Tipping the Scales

n a Friday night in June 1995, Philip Woodford made a bad decision. An engineer by training, Woodford had worked for the Army for 21 years and had no prior disciplinary record. He'd received glowing performance reviews and risen to become director of the Army's environment and safety directorate. But Woodford later admitted that he had, indeed, asked a female subordinate to meet him in an office, and that he then had locked the door, professed sexual feelings for her, and grabbed the woman's hand. She also said he kissed and hugged her against her wishes.

However, Woodford denied that he'd threatened the woman's job if she told anyone about the incident, as she said he had. Nonetheless, the Army fired Woodford, charging him with unbecoming conduct and sexual harassment. Woodford appealed the decision to the Merit Systems Protection Board, the independent arbiter that hears federal employee appeals of disciplinary actions.

An MSPB administrative judge found that Woodford's offense was only "a single instance of admittedly extremely poor judgment." The judge ruled that Woodford had not threatened the woman's job, and that his awkward come-on had been more "romantic" than "sexual." "As sexual harassment cases go, the appellant's misconduct was remarkably mild," the judge wrote. Given Woodford's long federal service, his sterling performance record and his clear remorse, the judge reduced Woodford's penalty to a 60-day suspension. When the agency appealed the case to the three-member MSPB in Washington, the board largely upheld the judge's decision, but allowed the agency to demote Woodford to a non-supervisory position.

In proposing earlier this year that it be freed from MSPB's oversight, the Defense Department pointed to the Woodford case as a prime example of a broken system. As Undersecretary of Defense for Personnel and Readiness David Chu told a group of reporters last June: "I think you have too much divergence in the current system between the immediacy of the facts that we confront and the remoteness of the appeal authority."

Chu described the federal disciplinary appeals process as "laborious" for supervisors and ultimately frustrating because "we are often overturned"-even though agencies win the vast majority of the time. Defense sought, and in November, won the authority to create its own internal appeals process. The Homeland Security Department already won similar authority last year and is creating its own system. That has left the MSPB in limbo. And with its workload likely to be drastically cut, the agency decided in November to close two field offices in Seattle and Boston. The board also is planning to close its Denver field office in 2005, and may close its New York City office that year as well. Administrative judges and support staff are expected to lose their jobs.

Chu's belief that the federal appeals system is slow, inefficient and too sympathetic to problem employees is widely held among top Bush administration officials. But experts on the system, federal managers and employees interviewed by Government Executive paint a more sympathetic picture and warn that abandoning the MSPB may leave a tangled jumble of different agency appeals systems that serve neither employees nor managers well. They acknowledge the federal appeals system needs some fine-tuning, but say it shouldn't be replaced by agency-specific systems. That is, unless Congress is ready to throw out the premise on which the appeals system is based: Federal employees are entitled to an independent judgment of whether adverse actions taken against them are justified in order to ensure the preservation of a merit-based civil service.

INDEPENDENT AND IMPARTIAL

The Merit Systems Protection Board, created by the 1978 Civil Service Reform Act, considers most employee disciplinary appeals. The board has 70 judges stationed across the country who hear cases and make decisions, which can then be appealed to the three-member board in Washington. If employees lose before the board, they can appeal their cases to the federal courts.

Despite a drastic downsizing over the last decade, the board is anything but slow. It makes most initial decisions in less than 100 days. And it is mostly sympathetic to agency managers. About 80 percent of cases adjudicated go the managers' way. Its case law is sound, at least as far as the federal courts are concerned. When MSPB decisions were appealed to federal courts in fiscal 2002, its rulings were upheld 94 percent of the time.

But there is an argument to be made that the system is arduous, particularly in cases in which a manager is trying to discipline or fire an employee for poor performance. There's also a strong argument that the appeals system should be consolidated. In addition to the MSPB, two other independent agencies-the Federal Labor Relations Authority and the Equal Employment Opportunity Commission-consider employee appeals. The FLRA handles labor-management disputes exclusively, while the EEOC deals with cases in which employees allege discrimination.

But the system's problems don't mean it should be thrown out the window, says Matthew Shannon, the MSPB deputy clerk and a 20-year civil service veteran. An independent third-party arbiter may not always please managers or workers, but it's the only way to ensure that a civil service based on merit continues, Shannon says. "The government is not the same as the corporate or private sector. It's critical to the efficiency and accountability of government to have the protections provided by independent review."

MSPB Administrative Judge Daniel Turbitt, who serves as vice president of the MSPB Professional Association, says internal agency systems just won't have the same credibility. When agencies hear appeals of their own managers' decisions, "there is an appearance that the employee no longer has an impartial, independent adjudicator," Turbitt says. "Is [an internal appeals system] a true opportunity to be heard? Or is it merely a slam-dunk for the agency?"

Federal managers, for the most part, share the same concerns. Bill Bransford, a counsel to the Senior Executives Association, says a strong MSPB gives managers freedom to manage. Without the backstop provided by the board, employees facing disciplinary action would be more likely to sue their supervisors, he says. Currently, Bransford says, "managers enjoy immunities because of the existence of MSPB. If you do away with it, you are inviting judicial scrutiny."

Besides, Bransford points out, the system is built to be sympathetic to agency managers. In bringing a case for poor performance under Chapter 43 of Title 5 of the U.S. Code, agencies must only demonstrate that a reasonable person could have viewed the employee's performance as unsatisfactory. Under Chapter 75, which governs cases involving employee misconduct, the agency must only prove by a preponderance of the evidence that the employee is guilty as charged. Given these rules, it's clear that the conventional wisdom about the difficulty of firing poor performers in government is something of a myth.

That's not to say the system is easy for managers to use. Studies by the General Accounting Office and the MSPB have found that despite the favorable rules, and MSPB's relatively speedy adjudication of cases, federal managers still fear the system and hesitate to use it, even in the most egregious cases.

A 1999 MSPB study, "Federal Supervisors and Poor Performers," showed that managers clearly were hesitant to take formal actions against their subordinates. Some of their hesitation was perfectly logical. Managers said they preferred to work informally with employees before threatening them with formal discipline. But managers also said they sometimes failed to take formal action even when it was warranted because they felt the process would take too much time. They also complained about the documentation necessary to prove a case before the MSPB. Managers said they felt that time spent on "counseling, training and documenting performance" was an "undue burden since these may not be seen as being among the supervisor's most critical tasks."

Supervisors also are clearly afraid that the disciplinary process will be turned back on them. Employees frequently defend themselves by arguing that their managers have discriminated against them, for example, because of their race, religion or gender. In 1996, GAO reported (T-GGD-96-110) that federal employees file discrimination complaints at more than five times the rate of private sector employees. And while the number of federal discrimination complaints peaked in 1998 at more than 28,000, it remains high. In 2002, nearly 22,000 federal employees alleged that they were victims of discrimination.

Because employees can make discrimination claims using three different routes-the MSPB, the EEOC and federal district courts-even the most frivolous cases can drag on for years, all the while harming managers' reputations and dampening employee morale. GAO has cited "mixed cases," in which both the EEOC and the MSPB have jurisdiction, as an example of inefficiency in the system. In its 1996 report, GAO argued that "while the boundaries of the appellate agencies may appear to be neatly drawn, in practice these agencies form a tangled scheme." GAO found that "a mixed-case appellant can-at no additional risk-have two agencies review his or her appeal. These agencies rarely differ in their determinations, but an employee has little to lose in asking both agencies to review his or her case." Indeed, in the last seven years, the MSPB has made a different determination than the EEOC in only 21 mixed cases, according to Shannon. Turbitt says the MSPB has advocated reform of mixed-case procedures for years. "People just need to roll up their sleeves and do it," he says.

GOING IT ALONE

Despite these long-standing problems, and the fact that almost everyone agrees that some consolidation is necessary, reform efforts have gone nowhere, thanks to turf battles among the adjudicative agencies and a lack of consensus on Capitol Hill.

So agencies have taken to pushing for their own systems. In 1996, Congress granted the Federal Aviation Administration authority to set up an internal disciplinary appeals structure, stripping employees of their MSPB appeal rights. Some other federal workers, such as congressional employees and FBI agents, have limited appeal rights through MSPB. FAA developed a system that it dubbed the "Guaranteed Fair Treatment Program." It consisted of a three-member panel with one employee representative, one management representative and a third-party arbiter. Employees retained the right to appeal decisions of the panel to the federal courts.

But from the beginning, the system met with employee resistance. Despite its name, employees questioned the fairness of a structure in which FAA management played a role in judging disciplinary actions taken by FAA supervisors. Employees also resented the fact that even if they won their appeals, they would still have to cover their own legal fees. Under the MSPB system, the board had the authority to order FAA to pay employee legal fees. In 2000, FAA employee unions and managers convinced Congress to reinstate MSPB appeal rights as an alternative appeals option for the agency's workers. For the most part, MSPB has been the forum of choice for FAA staffers ever since.

Now with Homeland Security and Defense contemplating new appeals systems, Turbitt says the MSPB Professional Association has lobbied Congress to remember the FAA example. "We've tried to remind them of what happened and let them know that with Defense and Homeland Security, we're looking at a much bigger thing here," says Turbitt.

In July, for the first time in years, the MSPB professionals hired an outside lobbyist, Washington consultant Timothy Moore, a former congressional aide. Moore lobbied unsuccessfully against the Defense Department's proposal to set up its own appeals system. But despite the fact that the Pentagon won permission to create an internal appeals operation, Defense officials have yet to announce whether they will actually do so. Even if officials do set up a system that replaces the initial step of rulings by MSPB administrative judges, under the legislation, employees would retain the right to appeal decisions of any in-house arbiter to the full three-member MSPB in Washington.

But in Turbitt's mind, that review would merely serve as a rubber stamp for the in-house arbiter, because no MSPB administrative judge would have the opportunity to review evidence. If Defense and Homeland Security bar their employees from using MSPB, he says, "it could start a domino effect," with other agencies quick to demand similar freedom. That, he argues, "will have harrowing ramifications."

GRUELING AND DRAINING

Nonetheless, there appears to be some room for compromise. Everyone agrees that training for managers in dealing with employee discipline is inadequate, and that misperceptions about the current system are one reason managers have failed to use it. As the MSPB found in its 1999 study of how managers deal with poor performers, "Very few federal managers bother to use the performance-based removal actions established by the law, in part, because they do not understand" either Chapter 43 of the civil service law, which governs discipline for poor performance, or Chapter 75, which governs discipline stemming from misconduct.

Congress divided the disciplinary procedures into these two sections in the 1978 Civil Service Reform Act in an effort to make it easier to take action against poor performers. It didn't work. In 2002, MSPB heard nearly 3,000 cases dealing with employee misconduct, but only 118 under the poor performance procedures. Over the past three years, 96 percent of disciplinary appeals to MSPB have fallen under the misconduct rubric, while only 4 percent have dealt with performance.

Indeed, even though the 1978 law reduced the burden of proof for agencies seeking to discipline an employee for poor performance-agencies must only show that a reasonable person could have viewed the employee's performance as poor-it also required that poorly performing employees be allowed a window of opportunity in which to improve. As a result, managers must put such employees on a "performance improvement plan" where they have as long as 120 days to demonstrate improvement. That requirement, more than the time MSPB takes for adjudication, is what really perturbs agency managers. "It's grueling, time-consuming, emotionally draining, and it robs time from everyone," says David Orr, a longtime human resources manager at the Customs Service and the Navy.

And though the performance improvement period was designed to protect workers, even John Gage, president of the American Federation of Government Employees, finds it to be a poor tool. "It's always been disingenuous," Gage says. The improvement period, he adds, isn't really a time for "remedial help" but rather an opportunity "to fight for your job." That's certainly how most managers treat it. Managers say that by the time they've resorted to putting an employee on a performance improvement plan, they use the time just to document their case and prepare for an MSPB appeal.

As the statistics bear out, managers much prefer to use the misconduct provisions of Chapter 75, and typically wait for any excuse to bring up a poorly performing employee under its less time-consuming procedures. Under that chapter, the manager must show that an employee was guilty of misconduct by a "preponderance of the evidence," a higher standard than under Chapter 43. But, the manager need not endure the performance improvement period required under Chapter 43.

How to get managers to use Chapter 43, or how to make it more appealing, remains the big question, says John Palguta, vice president for policy and research at the Partnership for Public Service, a nonprofit group devoted to government recruitment, and former director of the Office of Policy and Evaluation at MSPB. "Agencies and managers don't do enough to deal with performance problems," he says. "We want to encourage managers to take action, but we don't want partisan politics to have a role in who is hired and fired, so we have a long history of trying to provide some safeguards." The question, Palguta says, is "How do we achieve the right balance?"

WHY AGENCIES LOSE

Managers, of course, want to win every time. Given the relatively low standards of proof facing them in both misconduct and poor performance cases, it's surprising to some that they don't have an even better track record than they do. In the nearly 25 years since the MSPB began adjudicating cases, agencies have maintained a steady win rate of about 75 percent to 80 percent. But they've never been able to boost that tally. According to Bill Wiley, who served as chief counsel to former MSPB Chairman Ben Erdreich, the onus for that failure falls on the agencies.

To win performance cases, agencies must first establish that they have a sound appraisal system for evaluating employees. They must then demonstrate that they've communicated expectations to the staff and provided regular feedback on individual performance. Finally, they must provide assistance to help poor performers improve. The agency must meticulously document its actions every step of the way. Often, agencies fall short on this step.

When agencies lose in misconduct cases, it's typically because an they try to punish an employee with a history of problems by overreacting to one particular instance. "You'll often see cases where a supervisor puts up with poor performance or misconduct by an employee over time, then the employee comes into work 10 minutes late one day, and the manager wants to fire him," Wiley says. But the removal process in misconduct cases requires managers to give employees a chance to learn from their mistakes, and to provide them with written warning that they must shape up. Still, even in misconduct cases, the MSPB must find only that most of the evidence falls in the agency's favor.

In cases in which the MSPB sustains the charges but disagrees with the penalty, the problem usually results from the agency's failure to consider the "Douglas" factors, a set of criteria for assessing disciplinary penalties laid out by MSPB in the 1981 case Douglas v. Veterans Administration. Among the issues that agencies must consider are the seriousness of the offense, the employee's prior disciplinary record, the potential for rehabilitation and previous penalties handed out for similar offenses. In Philip Woodford's case, a failure by Defense to adequately consider these factors led to the MSPB's decision to reduce his penalty.

Wiley argues that on the whole, the requirements the MSPB imposes are a reasonable way to assure that federal employees are treated in a manner consistent with merit principles. But he also believes MSPB should adapt to meet the needs of agencies that are anxious to speed up the appeals process. Recently, he pointed out, the board has taken a step to shorten its adjudication period, by reducing the extra time that either employee or agency lawyers can request to prepare a case from 60 days to 30.

But MSPB should go further, Wiley says, by offering different adjudication systems to meet the varying needs of agencies. The board, he says, "should be adapting. It ought to be marketing itself." That way Congress can reform the federal appeals system without creating new appeals bureaucracies at every agency, and can make use of MSPB's experience in adjudicating cases over the last 25 years, even if the old system is shuttered.

But whatever a new system might look like, coming to consensus on a governmentwide approach and then getting the attention of Congress is not going to be easy. In the mid-1990s, the House Appropriations Committee commissioned a panel of experts from the various appeals agencies and the Office of Management and Budget to propose reforms of the appeals process. "We wrestled with it for four months," remembers Joseph Swerdzewski, former general counsel at the Federal Labor Relations Authority, who sat on the panel. When the panel arrived to make its recommendations to the committee, only the chairman showed up for the hearing, and the panel's recommendations languished.

At a recent forum of appeals system experts assembled by the National Academy of Public Administration, a group of panelists representing both federal employees and managers agreed on some critical problems facing the system: a lack of training for managers in dealing with performance issues, a lack of incentives for managers to act on disciplinary matters, a dearth of resources to establish performance appraisal systems, and a confusing labyrinth of appeals systems.

The panelists agreed that any new system should be fair, fast and protect the mission goals of agencies as well as the merit principles underlying civil service employment. But when asked to come up with solutions, the conversation sputtered. The problem, Swerdzewski says, is that Congress, and even the experts who watch the federal appeals system every day, simply haven't come to a consensus about how a new system would operate and what rights it would guarantee.