According to the Office of Personnel Management (“OPM”), the Federal Civilian workforce consists of over 2.1 million individuals. In 2017, over 15% of those employees were located in the DMV – the metro area consisting of the District of Columbia, Maryland, and Virginia. [1]  Federal employees have unique legal protections, unique pay provisions, and often have completely different concerns in terms of job separation when compared to private or state employees in the same area.

One proposed rule change, currently in an open comment period before the OPM issues a final rule, concerns ‘Clean Record Settlements’ following adverse action. Adverse action can include a number of steps (including termination and suspension) a federal agency might take after an employee is subject to disciplinary action. Any potential adverse action is an enormous issue for federal employees; however, in the DMV, where possession of a security clearance is critical to employment, even the mention of potential adverse action is scary.

With the assistance of an experienced attorney, an employee can challenge potential adverse action. Such challenges (after adverse action is proposed) are brought before the Merit Systems Protection Board. Actions before the Board (the “MSPB”) are akin to a court appeal – only in an administrative setting. Appeals at the MSPB can be time intensive, and often parties (the agency and the employee) seek to resolve the issues with a settlement agreement.

In the past, such settlement agreements could include a clause which called for a ‘Clean Record.’ The purpose of such clauses was to achieve the agency’s main objective (usually terminating the employee) while avoiding a long and drawn-out appeal process by offering the employee an opportunity to have a clean record – meaning that their employment record would be wiped clean of references to the disciplinary action or adverse action. That clean record clause would be a valuable offer for the employee because it would mean that they could seek other employment without prospective employers having any knowledge of the prior work problem.

As stated above – settlement agreements often contained such clauses in the past. That is because such clean record clauses were banned by President Trump by Executive Order in 2018. Two years later, the Executive Order was codified in the Code of Federal Regulations. The banning of the clauses was motivated, in part, by concerns that such clauses end up keeping problem employees in the federal workforce because an agency’s immediate concern is usually getting rid of the employee subject to the adverse action – not whether that employee is out of the federal workforce completely. Opposing views are that clean record clauses protect employees where agencies have attempted to use adverse action just to clear a billet or for some other unjustified purpose.

In 2021 President Biden revoked President Trump’s Executive Order, but that revocation did not bring back clean record clauses because the ban of such clauses had become a regulation, and Executive Orders can revoke Executive Orders but cannot revoke regulations – in order to change a regulation, agencies have to go through the normal rulemaking process. OPM proposed a rule change in 2022[2] to bring back clean record settlements, and a final decision will be issued following the current comment phase. One lesson for employees coming out of the dueling Executive Orders, especially in our current polarized and quickly changing and changing back environment, is that it is valuable to find counselors who are well-versed with changes in the rules regarding employment appeals.

For federal employees, the rule change will mean the return of a pathway to resolve costly and time-consuming disputes with agencies. 

[1] See https://www.fedscope.opm.gov/

[2] https://public-inspection.federalregister.gov/2021-28205.pdf