in the positions, only preference eli-\
gables are currently entitled to adverse action coverage. This subsection
permits the Office of Personnel Management, in its discretion, to extend
adverse action and appeal coverage to positions or groups of positions
which meet criteria it establishes for granting these rights.
Section 7512. Actions covered
This section identifies the actions covered by this subchapter : re-
movals, suspensions for more than 30 days, reductions in grade; reduc-
tions in pay of an amount exceeding one step of the employee's grade
or 3 percent of the employee's basic pay; and furloughs for 30 days
or less. Furloughs 'for more than a total of 30 days shall continue to
be reduction-in-force actions taken under section 3502 of this title.
The present statutory language includes a reference to "reduction'in
rank." This reference is deleted so as to eliminate reduction in rank as
an appealable action. In 1944, when the procedural rights were first ex-
tended employees, thousands of positions were not covered by any posi-
tion classification system. Consequently, where there was no reduction
in compensation, it was necessary to look to something else, for example,
the individual's relative standing in the agency's organizational struc-
ture, to determine whether an adverse action.had been taken. However,
all or most positions in the competitive service, with rare exception, are
now covered by position classification or job-grading systems, with
pay related directly to the grade of the position as determined under
those systems. The concept of "rank" as a separate category of appeal-
able actions is no longer necessary. This change will also more closely
relate the protections afforded to the severity of the action taken. It
will increase the flexibility of agencies to assign employees to positions
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and duties where they are needed without having to take an adverse
action against an employee when the job title or duties have changed,
but the grade has not.
The provision also excludes reductions in pay of less than 3% of the
employee's basic pay, or one step of the employee's grade.
Finally, this subchapter does not apply to a disciplinary action in-
itiated by the Special Counsel against a Federal, state or local em-
ployee. The specific procedural protections contained in the new sec-
tion 1207 will instead govern.
Additional exceptions conforming this section to other provisions in
title V cover employees subject to section 7532 (national security),
supervisors or managers who have not completed their probationary,
period, and employees who are subject to adverse actions on the basis
of unacceptable performance. Section 4303 of title V, as amended by
this bill, covers employees demoted or removed for unacceptable per-
formance. As under current law, appeals arising out of reduction in
force actions will be governed by section 3502 rather than this
subchapter.
Section 7513. Cau8e and procedure
Subsection (a) provides that an agency may take an adverse action
of the kind described in section 7512 against an employee for such cause
as will promote the efficiency of the service. Any action taken must
comply with regulations prescribed by the Office of Personnel Manage-
ment. These are identical to current statutory provisions relating to
adverse actions.
Subsection (b) specifies the minimum rights of an employee against
whom an adverse action is proposed. These are:
1. At- least thirty days' advance written notice of the proposed
action. The thirty day period may be reduced only when there is rea-
sonable cause to believe the employee is guilty of a crime for which a
sentence of imprisonment can be imposed. The notice must state "spe-
cific reasons" for the proposed action. The latter is a change from the
current statutory provision which requires that the notice of proposed
adverse action state "any and all reasons, specifically and in detail."
The change is intended to reduce the degree of detail now sometimes
required in order to avoid reversal on procedural grounds. The agency
must still tell the employee the reasons for the proposed action in
sufficient detail to allow the employee to make an informed reply.
2.. A reasonable time to answer orally and in writing and to furnish
material to support the answer. Under this provision, the employee's
rights are expanded to permit the employee to submit other documen-
tary evidence in addition to affidavits. The term "answer orally" is
substituted for "answer personally." The intent, however is still that
the employee have the opportunity to make an oral reply, in person,
to an individual authorized to make or recommend a decision on the
proposed action. The right of the employee to review material on
which an agency has relied in proposing an action is now provided by
regulation. It is expected the right will be continued by regulations
issued by OPM.
3. To be accompanied by an attorney or other representative. This
provides a new statutory right. The right to be accompanied by a
representative at the pre-decision stage is currently authorized by a
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number of agencies, but the statutory right to representation is re-
stricted to the appellate stage of the action. It is appropriate that the
right be extended by statute to the predecision stage. The employee
may not, however, be represented by an individual whose activities as
representative would cause a conflict of interest. The provision does
not authorize an employing agency to pay the cost of an employee's
representative, but does not disturb existing provisions relating to
use of official time to represent another employee.
4. A written decision, including a statement of those reasons in the
notice of proposed adverse action which have been found sustained,
and those which have not been sustained, must be ' furished the em-
ployee at the earliest practicable date.
Subsection (c) retains with the agency head the discretionary au-
thority he now possesses to provide the opportunity for a hearing, at
the reply stage, which would include the right to examine witnesses,
prior to the final agency decision in proposed actions. Only two agen-
cies, according to the Civil Service Commission, now provide pre-
termination hearings for all employees, HEW and NLRB. The specific
inclusion of this provision is 'intended to preserve, not to alter, the
full discretion the agency now has to decide whether to grant such
pretermination hearings.
Subsection (d) establishes an employee's right to appeal an ad-
verse action effected under this subchapter to the Merit Systems Pro-
tection Board. The procedures governing such appeals are contained
in section 7701, discussed below.
Subsection (e) requires that certain documents, all of which are pro-
vided by or furnished to the employee, relating to adverse actions be
made a part of the agency's records, and furnished, on request, to the
Merit Systems Protection Board to insure that a record of the action
is retained and available if the action is appealed.
Section 7514. Regulation
This section authorizes the Office of Personnel Management to issue
regulations to carry out the purposes of this subchapter. OPM does
not have authority, however, to issue regulations which would under-
mine the authority of the Board directly or indirectly to regulate the
procedures under which it reviews matters appealed to it, or the au-
thority of the Board to decide matters in accordance with its interpre-
tation of applicable law. The provision so specifies.
SECTION 205. APPEALS
Section 205 reenacts chapter 77 of title V with a number of amend-
ments. This section makes important changes in the procedures gov-
erning review by the Board and the courts of adverse actions, such as
removals, and other appealable actions taken by an agency. The changes
protect the right of employees, recognized by the Supreme Court in
Arnett v. Kennedy, 416 U.S. 134 (1974), to a full and fair considera-
tion of their case. At the same time, they are intended to give agencies
greater, ability to remove or discipline expeditiously employees who
engage in misconduct, or whose work performance is unacceptable.
Henceforth, the Board and the courts should only reverse agency
actions under the new procedures where the employee's rights under
this title have been substantially prejudiced.
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Section 205 makes a number of important changes in current law.
Among other changes, it
-Guarantees the employee the right to an evidentiary, hearing
whenever questions of fact are in dispute;
-Directs the Board to consider appeals in an expeditious manner
and establishes procedures to assure that this is achieved;
-Provides for the award of attorney fees to employees in certain
cases;
-Alters the standards governing appellate review of an agency
action to eliminate unwarranted reversals of agency actions;
-Eliminates evidentiary hearings in appellate cases where there
are no genuine and material issues of fact in dispute;
-Authorizes the Board to combine cases on appeal before it, and
to take other action to expedite appellate review where to do so
would not prejudice the rights of employees;
-Encourages more consistent judicial decisions on review by pro-
viding for judicial review by the Court of Claims or the U.S.
Court of Appeals rather than by U.S. District Courts in most
cases and merely eliminates an unnecessary layer of judicial re-
view; and
-Avoids burdening the courts with unnecessarily detailed review
of agency actions by establishing as the scope of review the tradi-
tionally limited appellate review the courts provide agency ac-
tions in other areas.
In addition, the provisions provide a procedure for the appellate
consideration of adverse actions involving charges of discrimination.
They take account of the intended role of the new independent Merit
Systems Protection Board, as well as the expanded role that Reor-
ganization Plan No. 1 of 1978 anticipates for the Equal Employment
Opportunity Commission in the area of Federal personnel policies.
The Committee first considered this issue in connection with Re-
organization Plan No. 1 of 1978, which in part transferred responsi-
bility for various aspects of equal employment opportunity from three
different agencies to the Equal Employment Opportunity Commis-
sion. The. plan proposed to transfer responsibility for preventing dis-
crimination in the federal workforce from the Civil Service Commis-
sion to the Commission. When the Committee considered Reorganiza-
tion Plan No. 1, it expressed serious reservations about the consistency
of the proposed plan with the overall civil service reform proposed in
this bill. The Committee report on Reorganization Plan No.1 describes
in detail the concerns it had -with the original proposal. (Senate Re-
port No. 95-750, April 20, 1978, pages 9-14) At the time the President
agreed in a letter to the Committee, printed as Appendix 2 to the
Committee Report on Reoranization Plan No. 1, that there were prob-
lems raised by the reorganization plan which should be resolved in
connection with the consideration by Congress of this bill.
The procedures adopted by the committee resolve these problems.
The chief purpose of the committee amendment is to make sure that
neither the Merit Systems Protection Board, nor the Equal Employ-
ment Opportunity Commission. will be able to overrule the other.
Instead, the powers of the Board and the Commission are carefully
balanced one against the other. The committee felt that it was abso-
 Approved For Release 2007/05/14: CIA-RDP85-00003R000300090001-1
lately essential to the success of the overall civil service reform effort
that there be this creative balance between the authority of the Board
and the Commission because of the unique nature of the issues in-
volved. In .addition, the procedures are designed to protect against
inconsistent decisions by the Board and Commission, to prevent forum
shopping, and to make the procedures for consideration of the same
matter by both agencies as streamlined as possible.
Under the procedures adopted by the committee, the Board will
continue to consider all actions appealable under the other provisions
of this bill, even if the appeal also involves issues of discrimination.
This will allow the Board to consider, as related aspects of the same
case, allegations that there had been violations of the merit system
principles implemented by title V, as well as the anti-discrimination
laws. In such cases, questions-of the employee's inefficiency or miscon-
duct, and discrimination by the employer, will be two sides of the
same question which must be considered together. Any provision deny-
ing the Board jurisdiction to decide certain adverse action appeals
because discrimination is raised as an issue would make it impossible
for the government to have a single unified personnel policy which
took into account the requirements of all the various laws and goals
governing Federal personnel management. In the absence of full
Board jurisdiction, forum shopping and inconsistent decisions, per-
haps arising out of the same set of facts, would result.
At the same time the provisions provide for an active role in the
process by the Equal Employment Opportunity. Commission where
questions of discrimination are involved. The Commission will be re-
sponsible for issuing general policy rules and directions. In the case
of discrimination complaints involving personnel actions not other-
wise appealable to the Board, the Commission will have full respon-
sibility for deciding the matter. In adjudications of dismissals, or
similar types of actions appealable to the Board the amendment estab-
lishes procedures to assure the Board and the Commission, work to-
gether to resolve any differences between them at the agency level. So
that neither agency has the ultimate authority to override the views of
the other, it provides for automatic review by the Court of Appeals
where the two agencies cannot resolve their differences in a particular
case.
In a similar vein, the section establishes an orderly and workable
method for assuring OPM participation in Board proceedings and a
means for OPM to appeal Board decisions to court where the Board
and the Director have substantial disagreements about the proper
interpretation or direction of the government's personnel laws.
Section 7701(a) - (f) . Appellate procedures
Section 7701 provides for the processing of adverse actions and
other appeals within the jurisdiction of the Merit Systems Protection
Board. The Board may refer any case appealable to it for adjudication
to an appeals officer or to an administrative law judge who would have
the authority to decide the ease.
Sections 7701 (b) and (c) govern the type of hearing an employee
must receive before the Board. The Committee amended this provision
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of the bill to make it absolutely clear that an employee would receive
a full evidentiary hearing in any case where there is a dispute as to
any genuine and material issue of fact-that is, a dispute as to facts
which must be resolved before a decision can be reached, and which
maybe most appropriately considered and resolved through the tradi-
tional adjudicatory methods used in evidentiary hearings. This would
'include instances, for example, where oral testimony and cross-exami-
nation is the best way to test the credibility of the witnesses. The bill
was amended by the Committee to specifically provide that in such
cases an evidentiary hearing should include the traditional right of
cross-examination. In any case involving removal of an employee from
the Federal service, the Board, because of the importance of the case,
must provide that the case be heard by an administrative law judge
selected according to the especially demanding procedures specified
in- the Administrative Procedure Act, or the Board must assign the
case to one of its more qualified and experienced appeals officers.
Where there is no dispute about the facts, the presiding officer may
avoid holding an evidentiary hearing since in these cases a full hear-
ing is unnecessary. The Committee amendment specifies the proce-
dure either party must follow if it requests summary judgment on the
grounds there are no factual disputes in the case. The wording adopted
by the Committee assures the employee a full opportunity to present
his case before a decision is made. The presiding officer may authorize
the conduct of discovery procedures so that the employee has a chance
to assemble his case before a decision on the summary judgment mo-
tion is rendered. This is especially important because often the agency
alone will possess the records the employee needs to successfully argue
his case.. The administrative law judge or appeals officer may afford
the parties the right to an oral argument before a decision is reached
on the summary judgment motion.
Subsection (d) establishes the standards that govern Board review
of an adverse action.
As in the case of the standards governing appeals from actions based
on unacceptable performance, the bill changes the applicable stand-
ards to avoid unnecessary reversal of agency actions because of tech-
nical procedural oversights, or because the judgment of the agency is
not given sufficient weight. However, the Committee felt that the
agency should have to meet a heavier burden of proof when it sought
to take an adverse action against an employee for misconduct than
when the action was based on unacceptable performance. In the case of
misconduct, the case is more susceptible to the normal kind of eviden-r
tiary proof, and the nature of the proceeding is more disciplinary in
nature.
Currently, when an agency takes adverse action against one of its
employees, it must prove by a preponderance of the evidence that the
action will promote the efficiency of the service. Under the legislation,
the Board would sustain an agency decision unless there was-
(1) Procedural error which substantially impaired his rights;
(2) Prohibited discrimination;
(3) The agency decision is unsupported by substantial evidence
on the record taken as a whole ; or
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(4) The agency action involved a prohibited personnel prac-
tice or was otherwise contrary to law.
As under current law, the agency would continue to have the burden
of going forward with its case first, and the burden of convincing the
decision maker in the end that its action was lawful. There must be
substantial evidence in the record supporting the agency action. In
these two respects S. 2640 as reported differs from the original bill,
which placed the burden on the employee, and only required that the
agency action not be arbitrary or capricious.
It is intended that the standards adopted by the Committee impose
upon an agency a higher standard of proof than, will be applicable
when an agency action is based on unacceptable performance. How-
ever, it is intended that the overall effect of the new standards will be
fewer reversals by the Board or the courts of adverse actions taken by
the agencies.
Under section 7701(e), the decision of the appeal by the presiding
officer shall be final unless a party to the appeal, or the Office of Per-
sonnel Management, petitions the Board to reopen the case not later
than 30 days after receiving notice of the decision, or unless the Board
reconsiders a case on its own motion. The 30-day limit may be ex-
tended by the Board for good cause shown. A case may be reopened
by a single member. The section eliminates the intermediate appeals
stage now provided parties through the Civil Service Commission's
Appeals Review Board. This change should help expedite final Board
action, while assuring that more cases will be reviewed by the Board
itself than currently are reviewed by the members of the Civil Service
Commission.
A Committee amendment to this subsection limits the occasions
on which the OPM could petition the Board for review to only those
instances where the OPM director first determines that the decision
is erroneous and that, if allowed to stand, the decision would have a
substantial impact on the administration of the civil service laws
within OPM's jurisdiction. The OPM should limit the cases in which
it seeks the review by the Board to those that are exceptionally
important. .
Section 7701(g) . Consolidation of appeals
Subsection (g) authorizes Board officials to consolidate appeals
filed by two or more appellants, and to join two or more appeals filed
by the appellant. Under the present system, Commission appellate
officers process as separate cases similar appeals or complaints which
are filed by different individuals, except when those individuals con-
sent to combining the appeals and complaints for processing. Ap-
pellate offices also process separately more than one appeal or com-
plaint received from the same individual. It is apparent, however, that
cases involving the same or very similar facts or circumstances or
issues can be processed more expeditiously and efficiently if they are
combined. The legislation provides the Board and its appeals officers
with clear authority to do so. However, this action may not be taken
if it would prejudice the rights of parties. Before any action is taken
under this.authority, the parties should be given notice and an oppor-
tunity to present their views in some form.
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Section 7701(f), (h.), and (i). Procedures in appeals involving is-
sues of discrimination
Subsections (f), (h) and (i) contain the provisions in section 7701
chiefly governing Board consideration of adverse actions involving
charges of discrimination. The procedure will work as follows :
1. Whenever an agency takes an action which involves the kind
of action that the employee could appeal to the Board, such as re-
moval or reduction in grade, the employee must appeal the action
to the Board if it wishes any administrative review of the agency
action. (Subsection (h)) The appeal must be to the Board
whether the employees alleges only that the agency action
was unlawful under the laws prohibiting discrimination, or the
employee alleges only that the procedural and substantive protec-
tion afforded him under the personnel laws in title V were vio-
lated, or he alleges a violation of any combination of these
different laws. The Board has jurisdiction whether the employee
raises the discrimination laws as a defense or answer to the agency
action, or whether the employee files a separate complaint against
his employer under the anti-discrimination laws for proposing to
take the appealable action against him. If the employee does file
a separate discrimination complaint, subsection (f) (2) specifies .
that the agency shall have no more than 60 days to resolve the
complaint. At the end of that time both the adverse action and
the discrimination complaint must be appealed as a single action
to the Board.
The jurisdiction of the Board is determined entirely by the
nature of the personnel action taken, not by the kind of legal or
factual arguments raised or the procedures used to raise the dis-
crimination issue. Similarly, an employee may file a discrimination
grievance with the agency on the basis of an action by the agency
which is not itself appealable to the Board. Separately, the agency
may propose to take an action against the employee of the kind
appealable to the Board. Proceedings under both actions should be
a part of the record considered by the Board. The Equal Employ-
ment Opportunity Commission should defer any action on the
separate grievance not involving an appealable action until the
agency action in the appealable matter has been finally resolved.
Class actions, as well as individual complaints, involving dis-
crimination issues are equally subject to the Board's jurisdiction.
The procedures specified in this bill do not alter the right of
any employee to file a case in Federal district court after 180 days
now provided by title VI of the Civil Rights Act of 1964, as
amended. This alternative route will be available to the employee
at any point during the procedure in accordance with the time
requirements in title VII.
2. If the employee wishes to appeal the agency action the mat-
ter must be appealed to the Board. The Board will be the sole
place where the factual.record in the case is made. (See subsec-
tions (h) and (i) (3) ).
3. If the matter is appealed to the Board, the Board must no-
tify the Equal Employment Opportunity Commission as soon as
it becomes apparent that there will be involved, or may be in-
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volved, the application to Federal- employees of any anti-discrimi-
nation law for which the Commission is in part responsible.
(Subsection (i) (1)). Subsection (h) spells out the anti-discrimi-
nation laws involved. They are Title VII of the Civil Rights Act
of 1964, the Equal Pay Act, the Age Discrimination in Employ-
ment Act-of 1967, and the Rehabilitation Act of 1973 prohibiting
discrimination on the basis of handicapping condition. Upon re-
ceipt of the notice, the Commission will be able to participate
fully in the consideration of the case before the Board. During
the initial consideration of the issue before an appeals officer,-it
may present what facts it wishes through calling witnesses of its.
own or other means. It may cross-examine witnesses, and raise
legal arguments. Through this procedure the Commission may
make sure that from the beginning the record reflects its concerns
and views.
Subsection (f) will govern the conduct of an appeal involving
discrimination. This subsection specifies that the appeals officer
of the Board will be the one responsible for making the decision,
either on the basis of the written record, or after conducting an
evidentiary hearing in those cases where the appeals officer de-
termines an evidentiary hearing is required by Board regulations.
The appeals officer appointed under subsection (f) to hear the
case will be the same kind of appeals officer used by the Commis-
sion to consider other kinds of appealable actions. The other pro-
cedures in section 7701 governing appealable actions generally,
such as those governing the conduct of evidentiary hearings and
the granting of summary judgments, will also continue to govern
whether or not violation of the anti-discrimination laws is alleged.
4. Following a decision by the appeals officer, the Commission
may petition the Board to reconsider the decision. (Subsection
(e))-. In order to assure resolution of any differences between the
Board and the Commission as early in the process as possible, the
Commission should seek full Board review whenever it has im-
portant differences with the way the appeals officer decided the
case, rather than waiting until the matter is finally decided by
the Board, and then requiring subsequent referral to the Com-
mission. For the same reasons, the Board should consider carefully
any Commission request under subsection. (e). The Commission
may request Board reconsideration of an appeals officer decision
even if the Commission did not participate in the proceeding be-
fore the appeals officer. If the Commission believes that the factual
record in the proceeding is inadequate, it may urge the Board to
remand the proceeding to the appeals officer for such further de-
velopment of the record as may be required.
. 5. Only after the Board completes action on the matter by issu-
ing a final administrative decision does the Commission have an
opportunity to reconsider the decision and order the Board (sub-
section (i) (3). The Commission may reconsider such decision and
order either upon a petition by the employee who brought the
proceeding before the Board in the first place, or on its own initia-
tives. In order for the Commission to reconsider the Board's ac-
tion, however, the Board's decision and order must have a sub-
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stantial impact on the general responsibilities of the Commission
for implementing the anti-discrimination laws in the federal
work sector as a whole. Thus, decisions and orders which propel
case law in a new direction, or which.raise significant conflicts
with the policies or interpretations of the Commission, may be
considered by the Commission. Board actions in individual cases
where the significance of the case is limited to its particular
facts-so that the decision and order does not have general appli-
cability-should not be considered. The Commission has 30 days
from the date of the Board's final decision and order to decide
whether to consider it. The Commission may invoke jurisdiction
under this subsection only if it first explains in a written finding
how the decision and order of the Board may have a substantial
impact on its administration of the anti-discrimination laws. If,
after 30 days, the Commission has not decided to reconsider the
case, the original decision and order of the Board becomes the
final agency action in the matter. (Subsection (i) (2) )
6. Upon reconsidering the decision and order of the Board, the
Commission may review the entire record in the case developed
by the Board. It may receive additional legal arguments from the
parties if it wishes. It may not, however, reopen the factual record
and take additional evidence. Nor may it supplement the factual
record in the case by receiving affidavits or the like. The Com-
mission has a total of sixty days from the time the Board issued
its decision and order to review the record, and act. The Commis-
sion may take one of two actions. It may concur in the decision
and order of the Board; or issue another decision and order.
If the Commission concurs in the Board's decision and order,
that concludes the matter at the agency level. The decision and
order of the Board becomes the final agency action in the matter
not subject to any further consideration at the administrative
level. ((subsection (i) (3) (A) and (i) (4) )
The extent of the authority of the Commission to issue, in the
alternative, a different decision and order is spelled out in sub-
section (i) (3) (B). The Commission may propose a difference
order and decision only to the extent that such differences are
supported by, a written finding that in its view the Board decision
was wrong in one of two ways. Either the Commission may con-
clude that the Board's interpretation of the meaning of any anti-
discrimination statute, or any rule, regulation, or policy direction
issued thereunder, was wrong as a matter of law. Or the Commis-
sion may conclude that taking all the evidence in the record, as a
whole, the Board's application of such laws to the evidence in the
record on the issue of discrimination can not be supported as a
matter of law.
7. When the Commission does issue a different proposed order
and decision the matter must go back to the Board. (Subsection
(i) (5) ). The Board must reconsider its earlier decision and order
in light of the Commission's differing interpretation of the law
and-within 30 days-take final agency action on the matter. In
those 30 days the Board may-if it finds it necessary because of
the decision and order of the Commission-reopen the record and
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take further evidence. This should happen only in the most ex-
traordinary circumstances. The Board and the Commission should
cooperate in developing the factual record at the time the matter
is initially considered by the Board. The burden and delay im-
posed on the parties by reopening the record at this stage of the
proceeding should dictate against it except for the most compel-
ling reasons. The decision of the Board whether or not to reopen
the case and take additional evidence on the case is a matter en-
tirely within its discretion. It need not do so unless it concludes
it is the best course to follow.
Upon reconsidering its decision, the Board may. either
(1) Adopt the order of the Commission ;
(2) Reaffirm its original decision and order; or
(3) Issue another decision and order which does not follow
either the Commission's proposed order and decision, or its
own original decision and order.
If, under the first option, the Board adopts the proposed order
of the Commission, the Board's action constitutes final agency
action in the matter. The first option applies in any instance
where the Board adopts the relief, or otherwise issues a final order,
that is the same as what the Commission proposed. For this first
option to be applicable, the Board need not endorse every part of
the Commission's legal reasoning, as reflected in its proposed
decision. What is determinative is whether the Board orders the
same action as the Commission. If so, that is the end of the matter
under this subsection.
8. If the Board concludes against adopting the proposed Com-
mission order, it means there still exists an unresolved dispute on
a question of law between the two agencies. The Committee felt
that in such instances neither agency should have the authority
to overrule the view of the other. Where such a dispute persists
after the repeated procedures available to both agencies to resolve
their differences at an earlier stage, the Committee felt that the
matter was of sufficient importance, and the legal issues well
enough drawn, that the Court of Appeals should consider the
matter and resolve the differences.
Accordingly, in these cases the matter must be immediately
certified to the Court of Appeals for the District of Columbia.
(subsection (i) (5) )'. The appeal follows automatically. Neither
agency has the right or obligation to decide whether the appeal
should be brought. Neither agency should be considered as appeal-
ing the action of the other. Since the Board will be the last agency
to have the record before it, it will have the ministerial duty of
deciding what should be a part of the record and seeing to it that
the record is actually forwarded to the Court.
If a matter is certified under this section it may. be several
months before the Court of Appeals may act. The Committee
therefore felt some interim relief at the administrative level
should be authorized so that the employee is not unduly burdened
by the inability of the two agencies to resolve their differences.
Subsection (i) (5) therefore authorized one of the agencies-the
Commission-to grant certain interim relief in its discretion upon
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petition by the employee, where it is necessary to reduce excep-
tional hardship the employee might otherwise incur. The pro-
vision specifies that the Commission may not issue interim relief
which prejudices the final resolution of the matter by awarding
backpay, reinstating the employee, or otherwise reversing or stay-
ing the agency action under consideration by the Court. Where an
agency has dismissed an employee on the grounds of unacceptable
performance, however, the Commission may prohibit the agency
from disclosing to future employers the agency's findings about
the employee's performance.
9. Upon a 1, the Court should review the entire record.
(Subsection (i) (5) ). It must decide the proper interpretation of
the applicable statute and related law. It must decide whether the
Board's application of the law to the evidence in the case was in
fact reasonable, or whether the Commission was correct in con-
cluding that the Board's conclusion in such matters. was unsup-
portable as a matter of law. In applying the law, the Court should
pay due deference to the respective expertise of each agency. For
example? the Commission's interpretation of the meaning of
policy directives issued by it under title VII of the Civil Rights
Act of 1964, as amended, or other antidiscrimination statutes is
entitled to appropriate weight, just as is the Board's interpretation
of the civil service laws under title V of the U.S. Code. In deciding,
however, how to resolve any conflicting goals or standards caused
by applying both the personnel rules and principles, and the anti-
discnmination rules and principles to the same case, the Court
will have to re ach a decision on its own, without prejudicing the
matter by according greater presumptive weight to how one
agency or the other would resolve the confl icts.
The Court of Appeals should reach a decision, and remand the
matter to the Board to take such further action as required by the
Court.
The procedures described above governing discrimination cases is
different from those originally proposed in Reorganization Plan No.
1 of 1978. Upon enactment the procedures outlined in this bill shall
supercede anything in the Reorganization Plan that conflicts directly
or indirectly with the procedures established by this bill. Section
804 (a) of the bill so specifies. This will cause no added difficulties since
the President, at the request of this Committee, has delayed implement-
ing the applicable parts of Reorganization Plan No. 1 until the Com-
mittee has had an opportunity to act on this legislation.
Section 7701(j)-(m). Miseellaneaua matters concerning appeal
Section 7701(j) requires an agency to pay an employee's reason-
able attorney fees in proceedings before the Board if the employeq
is the prevailing party,.and the Board determines that the agency's
action was taken in bad fkith. The Civil Service Commission currently
does not have the authority to require agencies to pay the attorney fees
of employees who prevail in their appeals. Employees whose agencies
have taken unfounded actions against them may spend a considerable
amount of money defending- themselves against these actions, they
cannot be reimbursed for attorney fees upon prevailing in their appeals
to the Commission. Instead, they must file civil actions against the
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Government in order to obtain a review of their requests for
reimbursement. 72
The legislation remedies this problem by authorizing the Board
members and hearing officials to require payment, by agencies which
are losing parties to proceedings before the Board, of attorney fees to
the employees who prevailed. Payment is only required when it is 'Pear-
ranted on the grounds that the agency's action was taken in bad faith.
This may occur, for example, when the action brought is wholly un-
founded. Or when there is evidence the agency brought the action to
harass the employee or to exert improper pressure on the employee to
act in certain ways. The circumstances justifying the award of
attorney's fees is left to the discretion of the Board to develop in light
of its experience. The award of attorney's fees should not become, how-
ever, the ordinary practice in cases which the employee wins.
On the other hand, statutory law already provides for the award of
attorney fees whenever a party in a discrimination suit prevails. The
section preserves the right of. the Board to award attorney fees under
this different standard whenever it finds the employee's rights under
the laws prohibiting discrimination have been violated.
Section 7701(k) provides that matters subject to the Board's appel-
late jurisdiction could be settled instead by methods provided for by
the Board under its regulations. Suitable forms of conciliation, media-
tion, arbitration, and other methods mutually agreeable to the parties
could be used. This would give the Board the opportunity to experi-
ment with, and develop, efficient and effective alternatives for resolv-
ing disputes concerning appealable matters.
The Committee added a new subsection (1) requiring the Board to
establish and announce publicly the deadline for completing action on
each appeal filed with it. The Committee study of Delay in the Regu-
latory Process, published as Volume IV of its Study on Federal Regu-
lation, identified better agency management and planning as one of
the prime ways regulatory delay could be reduced. The Committee
unanimously adopted a recommendation that agencies make greater
use of deadlines as a way to help eliminate delay. Experience at such
agencies as the NLRB has shown that this is an effective way of re-
ducing delay.
Administrative delay of cases before the Board is especially trouble-
some because it directly affects in significant ways employees who
may not even have a job while the appeal is pending. At the least, the
future course of the career of the employee is subject to great uncer-
tainty for as long as the appeal is pending. In discrimination cases, the
employee is entitled to start a de novo hearing in district court if
agency proceedings are not completed in 180 days. Consequently the
subsection contains, in addition to the requirement for the establish-
ment of deadlines, a general direction to the Board to expedite, to the
greatest extent possible, its proceedings. The procedures established by
this subsection, and the section generally, should be administered con-
sistent with this policy.
In addition to establishing a target for completing action on each
appeal, the Board should also adopt procedures and staff to track the
progress of each appeal to help assure that action on it will bcom-
pleted by the announced deadline, and to act where delays do appear.
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In setting deadlines the Board may be able to use categories established
on the basis of its past experience as an aid in predicting how quickly
any particular case may be completed. The deadline set for each indi-
vidual case should be a_ realistic one, however, that accurately reflects
the amount of time needed to complete tht particular case. In estab-
lishing deadlines in any particular case the Board should also consider
.the extent of hardship the employee may suffer pending resolution of
the case. Those cases where there is exceptional hardship should re-
ceive greater priority and a shorter deadline for completing action.
The subsection requires the Board to report to Congress on the suc-
cess it has had in meeting both the original deadlines established for
each case, and any revised deadlines it was necessary to aopt for par-
ticular cases.
Finally, section 7701(m) authorizes the Board to issue any regu-
lations necessary to carry out the purpose of the section. The Board
will determine, for example, how it will receive and process appeals
and complaints, how much weight it will accord certain types of evi-
dence, or the like.
Section 7702. Judicial review of decisiom of the Board
Section 205 also adds to Title V a new Section 7702 detailing pro-
cedures for judicial review of the decisions of the Merit Systems Pro-
tection Board.
The Procedures :
-Eliminate unnecessarily detailed judicial reviews of cases
handled by the Board;
-Encourage more uniform judicial decisions in the Federal
personnel area;
-Place responsibility for supplementing inadequate case records
on the Board rather than on the courts; and
-Recognize the finality of the Board's administrative decisions
in a way that is chaacteristic of decisions of other independent
agencies.
Section 7702 (a) authorizes an employee or applicant adversely
affected by a final order or decision of the Board to seek. judicial
review. The section applies to judicial review of all final orders or de-
cisions of the Board, including discrimination and other appeals acted
on by the Board under section 7701 and disciplinary actions taken
by the Board against employees under section 1207. The wording
is similar to the general provisions governing the right of review from
agency actions found in Section 702 of the Administration Procedure
Act. In the. interest of clarity, the subsection specifies that when
judicial review is sought of an agency action appealed to the Board
under Section 7701, the aggrieved employee or applicant, should bring
the suit against the agency that took the personnel action in question,
not the Board. This is consistent with present practice governing
judicial review of agency actions first appealed to the Civil Service
Commission. When the Board orders actions under any other sections,
such as the imposition of a fine in a disciplinary action, under Section
1207, or declines to issue a permanent stay under Section 1205(a) (2),
the suit would, of course, be against the Board istelf. If an employee
does seek judicial review of an agency action reviewed by the Board,
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the Board has the right to intervene in the proceeding. This will be
particularly useful where the appeal raises questions of particular
significance to the Board, such as the validity of the procedures fol-
lowed by the Board in the case. Participation by the Board in the
court. proceedings would not involve the Board, except in the most
exceptional cases, in the introduction of evidence of its own.
Subsection (b) specifies the forum in which an employee or ap-
plicant may bring the review proceeding. Currently employees who
wish to challenge Commission decisions generally file their claims with
U.S. District Courts. The large number of these courts has caused
wide variations in the kinds of decisions which have been issued on the
same or similar matters. The section remedies the problem by
providing that Board decisions and orders (other than those in-
volving discrimination complaints and determinations concerning life
and health insurance) be reviewable by the Court of Claims and U.S.
Courts.of Appeals, rather than by U.S. District Courts.
Under the anti-discrimination laws an employee has 30 days from
the final agency action to initiate a de novo district court proceeding.
District court is a more appropriate place than the Court of Appeals
for these cases since they, may involve additional fact-finding. Further-
more, discrimination complaints involving employees outside the Fed-
eral government are now considered by U.S. District Courts. To encour-
age uniformity in judicial decisions in this area both kinds of cases
should continue to be considered by the U.S. District Court. The sec-
tion therefore exempts from the general requirement that employees
appeal"-to the Court of Appeals or Court of Claims those suits brought
pursuant to the anti-discrimination laws. This includes any type of
anti-discrimination statute, even if not specifically cited in the section,
if its judicial review provisions incorporate by reference, or otherwise
follow, one of the statutes actually cited. Since U.S. District Courts
are specifically given jurisdiction over life and health insurance cases
under sections 8715 and 8912 of Title V, these special provisions are not
amended either.
In the case of actions appealed to the Board involving allegations
of discrimination, final agency action for purposes of obtaining judi-
cial review does not occur until completion of the procedures permit-
ting the Equal Employment Opportunity Commission, as well as the
Board, to consider the matter. Thus, the thirty day period the em-
ployee has in discrimination cases to go to District Court after final
agency action will only begin to run after both agencies have con-
sidered the matter according to the procedures in subsection (i), or it is
apparent. that the Equal Employment Opportunity Commission will
not consider the case. The latter result will occur only after the Com-
mission has specifically declined to review the case, or thirty days from
the date of the Board's original decision and order have elapsed, and
the Commission has not decided to consider the case under subsection
(i) (3). The bill specifies that if an employee decides to resort to dis-
trict court after the Board issues a new decision and order, or recon-
firms its original decision, after consideration by the Commission, the
otherwise automatic certification of the case to the Court of Appeals
under section 7701 (i) (5) may not go forward.
The Court of Claims and U.S. Court of Appeals shall review cases
filed with them under this section to determine whether the decision
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was arbitrary or capricious and not in accordance with the law, and
whether the procedures required by law or regulations were followed.
If the_ court determines that further evidence is necessary, it shall re-
mand the case to the Board for further processing as appropriate. The
Board shall file with the court a record of its proceedings following the
remand. The Board's findings of fact shall be conclusive when support-
ed by substantial evidence in the administrative record. In reviewing
the Board's factual findings, the Court must determine whether the
findings satisfy the particular standards of proof applicable to the
agency action in question. Court review of the factual findings will be
less vigorous therefore in the case of an action based on unacceptable
performance (Section 4303(f)) than an action based on misconduct
(Section 7701(d) ). Likewise, agency actions should be reversed be-
cause the agency's procedures were in error only if the procedures
followed substantially impaired the rights of the employees.
Finally, subsection (d) provides that the Director of the Office of
Personnel Management may request a review of any final decision
or order of the Board involving personnel management laws, rules,
and regulations for which the Office of Personnel Management is re-
sponsible by filing a petition for judicial review with the U.S. Court
of Appeals for the District of Columbia.
Where there is involved Board action under its Section 7701 ap-
pellate jurisdiction, the suit by OPM would not be against the Board,
but the Board would have the right to appear in the proceedings.
The Committee amended this section to emphasize that the OPM
should seek judicial review only in those exceptional cases where it
finds that the Board erred, as a matter of law, in interpreting the
civil service laws, and that the erroneous decision will have a sub-
stantial impact on how aspects of the civil service rules are inter-
preted in the future. The Director of OPM should not seek judicial
review if the potential effect of the decision will be limited to the facts
of the case. In order to avoid unnecessary appeals by the Director,
the provision also requires the Director to petition. the Board for re-
consideration of its decision in those cases where the Director was not
involved in the case at the Board level. This will make sure the Board
has an opnortunity to consider the concerns of OPM before suit is
brought. The Director, like any other petitioner, is required to seek
review within 30 clays of the decision of the Board. While an employee
or applicant au_grieved by the agency action is entitled as a matter of
rip-ht to judicial review, this will not be the case when the Director
seeks review. The subsection snecifies that judicial review shall be at
the discretion of the court. If it determines, for example, that the
isS>PS raised. will not have a substantial impact on the administration of
civil service laws, or if a separate review proceeding in the same case
has been brought by the employee in a different circuit, the court may
decline to accept the petition for review.
Section 206 of the, bill amends section 2242 of title 29. by adding
final orders of the Board to the list of matters over which the Court
of Appeals has exclusive jurisdiction.
64
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TITLE III-STAFFING
This title authorizes (a) Federal agencies to establish programs for
student volunteer employment as part of an educational program
where student volunteers would not displace other Federal employees,
(b) the President to establish periods of probation for new appoint-
ments to the competitive service or individuals appointed to super-
visory or managerial positions, (c) agencies to establish training pro-
grams for employees to prepare such employees for placement in other
Federal agencies, and (d) voluntary immediate retirement for em-
ployees affected by major reorganizations in their agencies.
SECTION 301. VOLUNTEER SERVICES
Section 301(a) establishes agency authority for student volunteer
services by adding a new Section 3111 to Title 5.
Section 311.1. Acceptance of Volunteer Service
Subsection 3111 (a) of the new section defines student as an individ-
ual who is enrolled, not less than half-time, in a high school, trade
school, technical or vocational institute, junior college, college, uni-
versity, or'comparable recognized educational institution. An individ-
ual who satisfies this definition is not deemed to lose status as a student
during the interim between school years if this interim is not more
than 5 months and if the Office of Personnel Management is satisfied
that the individual has a bonafide intention of continuing to pursue
a course of study or training immediately after the interim.
Subsection 3111(b) explains the conditions under which the head
of an agency may accept voluntary services. The service must be per-
formed by a student, as defined in subsection (a), with the permission
of his or her school, as part of an agency program to provide meaning-
ful educational experience for the student volunteer. Voluntary services
must be uncompensated and cannot be accepted if they will displace
Federal employees.
Subsection 3111(c) explains that a volunteer is not considered a
Federal employee for the purposes of any Federal law except for in-
jury compensation and tort claims. The exclusionary language of sub-
section section (c), when read with subsection (b), precludes payment for vol-'
untary services under the Fair Labor Standards Act of 1938, as
amended, or any other statute providing for the compensation of Fed-
eral employees.
Subsection 301(b) provides the conforming amendment to Title V,
United States Code.
Subsection 301(c) provides for probationary periods for Federal
employees by amending Section 3312 of Title V, United States Code.
Subsection (a) (1) of Section 3321 continues present law concern-
ing initial probationary periods before appointment to the competitive
service becomes final. Subsection (a) (2) authorizes the President to
issue orders and directives which provide for a period of probation
before an initial appointment to a supervisory or managerial position
becomes final. Subsection (b) explains the action to be taken if an indi-
vidual in it supervisory or managerial position does not satisfactorily
complete this probationary period.
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Under present law, persons initially transferred, assigned, or pro-
moted to supervisory or managerial position may be removed only
through the application of formal adversary proceedings. The effect of
this amendment is to allow the removal of an individual transferred,
assigned, or promoted to a supervisory or managerial position for the
first time, if he or she does not satisfactorily complete the period of pro-
bation. The individual will be returned to a position of no lower pay
and grade than the position occupied by the individual prior to the
supervisory or managerial assignment. Although an individual may be
serving subject to a probationary period under subsection (a) (2), an
agency may still institute adverse action proceedings for cause un-
related to supervisory or managerial performance and the individual
will have full appellate rights in those circumstances.
Subsection (a) (2) of Section 3321 applies only to persons who are
appointed to supervisory or managerial positions after completing the
probationary period now required by law. Thus, an individual who en-
ters Federal employment in a supervisory or managerial position will
be subject to the probationary period specified in subsection (a) (1).
Sections, 301 (d) and (e) repeal Section 3319 of Title 5, United States
Code, concerning the eligibility of more than two members of any one
family to obtain jobs in the Federal competitive service. Enacted prin-
cipally as a measure to prohibit nepotism in 1883, the members of fam-
ily restriction has become obsolete. Now, in addition to the safeguard
provided by the merit system itself, a strong antinepotism law (5
U.S.C. 3110) specifically prohibits what the members of family legis-
lation attempted to do indirectly. Nepotism is also specified as a pro-
hibited personnel practice in Title I of this bill.
Section 302 amends Section 4103 of Title 5, United States Code, con-
cerning training programs for Federal employees by allowing an
agency to train its employees ? for placement in another agency if the
employees are slated for separation under conditions which would
entitle them to severance pay under Section 5595 of Title 5. Before
authorizing such training, the agency is required to obtain verification
from the Office of Personnel Management that there is a reasonable
expectation of placement in another agency. The agency is required to
consider, when selecting an employee for such training, the present
skills, knowledge, and abilities of the employee, the employee's capa-
bility to learn new skills and acquire new knowledge and abilities, and
the benefits to the Government resulting from the retention of compe-
tent employees.
SECTION 303. TRAVEL, TRANSPORTATION AND SUBSISTENCE
Section 303 amends Section 5723(d) of Title 5. United States Code,
to allow the Office of Personnel Management to delegate its authority
to determine positions for which a manpower shortage exists for pur-
poses of determining if travel expenses may be paid pursuant to
that Section.
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SECTION 304. RETIREMENT
Section 304 amends Section 8336(d) (2) of Title 5, United States
Code, concerning immediate retirement of employees in reduction of
force situations.
Under present law an employee may voluntarily apply for an an-
nuity under this section if : (1) his or her agency is involved in a major
reduction in force as determined by the Civil Service Commission; (2)
the employee is working in an agency or agency installation within
which the Commission has designated the major reduction in force
retirement provisions to be applicable; and (3) the employee meets the
minimum age and service requirements required for a regular discon-
tinued service annuity (i.e., 20 years of creditable Federal service and
minimum age 50, or 25 years of creditable Federal service with no mini-
mum age requirement). This bill would expand the coverage of the
major reduction in force retirement provisions to cover all situations
included in the definition of "reorganization", as determined by the
Office of Personnel Management. In effect, this proposed amendment
would permit an employee to retire if his or her agency was engaged in
a major reduction in force, a reorganization or a 'major transfer of
function, provided that the Office of Personnel Management approved
the use of this special retirement authority. A "major transfer of func-
tion" is added as a concept meaning the movement of a continuing
function, for example, the work of an office from one place to another,
even though the function might remain within the same agency.
TrrI.E IV-SENIOR EXECUTIVE SERVICE
Title IV contains one of the most significant elements of the Civil
Service Reform Act : Provision for the creation of a corps of top
management leaders in a Senior Executive Service. The greatest asset
and strength of any government is its top leadership. This is particu-
larly true for the U.S. Government, which is.the largest employer in
the Nation. Its programs are far-reaching and complex, and they
must be conducted with great sensitivity to conflicting public and
private interests and with impartiality and compassion. Meeting this
great responsibility requires strong executive leadership, which can
respond to rapidly changing conditions and circumstances surround-
ing Federal programs and still chart a course which takes into account
the national interest, the achievement of presidential -and congres-
sional goals, and simultaneously maintains the soundest management
techniques.
The committee believes that the establishment of a Senior Executive
Service represents a major step toward the achievement of a goal of
the most highly motivated and highly competent Federal service
leadership possible..
Title IV provides for the establishment of a new Senior Executive
Service to include most of the top executive positions in the Federal
service. There are about 9.200 of these positions in the Federal Govern-
ment. It contains provisions regarding various types of appoint-
ments in the Senior Executive Service, development programs for the
Senior Executive Service, removal and reinstatement, performance
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appraisal systems, establishment and adjustment of pay rates, per-
formance awards, and provisions necessary for the transition to the
Senior Executive Service.
Title IV will
-allow agencies to reward executives through cash bonuses and
awards for especially meritorious service;
-make tenure as executives contingent upon successful per-
formance ;
-permit reassignment of executives more expeditiously to
meet shifting agency priorities;
-make it possible for career employees to serve in top-level
policy jobs outside the competitive service without losing their
status as career employees;
-place for the first time a cap on the total number of political
appointments that can be made to top-level executive positions;
-permit more readily the movement among agencies of senior
executives.
-guarantee career employees who do not remain in the execu-
tive service other positions in the Federal service;
-establish appraisal systems and procedures to protect mem-
bers of the executive service from arbitrary personnel actions.
Title IV contains 15 sections. Sections 401 through 411 amend title
5 of the United States Code and govern the Senior Executive Service.
Sections 412 through 415 contain provisions relating to the transition
to the Senior Executive Service.
Section 401 (a) amends chapter 21 of title 5, United States Code,
by inserting after section 2101, a new subsection 2101(a), entitled
the "Senior Executive Service." Section 401 (a) also states that the
"Senior Executive Service" consists of Senior Executive positions.
Section 401(b) excludes the Senior Executive Service from the
definition of "competitive service" in subsection 2102(a) of title 5,
United States Code.
Section 401(c) excludes the Senior Executive Service from the
definition of "excepted service" in section 2103 (a) of the United States
Code. The purpose of subsections 401(b) and (c) is to make clear that
the Senior Executive Service is a separate service and not a part of
either the competitive or the excepted service.
Section 401(d) provides that the hiring of any individuals from
outside the Federal service to serve in the Senior Executive Service
shall not be governed by the rules on preference eligibles.
Subsection 401 (e) amends the chapter analysis to include the new
section 2101(a) .
SECTION 402. AUTHORITY FOR EMPLOYMENT
The key provisions for establishing and governing the Senior Ex-
ecutive Service are contained in this section, which adds a new sub-
chapter II to chapter 31 of title 5, United States Code.
Section 3131 formally establishes the Senior Executive Service for
the purpose of insuring Federal executive management of the highest
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quality and sets forth the following objectives for administering the
Service : provide a compensation system to attract and retain excellent
Government executives; link quality performance with compensation
and retention; assure executive accountability for the effectiveness
and productivity of subordinates; make tenure contingent upon suc-
cessful performance; recognize exceptional accomplishment; provide
flexibility in executive assignments to best accomplish the agency
mission; provide severance pay and placement assurance for those
removed from the Service for nondisciplinary reasons; protect em-
ployees from arbitrary actions; provide program continuity and pol-
icy advocacy in public programs; maintain a merit system free of
improper political interference; ensure accountability for honest and
efficient Government; assure faithful adherence to laws relating to
equal employment opportunity, political activity, and conflicts of
interest; and provide for executive development.
The committee felt that.in addition to the purposes included in S.
2640, 'as introduced, it should be made clear .that Senior Executive
Service executives were to be held accountable for the performance
of those working under them. It, therefore, added subsection 3131 (a)
(3) which provides that the Senior Executive Service shall be ad-
ministered in such a manner as to "assure that executives are account-
able and responsible for the effectiveness and productivity of em-
plovees under them."
The committee expects that agency heads will use this subsection
as a means to reward executives whose employees perform effectively
and to take appropriate action when executives do not perform
adequately.
Section 3132. De, finitions amd Exclusions
Subsection (a) (1) states that for the purposes of this subchapter
"agency" means an executive agency, but does include a Government
Corporation and the General Accounting Office or: (1) any agency
or unit thereof excluded from coverage by the President under sub-
section (c) of this section; (2) the Central Intelligence Agency, the
Defense Intelligence Agency, the National Security Agency, and, as
determined by the President, an Executive agency, or unit thereof,
whose principal function is the conduct of foreign intelligence or.
counterintelligence activities.
Subsection (a) (2) defines "Senior Executive Service position" as
e position properly classifiable above GS-15 of the General Schedule
and below Level III of the Executive Schedule, or their equivalents, in
which an employee directs the work of an organization, is accountable
for the success of specific programs, monitors organizational progress
towards goals, supervises the work of employees other than personal
assistants, or exercises other important policymaking or executive func-
tions. S. 2640 as introduced included a more restrictive definition of a
Senior Executive Service position. The committee added the condition
"or exercises other important policymaking or executive functions" in
order to Allow the Office of Personnel Management the flexibility to
include within the Senior Executive Service employees who, while
they do not direct organization units or supervise a significant number
of employees, do occupy important policymaking or executive posi-
tions within an agency.
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Subsection (a) (2) also provides that, except for the Foreign Serv-
ice, the term "Senior Executive Service position" shall not include any
position to which an individual is appointed by the President by and
with the advice and consent of the Senate.
Subsection (a) (3) provides that for the purposes of this sub-
chapter "executive" means a member of the Senior Executive
Service.
Subsection (a) (5) provides that for the purposes of this sub-
chapter, "career .reserved position" means any position in the SES
which can only be filled by a career appointee.
Subsection (a) (5) provides that for the purposes of this subchap-
ter "general position" means any position in the SES which may be
filled by either a career or noncareer appointee or by a limited emer-
gency or term appointment.
Subsection (a) (6) provides that for the purposes of this sub-
chapter "career appointee" means an individual appointed to a Sen-
ior Executive Service position based on selection. through a competi-
tive staffing process consistent with Office of Personnel Management
regulations and, in the case of initial appointment, approval of ex-
ecutive qualifications by the Office of Personnel Management.
Subsection (a) (8) provides that for the purposes of this subchap-
ter "noncareer appointee" means an individual appointed to a Senior
Executive Service position without approval of executive qualifica-
tions by the Office of Personnel Management.
Subsection (a) (8) provides that for the purposes of this subchap-
ter "limited emergency appointment" means a nonrenewable ap-
pointment, not to exceed 18 months, to a position to meet a bona fide,
unanticipated urgent need.
Subsection (a) (9) provides that for the purposes of this chapter
"limited term appointment" means a nonrenewable appointment for
for a term of 3 years to a position the duties of which will expire dur-
ing that period.
Subsection (b) provides that for the purposes of paragraph (4)
of section (a) of the section defining a "career reserved position," the
Office of Personnel Management shall prescribe the position criteria
and regulations governing the designation of career reserved posi-
tions. The designation of a career reserved position shall be made by
the agency. The designation of a position as a general position is sub-
ject to post audit by the Office of Personnel Management.
Subsection (c) provides that agencies may apply to the Office of
Personnel Management for exclusion of the entire agency or part of
the agency from being required to place positions in the Senior Ex-
ecutive Service. The reasons justifying the exclusion must be included
in the application. After review and investigation, the Office of Per-
sonnel Management will recommend to the President inclusion or
exclusion of the agency or component. If the President makes a writ-
ten determination of exclusion, the agency or component will be ex-
cluded from being required to place positions in the Senior Executive
Service.
Subsection (d) declares that an agency or unit which is excluded
from coverage under subsection (c) must make a sustained effort to
bring its personnel system into conformity with the Senior Executive
Service to the degree practicable.
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Subsection (e) provides that the Office of Personnel Management
may recommend revocation of such exclusion to the President at any
time and that such exclusion may be revoked upon written determi-
nation by the President.
Subsection (f) requires the Office of Personnel Management to
notify Congress if any agency or unit is excluded from the Senior
Executive Service or if any agency exclusion is revoked.
Section 3133. Authorization for number of Senior Executive Service
positions
Subsection (a) requires that each agency examine, in each odd num-
bered calendar year, its total needs for Senior Executive Service posi-
tions for the 2 fiscal years, beginning after such- calendar year, and
submit a written request to the Office of Personnel Management, in
accordance with regulations prescribed by that Office, for authority
to establish a specific number of Senior Executive Service positions.
Subsection (b) requires that the agency request submitted under
subsection (a) shall be at such time and in such form as the Office of
Personnel Management prescribes and shall be based on the following
factors : (1) the anticipated program activity and budget requests of
the agency for the 2 fiscal years; (2) the anticipated level of work to
be performed by the agency in the 2 fiscal years; and (3) such other
factors as may be prescribed from time to time by the Office of Per-
sonnel Management.
Subsection (c) requires that the Office of Personnel Management,
after its receipt of each agency's request for a specific number of
Senior Executive Service positions, and upon consultation with the
Office of Management and Budget, authorize for each agency a spe-
cific number of Senior Executive Service positions and the number of
positions in the entire Senior Executive Service. The requirement for
consultation with the Office of Management and Budget recognizes
the fact that executive personnel needs flow from approved programs
and budgets. The authorizations are subject to congressional review
as provided in section 3135 of title 5 as added by this act. This subsec-
tion also authorizes an unallocated pool of 5 percent of the number of
allocated positions.
Subsection (d) states that the authorizations made under subsection
(c) shall remain in effect until changed under subsections (e), (g) or
(h) of section 3133.
Subsection (e) (1) permits agencies to submit a written request for
adjustments to its authorized number of Senior Executive Service
positions. The Office of Personnel Management may also make reduc-
tions in the number of positions assigned to a particular agency.
Subsection (e) (2) requires the adjustment request be submitted
in such form as the Office of Personnel Management prescribes and to
be based on the current budget and program activity in the agency.
Subsection (f) provides that the Office of Personnel Management
may make changes in the allocations made under subsection (c), sub-
ject to subsections (e) and (f) of section 3133. Subsection (f) further
provides that total adjustments during a fiscal year may not enlarge
the Senior Executive Service beyond the number identified under pro-
visions of subsection (c).
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Subsection (g) provides that the Office of Personnel Management
allocation of the number of Senior Executive Service positions will
be effective on the next succeeding October 1 following the submission
to the Congress of the report required by section 3135.
Section 3134. Limitations on noncareer Senior Executive Service
appointments
Subsection (a) of section 3134 requires each agency to examine its
needs for noncareer Senior Executive Service appointees for the next
following fiscal year and to submit a written report to the Office of.Per-
sonnel Management requesting authority to make a specific number
of noncareer Senior Executive Service appointments.
Subsection (b) (1) charges the Office of Personnel Management
with making an annual determination of the number of noncareer
appointments to be made available to each agency with the provision
that the number of noncareer appointees to the Senior Executive
Service, governmentwide, must not exceed 10 percent of the total
number of governmentwide Senior Executive Service positions.
Subsection (b) 2) provides that an agency with four or more
Senior Executive. Service positions may fill such positions only to the
extent that the proportions of positions filled as noncareer does not
exceed 25 percent or that proportion which was authorized in the
agency as of the date of enactment of the Civil Service Reform Act of
1978, whichever is greater.
The committee added this subsection as a further protection against
any possible political abuse of the Federal service. It would preclude
any Administration from loading up one key agency or department
with political appointments.
Subsection (c) authorizes the Office of Personnel Management to
adjust the number of noncareer positions authorized under subsections
(a) and (b) for emergency needs provided the number of noncareer
executives, governmentwide, does not exceed 10 percent of the total
number of Senior Executive Service positions.
Section 3135. Biennial report
Section 3135 (a) provides for a biennial report to each new Congress
on the Senior Executive Service. The report will include data on the
authorized and projected number of Senior Executive Service posi-
tions in each agency; exclusions from the Senior Executive Service
of any agency or group of executives; percentages of executives at
each pay rate; statistical data on the distribution and amounts of
performance in each and such other information as the Office of
Personnel Management considers appropriate. In order for Congress
to be more fully informed about agency plans regarding Senior
Executive Service positions, the committee added two additional re-
quirements to what the biennial report must contain : the job descrip-
tions of Senior Executive Service positions in each agency and an
agency-by-agency projection of planned changes of Senior Executive
Service appointments from career to noncareer and from noncareer
to career status for the two fiscal years after the biennial report. The
job descriptions required in the report may be in summary form.
. Section (b) provides for an interim report to the second session of
each Congress showing adjustments to the biennial report.
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Section 3136. Regulations
-Subsection-_(a) authorizes the Office of Personnel Management to
prescribe regulations necessary to carry out the purpose of subchap-
ter II. of chapter 31 of title 5, United States Code, and amends the
table of chapters for chapter 31 to include new sections regarding the
Senior Executive Service.
Section 402(b) amends present section 3104(a) of title 5, United
States Code, by adding the word "nonmanagerial" after the word
"establish" so as to read, when amended, "(a) The head of an agency
named below may establish nonmanagerial scientific or professional
positions . . ." The word "nonmanagerial" has been added to make
clear that the agency head's authority under section 3104(a) does
not relate to the Senior Executive Service.
Section 402(c) provides that an agency head may not fill Senior
Executive Service positions under the authority of section 3109(b)
pertaining to temporary or intermittent contracts with experts and
consultants.
SECTION 403. EXAMINATION, CERTIFICATION AND APPOINTMENT
Section 403(a) amends chapter 33, title 5, United States Code,
entitled "Examination, Selection and Placement," by adding a new
subchapter VIII entitled, "Senior Executive Service Appointment,
Placement, Transfer and Development." The new subchapter VIII
contains seven sections which-are discussed separately below.
Section 3391. General provisions applicable to career executives
Subsection (a) provides that qualification standards for career
reserved positions shall meet requirements established by the Office
of Personnel Management.
Subsection (b) requires appointees to meet the qualifications of
the career reserved positions to which they are .appointed.
Subsection (c) states that the -appointing authority is responsible
for determining that a selectee meets the qualification requirements
of a particular career reserved position.
The result of subsections (a), (b) and (c) is that the Office of
Personnel Management will establish general executive requirements
for career reserved Senior Executive Service positions.
The appointing authority will be responsible for determining that
a selectee meets executive standards established for the particular posi-
tion. In so doing, the appointing authority may factor in specific cri-
teria related to knowledge of and experience in the program for which
the executive is being recruited.
Subsection (d) prohibits discrimination for nonmerit factors such as
age, race, national origin, handicapping conditions, sex, marital status,
political affiliation and religion.
This subsection merely repeats for emphasis the prohibition de-
scribed in section 2302 (b) of this bill. -
Subsection (e) provides that career appointees in the Senior Execu-
tive Service who accept Presidential appointments requiring Senate
confirmation shall continue to be covered by the performance award,
incentive award, retirement and leave provisions of the Senior Execu-
tive Service during the term of their Presidential appointments.
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Section 3392. Career appointments to the Senior Exeeut. ve Service
Section 3392 (a) provides that career recruitment may (1) include all
current Federal employees or (2) be open to both Federal employees
and to persons outside of Government.
Subsection (b) states that the recruitment process must attempt
to reach all groups of qualified applicants, including women and
minorities.
Subsection (c) charges any agency executive resources board with
the conduct of competitive staffing, subject to requirements established
by the Office of Personnel Management.
Subsection (d) requires the Office of Personnel Management to ap-
point members of qualification review boards from within and out-
side the Federal service to certify the executive qualifications of career
candidates for the Senior Executive Service, except that a majority
of members of each such board shall consist of career executives. Mem-
bers of the qualified review boards from outside the Federal service
shall be persons knowledgeable about the field of public management
and other occupational fields relevant to the type of occupation for
which an individual is being considered. Subsection (d) also provides
that the Office of Personnel Management shall set criteria for estab-
lishing executive qualifications for appointment as a career executive
in the Senior Executive Service, which shall include : (1) demonstrated
performance in executive work; (2) successful participation in a cen-
trally sponsored or agency career executive development program ap-
proved by the Office of Personnel Management; or (3) unique or special
individual qualities predictive of success to apply in those cases in
which an outstanding candidate would otherwise be excluded from
appointment.
S. 2640, as introduced, did not contain a requirement that a majority
of any qualification review board be composed of career employees.
The committee added this requirement in order to ensure that per-
sons with experience and knowledge regarding the requirements of
executive management in the Federal service play a large role in the
recruitment of employees into the Senior Executive Service.
Under subsection (d), the recruitment of career appointments to the
Senior Executive Service would proceed as follows. A Qualification
Review Board, composed of a majority of career executives, would
establish a set of general executive qualifications for the position
being filled. The criteria would include those set forth in subsection
(d). This screening process determines who meets the general execu-
tive qualifications test. At this point, an executive resources board
from the agency would, in conjunction with the appointing authority,
screen the applicants on the basis of criteria more specifically re-
lated to the executive position itself. The agency, for instance, might
very well add in factors such as substantive knowledge of the program
area or years of experience in the particular or similar program areas.
The final selectign by the appointing authority would be made from
an evaluation of the applicants that takes into account these additional
agency programmatic factors.
Subsection (e) requires employees with career status from other
Government personnel systems to have their executive qualifications
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approved by the Office of Personnel Management for a career
appointment.
Subsection (f) states that discrimination on account of political
affiliation is prohibited.
This subsection merely repeats for emphasis the prohibition de-
scribed in section 2302 (b) as added by title I of this bill.
Subsection (g) requires a 1 year probationary period for employees
entering the Senior Executive Service under career appointments.
Subsection (h) requires that the title of each career reserved position
be published in the Federal Register.
Section 3393. Appointments to general positions in the Senior Execu-
tive Service
Subsection (a) provides that each agency, after consultation with
the Office of Personnel Management, shall establish qualification stand-
ards for all general positions. Such standards shall, to the maximum
extent practicable, conform to qualification requirements established
by the Office of Personnel Management for comparable career reserved
positions. The appointing authority is responsible for determining
that an individual appointed to a general position meets the qualifica-
tions established for that position.
Under subsection (a) the recruitment of executives for general posi-
tions would proceed as follows if the appointment is open to persons
who are not members of the Senior Executive Service. The agency
would first consult with the Office of Personnel Management regarding
general executive qualification standards. These executive qualifica-
tions for the position would, to the maximum extent practicable, con-
form with such standards for comparable career reserved positions,
but the final determination of the general executive qualifications
would be the responsibility of the agency. The agency may appoint
a noncareer executive to the position after determining that the indi-
vidual meets any general or specific standards the agency has estab-
lished for the job. Or the agency may appoint a career executive. In
that case, the recruiting process would proceed in a manner similar
to that of the recruiting process for career appointments; that is, the
Office of Personnel Management would screen a pool of candidates for
career appointments to the Senior Executive Service to determine if
they met the general executive qualifications test. The agency execu-
tive resources board, in conjunction with the appointing authority,
would evaluate the applicants on the basis of more specific job-related
criteria. The final selection by the appointing authority would be
made from an evaluation of the applicants that takes into account .
these additional agency programmatic factors.
Subsection (b) provides that employees given noncareer appoint-
ments do not acquire credit toward career status and may be removed
by the appointing authority.
Subsection (c) prohibits noncareer appointments to career reserved
positions.
Subsection 3393(d) provides that appointment or removal of a per-
son to a general Senior Executive. Service position in an independent
regulatory agency shall not be subject to review or approval by an
officer or entity within the Executive Office of the President. The com-
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mittee added this subsection in order to ensure that independent regu-
latory agencies are not subject to political control in the appointment
of their top noncareer executives. The committee feels that this in-
sulation from the White House in appointments is necessary to main-
tain the independence of these agencies, as intended by the Congress.
Section 3394. Limited appointments to the Senior Executive Service
Subsection (a) provides that limited emergency appointments to
the Senior Executive Service may only be made when filling new
positions established in a bona fide emergency as defined by the Office
of Personnel Management regulations; may not exceed 18 months;
are nonrenewable; and may be recruited for by the agency without
regard to the competitive process.
. Subsection (b) provides that limited term appointments may be
made only for positions the duties of which will expire in three years
or less; are nonrenewable; and may be filled by the agency without
regard to the competitive process.
Subsection (c) provides that a career Senior Executive Service
employee appointed under either type of limited appointment does not
satisfy the probationary period requirement for the Senior Executive
Service.
Subsection (d) requires Office of Personnel Management approval
of use of limited appointment authority before making such an
appointment.
Section 3395. Placement and transfer 'within the Senior Executive
Service
Subsection (a) permits career appointees to: (1) be reassigned to a
Senior Executive Service position within the same agency; (2) volun-
tarily transfer to a Senior Executive Service position in another
agency; and (3) request assignment outside the Senior Executive
Service, provided that the agency shall furnish to the executive at
least 15 days before a reassignment under paragraph (h) (1) a written
notification of the impending action.
The committee added the provision regarding the 15-day notice in
order to give the SES executive ample notice of the impending action.
It is the committee's intent that the written notification provided by
the agency regarding the assignment include an explanation of the
reasons for the transfer in terms of the agency's priorities and manage-
ment of its executive resources. This provision is not intended to give
the employee any new appeal rights.
Subsection (b)permits an executive with a limited appointment
(limited emergency or limited term) to be reassigned to a position meet-
ing the criteria under which the employee was originally appointed.
However, continuous service in any one agency under a limited emer-
gency appointment may not exceed 18 months, and under a limited
term appointment such service may not exceed 3 years. An executive
with a limited appointment may not be given a career appointment
in the. Senior Executive Service except under the competitive merit
staffing process and may not be given another limited appointment in
the same agency when the maximum period of service authorized for
the original appointment has expired, until 1 intervening year has
passed.
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Subsection (c) states that an executive with a noncareer appoint-
ment may be reassigned or transferred to any general Senior Executive
Service position in the same agency or in another agency, and may be
appointed to a noncareer position outside the Senior Executive Service.
Subsection (d) prohibits involuntary reassignment or removal of a
career executive from the Senior Executive Service within 120 days
after the appointment of an agency head or after the appointment of
the noncareer employee who is closest to the career executive in the
supervisory chain of command, except where the reassignment or re-
moval is the result of a corrective action involving misconduct, or an
unsatisfactory performance rating given to the career executive prior
to the appointment.
S. 2640, as introduced, merely provided for no removal or reassign-
ment within 120 days after the appointment of an agency head. But in
most cases it is a lower .level noncareer supervisory employee who
makes the decision regarding removal or reassignment. In order to
carry out the clear intent of this subsection-that is, to protect Senior
Executive Service employees from peremptory removal or reassign-
ment during periods of supervisory transition-the committee added
the proviso that Senior Executive Service employees could also not be
transferred or removed from the Senior Executive Service within 120
days after the appointment of a noncareer employee who is closest
to the career executive in the supervisory chain of command.
Section 3396. Development for and within the Senior Executive Service
Subsection 3396 (a) provides for the establishment of programs by
the Office of Personnel Management or by agencies under criteria es-
tablished by the Office of Personnel Management, for the systematic
development of candidates for the Senior Executive Service and for the
continuing development of members of the Senior-Executive. Service.
Subsection (b) requires the Office of Personnel Management to assist
agencies _ in the establishment of development programs and to direct
them to take corrective action if required to bring such programs into
conformity with criteria established by the Office of Personnel Man-
agement.
Subsection (c) requires the Office of Personnel Management to en-
courage temporary service in a variety of agencies, in State or local
governments, and in the private sector.
Subsection d provides for paid sabbaticals for career execut:.
for up to 11 months plus travel and per diem costs when it will con-
tribute to their career development. The purpose of the sabbatical
period is to engage in study or unpaid work experience which will con-
tribute to the individual's development and effectiveness in performing
his official duties. An individual may not be granted more than one sab-
batical.in a 10-year period and must have had a minimum of 7 years
prior service in positions with duties and responsibilities equivalent
to the Senior Executive Service including at least 2 years of actual
membership in the Service.
Section 3397. Definition
Section 3397 provides for the purposes of his subchapter, the terms
"career reserved position", "career appointee", "general position"2
"limited emergency appontment", "limited term appointment", and
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"executive" have the same meaning as such terms are given in section
3132 of this title.
Section 3398. Regulations
Section 3398 provides that the Office of Personnel Management may
prescribe regulations necessary to carry out the purpose of subchapter
VIII of chapter 33 of the United States Code. It also amends the
table of sections for chapter 33 of title 5, United States Code.
Section 404 amends chapter 35 of title 5, United States Code, which
deals with "Retention Preference, Restoration and Reemployment,"
excluding the Senior Executive Service from subchapter I, and by
adding a new subchapter V entitled "Removal, Reinstatement and
Guaranteed Placement provisions of the Senior Executive Service."
Section 3591. Removal from the Senior Executive Service
Subsection (a) provides that career employees can be removed from
the Senior Executive Service : (1) During the 1-year probationary
period; (2) for less than fully successful performance; or (3) for mis-
conduct, neglect of duty, or malfeasance.
During the first probationary year in the SES, a career executive
could be removed even though the executive had not been given a less
than successful rating. The career executive would have no appeal
ri hts in this circumstance.
Subsection (b) permits removal of limited emergency appointees
by the appointing authority prior to the mandatory 18-month separa-
tion point.
Subsection (c) permits limited term appointees to be removed by
the appointing authority prior to the mandatory 3-year separation
point.
Subsection (d) states that noncareer employees may be removed at
any time by the appointing authority. Employees covered by subsec-
tions (b), (c) and (d) may be removed at any time by the agency.
Section 3592. Reinstatement into the Senior Executive Service
This section permits reinstatement of a former Senior Executive
Service employee who has career status to any Senior Executive
Service position if the individual has successfully completed the Senior
Executive Service probationary period, and the separation from the
Senior Executive Service was not for misconduct, neglect of duty,
malfeasance, or less than fully successful performance as defined in
chapter 43.
Section 3593. Guaranteed placement -.n other personnel systems
Subsection (a) provides that a right to placement in a Federal
service position outside the Senior Executive Service to those career
status employees who were appointed to the Senior Executive Service
from a career or career-type position within the civil service who, dur-
ing the one year probationary period are removed from the Senior
Executive Service for reasons other than misconduct, neglect of duty
or malfeasance, or who, after the probationary period, are removed
from the Senior Executive Service for less than fully successful per-
formance.
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Subsection (b) states that career executives who accept Presiden-
tial appointments outside the Senior Executive Service and then are
removed (for reasons other than misconduct, neglect of duty, or mal-
feasance) are entitled to placement back into the Senior Executive
Service, provided they apply to the Office of Personnel Management
for such placement within 90 days after the separation from the Pres-
idential appointment.
Subsection (c) states that under subsection (a) the position in
which the employee is placed must be a continuing career position at
least at the GS-15 level and be at either the salary held prior to
appointment to the Senior Executive Service, or at a salary which is
equal to the last Senior Executive Service base pay, whichever is high-
er. It also states that placement in a position outside the Senior Ex-
ecutive Service shall not cause the separation or reduction in grade
of any other employee in the agency.
Subsection (d) states that a former Senior Executive Service mem-
ber receiving retained pay will receive one half of each comparability
increase under section 5305 if any until the employee's pay equals the
top rate payable to his current position.
Section 3594. Deflnition8
This section provides that for the purpose of this subchapter, the
terms "career appointee" and "Senior Executive Service position"
have the same meaning as these terms have in section 3132 of this title.
Section 3595. Regulations
This section provides that the Office of Personnel Management
shall prescribe regulations necessary to the administration of this
subchapter.
Section 404(b) provides for amending the table of sections for
chapter 35 of title 5, United States Code, to conform with the provi-
sions of this chapter.
Section 405 (a) amends chapter 43'of title 5, United States Code,,
by adding a new subchapter II entitled, "Performance Appraisal in
the Senior Executive Service."
Section 4311. Senior Executive Service performance appraisal 8y8teffa
Subsection (a) requires each agency to develop one or more per-
formance appraisal systems with respect to Senior Executive Service
employees. Such systems should : (1) Provide for systematic apprais-
als of job performance; (2) encourage excellence in performance;
and (3) link performance with eligibility for retention and perform-
ance awards.
Subsection (b) states that each such performance appraisal sys-
tem shall provide: (1) for written appraisals; (2) that the perform-
ance requirements be established at the beginning of the rating period
and communicated to the employee; and (3) that each employee be
shown his performance appraisal and rating, be given an opportunity
to respond in writing, and have the rating reviewed by a higher man-
agerial level.
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Subsection (c) states that the Office of Personnel Management
shall order corrective action if an agency performance appraisal sys-
tem does not meet the. requirements of this subchapter and the regula-
tions prescribed thereunder.
Section 4312. Criteria for performance apprai8als
This section states that executive success in the Senior Executive
Service shall take into account both individual performance and
organizational accomplishment. The criteria are to be based on such
factors as : (1) Improvements in efficiency, productivity and quality of
work or service; (2) the effectiveness and productivity of the employ-
ees for whom the executive is responsible; (3) cost savings or cost
efficiency; (4) timeliness of performance and (5) the meeting of affirm-
ative action goal and the achievement of equal employment oppor-
tunity requirements. S. 2640 as introduced did not include either the
second or the fifth criteria listed above. The committee added criterion
number two because of its belief that Senior Executive Service execu-
tives should be held responsible for the productivity and efficiency of
their employees and that their own performance ratings should there-
fore include this specific evaluation. The committee added the equal
employment opportunity factor to emphasize the importance of this
aspect of the manager's responsibilities.
Section 4313. Rating8 for managerial performance appraisal
Subsection (a) requires that each performance appraisal system
must provide for at least annual ratings reflecting a number of levels
of performance including one or more successful levels or ratings, a
level which is minimally satisfactory, . and an unsatisfactory level.
Subsection (b) requires that the head of each agency shall establish
a system to appraise the performance of members of the Senior Execu-
tive Service. The system must include an agency performance review
board which will evaluate the performance and accomplishments of
executives in the agency in light of the specific goals and requirements
established for each position. The board will advise the appointing,
authority who actually assigns the individual's performance rat-
ing. The evaluation must take place at least annually, except that
no evaluation can be made of a career employee within 120 days fol-
lowing the beginning of a new Administration. Otherwise an unsatis-
factory rating may be assigned at any time during the performance
appraisal period. The evaluations are not appealable. The result of
such evaluation is that: (A) career employees receiving a rating at
a fully successful level may be given performance awards as described
in section 5384 as added -by this act; (B) an unsatisfactory rating re-
quires corrective action such as reassignment, transfer, or separation
from the Senior Executive Service. Employees who, twice in 5 years,
receive an annual rating of unsatisfactory must be separated from the
Senior Executive Service; (C) employees who, twice in 3 years, re-
ceive an annual rating reflecting performance which is less than fully
successful must be separated from the Senior Executive Service.
Subsection (c) (1) provides that a performance review board, be-
fore conducting its own appraisal of an executive, shall receive from
the executive's supervisor a preliminary appraisal and from the ex-
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ecutive-if he chooses-a written response. The Board will conduct
such further review as it finds necessary and advise the appointing
authority in writing of its own appraisal.
Subsection (c) (2) provides that members of performance review
boards shall be appointed in a manner to assure consistency and ob-
jectivity in performance appraisals and the appointment of members
of the boards shall be published in the Federal Register.
Subsection (c) (3) provides that when a career executive is evalu-
ated a majority of the members of the board shall also consist of career
executives.
The committee added subsection (c) in order to strengthen and
clarify the rights of career Senior Executive Service executives in rela-
tion to the Senior Executive Service performance appraisal system. S.
2640, as introduced, did not spell out, in detail the process by which the
performance review board and appointing authority would operate.
Subsection (c) provides that the board would have before it when it
undertakes its own appraisal both a preliminary appraisal by the
executive's supervisor and a response from the executive. In addition,
subsection (c) (3) provides that a career executive be appraised only
by boards whose membership consists of a majority of career execu-
tives. S. 2640 as introduced had provided only that such boards contain
one member in a career position. The committee felt that career SES
executives should constitute a majority of the performance review
boards when a career executive was being evaluated. In this way per-
sons who are knowledgeable and directly involved in the day-to-day
responsibilities of Federal executives will have a large voice in judg-
ing their peers. Their.status as career executives will protect the ap-
praisal from being unduly influenced by political considerations.
Subsection (d) provides that the Office of Personnel Management
shall report annually to Congress on the activities of the perform-
ance review boards, on the number of individuals removed from the
Senior Executive Service for unsatisfactory performance, and on the
number of. performance awards granted to Senior) Executive Service
executives.
Section 4314. Definitions
This section provides that for the purpose of this subchapter the
terms "agency," "executive," and "career appointee" shall have the
same meaning as such terms have in section 3132 of this title.
Section 4315. Regulations
This section provides that the Office of Personnel Management may
prescribe regulations necessary for the administration of this chapter
and that the table of sections for chapter 43 of title 5, United States
Code, is amended to make it conform with the provisions of this bill.
SECTION 406. INCENTIVE AWARDS AND RANKS
Subsection 406(a) amends chapter 45 of title 5, United States Code,
by adding a new section 4507 entitled, "Incentive Awards and Ranks
in the Senior Executive Service."
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Section 4507. Incentive awards and ranks in the Senior F. xecutive
Service
Subsection (a) requires each agency to forward annually to the
Office of Personnel Management information regarding career execu-
tives recommended for special rank. The Office of Personnel Manage-
ment shall recommend to the President appointments to such rank.
The President shall commission those selected. The ranks are (1)
Meritorious Executive for sustained excellence and (2) Distinguished
Executive for sustained extraordinary accomplishment.
Under subsection (b), no more than 5 percent of the members of
the Senior Executive Service may be appointed to the rank of Meri-
torious Executive in a calendar year and no more than 15 percent of
the active Senior Executive Service members may hold the rank at
any time.
Subsection (c) permits no more than 1 percent of the active Senior
Executive Service members to hold the rank of Distinguished
Executive.
Subsections (d) and (e) provide for cash awards to Meritorious and
Distinguished Executives. Meritorious Executives receive $2,500 an-
nually for a period of 5 years. Distinguished Executives receive $5,000
annually for a period of 5 years. The annual payment of these awards
are conditioned upon the person continuing in the Government em-
ployment in an active status in the Senior Executive Service. The com-
miltee decided that awards would not be subject to retirement or life
insurance deductions and would not be used' in calculating annuity
entitlement.
Subsection (f) specifically provides that an employee in the Senior
Executive Service,, who receives a Presidential appointment outside
the Senior Executive Service after receiving such an award, shall con-
tinue to receive the annual payments to which he otherwise would be
entitled.
Subsection (g) provides that the analysis of chapter 45, title 5,
United States Code, is amended at the end by adding the following
item : "4507. Incentive awards and ranks in the Senior Executive
Service."
SECTION 407. PAY RATES AND SYSTEMS
Section 407(a) amends section 5308 of title 5, United States Code.
Section 5308. Pay limitation
Paragraph (1) states that executives in the Senior Executive Serv-
ice may be paid up to a base rate equal to Level IV in the Executive
Schedule.
Section 407(b) amends chapter 53 of title 5, United States Code, by
adding at the end the following new subchapter: "Subchapter VIII-
Pay for the Senior Executive Service."
Section 5381. Purpose: Defanitione
Subsection (a) states that the purpose of the new subchapter VIII
is to provide a pay system for the Senior Executive Service which
would be established under amended subchapter II of chapter 31 of
title 5, United States Code.
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Subsection (b) provides that for, the purposes of this subchapter,
"agency", "Senior Executive Service position", and "executive" have
the same meanings given these terms by section 3132 of this title.
Section 5382. Establishment of rates of pay for the Senior Executive
Service
Subsection (a) provides that there shall be five or more rates of basic
pay for the Senior Executive Service established and thereafter ad-
justed by the President.
Subsection (b) provides that the lowest rate shall not be less than
the sixth step of GS-15 and the highest rate shall not exceed the rate
for level IV of the Executive Schedule.
Subsection (c) provides that the President shall adjust the rates
of basic pay for the Senior Executive Service at the same time he ad-
justs the rate of pay for other elements of the Federal service under
title 5, United States Code. Such adjustments are to be included in
the President's report to Congress under title 5, United States Code,
5305 (a) (3) or title 5, United States Code, 5035(c) (1).
S. 2640, as introduced, provided that employees subject to the merit
pay system (GS--13 through GS-15 managers) would not be entitled
to automatic comparability pay increases. S.'2640, as introduced, how-
ever, provided that members of the SES could receive full compara-
bility pay increases. The committee has equalized the treatment of
both groups of employees. This subsection provides that members
of the SES should not be entitled to comparability pay increase. The
only exception to this would be in establishing minimum and maxi-
mum rates of pay. At any time the minimum and maximum rates of
pay for SES executives was adjusted to reflect comparability increases,
the minimum and maximum rates of pay rates for GS-13 through
GS-15 managers will likewise be adjusted. The committee, thus, has
eliminated any differences between the way SES executives and the
GS-13 through GS-15 managers are treated under the provisions for
comparability pay increases.
Subsection (d) states that the rates of basic pay referred to in this
section shall supersede any prior rates and.shall be printed in the
Federal Register.
Section 5383. Setting individual executive pay
This section states that the pay for an executive is to be set accord-
ing to criteria provided by the Office of Personnel Management. Ex-
cept for adjustments to the whole rate structure made by the Presi-
dent, an executive's pay cannot be adjusted more than once in any
12-month period. Once a year the base pay of the executive may be
either increased or decreased by any amount, so long as the new rate
of. pay stays within the minimum and maximum levels established by
section 5382.
S. 2640, as introduced, provided that the sum total of all moneys
to an executive for any calendar year. for his base pay, performance
awards and special incentive awards should not exceed 95 percent of
the rate provided for Executive Level II. The effect of this provision
would have meant that Senior Executive Service executives who were
near or at the top base rate of pay would have received little or no
monetary gain from either the performance or incentive awards. The
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committee felt that this was inequitable and counter to the purpose
of rewarding excellence by instituting performance and incentive
awards. It, therefore, deleted this subsection with the intent that Sen-
ior Executive Service executives would be able, in the years they re-
ceived incentive or performance awards, or both, to be paid the full
amounts in addition to their base salaries.
In subsection (b), the committee added a provision that if an agency
decides to reduce the rate of base pay for a Senior Executive Service
executive,'it must notify the person 15 days before the first day of the
pay period for which the reduction is to take effect. It is the commit-
tee's intent that this notification include an explanation of the reasons
for the reduction in terms of the salary resources available to the
agency for the jobs to be performed by its corps of Senior Executive
Service executives. The provision for notification is not intended to
give the executive any new right of appeal concerning the action.
Section 5384. Performance awards for the Senior Executive Service
Subsection (a) states that the purpose of such awards is to encourage
excellence, and that the cash awards shall be in addition to basic pay
and not subject to the ceiling limitations placed on Government sal
aries. The performance review board will recommend to the appoint-
ing authority the amount of award they feel should be given to each
executive they recommend rating as fully successful.
Subsection (b) provides no awards may be granted to an executive
whose last performance rating was less than fully successful. The
amount of the award may not exceed 20 percent of the executive's basic
pay. Performance awards may not be paid to more than 50 percent of
the executives in any agency employing 4 or more members in the
Senior Executive Service in any fiscal year.
Subsection (c) states that the Office of Personnel Management is
authorized to issue guidance to agencies on the proportion of salary
expenses that may be appropriately applied to payment of perform-
ance awards and the distribution of awards of various amounts.
Section 5385. Regulation
Subsection (a) directs the Office of Personnel Management to issue
regulations necessary for the administration of pay for the Senior
Executive Service, subject to such policies and procedures as the
President may prescribe.
Subsection 407(c) contains two confirming amendments regarding
retirements to sections 8331(3) and 8704(c) of title 5, United States
Code.
Subsection 407(d) amends the chapter analysis of chapter 53 of
title"5,-United States Code, so that it will properly reflect the content
of the chapter after the bill is enacted.
Paragraphs (1) and (2) amend chapter 55 of title 5, United States
Code. They amend 5, United States Code, 5504 (a) (B) so as to include
Senior Executive Service employees under the standard Government
biweekly pay period.
Paragraph (2) amends section 5595(a) (2) (i) to permit severance
pay for members of Senior Executive Service.
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SECTION 409. TRAVEL, TRANSPORTATION, AND SUBSISTENCE
This section amends section 5723(a) (1) of title 5, United States
Code, to permit an.agency to pay the travel expenses of a new member
of the Senior Executive Service.
Section 5752. Travel expenses of Senior Executive Service candidates
This section permits an agency to pay the travel expenses for can-
didates for such positions when the expenses were incurred incident
to preemployment interviews requested by the employing agency, by
adding a new section 5752 in title 5, United States Code.
This section amends chapter 63 of title 5, United States Code. This
sections amends 5,.United States Code, 6304, by adding a new subsec-
tion (f) to exclude employees in the Senior Executive Service from a
limitation on the accumulation of annual leave. Currently, employees
may generally not carry over more than 30 days of annual leave from
year to year. This exclusion would allow executive managers to spend
as much time on the job as the job requires without forfeiting their en-
titlement to annual leave for later use or to the cash value of that
leave upon separation from the Federal service.
SECTION 411. DISCIPLINARY ACTION
Section 411 (a) amends chapter 75 of title 5, United States Code.
Section 7541. De funitions
This section sets forth definitions of "employee", "disciplinary ac-
tion", "removal", and "suspension." An "employee" is defined as an
individual in the Senior Executive Service who has either completed
one year of continuous service in such Service or was covered by the
provisions of subchapter II of this chapter when appointed to a posi-
tion in the Service. "Disciplinary action" is an action based on the
conduct of the employee, including but not limited to, misconduct,
neglect of duty, or malfeasance. But it does not include less than full
successful performance. Disciplinary action may result in involuntary
removal, or suspension for more than 30 days. "Removal" is defined as
separation from the Federal service. "Suspension" means the placing
of an employee in a temporary nonduty nonpay status for disciplinary
reasons.
Section 7542. Actions covered
This section states that this subchapter applies to a disciplinary
removal or suspension for more than 30 days of an individual in the
Senior Executive Service, but does not apply to a suspension or re-
moval under 5 United States Code 7532 (National Security).
Subsection 7543. Cause and Procedure
Subsection (a) provides that agency disciplinary action against an
employee may be taken only for such cause as will promote the ef-
ficiency of the service. This subsection also provides for regulations by
the Office of Personnel Management, and makes clear that removal
for less than fully successful performance is not a disciplinary action.
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Subsection (b) sets forth procedures for disciplinary actions. The
employee is entitled to : At least 30 days written notice stating any and
all reasons, specifically and in detail, for the proposed action, except
where there is reasonable cause to believe the employee is guilty of
a crime for which a sentence of imprisonment can be imposed; a rea-
sonable time to answer, orally and in writing, and to furnish affidavits
and documents in support of the answer; be accompanied, represented
and advised by a representative; and a'written decision, with support-
ing reasons, at the earliest practicable date.
Subsection (c) permits the agency to give a hearing but specifically
does not require a hearing.
Subsection (d) requires that documents pertaining to a disciplinary
action be made a part of the agency's records and be furnished to the
Merit Systems Protection Board or to the Office of Personnel Man-
agement upon request.
Subsection (e) provides for an appeal of disciplinary action to
the Merit Systems Protection Board under section 7701 of this bill,
and that the decision of the agency shall be sustained except as pro-
vided for in section 7701 of the bill.
The procedures discussed in section 7543 are the same as provided
for other Federal employees in title I I of this bill.
Subsection 411(b) amends the table of sections of chapter 75 of
title 5, United States Code, to make it conform to the bill when
passed.
SECTION 412
S. 2640, as introduced, contained a section 412 entitled, "Retire-
ment." The original section 412 provided an immediate annuity if an
executive in the Senior Executive Service were separated from the
Senior Executive Service for less than fully successful performance
and had completed 25 years of Federal service or had become 50 years
of age and had completed 20 years of Federal service. The annuity
in such cases would be reduced 2 percent a year for each year the
employee was under age 55. The section also provided for a change
in the way retirement annuities were to be calculated for members
of the Senior Executive Service who have received performance
awards. For every year that an award was received the employee's
annuity calculation would have included 21/2 percent of his average
top 3 salary years in place of any lesser percentage based on years of
total service.
Several witnesses, including the Government Accounting Office,
questioned the wisdom and equity of providing a subsidy to one or
more special groups of employees from the general Federal service
retirement fund. The committee chose to delete this section especially
in light of this testimony.
This section provides specific guidance for the conversion period
following enactment with respect to agency action in converting cer-
tain positions to the Senior Executive Service and also with respect
to the various options of the employee-incumbents of such P.O. Subsection (a). charges each agency with the responsibility of
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designating those positions which are to be incorporated into the
Senior Executive Service and those positions which are career re-
served. Such designations shall be accomplished under the guidance
and review of the Office of Personnel Management during the period
between enactment and the effective date of this title. The subsection
also indicates that positions which are properly classified above the
GS-15 level may be designated as Senior Executive Service positions
even if they have hitherto been classified at the GS-15 level.
Subsection (b) provides that each agency will submit a request
for total Senior Executive Service space allocations and for the num-
ber of noncareer appointments needed. The Office of Personnel Man-
agement will then establish interim authorizations for such appoint-
ments.
Subsection (c) provides two options to employee-incumbents of
positions designated as Senior Executive Service. First, the employee
may remain in the current appointment and pay system, retaining the
grade, seniority and other rights and benefits associated with career
and career-conditional appointment. Furthermore, election of this
option shall not cause the separation, displacement, or reduction in
grade of any other employee of the agency. In the alternative, the
employee may convert to a Senior Executive Service appointment.
The conversion of this appointment would be governed by the pro-
visions of subsection (d), (e), (f), (g) or (h) of this section, as
appropriate. The employee must elect one of these options within 90
days from the date he is notified in writing that his position has been
incorporated into the Senior Executive Service.
Subsection (d) states that employees who elect automatic conversion
and who are currently serving under career or career-conditional or
similar appointments shall receive a career appointment in the Senior
Executive Service.
Subsection (e) states that employees who elect automatic conversion
and who are currently serving under an excepted service appointment
in a position which is not designated a career reserved position in the
Senior Executive Service, shall receive a noncareer appointment in the
Senior Executive Service.
Subsection (f) provides for excepted employees who are serving in
positions designated career reserved in the Senior Executive Service.
These employees shall be reassigned to an appropriate Senior Execu-
tive Service general position or terminated.
Subsection (g) allows those persons listed in (e) whose position is
designated as a Senior Executive Service position, but who have re-
instatement eligibility to a position in the competitive service, to re-
quest from the Office of Personnel Management reinstatement of career
status in order to be converted to a career appointment in the Senior
Executive Service. The names and grounds for status of all such
employees who are converted to career status must be published in the
Federal Register.
Subsection (h) relates to employees who are under a limited execu-
tive assignment under subpart F or part 305 of title. 5, Code of, Federal
Regulations, who have elected an automatic appointment conversion,
such employees shall be converted to: (1) A Senior Executive Service
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limited term appointment if the position encumbered will terminate
within 3 years of the effective date; (2) a Senior Executive Service
noncareer appointment if the position encumbered is designed as a
Senior Executive Service general position; or (3) a Senior Executive
Service noncareer appointment and reassigned to Senior Executive
Service general position if the encumbered position is designated as a
Senior Executive Service career reserved position.
Subsection (i) deals with pay. If the employees' base pay at the time
of conversion is more than the base pay of the level to which they
are converted, the employees retain their pay.
Subsection (1) authorizes the Office of Personnel Management to
prescribe regulations to carry out the purpose of this section and to
provide for an employee appeal to the.Merit Systems Protection Board
from improper agency action under this section, under section 395
(d) or section 3593, or who believes that an agency's action has not
been timely under section 4313 (b) (2) of this title.
This section repeals all preexisting authority for the establishment
or pay of positions subject to section 401 of this act. Such repeal can
involve total deletion of a provision or the modification of a provision.
SECTION 414. SAVINGS PROVISION
This section indicates that enactment of this act shall not decrease
the pay, allowances, compensation or annuity of any person. This pro-
vision governs the initial appointment of employees in the Senior Ex-
ecutive Service. The subsequent pay and compensation of the execu-
tives will be determined by the performance of the executive.
SECTION 415. EFFECTIVE DATE
This section sets an effective date for this title of nine months after
enactment. The only exception is section 412 (conversion procedures),
which takes effect immediately upon enactment.
TITLE V-MERIT PAY
This title establishes a system of compensation for certain super-
visors and managers which would be based, at least in part, on the
quality of those employees' work. Under this title, managers would
use performance appraisals to document a covered employee's ac-
complishments during the review period. Instead of granting almost
automatic pay increases, as is now the case, this title would require
pay increase decisions relative to comparability increases to be based
upon the degree to which an individual met or exceeded performance
objectives.
The merit pay system would not require additional expenditures of
money. The money saved from not awarding full across-the-board
comparability increases and automatic step increases would be used
to reward those employees who deserve pay raises or bonuses.
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SECTION 801. PAY FOR PERFORMANCE AMENDMENTS
Section 501 (a) amends title 5, United States Code, by adding a new
chapter 54, entitled "Merit Pay," to provide for the establishment of a
merit pay system for certain Federal employees.
Section 5401. Purpose
This section states the purposes of the new chapter 54.
Section 5402. Merit pay system
Subsection (a) directs the OPM to establish a , merit pay system
covering managerial and supervisory employees in grades GS-13
through GS-15.
Subsection (b) (1) provides that an agency may file with the OPM
a request for exclusion from the merit pay system. The OPM shall
review the applications and recommend to the President whether the
agency or unit should be excluded, and the President may, in writing,
exclude an agency or unit from coverage. Subsection (b) (2) provides
that any agency or unit so excluded shall make a sustained effort to
bring its. personnel system into conformity with the merit pay system.
Subsection (b) (3) states that the OPM may at any time recommend
that the exclusion granted to an agency or unit be revoked and the
President may revoke the exclusion.
Subsection (c) provides that the merit ay system established under
subsection (a) of this section shall provide fora range of base pay for
each grade to which it applies. The minimum and maximum of each
grade in which there are employees who are covered by the merit pay
system shall be the same as the minimum and maximum for those
grades as they apply to employees not covered by the merit pay system.
All specific intervening steps in the schedule are eliminated for em-
ployees under the merit pay system. Thus, an employee covered by the
merit pay system may have a pay rate at any dollar amount from the
minimum to the maximum rate for the assigned grade.
Subsection (d) (1) provides that when the size of the comparability
adjustment under section 5303 of title 5, United States Code, is deter-
mined each year, the OPM, in consultation with the OMB, will make
a determination as to what portion of that adjustment will be given
as a comparability pay increase to employees covered by this merit
pay system. Subsection (d) (2) provides language which corresponds
to language contained in section 5305(p), title 5, United States Code.
This language ensures that any portion of the comparability adjust-
ment granted employees in the merit pay system will not require them
to start a new waiting period for a within-grade increase should they
transfer into a grade or position which is not covered by the merit pay
system. Subsection (d) (3) states that no employee may be paid less
than the minimum rate of basic pay of the grade of:such employee's
position and that no employee shall suffer a reduction in the rate of
basic pay as a result of the employee's initial coverage by, or subse-
quent conversion to, the merit pay system.
Subsection (e) provides that the manner in which an employee's
pay may be increased within the pay range of the assigned grade will
be prescribed in regulations developed by the Office of Personnel Man-
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agement. The subsection specifies, however, that a determination to.
either increase or not increase the pay of an employee : (1) may take
into account both individual performance and organizational accom-
plishment; (2) shall be based on such factors as improvements in
efficiency, productivity, quality of work or service, cost savings, and
timeliness of performance (among others) ; (3) shall be reviewable
under procedures established by the agency head, but shall not be.
appealable outside the agency; and (4) shall be subject to guidelines
on the distribution of advances issued by the Office of Personnel Man-
agement. Subsection (e) also provides that whatever portion is not
granted as a general adjustment shall be used to partly fund the pool
with the remaining funding to be determined considering what percent
of payroll is generally expended for within-grade increases and quality
step increases for employees who are not covered by this system.
The Committee added one additional factor to those by which pay
increases will be determined : "the quality of performance by the em-
ployees for whom the manager or supervisor is responsible." this pro-
vision matches similar language for SES executives put into title IV.
It emphasizes that employees should be judged in part upon their
performance in assuring effective work from employees under them.
Subsection (f) establishes authority to grant incentive awards to
managers subject to this chapter. The authorization parallels the pres-
ent provisions of chapter 45.
The only modification of these basic provisions is the increase from
$5,000 to $10,000 in the dollar amount which may be granted by the
head of any agency. The $5,000 figure has been in the law since 1954
and, through the passage of time and the attendant inflation, the value
of this amount has been seriously eroded. Further, it is considered
desirable to give individual agencies increased authority to administer
their own programs.
Under subsection (g), the Office of Personnel Management will
develop regulations which give employees covered by the merit pay
system, whose continuous service is interrupted in the public interest
by service with the armed forces or by service in essential non-
government civilian employment during a period of war or national
emergency, the opportunity to be advanced within the pay range based
upon the quality of their past performance in order that they are not
penalized as a result of such service.
Subsection (h) provides that increases in basic pay resulting from
the merit pay system shall be considered fixed by statute. As such,
they are included in the amounts to which cost of living allowances
and post differentials under 5 U.S.C. 5941 are applied.
Section 5403. Reports
S. 2640, as introduced, merely provided for periodic reports to
Congress on the merit pay system. The Committee changed this section
to require annual reports to Congress until such time as the merit pay
system is fully implemented and thereafter periodic reports on the
effectiveness of the system and the costs associated with it. This change
was made to conform the reporting requirement to the Committee's de-
cision that the merit pay system be phased in incrementally (see dis-
cussion-in section 503 of this title).
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Section 5404. Regulations.
Section 5404 requires the Office of Personnel Management to issue
regulations implementing this subchapter.
SECTION 502. CONFORMING AND TECHNICAL AMENDMENTS
Subsection (a) of section 502 amends section 4501(2) (A) of title 5,
United States Code, by inserting "but does not include an individual
paid under the merit pay system established under section 5402 of this
title; and". This change recognizes the transfer of the operation of
incentive awards for employees covered by the merit pay system to
section 5402 in order that it might become an integral portion of their
direct compensation plan. This is intended to focus the attention of
Federal managers on this portion of the compensation program when
developing recommendations for pay increases to employees.
Subsection (b) of section 502 amends section 4502(a) of title 5,
United States Code, by increasing the maximum cash award from
$5,000 to $10,000.
The $5,000 figure has been in law since 1954 and through the passage
of time and the attendant inflation, the value of this amount has been
seriously eroded.
Subsection (c) of section 502 amends section 4502(b) of title 5,
United States Code, by increasing the maximum cash award which
may be anted by the head of an agency without the approval of the
Office of Personnel Management from $5,000 to $10,000.
Subsection (d) of section 502 is an amendment to section 4506 of
title 5, United States Code, striking out "Civil Service Commission
may" and inserting in lieu thereof "Office of Personnel Management
shall" and imposes a duty to prescribe re lations.
Subsection (e) of section 502 amends section 5332(a) of title 5,
United States Code, to exclude those employees who will be covered by
the merit pay system. This is the section which currently provides that
each employee covered by subchapter III of chapter 53 of title 5,
United States Code, is entitled to basic pay in accordance with the
General Schedule. However, because employees covered by the merit
pay system will not automatically receive the full comparability
adjustment which will be applied to the General Schedule and since
the pay ranges under the merit pay system will not contain any step
rates, these employees must be excluded from this provision.
Subsection (f) of section 502 amends section 5334 of title 5, United
States Code, by providing that (1) where a reference is made to a'step'
it shall mean any dollar amount within the range for an employee
moving to a position covered by the merit pay system and (2) where
the reference is made to `two steps' or `two step increases' it shall mean
six percent for employees covered by the merit pay system since there
will be no steps. Six percent is approximately the size of two within-
grade step increases.
Subsection (g) of section 502 amends section 5335(e) of title 5,
United States Code, to exclude those-employees who will be covered
by the the merit pay system. Because these employees will receive
individually-determined increases to base pay and?advance within a
range which does not contain steps, they are excluded from this section
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which provides for the system of periodic step increases under the
General Schedule.
Subsection (h) of section 502 amends section 5336(c) of title 5,
United States Code, to exclude employees covered under the merit pay
System from the provisions for receiving additional step increases.
Subsection (i) of section 502 amends the analysis of chapter 53 of
title 5, United States Code, to conform to the amendments made by
section 501 of this bill.
This section provides that the provisions of this title take effect on
the date of enactment of the Act, except that the provision shall be
applied to. positions in accordance with schedules laid down by the
OPM.
S. 2640 provided that the entire merit pay system for all GS-13
through GS-15 managers would go into effect after 90 days. The Coin-
mittee felt, however, that this very short time period for implementa-
tion would place too heavy a burden on the OPM and the agencies, and
that it was likely to result in hasty and ill-informed decisionmaking
regarding the new system. Thus, it decided to give the OPM leeway to
implement the system gradually, for instance, on an agency-by-agency
basis or grade-by-grade basis. The Committee understands that full
implementation, may require three to four years. The Committee be-
lieves that incremental implementation will produce a more efficient
and equitable system for the Federal employees covered by this title.
TITLE VI-RESEARCH, DEI ONSTRATION, AND OTHER PROGRAMS
This title (1) authorizes the OPM to engage in research and dem-
onstration projects aimed at improving personnel management in the
Federal government, and to waive certain provisions of law in the
conduct of such experiments, and (2) amends the Intergovernmental
Personnel Act to simplify personnel requirements as conditions for
State and local government participation in Federal grant programs,
and to facilitate increased intergovernmental mobility.
This section adds a new Chapter 47 of Title 5, United States Code,
entitled "Personnel Research and Demonstration Projects." This new
Chapter establishes Research and Demonstration authority for the
Office of Personnel Management as follows :
Section 4701. Definitions
Paragraph (1) defines an "agency" through incorporation by ref-
erence of the defnition used to include agencies within "merit system
principles" and "prohibited personnel practices" under Section 101 of
this Act, including (a) an Executive agency, (b) the Administrative
Office of the United States Courts, and (c) the Government Printing
Office, but excluding (a) a Government Corporation, and (b). the Gen-
eral Accounting Office. Unlike Section 101, however, no general au-
thority is provided the President under this title to exempt positions
due to their confidential or policy-making character.
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Paragraph (2) specifically exempts certain agencies or positions
in agencies from inclusion under this title, including (a) the Federal
-Bureau of Investigation, (b) the Central Intelligence Agency, (c) the
Defense Intelligence Agency, (d) the National Security Agency, (e)
the Drug Enforcement Authority, and (f) other Executive agencies
or units thereof whose principal function is the conduct of intelligence
or counterintelligence activities, as determined by the President.
Paragraph (3) defines an "employee" as an individual employed in
or under an agency.
Paragraph (4) defines an "eligible" as an individual who has quali-
fied for an appointment to the competitive service, and whose name
has been entered on an appropriate register or list of eligibles.
Paragraph (5) defines "demonstration project" as one aimed at de-
termining whether a specified change in policies or procedures will
result in improved Federal personnel management, and is conducted
or supervised by the Office. of Personnel Management.
Paragraph (6) defines "research program" as a planned study of
public management policies and systems, the manner in which they
are operating, their effects, comparisions among policies and systems,
and possibilities for change.
Section 470$. Research, and development functions
Section 4702 authorizes the Office of Personnel Management to es-
tablish, maintain, and evaluate research and development projects to
find improved methods and technologies in Federal Personnel Man-
agement. OPM is also directed to establish and maintain a system for
collection and public dissemination of such research and development,
and to encourage exchange of information among interested parties.
OPM is authorized to carry out these activities directly or through con-
tract or agreement.
Section 4703. Demonstration projects
Section 4703 establishes the scope and limitation of OPM's author-
ity to conduct experimental demonstration projects aimed at improv-
ing Federal personnel management. Because this Section permits
OPM to waive certain provisions of law in conducting these projects,
the Committee was particularly concerned that adequate safeguards
be developed to assure that this power not be abused. Any demonstra-
tion project that oversteps these limitations, or does not satisfy the
essential definitional intent of such projects is prohibited.
Part (a) of this Section authorizes OPM to conduct and evaluate,
either directly or through agreement or contract with one or more
Federal agencies or other public or private organizations, demonstra-
tion projects involving up to 5,000 individuals (not including control
groups) and having an active duration of up to 5 years. No more than
10 active demonstration projects may be underway at any one time.
The intent of this requirement is to limit to 50,000 the total number
of Federal employees that may be involved directly, at any one time,
in active demonstration projects. For purposes of this limitation, an
"active" project is intended to mean one where the experimental con-
dition remains in effect. A project where the experiment is no longer
in effect, but where evaluation study is still underway, would not be
.considered an "active" project for purposes of this limitation.
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In order to provide OPM with the ability to experiment with new
and innovative means of improving Federal personnel management,
the Committee agreed to a limited allowance for OPM to either (a)
act beyond specific authorities granted to it under Title 5, United
States Code, or (b) waive inconsistent provisions of Title 5, United
States Code, in creating experimental conditions for purposes of
demonstration projects.
While the Committee recognized the need to allow OPM adequate
flexibility to develop new approaches to Federal personnel manage-
ment policies and procedures, it was concerned about the dangers in-
herent whenever any Federal agency is given authority to waive pro-
visions of law. For this reason, a number of provisions were inserted
to assure that demonstration project authorities are not used to abridge
employee rights, contravene the express will of Congress, or under-
mine the essential purpose of this Act, that is, to create a fairer,
more effective, more merit-oriented Federal civil service. For instance,
the Committee decided to insert language forbidding any demon-
stration project to violate merit system principles or prohibited per-
sonnel practices established under Title II of this Act.. Any demon-
stration project which does so would be subject to the full range of
disciplinary powers accorded the Merit Systems Protection Board
and its Special Counsel. Further, no demonstration project may affect
leave, insurance, or annuity provisions established under this Title.
To provide assurance that demonstration projects are proper, rigor-
ous procedural safeguards must be satisfied before any such project
may go into effect. A detailed plan must be developed, published in
the Federal Register, and submitted to public hearings'as a precondi-
tion to implementation. The plan must identify the purposes of the
proposed demonstration project, the number, types, and categories of
employees and eligibles to be affected, the methodology, the duration,
the anticipated costs, the training to be provided, and the methodology
and criteria for evaluation of the project. Further, employees who
might be affected by the project must be notified and consulted with
at least 6 months prior to first implementing the project. Congress also
must be provided a detailed report on the proposed project at least 3
months in advance of implementation.
No project may be implemented unless the agency involved has
approved the proposal.
To insure that employees have an active input into the planning and
implementation of demonstration projects and are fully appraised of
any change which might affect their status or well-being, parts (e)
and (f) of this section establish rules for prior consultation with
employees before a project may be initiated. Where employees are
within an agency unit where an employee organization holds exclu-
sive recognition rights, no demonstration project may be entered into
(a) if the project would violate a negotiated agreement between the
employee organization and such agency unless a written agreement
provides for such projects, or (b) if the project is not covered by such
a written agreement, unless there has been consultation or negotiation,
as appropriate, with the employee organization. It is the intent of
this provision that the authority to enter into demonstration projects
and to waive certain provisions of law not be construed as license to
violate any agreement entered into by an agency and its employees, or
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to bypass the exclusive recognition rights accorded an employee
organization.
Where employees are within a unit where an employee organization
has not been accorded exclusive recognition rights, the requirement for
prior consultation with employees must still be adhered to, and part
(f) forbids the implementation of any project where consultation has
not taken place.
Finally, an evaluation is required of all demonstration projects en-
tered into under this section, including an evaluation of results and
their impact on improving public management. All agencies are man-
dated to cooperate with the Director of OPM in the performance of
his demonstration project authority, including the providing of infor-
(nation and reports.
Section 4704. Alloction of Funds
Section 4704 allows OPM to allocate funds appropriated to it for
the purpose of conducting demonstration or research projects to other
agencies, where such other agencies are to be actually conducting or
assisting in the conducting of such pro ects. However, to insure con-
tinued Congressional control over such funds, allocated funds may re
main available only for so long as specified in appropriation Acts. And
no contracts may be entered into under this Section unless specifically
provide for in advance by relevant appropriations Acts.
Section 4705. Reports
Section 4705 requires that OPM, as part of its annual report to
Congress, include a summary of all research and demonstration proj-
ects conducted during the year, the effect of the projects on improving
management efficiency, and recommendations of policies and proce-
dures which will improve the attainment of general research objectives.
Section 4706. Regulations
Section 4706 authorizes the OPM to prescribe regulations to admin-
ister the provisions of this Chapter.
SECTION 802. INTERGOVERNMENTAL PERSONNEL ACT AMENDMENTS
This Section amends the Intergovernmental Personnel Act as
follows :
Subsection 602 (a) amends section 208 of the Intergovernmental
Personnel Act (IPA) to (1) authorize Federal agencies to require
State and local governments, as a condition of participation in Federal
assistance programs, to have merit personnel systems for the positions
engaged in the administration of such programs; and (2) abolish all
statutory personnel requirements established as a condition of the
receipt of Federal grants-in-aid by State and local governments, except
those listed in Section 208 of the IPA, those that prohibit discrimina-
tion in employment or require equal employment opportunity or
affirmative action, the Davis-Bacon Act, and the Hatch Political
Activities Act.
Subsection 602(b) amends section 401 of the IPA to extend the au-
thority to participate in the mobility program to certain other
organizations.
Subsection 602(c) amends section 403 of the IPA to make commis-
sioned Public Health Service Officers eligible to participate in the
IPA mobility program.
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Subsection 602(d) amends section 502 of the IPA to define the
Trust Territory of the Pacific Islands as a jurisdiction which is eligible
to participate in all IPA programs.
Subsection 602(e) amends section 506 of the IPA to include the
Commonwealth of Puerto Rico, Guam, American Samoa, and the
Virgin Islands in the formula allocation of IPA grants and exclude
these jurisdictions from the local government allocation.
SECTION 603. AMENDMENTS TO THE MOBILITY PROGRAM
This Section amends Title 5 of the United States Code to expand the
Intergovernmental Mobility Program as follows:
Subsections 603 (a) through (d) amend sections 3371 through 3375
of title 5, United States Code, to extend eligibility to participate in
the mobility program to the Trust Territory of the Pacific Islands; to
a mil.
ti tary department; a court of'the United States; the Administra-
ve Office of th e United States Courts; the Library of Congress; the
Botanic Garden; the Government Printing Office; the Congressional
Budget Office; the United States Postal Service; the Postal Rate Com-
mission; the Architect of the Capitol; the Office of Technology Assess-
ment; and other organizations such as a national, regional, statewide,
or metropolitan organization representing member State or local
governments; an association of State or local public officials; or a
nonprofit organization, one of whose principal functions is to offer
professional advisory, research, development or related services to
governments or universities concerned with public management. Fed-
eral employees in non-career appointments in the Senior Executive
Service and employees in the excepted service who are serving in con-
fidential or policy determining positions are excluded from participa-
tion in the mobility program.
Subsection 603(e) amends section 3374 of title 5, United States
Code, to provide technical amendments to assure fairness and equity
for persons participating in mobility assignments. If enacted, Federal
retirement and other benefits, in the rare cases where such programs
apply to certain State and D.C. government employees, would not be
lost by such employees while they are. on mobility assignments. Federal
agencies would be authorized to reimburse State and local govern-
ments and institutions of higher. learning, and other organizations for
various fringe benefits (e.g., health and life insurance, retirement,
etc.) of employees on detail from such organizations.
Subsection 603(f) amends section 3375 of title 5, United States
Code, to authorize an executive agency to reimburse mobility assignees
for certain miscellaneous relocation expenses related to a geographic
move for purposes of a mobility assignment on the same basis such
payments are authorized on a permanent change of station (e.g., auto-
mobile registrations, drivers' licenses, etc.).
TITLE VII-LABOR-MANAGEMENT RELATIONS
Title VII establishes a Federal Labor Management Relations Au-
thority and creates a statutory base for the improvements of labor-
management relations in the Federal service. The Authority will carry
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out the duties and responsibilities now being handled by the part-time
Federal Labor Relations Council and Assistant Secretary of Labor
for Labor-Management Relations. Title VII permits labor unions to
bargain collectively over personnel policies, practices, and matters af-
fecting working conditions within the authority of agency managers.
It specifies areas for decision which are reserved to management and
may not be subjected to the collective bargaining process.
Title VII also provides statutory base for the establishment of griev-
ance and arbitration procedures for Federal employees organized in
collective bargaining units. Through the statutory establishment of
a Federal Service Impasses Panel, it provides for the resolution of
impasses between agencies and labor unions. Further, it sets out a
grounp of unfair labor practices for both the agencies and the'unions.
This section provides that subpart-F of part III of title 5, United
States Code, is amended to .add the following chapter.
CHAPTER 72-FEDERAL SERVICE LABOR-MANAGEMENT
RELATIONS
Section 7201. Finding8 and purpose
Subsection (a) states findings of Congress that the public interest
demands the highest standards of employee performance and the con-
tinued development of modern and progressive work practices to facil-
itate the efficient accomplishment of the operations of the Government.
Subsection (b) states findings of Congress that the protection of the
right of employees to organize, bargain collectively, and participate
through labor organizations of their own choosing in decisions which
affect them can be accomplished with full regard for the public interest
and contributes to the effective conduct of public business.
Subsection (c) states that the purpose of this subchapter is to pre-
scribe rights and obligations of employees of the Federal Government
and to establish procedures to meet the special requirements and needs
of the Federal Government.
Section 72,02. Definitions; application
Subsection (a) (1) defines "agency-"
Subsection (a) (2) defines `,employee." The definition includes a
person who was separated from service as a consequence of,-or in con-
nection with, an unfair labor practice under section 7174 of this sub-
chapter. This language is an adaptation of language in section 2(3)
of the National Labor Relations Act. B.
its operation under NLRA,
and intended by its inclusion in this subchapter, persons determined
to have been separated in violation of the unfair labor practice pro-
visions of this subchapter. .could vote in representation elections and
have access to those provisions, e.g., "It shall be an unfair labor prac-
tice ... to interfere with ... an employee in the exercise of rights as-
sured by this subchapter." The term "uniformed services" used in sub-
section (a) (2) (D) (ii) is intended to have the same meaning as that
given the term by section 2101(3) of this title which reads as follows:
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Sec. 2101. Civil Service; armed f orgies; uniformed services
For the purpose of this title-
(3) "uniformed services" means the armed forces, the commissioned
corps of the Public Health Service, and the commissioned corps of
the Environmental Science Services Administration.
Subsection (a) (3) defines "labor organization." Subsection (a) (4)
defines "agency management." Subsection (a) (5) defines "Authority."
Subsection (a) (6) defines the "General Counsel." Subsection (a) (7)
defines the "Panel." Subsection (a) (8) defines the "Assistant Secre-
tary."
Subsections (a) (9), (10) and (12) define "Confidential employee,"
"Management official" and "Professional employee," respectively. Ex-
ecutive Order 11491 referred to but did not define these terms. The
Assistant Secretary defined them in case decisions. Such definitions are
now codified in sections 7162(a) (9), (10) and (12).
Subsection (a) (11) defines "supervisor." Subsection (a) (12) de-
fines "professional employee." Subsection (a) (13) defines "agree-
ment."
Subsection (a) (14) defines "collective bargaining," "bargaining"
or "negotiating" as synonymous terms with references to the mutual
obligation of agency representatives and the exclusive representative
set forth in section 7215. Subsection (a) (15) defines "exclusive repre-
sentative." Subseciton (a) (16) defines "person."
Subsection (a) (17) defines "grievance." This term is intended to
apply broadly than just to complaints concerning matters covered by
a negotiated grievance procedure. For example, "grievance" as used
in section 7212(c) refers to a procedure which has not been negotiated
by the parties, such as an agency grievance procedure, but does not
apply to complaints concerning matters not subject to a grievance
procedure such as classification and Fair Labor Standards Act matters.
Subsection (b) provides that this subchapter applies to all em-
ployees and agencies in the executive branch except for specific exclu-
sions set forth below. This subsection tracks the language of Executive
Order 11491, section 31a' .
Subsection (c) specifies the agencies, subdivisions thereof and per-
sonnel to which this subchapter does not apply. It reflects current
exclusions under Executive Order 11491. For the purpose of clarity,
the National Security Agency, the U.S. Postal Service and the person-
nel of the Authority, General Counsel and Panel are specifically listed
as excluded. S. 2640 as introduced included among the exceptions the
United States Postal Commission. The Committee decided that there
was no reason to exclude the Commission because there are no national
security issues involved and by statute it is a government agency.
Subsection (d) provides. that an agency head may, as deemed in the
national interest, suspend this subchapter with respect to an agency or
subdivision located outside the U.S. It tracks the provision of Exec-
utive Order 11491, section 3 (c).
Subsection (e) provides that employees engaged in administering
a labor-management relations law (except. for personnel of the Au-
thority, General Counsel and Panel, who are excluded by subsection
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(c) of this section) may not be represented by labor organizations
which also. represent other employees covered by that law. A similar
provision is contained in Executive Order 11491, section (3) (d), the
purpose of which is to avoid conflicts of interest for the employees
administering the labor-management relations law.
Section 7203. Federal Labor Relations Authority; Office of the Gen-
eral Counsel
Subsection (a) establishes the Federal Labor Relations Authority as
an independent establishment in the Executive Branch of the Govern-
ment. This provision conforms with Reorganization Plan No. 2 of
1978.
Subsection (b) provides that the Authority is composed of a Chair-
person and two other full-time members, not more than two of whom
may be adherents of the same political party, and none of whom, in
general, may be employed elsewhere in the Government. The compo-
sition of the Authority as an independent, third-party establishment
will eliminate the appearance of bias which has inhered in the compo-
sition of the Federal Labor Relations Council (consisting of three
high-level Government managers) under Executive Order 11491. The
full-time nature of membership on the Authority is further responsive
to criticism of the Council, the members of which serve on the Council
on only a part-time basis.
Subsection (c) provides for the appointment and reappointment
of the members, and the designation of the Chairman of the Author-
ity. It further provides for removal of any member. of the Authority
by the President.
Subsection (d) provides for five-year terms of office of each member
of the Authority, for the dates of expiration of such terms, and for the
filling of vacancies. -
Subsection (e) provides that a vacancy in the Authority shall
not impair the right of the remaining members to exercise the Au-
thority's powers.
Subsection (f) provides that the Authority shall make an annual
report to the President for transmittal to Congress.
Subsection (g) creates the Office of the General Counsel in the
Authority. It also provides for the General Counsel's' appointment,
term of office, reappointment, removal, and full-time service. It is
the intent of the Committee that the Office of the General Counsel
will be an independent organizational entity within the ?Authority,
and thereby maintain a separation between the prosecutorial and
adjudicatory functions of the Authority.
Section 7204. Powers and duties of the Authority; the General Counsel
Subsection (a) provides for the Authority's powers and duties to
administer and interpret this subchapter, decide major policy issues,
prescribe regulations needed to administer its functions, and dis-
seminate intormation relating to its operations. Similar powers and
duties are assigned to the r ederal Labor Relations Council under
Executive Order 11491. Under this provision, the Authority will not
advise or issue policy guidance to agencies, which role will rest with
the Office of Personnei Management. Likewise, the Authority is not
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authorized to advise the President other than the normal role of
agencies to suggest necessary and desired changes in legislation. Also,
the Authority, like the Council, will not issue advisory opinions.
Subsection (b) provides that the Authority shall decide appro-
priate unit questions, supervise elections, decide questions concerning
eligibility for national consultation rights, and decide unfair labor
practice complaints. Similar powers and duties are assigned to the
Assistant Secretary of Labor for Labor-Management Relations un-
der Executive Order 11491. Integration of the powers and duties
of the Assistant Secretary, except for decisions relating to alleged
violations of the standards of conduct for labor organizations, in the
Authority will improve coordination and eliminate the fragmented
nature of the decision-making under the Executive Order between
the Assistant Secretary and the Federal Labor Relations Council.
The initial jurisdiction to decide alleged violations of the standards
of conduct for labor organizations will be retained by the Assistant
Secretary, who administers similar standards in the private sector.
The Committee revised subsection 7204(b) (2) to provide ex-
plicitly that a labor organization which receives a majority of the
valid 'ballots cast in a representation election would be accorded
exclusive recognition.
Subsection (c) provides for the Authority's powers to decide ap-
peals on negotiability issues, exceptions to arbitration awards, ap-
peals from decisions of the Assistant Secretary, and other matters it
deems appropriate to assure the effectuation of the purposes of this
subchapter. Similar decisional powers are assigned to the Federal
Labor Relations Council under Executive Order 11491. The power
of the Authority, like that of the Council, to consider other matters
it deems appropriate to assure the effectuation of the purposes of
this subchapter is intended to be used sparingly and to permit the
Authority to deal with labor-management issues, and problems with-
in the overall scope of its authority, but not set forth expressly in
this section of the subchapter. The phrase "may consider" as used
in subsection (c) is intended to grant the Authority discretion with
respect to the manner and extent, not the scope, of its decisional
authority. Thus, it is not intended that the Authority be permitted
to eliminate all consideration of matters expressly listed in this sub-
section, but that it be empowered, consistent with this subchapter,
to establish by regulation procedural requirements, e.g., timeliness,
service, etc.; and procedural limitations on the conditions upon which
merits decisions will issue. For example, currently the Council will
grant a petition for review of an arbitration award only where it
appears, based upon the facts and circumstances described in the
petition, that the exceptions to the award present grounds that the
award violates applicable law, appropriate regulations or the Order,
or other grounds similar to those upon which challenges to arbitra-
tion awards are sustained by courts in private sector labor-manage-
nient relations. Initial review of exceptions to an arbitration award
is limited to a determination as to whether this condition has been
met; if such condition has been met, a decision on the merits will
later be issued. It is intended that the Authority, subject to its own
regulations, will operate in a similar manner-reviewing all appeals,
but limiting the extent of review where warranted.
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The provision further expressly sanctions appeals to the Authority
from final decisions and orders of the Federal Service Impasses Panel.
The broad authority of the Council under Executive Order 11491 to
interpret the Order, decide major policy issues and take whatever
action is required to effectuate the purposes of the Order implies a
right to oversee final decisions and orders of the Panel. This subchap-
ter specifically sets forth the limited power of review by the central
authority to assure uniform application of the legal requirements in
the program, but it is not anticipated that it would often be necessary
to exercise it except in the unlikely event that the legal requirements of
the program are misapplied. The Authority would not otherwise re-
view the substance or merits of any final decisions and orders of the
Panel.
Subsection (d) provides that the Authority shall adopt an official
seal which shall be Judicially noticed.
Subsection (e) provides for the location of the Authority's office in
or about the District of Columbia, for the exercise of the Authority's
powers at any time or place, and for the power of its members or
agents to make inquiries necessary to carry out its duties.
Subsection (f) provides that the Authority may appoint officers and
employees, and delegate to such officers and employees authority to
perform such duties and make such expenditures as may be necessary.
Subsection (g) provides for the E.llowance and payment of the
Authority's expenses.
Subsection (h) provides for the Authority's power and duty to pre-
vent violations of this subchapter.; and for the Authority's powers to
hold hearings, subpena witnesses, administer oaths, take testimony or
depositions of persons under oath, issue subpenas requiring the pro-
duction and examination of evidence, and take such other action as
may be necessary. It also provides, under certain conditions, that the
Authority may request an advisory opinion from the Director of the
Office of Personnel Management; that the Director shall have standing
to intervene as a party in Authority proceedings; and that the Director
may request that the Authority reopen and reconsider its decision.
Subsection (i) provides that the Authority, may require an agency
or labor organization to cease and desist from violations of this sub-
chapter and require it. to take such remedial action as it considers
appropriate to effectuate the policies of the subchapter.
Subsection (j) provides that the Authority shall maintain a record
of its proceedings and make public any decision made by it or any
action taken by the Panel under section 7222 of this title. Further sec-
tion 552 (public access to information) shall apply with respect to any
record maintained under this subsection of this title.
Subsection (k) provides that the General Counsel is authorized to
investigate unfair labor practice complaints; to make final decisions
concerning the issuances of notices of hearings on unfair labor practice
complaints; to prosecute unfair labor practice complaints before the
Authority; to direct and supervise all field employees of the General
Counsel; to perform such other functions as the Authority prescribes,
which would include participation before the Authority in unfair
labor practice proceedings; and to prescribe regulations needed to
administer the functions of the General Counsel under this subchapter.
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The General Counsel is intended to be autonomous in investigating
unfair labor practice complaints, in making "final decisions" as to
which cases to prosecute before the Authority in its capacity as deci-
sion maker, and in directing and supervising field employees of the
General Counsel. Specifically, the Authority would neither direct the
General Counsel concerning which unfair labor practice cases to pros-
ecute nor review the General Counsel's determinations not to prosecute,
just as the National Labor Relations Board does not exercise such con-
trol over its General Counsel.
Subsection (1) provides that the decisions of the authority shall be
final and conclusive, and not subject to judicial review except for con-
stitutional questions. Access to judicial review, however, for adverse
action and discrimination matters would continue under this chapter.
Section 7211. Employees' righte
Subsection (a) incorporates the policy contained in section 1(a)
of Executive Order 11491 concerning the rights of employees to form,
join or assist a labor organization and participate in its management
or representation; or to refrain from such activity. It further provides
that employees have the right to bargain collectively through repre-
sentatives of their own choosing subject to limits contained in section
7215 (c) of this subchapter.
Subsection (b) incorporates the policy contained in section 1(b)
of Executive Order 11491 that participation in the management or
representation of a labor organization by a supervisor, or by other
employees whose participation would create a real or apparent conflict
of interest or would be incompatible with law or the employees' official
duties, is not authorized. The same policy is specifically extended to
management officials and confidential employees for the same reasons.
Section 7212. Recognition of labor organization
Subsection (a) provides that an agency shall accord exclusive recog-
nition or national consultation rights to a labor organization which
meets the requirements of this chapter for such recognition or consul-
tation rights. This tracks section 7(a) of Executive Order 11491.
Subsection (b) provides that recognition, once accorded, shall con-
tinue as long as the organization meets the requirements of this chapter
for recognition by preventing the disruption caused by repeated
elections.
Subsection (c) tracks section 7(d) of Executive Order 11491. Sec-
tion 7212(c) (1) creates no new employee rights but provides that
recognition of a labor organization does not preclude an employee
from exercising grievance or appellate rights already established by
other laws or regulations or from choosing any personal representative
in such proceedings as may be authorized by the law or regulation
creating the grievance or appellate rights. However, where the griev-
ance or appeal is covered and pursued under a negotiated grievance
procedure as provided in section 7221 of this subchapter, all employees
in the bargaining unit-union members and nonmembers alike-must
use that procedure to resolve the dispute, and may be represented only
by the exclusive representative. Where the negotiated procedure covers
adverse. action and discrimination complaints, the employee has an
option to use the negotiated procedure of the statutory appeal proce-
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dure, but not both. If the employee chooses the negotiated procedure,
only the exclusive representative of the unit- may act as the employee's
representative. However, if the employee chooses the statutory appeal
procedure, the employee may also choose his/her own representative,
and the union (as exclusive representative of the unit) would have
neither a right nor an obligation to represent the employee.
Section 7213. National consultation rights
This section provides that an agency shall accord national consul-
tation rights to a labor organization which qualifies under criteria
established by the Authority, describes the duties of an agency which
has accorded national consultation rights to a labor organization, and
provides further that questions as to the eligibility of labor organiza-
tions for national consultation rights shall be referred to the Authority
for decision. When a labor organization holds national consultation
rights, the agency must give the labor organization notice of proposed
new substantive personnel policies and proposed changes in estab-
lished personnel policies and an opportunity to comment on such
proposals. The labor organization has a right to suggest changes in
personnel policies and to have those suggestions carefully considered.
The labor organization also has a right to consult, in person at reason-
able times, upon request, with appropriate officials on personnel policy
matters and a right to submit its views in writing on personnel policy
matters at any time. National consultation rights do not include the
right to negotiate. Further, the agency is not required to consult with
a labor organization on any matter which would be outside the scope
of negotiations if the labor organization held national exclusive recog-
nition in that agency.
Section 7214. Exclusive recognition
Subsection (a) provides that an agency shall accord exclusive
recognition to a labor organization if the organization has been
selected as the representative in a secret ballot, by a majority of the
employees as an appropriate unit. The proviso in subsection (a)
permits an agency to grant exclusive recognition to a labor organiza-
tion without an election when the appropriate unit is established by
consolidating existing exclusively recognized units of that labor
organization.
The Committee revised subsection 7214(a) to make it clear that
a labor organization which receives a majority of the valid ballots
cast in a representation election would be accorded exclusive
recognition.
Subsection (b) defines the bases for determining appropriate units
as well as certain conditions which are not appropriate for estab-
lishing such units. Any question with respect to the appropriate unit
may be referred by the agency or the labor organization to the
Authority for a decision.
The Committee clarified the language of subsection 7214(b) to
provide that appropriate units may be established on an agency basis.
Subsection (c) provides that all elections conducted under the
supervision of the Authority shall be by secret ballot. Elections may
be held to determine whether a labor organization should be recog-
nized as the exclusive representative in a unit; replace another labor
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organization as the exclusive representative; cease to be the exclusive
representative; and be recognized as the exclusive representative of
employees in a unit composed of employees in units currently repre-
sented by that labor organization or continue to be recognized in
existing .separate units. Subsection (c) also contains an "election
bar" rule under which no election may be held in any unit or part
of such unit within 12 months of a valid election. This provision is
intended to foster stability and certainty as to labor relations issues
by preventing the disruption caused by repeated elections.
Section 7215. Representation rights and duties; good faith bargaining;
scope of negotiations; resolution. of negotiability disputes
Subsection (a) provides that a labor. organization accorded exclu-
sive recognition is the exclusive representative of employees in the
unit and is entitled to act for and negotiate agreements covering all
employees in the unit and to be represented at formal discussions
between management and employees concerning grievances, personnel
policies and practices, or other matters affecting general working
conditions of employees in the unit. It also provides that the exclu-
sive representative is responsible, for representing the interests of all
unit employees without discrimination and without regard to labor
organization membership. It further provides that the agency and
the labor organization shall negotiate in good faith for the purpose
of arriving at an agreement.
The parties have a mutual duty to bargain not only with respect
to those changes in established personnel policies proposed by man-
agement, but also concerning negotiable proposals initiated by either
the agency or the exclusive representative in the context of negotia-
tions leading to a basic collective bargaining agreement. Where
agency management proposes to change established personnel policies,
the exclusive representative must be given notice of the proposed
changes and an opportunity to negotiate over such proposals to the
extent they are negotiable. In addition, a union holding exclusive
recognition must be given the opportunity to be represented at formal
discussions between management and employees concerning griev-
ances, personnel policies and practices, or other matters affecting gen-
eral working conditions of employees in the unit. -
Subsection (b) defines the duty to "negotiate in good faith" to
include approaching negotiations with a sincere resolve to reach an
agreement, being represented at negotiations by appropriate repre-
sentatives prepared to discuss and negotiate on all negotiable mat-
ters, meeting at reasonable times and places, and if an agreement is
reached, executing a written document embodying the agreed terms
and taking necessary steps to implement the agreement.
Subsection (c) provides that. an agency and a labor organization
accorded exclusive recognition shall negotiate with respect to person-
nel policies and practices and matters affecting working conditions so
far as may be appropriate under this chapter and other applicable
laws and regulations elaborated below. The scope of negotiations
under this section is the same as under section 11(a) of Executive
Order 11491. That is, under this subchapter a labor organization is
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entitled to negotiate on the personnel policies and practices and matters
affecting working conditions of employees in the bargaining init.
which it represents, but only to the extent appropriate under laws and
regulations which are set forth in the Federal Personnel Manual; con-
sist of published agency policies and regulations issued at the agency
level or level of primary national subdivision for which a compelling
need exists (as determined under criteria established by the Author-
ity) ; or are set forth in a national or other controlling agreement
entered into by a higher unit of the agency.
Subsection (d) excepts certain enumerated matters from the obliga-
tion to negotiate under section 7215, in effect rendering bargaining
on those matters optional or permissive; and recognize that there is
an obligation to negotiate over the impact of realignments of work
forces and technological change. Excepted from the obligation to
negotiate are matters with respect to the numbers of employees in an
agency; the numbers, types, and grades of positions or employees
assigned to an organizational unit, work project or tour of duty (i.e.,
the agency's staffing patterns, including job content) ; and the tech-
nology of performing agency work.
Subsection (e) provides procedures for the resolution of negoti-
ability issues arising in connection with negotiations. The procedures
correspond exactly to those contained in section 11(c) of Executive
Order 11491.
Section 726. Unfair labor practices
Subsection (a) provides that certain enumerated actions are unfair
labor practices for agencies. Similar unfair labor practices are con-
tained in section 19(a) of Executive Order 11491. Those unfair labor
practices are :
(1) interfering with, restraining, or coercing an employee in
connection with the exercise of rights assured by this chapter
of the United States Code;
(2) encouraging or discouraging membership in any labor or-
ganization by discrimination with regard to hiring, tenure, pro-
motion, or other conditions of employment;
(3) sponsoring, controlling or otherwise assisting any labor
organization, unless the assistance consists of furnishing cus-
tomary and routine services and facilities-
(A) in a manner consistent with the best interests of the
agency, its employees, and the organization, and
(B) on an impartial basis to any organization having
equivalent status.
In addition, the subsection provides that it is an unfair labor
practice for an agency to-
(4) discipline or otherwise discriminate against an employee
because the employee has filed a complaint., affidavit, petition,
or given any information or testimony under the provisions of
the subchapter;
(5) refuse to accord appropriate recognition to a labor or-
ganization qualified for such recognition; or
(6) to refuse to consult or negotiate in good faith with a labor
organization as required by the chapter.
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1570
Subsection (b) provides that certain actions are unfair labor prac-
tices for labor organizations. Similar unfair labor practices are con-
tained in section 19(b) of Executive Order 11491 except that section
7216(b) (4) codifies the Federal Labor Relations Council's inter-
pretation of section 19(b) (4) that it is an unfair labor practice for a
labor organization to picket an agency in a labor-management dispute
where such picketing interferes or reasonably threatens to interfere
with an agency's operations. Specifically, this subsection makes it an
unfair labor practice for a labor organization to-
(1) interfere with, restrain, or coerce an employee in connec-
tion with the exercise of rights assured by this chapter of the
United States Code;
(2) cause or attempt to cause an agency to coerce an employee
in connection with the exercise of rights under this chapter;
(3) coerce or attempt to coerce an employee, or to discipline,
fine or take other economic sanction against a member of a labor
organization, as punishment or reprisal or for the purpose of
hindering or impeding work performance, productivity or the
discharge of duties by the employee;
(4) (A) call, or participate in, a strike, work stoppage, slow-
down, or picketing of an agency in a labor-management dispute if
the picketing intereferes or reasonably threatens to interfere with
an agency's operations or (B) condone any activity described in
(A) above by failing to take action to prevent or stop it;
(5) discriminate against an employee with regard to the terms
or conditions of membership in the organization because of race,
color, religion, national origin, sex, age, or handicapping condi-
tion; or
(6) to refuse to consult or negotiate in good faith with an
agency as required by this chapter.
Subsection (c) provides that it is an unfair labor practice for a labor
organization holding exclusive recognition to deny membership to a
unit employee except under certain conditions. Those conditions are :
(1) the employee's failure to meet reasonable occupational standards
uniformly required for admission, or (2) failure by the employee to
tender fees and dues uniformly required as a condition of acquiring
and retaining membership. Similar language contained in section
19(c) of the Executive Order has been interpreted as an unfair labor
practice provision. The subsection does not preclude a labor organiza-
tion from enforcing discipline in accordance with procedures under
its constitution and bylaws as long as such action is consistent with the
requirements of this chapter.
It is intended that unfair labor practice complaints will be handled
by the General Counsel of the Authority in a manner essentially iden-
tical to National Labor Relations Board practices in the private sec-
tor. The one deviation from private sector practices is that, it is en-
visioned that there be retained the current Executive Order 11491 re-
quirement that there be first filed a pre-complaint charge which would
provide an opportunity for informal resolution of the issues by the.
parties. If a matter is not resolved informally, a complaint may be
filed with the General Counsel, who will conduct such investigation
as is necessary to determine whether a reasonable basis for the com-
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1571
plaint has been established. If so, the General Counsel shall, in the
absence of settlement, issue a notice of hearing. If a reasonable basis
for the complaint has not been established, absent withdrawal, the
complaint will be dismissed. At the formal hearing before an adminis-
trative law judge the General Counsel shall prosecute the unfair labor
practice for the complainant. After the close of the hearing, the ad-
ministrative law judge"will issue a report and recommendation. The
Authority shall, subject to its regulations, consider any exceptions
filed by the parties and decide the unfair labor practice complaint.
Subsection (d) is similar to a provision contained in section 19(d)
of Executive Order 11491. Under section 19(d), issues which can be
raised under a statutory appeal procedure may not be raised as an un-
fair labor practice. This prohibition is preserved in section 7216(d).
However, section 7221(d) of this chapter permits a negotiated griev-
ance procedure to cover matters for which a statutory appeal proce-
dure exists, except for those matters specifically enumerated. Where a
negotiated grievance procedure covers a non-excepted matter for which
a statutory appeal procedure exists (other than adverse action and dis-
crimination matters), the otherwise applicable statutory appeal proce-
dure may not be invoked to resolve such matters. Accordingly, the
issues involved may be raised either under the negotiated grievance
procedure or, where appropriate, in an unfair labor practice proceed-
ing. Those matters specifically enumerated in section 7221(d), which
cannot be covered in a negotiated grievance procedure must be resolved
exclusively under the applicable statutory appeal procedure. Accord-
ingly, issues which can be raised under such statutory appeal procedure
may not be raised in an unfair labor practice proceeding.. Finally,
where discrimination or adverse action matters (including demotion or
removal for unacceptable performance under section 4303 of this title)
are covered by a negotiated grievance procedure, an employee has the
option of using either the negotiated procedure or statutory procedures.
The use of either option will preclude the use of the unfair labor prac-
tice procedures.
The subsection also provides that appeals or grievance decisions
shall not be construed as unfair labor practice decisions under this
chapter nor as precedent for such decisions. All complaints of unfair
labor practices prohibited under this section that cannot be resolved by
the. parties shall be filed with the FLRA.
Subsection (e) provides that questions concerning whether issues
can properly be raised under an appeals, procedure as described in sec-
tion 7216(d) shall be referred for resolution to the agency responsible
for final decisions relating to those issues. This provision is similar to
section 7221 (g) of this subchapter in purpose and effect. Under sec-
tion 7216(e), the question is whether a statutory apneal procedure
described in 7221(d) precludes an unfair labor practice proceeding
whereas under 7221(g) the question is whether such statutory appeal
procedure renders a grievance nongrievable or nonarbitrable.
Section 7217. Standards of conduct for labor organizations
This section nrovides that labor organizations must subscribe to
certain standards of conduct and that the Assistant Secretary shall
prescribe regulations to effectuate this section. Subsection (a) sets
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1572
forth these standards of conduct, which are the same as contained in
Executive Order 11491. An organization does not have to prove that
it is free from corrupt influences and influences opposed to basic demo-
cratic values if its governing requirements include explicit and detailed
provisions requiring it to (1) maintain democratic procedures and
practices, (2) exclude persons from office in the organization if they
are affiliated with communist or other-totalarian influences, (3) pro-
hibit conflicts of interest by its officers and agents, and (4) maintain
fiscal integrity in the organization's affairs.
Under subsection (b), an organization could still be required to fur-
nish evidence of its freedom from corrupt influences or influences op-
posed to basic democratic principles if there is reasonable cause to
believe that the organization is subject to such influences or that the
organization has been subject to a sanction by .a parent or affiliated
organization because of its unwillingness or inability to comply with
the requirements of subsection (a).
Subsection (c) requires a labor organization which has or seeks
recognition as a representative of employees to file financial and other
reports with the Assistant Secretary. It also must provide for bond-
ing of officials and employees of the organization, and comply with
trusteeship and election standards.
Subsection (d) requires that complaints of violations of this sec-
tion be filed with the Assistant Secretary. As noted under section
7204(b), the power and duty to decide alleged violations of the stand-
ards of conduct are not being transferred to the Authority because the
Assistant Secretary administers similar' standards in the private sec-
tor. Further, as noted under section 7204(c), the Authority may re-
view the Assistant Secretary standards of conduct decisions as the
Federal Labor Relations Council now does under Executive Order
11491.
This subsection also empowers the Assistant Secretary to require a
labor organization to cease and desist from violations of this section
and requires it to take action that he considers appropriate to carry
out this section's policies.
Section 7218. Basic provisions of agreements
This section provides that each agreement between an agency and
a labor organization is subject to certain enumerated requirements
and mandates that these requirements be expressly stated in any agree-
ment between an agency and a labor organization. Subsection 7218
(a) (1) provides that in the administration of. agreements, officials
and employees are governed -by existing or future laws, the regulations
of appropriate authorities, and certain published agency policies and
regulations. Subsection (2) enumerates the rights that, management,
officials of an agency must retain, and in effect prohibits negotiating
on proposals which would negate management's reserved authority as
to the rights involved: to determine the mission, budget, organiza-
tion, and internal security practices of the agency; to direct empolyees
of the agency; to hire, promote, transfer, assign, and retain employees
in positions within the agency; to suspend, demote, dicharge, or take
other disciplinary action against employees; to relieve employees from
duties because of lack of work or for other legitimate reasons; to
maintain the efficiency of Government operations entrusted to the
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agency; to determine the methods (how), means (with what.), and
personnel (by whom) by which agency operations will be conducted;
and to take whatever actions may be necessary to carry out the
agency's mission in emergencies. section 7218(a) (1) and (2) cor-
responds to section 12(a) and (b) of Executive Order 11491 except
that matters relating to an agency's mission, budget, organization,
and internal security practices are prohibited from bargaining under
subsection (2) ; and, further, it is specified in subsection (2) that
nothing in that subsection shall preclude parties from negotiating
procedures which management will observe in exercising its authority
to decide or act or from negotiating arrangements for employees
adversely affected provided that such negotiations do not result in
certain consequences and are consonant with law and regulations as
provided in section 7215(c). These principles with respect to the obli-
gation to negotiate "procedures" and "impact," while not expressly
stated in Executive Order 11491, are established in case law thereunder.
Subsection 7218(c) continues the requirement contained in Execu-
tive Order 11491 that nothing in the agreement shall require member-
ship in a labor organization or require employees to pay money to a
labor organization except pursuant to a voluntary, written authoriza-
tion -for the payment of dues through payroll deductions.
Subsection 7218(d) provides that the requirements of section 7218
must be expressly stated in all agreements between an agency and an
organization.
Section 7219. Approval of agreements
This section provides that a negotiated agreement is subject to the
approval of the head of the agency involved or other designated-offi-
cial, and provides a time limit (45. days from the date the agreement
is signed by the negotiating parties) for the completion of such agency
action. The purpose of the provision is to ensure that, agreements con-
form to applicable laws (including this subchapter), existing pub-
lished agency policies and regulations (unless an agency has granted
an exception to them), and regulations of other appropriate authori-
ties (such as the Office of Personnel Management). A substantially
identical provision is contained in Executive Order 11491. Experi-
ence under that Executive Order in. numerous negotiability disputes
established that the prision was warranted to accomplish the pur-
pose described, and that the time limit imposed was a reasonable one
to expedite the review process without sacrificing the quality of such
review.
Section 7221. Grievance procedures . -
Subsection (a) provides that an agreement must contain a procedure
for the 'consideration of grievances. The coverage and scope of the
procedure is left to negotiation between the parties so long as it does
not conflict with statute and so long as it does not cover any of the
matters specifically excluded from coverage by section 7221(d). Thus,
if the parties choose to do so, they may negotiate into coverage under
their grievance procedure many of the matters that are covered by
statutory appeal procedures, such as appeal from the withholding
of within-grade salary increases and appeal from reduction-in-force
actions. With the. exception of adverse actions and discrimination
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complaints, where a grievance falls within the coverage of the nego-
tiated grievance procedure, both union and nonunion members of the
bargaining unit must use the negotiated procedure to resolve the
grievance. Where the negotiated procedure covers adverse actions or
discrimination complaints, under section 7221(e) and 7221 (f) the
employee will have an option to use the negotiated grievance proce-
dure or the statutory appeal procedure, but not both.
Subsection (b) provides for the adjustment of grievances between
an employee or group of employees and the agency without the inter-
vention of the exclusive. representative. However, in such cases the
adjustment cannot be inconsistent with any of the terms of the argu-
ment and the exclusive representative must have been given an oppor-
tunity to be present at the adjustment.
Subsection (c) provides that a negotiated grievance procedure must
provide for arbitration as the final step of the procedure. This con-
trasts with the provisions of Executive Order 11491 under which the
determination as to whether to provide for arbitration was left to
negotiation between the parties. However, arbitration can only be
invoked by the agency or the exclusive, representative. Thus an ag-
grieved employee does not have a right to arbitration. This maintains
the right of an exclusive representative to refuse to take to arbitra-
tion any grievance which it, in good faith, believes should not be pro-
cessed through to arbitration so long as it meets its representational
responsibilities under this subchapter. This section further requires
the parties to provide in their grievance procedure that, except as
provided in section 7221 (g), an arbitrator will be empowered to resolve
arbitrability questions.
Subsection (d) provides that a negotiated grievance procedure may
cover any matter over which an agency has authority so long as it does
not otherwise conflict with the provisions of this subchapter, and so
long as it doesn't include any matters involving examination, certifi-
cation and appointment, suitability, classification,, political activities,
retirement, life and health insurance, national security or the Fair
Labor Standards Act.
Subsection (e) provides employees with an option, in appealing
matters covered under 5 U.S.C. section 4303 (demotion or removal for
unacceptable performance) or 5 U.S.C. section 7512 (removal, suspen-
sion for more than 30 days, reduction in grade, reduction in pay of an
amount exceeding one step of an employee's grade or 3 percent of the
employee's basic pay, furlough for 30 days or less), of using the sta-
tutory appeal procedure under 5 U.S.C. section 7701 or the negotiated
grievance procedure if such matters have been negotiated into coverage
tinder the grievance procedure. It also provides that matters similar to
those listed above which may arise under other personnel systems
applicable to employees covered by this subchapter, such as those pro-
vided in title 38, United States Code, may, in the discretion of the ag-
grieved employee, be raised under either the negotiated grievance pro-
cedure or under any appellate procedures which would otherwise be
available to the employee if the matter weren't covered by the grievance
procedure.
Subsection (f) provides employees with an option on discrimina-
tion matters listed in 5 U.S.C. section 2302(b) (1) to use either a sta-
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tutory procedure or the negotiated grievance procedure to resolve the
matter. Selection by the employee of the negotiated procedure would
not prejudice an employee's right to request the Merit Systems Pro-
tection Board to review a final decision in the matter as provided for in
5 U.S.C. section 7701.
Subsection (g) provides that questions as to whether a grievance is
on a matter excepted front coverage under the grievance procedure by
section 7221(d) shall be referred for resolution to the agency respon-
sible for final decisions in those matters.
Subsection (h) provides that if an employee exercises the option to
pursue a matter covered under 5 U.S.C. sections 4303 and 7512 through
the negotiated grievance procedure an arbitrator must apply the same
standards in deciding the case as would be applied by an administrative
law judge or an appeals officer if the case had been appealed through
the appellate procedures of 5 U.S.C. section 7701.
Subsection (i) provides that the parties must negotiate the alloca-
tion of. the costs of arbitration. It also prohibits an arbitrator from
awarding attorney or representative fees, except in matters where an
employee is the prevailing party and the arbitrator's decision is based
on a finding of discrimination, attorneys fees may be awarded and shall
be governed by the standards applicable under the Civil Rights Act of
1964.
Subsection (j) provides that challenges to an arbitrator's award
may be sustained by the Authority on grounds that the award violates
applicable. laws, appropriate regulations, or other grounds similar to
those applied by Federal Courts in private sector labor-management
relations. Challenges are not permitted to the Authority on matters
covered by subsection (e). Decisions of the Authority are final, except
for the right of an aggrieved employee under subsection (f) .
Subsection (k) provides for judicial review of an arbitrator's award
in matters covered under 5 U.S.C. sections 4303 and 7512 in the same
manner and under the same conditions that apply to matters decided
by the Merit Systems Protection Board'. In applying the provisions of
5 U.S.C. section 7702 (Judicial review of decisions of the Merit Sys-
tems Protection Board) the word "arbitrator" should be read in place
of the words "Merit Systems Protection Board". It further provides
for judicial review of an arbitrator's award in matters similar to those
covered under 5 U.S.C. sections 4303 and 7512 which arise under other
personnel systems in the same manner and on the same basis as would
be available to an employee who had not used the negotiated grievance
procedure to appeal the matter.
The provision for judicial review is. intended to assure conformity
between the decisions of arbitrators with those of the Merit Systems
Protection Board. Under the terms of this subsection, an arbitrator
must establish a record that will meet the judicial tests provided for in
section 7702 of this title.
Section 72222. Federal Service Impasses Panel; negotiation impasses
Subsection (a) (1) establishes within the Authority the Federal
Services Impasses Panel. The Panel is composed of the Chairman and
an even number of members, appointed by the President.. No Federal
employee shall be appointed to serve as a member of the Panel. Sub-
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section (a) (2) provides for staggered appointments of Panel mem-
bers, and that the Chairman shall serve for a five-year term. Any mem-
ber of the Panel may be removed by the President. Subsection (a) (3)
provides that the Panel may appoint an executive secretary. It also
provides for the pay rates of members of the Panel.
Subsection (b) provides that the Federal Mediation and Concilia-
tion Service upon request shall provide service and assistance to agen-
cies and labor unions in the resolution of negotiation impasses.
Subsection (c) provides if voluntary arrangements fail either the
labor union or the agency may request the Panel to consider the matter.
Subsection (d) provides that the Panel shall promptly investigate
any impasse, and recommend procedures for resolving the matter. If
the parties do not arrive at a settlement through means of one of the
procedures recommended, the Panel may hold hearings and then take
whatever action is necessary that is not inconsistent with the provi-
sions of this chapter to resolve the impasse-Notice of the Panel's final
action shall be promptly served and shall be binding for the term of
the agreement unless the parties mutually agree otherwise.
Section 7231. Allotments to repre8entative8
This section provides for agency payroll deduction of labor organi-
zation dues pursuant to written employee assignment and for the right
to terminate such assignment at intervals of not more than 6 months. A
similar provision is contained in Executive Order 11491 except that the
Executive Order's requirement that such a payroll deduction be sub-
ect to the regulations of the Civil Service Commission has been de-
leted. Subsection (b) requires that an allotment for the deduction of
dues terminates when the dues withholding agreement between the
agency and the exclusive representative is terminated or ceases to be
applicable to the employee. The allotment would also be terminated if
the employee has been suspended or expelled from the labor organiza-
tion which is the exclusive representative.
Section 7232. Use of official time.
This section provides for limitations on the use of official time by
employees for labor organization activities. The same limitations are
contained in Executive Order 11491. The limitations contained in the
first part of this provision concern the use of official time for internal
labor organization business and are directed toward restricting to
nonduty hours activities which are of primary concern and benefit
only to the labor organization. The second part of the provision
prohibits employees who represent a labor organization from being
on official time when negotiating an agreement, except to the extent
that the' negotiating parties agree otherwise within certain specified
limits. Under the second part, the negotiating parties may agree to
authorize official time for a reasonable number of labor organization
negotiators, normally not to exceed the number of management rep-
resentatives, for up to 40 hours or one-half the time spent in nego-
tiations relating to the negotiation or renewal of a 'basic collective
bargaining agreement, as opposed to negotiations which arise out
of circumstances during the term of the basic agreement (midcon-
tract negotiations). But nothing in the provision prohibits an agency
and labor organization from negotiating provisions which provide
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for official time for labor organization representatives to engage in
contract administration and other representational activities (in-
cluding negotiations which arise out of circumstances during the
term of the basic agreement) which are of mutual interest to both
the agency and the labor organization and which relate to the labor-
management relationship and not to "internal" labor organization
business. Examples of such representational and contract adminis-
tration activities include the investigation and attempted informal
resolution of employee grievances, participation in formal grievance
resolution procedures, attending or preparing for meetings of com-
mittees on which both the labor organization and management are
represented and discussing problems in agreement administration
with management officials. The types of representational activities
described, when the agency determines that such activities are related
to the performance of labor-management functions contributing to
the efficient administration of. the agency, are consistent with the
stated purposes of this chapter and agreement provisions pertaining
to the use of official time for such contract administration purposes
are of wide application throughout the Federal sector.
Section 7233. Remedial action
This section provides that remedial action maybe directed by ap-
propriate authority, including an arbitartor, in order to effectuate
the purposes and policies expressed in this subchapter, so long as
such remedial action is consistent with the statute, including the
backpay provisions of section 5596 of title 5, United States Code
(Back Pay Act of 1966).
Section 7234. Subpenaa
This section provides for. the issuance of subpenas by any Au-
thority member, the General Counsel, the Panel, or any employee
designated by the. Authority requiring the attendance and testimony
of witnesses and the, production of evidence. It provides that no
subpena shall issue requiring disclosure of intra-management guid-
ance, advice or training within an agency or between. an agency and
the Office of Personnel Management. It also provides for the admin-
istration of oaths, the examination of witnesses and the receipt of
evidence. In the case of failure to obey a subpena, a United States
district court is authorized by this section to issue an order requiring
the appearance of witnesses or the production of evidence. Failure
to comply with the court's order could be punished as contempt of
court. This section also provides that witnesses be paid the same
fees and mileage allowances which are paid subpenaed witnesses in
the courts of the United States.
Section 7235. Regulations
This section provides for the issuance of regulations by the Auth-
ority, the General Counsel, the Panel, and the Federal Mediation
and Conciliation Service, to carry out their respective functions.
The requirements of the Administrative Procedure Act shall be ap-
plicable to the adoption, amendment or repeal of such regulations.
This provision is consistent with the practice which obtained in the
issuance of regulations under Executive Order 11491.
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Subsection 701(b) of the bill specifies that certain laws, agree-
ments, recognitions, policies, regulations, procedures and decisions
would not be precluded by the amendments adopted earlier in sec-
tion 701.
Paragraph (1) sanctions the maintenance of exclusive recognitions,
certifications, or lawful bargaining agreements entered into before the
effective date of this subchapter, and the maintenance of recognition
for units of management officials or supervisors by labor organizations
which traditionally represent such personnel in private industry and
which hold recognition in an agency on the effective date of this sub-
chapter. Similar "grandfather" provisions are contained in Executive
Order 11491.
Paragraph (2) provides for the continuation of policies, regula-
tions, procedures, and decisions established or issued under Executive
Order 11491 or any related Executive order, until revised or revoked
by law, or until superseded by action of the Authority. Under this
provision, cases which arose under Executive Order 11491 shall con-
tinue to be processed after the effective date of this subchapter in the
same manner as before such effective date, except to the extent other-
wise provided by law or by appropriate decision or regulation of the
Authority.
Subsection 701(c) of the bill provides that the terms of office of
members of the Authority, and the General Counsel, which terms are
fixed under Reorganization Plan No. 2 of 1978, shall continue in effect
until those terms would expire under the reorganization plan, and that,
upon the expiration of those terms, appointments to office will be made
for the respective 5-year terms provided in section 7203 of title 5. It
further provides that the terms of office of Impasse Panel members,
which terms are not fixed under the reorganization plan, shall con-
tinue in effect until members of the Panel are appointed for the re-
spective fixed terms provided in section 7222 of title 5.
Subsection 701(d) authorizes the appropriation of such funds as
are necessary to carry out the functions of the Authority, the General
Counsel, and the Panel, and the functions of the Assistant Secretary
under this section.
The next subsection provides for an amendment of the analysis to
add to this chapter.
Subsections 701 (f), (g), and (h) amend sections 5314-5316 of title
5, United States Code, to add the Chairmen, the Members, and the
General Counsel of the Federal Labor Relations Authority to posi-
tions at levels III, IV, and V (respectively) of the Executive- Sched-
ule.
Section 702. Remedial Authority
This section of the Act amends the Back Pay Act of 1966 to reflect
the broader interpretation of the statute that has been given the Back
Pay Act in recent years by the Comptroller General and the Civil
Service Commission through decision and regulations. It also reflects
the 1976 decision of the Supreme Court in United States v. Testan by
explicitly exempting reclassification actions from its provisions.
This provision would strike out subsections (b) and (c) of section
5596 of title 5, United States Code, and add new subsections (b) and
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(c). The, new subsection (b) provides for coverage under the Back
Pay Act for any employee who is found by an appropriate authority
to have suffered a withdrawal, reduction, denial, or denial of an in-
crease in, all or part of the employee's pay, allowances, differentials
or any other monetary or employment benefits which would not have
occurred but for an unjustified or. unwarranted action taken by an
agency.
Subsection (b) (1) provides that when any of the above-described
circumstances are found, the employee is entitled to be made whole for
any losses found to have been suffered by the employee, less any in-
terim earnings the employee may have earned and would not have
earned if the unjustified or unwarranted action had not been taken.
It specifically provides that. a make-whole remedy may include rein-
statement to the same position that the employee was in before the
unjustified or unwarranted action was taken or for restoration to a
substantially similar position. It also provides for directing a promo-
tion to a higher level position when such an order would effectuate
the make-whole pur oses of the Act.
Subsection (b) (2) maintains the current provisions of the Back Pay
Act regarding annual leave restoration that were added to the Act by
Pub. L. 94-172 section 1(a) Dec. 23, 1975, 89 Stat. 1025. It provides
that for all purposes an employee is deemed to have performed service
for the agency during the period of the unjustified or unwarranted
action.
Subsection (c) (1) defines an "unjustified or unwarranted action" to
include acts of commission as well as omission with respect to non-
discretionary provision of law, Executive order, regulation or collec-
tive bargaining agreement.
Subsection 5596(c) (2) defines administrative determination. The
listed agencies and persons are not meant to be all-inclusive.
Subsection (c) (3) lists certain agencies and persons who,..for pur-
poses of applying the provisions of the Act, are deemed to be an "ap-
propriate authority." The list is not meant to be all-inclusive.
Subsection (d) provides that the provisions of the section shall not
apply to reclassification actions, thus specifically recognizing the Su-
preme Court decision in United States V. Testan. It also.provides that
in formulating a remedy under the Act an otherwise proper promotion
action by a selecting official from a group of properly ranked and
certified candidates cannot be set aside.
Subsection (e) provides that the Office of Personnel Management
shall prescribe regulations to carry out the section. It specifically
provides that the regulations do not apply to the Tennessee Valley
Authority.
Subsection (a) of section 801 provides that all Executive orders,
rules, and regulations shall continue in effect except as the provisions
of this Act may govern. Such Executive Orders, rules, and regulations,
are to continue in effect, according to their terms, until modified, term-
inated, suspended or repealed by the President, the Office of Person-
nel Management, the Merit System Protection Board, the Equal Em-
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ployment Opportunity Commission, or the Federal Labor Relations
Authority as to matters within their respective jurisdictions.
Subsection (b) provides that no provision of the Act shall affect
any administrative proceedings pending at the time the provision
takes effect. Orders. are to beissued in such proceedings and, appeals
taken from those proceedings as if this Act has not been enacted.
Subsection (c) provides for the continuation of any suit by or
against the heads of the Office of Personnel Management and Merit
Systems Protection Board or officers or employers of those agencies,
as in effect immediately before the effective date of the Act. Such
suits, actions, or other proceedings are to be determined as if the Act
had not been enacted.
SECTION 802. AUTHORIZATION OF APPROPRIATIONS
This section authorizes to be appropriated out of any moneys in the
Treasury not otherwise appropriated, such sums as may be necessary
to carry out the provisions of this Act.
It is expected that most of the funds necessary to carry out the provi-
sions of this Act will be derived from appropriations under current
law. The moneys needed for the Office of Personnel Management, Merit
Systems Protection Board, and Office of Special Counsel are largely to
be derived from current Civil Service Commission authorizations. The
original estimates supplied by the Administration as to the allocation
of resources among the new agencies and units, however, needs to be
revised. The Committee has substantially increased the authority and
responsibilities of the Merit Systems Protection Board and the Special
Counsel. The resources allocated to these bodies should therefore be
substantially greater than original Administration estimates.
SECTION 803. POWERS OF PRESIDENT UNAFFECTED EXCEPT
BY EXPRESS PROVISIONS
This section makes clear that except as expressly provided in this
Act, nothing in it shall be construed to limit, curtail, abolish, or termi-
nate any function of, or authority available to, the President which
the President had immediately before the effective date of this Act.
Nor is it to be construed to limit, curtail, or terminate the President's
authority to delegate, redelegate, or terminate any delegation of func-
tions which he had immediately before the effective date of this Act.
Subsection (a) of this section provides that any provision in either
Reorganization Plan Numbers 1 or 2 of 1978 inconsistent with any
provision of this Act is repealed.
Subsection (b) authorizes the President or his designee to submit to
the Senate Committee on Governmental Affairs and the House Com-
mittee on Post Office and Civil Service a draft of any technical and
conforming amendments to title 5 of the United -States Code which
have not been made by this Act and which are necessary to reflect the
amendments to the substantive provisions of law made by this Act and
Reorganization Plan Numbered 2 of 1978. Such technical and conform-
ing amendments must be submitted as soon as practicable but not later
than 30 days after the date of enactment of this Act.
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This section provides that the provisions of the Act shall take effect
90 days after the date of enactment. of this Act, except as otherwise
expressly provided in this Act.
VII. EVALUATION OF REGULATORY IMPACT
Paragraph 5(a) of Senate. Rule XXXIX requires each report ac-
companying a bill to evaluate "the regulatory impact which would be
incurred in carrying out the bill."
S. 2640 is not, a regulatory bill. It does not directly affect private
individuals or businesses. The bill will help improve personnel activi-
ties within Federal agencies, which, in turn should help agencies
regulate more effectively. The economic impact of regulation on such
individuals and businesses, likewise, is not changed by anything in
S. 2640. The bill will not increase paperwork for the private sector.
CONGRESSIONAL BU'IHIET OFFICE,
Washington, D.C., July 11, 1978.
Hon. ABRAHAM RIBICOFF,
Chairman, Committee on Governmental Affairs,
U.S. Senate, Washington, D.C.
DEAR DIR. CHAIRMAN: Pursuant to section 403 of the Congressional
Budget Act, of 1974, the Congressional Budget Office has prepared the
attached cost estimate for S. 2640, the Civil Service Reform Act. of
1978.
Should the committee so desire, we would be pleased to provide
further details on the attached cost estimate.
Sincerely,
JAMES BLUM
(For Alice M. Rivlin, Director).
2. Bill title: Civil Service Reform Act of 1978.
3. Bill status: As reported by the Senate Committee on Government
Affairs on July 10, 1978.
4. Bill purpose : S. 2640 reorganizes the federal personnel system.
Title I establishes the basic merit principles of the new personnel sys-
tem and outlines the authority of the President and agency heads for
ensuring that personnel management in the Executive Branch is car-
ried out according to those principles.
Title II establishes the responsibility of the Merit. Systems Protec-
tion Board (MSPB), the Office of Personnel Management (OPM) and.
the Special Counsel. This title also revises adverse action procedures;
provides a new system of appraising employee performance; estab-
lishes new procedures for removal or demotion based on unacceptable
performance; and provides for greater delegation of personnel author-
ity to federal agencies.
Title III authorizes agencies to accept the services of unpaid student,
volunteers and to train employees threatened with separation .due. to
a reduction in force. In addition, early retirement, authority is extended
to reorganization situations.
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Title IV outlines the numbers, distribution, accountability and com-
pensation for members of the newly created Senior Executive Service
(SES). A limited number of performance and incentive awards would
replace longevity pay increases.
Title V provides authority to establish a merit pay system for super-
visors and managers in grades 13 through 15 of the general schedule.
Within-grade salary increases will be replaced by merit increases
which will be awarded only in recognition of superior performance.
Title VI authorizes OPM to conduct public management research
and to carry out demonstration projects to test and evaluate new ap-
proaches to personnel management.
Title VII outlines the rights and obligations of federal employees
and establishes procedures relating to labor-management relations.
Title VIII offers miscellaneous amendments and authorizes the ap-
propria~tion of such sums as may be necessary to carry out the provi-
sions of the bill.
5. COST ESTIMATE
[8y fiscal years, in millions of dollars]
Title 11______________________________
4.6
5.1
5.4
5.8
6.1
Title IV______________________________ ?
3.6
28.5
31.9
35.4
37.7
Title VI
3.1 3.1
3.4
3.8
3.9
3.8
Title VII
.3
.5
.6
.6
.9
Other administrative costs--------------
2.0
.4
.4
.5
.5
This estimate does not include the potential costs of the early re-
tirement provisions of Section 304, and the unlimited accrual of leave
permitted by Section 410. These costs, which could be substantial, can-
not be estimated at the present time. In addition, the net cost of the
retraining program authorized in Section 302 (including potential
savings in severance pay) could not be estimated in the time available.
6. Basis of estimate : For the purpose of this cost estimate, it is as-
sumed that this bill will be enacted on or after October 1, 1978. All
costs have been adjusted for inflation in future years based on CBO
economic assumptions. All sections of the bill with a significant cost
impact are discussed below.
This section defines the functions of the OPM, and establishes the
positions of director, deputy director, and associate directors.
Estimated costs-OPM :
Fiscal year: Millions
1979
--------------------------------------------------------
$0.5
1980
--------------------------------------------------------
.7
1981
--------------------------------------------------------
.8
1982
--------------------------------------------------------
.8
1983
--------------------------------------------------------
.9
It has been assumed that additional costs will be incurred only for
the director, deputy director, and five associate directors, at the au-
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thorized salary levels, along with clerical support for each. All other
employees of the OPM are assumed to come from the Civil Service
Commission (CSC), and the cost of the functions they perform at the
OPM would be the same as if performed by the CSC.
SECTION 202. MERIT SYSTEMS PROTECTION BOARD AND SPECIAL COUNSEL
The MSPB, to be composed of three members, a special counsel, and
such other employees as deemed necessary, is to be responsible for the
investigation, hearing or adjudication of adverse or prohibited per-
sonnel actions, for conducting studies relating to the civil service
and other merit systems, and for establishing rules and regulations
pertaining to its activities.
Estimated costs-MSPB :
ear : Miiciona
Fi
l
sca
y
1979 -------------------------------------------------------- $0.4
1980 --------------------------------------------------------- .5
1981 -------------------------------------------------------- .5
1982 -------------------------------------------------------- .6
1983 -------------------------------------------------------- .6
The estimated costs for this section are comprised of the difference
between the specifically authorized salaries for the members and of-
ficers of the CSC and the MSPB. In addition, based on estimates
supplied by the CSC, costs for 25 additional persons at an average
fiscal year 1978 salary of $17,500 have been added for investigation of
complaints regarding prohibited personnel actions, particularly
"whistle blower" complaints. All other personnel are assumed to come
from the CSC.
Each agency is responsible for developing performance policies
and regulations for periodic appraisal of job performance of employ-
ees. Based on CSC data, it is estimated that costs will be $3.4 million
in aggregate in 1979. It is projected that the administration of the
merit pay plan will continue to be an integral part of personnel op-
erations, with costs increasing to $4.2 million in fiscal year 1983.
Estimated costs-performance appraisal :
Fiscal year : Miiiiona
1979 -------------------------------------------------------- $3.4
1980 -------------------------------------------------------- 3.6
1981 -------------------------------------------------------- 3.8
1982 -------------------------------------------------------- 4.0
1983 -------------------------------------------------------- 4.2
The MSPB may require an agency to pay attorney fees incurred
by an employee in cases where the Board determines that the agency
acted in bad faith, and at all times when the employee is the prevailing
party and the decision is based on finding of discrimination. Based on
an estimated annual caseload of 4,900, it is projected that there will be
approximately 100 cases each year in which the employee prevails and
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it is also determined that the agency acted in bad faith, and that each
year approximately 300 cases of discrimination will result in the em-
ployee prevailing. Assuming a cost of $750 per case (at 1979 cost
levels), the estimated costs for payment of attorney fees are as follows :
Estimated costs-attorney fees :
Fiscal year : Millions
1979
--------------------------------------------------------
$0.3
1980
--------------------------------------------------------
.3
1981
--------------------------------------------------------
.3
1982
--------------------------------------------------------
.4
'1983
--------------------------------------------------------
.4
While this section makes other procedural or definitional changes
affecting the appeals process, these are not expected to have a signifi-
cant cost impact.
SECTION 301. VOLUNTEER SERVICES
This section provides a general authorization to agencies to accept
voluntary services performed by students. The volunteers are not to be
considered federal employees except for purposes relating to injury
compensation and tort claims. Although.the Government could incur
some costs as a result of claims by volunteers, no additional costs of
this kind have been included in this estimate.
Section 301 also changes the regulations governing probation pe-
riods in the competitive service and removes the restriction on family
members employed in the competitive service. These provisions are
not expected to result in any additional costs.
Under this section, federal employees who face separation from an
agency because of a reduction in force would be eligible to be trained
for jobs in other agencies. It is likely that training costs would in-
crease as a result of this provision; however, many of these employ-
ees would have been eligible for severance pay or unemployment com-
pensation. It is not possible at this time to estimate the net cost or sav-
ings that may result from this provision.
The section allows early retirement for employees whose agencies
are undergoing a major reorganization, reduction-in-force, or trans-
fer of function. The total number of eligible employees, as well as the
number of those who would elect early retirement, cannot be estimated
at this time. However, the potential cost of this provision could be
significant.
SECTION 403. EXAMINATION, CERTIFICATION, AND APPOINTMENT
This section establishes the procedures and requirements for ap-
pointment of personnel in the SES. It provides for skill development
programs and authorizes up to 11 months leave with pay, plus travel
and per diem expenses for training of eligible persons.
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Estimated cost-personnel .development :
Fiscal year : Hilliona
1979 -------------------------------------------------------- $3.5
1980 -------------------------------------------------------- 3.7
1981 -------------------------------------------------------- 3.9
1982 -------------------------------------------------------- 4.1
1983 -------------------------------------------------------- 4.3
Based on information from the CSC, it is assumed that approxi-
mately 50-60 persons would take the 11 month sabbatical at an average
cost of $50,000 per employee. An additional $0.5 million is assumed to
be spent by the OPM for setting up training programs and establish-
ing the requirements and procedures for SES personnel.
Agencies are required to develop senior executive service perform-
ance appraisal systems. Costs for developing criteria and ratings for
executive performance appraisal have been included in the costs shown
for Section 203.
CSC estimates that approximately 9,200 federal employees will be
eligible for the Senior Executive Service (SES) in fiscal year 1979,
,and that the number of eligible employees, as well as the amount of the
stipend, will remain stable throughout the projection period. It is as-
sumed that the maximum of 15 percent of the SES will be designated
as meritorious executives and no more than 5 percent in any one year.
This designation provides an annual stipend of $2,500 for up to five
years. It is also assumed that the specified maximum of 1 percent of
the SES members will be appointed as distinguished executives, which
offers an annual stipend of $5,000 for up to five years. Estimated costs
for these awards are shown below:
Estimated cost-incentive awards:
Fiscal year : Milliono
1979
-------------------------------------------- -----------
----
1980
--------------------------------------------------------
$1.6
1981
--------------------------------------------------------
2.8
1982
--------------------------------------------------------
4.0
1983
--------------------------------------------------------
4.0
Each member of the SES will receive a base rate of pay not less than
the rate for the sixth step of grade GS-15 of the general schedule (now
$42,201) and not higher than the rate for level IV of the executive
schedule (now $50,000). In addition, up to 50 percent of the executives
in an agency may receive performance awards not to exceed 20 percent
of the executive's rate of base pay. Agencies are given considerable
flexibility as to how the merit pay awards are to -be spread among the
executives. It is estimated that when fully operational, approximately
4,000 mertit pay awards at an average size of $6,000, will be distributed
in 1980 with the average size increasing with inflation thereafter. The
costs of these merit awards would increase if the size of the ?SES or
the average award size were to increase.
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The increased cost of merit pay awards will be partially offset by the
elimination of the present system of step increases. Assuming that the
present $47,500 pay ceiling is increased with annual comparability ad-
justments after fiscal year 1979, the estimated savings in normal step
increases will be approximately $1 million per year. (If the ceiling
were totally removed, this offset would be substantially larger).
As a result of these performance awards, the unfunded liability of
the Civil Service Retirement and Disability Fund will increase. The
impact of this provision has been estimated based on CSC projections
and the following assumptions: an average of 4,000 SES members
receiving performance awards each year; an average salary at retire-
nlent of $50,000; the typical executive receiving five performance
awards during his career; annuities calculated at 21/2 percent of the
average employee's three highest years' salaries; and the present value
of the added benefits at the time of retirement equal to 12 times the
added benefit. The estimated increase in the unfunded liability will be
$60 million with annual installments derived from annuity tables equal
to $4 million annually. The following table shows estimated' outlays,
which will continue to increase beyond the projection period.
Estimated net costs:
Fiscal year 1979: Millions
Performance awards------------------------------------------ -----
Retirement costs--------------------------------------------- -----
Fiscal year 1980:
Performance awards------------------------------------------ $23.0
Retirement costs--------------------------------------------- -----
Fiscal year 1981:
Performance awards------------------------------------------ 24.7
Retirement costs--------------------------------------------- 0.3
Fiscal year 1982:
Performance awards ----------------------- -------------------- 26.5
Retirement costs--------------------------------------------- 0.6
Fiscal year 1983:
Performance awards-..---------------------------------------- 28.3
Retirement costs--------------------------------------------- 1.0
SECTION 409. TRAVEL, TRANSPORTATION AND SUBSISTENCE
This section authorizes the payment of travel expenses for potential
SES candidates who interview with the federal government.
Estimated cost-travel
Fiscal year : Millions
1979 -------------------------------------------------------- $0.1
1980 -------------------------------------------------------- .2
1981 -------------------------------------------------------- .2
1982 -------------------------------------------------------- .2
1983 -------------------------------------------------------- .2
Based on information obtained from the CSC, it is assumed that
travel expenses will be approximately $135,000 a year (at 1979 cost
levels).
This section would remove the current limit of six weeks annual
leave carry over for USES personnel, allowing them to accumulate as
much leave as they wish. Even though this could result in significant in-
creases in costs when employees leave the Federal Government, it is
not possible to estimate how much additional leave would be accrued.
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This section establishes a merit pay system for federal employees in
grades 13 through 15 of the general schedule. Within-grade salary
increases will be replaced by merit increases, which will be awarded
only in recognition of superior performance. The amount of money
available for merit pay will be determined by the OPM, and set so as
to equal those estimated amounts which are not being paid through
regular step increases. It is assumed, based on CSC data, that the net
effect of these changes is neither an increase nor decrease in total per-
sonnel compensation, but rather a redistribution of these resources.
Section 601 establishes a program to encourage research and demon-
stration projects in the area of personnel and public management. It is
estimated that approximately four to eight projects, costing approxi-
mately $100,000 to $300,000 each, will be required to develop these
new theories and approaches to personnel management problems.
Estimated cost-research :
Fiscal year: Millions
1979 -------------------------------------------------------- $0.8
1980 ------------------------------------------------------- 1.0
1981 -------------------------------------------------------- 1.2
1982 -------------------------------------------------------- 1.2
1983 -------------------------------------------------------- 1.0
This section authorizes the federal government to make up any dif-
ferences in salary when a federal employee is assigned to a state or local
government, or a state or local employee is assigned to the federal gov-
ernment.
Estimated cost-mobility program :
Fiscal year: Millions
1979 ------------------------------------------------------- $2.3
1980 -------------------------------------------------------- 2.4
1981 -------------------------------------------------------- 2.6
1982 -------------------------------------------------------- 2.7
1983 -------------------------------------------------------- 2.9
There are currently approximately 1,100 people in the Mobility Pro-
gram, divided fairly evenly between federal and state and local em-
ployees. The federal employees would receive approximately $3,000
from the federal government per year in salary as a result of this sec-
tion, since state and local salaries are generally lower than federal.
Although travel costs are already paid, this pay comparability pro-
vision is expected to stimulate the transfer of employees, thereby in-
creasing travel costs, estimated to be approximately $1,500 per person.
Under this section, the Federal Labor Relations Authority and an
Office of the General Counsel would be established in order to formu-
late and implement management policies in the field of management-
labor relations. It is estimated that four executives at a GS-18 level,
plus support staff, as well as four technical consultants will be re-
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quired. This is in addition to existing staff transferred from other
agencies to this function. The estimated costs are as follows :
Estimated cost-labor-management relations :
Fiscal year : Millions
1979
--------------------------------------------------------
$0.3.
.1980
--------------------------------------------------------
.5
1981
--------------------------------------------------------
.6
1982
--------------------------------------------------------
.6
1983
--------------------------------------------------------
.7
Estimated costs-general:
Fiscal year : Minions
1979
--------------------------------------------------------
$2.0
1980
-------------------------------------------------------
0.4
1981
--------------------------------------------------------
.4
1982
--------------------------------------------------------
.5
1983
------------ ----------------- - ------------------------
.5
There are a number of sections of this legislation which authorize or
require the development of rules and regulations and require the sub-
mission of various new reports, but for which no specific costs have
been attributed. It has been assumed that these new requirements will
cost an additional $1 million in the first year. Regulation development
costs are expected to decrease over the projection period, and reporting
costs to remain constant. The actual physical. moving costs resulting
from the reorganization have been estimated to be $1 million in fiscal
year 1979.
7. Estimate comparison : None.
8. Previous CBO estimate : None.
9. Estimate prepared by: Mary Maginniss and Kathy Weiss.
10. Estimate approved by :
C. G. Nucxom
For James L. Blum,
Assistant Director for Budget Analysis.
IX. RECORD VOTE IN COMMITTEE
June 14, 1978
In compliance with section 133 of the Legislative Reorganization
Act of 1946, as amended, rollcall votes taken during Committee con-
sideration of this legislation are as follows : Vote on Eagleton/Javits
Amendment on Veterans Preference : 7 yeas-9 nays.
YEAS NAYS
Eagleton Muskie
Sasser Chiles
Humphrey Nunn
Percy Glenn
Javits Stevens
Danforth Mathias
Ribicoff (Proxy)
Jackson
Roth
Heinz
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Vote on Study on Veterans Preference : 13 yeas-1 nay :
Muskie
Chiles
Nunn
Glenn
Sasser
YEAS NAYS_
Eagleton
Humphrey
Percy
Javits
Stevens
Mathias
Danforth
Heinz
Ribicoff
June 29, 1978
Vote on Javits/Ribicoff Amendment on appellate procedures in
mixed discrimination cases : 7 yeas-4 nays :
YEAS NAYS
Percy Glenn
Javits Sasser
Danforth Mathias
Ribicoff Heinz
(Proxy)
Jackson
Nunn
Humphrey
FINAL PASSAGE : Ordered reported:' 8 yeas-2 nays :
YEAS NAYS
Eagleton. Stevens
Chiles Mathias
Glenn
Sasser
Percy
Javits
Danforth
Ribicoff
(Proxy)
Jackson
Nunn
Humphrey
1 Committee rules provide that on "Final Passage" proxies may be allowed solely for the
purpose of recording a member's position on the pending question.
 Approved For Release 2007/05/14: CIA-RDP85-00003R000300090001-1
X. ADDITIONAL VIEWS OF MR. PERCY
The Senate Governmental Affairs Committee has acted with both
prudence and expedition in favorably reporting S. 2640, the Civil
Service Reform Act, to the full Senate. I consider this legislation a
significant step forward in making government work better for all
Americans who deserve service in return for their tax dollars. I have
sponsored this legislative initiative from the start, and. believe the
Committee has developed a sound and comprehensive bill. Only if we
make the machinery of government more efficient and effective, can we
expect Federal programs to succeed.
The Federal government currently employs 2.8 million civilian
personnel at an annual payroll cost in excess of $46 billion. More than
two million of these employees fall within the Civil Service merit sys-
tem. For the most part, the Federal government has been able to at-
tract a high caliber of competent, productive and hardworking indi-
viduals to staff its agencies and Departments. However, far too many
Federal employees are incompetent, inefficient, and low in productiv-
ity to a degree that would not be tolerated in the private sector. Com-
petent Federal employees who do their jobs well resent the fact that
others who do not are still virtually guaranteed tenure under a system
which makes firing for incompetence a near impossibility, and which
assures that the incompetent enjoy equal pay with the highly qualified.
The Civil Service Reform Act reported by this Committee will go
a long way in correcting these deep-rooted flaws in the Federal
bureaucracy.
However, I disagree with two provisions of the legislation as re-
ported by the Committee that I believe warrant further comment.
VETERANS PREFERENCE
A central element in the Administration's original proposal to im-
prove the Federal Civil Service system concerned modifications of
Federal veterans preference laws as they affect hiring and retention in
Civil Service. Though a number of problems were found in the orig-
inal Administration proposal on this point, Senators Javits and
Eagleton presented the Committee with an amendment which would
accomplish three significant goals: (a) better focus veterans prefer-
ence on those veterans most in need of employment opportunities, that
is, disabled veterans and veterans of the Vietnam Era; '(b) bring us
closer to a pure merit system in hiring of Federal civilian employees;
and (c) better enable qualified women and other groups to compete on
a more equal basis in obtaining Federal civilian lobs. Unfortunately,
the Committee voted 9-7 not to accept the Javits-Eagleton amend-
ment. I believe this was a mistake. The House Committee on Post
Office and Civil Service, on other hand, adopted a similar provision
by a vote of 16-9.
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Veterans comprise some 48 percent of Federal civilian employees.
But less than one in ten is a veteran of the Vietnam Era, despite the
fact that Vietnam Era veterans number 8.5 million today, almost one
third of the total American veteran population. In some large Federal
agencies, the proportion of Vietnam Era veterans is well under 5 per-
cent. If the essential purpose of veterans preference is to give veterans
tangible assistance in making up for lost time and opportunity re-
sulting from military service, the current system defeats this purpose
by allowing the older veteran to use his preference to deny the younger
veteran that opportunity.
Currently, of all veterans now being hired by the Federal Govern-
ment, almost half are pre-Vietnam Era. And, of those Vietnam Era
veterans hired by the Federal Government, more than 12 percent are
retired military personnel, already receiving full pensions and having
served a 20-year military career, rather than the young veterans them-
selves. Fifty of these so-called "double dippers" receive, on average, in
excess of $80,000 per year and another 60 receive more than $60,000
per year from the Federal Government, which is often more than their
supervisors or agency heads earn.
At the same time, unemployment for Vietnam Era veterans is far
greater than that for veterans in the older group.
While I strongly agree with the assertion that veterans, who have
taken great risks and have sacrified productive years of their lives in
defense of their country, are deserving of preference in Federal hiring,
the current structuring of the veterans preference system has worked
against those veterans most in need. Considering the heavy burden
that Vietnam Era veterans in particular have had to suffer, both as a
result of their actual military service as well as a result of public atti-
tudes toward that war, to leave these veterans shortchanged is grossly
unfair.
This same unfairness is present with disabled veterans, who must
compete with nondisabled veterans who, in addition to their five pref-
erence points, have been able to accrue other job advantages because of
their health. Veterans who have been injured during service certainly
deserve special treatment.
Veterans preference was established as a means of helping veterans
whose lives had been displaced by military service to make up for lost
time and sacrifices upon returning to the civilian economy. Preference
was not intended as a mere symbol of military service, but rather a
practical form of help to veterans in need. The attitude that has grown
up over the years that veterans preference is a "lifelong entitlement
right" rubs directly against the need of helping veterans return to
civilian life. It creates a system of vested interests under which the
older vetera;. competes against the younger veteran, almost always to
the detriment of the latter. In an economy of scarce resources, we can-
not. afford not to focus our assistance efforts where they would be most
effective.
The documentation of how veterans preference has affected the op-
portunities for qualified women in competing on an equal basis in ob-
tainine Federal jobs can be summed up in one statistic: of more than
29 million living American veterans, only about 800,000 are women.
What is at stake here is not simply a matter of equal employment op-
 Approved For Release 2007/05/14: CIA-RDP85-00003R000300090001-1
portunity but also the ability of the Federal Government to hire the
best qualified individuals for positions of responsibility.
What veterans and veterans' organizations must take into account is
that the vast majority of American veterans do not share the vested
interests of Federal employees (only 4.9 percent out of 29 million
American veterans are employed by the Federal Government). But, as
taxpayers and consumers of government services, every veteran suf-
fers the brunt of inefficient government and realizes the benefits of
improved government service. Veteran and nonveteran taxpayers alike
must pick up the tab for a Civil Service system which has resulted in
a growing portion of their tax dollars to be squandered by inefficiency
and waste. The modification of veterans preference would thus aid vet-
erans, not only by targeting preference toward the most needy veterans,
but also by improving the condition of all veterans as citizens.
Veterans, however, can make a special claim that they have proven
their patriotism in a manner above and beyond their fellow citizens.
As such, they above all understand the meaning of the common good.
For this reason, veterans in particular should rally to this proposal
for Civil Service reform.
The Javits-Eagleton veterans preference amendment, by limiting
preference usage for non-disabled veterans to a single use during a
period of 15 years from military discharge, in combination with other
changes, is a fair approach to this problem. It would shift the emphasis
of preference to where it belongs, on disabled veterans and Vietnam
Era veterans, while bringing us closer to a Federal Civil Service based
on merit. Hopefully this principle will be established in the course of
the legislative process.
A cornestone of Civil Service reform has been the creation of greater
flexibility among Federal managers to help them better to do their jobs,
while at the same time creating strong policing mechanisms to assure
that the greater flexibility is not abused or misused. A key to this sys-
tem of merit checks and balances is the ability of the Merit Systems
Protection Board to bring disciplinary actions against officials who
violate the merit system by committing "Prohibited personnel prac-
tices." Unfortunately, however, the Committee voted 7-6 to severely
weaken this merit enforcement power by exempting Presidential ap-
pointees, mainly Federal agency heads, from the disciplinary jurisdic-
tion of the Merit Systems Protection Board, including even the ability
of the Board to decide whether the Presidential appointee had, in fact,
committed the merit violation. Again. I believe this was a mistake.
The Presidential appointees covered by this exemption are some 800
individuals appointed by the President and confirmed by the Senate.
They are generally agency heads or high ranking officials in Federal
agencies, such as Assistant Secretaries. As such, they play an enor-
mously influential role in personnel decision-making throughout the
government.
The Administration has argued that only the President should have
the authority to discipline these appointees. Constitutional precedent
exists for this assertion concerning removal of appointees. But as the
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bill has been amended by the Committee, not only would the Merit
Systems Protection Board not have authority to exact penalties against
appointees, it would not even have the authority to determine whether
the appointee had, in fact, committed a "prohibited personnel prac-
tice." Without such a determination by the MSPB, the President, in
the case of a merit violation by one of his appointees, would. be pre-
sented only the unproven allegations of the MSPB Special Counsel. At
no point would the President be presented an independent evaluation
of allegations. Such a system could place an unfair burden on the
President and appointees who would not have opportunities to clear
their names.
A limited approach of authorizing the MSPB to hear charges of
merit violations against Presidential appointees, make findings on the
validity of those charges and then leaving the actual imposition of
penalties to the President, would greatly improve this situation. Under
such a system, the inherent political responsibility of the President for
appointees would be an adequate check to ensure that justice is done.
The need to establish checks against merit abuse by Presidential
appointees is particularly important given the enormous power S. 2640
gives to agency heads and other top officials under the new Senior
Executive system.
The SES, a managerial corps consisting of the 8,500 highest Civil
Service employees, would be subject to broad supervisory discretion in
matters of pay, promotion, transfer, removal and bonuses. Improper
influences among this body could have a ripple effect throughout the
competitive service. Because this group would be quite limited in any
one agency, the agency head himself would be in a pivotal decision-
making position with regard to personnel matters among the SES.
Most fears of potential politicization of the Federal bureaucracy have
focused on the SES.
A strong enforcement mechanism, I believe, would effectively pro-
tect this new innovative program from abuse. However, if agency
heads themselves are exempted from any enforcement authority, a
serious gap exists in that enforcement mechanism.
For this reason, I hope that the exclusion of Presidential appointees
from the disciplinary authority of the Merit Systems Protection Board
can be corrected in the course of the legislative process.
I support and have cosponsored the Civil Service Reform bill as it
is reported by the Committee and believe it to be, on the whole, an
excellent proposal. I disagree, however, with a major feature of the
bill : its apportionment of administrative authority relating to employ-
ment discrimination involving federal workers.
The Committee bill would create a procedure under which differ-
ences between the Equal Employment Opportunity Commission and
the Merit System Protection Board on Employment discrimination
questions would be resolved by the Court of Appeals. As the Committee
report. states. "neither agency should have the authority to overrule the
view of the other", and, when the matter is certified to the Court of
Appeals, neither "agency should be considered as appealing the action
of the other".
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An alternative procedure, which I urged the Committee to adopt but
which it rejected, would allow both the MSPB and the EEOC to rule
on such discrimination questions in a manner similar to that provided
by the Committee but would designate the EEOC as the final authority,
at the administrative level on such questions. Under this procedure,
which was originally proposed by the Administration, the EEOC
would review the MSPB's actions insofar as they related to discrimina-
tion and render a decision which could be implemented immediately
and, if reviewed, treated by the court with the deference normally
accorded to final agency actions.
The basic difference between the two approaches lies in the respective
answers they give to the question : Which agency should be the final
administrative authority on issues of. alleged employment discrimina-
tion in the federal work force? The Committee's answer is that such
final authority should be shared-although the extent of the sharing is
ambiguous-between the MSPB and the EEOC. My approach would
place that authority clearly in the EEOC.
The case for the latter approach rests on the proposition' that the
EEC is the Federal Government's central repository of sensitivity and
expertise on employment discrimination matters. It is the administra-
tive agency that has the responsibility at the federal level for consider-
ing employment discrimination disputes arising in the private sector.
I see no reason why, where discrimination disputes involve the employ-
ment practices of a federal agency, the final administrative authority
relating to those disputes ought not also to be centralized in the EEOC.
From the beginning three basic arguments have been made against
this approach: that it would damage the independence of the MSPB
by subjecting its decisions on certain questions to review by an execu-
tive branch agency; that the combination of adjudicatorv and advocacy
functions within the EEOC would be undesirable; and that such an
approach would be administratively unworkable. I am not persuaded
by these arguments.
With respect to the first, this Committee and the Congress on several
occasions have permitted an executive agency to override an independ-
ent regulatory commission on questions which were considered best
left to the executive branch. Precedents can be found in the existing
Presidential. override authority-o a Civil Aeronautics Board and
the International Trade Commission ; and in the Department of
.Energy Organization Act andci~~V_ie Nuclear Non-Proliferation Act of
1978. both of which were i~n_psilered earlier in this Congress by this
Committee.
It is not the case. as it sometimes has been argued, that the executive
branch may exercise these override authorities only in the, foreign
policy area. Under the DOE Organization Act, the DOE may veto
FERC decisions on "energy actions" and other domestic matters
specified in the Act.
On the second and third of the arguments put forward, I can see
no difference between the Committee's approach and the one I support
in the extent to which they are subject to the concerns raised. Apart
from that. I believe those concerns to be minor at worst.
It is my hope therefore that the Committee's action on this matter
will he reversed and the excellence of the remainder of the bill pre-
served during further consideration of the legislation this year.
JOHw GLENN.
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ADDITIONAL VIEWS OF MR. HEINZ
The plan this legislation embodies is clearly a sound product based
on extensive consideration both by the Administration prior to its
presentation and in the Governmental Affairs Committee. Overall,
reorganization of the Civil Service System will make some needed
improvements in the operating of the federal service, based on sound
management principles implemented in a generally equitable manner.
In my view, however the Committee did make a serious mistake in
its failure to adopt the original Glenn Amendment defining the rela-
tionship between the Equal Employment Opportunity Commission
and the Merit System Protection Board. The compromise that was
adopted clearly moves too far away from the original conception
that was embodied in the Equal Employment Opportunity Commis-
sion Reorganization Plan, which was approved and reported out of
the Governmental Affairs Committee on April 20, 1978.
Beyond that specific issue, however, I also fear that in its restructur-
ing of the Civil Service, the Committee may have overlooked what
should be one of the most fundamental principles of any substantive
reform and what is one of the chief causes of citizen concern and
complaint about government. That problem, simply, is size, and the
principle-equally simple-is that a responsible reform designed to
streamline the bureaucracy and make it more efficient should neces-
sarily make it smaller.
This is no minor matter in a day when citizens are growing increas-
ingly frustrated with the size and reach of their government and are
showing their frustrations with growing support for tax and spending
cut initiatives. In this climate, caused in part by continual bureaucratic
inefficiency, it is incumbent on us to analyze reform from the stand-
point of size as well as efficiency, and to act, firmly if necessary, to
cut costs.
Unfortunately, nowhere in this legislation is there any meaningful
effort to place controls on the overall size of the federal work force.
We are led to believe that the decentralization and increased effi-
ciency created by this restructuring will lead to fewer clerks and
"paper pushers," although more trained managers; however, nowhere
in the bill.is any effort made to require the attainment of this goal.
Indeed it is possible, even likely, given the inevitable tendencies of
large bureaucracies, that the "reforms" in this legislation will in fact
simply add a new layer of management on top of existing layers
without reducing the umber
trali ber of employees elsewhere ; that "decen
zation" will result in hiring increases in other agencies without
a corresponding decrease in the O''Ice of Personnel Management;
and that the end result will be more people, more bureaucracy, and
more cost, rather than the reverse.
(131)
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Moreover, the bill actually compounds this problem by increasing
the number of top-level employees from 3 to 14, and by increasing the
salary level of current executive level employees.
The top level employees in the Office of Personnel Management, for
example, have been upgraded over their Civil Service Commission
counterparts. The net result of this upgrading at the highest levels is
an added cost to the taxpayers of more than $125,000 per year. This is
a small sum compared to the billions in the federal budget, but it is a
proper place to begin, particularly if the public is to have any confi-
dence in a reform which through its efficiency should be cutting per-
sonnel costs.
Obviously, insuring reductions in personnel costs is a difficult task
under the best of circumstances. Decisions to hire, retain, or promote
are always easier than personnel freezes, reductions in force or grade.
However, if this reform is to have any meaning those hard decisions
must be made in a way that is fair and firm without being inflexible,
and it is the task of this legislation to see that these decisions are made.
This bill, unfortunately, does not yet meet that test.
H. JOHN HEINZ.
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MINORITY VIEWS OF MR. MATHIAS
AND MR. STEVENS
This legislation must be rejected by the Senate and returned to this
Committee for additional consideration, for it clearly failg to meet
the central purpose of needed civil service reform. That purpose is to
give the President and Federal managers more discretion and flexi-
bility in personnel management while at the same time assuring a civil
service system based on merit principles rather than political and
personal favoritism. The bill would give the President and his political
appointees enormous new power over the civil service. However, it
fails to provide prudent safeguards to encourage impartial and effec-
tive performance by career employees. The bill does not strike the
proper balance between protection of merit principles and manage-
ment flexibility in at least three major areas: the organizational struc-
ture; competitive examinations; and the senior executive service.
The most serious weakness in the Administration's proposals to re-
form the civil service is that it increases the possibilities for manipu-
lating the civil service for personal or political favoritism. Instead of
having personnel policy made by a bipartisan body, it would be made
by an administrator serving at the pleasure of the president. Although
this change would be accomplished by Reorganization Plan No. 2 of
1978 (which will become effective August 10, 1978, unless disapproved
by the Senate or the House of Representatives) it must be discussed
here, for many provisions of this bill relate directly to this feature
of the Plan.
Daily operations of the central personnel agency do need to be the
responsibility of a single individual. This is, in fact, what happens
now with the Chairman of the Civil Service Commission. He is desig-
nated by law as the Chief Operating Officer of the Agency. Everything
the Administration wants a new Office of Personnel Management to
do under a single administrator can be done under a bipartisan body
with the Chairman serving as the Chief Operating Officer. However,
under this bill and the Administration's proposal merit would be seri-
ously endangered, for a single individual would make personnel policy
for the entire Federal civil service work force of more than two mil-
lion employees.
Administration spokesmen point to some states and cities where re-
sponsibility for making personnel policy was recently shifted from a
multi-headed agency to a single administrator. The analogy, however,
is inapt for none is comparable to the size, complexity, diversity, and
power of the Federal government. In addition, no one has studied
whether the policies made by these administrators are better or worse,
(133)
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or whether they have resulted in more or less political and personnal
favoritism in the civil service.
The power to make personnel policy includes the power to interpret
the laws; to decide the policies for authorizing exceptions to certain
laws; to make the policies which determine how job applicants shall
be ranked for employment consideration; to take positions out of the
competitive service so they can be filled politically; and to set aside
almost all civil service laws in Demonstration Projects that would
affect many thousands of individuals. The citizens of the United States
would have far greater confidence in the wisdom and impartiality of
such policies if they were made by a bipartisan body. This is, of course,
the primary reason for having established the bipartisan Civil Service
Commission in the first place.
The 95-year-old civil service system is not without faults; it has
gone through many changes to overcome weaknesses as they have been
identified. But abolishing bipartisan personnel policy-making will
not correct any of these weaknesses. Nor will it improve the quality and
performance of the civil service or increase the public's confidence in
it. None of the civil service problems identified by the Administration
would be solved by having personnel policies made by one person. No
rational case has been made for abolishing policy-making by a biparti-
san body, while the advantages of having a bipartisan policy-making
body are obvious.
Another serious weakness relates to the role of the Special Counsel.
He would be responsible for investigating prohibited personnel prac-
tices and prosecuting those who commit such practices. Appointed
by the President with the consent of the Senate to serve during the
President's term, he would be, and would be perceived as being, a
political appointee serving at the pleasure of the Administration. How
then would it be possible for the Special Counsel to initiate, thor-
oughly investigate, and then take actions which by their very nature
could prove embarrassing to the Administration ?
To be effective and to enjoy the confidence of the people, the Special
Counsel must be insulated from overt and subtle influences of the
President and his appointees. Neither S. 2640 nor Reorganization Plan
No. 2 provides this insulation.
In addition, the bill denies the Special Counsel the power to disci-
pline Presidential appointees who engage in prohibited personnel
practices. Such a Special Counsel would be at best a feeble protector
of the civil service merit system.
S. 2640 authorizes the Director of the Office of Personnel Manage-
ment to delegate, in whole or in part, any function vested in the Di-
rector, including authority for competitive examinations, to the heads
of agencies in the Executive Branch and, other agencies employing
persons in the competitive service.
This would authorize shifting from the central personnel agency
to each agency the authority to examine applicants for jobs in that
agency. This was the practice prior to 1965, and there were many com-
plaints from all over the country to members of Congress and others
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that applicants for Federal jobs were not examined fairly, properly,
or quickly. When Congress and the President centralized examining
in sixty-five area offices of the Civil Service Commission the com-
plaints dropped off sharply.
No doubt there are problems in the existing system. The biggrest one
is that it takes too long to fill jobs. But 85 percent of the time is taken
by the agencies, not the area offices of the Commission. Steps can and
should be taken to speed the process and make other improvements.
But having applicants for Federal jobs examined by the agencies
is the wrong way to go if we want a high quality civil service based
on open competition. It is the wrong way to go if we want an im-
partial civil service, not one selected on the basis of political and
personal favoritism. Experience in this decade tells us that honest and
able agency officials and staffs need to be insulated from the pressures
for patronage-political and personal-in this stage of the employ-
ment process.
Another compelling reason to exclude competitive' examining from
the blanket authority for delegations is the dismal record of agency
performance in carrying out the authority given them to establish
the proper grade (rryand therefore pay) for white-collar jobs. A recent
report of the Civil Service Commission states that 136,000 white-
collar jobs are overgraded, in many cases because of pressures from
agency managers.
If competitive examining is shifted to the agencies there will also
be internal and external pressures for personal and political patron-
age during that stage of the employment process. In the face of this,
extremely poor performance in using the delegated classification
powers, it is inconceivable that the Senate would authorize the dele-
gation of the important and sensitive competitive examining respon-
sibility to agencies.
III. SENIOR EXECUTIVE SERVICE
Some of the provisions of the bill relating to the proposed Senior
Executive Service while desirable, are so seriously flawed that, on
balance, they are unsatisfactory. Specifically, the bill would give to
Presidential appointees wide discretion to reduce significantly the re-
sponsibilities and pay of career executives. There is no restraint
against ill-considered, arbitrary, or partisan actions. But even more
important, this power in the hands of Presidential appointees will
have the effect of denying to the American people the-kind of respon-
sible sharp criticism from career executives that over the years has
been essential to the public interest. .
Based on past experience in both Democratic and Republican Ad-
ministrations, we can expect that the Presidential appointees who
would exercise this new power will be for the most. part exceptionally
able and highly dedicated to the national interest. In our democratic
process they are the vital link between the decision of the electorate in
choosing a President and the overall direction and management of
the agencies. As the pressures and problems test the political-career
relationships, it is' important for the public interest that political ap-
pointees not have suffocating power over career executives : power that
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could be used intemperately, or to satisfy a special interest. We should
'have no doubt that when Presidential appointees have this power, all
of them; no matter how well-intentioned and competent, will be sub-
ject to pressure from many sides, often irresistible, to use the power to
serve special rather than public interests.
Career. executives represent an important national resource which
the Federal government develops at considerable cost. Their central
commitment is to give nonpartisan professional advice and see to the
impartial administration of the laws. Both functions would be jeopar-
dized lly such a grant of authority to political appointees.
The argument is made that this unrestricted discretion to reassign
and reduce pay and responsibilities is needed for management flexi-
bility. But no evidence has been provided as to the widespread exis-
tence of the problems that this extraordinary grant of authority would
solve. It has also been argued that the unrestricted authority to reas-
sign exists now and-that this therefore is no change. This is specious
reasoning. Under this bill, five separate grades (GS-16,17, and 18, and
Executive Levels V and IV) would be combined into one Senior Exec-
utive Service without grades. Existing law gives Presidential ap-
pointees, absolute power to reassign from one position to another only
if ..they are in the same grade and rank. The proposed unlimited
power would permit a Presidential appointee to reassign a career
executive from a position of Deputy Regional Director now at GS-16
and located some hundreds or thousands of miles from Washington.
At the same time, the Presidential appointee could reduce the annual
pay of the career executive by. up to $8,000.
Advocates for this grant of power argue that top executives in
large corporations have it, and that Presidential appointees should
too in order to encourage responsiveness. But the analogy fails. No
corporation could succeed if it lost its top three levels of executives
every two to four years as Federal agencies lose their Presidential ap-
pointees. This underscores the need for professionalism, objectivity,
competence, and continuity of career executives- to assure reasonable
stability in the operations of Federal agencies. With rare exceptions,
career executives have readhed the top by repeatedly proving their
ability to perform well under difficult conditions. They are the glue
that holds the government together in times of political transition.
They are our ancestral memory. We tamper with their status at our
peril.
Presidential appointees in the agencies occupy their positions for
relatively short periods, and in their eagerness to exercise leadership
by making changes in policies and operations, many are often impa-
tient with career executives who disagree with them. Such disagree-
ment is often taken as evidence of unresponsiveness. The proposed new
power for Presidential appointees would send a clear signal to many
career executives that if they don't want to be shipped out., they should
not question or disagree with the views of their bosses. We would sub-
stitute a new veneration of "agreeable" career executives for the con-
structively critical and politically neutral professionals who now serve
this nation well. Apprehensive silence at the crucial point where po-
litical and career appointees should debate proposed policies, pro-
grams, and procedures would serve the nation badly.
Ap rl F Rinlinage '?n071
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The public interest would be served far better by including some
reasonable statutory restraints, short of full appeal rights for career
executives, to prevent arbitrary actions or those based on personal
favoritism. For example, personnel actions affecting the thousands of
career executives who will be in the Senior Executive Service should
be under the jurisdiction of the Special Counsel of the Merit System
Protection Board with regard to prohibited personnel practices. Yet
Section 2302(a) of the bill specifically limits the Special Counsel in
this area by-defining "prohibited personnel practices" in terms of per-
sonnel actions with respect to "an employee in, or applicant for, a posi-
tion in the competitive service, a career position in the Senior Execu-
tive Service." Thus, the elemental protection against arbitrary action
that would help provide a reasonable safeguard for the public's inter-
est is restricted to that small proportion of senior-career executives
who will be in career reserved positions. Extending this safeguard to
all senior career executives would help protect the public's interest in
developing and retaining first-rate career executives and would make
it possible to begin to hold Presidential appointees accountable for
their actions in these respects.
There is a major related danger in the provisions of the bill that
create the Senior Executive Service. Currently there are about 9,000
executive positions in the Federal service (aside from those filled by
Presidential appointees). About 10 percent, or 900 of these, are desig-
nated as specific positions to be filled politically. The Administration
proposes to change this so that most of the 9,000 positions could be
filled by political appointment, although at one time no more than ten
percent of all executive positions could be occupied by political ap-
pointees.
Once the impartiality and non-partisanship of a career executive is
no longer a requirement for filling these positions, the baser elements
of human nature will flourish. Significant numbers of career people
in positions in and just below the Senior Executive Service will surely
be encouraged to use their official discretion in subtle ways to serve
partisan and special interests. Some unfortunately will probably suc-
cumb to the temptation in hopes of being looked on favorably as they
seek entry into the Senior Executive Service. Of course, with a career
appointment, these individuals would not be part of the 10 percent
limitation on the number of political appointees. They would remain
career appointees who have demonstrated their political reliability.
In other words, it would be relatively easy to politicize far more than
10 percent of the positions in this service, particularly so because
career executives could be reassigned and demoted without cause.
To satisfy ourselves that this scenario is not far-fetched, we need
only read the House Post Office and Civil Service Committee's "Final
Report on Violations and Abuses of Merit Principles in Federal Em-
Testifying in closed session before the Senate Select Com-
mittee, John Ehrlichman, Counsel to President Nixon for
Domestic Policy, was asked if there was an interest to in-
fluence the career service in a partisan manner. Ehrlichman
responded to Senate committee staff with the following :
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Mr. EHltracRMAN. It was an itch on our part to get
friends in the departments rather than the people that
we found there, but that was just a general ongoing de-
sire on our part.
CoMMrrFEE COUNSEL. Was this in career positions as
well as other positions?
Mr. EH LICHMAN. Sure. Just like-the Democrats did
that.
COMMITTEE COUNSEL. And how would something like
that be carried out?
Mr. EHRLICHMAN. By attrition essentially. You'd get
replacements and the people you get in the replacements
would be hopefully sympathetic with the politics.
It takes very little imagination to predict what would happen if
Presidential appointees had the power to create attrition at will.
The Bill should be revised so that the only specific positions in
the Senior Executive Service designated by the central personnel
agency could be filled by political appointment, and, as provided in
the bill, the total number of such positions should not at any time
exceed 10 percent of the total positions in the Senior Executive Serv-
ice. In addition, the criteria for designating positions in the Senior
Executive Service as appropriate for political appointment need to be
prescribed in law. Despite occasional problems and criticisms, the
criteria established by Executive Order during the Eisenhower Ad-
ministration. and modified during the Johnson Administration, ap-
pear to provide a reasonable balance for management flexibility, pro-
tectiort against political and personal favoritism, and most important,
the effective continuity of government. Therefore, the bill should
also be revised to include the following criteria for designating posi-
tions in the Senior Executive Service which may be filled by other
than career executives :
(1) Incumbents who are deeply involved in the advocacy of
Administration programs and support of their controversial
aspects;
(2) Incumbents who participate significantly in the deter-
mination of major political policies of the Administration; or
($) Incumbents who serve principally as personal assistant.to
or advisor of a Presidential appointee or other key political
figure.
An additional criterion was added by Executive Order in the previ-
ous Administration to permit taking Regional Director positions
out of the competitive service based on a possible future policy
advocacy role. This addition is not included became, as it.has been
applied,. the national interest has been served poorly by permitting
the appointment of politically partisan, minimally qualified indi-
viduals as top field managers of Federal programs that are intended
to 'provide benefits impartially to, and otherwise impact directly on,
millions of citizens as well as state and local governments. The fur-
ther politicization of the civil service in the field is now occurring
with positions below the Regional Directors being taken out of the
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competitive civil service. It would be in the public interest to revise
this trend by specifying in law the above criteria and making it
clear that they are to be applied faithfully.
We believe it would be in the public interest for the Senate to
disapprove both S. 2640 and Reorganization Plan No. 2. This will
provide the Governmental Affairs Committee and the Administra-
tion the opportunity to improve and perfect the legislation and "the
Reorganization Plan so that there is at least a reasonable chance of
meeting the high expectations of the American people for reform in
the Federal civil service.
CHARLES MCC. MATHIAS, Jr.
TED STEVENS.
XI. CHANGES IN EXISTING LAW
In compliance with subsection 4 of Rule XXIX of the Standing
Rules of the Senate, changes in existing law made by the bill, as re-
ported, are shown as follows (existing law proposed to be omitted
is enclosed in black brackets, new matter is printed in italic, and
existing law in which no change is proposed shown in Roman) :
s s s s s s *
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