Panel Deals Major Blow to Trump's Signature Civil Service Reform, Calls for Rehiring of Fired Workers

The Trump administration was dealt a blow by a labor panel on Monday, which ruled the Veterans Affairs Department violated a contract with one of its employee unions as it sought to quickly dismiss poorly performing workers. 

The Federal Labor Relations Authority decision in part unwinds VA’s implementation of the 2017 VA Accountability and Whistleblower Protection Act, a law that made it easier to fire employees. President Trump has repeatedly highlighted the act as one of the key legislative accomplishments of his term. FLRA upheld a 2018 arbitrator’s ruling, which found VA violated its collective bargaining agreement with the American Federation of Government Employees when it eliminated “performance improvement plans” from the pre-disciplinary process. Monday’s decision requires VA to reinstate all employees fired without first being provided such a plan.

Trump, VA and lawmakers in both parties have heralded the law as a significant step in cracking down on misbehaving and poorly performing employees, but its enforcement has been mired in controversy since its passage. A federal court ruled earlier this year that VA could not apply the law retroactively and appellate judges could review whether VA’s selected punishment fit an employee’s alleged misbehavior. 

AFGE brought the case for mediation after VA issued a series of memoranda that said VA was no longer required to give employees 90 days to improve and performance improvement plans—or PIPs—would not be used. The union said that violated specific clauses in its collective bargaining agreement requiring those steps for employees identified for poor performance.

VA argued before FLRA, as it did before a mediator two years prior, that the contents of the 2017 accountability law superseded the provisions of its contract requiring the improvement plans. The authority agreed with the arbitrator, however, in ruling the law dealt only with the timeline for carrying out a firing or other punishment after VA provided the disciplinary notice. Because the PIPs are intended to improve performance well before the actual issuance of a punishment, FLRA said, the law has no bearing on them. 

“The Accountability Act does not specify what actions an agency can or cannot do prior to providing notice of a removal, demotion or suspension,” FLRA wrote in its majority opinion. 

The authority also said the arbitrator’s decision did not interfere with management’s ability to communicate with and assign work to employees because it is merely ensuring compliance with a provision of a collective bargaining agreement to which management itself had agreed. VA argued the arbitrator was too broad in his framing of the issue and improperly included all bargaining unit employees, but FLRA said those interpretations were appropriate. The labor panel also rejected VA’s assertion that the case was outside of its jurisdiction, noting the issue was about contractual and statutory violations rather than appeals of specific firings.  

The FLRA decision requires VA to resume compliance with its collective bargaining agreement, rescind any adverse action against AFGE-represented employees who did not first receive a performance improvement plan, and reinstate any fired worker at the department, including back pay, restored leave and other benefits. VA will also pay AFGE’s attorney fees, though it can still appeal the ruling to federal court. A department spokesperson said VA is reviewing the decision. 

VA challenged the remedy ordered by the arbitrator and upheld by FLRA, but the panel said it was “reasonably and proportionally related to the found violation.” 

Thomas Dargon, acting supervisory attorney for the AFGE VA council, said the union has flagged the PIP issue since before the law was even passed. 

"We're very pleased," Dargon said of the FLRA decision. "It's a complete and total victory."

AFGE originally brought the case to mediation on behalf of its employees at the Veterans Benefits Administration, but the union has since said it expects the ruling to apply across the department. It is unclear exactly how many VA employees could be impacted by the ruling, but public data show the department has fired at least 7,800 employees since the accountability law and subsequent memoranda revoking performance improvement plans went into effect. AFGE represents more than two-thirds of the department's nearly 400,000 workers, and the union expects the number of impacted employees is at least in the hundreds. 

While the bill won broad bipartisan support, lawmakers have since consistently accused the Trump administration of flouting congressional intent in implementing it. Trump, for his part, frequently cites the success of the accountability law among his most significant accomplishments, saying it has enabled the department to get rid of poorly behaving employees.

“In just a few short years, my administration completely overhauled the Department of Veterans Affairs removing employees who were not giving our veterans the care and attention they deserve and making the agency more accountable to the heroes it serves,” Trump said earlier this month. He previously said the law was “very important” to him as it allowed VA to remove “sadists” and “thieves.” 

Colleen Duffy Kiko, the FLRA chairman, dissented in part with the decision, saying the true intent of the accountability law did in fact run counter to the AFGE contract. Performance improvement plans are part of the adverse action process, she said, and therefore should be part of the 15-day removal timeline the law created. The decision changes that to a 105-day timeline, she argued, and the legislative history of the bill made clear lawmakers had intended to streamline the “cumbersome process for taking adverse actions against employees unfit to serve our nation’s veterans due to poor performance or misconduct.”