Guest Author: Marick F. Masters*
On May 25, 2018, President Trump issued a trifecta of executive orders to reform the federal personnel system. Executive Order 13839 “Promoting Accountability and Streamlining Removal Procedures Consistent with Merit System Principles” in particular addressed an issue the President had raised in his FY 2019 budget package as part of a management agenda: “A percentage [of federal workers], however, are simply unable or unwilling to perform at acceptable levels. Their peers in the Federal workforce recognize this issue. Every year, the vast majority of Federal workers surveyed disagree with the statement that, ‘in my work, steps are taken to deal with a poor performer who cannot or will not improve.’ The requirements to successfully remove an employee for misconduct or poor performance are onerous…” To remedy this problem, E.O. 13839 declared that “Removing unacceptable performers should be a straightforward process that minimizes the burden on supervisors. Agencies should limit opportunity periods to demonstrate acceptable performance under section 4302(c)(6) of title 5, United States Code, to the amount of time that provides sufficient opportunity to demonstrate acceptable performance.” This order clearly rested on the assumption that the federal personnel system failed to provide for sufficient managerial authority to discharge employees whose performance or conduct merits such action. Accordingly, E.O. 13839 expanded the relevant authority of management by allowing managers to consider an employee’s prior performance record, eliminating the practice of progressive discipline, and restricting the review of disciplinary action in arbitrations.
The trio of controversial executive proclamations prompted litigation, which resulted in a federal district judge invalidating selected provisions of the orders in an August 25, 2018 ruling, including sections 2(b), 2(c), 4b (iii), and 7 of E.O. 13839 (American Federation of Government Employees v. President Donald Trump, No. 1:18-cv-1261). By invalidating section 7, Federal District Judge Ketanji Brown Jackson essentially blocked agencies from implementing the order. In this regard, the Office of Personnel Management (OPM) had issued guidance on such implementation on July 5, 2018. A subsequent decision by the U.S. Court of Appeals overturned the judge’s ruling on the grounds that the Federal Labor Relations Authority (FLRA) had original jurisdiction to interpret the legality of the orders before any cognate disputes would become justiciable in a federal court.
The obvious salience of this order and the removal powers granted to federal managers beg the question of the extent to which there is an unaddressed performance problem in the federal government. We provide some insight into this matter by comparing the level of separations, including discharges, across industries. Specifically, we compare annual separation rates, which include separate rates for layoffs and discharges, among the overall U.S. workforce, the private sector, the public sector as a whole, and the federal government in particular. This comparison, obviously, does not establish the extent to which there are performance problems in the federal sector. Nor does it indicate whether federal managers are lax in disciplining poor performers or unduly hindered from doing so by cumbersome removal procedures.
Chapter 75, Title 5: Adverse Action
Federal personal policy regarding adverse actions against employees who are poor performers or engage in misconduct is provided in Chapter 75, Title 5, of the United States Code. In relevant part, it states that
“Under regulations prescribed by the Office of Personnel Management, an agency may take an action covered by this subchapter against an employee only for such cause as will promote the efficiency of the service.” Over time, according to a July 2018 report by the U.S. General Accountability Office (https://www.gao.gov/assets/700/693133.pdf), several more or less common examples of conduct which might warrant discipline have emerged:
- time and attendance infractions
- intoxication
- workplace violence
- physical aggression toward an employee
- improper use of a government-issued credit card
- misuse of government equipment (such as viewing pornography or gambling)
- use of public position for private gain
- behavior that affects national security. 3 5 U.S.C. §§7301-7363.
Federal personnel policy prescribes the rules agencies should follow in meting discipline, which include a 30-day notice of proposed adverse action which specifies the reasons for the disciplinary determination. Agencies must give adversely affected employees no less than seven days to review the relevant material documenting the reason for the action taken. Employees have the option then of appealing the decision through the grievance procedure established by an applicable collective bargaining agreement or through the route charted by the Merit Systems Protection Board.
Based on a case decided by the MSPB in 1981 (Douglas v. VA, 5 MSPR 280, 5 MSPB 313 (1981), federal managers should consider up to 12 factors (so-called Douglas factors) in deciding how to discipline federal employees for infractions. In brief, the MSPB Douglas ruling urged the consideration of the following: (1) seriousness of offense; (2) job level of employee; (3) past disciplinary record; (4) past work record; (5) impact on ability of worker to perform satisfactorily; (6) consistency of application of discipline across employees; (7) consistency with agency table of penalties; (8) notoriety of offense; (9) clarity of the potential disciplinary action for the alleged infraction; (10) potential to rehabilitate employee; (11) presence of mitigating circumstances; and (12) adequacy of alternative means of discipline.
Comparative Sector Data
We provide data on disciplinary actions taken in the roughly two-million civilian non-postal federal
workforce during the years between 2014 and 2016 available from OPM’s EHRI databases as reported in the aforementioned GAO report (https://www.gao.gov/assets/700/693133.pdf). It shows that less than one percent of the workforce is disciplined with penalties involving demotions, removals, and suspensions (See Figure 1 in the Appendix). Obviously, an even smaller fraction is involved in cases of just dismissal.
Figure 2 (See Appendix) reports the rate of layoffs and discharges across various industry sectors in the years from 2017 and 2019 (https://www.bls.gov/news.release/jolts.t20.htm). It shows, for example, that across all industries, the rate of layoffs and discharges totaled more than 14% in 2019. In the private sector, it stood at 16% for the same year. But in the public sector as a whole, the layoff and discharge rate in 2019 rested at 5.5%. While much lower than the overall private sector rate, it still stood higher than in the federal government with a comparatively low rate of such separations from work.
Thus, on the surface, it seems as if job security, as is widely reported elsewhere, is much greater in the federal service than among the workers in the private sector. In this vein, it is important to note that the public sector, generally, is much more densely unionized than in the private sector. Across the overall labor force in 2019, just 10.3% of workers belonged to unions. Within this measure, just 6.2% of private sector workers were unionized, while 33.6% were unionized in the public sector as a whole (relative to 25.6% among federal employees) (https://www.bls.gov/news.release/pdf/union2.pdf). In addition, most employers and employees in the private sector operate under the legal doctrine of employment at-will. Under this doctrine, employers may hire and fire at will, regardless of the cause. Only those employees covered by collective bargaining agreements (just over seven percent of the private sector workforce) and individual employment contracts that include “just cause” provisions enjoy additional protection from at-will employment conditions beyond the federal, state, and local laws which protect workers against discrimination on account of race, age, gender, national origin, religion, and color, etc.
Conclusion
The guidance provided by the Office of Personnel Management to implement E.O. 13839 includes a data form for agencies to complete to collect data on the adverse actions taken in the federal service
(https://www.chcoc.gov/sites/default/files/Data%20Collection%20Form%20EO%2013839_0.pdf). These data should provide more information on the federal experience regarding the appropriate disciplining of employees for inadequate performance. We should compare, through systematic research, the situation in the federal service to experience in the private sector (unionized and nonunionized) to determine the extent to which the level of discipline seems comparable across sectors, given similar records of employee performance.
*Marick F. Masters is a Professor of Business at the Mike Ilitch School of Business at Wayne State University, where he is also Interim Chair of the Department of Finance and Adjunct Professor of Political Science. He can be reached at marickm@wayne.edu or 313-577-5431. The opinions expressed here are only the author’s and not SFLERP’s.
APPENDIX
Figure 1 can be found on page 25 at https://www.gao.gov/assets/700/693133.pdf
Figure 2 can be found at https://www.bls.gov/news.release/jolts.t20.htm