By Anjali Patel, Esq., cyberFEDS® Legal Editor Washington Bureau
IN FOCUS: President Trump's executive order that bans agencies from altering an official personnel file as part of a settlement agreement "is bad for everyone" -- agency counsel and private practitioners alike - - because the parties can no longer settle a significant number of EEO complaints, said Joanna Friedman, a partner at the Federal Practice Group.
EO 13839’s ban against modifying personnel file records to resolve an employee-initiated action is "intended to ensure that those records are preserved so that agencies can make appropriate and informed decisions regarding an employee's qualification, fitness, and suitability as applicable to future employment," the Office of Personnel Management explained in its October 2018 guidance.
Friedman agreed that "it's not necessarily a good thing" when a clean record settlement allows "bad performers to get shuffled around" at other agencies. But cases that have solid evidence showing the employee was terminated because of a manager's discriminatory animus "are now unlikely to settle because the agency can no longer amend the personnel file to expunge the termination."
Even though this issue "cuts both ways," the solution to stop bad performers or employees committing misconduct from being rehired by another agency is not a clean record ban, Friedman said, because it is simply "clogging" the Equal Employment Opportunity Commission's and Merit Systems Protection Board's processes up with more complaints. It is also costing agencies more money and taking more time to go through litigation, she said.
As part of EEO complaint settlement negotiations, a huge number of complainants will ask for some change to their personnel file, such as reducing the level of discipline, changing a removal to a resignation, or raising a performance rating, she said.
However, under EO 13839 and OPM's subsequent guidance, agencies may not generally agree to alter an official personnel record to settle a complaint unless they admit in writing that the action was erroneous, illegal, or based on inaccurate information, she added.
So now if someone wants to change an allegedly unjust disciplinary action or performance rating, "the only way to settle the case is for the agency to admit wrongdoing."
Agencies, she said, "are unlikely to admit that they took an illegal or erroneous action or that their action contains inaccurate information." So, getting agencies "to change their mind is very difficult," especially since admitting error or taking an illegal action could be a basis for liability.
Although she and her partners have been trying this strategy to settle cases, "it has not worked so far," Friedman said.
Overall, "agency counsel is just as upset as employees' counsel because it is hindering everyone's ability to settle cases in situations where previously the case could have easily settled," Friedman noted.
OPM's guidance also provides another "out" for proposed actions by allowing agencies to rescind proposals as part of a settlement agreement of an EEO complaint because "the proposal does not go in the OPF and does not require any personnel file changes," she added.
However, for EEO cases, the agency's ability to rescind proposals generally will not affect settlements.
"Typically, employees cannot file an EEO complaint on a proposal" because "in the vast majority of cases they cannot claim the action is discriminatory until it is effectuated," she said.
The "only exceptions" are when the proposal is part of a harassment or retaliation allegation because the standards of proof are different, she added.
"The main situation where this will make a difference is a proposed removal or disciplinary action" in which an employee has already initiated an EEO complaint or files a harassment claim to include the proposal, she said. Under these circumstances, counsel may try to settle the EEO case by having the proposed action rescinded because that would not usually require an OPF change.
Another "big" consequence is that the "parties can no longer settle EEO cases if they are trying to amend a performance evaluation rating as part of the resolution to the case."
Amending performance evaluations as part of the settlements "is a very common part of EEO complaints," she said.
But OPM's guidance allowing proposals to be rescinded does not help here because "there is no proposed performance evaluation -- it's just issued and that's your evaluation."
As a result, if the EEO complaint is only about the performance evaluation rating, "complainants are forced to spend thousands of dollars in attorney's fees" to even get to the hearing stage, with the agency spending at least $5,000 for the investigation and even more for the hearing stage, she added.
Even though her firm notifies employees that getting a hearing typically takes two to three years from the time a complainant files a precomplaint, many employees opt to pursue this option because it is their only choice to fight the discriminatory action -- they are essentially "being held hostage" by the unsuccessful evaluation because "no other agency is going to hire them."
Beware settlements contrary to law
Even at the hearing stage before the AJ's decision, the parties cannot agree to any settlement that changes an official personnel record. AJs do not have authority to order the agency to correct or modify personnel records as part of a settlement because that would violate the EO, and settlement negotiations are voluntary, Friedman said.
Although a few EEOC AJs have allowed parties to submit a settlement with terms that require OPF changes, Friedman said the vast majority of AJs will not accept such a settlement agreement. If the agency breaches such an agreement, and the employee has to seek enforcement, the EEOC's Office of Federal Operations is unlikely to rule in the complainant's favor because the term of the agreement requiring a change to the personnel file is contrary to EO 13839 and is unenforceable, she explained.
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