Determining the Appropriate Penalty for Federal Employees Charged With Misconduct

Issuing agencies

Abstract

The Merit Systems Protection Board (MSPB or Board) is issuing a final rule amending its regulations governing the Board's review of the reasonableness of an agency's chosen penalty in misconduct-based adverse actions appealed to the Board. Under the final rule, the Board will no longer require consideration of the 12 factors set forth in Douglas v. Veterans Administration, 5 M.S.P.R. 280 (1981), in every case. Instead, the Board will evaluate whether the agency's penalty is within the tolerable limits of reasonableness in light of the totality of the circumstances, determined on a case-by-case basis.

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[Federal Register Volume 91, Number 170 (Thursday, September 3, 2026)]
[Rules and Regulations]
[Pages 56549-56574]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-18061]



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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 91, No. 170 / Thursday, September 3, 2026 / 
Rules and Regulations

[[Page 56549]]



MERIT SYSTEMS PROTECTION BOARD

5 CFR Part 1201

[Docket ID: OPM-2025-0012]
RIN 3124-AA35


Determining the Appropriate Penalty for Federal Employees Charged 
With Misconduct

AGENCY: Merit Systems Protection Board.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Merit Systems Protection Board (MSPB or Board) is issuing 
a final rule amending its regulations governing the Board's review of 
the reasonableness of an agency's chosen penalty in misconduct-based 
adverse actions appealed to the Board. Under the final rule, the Board 
will no longer require consideration of the 12 factors set forth in 
Douglas v. Veterans Administration, 5 M.S.P.R. 280 (1981), in every 
case. Instead, the Board will evaluate whether the agency's penalty is 
within the tolerable limits of reasonableness in light of the totality 
of the circumstances, determined on a case-by-case basis.

DATES: 
    Effective date: This rule is effective October 5, 2026.
    Applicability date: The amendments made by this rule apply to 
appeals filed with the Board on or after October 5, 2026. Appeals 
pending before the Board on the effective date will be adjudicated 
under the framework in effect when they were filed.

FOR FURTHER INFORMATION CONTACT: Gina K. Grippando, Clerk of the Board, 
by email at <a href="/cdn-cgi/l/email-protection#f19c828193b19c828193df969e87"><span class="__cf_email__" data-cfemail="c9a4bab9ab89a4bab9abe7aea6bf">[email&#160;protected]</span></a> or by telephone at (202) 653-7200.

SUPPLEMENTARY INFORMATION:

I. Overview and Scope of This Final Rule

    On July 2, 2026, the Office of Personnel Management (OPM) and the 
Merit Systems Protection Board (MSPB or Board) published a joint notice 
of proposed rulemaking, Promoting Employee Accountability, 91 FR 40444 
(July 2, 2026) (the NPRM). The NPRM contained two distinct sets of 
proposals issued under two distinct grants of statutory authority: OPM 
proposed amendments to 5 CFR parts 412, 432, 715, and 752 (RIN 3206-
AO91), and the Board proposed amendments to its own appellate 
procedures at 5 CFR 1201.56 (RIN 3124-AA35). The NPRM stated that, 
after consideration of comments, ``the agencies may issue a joint final 
rule or each agency may finalize its respective proposals in separate 
final rules.'' 91 FR at 40444. The Board is issuing this final rule 
under the title ``Determining the Appropriate Penalty for Federal 
Employees Charged With Misconduct,'' which reflects the subject and 
scope of the Board-only amendments finalized in this document.
    The comment period closed on August 3, 2026. Approximately 676 
unique comments were received on the joint docket from organizations 
and individuals, including labor organizations, associations of federal 
employees, managers, executives, and retirees, organizations of 
practitioners, policy and good-government organizations, current and 
former civil servants, and individual members of the public. Of these, 
43 comments were attributed to individual commenters who indicated on 
their comment submission that their comment represented more than 1 
submission. The Board has reviewed and considered all comments 
received.
    Many commenters urged that the proposed rule be withdrawn or 
rescinded in whole or in principal part (for example, commenters 0337, 
0391, 0427, 0430, 0439, 0492, 0554, 0628, 0629, 0634, 0642, 0644, 0647, 
0654, 0656, 0667, 0676). Several commenters expressed strong support 
for the proposed rule as a whole (for example, commenters 0612, 0623, 
0630, 0631, 0664), including two Federal executive departments 
(commenters 0612, 0623), a Federal employee, in his individual 
capacity, with experience in management-side labor and employee 
relations (Commenter 0630), and an individual Federal employee who 
submitted an arbitration award for the record (Commenter 0631). 
Additional commenters likewise expressed support for the proposed rule 
or for particular elements of it (commenters 0006, 0031, 0301, 0350, 
0352, 0359, 0387, 0395, 0405, 0406, 0417, 0424, 0429, 0434, 0437, 0489, 
0545, 0584, 0585, 0586, 0587, 0588, 0591, 0613, 0614, 0615, and 0627), 
including several whose submissions are discussed in Section VII. Other 
commenters did not oppose reform as such but urged specific revisions 
to preserve clear, reviewable standards and realistic procedures (for 
example, commenters 0293, 0431, 0435, 0509, 0524, 0538, 0558, 0562, 
0570, 0625, 0626, 0636, 0657, 0658, 0666, 0675).
    The Board also received several hundred briefer submissions from 
individual commenters--current and former Federal employees, including 
supervisors, in their personal capacities; veterans; and members of the 
public--including many substantially similar or identical form-letter 
submissions. The Board has reviewed and considered each of these 
submissions and, consistent with ordinary practice, responds to them by 
subject in this document rather than individually. Many commenters (for 
example, 0005, 0009, 0017, 0019, and 0052) expressed general opposition 
to the proposed rule or urged its withdrawal without raising distinct 
arguments directed to the Board's amendments; the Board declines to 
withdraw its proposal for the reasons stated throughout this preamble. 
Many other commenters (for example, 0007, 0008, 0011, 0018, 0020, and 
0021) urged that the Douglas factors be retained in whole or in part, 
or argued that a totality-of-the-circumstances standard will produce 
vague, inconsistent, subjective, or politicized penalty decisions; 
those comments are addressed in Sections IV.1, IV.2, IV.14, IX.1, and 
IX.5. Workforce and retention concerns are addressed in Section IV.17.
    Many commenters (for example, 0033, 0051, 0109, 0115, 0116, 0123, 
and 0124) argued that the existing framework is workable, that no need 
for the change has been demonstrated, or that the rule will increase 
rather than decrease litigation and cost; those comments are addressed 
in Sections IV.7, IX.1, and IX.3. Comments addressed exclusively to 
OPM's proposed amendments--including comments concerning performance 
improvement periods, response times, employee representatives and 
official time, settlement agreements, abandonment of

[[Page 56550]]

position, and agency tables of penalties (commenters 0002, 0029, 0034, 
0035, 0041, 0077, and 0078, for example)--are outside the scope of this 
final rule and are referred to OPM, as discussed in Section III. 
Finally, several submissions consisted in whole or in part of attached 
files (commenters 0307, 0321, 0422, 0495, 0539, 0560, 0567, 0568, 0582, 
0607, and 0650); the attachments are part of the rulemaking record and 
have been considered, and arguments in them directed to the Board's 
amendments are addressed by subject in this preamble.
    The Board acknowledges the full range of views expressed. The Board 
has considered every comment to the extent it bears on the Board's 
amendments to part 1201. For the reasons stated in the NPRM and 
elaborated below, the Board declines to withdraw its proposal and is 
finalizing the amendments to 5 CFR 1201.56, with the applicability 
statement set forth in the DATES section of this document and the 
preamble clarifications discussed in Sections VIII and IX.
    Because the docket was joint, many comments addressed OPM's 
proposals, the Board's proposal, or both. In this document, the Board 
finalizes only its own proposal: the amendments to 5 CFR 1201.56. OPM's 
proposed amendments to parts 412, 432, 715, and 752 are not finalized 
in this document. OPM is finalizing its proposals separately and 
responds in its own final rule to comments directed to those proposals 
and to the interaction of those proposals with other OPM rulemakings.
    As finalized, the rule provides that, in an appeal of an action 
taken under 5 U.S.C. chapter 75 in which the Board sustains the charged 
conduct, the Board will evaluate whether the agency's chosen penalty is 
within the tolerable limits of reasonableness in light of the totality 
of the circumstances, determined on a case-by-case basis, with no 
particular set of enumerated factors required to be addressed in every 
case. The rule further codifies the framework, consistent with Lachance 
v. Devall, 178 F.3d 1246, 1260 (Fed. Cir. 1999), governing when the 
Board will sustain an agency's penalty, mitigate to the maximum 
reasonable penalty, or afford the agency an opportunity to institute a 
lesser penalty. As stated in the NPRM, nothing in this rule alters the 
longstanding due process requirement that an agency intending to rely 
upon aggravating factors as a basis for its penalty must include those 
factors in the advance notice of the proposed action so the employee 
has a fair opportunity to respond, on pain of reversal on 
constitutional due process grounds. 91 FR at 40455.

II. Length of Comment Period

    Several commenters asked that the comment period be extended. 
Commenter 0656 requested a 60-day extension, stating that the proposed 
changes are substantial and that affected employees may not have had a 
full opportunity to consider and prepare comments. Commenter 0647 
argued that a 30-day comment period is ``not an adequate comment period 
for a proposed rule of this magnitude''; that the Executive orders 
governing regulatory planning contemplate comment periods of at least 
60 days in most cases; that judicial decisions treat 60 days as a more 
reasonable minimum for complex rules; and that the NPRM's detailed 
solicitation of reliance-interest information could not reasonably be 
answered within the period provided.
    Commenter 0647 urged that, if the proposal is not withdrawn, the 
comment period be reopened for no fewer than 60 additional days. 
Commenter 0430 likewise requested a 60-day extension, citing the length 
of the joint rule as filed, the number of parts of title 5 of the Code 
of Federal Regulations it amends, the size of the affected workforce, 
and the volume of the docket as of late July 2026. Commenter 0439, an 
individual federal employee commenting in their personal capacity, 
requested, in the alternative to withdrawal of the rule, that the 
comment period be extended by at least 60 days, citing the rule's 
length and scope and the size of the workforce it affects. Commenter 
0391 objected that the comment period ran just 32 days, from July 2 to 
August 3, 2026, shorter than the 60-day period it stated OPM has itself 
previously described as its standard practice for comment periods of 
this kind, and expressed concern that the compressed timeline would 
limit public scrutiny of the proposal. Commenters 0496, 0595, 0658, 
0671, 0673, and 0674 likewise requested a 60-day extension of the 
comment period or objected that the 32-day period provided was 
insufficient for a rulemaking of this scope.
    The Board declines to reopen or extend the comment period. The 
Administrative Procedure Act does not prescribe a minimum comment 
period; it requires a meaningful opportunity to participate, and the 
period provided here--July 2 through August 3, 2026--afforded that 
opportunity with respect to the Board's proposal, which presented a 
single, clearly framed issue: the standard the Board will apply in 
reviewing the reasonableness of agency-selected penalties, together 
with codification of existing mitigation case law.
    The Executive order provisions commenters cite do not alter that 
conclusion. Executive Order 12866 provides that each agency ``should 
afford the public a meaningful opportunity to comment on any proposed 
regulation, which in most cases should include a comment period of not 
less than 60 days.'' E.O. 12866, sec. 6(a)(1), 58 FR 51735, 51740 (Oct. 
4, 1993). Executive Order 13563 similarly directs that, ``[t]o the 
extent feasible and permitted by law, each agency shall afford the 
public a meaningful opportunity to comment through the internet on any 
proposed regulation, with a comment period that should generally be at 
least 60 days.'' E.O. 13563, sec. 2(b), 76 FR 3821, 3821-22 (Jan. 21, 
2011).
    Three features of these provisions defeat the commenters' reliance 
on them. First, their operative terms are permissive--``should,'' ``in 
most cases,'' ``generally,'' ``[t]o the extent feasible''--and thus 
contemplate that comment periods shorter than 60 days will sometimes be 
appropriate. This is such a case: the Board's proposal presented a 
single, discrete question of adjudicatory methodology, fully framed in 
the NPRM, on which meaningful comment did not require a longer period. 
Second, both Executive orders are directions for the internal 
management of the executive branch's regulatory process, and each 
expressly disclaims the creation of any right or benefit, substantive 
or procedural, enforceable at law by a party against the United States. 
E.O. 12866, sec. 10; E.O. 13563, sec. 7(d). Third, the Executive 
orders' 60-day guidance is addressed to the general run of rulemakings, 
many of which impose primary-conduct obligations on regulated parties; 
it does not purport to establish a minimum for every rule regardless of 
scope, and it does not convert the 32-day period provided here into a 
procedural violation.
    Nor do the cited judicial decisions establish a 60-day floor. The 
principal decision commenters cite, Petry v. Block, 737 F.2d 1193, 1202 
(D.C. Cir. 1984), described a 60-day period as a more reasonable 
minimum for complex rules while nonetheless upholding the rule there at 
issue, which had been adopted after a comment period far shorter than 
the one provided here; it establishes no categorical floor, and the 
complexity concern it reflects is answered by the discrete scope of the 
Board's proposal.
    The depth and quality of the submissions received refute the 
suggestion that interested parties lacked

[[Page 56551]]

a meaningful opportunity to comment: the record includes, among other 
things, a multi-part legal analysis marshaling four decades of the 
Board's own annual-report statistics (commenter 0647), detailed 
treatments of the Board's statutory authority and Federal Circuit 
precedent (commenters 0427, 0629, 0634), and extensive discussions of 
reliance interests responding directly to the NPRM's solicitation 
(commenters 0634, 0629, 0647). Commenter 0430's own submission--a 
comprehensive analysis addressing the Board's proposal section by 
section and answering in full the Board's request for factor-by-factor 
comment--further confirms that the period afforded a meaningful 
opportunity to comment on the Board's proposal. The same is true of the 
submissions of commenters 0439 and 0391, each of which addresses the 
Board's penalty-review proposal in substance within the period 
provided. The same is true of the additional extension requests: 
commenters 0496, 0658, and 0674, among others, accompanied their 
requests with detailed substantive analyses of the Board's proposal, 
further confirming that the period provided was adequate for meaningful 
comment on the discrete question the Board presented.

III. Comments Outside the Scope of This Final Rule

    A substantial share of the comments received addressed OPM's 
proposed amendments rather than the Board's. OPM responds to them in 
its separate final rule. The Board expresses no view here on OPM's 
proposals. The Board notes, however, one point of intersection 
addressed by several commenters and answered in Section IV below: 
commenters argued that the combined effect of the Board's revised 
penalty-review standard and OPM's proposed elimination of penalty 
tables and narrowing of comparators would remove multiple consistency 
safeguards at once. The Board responds to that argument in Sections 
IV.2, IV.8, and IV.9 as it bears on the Board's own rule.
    Several commenters situated this rulemaking within other pending or 
recent rulemakings. Commenter 0636 reiterated its opposition to the 
exclusion of employees in Schedule Policy/Career positions from 
adverse-action appeal rights. Commenter 0616 likewise objected to the 
treatment of Schedule Policy/Career employees in OPM's proposed rule 
and argued that the combined effect of this rulemaking and other 
executive actions will politicize the career civil service, and 
commenter 0028 raised similar objections concerning Schedule Policy/
Career positions, nondisclosure requirements, and other pending 
rulemakings. Commenters 0644, 0427, and 0625 argued that this 
rulemaking cannot be evaluated in isolation from other OPM rules--
concerning suitability action appeals, probationary and trial-period 
appeals, and reduction-in-force appeals--that reassign categories of 
review from the Board to OPM.
    Commenter 0391 likewise urged that this proposal be evaluated 
together with other pending personnel proposals--including a separate 
OPM proposal concerning nondisclosure agreements--and with other 
personnel actions taken by the administration, rather than in 
isolation, and that any final rule account for their combined effect on 
employees' practical ability to report wrongdoing without fear of 
swift, thinly justified removal. Commenter 0427 further argued that the 
transfers of adjudication authority effected by those rulemakings are 
unconstitutional absent congressional reorganization authority.
    The exclusion of Schedule Policy/Career positions from coverage, 
and the suitability, probationary, and reduction-in-force appeal 
rulemakings, are OPM rulemakings conducted under OPM's authorities and 
separate RINs and dockets; comments concerning them are referred to OPM 
and, where applicable, to the dockets for those rulemakings. The 
nondisclosure-agreement proposal identified by Commenter 0391 is 
likewise a separate OPM request for comment concerning the proposed 
creation of a new Optional Form, in a separate docket, and comments 
concerning it are referred to that docket; the concern that the 
combined effect of this rule and other actions will impair employees' 
practical ability to report wrongdoing is addressed in Section IV.2.
    This rule does not remove, narrow, or transfer any category of 
Board jurisdiction. This final rule does not alter which actions are 
appealable to the Board, who may appeal, the agency's burden of proof 
under 5 U.S.C. 7701(c), the availability of affirmative defenses under 
5 U.S.C. 7701(c)(2), or the availability of judicial review under 5 
U.S.C. 7703. It addresses one thing: the analytic standard the Board 
will apply in reviewing the reasonableness of a penalty in appeals 
properly before it. Employees retain the same forum, the same 
procedural rights before the Board, and the same access to judicial 
review after this rule as before it. The constitutional transfer 
argument advanced by Commenter 0427 is addressed in Section VI, because 
as applied to this rule its premise is mistaken: this rule transfers 
nothing. The Board separately notes that its statutory oversight 
functions with respect to OPM regulations, including its duty under 5 
U.S.C. 1204(a)(4) and 1204(f) to review OPM rules and to report on 
whether their implementation would require any employee to commit a 
prohibited personnel practice, are unaffected by this rulemaking, as 
discussed further in Section VI.
    Finally, this rule does not alter veterans' preference rights or 
the appeal rights afforded by the Veterans Employment Opportunities 
Act: in response to Commenter 0524, the Board confirms that nothing in 
this rule diminishes any procedural or appeal right of veteran 
employees, and that service-related circumstances, including 
disabilities and accommodation needs, remain cognizable under the 
totality of the circumstances wherever the record makes them material. 
In response to Commenter 0478's observation concerning the recurrence 
of the phrase ``sole and exclusive discretion'' in the proposed 
regulatory text, the Board notes that the provisions containing that 
phrase are OPM's proposed amendments, which are not finalized in this 
document; the phrase does not appear in the Board's regulatory text.

IV. Retirement of the Mandatory Douglas Framework and Adoption of 
Totality-of-the-Circumstances Review

    Consistent with the organization of this document, comments 
directed to the evidentiary basis and need for the Board's change, to 
reliance interests and transition, and to regulatory alternatives are 
addressed in the Regulatory Analysis in Section IX: the need-related 
comments in the Statement of Need (Section IX.1), the comments 
proposing alternatives in Regulatory Alternatives (Section IX.5), and 
the reliance and transition comments in Reliance Interests and 
Transition (Section IX.6). The remaining comments on the Board's 
amendments are addressed in this section and in Sections V through VII.

IV.1. Whether the Totality-of-the-Circumstances Standard Is Vague or 
Standardless

    Comment: Many commenters argued that a totality-of-the-
circumstances standard under which no particular set of factors must be 
considered in every case is vague, standardless, or an invitation to 
arbitrary decision-making.
    Commenter 0626 argued that an undefined totality approach risks 
replacing a predictable analytical framework with a largely subjective 
inquiry. Commenter 0636 argued that the answer to a framework that has 
become too rigid is a clearer framework,

[[Page 56552]]

not the absence of one. Commenter 0628 argued that agencies and 
employees will be forced to await the Board's ad hoc analysis before 
knowing whether a penalty was reasonable, making the process more 
subjective, less fair, and slower. Commenter 0634 argued that a 
totality inquiry needs criteria to identify what belongs in the 
totality, and predicted that managers and administrative judges will 
either recreate Douglas under different labels or proceed without a 
shared method. Commenter 0427 argued that the proposed test releases 
decisionmakers and adjudicators from any analytical methodology and 
would permit rulings based on nearly anything, and that the NPRM 
overstates the risk that decisions are overturned for failing to 
discuss every factor, citing Federal Circuit decisions holding that 
neither the Board nor agencies commit reversible error by not expressly 
addressing all twelve factors.
    Commenter 0647 argued that the proposed standard lacks a defining 
principle and will leave agencies and the Board in an analytical 
vacuum, citing precedent that the Board need only consider the relevant 
factors and that mitigation is warranted only where the agency failed 
to weigh the relevant factors or the penalty clearly exceeded the 
bounds of reasonableness. Commenter 0435 argued that a totality test 
measured only against the tolerable limits of reasonableness is likely 
to produce less consistency and more successful litigation challenges 
because it removes the shared vocabulary agencies and the Board have 
used for decades. Commenter 0654 argued that removing the enumerated 
factors in favor of an undefined discretionary standard makes the 
outcome of penalty review less predictable for the employee preparing a 
defense, less consistent across similarly situated employees, and 
correspondingly harder to challenge on appeal, even though the nominal 
right of Board review is retained.
    Commenter 0391 argued that the rule replaces a structured, 
judicially tested disciplinary framework with a vague standard under 
which managers will no longer be required to walk through a specific 
list explaining why removal, rather than a warning or a suspension, was 
the right decision, making it much harder for an employee or a 
reviewing body to argue that the punishment did not fit the offense. 
Commenter 0337 argued that the Douglas factors currently require 
deciding officials to consider the employee's length of service, past 
performance, disciplinary history, rehabilitation potential, and 
consistency with penalties imposed on others, and that without those 
required considerations there are fewer checks on subjective management 
decisions, making it easier to justify removal rather than corrective 
action. Commenter 0642, a letter from six Members of Congress, argued 
that these consistent standards have for nearly five decades, across 
administrations of both parties, provided fairness to federal workers 
facing accusations of misconduct, and that requiring agencies to rely 
instead on an arbitrary, case-by-case examination under which no 
particular factors must be considered in every case could allow 
agencies to ignore important mitigating factors and more easily remove 
skilled workers with strong rehabilitation potential from critical 
industries. Commenter 0439 argued that each of the twelve factors 
exists because a recurring unfairness--an unproven claim of 
seriousness, a penalty inconsistent with what a coworker received for 
the same conduct, discipline imposed for violating a rule no one ever 
explained--needed a specific answer, and that, in the commenter's 
words, ``a standard that requires nothing in particular protects 
nothing in particular.''
    Numerous additional commenters raised substantially similar 
objections to the asserted vagueness or subjectivity of the totality 
standard (see Section I), and several added distinct variations. 
Commenters 0293, 0294, 0295, and 0297 argued that ``a vague standard is 
not a flexible standard when only one party (the agency) controls the 
underlying record.'' Commenter 0537 asked for greater protection 
against false allegations. Commenter 0487 argued that annual 
performance appraisals lose their point if an employee's documented 
work record need not be considered in setting a penalty, and commenter 
0669 argued that the enumerated factors ensure consideration of the 
government's own investment in an employee's training and development. 
Commenter 0431, a Federal supervisor, commenting in his personal 
capacity, urged retention of all twelve factors on the ground that a 
standard under which no particular set of factors must be considered 
gives employees no assurance that anything in particular will count.
    Response: The Board does not agree that the standard adopted in 
this final rule is standardless, and it takes this opportunity to state 
precisely what the rule does and does not do.
    What the rule does not do: It does not declare any consideration 
irrelevant. Under the totality of the circumstances, the considerations 
identified in Douglas--the nature and seriousness of the offense; the 
employee's position and responsibilities; the employee's disciplinary 
and work record; the effect of the offense on the employee's ability to 
perform and on supervisory confidence; the consistency of the penalty 
with penalties imposed on similarly situated employees; the clarity of 
notice; the potential for rehabilitation; mitigating circumstances; and 
the adequacy of alternative sanctions--remain available to the parties 
and to the Board wherever they are material to the reasonableness of 
the penalty in the case at hand. Parties remain free to raise them; 
absent direction otherwise from OPM, deciding officials remain free to 
address them; and the Board and its administrative judges will weigh 
relevant record evidence bearing on them.
    What ends is the treatment of the twelve factors as a compulsory 
analytic code: the expectation that every factor be recited in every 
case, the litigation of penalty appeals as audits of factor-recitation, 
and any premise that an otherwise reasonable penalty may be disturbed 
because a decision letter or an initial decision did not march through 
an enumerated list.
    What the rule does: It anchors penalty review where Congress placed 
it. The operative standards are statutory and regulatory, not open-
ended: the action must be taken ``only for such cause as will promote 
the efficiency of the service,'' 5 U.S.C. 7513(a); the agency bears the 
burden of proving its case, including the reasonableness of its 
penalty, by a preponderance of the evidence, 5 U.S.C. 7701(c)(1)(B); 
the Board may not sustain a decision that resulted from harmful 
procedural error, was based on a prohibited personnel practice, or was 
not in accordance with law, 5 U.S.C. 7701(c)(2); and the Board's 
inquiry, now codified in Sec.  1201.56, is whether the penalty is 
within the tolerable limits of reasonableness--the formulation drawn 
from Douglas itself, 5 M.S.P.R. at 306--in light of the totality of the 
circumstances established by the whole record.
    Board decisions applying this standard will continue to be 
reasoned, grounded in record evidence, and subject to review by the 
federal courts under 5 U.S.C. 7703(c) for arbitrariness, 
capriciousness, abuse of discretion, legal error, procedural error, and 
lack of substantial evidence. A body of published precedent applying 
the codified standard will continue to develop and to guide agencies, 
employees, and practitioners, exactly as Board and court precedent have 
always done. Far from releasing adjudicators to rule on the basis of 
nearly anything, the

[[Page 56553]]

codified standard binds them to the whole record and to reasoned, 
reviewable decision-making.
    The authorities invoked by commenters 0427 and 0647--holding that 
only relevant factors need be considered, that failure to expressly 
address every factor is not reversible error, and that mitigation is 
warranted only where the agency failed to weigh the relevant factors or 
the penalty clearly exceeded the bounds of reasonableness--establish 
that the twelve factors were never mandatory in every particular. The 
final rule preserves both aspects of that settled law: the obligation 
to weigh relevant, material considerations continues under the totality 
standard, and the mitigation trigger the Board is codifying--a penalty 
outside the tolerable limits of reasonableness--is the same trigger 
those decisions articulate. What those authorities also demonstrate, 
however, is that the mandatory twelve-factor framing adds nothing of 
substance to the law commenters describe; retiring the framing 
therefore sacrifices nothing of substance either.
    The Board also rejects the premise that predictability resided in 
the factor list. Douglas itself was explicit that the factors were 
nonexhaustive, that not every factor is pertinent in every case, and 
that the factors carry no prescribed weights; the Federal Circuit 
reiterated the same in Nagel v. Department of Health & Human Services, 
707 F.2d 1384 (Fed. Cir. 1983). A framework that prescribes neither 
which factors govern a given case nor how they are to be weighed does 
not supply the consistency commenters attribute to it.
    What it supplied in practice, as the Board has observed, was a 
template for recitation. The final rule replaces recitation with the 
substantive question, and--for the first time--places the operative 
review standard and the Devall mitigation framework in the Board's 
regulations, where all parties can find them. That is a gain in 
transparency, not a loss. Finally, as to the prediction that the 
process will become slower because reasonableness will be determined 
case by case: penalty reasonableness has always been determined case by 
case. Douglas commanded exactly that, cautioning against acting 
automatically on the basis of generalizations unrelated to the 
individual situation. 5 M.S.P.R. at 303. The Board expects the rule to 
reduce, not increase, adjudicatory burden, by eliminating a layer of 
satellite litigation over whether each factor was recited and weighted, 
and by focusing the parties' evidence and argument on the 
considerations actually material to the case.
    The arguments of commenters 0654, 0391, 0337, 0642, and 0439 are 
answered by the same points. Every consideration those commenters 
identify--length of service, past performance and disciplinary record, 
rehabilitation potential, consistency with the penalties imposed on 
similarly situated employees, notice of the rule violated, and 
mitigating circumstances--remains relevant and cognizable under the 
totality of the circumstances wherever the record makes it material, 
and a penalty determination that ignores material record evidence 
bearing on those considerations risks being mitigated or reversed as 
not within the tolerable limits of reasonableness.
    The additional variations of commentary on this theme are answered 
by the same architecture. As to the asymmetry-of-the-record argument 
pressed by commenters 0293, 0294, 0295, and 0297: the agency bears the 
burden of proving the reasonableness of its penalty on the whole 
record, and the Board's procedures afford appellants discovery of 
agency records and evidence, 5 CFR 1201.71 through 1201.85, so the 
record against which reasonableness is judged is not within the 
agency's unilateral control. As to Commenter 0537: penalty review under 
section 1201.56(b)(3) operates only on charges the agency has proven by 
a preponderance of the evidence; an allegation the agency cannot prove 
supports no penalty at all. As to Commenters 0487 and 0669: an 
employee's documented performance record and the government's 
investment in the employee's training and development are precisely the 
kinds of circumstances that may remain relevant and cognizable under 
the totality of the circumstances Commenter 0431's objection restates 
the premise, addressed above and in Section IV.14, that protections 
exist only if enumerated; however, the codified standard preserves the 
substance of each protection through the burden of proof, the due-
process notice obligation, and the whole-record requirement.

IV.2. Consistency, Merit System Principles, and the Detection of 
Disparate or Politicized Treatment

    Comment: Commenter 0636 argued that consistency and uniformity are 
themselves merit-system values, citing the requirement of fair and 
equitable treatment in 5 U.S.C. 2301(b)(2), and that a standard under 
which no factors need be considered makes it substantially harder to 
detect and correct disparate treatment--and correspondingly easier for 
arbitrary, inconsistent, or pretextual actions to survive review. 
Commenter 0634 argued that the Board's change, combined with OPM's 
proposed prohibition of penalty tables and narrowing of comparators, 
would remove guideposts on both sides of the appeal and invite 
variation based on the identity of the supervisor or employee. 
Commenter 0656 argued the change substantially increases the likelihood 
that Merit System Principles are violated. Commenter 0435 emphasized 
that a structured penalty analysis particularly protects career 
executives, who are visible and at times subject to pressures unrelated 
to the quality of their work, against penalties that are 
disproportionate or that could appear to have been imposed for reasons 
other than the efficiency of the service.
    Commenter 0625 expressed concern that reducing codified frameworks, 
at the same time other administration actions are increasing the 
potential for political influence over personnel decisions, makes it 
more likely that discipline and removal decisions will be driven by 
favoritism or politics rather than documented performance and due 
process. Commenter 0654 argued that the cumulative effect of the 
proposed changes carries a heightened risk of chilling protected 
activity, including whistleblowing and equal employment opportunity 
complaints; cited a 2020 Government Accountability Office report 
finding that employees who filed whistleblower disclosures or 
retaliation complaints were terminated at higher rates than the federal 
workforce generally; and argued that where the standard governing 
penalty review becomes less structured and harder to test against fixed 
considerations, an employee who suspects that a proposed adverse action 
is retaliatory in substance faces a correspondingly harder task in 
identifying and proving that a materially inconsistent or 
disproportionate penalty reflects retaliation rather than a legitimate 
exercise of managerial discretion--a structural risk the commenter 
described as independent of the intent behind any individual removal 
decision.
    Commenter 0391 argued that the rule is one piece of a broader 
effort to convert the federal civil service to a spoils system; that an 
employee who reports financial irregularities, questions an improper 
order, or raises a scientific finding inconvenient to a political 
priority could be moved from a performance rating to a completed 
removal in roughly a month, with a thinner paper trail and less 
structured justification required at each step; and

[[Page 56554]]

that separate anti-retaliation mechanisms, such as complaints to the 
Office of Special Counsel or an inspector general, proceed on timelines 
too slow to prevent the harm.
    Commenter 0337 argued that not every manager is a good manager; 
that managers vary in experience, competence, and integrity; that the 
personnel system should protect employees from poor management just as 
it protects agencies from poor employees; and that expanding managerial 
discretion while removing long-standing safeguards increases the risk 
of arbitrary, biased, or retaliatory decisions, including favoritism 
and the replacement of experienced employees with preferred candidates, 
even where a removal is ultimately overturned on appeal.
    Commenter 0439 further defended comparator evidence arguing that 
comparator evidence is the most concrete way an employee can show that 
a penalty was arbitrary rather than principled, that the Board recently 
recalibrated its comparator doctrine in a disciplined and agency-
protective way in Singh v. United States Postal Service, 2022 MSPB 15, 
and that making the inquiry optional removes a working, recently 
updated safeguard.
    Related concerns came from many quarters. Commenters 0243, 0399, 
0463, 0504, 0579, and 0620 argued that discipline must apply with equal 
rigor to supervisors and senior officials, with commenter 0243 urging 
that supervisory status continue to be treated, where appropriate, as 
an aggravating rather than a mitigating circumstance, and commenter 
0504 arguing that accountability should begin at the senior grades. 
Commenter 0544 asserted that discipline is being used pretextually at 
the commenter's facility to remove employees and repost their positions 
at lower grades. Commenter 0543, a disabled veteran, and commenters 
0518 and 0519 described hostility toward veteran employees and argued 
that reduced structure in penalty review will fall hardest on employees 
who depend on independent redress, with commenter 0543 warning of 
severe personal consequences for affected employees. Commenter 0012 
argued that deference to an agency's penalty is unjustified where, in 
the commenter's view, other provisions of the joint proposal remove 
standardization. Commenters 0040 and 0671, among many others, expressed 
concern that the revised standard will empower biased or vindictive 
management and facilitate the removal of whistleblowers.
    Response: The Board agrees that consistency in the treatment of 
similarly situated employees is a merit-system value, and nothing in 
this rule diminishes the tools by which inconsistency is exposed and 
remedied in Board proceedings. Evidence that similarly situated 
employees received materially different penalties for the same or 
similar conduct remains relevant under the totality of the 
circumstances. Beyond penalty review, the structural safeguards against 
disparate, pretextual, or politicized action are statutory and are 
untouched by this rule: an appellant may establish as an affirmative 
defense that the action was based on discrimination--including 
discrimination on the basis of political affiliation--whistleblower 
reprisal, or any other prohibited personnel practice described in 5 
U.S.C. 2302(b), and the Board may not sustain an action shown to rest 
on such a practice. 5 U.S.C. 7701(c)(2)(B). Harmful-error and not-in-
accordance-with-law defenses likewise remain fully available. 5 U.S.C. 
7701(c)(2)(A), (C). A penalty imposed for reasons other than the 
efficiency of the service fails the statutory standard itself--and that 
statutory standard is precisely the question the codified totality 
inquiry directs the Board to ask.
    The Board additionally observes, as it did in the NPRM, that the 
perceived obligation to process every case through an identical twelve-
factor template is itself in tension with the individualized judgment 
the merit system demands, and with Merit System Principles 4 and 6 in 
particular. 91 FR at 40447. Uniformity of recitation is not uniformity 
of treatment. The consistency the merit system requires is that like 
cases produce like outcomes for reasons the record supports--a question 
the totality standard addresses directly. To the extent commenters' 
concern rests on the combined effect of this rule and OPM's proposed 
provisions on penalty tables and comparators, the Board notes that 
those OPM provisions are not finalized in this document, and the 
operation of the Board's rule described above--including the continued 
relevance and admissibility of comparator evidence in Board 
proceedings--does not depend on them.
    These submissions are answered by the same statutory architecture. 
The retaliation scenarios Commenters 0654 and 0391 describe are the 
subject of protections this rule does not touch: whistleblower 
reprisal, retaliation for the exercise of complaint or appeal rights, 
and every other prohibited personnel practice described in 5 U.S.C. 
2302(b) remain affirmative defenses on which the Board may not sustain 
an action, 5 U.S.C. 7701(c)(2)(B), and an action taken for retaliatory 
reasons fails the efficiency-of-the-service standard itself. Nothing in 
the Board's rule shortens any timeline, reduces the record an agency 
must create--including the due-process obligation to identify in the 
advance notice the aggravating factors on which the penalty will rest--
or accelerates any removal.
    In response to Commenter 0337, the Board observes that this rule is 
not premised on an assumption that every manager exercises discretion 
well. This rule preserves Board penalty review in full: every penalty 
within the Board's jurisdiction remains subject to independent 
adjudication on the whole record, under a codified and publicly stated 
standard, with the Board's mitigation authority preserved. As to 
comparator evidence, the Board confirms what is stated above in this 
section: evidence that similarly situated employees received materially 
different penalties for the same or similar conduct remains relevant, 
and nothing in this rule disturbs the Board's precedent governing 
comparator analysis, including Singh.
    The responses above answer these submissions as well. The codified 
standard is a single standard: it governs the Board's review of penalty 
reasonableness in every appeal within its scope, whatever the 
appellant's grade, position, or supervisory status, and comparator 
evidence concerning similarly situated supervisors, like comparator 
evidence concerning any similarly situated employee, remains relevant.
    Nothing in this rule alters the settled principle that the 
heightened responsibilities of a supervisory position may bear on the 
reasonableness of a penalty wherever the record makes them material. 
Pretextual discipline of the kind commenter 0544 describes is the 
subject of the affirmative defenses and prohibited-personnel-practice 
protections described above, which this rule leaves untouched; evidence 
that an action was taken to achieve an improper staffing objective 
rather than to promote the efficiency of the service defeats the action 
under the statutory standard itself. As to comparator scope, in 
proceedings before the Board, comparator evidence is not confined to a 
single supervisor or work unit; its probative weight depends on the 
similarity the record establishes, as the Board's precedent, including 
Singh, provides. Finally, the Board takes seriously the concerns of 
veteran employees expressed by commenters 0518, 0519, 0524, and 0543. 
Nothing in this rule diminishes the Board's independent review, the 
availability of

[[Page 56555]]

disability-discrimination and reprisal defenses, or the agency's burden 
of proof; the Board's processes remain fully available to veteran 
appellants, and material evidence of disability, accommodation needs, 
or service-related circumstances remains cognizable under the totality 
of the circumstances.

IV.3. Notice to Employees and the Claim That the Rule Hides the Ball

    Comment: Commenter 0629 argued that the Douglas framework gives 
both parties notice of the considerations a reviewing body will find 
relevant, and that the totality standard does not change the ultimate 
calculation performed by the deciding official but removes the stage at 
which everyone must show their work, leaving managers and employees in 
the dark. Commenter 0427 similarly argued that employees use the 
articulated factors to respond before final agency action and that 
managers consider the factors and employee evidence before deciding, 
adding predictability and efficiency to the statutory process. 
Commenters 0003, 0044, 0217, 0373, and 0493 pressed a related, ex ante 
version of the argument: that the enumerated factors do front-end 
work--prompting proposing and deciding officials to seek out mitigating 
information before deciding, requiring supervisors to show their work, 
disciplining investigations, and lending credibility to the resulting 
decision--and that without them penalty decisions will become a ``black 
box.'' Commenter 0316 argued that added flexibility reduces 
transparency, and commenters 0095, 0177, 0505, 0508, 0564, and 0663 
raised similar transparency and notice concerns.
    Response: The Board disagrees. Three sources of notice remain. 
First, the substantive considerations that have always mattered 
continue to matter: an employee's years of service, clean record, 
rehabilitative potential, and mitigating circumstances do not become 
less relevant because their consideration is no longer compelled by an 
enumerated list, and this preamble expressly confirms their continued 
relevance in appropriate cases. Second, and more fundamentally, the 
constitutional and case-law notice obligations that protect the 
employee's opportunity to respond are unchanged: as the NPRM stated, an 
agency that intends to rely on aggravating factors as a basis for its 
penalty must identify them in the advance notice of the proposed action 
so the employee has a fair opportunity to respond before the deciding 
official, and failure to do so risks reversal of the action on due 
process grounds. 91 FR at 40455. That requirement--not the Douglas 
list--is what guarantees the employee knows the charges to be answered, 
and it survives this rule in full. Third, the final rule codifies the 
operative review standard and the already existing Devall mitigation 
framework in regulation for the first time.
    The ex ante argument pressed by commenters 0003, 0044, 0217, 0373, 
and 0493 warrants a direct answer. The Board agrees that well-founded 
penalty decisions rest on information gathered before the decision is 
made; that is what the burden of proof requires. What compels that 
gathering, however, is not the enumeration of twelve factors--it is the 
agency's obligation to prove, on the record and against the employee's 
reply, that the chosen penalty is reasonable, together with the due-
process obligation to identify in the advance notice the aggravating 
considerations on which the penalty will rest.
    Both obligations survive this rule in full, and a deciding official 
who fails to inform himself or herself of the material circumstances--
including mitigating circumstances raised in the employee's reply--
risks producing exactly the unexplained, unsupported penalty 
determination that fails under the codified standard. Nothing in this 
rule prevents an agency from continuing to use structured internal aids 
to organize that work (Sections IV.8 and IX.6) or from providing 
detailed written decisions; what may no longer be demanded is 
recitation of an enumerated list as a condition of a penalty's 
validity. Commenter 0493's related observation--that an excessive 
penalty itself disserves the efficiency of the service by demoralizing 
a productive workforce--states a proposition the codified standard 
embraces: a penalty disproportionate to the sustained conduct on the 
whole record is not within the tolerable limits of reasonableness and 
thus will not be sustained.

IV.4. Statutory Authority for the Board's Rule

    Comment: Commenter 0656 asserted that OPM and MSPB have no 
authority to regulate away controlling decisions with which current 
leadership disagrees and that the change runs counter to congressional 
intent because Congress has not acted on the issues identified. 
Commenter 0647 argued that the Douglas factors were drawn from 
preexisting Civil Service Commission law and were understood to be 
necessary tools compelled by the CSRA's prohibition on penalties that 
are arbitrary, capricious, or an abuse of discretion, and that without 
a demonstrated substantive flaw in Douglas the Board cannot lay a 
foundation for abandoning it. Commenter 0634 argued that a regulation 
cannot make material evidence optional by deleting the name of the 
framework in which courts have considered it--reasoning that if the 
proposed standard preserves existing obligations the change is largely 
semantic, and if it authorizes ignoring material evidence it invites 
reversal under 5 U.S.C. 7703(c).
    Commenters 0010, 0048, 0069, 0341, and 0419 likewise argued that 
the agencies lack authority for the change or that it is contrary to 
congressional intent. Commenter 0066, a practitioner before the Board, 
argued that the Douglas analysis is implicitly written into statutory 
law through Senior Executive Service legislation that, in the 
commenter's view, legislated mitigation standards paralleling Douglas, 
such that its abandonment would not survive review under the 
Administrative Procedure Act; the commenter also noted, while expressly 
reserving them, the questions whether the Board may overrule decisional 
law by regulation and whether the regulation constitutes a prohibited 
advisory opinion.
    Response: The Board has ample authority for this rule. Congress 
authorized the Board to prescribe regulations to carry out its 
adjudicatory functions, 5 U.S.C. 1204(h) and 7701(k), and the standard 
this rule addresses is one the Board itself created: the Douglas 
factors appear nowhere in the CSRA. Congress enacted a standard--``only 
for such cause as will promote the efficiency of the service,'' 5 
U.S.C. 7513(a)--and a burden of proof, 5 U.S.C. 7701(c), and left the 
methodology of penalty review to the Board. The Board articulated one 
methodology in 1981 through adjudication (in Douglas); it may refine 
that methodology in 2026 through notice-and-comment rulemaking. It is 
well established that an agency vested with both rulemaking and 
adjudicatory authority may choose to announce and revise principles of 
general applicability through rulemaking rather than case-by-case 
adjudication. See SEC v. Chenery Corp., 332 U.S. 194, 203 (1947); 
Heckler v. Campbell, 461 U.S. 458, 467 (1983); Am. Hosp. Ass'n v. NLRB, 
499 U.S. 606, 612 (1991). A change in the Board's own decisional 
framework, adopted with public participation and a reasoned 
explanation, is the ordinary and lawful exercise of that authority--not 
a usurpation of Congress's role. Congress's silence on the Douglas 
factors cuts in the Board's favor, not

[[Page 56556]]

against it: the factors are the Board's gloss on the statute, and the 
Board is returning its review to the statutory text.
    Commenter 0647's provenance argument confirms, rather than refutes, 
this conclusion. The CSRA compels reasoned, non-arbitrary, evidence-
supported penalty decisions; it nowhere compels the twelve-factor form. 
That Douglas synthesized considerations drawn from preexisting 
adjudicatory practice confirms the factors' character as decisional 
common law--the very kind of framework an adjudicatory agency may 
restate, refine, or replace, whether by adjudication or by rule. The 
substantive prohibitions the commenter identifies--against arbitrary, 
capricious, or abusive penalties--are statutory, are preserved, and are 
codified in this rule's tolerable-limits-of-reasonableness standard.
    As to commenter 0634's dilemma--that the change is either semantic 
or unlawful--the Board rejects both horns. The change is not semantic: 
it eliminates a mandatory analytic overlay, the recitation-centered 
litigation that overlay generated, and any basis for disturbing an 
otherwise reasonable penalty for failure to enumerate factors. Neither 
does the change authorize disregard of material evidence: the Board's 
obligation to decide on the whole record, the agency's burden of proof, 
and judicial review under 5 U.S.C. 7703(c) all remain. Material record 
evidence bearing on reasonableness--including mitigating evidence--
cannot lawfully be ignored under the totality standard any more than it 
could under Douglas, and this preamble so confirms. What the rule 
eliminates is the compulsory form, not the substantive obligation of 
reasoned, record-based decision-making.
    Commenter 0066's ratification argument does not alter this 
analysis. Congressional enactments addressing actions against senior 
executives operate within subchapter V of chapter 75, a materially 
different scheme that this rule does not touch (Section IV.13). 
Legislation particular to that scheme neither enacted the twelve-factor 
form for actions under 5 U.S.C. 7513 nor withdrew from the Board the 
authority over its own decisional methodology that 5 U.S.C. 1204(h) and 
7701(k) confer, and congressional acquiescence in an adjudicatory 
framework of the Board's own creation does not freeze that framework 
against revision through notice-and-comment rulemaking. As for the 
questions the commenter reserves: the relationship of this rule to 
decisional law is addressed in Section IV.5, and the rule is not an 
advisory opinion--it is a legislative rule of general applicability, 
adopted under 5 U.S.C. 1204(h) and 7701(k) through notice-and-comment 
procedures, that decides no pending case and advises no party on any 
specific dispute.

IV.5. Federal Circuit and Supreme Court Precedent

    Comment: Commenter 0629 argued that the Board may not eliminate the 
Douglas standard by rulemaking because the Federal Circuit has adopted 
Douglas analysis into its own precedent, which the Board must follow 
unless and until the court itself revises it, citing Federal Circuit 
decisions rejecting Board attempts to depart from circuit-endorsed 
legal tests and a decision applying Douglas notwithstanding a 
subsequent express statute; the commenter predicted the Federal Circuit 
is likely to reject any attempt by regulation to undercut its 
longstanding precedent. Commenter 0427 argued that the Supreme Court 
has upheld Douglas as a proper statement of the Board's authority. 
Commenter 0647 noted that the Federal Circuit has repeatedly approved 
use of the factors as a basis for determining the reasonableness of a 
penalty and has held that failure to consider a significant mitigating 
circumstance constitutes an abuse of discretion. Commenter 0634 
similarly emphasized that the Supreme Court has described Douglas as 
the general framework for penalty review. Commenters 0096 and 0212 
similarly argued that removing the factors contradicts decades of 
precedent, and commenter 0066 emphasized that innumerable Federal 
Circuit decisions have informed and confirmed the application of the 
Douglas standards without ever criticizing their existence.
    Response: The Board has carefully considered its relationship to 
Federal Circuit and Supreme Court precedent and concludes that this 
rule is consistent with it. Three points are essential.
    First, the Douglas factors are the Board's creation, not the 
court's or Congress's. The Supreme Court's description of Douglas as 
the Board's general framework reflects exactly that: Douglas is the 
framework the Board announced for exercising its own review function. 
The Federal Circuit's decisions have reviewed the Board's application 
of the Board's framework and have repeatedly emphasized--beginning with 
Nagel--that the factors were intended to assist, need not be applied 
mechanically, and that consideration of the relevant factors is all the 
law requires. 707 F.2d at 1386. Decisions approving the framework as a 
lawful exercise of the Board's authority are not holdings that it is 
the only lawful methodology; no decision of the Federal Circuit or the 
Supreme Court holds that the twelve enumerated factors are compelled by 
5 U.S.C. 7513, by 5 U.S.C. 7701, or by the Constitution.
    What circuit precedent does compel--and what this rule preserves 
and codifies--are the substantive limits on penalties: a penalty may 
not be arbitrary, capricious, an abuse of discretion, grossly 
disproportionate to the offense, or unsupported by the record. See, 
e.g., Beard v. Gen. Servs. Admin., 801 F.2d 1318, 1321 (Fed. Cir. 
1986); Webster v. Dep't of the Army, 911 F.2d 679, 685-86 (Fed. Cir. 
1990); Tartaglia v. Dep't of Veterans Aff., 858 F.3d 1405, 1408-09 
(Fed. Cir. 2017); Lachance v. Devall, 178 F.3d 1246 (Fed. Cir. 1999).
    The principle Commenter 0647 invokes--that failure to consider a 
significant mitigating circumstance is an abuse of discretion--survives 
intact under this rule: the totality of the circumstances by definition 
includes significant mitigating circumstances established by the 
record, and a penalty determination that ignores them remains an abuse 
of discretion under the codified standard. The Supreme Court's decision 
commenters invoke, United States Postal Service v. Gregory, 534 U.S. 1 
(2001), is consistent with this understanding. Gregory addressed the 
Board's treatment of prior disciplinary actions in penalty review; it 
described the Douglas factors as the Board's own general framework for 
penalty review and emphasized the deferential character of the Board's 
review of agency-selected penalties--the very allocation of 
responsibility this rule codifies--and it nowhere held that the 
enumerated factors are required by statute or are otherwise beyond the 
Board's authority to revise. 534 U.S. at 8-10.
    The Federal Circuit decisions commenters collect are of a piece: 
Zingg v. Department of the Treasury, 388 F.3d 839, 841 (Fed. Cir. 
2004), approved use of the factors as ``a basis for determining the 
reasonableness of a penalty''--approval of a permissible methodology, 
not a holding that the methodology is exclusive--and VanFossen v. 
Department of Housing & Urban Development, 748 F.2d 1579, 1581 (Fed. 
Cir. 1984), and Purifoy v. Department of Veterans Affairs, 838 F.3d 
1367, 1372 (Fed. Cir. 2016), enforce the record-based principle, fully 
preserved here, that significant mitigating circumstances may not be 
ignored. The same is true of the decisions invoked by commenters 0066, 
0096, and 0212: decisions applying and clarifying the Board's

[[Page 56557]]

framework confirm its lawfulness; they do not enact it as the exclusive 
methodology.
    Second, the line of authority reflected in Cobert v. Miller, 800 
F.3d 1340, 1349 (Fed. Cir. 2015)--on which commenter 0629 relies for 
the proposition that the Board must follow circuit-endorsed legal tests 
unless and until the court itself revises them--concerns a different 
posture: the Board's obligation, when adjudicating, to follow circuit 
precedent interpreting governing law rather than departing from it by 
decision. This rule is not an adjudicatory departure from circuit 
precedent; it is a legislative rule, adopted through notice-and-comment 
procedures under an express statutory grant, 5 U.S.C. 1204(h), revising 
the Board's own methodology on a question the statute leaves to the 
Board. When the legal framework itself lawfully changes, the court 
reviews Board decisions under the new framework; prior decisions 
applying the superseded framework do not freeze it in place.
    Miller itself illustrates the distinction: the Federal Circuit 
there held that the Board, when adjudicating, was not free to disregard 
circuit precedent that had adopted an interpretation the Board itself 
first developed. It did not address, much less foreclose, revision of 
the Board's decisional methodology through a duly promulgated 
legislative rule. Nor does the Board read the Federal Circuit's 
decisions as having independently adopted the twelve-factor enumeration 
as a construction of 5 U.S.C. 7513 or 7701 that binds the Board in 
rulemaking. What the court has adopted and enforced as its own 
precedent are the substantive boundaries of penalty review--deference 
to the agency's primary discretion, bounded by the tolerable limits of 
reasonableness and policed through abuse-of-discretion review--and this 
rule codifies those boundaries rather than departing from them. And 
Connor v. Department of Veterans Affairs, 8 F.4th 1319 (Fed. Cir. 
2021)--the decision commenters cite as applying Douglas notwithstanding 
a subsequent express statute--construed a distinct statutory scheme, 
the expedited removal authority Congress enacted for a single 
department (the Department of Veterans Affairs) at 38 U.S.C. 714, and 
addressed the role of the Douglas factors under that scheme in the 
absence of any regulation or other applicable case law on the question; 
it did not hold that chapter 75 or chapter 77 mandates the twelve 
factors as against a duly promulgated Board regulation.
    Third, the Board acknowledges--as it must--that the validity of 
this rule, and of Board decisions applying it, will be subject to 
judicial review under 5 U.S.C. 7703. The Board has concluded that the 
rule is within its authority and consistent with statute and precedent 
for the reasons stated here, and it has structured the rule to codify, 
rather than displace, the substantive principles the Federal Circuit 
has enforced. Should the court conclude otherwise in any respect, the 
Board will of course conform its adjudications to the court's rulings. 
In the interim, the rule reduces rather than creates tension with 
circuit precedent: it leaves untouched every holding enforcing the 
substantive limits of penalty review, and it withdraws only a 
decisional template the court itself has repeatedly described as non-
mandatory. See Nagel, 707 F.2d at 1386; Kumferman v. Dep't of the Navy, 
785 F.2d 286, 291 (Fed. Cir. 1986); Davis v. U.S. Postal Serv., 487 F. 
App'x 571, 576 (Fed. Cir. 2012) (holding that the Board need not 
expressly address every factor in every decision).

IV.6. Due Process and Access to Judicial Review

    Comment: Commenter 0626 argued that broad discretionary standards 
without clearly articulated limits may make court review more 
difficult, invoking Supreme Court decisions reflecting a principle that 
personnel systems should be predictable and capable of meaningful 
judicial review. Commenters 0629 and 0656 invoked employees' 
constitutional due process rights, including the pre-deprivation 
protections recognized in Cleveland Board of Education v. Loudermill, 
470 U.S. 532 (1985). Commenter 0654 likewise invoked Loudermill and 
Arnett v. Kennedy, 416 U.S. 134 (1974), and argued that the 
predictability on which Loudermill's due-process framework depends 
rests on the assumption that a reviewing body's assessment of an 
adverse action can be meaningfully tested against ascertainable 
standards--an assumption the commenter contended an undefined 
discretionary standard undermines even though the nominal right of 
Board review is retained. Commenters 0014, 0062, 0088, 0121, 0292, 
0314, and 0370 likewise invoked due process and the right of employees 
to defend themselves.
    Response: This rule does not touch any of the interests those 
authorities protect. The mixed-case decisions Commenter 0626 cites 
concern the forum for judicial review; nothing in this rule alters the 
Board's jurisdiction, mixed-case procedures, or the routing of judicial 
review, and those decisions remain fully applicable. Loudermill 
concerns the pre-deprivation process due a tenured public employee--
notice of the charges, an explanation of the evidence, and a meaningful 
opportunity to respond before the deciding official. Those protections 
arise from 5 U.S.C. 7513(b) and from the Constitution, are administered 
through agency-level procedures, and are not amended by this rule. 
Indeed, as noted above, the rule expressly leaves intact the case law 
requiring that aggravating factors relied upon for the penalty be 
identified in the advance notice, on pain of reversal on due process 
grounds. 91 FR at 40455.
    As for meaningful judicial review, the codified standard is at 
least as reviewable as its predecessor: the Board's decisions will 
identify the circumstances found material, weigh them on the record, 
and explain why the penalty does or does not fall within the tolerable 
limits of reasonableness, and the Federal Circuit will review those 
decisions under the unaltered standards of 5 U.S.C. 7703(c). Commenter 
0654's argument fares no better. Loudermill and Arnett concern the pre-
deprivation process due before an adverse action is taken--notice of 
the charges, an explanation of the evidence, and a meaningful 
opportunity to respond--and, as stated above, those protections are 
unaltered by this rule. To the extent the commenter's argument concerns 
the standards governing post-deprivation review, the codified standard 
supplies ascertainable standards: the tolerable-limits-of-
reasonableness inquiry the Federal Circuit has policed for four 
decades, the agency's unchanged burden of proof under 5 U.S.C. 
7701(c)(1)(B), and reasoned, record-based Board decisions subject to 
judicial review under 5 U.S.C. 7703(c).
    These conclusions answer as well the similar due-process objections 
of commenters 0014, 0062, 0088, 0121, 0292, 0314, and 0370: the pre-
deprivation protections of notice, an explanation of the evidence, and 
a meaningful opportunity to respond arise from the Constitution and 5 
U.S.C. 7513(b) and are unaltered by this rule, and post-deprivation 
review before the Board and the courts continues under unchanged 
burdens of proof and standards of judicial review.

IV.7. The Claim That the Rule Will Increase Litigation and Reversals

    Comment: Commenter 0634 predicted that, absent identified factors, 
managers and administrative judges will either recreate Douglas under 
different labels or proceed without a shared method, producing 
reversals for arbitrary and capricious decision-making; commenters 
0667, 0656, 0427, and 0647 predicted increased litigation, less

[[Page 56558]]

consistency, and poorly reasoned decisions; commenter 0435 predicted a 
higher likelihood of successful litigation challenges; and commenter 
0629 argued that without delineated factors the Federal Circuit would 
be required to review every penalty more searchingly, opening the door 
to challenges. Commenters 0027 and 0345 predicted that removals under 
the revised standard will be undone in litigation; commenter 0496 
argued that discarding a framework around which forty-five years of 
precedent has developed ``resets the litigation clock rather than 
reducing it''; and commenter 0665 argued that the rulemaking supplies 
no cost estimate for the foreseeable litigation over what the totality 
standard requires.
    Response: The Board expects the opposite, for reasons already 
stated: the rule removes an entire category of appellate issues--
whether each factor was recited, addressed, and adequately weighted--
that today consumes party and adjudicator resources without advancing 
the statutory inquiry. The Board also notes that the standard it is 
codifying is not novel to the reviewing court: the tolerable-limits-of-
reasonableness formulation is the one the Federal Circuit has policed 
for four decades, and the abuse-of-discretion and gross-disproportion 
limits the court enforces are unchanged.
    The Board's own historical data, submitted by commenter 0647 and 
discussed in the Statement of Need in Section IX.1, corroborate this 
expectation: mitigation outcomes have been rare and stable for decades 
because they turn on substantive reasonableness, which this rule leaves 
in place. To the extent an initial period of precedent-building 
accompanies any doctrinal refinement, the Board is confident that its 
published decisions will supply guidance sufficiently rapidly, as they 
did in the years following Douglas itself. And to the extent commenters 
predict that adjudicators will continue to find familiar Douglas 
considerations material in many cases, the Board does not regard that 
as a defect: those considerations are often material. The point of this 
rule is that their consideration follows from the record, not from a 
mandatory template.
    Commenter 0496's litigation-clock argument, and commenter 0665's 
related cost objection, are answered by the same points and in Section 
IX.3. The codified formulation is not a new test whose meaning must be 
constructed from nothing: it is the tolerable-limits-of-reasonableness 
standard the Federal Circuit has policed for four decades, together 
with the Devall mitigation framework, both carried forward with their 
existing case law intact. Precedent applying the substantive limits of 
penalty review retains its force; what is retired is the litigation of 
recitation, not the law of reasonableness.

IV.8. The Prediction That Informal Frameworks Will Persist Without 
Transparency

    Comment: Commenter 0625 predicted that removing codified frameworks 
will not eliminate their use in practice: because the possibility of 
appeal remains, human resources and legal offices will continue to 
develop and apply their own informal, Douglas-like checklists and 
penalty aids--but without the transparency, consistency, and 
accountability that come from codified frameworks--making the 
application of performance-based and adverse actions more opaque and 
more variable across agencies. The commenter also observed that large, 
multi-layered agencies with thousands of supervisors need some shared 
framework to promote consistent, defensible decisions, and that 
unstructured discretion is workable only in small organizations.
    Response: This rule governs the standard the Board applies on 
review. The transparency and accountability the commenter values are 
supplied at that stage by public, codified, and reviewable materials 
that this rule leaves in place or creates: the codified review standard 
and mitigation framework in Sec.  1201.56; the due-process requirement 
that aggravating factors be identified in the advance notice; the 
record on appeal; and the Board's decisions. Cross-agency consistency 
is policed by a single codified standard of review applied by one 
national adjudicator and reviewed by one court.

IV.9. Request To Exclude Federal Law-Enforcement Personnel or To 
Prescribe Factors for Law-Enforcement Appeals

    Comment: Commenter 0443, which expressed support for the proposed 
rule's stated objectives, requested that covered federal law-
enforcement personnel be excluded from the rulemaking's amendments--
including the amendment to 5 CFR part 1201--and that the Board retain 
Douglas-based penalty review in appeals under 5 U.S.C. 7513 involving 
such personnel. In the alternative, the commenter requested that the 
final rule expressly require the Board to consider, in law-enforcement 
appeals, the officer's operational circumstances, prior record, notice 
of the governing standard, consistency of penalty, intent, and 
rehabilitation potential. The commenter emphasized that law-enforcement 
duties--arrests, citations, crowd control, and use of force--
predictably generate public complaints, including complaints that are 
ultimately unsubstantiated; that penalty procedures applicable to 
officers must preserve the ability to distinguish proven misconduct 
from good-faith operational judgment exercised under rapidly evolving 
conditions; and that a general totality standard, particularly in 
combination with OPM's proposed provisions on penalty tables and 
comparators, may reduce transparency and produce inconsistent outcomes 
among similarly situated officers. The commenter also requested, at a 
minimum, a separate law-enforcement impact analysis before the rule is 
applied to those workforces. Other commenters serving in or 
representing law-enforcement and correctional workforces raised similar 
concerns (commenters 0119, 0239, 0299, 0324, 0349, 0357, 0394, 0397, 
0401, 0403, 0404, 0423, 0441, 0648, and 0655), emphasizing the 
operational realities of policing and corrections, the volume of 
complaints those environments generate, and the risk of inconsistent or 
command-influenced discipline; several also addressed OPM's proposed 
provisions, and those portions of their comments are referred to OPM.
    Response: The Board declines to adopt an occupational exclusion 
from Sec.  1201.56(b)(3) or to codify a mandatory factor list 
applicable to a subset of appeals. A single standard of review, applied 
by one national adjudicator and reviewed primarily by one court, is 
itself a structural guarantor of the consistency the commenter seeks; 
fragmenting the standard by occupation would multiply the boundary and 
classification disputes the commenter's own proposed definitions 
illustrate, and a codified mandatory list for one workforce would 
reintroduce, for that workforce, the compulsory-checklist dynamic 
described in Sections IX.1 and IX.5. The Board is confident, however, 
that the substance of the commenter's concerns is accommodated by the 
codified standard.
    Every consideration the commenter identifies--the operational 
context in which the conduct occurred; the distinction between proven 
misconduct and good-faith operational judgment exercised under 
dangerous, rapidly changing conditions; the officer's record; the 
clarity of the standards the officer was expected to meet; intent; the 
consistency of the penalty with penalties imposed on similarly situated 
officers; and rehabilitative potential--is a circumstance bearing on 
the

[[Page 56559]]

reasonableness of the penalty, remains fully cognizable under the 
totality of the circumstances, and, where the record makes it material, 
must be weighed.
    So too the commenter's observation that policing predictably 
generates complaints, including unsubstantiated ones: the codified 
standard operates on charges the agency has proven by preponderant 
evidence, not on the existence or volume of complaints, and the 
distinction between sustained misconduct and unsubstantiated allegation 
is preserved in full. Comparator evidence--including, where the record 
supports its materiality, evidence concerning officers in comparable 
commands, districts, or operational units--remains relevant, as stated 
in Section IV.2. The same response applies to the other law-enforcement 
and correctional commenters identified above: every operational 
consideration they identify remains cognizable under the totality of 
the circumstances, the codified standard operates only on charges 
proven by preponderant evidence, and relevant comparator evidence 
remains admissible in Board proceedings.

IV.10. The ``Conscientious Consideration'' Formulation and the Standard 
of Judicial Review

    Comment: Commenter 0430 argued that proposed Sec.  1201.56(b)(3) 
adopts the second half of Douglas's operative sentence--review of the 
penalty for whether it is within ``tolerable limits of 
reasonableness''--while deleting the first half, under which the 
Board's review is ``essentially to assure that the agency did 
conscientiously consider the relevant factors,'' and that a boundary 
without a metric bounds nothing; the commenter requested that any final 
rule codify both halves of the sentence. The commenter further argued 
that under Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), 
courts exercise independent judgment on questions of statutory meaning; 
that the Douglas framework is the Board's contemporaneous and 
consistent construction of the efficiency-of-the-service standard, of 
the kind that carries persuasive weight; and that the Board is 
discarding its most durable construction of the statutes it administers 
in favor of a position taken for the first time in this rulemaking. 
Commenter 0509 similarly argued that the proposal keeps 
``reasonableness'' while discarding the analysis that gives it meaning, 
and commenters 0478 and 0622 likewise invoked Loper Bright and the end 
of judicial deference to agency interpretations of statutes.
    Response: The Board declines to add the requested clause to the 
regulatory text, but it rejects the premise that the omission 
authorizes penalty decisions unmoored from the relevant considerations. 
The agency bears the burden of proving, by preponderant evidence on the 
whole record, that its penalty is reasonable. A penalty determination 
that is unexplained, rests on facts the record does not support, or 
ignores material record evidence--including significant mitigating 
circumstances--is not within the tolerable limits of reasonableness and 
risks mitigation or reversal; Sections IV.1, IV.5, and V so confirm, 
and the Federal Circuit's abuse-of-discretion precedent, which this 
rule codifies rather than displaces, so requires. The obligation of 
conscientious, record-based decision-making therefore survives in full. 
What the Board declines to codify is a formulation that four decades of 
experience shows is understood in practice as commanding a factor-by-
factor demonstration--the very understanding this rule is designed to 
correct. Reasoned consideration of what the record makes material is 
required; recitation of an enumerated list is not; and the difference 
between the two is the point of this rulemaking.
    As to Loper Bright: the Board agrees that courts will exercise 
independent judgment in reviewing this rule, but the commenter's 
framing mistakes what the rule decides. The statutory content of 
chapter 75 penalty review is not in dispute and is not changed: the 
action must be taken only for such cause as will promote the efficiency 
of the service; the agency must prove its case, including the 
reasonableness of its penalty, by preponderant evidence; and the 
Board's decisions are reviewed by the courts under 5 U.S.C. 7703(c).
    What this rule addresses is the Board's own decisional methodology 
for applying that standard--whether reasonableness review must be 
organized around an enumerated advisory list. That methodology is 
committed to the Board by 5 U.S.C. 1204(h) and 7701; the Board created 
it by adjudication in 1981, and it may revise it by rulemaking in 2026, 
as Section IV.4 explains. And to the extent longevity confers 
persuasive force on the Board's constructions, the construction that 
has endured--and that this rule codifies--is Douglas's actual standard 
of review: deference to the agency's primary discretion, bounded by the 
tolerable limits of reasonableness.
    The compulsory twelve-factor application the commenter defends is 
not a construction Douglas announced; it is the practice Douglas warned 
against, Nagel rejected, and this rule corrects. Finally, the Board has 
considered the commenter's argument that codifying Nagel--retaining the 
enumerated list with a codified anti-mechanical disclaimer--is the 
obvious alternative within the ambit of the existing policy. Section 
IX.5 explains why the Board concludes that course would re-entrench the 
perceived obligation this rule dispels: Douglas and Nagel both 
contained the disclaimer, and four decades of disclaimed practice 
nonetheless produced the checklist regime the record describes.
    These conclusions answer the parallel arguments of commenters 0509, 
0478, and 0622. The obligation of reasoned, record-based consideration 
that gives the reasonableness standard its content survives in full, as 
stated above; and because the rule revises the Board's own decisional 
methodology rather than construing ambiguous statutory text, the demise 
of judicial deference to agency statutory interpretation does not 
undermine it--the courts will review the rule, and Board decisions 
under it, exercising their own judgment, and the Board is confident in 
the rule's validity for the reasons stated in Sections IV.4 and IV.5.

IV.11. Due Process Notice and the Administrability of Penalty Review

    Comment: Commenter 0430 argued that the Douglas factors are what 
make administrable the constitutional notice obligation recognized in 
Stone v. FDIC, 179 F.3d 1368 (Fed. Cir. 1999), and Ward v. United 
States Postal Service, 634 F.3d 1274 (Fed. Cir. 2011): a shared, finite 
vocabulary in which agencies draft the penalty portion of proposal 
notices, employees frame replies, and the Board audits whether a 
decision strayed beyond the noticed grounds. If no factors are 
required, the commenter asked, what must the proposal notice? The 
commenter predicted that agencies will either continue noticing 
aggravating considerations with the same specificity as today--in which 
case the rule changes nothing--or allow notices to degrade into 
totality boilerplate while deciding officials reach for un-noticed 
considerations, producing a wave of automatic due-process reversals at 
the expense of agencies and employees alike.
    Response: The question the commenter poses has a settled answer, 
and this rule does not change it: the advance notice must identify the 
charges and the aggravating factors on which the agency intends to rely 
in selecting its penalty, in sufficient detail to give the employee a 
fair and meaningful opportunity to respond

[[Page 56560]]

before the deciding official, and a decision that rests on new and 
material information not so noticed--whether bearing on the charge or 
on the penalty--violates due process and will be reversed.
    That obligation was never keyed to the Douglas taxonomy. It is 
keyed to the information the deciding official actually considers: an 
agency has never been required to notice all twelve factors, and it has 
never been permitted to rely on an un-noticed aggravating consideration 
merely because that consideration could be sorted under one of them. 
Nothing in this rule alters those requirements, and Sections IV.3 and 
VIII expressly preserve them. The commenter's dilemma is therefore a 
false one. Agencies must continue to disclose, in the advance notice, 
the considerations on which the penalty will rest--with or without an 
enumerated review framework--and a deciding official who reaches beyond 
the notice courts reversal after this rule exactly as before it. What 
changes is not the notice obligation but the review of the decision: 
the Board will ask whether the penalty is reasonable on the whole 
record and consistent with the noticed grounds, not whether the 
decision letter recited an enumerated list. The Board expects agencies 
to respond to this rule the way careful litigants respond to any 
codified standard--by proving their noticed case--and the Board's 
adjudications will continue to enforce the due-process boundary without 
exception.

IV.12. Arbitration of Chapter 75 Actions Under 5 U.S.C. 7121(e)(2)

    Comment: Commenter 0430 argued that the NPRM did not address 
arbitration; that under 5 U.S.C. 7121(e)(2), an arbitrator resolving a 
grievance over a matter covered under 5 U.S.C. 4303 or 7512 shall be 
governed by 5 U.S.C. 7701(c)(1); and that under Cornelius v. Nutt, 472 
U.S. 648 (1985), Congress intended arbitrators to apply the same 
substantive standards the Board would apply, to promote consistency and 
prevent forum shopping. The commenter contended that the rule therefore 
either silently rewrites the review standard applied in every 
negotiated grievance procedure in the government or produces divergent 
review of identical removals depending on the forum in which they are 
challenged--the inconsistency, in the commenter's view, that the rule 
claims to cure. From the opposite direction, Commenter 0631, an 
individual federal employee commenting in their personal capacity, 
argued that arbitrators treat the Douglas factors as binding criteria 
and frequently mitigate removals that do not exactingly conform to the 
twelve-factor test--making it difficult, in the commenter's experience, 
to remove bargaining unit employees who commit serious misconduct--and 
urged that the rule be finalized quickly precisely because the codified 
standard would bind arbitrators.
    Many other commenters addressed the rule's operation in negotiated 
grievance and arbitration procedures from both directions (commenters 
0059, 0061, 0445, 0453, 0456, 0459, 0497, 0498, 0499, 0503, 0511, 0541, 
0563, 0574, 0635, 0638, 0641, 0643, and 0668), several arguing that 
arbitrators, unions, and agencies rely on the Douglas framework to 
evaluate and resolve disciplinary disputes and that its retirement will 
disrupt settled grievance practice. Commenter 0066 argued that 
arbitrators would be stripped of a useful analytical tool in evaluating 
adverse actions under just-cause provisions that parallel the 
efficiency-of-the-service standard.
    Response: Congress commanded substantive parity between the Board 
and arbitrators in covered matters, and this rule maintains that 
parity. The standard codified at Sec.  1201.56(b)(3) is, upon its 
applicability, the substantive standard governing the Board's review of 
penalty reasonableness in appeals within its scope; under 5 U.S.C. 
7121(e)(2) as construed in Cornelius, an arbitrator adjudicating a 
grievance over a matter that could have been appealed to the Board 
applies the same substantive standards the Board would apply. The 
parity command thus carries the codified standard into arbitration by 
operation of the statute--just as it has carried the Board's 
substantive case law into arbitration for four decades--and the forum 
divergence the commenter predicts does not arise.
    The same statutory parity answers Commenter 0631: upon its 
applicability, the standard codified in Sec.  1201.56(b)(3) is the 
substantive standard an arbitrator must apply in resolving a grievance 
over a matter that could have been appealed to the Board, as discussed 
further in Sections VII and IX.1. Consistent with the applicability 
statement described in Sections VIII and IX.6, the Board expects the 
codified standard to operate in arbitration on the same prospective 
basis on which it operates before the Board: a matter that would be 
adjudicated under the prior framework had it been timely appealed to 
the Board should be adjudicated under that framework in arbitration. 
The Board acknowledges that it does not administer negotiated grievance 
procedures, and nothing in this rule purports to regulate arbitral 
procedure or the content of collective bargaining agreements.
    The additional arbitration comments identified above are answered 
by the parity principle stated in this section: in covered matters, the 
substantive standard an arbitrator must apply is the standard the Board 
would apply, and the codified standard--including the continued 
relevance of every consideration the record makes material--will 
operate in arbitration exactly as it operates before the Board, on the 
same prospective basis. Arbitrators are no more stripped of analytical 
tools than the Board is: the considerations identified in Douglas 
remain available wherever the record makes them material; what may no 
longer be treated as dispositive is an agency's failure to recite an 
enumerated list.

IV.13. Scope of Paragraph (b)(3): Appeals Under 5 U.S.C. 7513

    Comment: Commenter 0430 observed that proposed Sec.  
1201.56(b)(3)(i) applies only to appeals filed under 5 U.S.C. 7513, and 
argued that the proposal is silent on the standard governing penalty 
review in Senior Executive Service actions under 5 U.S.C. 7543 and in 
other categories of penalty review outside Sec.  7513--a gap the 
commenter contended the final rule must either explain or close. 
Commenter 0570, an association representing Foreign Service employees, 
asked that the final rule confirm that the rule does not govern or bind 
review of Foreign Service disciplinary and adverse actions by the 
Foreign Service Grievance Board; that it imposes no obligation on the 
Department of State to conform the Foreign Affairs Manual's 
disciplinary-factors framework (3 FAM 4370 et seq.) to the totality-of-
the-circumstances approach; and that any such conformance remains 
governed by the labor-management provisions of the Foreign Service Act, 
22 U.S.C. 4101 et seq., rather than compelled by this rule.
    Response: The limitation is intentional, and the Board explains it 
here rather than expand the rule beyond what was proposed. Paragraph 
(b)(3) codifies the Board's penalty-review standard for the category of 
appeals in which penalty review is most frequently litigated--adverse 
actions taken under 5 U.S.C. 7513. For appeals outside that scope, 
existing law continues to govern, unchanged by this rule. In appeals of 
performance-based actions under 5 U.S.C. chapter 43, the Board does not 
review the agency's choice of penalty because it lacks authority to 
mitigate chapter 43 actions. In other appeals in which the Board 
reviews the

[[Page 56561]]

reasonableness of a penalty, including actions taken against members of 
the Senior Executive Service under 5 U.S.C. 7543, the Board's existing 
precedent continues to apply unless the Board in the future holds 
otherwise, either via regulation or case law.
    The limitation also reflects the materially different statutory 
scheme chapter 75 creates for the Senior Executive Service. Actions 
against senior executives proceed under subchapter V rather than 
subchapter II: the covered class is defined separately and more 
narrowly, 5 U.S.C. 7541; the covered actions are only removal and 
suspension for more than 14 days, 5 U.S.C. 7542, so both the penalties 
available to the agency and the penalties to which any mitigation could 
run are more limited than in actions under 5 U.S.C. 7512; and the 
governing cause standard is not ``such cause as will promote the 
efficiency of the service,'' 5 U.S.C. 7513(a), but the enumerated 
grounds of ``misconduct, neglect of duty, malfeasance, or failure to 
accept a directed reassignment or to accompany a position in a transfer 
of function,'' 5 U.S.C. 7543(a).
    Paragraph (b)(3) is drafted against the architecture of subchapter 
II: its totality inquiry is keyed to the efficiency of the service, and 
its mitigation framework presupposes the range of actions covered by 5 
U.S.C. 7512. A counterpart standard for executive appeals would 
accordingly require conforming provisions--among them, keying review to 
the cause standard of 5 U.S.C. 7543(a) and confining any mitigated 
penalty to an action authorized by 5 U.S.C. 7542--and would need to 
account for executive actions that carry no Board appeal at all, such 
as removal from the Senior Executive Service for less than fully 
successful executive performance under 5 U.S.C. 3592, for which the 
statute provides an informal hearing rather than an adjudication. Those 
design questions were not presented in the NPRM, and the Board does not 
resolve them here. The Board may consider, in adjudication or in a 
future rulemaking, whether the standard codified in paragraph (b)(3) 
should be extended to additional categories of appeals.
    The Board confirms the scope limitation that commenter 0570 
identifies. This rule amends 5 CFR 1201.56, which governs proceedings 
before this Board, and paragraph (b)(3) applies only to appeals filed 
with the Board under 5 U.S.C. 7513. The rule does not (and could not) 
amend the Foreign Service Act of 1980, does not govern or bind the 
Foreign Service Grievance Board or its review standards, and imposes no 
obligation on the Department of State or any other agency to conform 
internal disciplinary guidance, including 3 FAM 4370 et seq., to the 
standard codified here. Whether and how an employing agency revises its 
internal guidance, and any labor-management obligations attending such 
revisions under 22 U.S.C. 4101 et seq., are matters outside the scope 
of this rule, on which the Board expresses no view. Commenter 0066's 
related argument concerning Senior Executive Service legislation is 
addressed in Section IV.4 and is consistent with the scope limitation 
explained above: actions against senior executives proceed under a 
materially different statutory scheme, which is among the reasons 
paragraph (b)(3) is confined to appeals under 5 U.S.C. 7513.

IV.14. The Factor-by-Factor Submission

    Comment: In response to the NPRM's request for comment on whether 
the Board should retain all or some of the Douglas factors, Commenter 
0430 submitted a factor-by-factor analysis urging retention of all 
twelve. For each factor, the commenter identified the protection it 
supplies and a recurring failure mode it answers, supported by Board 
and Federal Circuit precedent and by illustrative composites drawn from 
practice: seriousness established by adjectives rather than facts, and 
zero-tolerance policies treated as removal mandates (factor 1); 
``position of trust'' recitals for positions carrying no special trust 
(factor 2); reliance on prior discipline that was un-noticed, 
unreliable, withdrawn, or expired (factor 3); conversion of long 
service and a clean record into an aggravator (factor 4); conclusory 
loss-of-confidence testimony contradicted by the agency's own conduct, 
such as an intervening promotion or months of unrestricted duty (factor 
5); materially different penalties for substantially similar conduct in 
the same unit under the same deciding official (factor 6); unexplained 
departure from the agency's own penalty guidance (factor 7); presumed 
rather than proven notoriety (factor 8); punishment for violating rules 
of which the employee lacked fair notice, including openly condoned 
practices (factor 9); treating an employee's denial of the charge or 
exercise of appeal rights as evidence of poor rehabilitative potential 
(factor 10); failure to weigh medical or other mitigating circumstances 
causally linked to the conduct (factor 11); and removal by default, 
without consideration of whether a lesser sanction would serve the 
agency's interest (factor 12). The commenter argued that the factors 
are the accumulated memory of what fairness requires, and that a 
totality standard under which no particular set of factors must be 
considered is the phrase without the memory.
    Response: The Board specifically requested this form of comment, 
and it has considered the submission factor by factor. Its answer, 
considered against each of the twelve, is the same, because the 
submission's premise is that the protections it catalogs exist by 
virtue of the enumerated list. They do not. Each is a substantive 
principle of reasoned, record-based penalty review, and each survives 
this rule where the circumstances of a particular case present it, for 
reasons this preamble makes explicit.
    It bears emphasis at the outset, however, that what follows 
describes how these principles operate when a case fairly raises them--
it does not reconstitute, under another name, a list that every penalty 
decision must traverse. Under the codified standard no consideration, 
enumerated or otherwise, must be addressed in every case; which 
principles bear on a given penalty, and with what weight, depends on 
the circumstances of the case and the record the parties make. A 
penalty may not rest on assertion: seriousness, loss of trust or 
confidence, notoriety, and reputational harm, when the agency relies on 
them, are facts the agency must prove, because the agency bears the 
burden of proving the reasonableness of its penalty by preponderant 
evidence, and a penalty resting on facts the record does not support is 
an abuse of discretion (factors 1, 2, 5, and 8). Aggravating 
considerations on which the agency relies, including prior discipline, 
must be identified in the advance notice so the employee can respond, 
on pain of reversal on due process grounds; and the reliability, 
recency, finality, and similarity of a prior action offered in 
aggravation remain subject to challenge and bear directly on the weight 
it can carry (factor 3; Sections IV.3 and IV.11). Length of service, a 
clean record, demonstrated rehabilitation, and mitigating circumstances 
causally connected to the conduct remain, where the record presents 
them, mitigating considerations entitled to the weight the record earns 
them; material mitigating evidence cannot be passed over in silence; 
and an employee's lawful denial of a charge, or exercise of the right 
to appeal, may not be treated as evidence of poor rehabilitative 
potential (factors 4, 10, and 11; Sections IV.1 and IV.10).
    Evidence that similarly situated employees received materially 
different

[[Page 56562]]

penalties for substantially similar conduct remains potentially 
relevant, and an agency that knowingly and unjustifiably treats 
employees differently may find that fact weighed against the 
reasonableness of its penalty (factor 6; Section IV.2). Where an agency 
maintains penalty guidance, an unexplained departure from its own 
guidance in the case at hand may bear on the reasonableness of the 
penalty under the totality of the circumstances (factor 7; the Board 
returns to this factor at the close of this response). Fair notice of 
the rule assertedly violated, and evidence that the charged practice 
was known to and tolerated by the agency, remain circumstances the 
Board will weigh in a case that raises them (factor 9). And because the 
question under the codified standard is whether the chosen penalty--not 
merely some penalty--is within the tolerable limits of reasonableness, 
a record showing that the deciding official gave no consideration to 
whether a lesser sanction would serve the efficiency of the service 
remains exactly the kind of record on which a penalty fails (factor 
12).
    A fuller explanation is warranted with respect to factor 7--
``consistency of the penalty with any applicable agency table of 
penalties,'' Douglas, 5 M.S.P.R. at 305-06--because that factor 
illustrates with particular clarity why the Board will no longer 
prescribe a fixed set of considerations that must be addressed in every 
case. The factor presupposes an instrument that need not exist. A table 
of penalties is internal agency guidance: it is adopted without notice 
and comment, is ordinarily self-described as advisory and non-
exhaustive, and may be revised or rescinded at any time; many agencies 
maintain no table, and some that once did have rescinded theirs. A 
mandatory factor keyed to ``any applicable'' table therefore makes the 
required content of a penalty analysis turn on the fortuity of whether 
such a document exists at a given agency at a given time--and, where 
one does exist, elevates internal guidance into a quasi-regulatory 
benchmark that no statute prescribes and that the guidance's own 
drafters typically disclaim. The Board's adjudicatory experience is 
that mandatory consideration of the factor has generated collateral 
disputes remote from the statutory question: litigation over which row 
of a table an offense occupies, whether conduct constitutes a first or 
a second offense, and how overlapping offense categories interact--
questions about the construction of guidance rather than about whether 
the penalty chosen is within the tolerable limits of reasonableness on 
the record made.
    Tables of penalties can also disserve the individualized judgment 
the statute requires. A table's ranges attach to offense labels rather 
than to circumstances, and ranges keyed to labels invite decision by 
label: the operative penalty judgment migrates upstream into the 
drafting and selection of charges, and a deciding official who locates 
the applicable row and stays within the printed range may treat the 
analysis as complete even though the statutory question--whether this 
penalty, for this employee and this conduct, promotes the efficiency of 
the service--has not been asked. Tables ossify as missions, workplaces, 
and forms of misconduct change, embedding judgments about relative 
seriousness that may be decades old. Because each agency's table is its 
own, substantially similar conduct can carry materially different 
prescribed ranges from one agency to the next, so that fidelity to a 
table may produce the appearance of consistency within an agency while 
entrenching unexplained variation across the government. And treating 
whatever guidance an agency adopts as a mandatory benchmark in 
litigation creates incentives that run against sound management: an 
agency can insulate itself by rescinding useful guidance, or by 
draining it of content through ranges that run from reprimand to 
removal for every offense--outcomes that serve neither employees nor 
agencies.
    An unexplained departure from the agency's own guidance, or its 
uneven application among similarly situated employees, may be weighed, 
as stated above, in determining whether a penalty is within the 
tolerable limits of reasonableness. What the rule removes is the 
obligation to address a table in every case--including the many cases 
in which no table exists, and those in which the table adds nothing the 
record does not already supply. The Board expresses no view here on 
OPM's separate proposals concerning agency tables of penalties, which 
OPM addresses in its own final rule.

IV.15. Structural Objections to the Joint Rulemaking

    Comment: Commenter 0430 argued that this is, to public knowledge, 
the first joint OPM-MSPB rulemaking of its kind; that Congress 
deliberately separated OPM's workforce-management function from the 
Board's adjudicatory and oversight functions; that the rule relaxes the 
Board's own scrutiny of the personnel actions OPM superintends; and 
that when the adjudicator announces in advance, in a rulemaking co-
authored with the entity whose actions it reviews, that it will extend 
substantial deference and require no particular considerations, 
deference becomes surrender.
    Response: These arguments restate the structural and prejudgment 
objections addressed in Section VI, and the Board incorporates that 
discussion here, adding two observations. First, the standard codified 
in this rule is not OPM's preferred standard adopted by the Board; it 
is the Board's own standard--the deference formulation and the 
tolerable-limits-of-reasonableness boundary announced in Douglas and 
enforced by the Federal Circuit for four decades--proposed by the Board 
under its own statutory authority and finalized by the Board in this 
separate, Board-only document on its own analysis.
    Second, the premise that the rule relaxes scrutiny is answered 
throughout this preamble: the agency's burden of proof, the affirmative 
defenses, the Board's mitigation authority, and reasoned-decision 
review under 5 U.S.C. 7703(c) are unchanged, and Section V states 
expressly that an unexplained, unsupported, or grossly disproportionate 
penalty will not be sustained. The Board's decision to finalize only 
its own proposal, under its own title and on its own timetable, is 
itself an exercise of the independence the commenter urges the Board to 
maintain.

IV.16. Additional Objections to the Review Standard and to the 
Regulatory Analysis

    Comment: Commenter 0676, styling its submission as a formal 
evidentiary submittal and legal brief, argued that the proposed rule is 
arbitrary and capricious, exceeds statutory rulemaking authority, and 
fails the analytical standards of E.O. 12866 and OMB Circular A-4. As 
relevant to the Board's rule, the commenter argued that retiring the 
Douglas factors in favor of what it characterized as an unguided 
totality standard removes essential guardrails ensuring that 
aggravating and mitigating circumstances are weighed impartially; 
invites arbitrary and inconsistent penalty application across 
supervisors and work units; would make it impossible for agencies to 
prove by preponderant evidence that a penalty promotes the efficiency 
of the service; and deprives administrative judges and litigants of 
objective standards, in violation of reasoned-decisionmaking 
requirements. The commenter demanded answers to a series of

[[Page 56563]]

questions, including what objective, replicable evidentiary standard 
administrative judges will use to evaluate penalty reasonableness under 
the totality standard and how disparate penalty impositions across 
regional offices will be prevented. It proposed, as an alternative, 
that the Board retain the Douglas factors as non-binding analytical 
guideposts, with explicit instructions against rigid, mechanical box-
checking, alongside streamlined penalty matrices. The commenter also 
argued that the rulemaking's economic analysis undercounts secondary 
litigation, EEO, and arbitration costs and fails the net-benefits 
directives of E.O. 12866 and Circular A-4.
    Response: The commenter's objections to the review standard restate 
the vagueness, consistency, and reasoned decision-making arguments 
addressed in Sections IV.1, IV.2, IV.4, and IV.10, and the Board 
incorporates those responses here. The commenter's proposed 
alternative--retention of the factors as non-binding guideposts 
accompanied by an anti-mechanical instruction--is the alternative the 
Board expressly considered and declined for the reasons stated in 
Sections IX.5 and IV.10: it is, in substance, the regime Douglas and 
Nagel themselves announced, and four decades of experience demonstrate 
that an enumerated list gravitates toward compulsory-checklist status 
in practice notwithstanding disclaimers. The Board has therefore 
evaluated the commenter's proposed alternative on the record and 
explained its reasons for not adopting it, which is what reasoned 
decision-making requires.
    To the commenter's specific question--what standard the Board's 
administrative judges will apply--the answer is the one codified in 
Sec.  1201.56(b)(3) and elaborated throughout this preamble: whether 
the agency has proven, by preponderant evidence on the whole record, 
that its chosen penalty is within the tolerable limits of 
reasonableness in light of the totality of the circumstances relating 
to the efficiency of the service. That standard is objective in the way 
legal standards are objective: it is applied to record evidence, in 
reasoned written decisions, subject to review by the full Board and by 
the federal courts under 5 U.S.C. 7703(c), and its uniform application 
across the Board's regional offices is secured by published, 
precedential Board decisions and a primary reviewing court, as 
discussed in Sections IV.1 and IV.7.
    The premise that the standard makes it impossible for agencies to 
carry their burden is mistaken for the reasons stated in Section IV.2: 
the codified inquiry is the same tolerable-limits inquiry the Federal 
Circuit has policed for four decades, under the same burden of proof, 
and agencies have carried that burden throughout. The commenter's 
economic objections are addressed in Section IX: the cost projections 
in the joint NPRM's regulatory analysis are attributable to OPM's 
proposed amendments and are addressed in OPM's final rule, and Section 
IX explains why the Board's own amendment imposes no more than de 
minimis costs and yields benefits that exceed them.

IV.17. Comments From Members of Congress Concerning Workforce Impacts 
and National Security

    Comment: Commenter 0642, a letter from three United States Senators 
and three Members of the House of Representatives who represent the 
civilian workforce at the Portsmouth Naval Shipyard, urged that the 
proposed rule be withdrawn and that the agencies consider alternatives 
that preserve federal workers' longstanding civil service protections. 
The commenters argued that the rule would weaken protections that 
promote merit-based employment, due process, and the recruitment and 
retention of skilled workers; that replacing the consistent standards 
applied since Douglas with an arbitrary, case-by-case examination could 
allow agencies to ignore important mitigating factors--including 
rehabilitation potential and length of service--and more easily remove 
skilled workers from critical industries; and that, at a shipyard that 
must hire hundreds of workers annually to meet the Navy's demand, 
stripping away the procedures that keep discipline fair introduces 
costly unpredictability, risks increased attrition in the experienced 
workforce that keeps the submarine fleet ready, and thereby threatens 
national security. The commenters also objected to the proposed 30-day 
limit on performance improvement periods, to making termination the 
default penalty for unacceptable performance, and to barring the use of 
official time to represent workers in removal proceedings.
    Response: The Board has given respectful consideration to the views 
of the Members of Congress. The concerns directed to the Board's 
amendment--that a totality standard permits mitigating considerations 
to be ignored--are answered in Sections IV.1 and IV.2 and throughout 
this preamble: rehabilitation potential, length of service, past 
record, and consistency with the treatment of similarly situated 
employees remain relevant and cognizable wherever the record makes them 
material; material mitigating evidence cannot lawfully be passed over 
in silence; the agency continues to bear the burden of proving the 
reasonableness of its penalty by preponderant evidence; and the Board 
retains, and has codified, its authority to mitigate penalties that 
exceed the tolerable limits of reasonableness. Nothing in the Board's 
amendments authorizes, requires, or makes more likely any performance-
based or adverse action; it governs only the standard of review the 
Board applies in appeals properly before it, and, for the reasons 
stated in Sections IX.1 through IX.4, the Board expects outcomes to 
continue to turn on substantive reasonableness. A review standard under 
which unexplained, unsupported, or disproportionate penalties will not 
be sustained protects, rather than threatens, the retention of a 
skilled workforce.

V. Codification of the Devall Framework, Deference, and Mitigation 
Authority

    Comment: Commenter 0626 expressed concern with the proposed rule's 
statement that the Board will defer to an agency's penalty analysis 
rather than conducting an independent review, arguing that if the Board 
simply accepts the agency's analysis, its function shifts from 
independent adjudicator to reviewer of process. Commenter 0667 observed 
that an agency's decision already carries substantial weight in a Board 
appeal unless clearly beyond the bounds of reasonableness, and argued 
the rule removes standards essential to the Board's system.
    Commenter 0427 argued that the proposed standard is designed to 
leave the Board as little more than a rubber stamp for agency 
disciplinary decisions, and that Douglas rests on Congress's intent 
that the Board function in an independent, quasi-judicial role applying 
de novo review. Commenter 0435 urged that the final rule preserve the 
Board's long-standing authority to review the reasonableness of a 
penalty and, where warranted, to mitigate it, and that the rulemaking 
not be used to constrain that authority. Commenter 0629 argued that the 
proposed codification of Lachance v. Devall is not a comprehensive 
statement of controlling law, and recited Federal Circuit precedent 
that the Board must review penalties for abuse of discretion, that 
penalties cannot be grossly disproportionate, and that an agency abuses 
its discretion by relying on facts unsupported by substantial evidence 
or

[[Page 56564]]

by imposing an unconscionably harsh penalty; the commenter stated these 
requirements cannot be avoided by rulemaking. Commenter 0430 stated 
that it does not oppose codification of the Devall framework, which it 
acknowledged is existing law, and asked that the Board be held to the 
NPRM's statement that the rule will not alter the Board's mitigation 
authority.
    Commenters 0012, 0518, 0519, 0538, 0579, 0616, 0646, and 0651 
raised related objections: that deference is unjustified or will 
insulate penalties from meaningful review; that codifying mitigation 
``to the maximum reasonable penalty'' preemptively constrains the 
Board's independent judgment (commenter 0012); that the Board should 
not volunteer to narrow its own role (commenter 0558); and that Board 
review cannot test whether the factual premises of an action are true 
(commenter 0646). Commenter 0559 argued that retiring Douglas while 
simultaneously codifying the Devall deference framework compounds the 
loss of transparency.
    Response: The Board clarifies that this rule neither adopts a 
rubber stamp nor purports to displace the Federal Circuit's penalty-
review precedent. On the contrary, the rule codifies this precedent.
    Deference to an agency's choice of penalty is not an innovation of 
this rule; it is the settled allocation of responsibility under the 
CSRA, recognized in Douglas itself: the Board's function is not to 
displace management's responsibility, but to ensure that managerial 
judgment has been properly exercised within tolerable limits of 
reasonableness, with appropriate deference to the primary discretion 
entrusted to agency management. 5 M.S.P.R. at 306; see 91 FR at 40455. 
Commenter 0427's own submission quotes this language. The de novo 
character of Board adjudication that the same commenter emphasizes 
concerns the Board's fact-finding and its independent adjudication of 
the agency's charges and the appellant's defenses--functions this rule 
does not touch.
    As to the penalty, the Board's role has never been de novo penalty 
selection; Douglas allocated primary discretion to agency management 
and reserved to the Board the assurance that the discretion was 
legitimately invoked and properly exercised. What this rule codifies is 
the existing structure of that review as the Federal Circuit 
articulated it in Devall: where the Board sustains all charges and 
finds the penalty reasonable, it sustains the action; where it sustains 
all charges but finds the penalty unreasonable, it mitigates to the 
maximum reasonable penalty; where it sustains fewer than all charges, 
it applies the Devall rules governing mitigation and the agency's 
expressed penalty preferences. 178 F.3d at 1260; 91 FR at 40454.
    None of this withdraws the Board's independent judgment. Under the 
final rule, the Board and its administrative judges will continue to 
determine independently, on the whole record and de novo as to the 
facts, whether the agency has proven its charges, whether the action 
promotes the efficiency of the service, whether any affirmative defense 
is established, and whether the penalty falls within the tolerable 
limits of reasonableness. An agency's penalty analysis receives the 
weight the record earns it--no more. A penalty that is unexplained, 
rests on facts the record does not support, ignores material mitigating 
evidence, or is grossly disproportionate to the sustained conduct will 
not be sustained, and the Board retains, and has codified, its 
mitigation authority for exactly those cases--the preservation 
commenter 0435 requested.
    For the same reasons, the Board agrees with commenter 0629 that the 
regulation is not, and does not purport to be, a comprehensive 
statement of controlling law, and that the substantive limits recited 
in the Federal Circuit's abuse-of-discretion precedent continue to 
govern. The rule is drafted to operate within that precedent, and the 
Board will apply it that way. The concern that codifying Devall somehow 
narrows administrative judges' authority is misplaced: administrative 
judges exercise the Board's penalty-review authority in the first 
instance, and the codified framework describes--for the benefit of all 
parties and adjudicators alike--how that authority operates. Placing 
the framework in regulation increases the transparency and 
predictability of Board review; it does not diminish its independence. 
Finally, the Board confirms, as commenter 0430 requested, that this 
rule does not alter the Board's mitigation authority, which predates 
this rule, was recognized by the Federal Circuit in Devall, and is now 
codified in Sec.  1201.56(b)(3).
    The related objections identified above rest on premises this 
section has addressed. The deference codified in Sec.  1201.56(b)(3) is 
Douglas's own allocation of responsibility, not a new withdrawal of 
review, and the maximum-reasonable-penalty formulation to which 
commenter 0012 objects is not a ceiling invented by this rule: it is 
the Federal Circuit's articulation, in Devall, of the limit on the 
Board's authority when it mitigates, and it binds the Board with or 
without this rule. In response to commenter 0646, the Board reiterates 
that its administrative judges find the facts de novo: whether the 
charged conduct occurred is determined independently on the record, not 
accepted from the agency, and an action resting on facts the agency 
cannot prove fails at the threshold. In response to commenters 0558 and 
0559, codification neither narrows the Board's role nor obscures it; it 
states publicly, in regulation, the review standard and mitigation 
framework that previously had to be assembled from decades of case 
law--a gain in transparency for every party who appears before the 
Board.

VI. The Board's Independence, the Joint Rulemaking, and Claimed 
Prejudgment

    Comment: Commenter 0634 argued that the proposed rule must be 
evaluated in the context of broader administration actions concerning 
the career civil service, and that joint authorship with OPM sits 
uneasily with the Board's separate statutory oversight duty under 5 
U.S.C. 1204(a)(4) and 1204(f), demanding decisional separation. 
Commenter 0427 argued that Congress created the Board to be independent 
of control or direction and as a check on other executive agencies 
including OPM; that OPM's recent rulemakings transfer core Board 
functions to OPM; that without congressional reorganization authority--
the last Reorganization Act having lapsed in 1984--one executive agency 
cannot diminish or restructure another; and that this proposal likewise 
seeks to transfer authority the Board cannot relinquish and OPM cannot 
arrogate, including by eliminating the Douglas factors and by divesting 
the Board of its ability to determine whether a performance-improvement 
period is reasonably long.
    Commenter 0435 identified two features of the joint NPRM as bearing 
on the Board's independence--the effort to set the Board's standard of 
review by regulation, and the narrowing of the Board's authority to 
mitigate a penalty it finds unreasonable--and urged that the rulemaking 
not constrain the Board's role. Commenter 0629 argued that the Board's 
co-sponsorship of provisions limiting adjudicators is troubling 
because, by committing in advance and outside any adjudicatory record 
that a categorical class of employee defenses will never succeed, the 
Board prejudges issues that will come before it, raising impartiality 
concerns. Commenters 0004, 0015, 0016, 0064, 0240, 0448, and 0662

[[Page 56565]]

likewise objected that it is inappropriate for the Board to co-author a 
rulemaking with OPM, and commenter 0496 argued that joint issuance 
raises a question about the appearance of impartiality. Commenter 0449 
argued that the joint package bundles provisions of differing strength, 
contending that a rule confident in each provision on the merits would 
not need to package its strongest justification alongside its weakest.
    Response: The Board takes seriously its distinct statutory role, 
and both the structure of this rulemaking and the content of this final 
rule reflect it.
    As to process: the Board and OPM each proposed amendments under 
their own statutory authorities, and each identified its own proposals 
and its own RIN in the joint NPRM. Joint publication reflected the 
practical interaction of the proposals and gave the public the 
opportunity--which many commenters used--to address that interaction in 
one place; it did not merge the agencies' deliberations or subordinate 
the Board's judgment to OPM's. The NPRM expressly preserved each 
agency's independent decisional path by providing that the agencies 
might finalize separately, 91 FR at 40444, and the Board's decision to 
finalize only its own proposal in this document, under its own title, 
on its own analysis, and on its own timetable, is itself a 
demonstration of that independence.
    The Board's oversight functions under 5 U.S.C. 1204(a)(4) and 
1204(f)--including its duty to review OPM rules after they take effect 
and to determine whether their implementation would require the 
commission of a prohibited personnel practice--are statutory, are 
unaffected by this rulemaking, and continue to apply with respect to 
OPM's rules, including the separate final rule OPM is issuing in this 
proceeding, in accordance with those provisions. Comments concerning 
the composition of the Board and related matters are beyond the scope 
of this rulemaking.
    As to the constitutional transfer argument: its premise is mistaken 
as applied to this rule. Nothing finalized in this document transfers 
any function from the Board to OPM, and nothing in it diminishes any 
Board authority. This is the Board's own regulation, adopted by the 
Board, under the Board's own rulemaking authority, 5 U.S.C. 1204(h), 
governing the Board's own standard of review. No Reorganization Act or 
other transfer authority is implicated when an agency revises its own 
adjudicatory procedures through its own rulemaking. Comments directed 
at OPM rulemakings that would reassign categories of appeals to OPM are 
referred to those dockets, and the provision commenter 0427 identifies 
concerning the length of performance-improvement periods is an OPM 
proposal under part 432 that is not finalized here. Commenter 0435's 
first concern--the effort to set the Board's standard of review by 
regulation--likewise mistakes the author: the standard of review in 
Sec.  1201.56 is being set by the Board itself, for its own 
proceedings, through public notice-and-comment procedures. A tribunal's 
adoption, through public rulemaking, of the standard it will apply is 
an exercise of independence, not a derogation of it. The commenter's 
second concern, regarding mitigation authority, is answered in Section 
V: that authority is retained and, for the first time, codified.
    As to prejudgment: the argument proves too much. It is black-letter 
administrative law that an agency with rulemaking authority may resolve 
issues of general applicability by rulemaking rather than reserving 
every question for case-by-case adjudication, and that doing so does 
not disqualify the agency from adjudicating cases arising under the 
rule. See Heckler v. Campbell, 461 U.S. 458, 467 (1983); SEC v. Chenery 
Corp., 332 U.S. 194, 203 (1947). This rule announces the legal standard 
the Board will apply; it prejudges no adjudicative fact in any appeal. 
It does not commit the Board to sustaining any penalty, forecloses no 
defense, and predetermines no outcome: every element of the agency's 
case, every affirmative defense, and the reasonableness of every 
penalty remain to be decided on the record of each appeal. Announcing 
the governing standard in advance, through public procedures, is the 
opposite of partiality; it is the ordinary means by which a tribunal 
gives all parties equal notice of the rules of decision. (The specific 
provision commenter 0629 characterized as foreclosing a categorical 
class of employee defenses--concerning the adequacy of performance 
assistance under proposed 5 CFR 432.104--is an OPM proposal not 
finalized here, and comments on it are referred to OPM.)
    The appearance concern raised by commenter 0496, and the co-
authorship objections of commenters 0004, 0015, 0016, 0064, 0240, 0448, 
and 0662, are answered by the process points above: the Board's 
proposal was its own, its deliberations were its own, and its decision 
to finalize separately, on its own analysis, is the structural answer 
to the concern. Commenter 0449's bundling objection is answered by this 
document itself: the Board has unbundled the package. It finalizes here 
only its own amendment, on its own justification, and the severability 
discussion in Section VIII confirms that the Board's rule stands 
independently of any disposition of OPM's proposals.

VII. Comments Supporting the Rule

    Comment: Commenter 0664 expressed strong support for the proposed 
rulemaking, including the Board's refocusing of penalty review, and 
documented collective bargaining provisions that, in its view, 
illustrate rigid application of the Douglas framework, including an 
agreement whose mandated Douglas analysis was the basis for arbitral 
mitigation of a penalty. The commenter also proposed specific 
expansions of OPM's regulatory text concerning official time. 
Commenters 0435 and 0625 supported aspects of the joint proposal--
including the supervisory training provisions and the personnel-records 
accuracy provisions--while opposing or urging revision of others.
    Additional supporting submissions included the following. Commenter 
0417, a career senior executive with 33 years of Federal service, 
described the Douglas analysis as having become (in their experience) a 
checklist completed in a mechanical fashion rather than a thoughtful 
assessment, and one used within agencies to discourage warranted 
discipline; the commenter recommended extending supervisory training to 
human-resources professionals and agency counsel. Commenter 0489, a 
human-resources and employee-relations professional, supported the rule 
on the basis of Federal Employee Viewpoint Survey results and published 
research on the productivity effects of unaddressed misconduct, and 
described firsthand experience with cases in which accountability was 
not achieved under the existing framework. Commenter 0545 endorsed 
commenter 0417's submission and described the totality standard as a 
balanced approach. Commenters 0587 and 0591, employee-relations 
practitioners, stated that the totality standard restores appropriate 
deference while preserving reasonableness review. Commenters 0350, 
0359, and 0406, supervisors and labor-relations specialists, described 
the existing framework's operation in union grievances and arbitration 
as an obstacle to warranted corrective action. Commenters 0006, 0031, 
0301, 0352, 0395, 0405, 0424, 0429, 0434, 0437, 0613, 0614, 0615, and 
0627 expressed general support and urged prompt finalization. 
Commenters 0584, 0585, 0586, and 0588 expressed support directed 
principally to OPM's proposed amendments, and those comments are

[[Page 56566]]

referred to OPM; commenter 0387 supported the rule while urging 
attention to employees with disabilities, a concern referred to OPM to 
the extent it addresses OPM's proposals and answered, as to the Board's 
rule, in Sections III and IV.2.
    Response: The Board acknowledges these expressions of support and 
has noted, in the Statement of Need in Section IX.1, the relevance of 
the collective bargaining materials identified by Commenter 0664 to the 
Board's assessment of how the Douglas framework operates in practice. 
The specific suggestions from these commenters concerning official 
time, training, and records accuracy relate to OPM's proposed 
regulatory text under parts 412, 432, and 752 and are referred to OPM 
for consideration in its final rule. The in-scope concerns raised by 
commenters 0435 and 0625 are addressed in Sections IV through VI.
    Comment: Four commenters filed detailed submissions in support of 
the rule. Commenter 0612, a Federal executive department, stated that 
the administrative procedures governing performance-based and adverse 
actions have accreted over nearly half a century from regulations, case 
decisions, and executive orders, and have become overly complicated and 
excessively burdensome; that the nearly universal expectation that a 
deciding official thoroughly consider the applicability of each of the 
twelve Douglas factors in every case has in practice produced a 
checklist used to ``paper'' the case file--one that carries little 
meaning for the deciding official or the employee but is then parsed 
and scrutinized in subsequent grievance arbitrations and appeals; and 
that the totality-of-the-circumstances standard better promotes the 
consideration that matters in every case: what is, or is not, in the 
interest of the efficiency of the service.
    Commenter 0623, another Federal executive department, supported the 
rule on the basis of multi-year workforce, disciplinary, arbitration, 
and settlement data from its own operations, and stated that the 
perceived need to address each Douglas factor regardless of its 
relevance increases litigation burden without producing more accurate 
or defensible outcomes; that a totality-of-the-circumstances standard 
grounded in the statutory efficiency-of-the-service requirement would 
allow deciding officials to focus on the facts most relevant to each 
case; and that, to the extent an individual Douglas factor remains 
relevant in a particular case, it can continue to inform the analysis 
without separate, mechanical documentation. That commenter also stated, 
in response to the NPRM's solicitation on reliance interests, that it 
is not aware of reliance interests of a kind or magnitude that would 
warrant delaying implementation.
    Commenter 0630, a Federal employee with agency responsibility for 
labor and employee relations, commenting in their personal capacity, 
strongly supported the Board's proposal, stating that although Board 
precedent does not require every factor to be addressed in every case, 
grievance arbitrators often treat each element of the Douglas framework 
as mandatory and seize on an agency's asserted failure to consider, or 
properly consider, a single factor as grounds to overturn or mitigate a 
removal. The commenter submitted for the record a December 2024 
arbitration award in which the arbitrator sustained charges of 
timesheet falsification and lack of candor, described the failure to 
perform assigned work while charging overtime as serious misconduct 
warranting discipline, and nonetheless mitigated the removal to a 
thirty-day suspension based on comparator cases and principles of 
progressive discipline. Because arbitrators must apply the Board's 
substantive standards in adverse-action grievances, the commenter 
argued, the Board's rule would carry the codified standard into 
arbitration and give agencies confidence that warranted removals will 
be sustained.
    Commenter 0631, an individual federal employee, similarly stated 
that arbitrators treat the Douglas factors as binding considerations 
and will overturn removals if the agency did not conscientiously 
consider each one, and submitted for the record--obtained through a 
Freedom of Information Act request--a 2018 arbitration award in which a 
Forest Service employee who, after consuming alcohol, accepted a fire 
assignment and drove a government-owned vehicle to the scene of an 
active fire, registering a blood alcohol content well above the state 
legal limit, was removed on charges of conduct unbecoming a federal 
employee and driving a government-owned vehicle after consuming 
intoxicants. The arbitrator found the charges proven and found a nexus 
between the conduct and the efficiency of the service, but concluded 
that the deciding official had not conscientiously evaluated each 
Douglas factor--reasoning that repeated statements about the 
seriousness of the offense could not substitute for a conscientious 
review of the case within the Douglas framework, and that the resulting 
penalty was therefore arbitrary, unfair, and unreasonable--and 
mitigated the removal to a 25-day suspension. The commenter argued that 
the award illustrates how the framework operates in arbitration and 
urged that the rule be finalized promptly.
    Response: The Board acknowledges these submissions and has 
considered them both as expressions of support and as record evidence. 
The two departments' accounts of their own administrative experience--
factor-by-factor documentation prepared to insulate the case file and 
then parsed in subsequent litigation; the burden of addressing each 
factor regardless of its relevance to the case--corroborate, from the 
perspective of agencies that must operate the framework, the diagnosis 
stated in the Statement of Need in Section IX.1, and the Board has 
weighed them alongside the opposing comments discussed there.
    The arbitration award submitted by commenter 0630 is part of the 
administrative record of this rulemaking, and illustrate, from the 
opposite direction, the same phenomenon the collective bargaining 
materials discussed in Section IX.1 illustrate: a proceeding in which 
sustained, serious misconduct was displaced as the focus of decision by 
an audit of enumerated considerations. The award submitted by commenter 
0631 is likewise part of the administrative record, and it supplies a 
second, independent arbitral illustration of that phenomenon: charges 
sustained, their seriousness acknowledged, a nexus to the efficiency of 
the service found--and removal nonetheless set aside on the ground that 
the deciding official's analysis did not conscientiously traverse the 
enumerated factors. Both awards are discussed in the Statement of Need 
in Section IX.1.
    The Board also confirms the premise of the arbitration point made 
by commenters 0630 and 0631, for the reasons stated in Section IV.12: 
because arbitrators adjudicating grievances over matters covered under 
5 U.S.C. 7512 must apply the same substantive standards the Board would 
apply, the standard codified in this rule will govern penalty review in 
arbitration on the same prospective basis on which it governs before 
the Board.
    Commenter 0623's statement that it has identified no reliance 
interests warranting transitional measures is noted; as explained in 
Section IX.6, the Board has nonetheless adopted an applicability 
statement as a measured accommodation of the reliance and transition 
concerns raised by other commenters.
    The Board acknowledges these additional expressions of support. The 
firsthand accounts of commenters 0417,

[[Page 56567]]

0489, 0350, 0359, and 0406--mechanical, risk-averse factor 
documentation; warranted actions deterred or abandoned; grievance and 
arbitral audits of factor recitation--corroborate, from the 
perspectives of supervisors and practitioners who operate the 
framework, the diagnosis stated in the Statement of Need in Section 
IX.1, and the Board has weighed them alongside the opposing comments 
discussed there. The training suggestion of commenter 0417 concerns 
OPM's proposed amendments to part 412 and is referred to OPM.

VIII. Changes From the Proposed Rule; Applicability; Severability

    After consideration of the comments, the Board is finalizing the 
amendments to 5 CFR 1201.56 as proposed, with an applicability 
statement set forth in the DATES section of this document rather than 
in the regulatory text, as follows:
    First, the final rule adopts the amendments to 5 CFR 1201.56 
without change to the proposed regulatory text. Several commenters 
(commenters 0391, 0430, 0435, 0439, 0443, 0625, 0626, 0636, 0642, 
0676), together with many individual commenters identified in Sections 
I, IV.1, and IX.5, urged the Board to codify an enumerated factor list 
or the conscientious-consideration formulation, a core subset of 
factors, occupation-specific standards or exclusions, or a general 
clarification that considerations of the kind identified in Douglas 
remain cognizable. The Board declines to add any such enumeration or 
clarification to the regulatory text (Sections IX.5, IV.9, IV.10, 
IV.14, and IV.16).
    In brief: four decades of experience demonstrate that an enumerated 
list gravitates toward compulsory-checklist status in practice 
notwithstanding anti-mechanical disclaimers--Douglas and Nagel 
themselves contained the disclaimer--so re-enacting a list in 
regulation would entrench the very perception of obligation this rule 
is designed to dispel; codifying a reduced subset would invite 
negative-implication arguments that omitted considerations are 
disfavored; occupation-specific lists or exclusions would fragment a 
single national standard of review and reintroduce the checklist 
dynamic for the carved-out workforce; and a regulatory-text 
clarification that Douglas-type considerations remain cognizable is 
unnecessary because that result follows from totality review itself and 
is confirmed authoritatively in this preamble. The regulatory text 
states the operative standard--review of the penalty for whether it is 
within the tolerable limits of reasonableness in light of the totality 
of the circumstances, together with the codified Devall mitigation 
framework--and this preamble supplies the Board's authoritative 
confirmation (Sections IV.1, IV.3, IX.5, and IX.6) that the 
considerations identified in Douglas remain relevant and cognizable 
wherever they are material to the reasonableness of the penalty.
    Second, the final rule states the applicability of the amended 
standard in this preamble rather than in the regulatory text. As set 
forth in the DATES section of this document, the amended Sec.  1201.56 
standard applies to appeals filed with the Board on or after the 
effective date of this rule, and appeals pending before the Board on 
the effective date will be adjudicated under the framework in effect 
when they were filed. The Board proposed no applicability language for 
codification, and it adds none in this final rule: the statement is 
transitional in nature, will be spent once the appeals pending on the 
effective date are concluded, and is therefore appropriately stated in 
the preamble--which supplies the authoritative statement of the Board's 
intent--rather than carried permanently in the Code of Federal 
Regulations. Section IX.6 explains the basis for the applicability 
statement and why it accommodates the reliance and transition concerns 
raised in the comments without prejudicing parties whose underlying 
actions predate the effective date.
    Third, consistent with the NPRM, 91 FR at 40455, the final rule 
effects no change to the requirement that aggravating factors relied 
upon in penalty selection be identified in the advance notice of 
proposed action, and no change to the Board's mixed-case procedures, 
jurisdiction, burdens of proof, or the availability of affirmative 
defenses.
    The Board's amendments to part 1201 are severable from OPM's 
amendments to parts 412, 432, 715, and 752, which OPM is finalizing in 
a separate document; the Board's rule operates independently of OPM's 
and would function sensibly regardless of the disposition of OPM's 
proposals. Within this rule, the totality-of-the-circumstances 
standard, the codification of the Devall mitigation framework, and the 
applicability statement are likewise severable from one another: each 
states an independently operative principle of Board review or 
administration, and the Board would have adopted each without the 
others.

IX. Regulatory Analysis

1. Statement of Need

    This rule is needed to return the Board's review of agency-selected 
penalties to the standard Congress enacted and to correct the drift, 
documented in the NPRM and elaborated below in this section, toward a 
rigid and mechanistic application of the framework announced in 
Douglas--an application the original decision never prescribed and 
expressly cautioned against. The perceived obligation to address twelve 
enumerated factors in every case has imposed recurring process costs on 
agencies, appellants, and the Board: standardized worksheets treated as 
legally compulsory; penalty appeals litigated as audits of whether each 
factor was recited and adequately weighted; and a checklist-centered 
practice that increasingly overshadows the statutory question--whether 
the agency's chosen penalty reasonably promotes the efficiency of the 
service under 5 U.S.C. 7513(a). 91 FR at 40453-54.
    Federal agency commenters corroborated that need from their own 
administrative experience, describing factor-by-factor documentation 
prepared to insulate case files and then parsed in subsequent grievance 
arbitrations and appeals (Section VII). The rule is also needed to 
place the Board's operative review standard, and the mitigation 
framework the Federal Circuit articulated in Devall, in the Code of 
Federal Regulations for the first time. Codification gives agencies, 
employees, representatives, and the Board's administrative judges a 
single, public, authoritative statement of how penalty review operates, 
improving the transparency and predictability of Board adjudication.
    Several commenters disputed that need, arguing that the Board 
offered no evidence that the Douglas framework causes unwarranted 
outcomes. Commenter 0629 characterized the NPRM's statement that 
agencies apply Douglas in a rigid, mechanistic way as an unsupported 
stereotype, and asked where the Board precedent chiding agencies for 
misapplication is, and where the statistics or examples are. Commenter 
0634 similarly asserted that the NPRM supplies no example in which an 
action failed because a deciding official omitted an irrelevant factor 
and identifies no Board decisions requiring mechanical worksheets.
    Commenter 0656 asserted that OPM and MSPB offer no evidence of an 
issue the rule purports to solve. Commenter 0654 argued that neither 
the NPRM's stated rationale nor the accompanying

[[Page 56568]]

record identifies particularized evidence that existing procedures have 
proven inadequate to protect the efficiency of the service, as opposed 
to being merely inconvenient to managers seeking faster removals, and 
that under the reasoned-decisionmaking requirement of Motor Vehicle 
Manufacturers Association v. State Farm Mutual Automobile Insurance 
Co., 463 U.S. 29 (1983), and 5 U.S.C. 553(c), a preference for 
expedited removal authority does not by itself supply a rational 
connection between the facts found and the choice made; the commenter 
stated that its submission was made in part to preserve a factual and 
legal accounting in the administrative record for any subsequent 
oversight, litigation, or judicial review.
    Commenter 0628 noted that agencies prevail in more than 80 percent 
of employment cases before the MSPB, arguing that agency leadership 
already has the tools to administer employee discipline. Commenter 0427 
argued that agencies' use of Douglas-based checklists is evidence of 
workability rather than rigidity--that the factors have endured because 
they provide a workable, clear framework. Commenter 0647 presented data 
drawn from the Board's own annual reports: penalties were mitigated in 
roughly 6.4 percent of adjudicated cases in FY 1986 and 4.7 percent in 
FY 1990, and in roughly 1.6 to 2.0 percent of adjudicated cases in each 
sampled year from FY 2000 through FY 2025. From this, commenter 0647 
argued that mitigation rates declined after Douglas and remain low; 
that no evidence shows agencies or the Board mitigate inappropriately 
or at unusual rates; and that no evidence ties any such problem to the 
Douglas factors.
    Commenters 0421, 0433, 0525, 0569, and 0662 pressed related record-
based objections, and commenter 0236 offered a contrary observation. 
Commenter 0421 argued that the agencies failed adequately to explain 
their deviation from decades of precedent. Commenter 0433, taking no 
position on adoption or withdrawal, identified what it described as an 
unreconciled gap between the Statement of Need and the joint NPRM's 
regulatory analysis, which reported a 33 percent single-year increase 
in removals under the existing framework; commenter 0616 pressed the 
same point in urging withdrawal. Commenter 0525 asked what removal rate 
the agencies believe would demonstrate an appropriately accountable 
workforce and urged that success metrics be defined before any change 
is made. Commenter 0569, an agency litigator commenting in their 
personal capacity, argued that there has been no showing that the 
Douglas factors impede agencies or the Board, and that the factors are 
non-prescriptive guides with decades of case law that make them easy to 
research and apply. Commenter 0662 argued that the NPRM's own 
acknowledgment that Douglas was never rigid undercuts the stated 
rationale. Commenter 0236, by contrast, asserted that the factors are 
already ignored at the commenter's agency without repercussion.
    The Board disagrees that the record is inadequate to support the 
change. The basis for this rule is, first and foremost, the Board's own 
institutional experience over more than four decades administering the 
framework it created. The Board and its administrative judges review 
the disciplinary records agencies actually produce, and the briefs 
parties actually file, in thousands of appeals each year. As the NPRM 
explained, that experience shows that agencies regularly rely on 
standardized Douglas worksheets as though they were legally compulsory; 
that parties routinely litigate whether each of the twelve factors was 
recited, whether the deciding official assigned adequate weight to each 
factor, and whether the administrative judge conducted an explicit 
factor-by-factor review; and that this checklist-centered practice has 
increasingly overshadowed the statutory question--whether the agency's 
chosen penalty reasonably promotes the efficiency of the service under 
5 U.S.C. 7513(a). 91 FR at 40454.
    An adjudicatory agency's firsthand observation of how a doctrine of 
its own creation functions in practice is competent--indeed, uniquely 
probative--evidence of the need to revise that doctrine. Nothing in the 
Administrative Procedure Act requires an agency to substantiate a 
change of this kind with statistical studies; it requires a reasoned 
explanation. An agency changing position ``need not demonstrate to a 
court's satisfaction that the reasons for the new policy are better 
than the reasons for the old one; it suffices that the new policy is 
permissible under the statute, that there are good reasons for it, and 
that the agency believes it to be better.'' FCC v. Fox Television 
Stations, Inc., 556 U.S. 502, 515 (2009).
    The same standard answers Commenter 0654. The Board has examined 
the relevant data available to it--its own sustained adjudicatory 
experience, the studies cited in the NPRM, and the corroborating 
comment record described in this section, including the arbitral awards 
submitted by commenters 0630 and 0631--considered the important aspects 
of the problem, and articulated a rational connection between what it 
has observed and the standard it is codifying; that is what State Farm 
and 5 U.S.C. 553(c) require. To the extent commenter 0654's evidentiary 
objection is directed at the procedural streamlining proposed by OPM--
response windows, improvement periods, and representation--it concerns 
OPM's proposals and is referred to OPM. The commenter's stated purpose 
of preserving its analysis in the administrative record is, in any 
event, accomplished: the submission is a permanent part of the docket 
of this rulemaking.
    The comment record itself corroborates the Board's observation. 
Commenter 0664 identified collective bargaining agreements that 
contractually mandate a strict weighing of the Douglas factors, 
including an agreement whose asserted violation--a failure to properly 
analyze the Douglas factors--was the basis for an arbitrator's 
mitigation of a penalty. Commenter 0631 supplied a second arbitral 
illustration, described in Section VII: an award in which the 
arbitrator sustained charges arising from an employee's operation of a 
government vehicle after consuming alcohol and found a nexus to the 
efficiency of the service, yet mitigated the removal to a suspension on 
the ground that the deciding official had not conscientiously evaluated 
each Douglas factor--reasoning that treated the enumerated framework, 
rather than the sustained misconduct, as the touchstone of decision.
    Other commenters, in defending the framework, described the twelve 
factors as the primary check and the only structured analysis against 
improper penalties (commenter 0656), and described a practice in which 
agencies routinely invoke their consideration of the factors as the 
defense of a penalty's reasonableness (commenter 0628)--descriptions 
that confirm the factors are treated in practice as an obligatory 
analytic code rather than the nonexhaustive, case-dependent summary of 
considerations that Douglas itself announced. Commenter 0427's own 
submission illustrates the point: it defends agency checklist practice 
as proof of the framework's utility. The persistence of a template, 
however, shows habituation, not fitness; the question is whether the 
checklist form serves or overshadows the statutory reasonableness 
inquiry, and the Board's experience is that it increasingly overshadows 
it.
    The Board also notes a tension that runs through the opposing 
comments:

[[Page 56569]]

commenters argue both that Douglas is already applied flexibly and non-
mechanically under Nagel, and that removing the mandatory framework 
will radically destabilize disciplinary review. Both cannot be true. To 
the extent the factors function merely as a nonbinding summary of 
considerations that remain relevant--as the Board confirms elsewhere in 
this preamble they do--the disruption commenters predict is 
substantially overstated. To the extent the factors function in 
practice as a compulsory checklist, the Board's diagnosis is confirmed.
    The mitigation-rate data presented by commenter 0647 measure the 
wrong variable. The Board did not propose this rule because it 
mitigates penalties too often or not often enough; the identified 
problem is the analytic overlay--the process costs of building, 
briefing, and adjudicating a twelve-factor record in every case; the 
satellite litigation over recitation and weighting; and the deterrent 
effect on supervisors documented in the studies cited in the NPRM. 91 
FR at 40446-47, 40453-54. None of those costs appears in a mitigation 
rate, and the rate likewise cannot capture agency-level effects such as 
penalties never proposed or actions abandoned. If anything, the data 
reinforce two of the Board's points. First, a mitigation rate that has 
remained low and stable for four decades indicates that outcomes at the 
Board turn on the substantive reasonableness question rather than on 
the twelve-factor form--which is precisely why the form can be retired 
without sacrificing substance.
    Second, the same data refute the parallel prediction, advanced by 
several of the same commenters, that this rule will produce dramatic 
changes in outcomes: if mitigation has been rare under Douglas because 
agency penalties are generally reasonable, it will remain rare under a 
codified standard that asks the same ultimate question. As to the 
observation that agencies prevail in a high percentage of appeals 
(commenter 0628), the sustain rate does not answer the problem this 
rule addresses for the same reason: a framework can produce high 
sustain rates and still misdirect the inquiry while imposing 
substantial costs on agencies, appellants, and the Board.
    The same points answer the record-based objections of commenters 
0421, 0433, 0616, 0525, 0569, and 0662. The reasoned-explanation 
obligation invoked by commenter 0421 is satisfied for the reasons 
stated throughout this section: the Board has identified the specific 
practice it observes, explained why that practice disserves the 
statute, exposed its proposed correction to public comment, and 
responded to objections on the merits. The removal statistics 
identified by commenters 0433 and 0616 measure the volume of agency 
actions, which the Board's rule does not regulate; they bear, if at 
all, on OPM's amendments, and they say nothing about the process costs 
and misdirected litigation that are the Board's stated basis for this 
rule--indeed, that the volume of actions rises and falls under the 
existing framework confirms that the twelve-factor form is not what 
determines outcomes.
    For the same reason, the Board declines commenter 0525's invitation 
to specify a target removal rate: the Board adjudicates appeals; it 
does not manage the workforce, and no removal rate, high or low, is a 
goal of this rule. Commenter 0569's description of the factors as 
readily applied, non-prescriptive guides restates the tension addressed 
above--if the factors truly operated as non-binding guides, retiring 
the mandatory form would work no disruption--and the Board's 
experience, corroborated by the record, is that they do not so operate 
in practice, an observation that commenter 0236's account of factor 
analyses disregarded without consequence reinforces from another 
direction and that the tension identified by commenter 0662 does not 
dissolve. Finally, the corroborating submissions described in Section 
VII, including the practitioner and supervisory accounts of commenters 
0417, 0489, 0350, 0359, and 0406, are additional record evidence 
supporting the diagnosis stated in this section.
    Commenters also challenged the sources cited in the NPRM. Commenter 
0554 argued that the studies cited--GAO and MSPB reports issued between 
1990 and 2021--do not support retiring the Douglas factors; that those 
sources instead reflect a decades-old consensus that performance 
management is best improved through increased supervisory training, 
individualized support for underperforming employees, and more 
effective use of probationary periods; that the Board did not assert 
that the Douglas factors have led to the retention of poorly performing 
employees; and that the Board instead relied on its own knowledge and 
expertise, which the commenter contended is an insufficient basis for 
rulemaking under decisions such as United Mine Workers of America v. 
Mine Safety & Health Administration, 626 F.3d 84 (D.C. Cir. 2010), and 
Coinbase, Inc. v. SEC, 126 F.4th 175 (3d Cir. 2025).
    Commenter 0492 similarly argued that the Douglas factors have 
worked for decades because they require deciding officials to examine 
the employee's record, comparative treatment, and rehabilitative 
potential before imposing discipline; that replacing them with a vague 
totality standard opens the door for different supervisors to impose 
different penalties for the same conduct; and that the rulemaking 
measures the speed of discipline while failing to measure the costs of 
poor management--how many disciplinary actions are overturned, how many 
grievances are sustained because management violated a negotiated 
agreement, how many Board appeals are lost, and how many taxpayer 
dollars are spent defending personnel actions that should never have 
been proposed.
    To the extent these comments restate the evidentiary objections 
addressed above, or the vagueness and consistency objections addressed 
in Sections IV.1 and IV.2, the Board incorporates those responses here, 
adding the following points specific to these submissions. First, the 
basis for the Board's rule is stated above: the Board's own sustained 
institutional observation, as the national adjudicator of these 
disputes, of how the framework it created operates in litigation--an 
observation corroborated by the comment record itself.
    Second, the decisions the commenter cites condemning conclusory 
invocations of agency ``knowledge and expertise'' involve agencies 
asserting expertise in place of explanation. The Board has not done 
that. It has identified the specific practice it observes--standardized 
worksheets treated as legally compulsory, penalty appeals litigated as 
audits of factor recitation, the statutory question overshadowed--
explained why that practice disserves the statute, exposed its proposed 
correction to public comment, and responded to the objections on the 
merits. A reasoned explanation grounded in an adjudicative agency's 
firsthand experience of its own doctrine, tested through notice and 
comment, is what the Administrative Procedure Act requires; it bears no 
resemblance to the conclusory assertions at issue in the cases the 
commenter cites.
    Third, the observation that the Board has not claimed the Douglas 
framework causes the retention of poor performers is accurate--and 
consistent with the Board's rationale. As explained above, the problem 
this rule addresses is the analytic overlay and its process costs, not 
the Board's mitigation rate or the outcomes of its cases. Fourth, as to 
commenter 0492's proposed metrics: the mechanisms by which deficient 
agency actions fail are untouched by this rule. The agency bears the 
burden of proof; harmful procedural error, prohibited

[[Page 56570]]

personnel practices, and decisions not in accordance with law remain 
grounds on which an appellant prevails; and the Board retains, and has 
codified, its mitigation authority. An agency case that cannot 
withstand review will fail under the codified standard exactly as it 
fails today, and the Board's published decisions and annual reports 
will continue to make those outcomes visible to the public. Proposals 
to impose new accountability measures on supervisors and managers, and 
comments directed at agency labor-relations and human-resources 
practices, are outside the scope of the Board's rule and are referred 
to OPM to the extent they bear on its proposals.

2. Impact

    This rule governs the standard the Board applies in reviewing the 
reasonableness of an agency's chosen penalty in appeals of adverse 
actions taken under 5 U.S.C. 7513 that are filed with the Board on or 
after the rule's effective date. It does not change which actions are 
appealable to the Board, who may appeal, the agency's burden of proof 
under 5 U.S.C. 7701(c), the availability of affirmative defenses, the 
Board's mixed-case procedures, or the availability or standards of 
judicial review. Its direct impact falls on the litigation of penalty 
issues in Board proceedings: parties will direct penalty evidence and 
argument to the considerations the record makes material rather than to 
an enumerated template, and the Board and its administrative judges 
will decide penalty reasonableness on the whole record under the 
codified standard. Agencies may choose to update deciding-official 
training and decision templates, but nothing in this rule requires 
agencies to discard existing training or internal analytic aids, and 
records assembled under the prior framework remain fully probative 
under the codified standard (Section IX.6). Employees retain every 
substantive protection identified in Sections IV and V, including the 
due-process notice obligations and the Board's codified mitigation 
authority. Because the ultimate statutory question is unchanged, the 
Board expects outcomes to continue to turn on substantive 
reasonableness, as they have for four decades (Section IX.1). The 
impacts of OPM's amendments to 5 CFR parts 412, 432, 715, and 752--
including any change in the number of performance-based or adverse 
actions agencies take--are attributable to those amendments and are 
addressed in OPM's separate final rule.

3. Costs

    The Board has considered the costs of this rule and concludes that 
they are de minimis. Several commenters (commenters 0430, 0439, 0492, 
0554, 0665, 0674, and 0676) cited the joint NPRM's regulatory 
analysis--including its projections of additional removals, additional 
initial appeals and petitions for review, additional EEO counselings 
and complaints of discrimination, and associated agency litigation-
defense costs--as evidence that the rulemaking would generate 
litigation rather than efficiency. Commenter 0439 argued specifically 
that an agency that predicts its own rule will produce roughly 599 
additional removals a year, 366 additional Board appeals, 205 
additional petitions for review, increases in EEO counseling and formal 
complaints of discrimination, and more than $20 million a year in new 
agency litigation-defense costs has not shown that the rule serves 
efficiency, but the opposite. Those projections concern the joint 
regulatory package and are driven by OPM's proposed amendments, which 
the NPRM projected would increase the number of actions agencies take; 
they are not attributable to the Board's amendment of its own review 
standard, which neither authorizes, requires, nor makes more likely any 
performance-based or adverse action, and they are addressed in OPM's 
separate final rule. Commenter 0665 further argued that the agencies 
produced granular cost estimates elsewhere in the joint rulemaking 
while supplying none for litigation over what the totality standard 
requires; the transition and adjudication costs of the Board's 
amendment, including the expected brief period of argument over the 
codified standard's application, are addressed below and in Sections 
IV.7 and IX.4.
    The costs attributable to the Board's own amendment fall into three 
categories, each of which the Board has considered. The first is one-
time familiarization: agency human-resources professionals, deciding 
officials, employee and union representatives, agency counsel, and the 
Board's own administrative judges will read the amended regulation and 
this preamble and absorb the codified standard. That cost is modest in 
absolute terms. The operative regulatory text is brief; the standard it 
codifies is the tolerable-limits-of-reasonableness formulation that has 
governed penalty review for four decades, so the learning burden falls 
on form rather than substance; and the cost is partially offset by the 
fact that the rule replaces a framework previously dispersed across 
decades of case law with a single, public, codified statement. The rule 
imposes no reporting, recordkeeping, or other compliance obligations, 
requires no new systems or processes, and requires no filing from any 
party.
    The second category is discretionary updating: agencies, unions, 
and representatives may elect to revise training materials, decision 
templates, and internal guidance that reference the Douglas factors. 
The Board expects those costs to be limited and incurred over time, for 
three reasons. Nothing in the rule requires agencies to discard 
existing training or internal analytic aids, and deciding officials 
remain free to organize their analyses around the considerations 
Douglas identified where they fit the case (Section IX.6), so revisions 
can be folded into ordinary training and guidance refresh cycles rather 
than undertaken on an emergency basis. The ultimate question in penalty 
review, the parties' evidentiary obligations, and the agency's noticing 
requirements are unchanged, so the substantive content of existing 
materials remains largely serviceable. And records and replies 
assembled under the prior framework remain fully probative under the 
codified standard, so no case files must be rebuilt.
    The third category is transition and adjudication costs. The 
applicability statement set forth in the DATES section of this document 
eliminates the principal potential transition cost--relitigation of 
penalty issues in appeals already pending--by providing that appeals 
pending on the effective date will be adjudicated under the framework 
in effect when they were filed. The Board acknowledges that any 
doctrinal refinement can generate a short initial period of argument 
over the new standard's application; it expects that period to be brief 
and its costs small, because the codified formulation is the one the 
Federal Circuit has policed for four decades and because the Board's 
published decisions will supply guidance rapidly, as they did in the 
years following Douglas itself (Section IV.7). Weighing against these 
limited costs is an offsetting, recurring saving: to the extent the 
codified standard eliminates satellite litigation over factor 
recitation and weighting, the per-appeal burden of briefing and 
adjudicating penalty issues will decline for agencies, appellants, and 
the Board alike. Finally, should the volume of appeals filed with the 
Board change as a result of OPM's amendments, the associated 
adjudication costs are costs of those amendments, were estimated in the 
joint NPRM, and are addressed by OPM. Considering these categories

[[Page 56571]]

together, the Board concludes that the incremental costs of its own 
amendment are de minimis.

4. Benefits

    The rule's principal benefits are qualitative. First, it refocuses 
penalty review on the question Congress enacted--whether the penalty is 
within the tolerable limits of reasonableness in light of the totality 
of the circumstances relating to the efficiency of the service--rather 
than on compliance with an enumerated template. Second, it eliminates a 
recurring category of satellite litigation: disputes over whether each 
of twelve factors was recited, addressed, and adequately weighted, 
which consume party and adjudicator resources without advancing the 
statutory inquiry. Third, it codifies, for the first time, both the 
Board's operative review standard and the Devall mitigation framework, 
giving all parties a single, public, authoritative statement of how the 
Board exercises its penalty-review authority--a gain in transparency 
and predictability over a framework previously dispersed across four 
decades of case law. Fourth, it preserves, and this preamble makes 
express, the substantive protections on which fair penalty review 
depends: the agency's burden of proof, the due-process obligation to 
identify aggravating factors in the advance notice, the whole-record 
requirement, the continued relevance of mitigating and comparator 
evidence, and the Board's mitigation authority. The Board cannot 
quantify these benefits with precision, but for the reasons stated in 
Sections IX.1, IV.1, and IV.7, it concludes that they are substantial 
and that they exceed the rule's de minimis costs.

5. Regulatory Alternatives

    The Board considered a range of alternatives to this rule, 
including each alternative proposed by commenters. Commenter 0636 
recommended that the Board retain, in regulation, a set of clear, 
understandable, and reviewable standards to guide penalty 
determinations while expressly disclaiming any requirement that every 
enumerated factor be mechanically addressed in every case. Commenter 
0626 recommended that the final rule expressly provide that relevant 
Douglas factors remain applicable; that agencies must articulate the 
basis for penalty determinations; that administrative judges retain 
authority to assess penalty reasonableness; and that Board review 
remain grounded in objective and reviewable criteria. Commenter 0435 
recommended that six considerations remain central to any 
reasonableness review, whether or not they continue to carry the 
Douglas name--the nature and seriousness of the offense; the employee's 
executive or fiduciary responsibilities; the past disciplinary and 
performance record; consistency with genuinely comparable cases; 
mitigating circumstances; and the potential for rehabilitation--while 
confirming they are not a rigid formula and that not all apply in every 
matter.
    Commenter 0625 recommended retaining emphasis on a core subset of 
factors most central to a fair and defensible penalty determination: 
the seriousness of the offense, the employee's past disciplinary 
record, the effect on the employee's ability to perform, consistency of 
the penalty with those imposed on comparable employees, and the 
potential for rehabilitation. Commenter 0676 proposed that the Board 
retain the factors as non-binding analytical guideposts, with explicit 
instructions against rigid, mechanical box-checking, alongside 
streamlined penalty matrices. Commenter 0509 urged retention of all 
twelve factors together with mandatory comparator review and continued 
penalty guidance, and commenters 0426 and 0558 similarly proposed that 
agencies retain non-prescriptive penalty guidance or written penalty 
guidelines. Commenter 0658 proposed modernizing the Douglas framework 
through updated guidance rather than retiring it, and commenter 0675 
proposed a simplified analysis for minor matters. Commenters 0609 and 
0672 proposed augmenting the factors to address the misuse of 
artificial intelligence, including fabricated or AI-generated evidence 
and automated monitoring of employees. And many commenters urged, as 
their preferred alternative, improved selection, training, and 
accountability of supervisors and human-resources advisers before, or 
instead of, any change to the review standard (for example, commenters 
0013, 0038, 0315, 0386, 0408, 0413, 0466, 0540, 0576, 0593, 0618, and 
0666).
    Commenter 0629 argued that the problem the Board identified--
mechanical use of the factors--can and should be overcome by training 
and updated policy rather than by discarding the framework, and 
commenter 0634 likewise urged that the better course is to retain the 
Douglas factors and clarify their application. Commenter 0647 argued 
that the Board failed to consider obvious alternatives, including 
continued case-by-case refinement of Douglas questions through 
adjudication, alternative discipline, and pilot programs. Commenters 
0391, 0439, and 0642 urged that all twelve Douglas factors be retained 
rather than replaced with an undefined totality standard, as did a 
large number of individual commenters (see Sections I and IV.1), with 
commenter 0391 urging that any reform be redrafted from the ground up 
with that preservation built in from the start, and commenter 0642 
asking that the agencies consider alternatives that preserve federal 
workers' longstanding civil service protections.
    The Board first considered leaving the current framework in place. 
For the reasons stated in the Statement of Need (Section IX.1) and in 
the NPRM, retaining the status quo would leave the Board's operative 
review standard uncodified and would perpetuate the checklist-centered 
practice this rule corrects.
    The Board next considered codifying an enumerated factor list--
whether the full twelve, a core subset, or a renamed equivalent--
accompanied by an anti-mechanical disclaimer; in substance, codifying 
the rule of Nagel. It declines that course because that is, in 
substance, the regime the Board already has, and its ineffectiveness is 
the occasion for this rule. Douglas itself disclaimed mechanical 
application, describing the factors as nonexhaustive and cautioning 
against formulaic weighing; Nagel repeated the disclaimer two years 
later; and the Board and the court have repeated it since. Four decades 
of experience demonstrate that an enumerated list gravitates toward 
compulsory-checklist status in practice notwithstanding disclaimers--in 
agency worksheets, in training, in negotiated agreements, and in 
litigation. Re-enacting a list in regulation, even with the strongest 
disclaimer, would entrench the very perception of obligation the rule 
is designed to dispel, and would invite the same recitation-centered 
litigation under a new citation.
    Codifying a reduced subset, as commenters 0435 and 0625 propose, 
would add a further problem of negative implication: considerations 
omitted from a codified subset would inevitably be argued to be 
disfavored or irrelevant--a result no commenter intends and the Board 
does not intend. The same reasoning answers commenter 0676's proposed 
guideposts-and-matrices alternative, which the Board has evaluated on 
the record and declines for these reasons (Section IV.16).
    The Board likewise declines to rely on training alone. Improved 
supervisory training is valuable--OPM proposed it, and several 
commenters supported it--but training cannot correct a perceived

[[Page 56572]]

legal requirement; only a change in the governing legal materials can. 
The Board notes that the same commenters who propose training as the 
remedy elsewhere argue that Board and court precedent already make the 
factors non-mandatory; if forty years of precedential instruction has 
not dispelled the perceived requirement, additional training premised 
on that precedent is unlikely to do so. The same reasoning answers the 
many commenters who urged training-first sequencing or improved 
supervisory selection as the alternative: a perceived legal requirement 
is corrected by changing the governing legal materials, not by 
instruction premised on the very precedent that failed to dispel the 
perception.
    The proposals of commenters 0426, 0509, 0558, 0658, and 0675--
retained penalty guidance, mandatory comparator review, modernized 
factor guidance, or a tiered analysis for minor matters--are variants 
of the enumerated-list alternatives addressed above and in Sections 
IV.10 and IV.14, and the Board declines them for the same reasons; 
nothing in this rule, however, prevents an agency from maintaining 
internal decisional aids, as Sections IV.8 and IX.6 explain, and 
comparator evidence remains relevant as stated in Section IV.2. As to 
commenters 0609 and 0672: the Board declines to codify new enumerated 
factors, for the reasons stated throughout this section, but the 
concern those commenters raise is accommodated by existing law and by 
the codified standard--the agency bears the burden of proving its 
charges and the reasonableness of its penalty on the record; the 
authenticity and reliability of the evidence offered, including 
digital, automated, or artificially generated material, bear directly 
on whether that burden is carried; and a charge or penalty resting on 
fabricated or unreliable evidence will not be sustained.
    For related reasons, the Board declines commenter 0647's suggested 
alternatives of continued adjudication and pilot programs: case-by-case 
adjudication is the vehicle that, over four decades and notwithstanding 
repeated precedential cautions, did not arrest the drift toward 
formalism; and pilot programs are ill-suited to the standard of review 
applied by a single, national adjudicative body, where a uniform rule 
of decision is itself the objective. The Board also considered 
occupational exclusions and occupation-specific factor lists, and 
declined them for the reasons stated in Section IV.9.
    The Board is, however, able to give commenters much of the 
assurance they seek, and does so in this preamble. First, as stated 
throughout this document, the considerations identified in Douglas--
including each of the considerations enumerated by commenters 0435 and 
0625--remain relevant and cognizable under the totality of the 
circumstances wherever they are material, and parties remain free to 
raise them.
    Second, agencies must, as always, be prepared to articulate and 
prove the basis for their penalties: the burden of proof under 5 U.S.C. 
7701(c)(1)(B) is unchanged, the due process obligation to notice 
aggravating factors is unchanged, and an unexplained or unsupported 
penalty will not survive review under the codified standard.
    Third, administrative judges and the Board retain full authority to 
assess penalty reasonableness and to mitigate penalties that exceed the 
tolerable limits of reasonableness, under the Devall framework now 
codified in Sec.  1201.56.
    Fourth, Board review remains grounded in reviewable criteria: the 
codified standard, the whole record, and the reasoned-decision 
obligations enforced by the Federal Circuit under 5 U.S.C. 7703(c). The 
difference between this final rule and commenters' preferred 
alternatives is not the presence or absence of standards; it is whether 
the standards take the form of a codified enumerated template.
    Finally, the Board adopted one alternative urged by commenters in 
part: in response to reliance and transition concerns, and as set forth 
in the DATES section of this document, the amended standard applies 
only to appeals filed with the Board on or after the effective date, 
with pending appeals adjudicated under the framework in effect when 
they were filed. Section IX.6 discusses the reliance interests bearing 
on that choice, including the view of one commenter (commenter 0623) 
that no reliance interests warrant transitional measures.

6. Reliance Interests and Transition

    Commenters identified substantial reliance interests in the Douglas 
framework in response to the NPRM's express solicitation of comment on 
reliance interests and possible transition measures. 91 FR at 40460. 
Commenter 0634 argued that Douglas is embedded in agency policies, OPM 
guidance, Board precedent, training, decision templates, negotiated 
agreements, and litigation practice; that replacing it will require 
retraining, rewriting policies, bargaining, and transition litigation; 
and that the NPRM's treatment of the change as having de minimis cost, 
with no transition provision, renders the change arbitrary and 
capricious under Department of Homeland Security v. Regents of the 
University of California, 591 U.S. 1, 30-31 (2020).
    Commenter 0629 similarly cited Regents and Encino Motorcars, LLC v. 
Navarro, 579 U.S. 211 (2016), and argued the agencies failed to 
consider less drastic alternatives. Commenter 0647 argued that the 
Douglas factors are deeply ingrained in the fabric of federal-sector 
labor relations and have engendered extraordinary reliance interests 
since 1981 among agencies, employees, unions, reviewing courts, and the 
Board itself, and that abandoning them without real analysis is 
arbitrary and unreasoned. Commenter 0642 similarly emphasized that 
these standards have been applied consistently for nearly five decades, 
across administrations of both parties, and have provided fairness to 
federal workers facing accusations of misconduct.
    Commenter 0430 requested that any final rule (1) apply the amended 
Sec.  1201.56(b)(3), if adopted at all, only to actions proposed after 
the final rule's effective date; (2) preserve Douglas-based review for 
all actions and appeals pending on that date, in whatever forum; (3) 
resolve the arbitration-parity question on the record; and (4) state 
expressly that nothing in the rule disturbs the Devall mitigation 
framework or the notice obligations recognized in Stone and Ward. By 
contrast, commenter 0623, a Federal executive department, stated that 
it is not aware of reliance interests of a kind or magnitude that would 
warrant delaying implementation.
    Commenter 0062 expressed a transition concern from the opposite 
direction, asserting that agency litigators are slow-walking pending 
disputes in anticipation of this rule in order to obtain the benefit of 
the revised standard. Commenter 0045 objected that repeated revision of 
the governing framework destabilizes settled expectations, and 
commenter 0665 identified reliance interests that include four decades 
of Douglas-based compliance practice built by agencies, employees, and 
their representatives.
    The Board acknowledged in the NPRM that Douglas has long been a 
cornerstone of federal employment law, and it has weighed the reliance 
interests commenters identified. Having done so, the Board concludes 
that those interests, while real, are more limited than commenters 
suggest, and that they are outweighed by the benefits of the rule and 
accommodated by its design.

[[Page 56573]]

    The reliance interests are limited because the ultimate legal 
question is unchanged. Before and after this rule, an agency must 
select a penalty that promotes the efficiency of the service and must 
be prepared to prove, by a preponderance of the evidence on the whole 
record, that its penalty is reasonable. The substantive considerations 
agencies have trained their deciding officials to evaluate--
seriousness, record, notice, consistency, rehabilitation, mitigation--
remain relevant wherever material. An agency whose human-resources 
professionals and deciding officials are practiced in assembling 
records addressing those considerations loses none of that investment. 
Nothing in this rule requires agencies to discard existing training or 
internal analytic aids, and nothing in this rule prohibits a deciding 
official from organizing his or her analysis around the considerations 
Douglas identified where they fit the case. What agencies, employees, 
and adjudicators may no longer do is treat the enumerated list as 
compulsory in form.
    The Board has also accommodated transition concerns--and has 
granted much of commenter 0430's transition request in substance--
through the applicability statement set forth in the DATES section of 
this document: the amended Sec.  1201.56 standard applies to appeals 
filed with the Board on or after the effective date of this rule, and 
appeals pending before the Board on that date will be adjudicated under 
the framework in effect when they were filed. The Board keys 
applicability to the filing of the appeal rather than to the date the 
underlying action was proposed because the rule governs the Board's 
review methodology--not any standard of primary conduct--and the filing 
of the appeal is the event that invokes that methodology.
    Because the amended standard governs the manner in which the Board 
evaluates penalty reasonableness in proceedings before it, its 
application to newly filed appeals is prospective in the relevant 
sense: it attaches no new legal consequence to completed conduct and 
alters no substantive standard the parties' actions were required to 
satisfy. Cf. Landgraf v. USI Film Prods., 511 U.S. 244, 275 (1994) 
(rules governing procedure in adjudication ordinarily apply to 
proceedings instituted after their adoption); Bowen v. Georgetown Univ. 
Hosp., 488 U.S. 204, 208 (1988). Nor does the filing-date rule 
prejudice a party whose action was proposed, answered, or decided under 
the prior framework: the ultimate question--whether the penalty is 
reasonable on the whole record--is unchanged; a record and reply built 
around the Douglas considerations are fully probative under totality 
review; the agency's noticing obligations are unchanged; and no defense 
or category of evidence available under the prior framework becomes 
unavailable under the codified one. The arbitration-parity question 
raised by commenter 0430 is addressed in Section IV.12, and the 
codified standard will operate in arbitration on the same prospective 
basis on which it operates before the Board. And the final rule 
confirms expressly, in Sections V and VIII, that it codifies rather 
than disturbs the Devall mitigation framework and effects no change to 
the requirement that aggravating factors relied upon in penalty 
selection be identified in the advance notice of proposed action.
    The applicability statement also answers commenter 0062's concern 
that pending disputes are being slow-walked in anticipation of this 
rule. Delay yields no advantage under the rule's design: appeals 
pending before the Board on the effective date proceed under the prior 
framework, and for appeals filed afterward the ultimate question--
whether the penalty is reasonable on the whole record--is unchanged, so 
there is no more forgiving substantive regime to be gained by timing. 
Dilatory litigation conduct, moreover, remains subject to the Board's 
existing case-processing authorities. The reliance identified by 
commenters 0045 and 0665--practice, training, and records built around 
the Douglas considerations--is the reliance addressed above: that 
investment remains fully serviceable under the codified standard, and 
the filing-date applicability rule ensures that no pending appeal is 
adjudicated under a framework other than the one in effect when it was 
filed.
    Finally, the Board considered the less disruptive alternatives 
commenters proposed, principally retaining a codified factor list--in 
whole or in part--with an anti-mechanical disclaimer, and explains in 
Section IX.5 why it declined that course. The Regents line requires an 
agency to assess reliance and weigh it against competing policy 
concerns; it does not require the agency to preserve the status quo. 
The Board has performed that assessment here.

X. Procedural Issues and Regulatory Review

A. Severability

    If any of the provisions of this rule is held to be invalid or 
unenforceable by its terms, or as applied to any person or 
circumstance, it shall be severable from its respective section(s) and 
shall not affect the remainder thereof or the application of the 
provision to other persons not similarly situated or to other 
dissimilar circumstances. As explained in Section VIII of this 
preamble, the Board's amendments to part 1201 are also severable from 
the amendments to 5 CFR parts 412, 432, 715, and 752 that OPM proposed 
in the joint notice of proposed rulemaking and is finalizing in a 
separate document: the Board's rule operates independently of OPM's and 
would function sensibly regardless of the disposition of OPM's 
proposals. In enforcing civil service protections and merit system 
principles, MSPB will comply with all applicable legal requirements.

B. Regulatory Review

    MSPB has examined the impact of this rule as required by E.O.s 
12866 and 13563, which direct agencies to assess all costs and benefits 
of available regulatory alternatives and, if regulation is necessary, 
to select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health, and safety effects, 
distributive impacts, and equity). A regulatory impact analysis must be 
prepared for rules that have an annual effect on the economy of $100 
million or more or adversely affect in a material way the economy, a 
sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local, or tribal 
governments or communities. This rulemaking does not reach that 
threshold but has otherwise been designated as a ``significant 
regulatory action'' under section 3(f) of E.O. 12866. This rule is not 
considered an E.O. 14192 regulatory action because, as addressed in 
Section IX.3, the Board's portion of the proposed rule imposes no more 
than de minimis costs.

C. Regulatory Flexibility Act

    The Board certifies that this regulation will not have a 
significant economic impact on a substantial number of small entities 
because it applies only to Federal agencies and employees.
    Commenter 0665 argued that this certification fails to address 
indirect impacts on labor organizations whose negotiated agreements are 
assertedly displaced by the joint proposal and which may qualify as 
small entities under 5 U.S.C. 601. The Regulatory Flexibility Act is 
concerned with the direct economic effects of a rule on regulated small 
entities, and this rule regulates none: it governs the standard

[[Page 56574]]

of review the Board applies in appeals before it and imposes no 
compliance obligation on any labor organization or other small entity. 
Any displacement of negotiated agreements to which the commenter refers 
would flow, if at all, from OPM's proposed amendments, which are not 
finalized in this document and which OPM addresses in its separate 
final rule. The certification is accordingly unchanged.

D. Federalism

    This regulation will not have substantial direct effects on the 
States, on the relationship between the National Government and the 
States, or on distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with E.O. 13132, 
the Board certifies that this rule does not have sufficient federalism 
implications to warrant preparation of a Federalism Assessment.

E. Civil Justice Reform

    This regulation meets the applicable standards set forth in 
sections 3(a) and 3(b)(2) of E.O. 12988 (61 FR 4729; Feb. 7, 1996).

F. Unfunded Mandates Reform Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires that agencies assess anticipated costs and benefits before 
issuing any rule that would impose spending costs on State, local, or 
tribal governments in the aggregate, or on the private sector, in any 1 
year of $100 million in 1995 dollars, updated annually for inflation. 
That threshold is currently approximately $206 million. This rulemaking 
will not result in the expenditure by State, local, or tribal 
governments, in the aggregate, or by the private sector, in excess of 
the threshold. Thus, no written assessment of unfunded mandates is 
required.

G. Congressional Review Act

    Subtitle E of the Small Business Regulatory Enforcement Fairness 
Act of 1996 (known as the Congressional Review Act or CRA) (5 U.S.C. 
801 et seq.) requires most final rules to be submitted to Congress 
before taking effect. The Board will submit to each House of Congress 
and to the Comptroller General of the United States a report regarding 
the issuance of this final rule before its effective date. The Office 
of Information and Regulatory Affairs in the Office of Management and 
Budget has determined that this rule is not a major rule as defined by 
the CRA (5 U.S.C. 804(2)).

H. Paperwork Reduction Act

    This regulatory action will not impose any new reporting or 
recordkeeping requirements under the Paperwork Reduction Act of 1995, 
as amended (44 U.S.C. chapter 35).

Gina K. Grippando,
Clerk of the Board.

List of Subjects in 5 CFR Part 1201

    Administrative practice and procedure, Government employees.

    Accordingly, for the reasons stated in the preamble, the Merit 
Systems Protection Board amends 5 CFR part 1201 as follows:

PART 1201--PRACTICES AND PROCEDURES

0
1. The authority citation for part 1201 continues to read as follows:

    Authority: 5 U.S.C. 1204, 1305, and 7701, and 38 U.S.C. 4331, 
unless otherwise noted.

Subpart B--Procedures for Appellate Cases

0
2. Amend Sec.  1201.56 by adding paragraph (b)(3) to read as follows:


Sec.  1201.56  Burden and degree of proof.

* * * * *
    (b) * * *
    (3) Penalty determination. (i) This paragraph (b)(3) applies only 
to appeals filed under 5 U.S.C. 7513.
    (ii) The agency's choice of penalty is entitled to substantial 
deference. The Board will review a penalty only to determine whether it 
is within the tolerable limits of reasonableness in light of the 
charges sustained under paragraph (b)(1)(ii) of this section. This 
determination is based upon the totality of the circumstances relating 
to the efficiency of the service, on a case-by-case basis.
    (iii) If the Board sustains all of the agency's charges, the Board 
will determine whether the penalty imposed by the agency is within the 
tolerable limits of reasonableness, and will not substitute its 
judgment for the judgment of the deciding official.
    (A) If the Board makes an affirmative finding in this regard, the 
Board will sustain the agency's action.
    (B) If the Board makes a negative finding in this regard, the Board 
may mitigate the agency's original penalty to the maximum reasonable 
penalty.
    (iv) If the Board sustains fewer than all of the agency's charges, 
the Board may mitigate the agency's original penalty to the maximum 
reasonable penalty so long as the agency did not indicate either in its 
final decision, or during proceedings before the Board, that it desired 
that a lesser penalty be imposed if the Board did not sustain all of 
its charges.
    (A) If the agency so indicated, the Board may:
    (1) Impose the lesser penalty the agency indicated it would have 
imposed; or
    (2) If the Board cannot discern what that penalty would have been, 
accord the agency an opportunity to institute a lesser penalty.
    (B) If the agency did not so indicate, the Board may:
    (1) Mitigate the agency's original penalty to the maximum 
reasonable penalty; or
    (2) Accord the agency an opportunity to institute a lesser penalty.
* * * * *
[FR Doc. 2026-18061 Filed 9-2-26; 8:45 am]
BILLING CODE 7400-01-P


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