Critical Case Update: Unacceptable Performance Removals in 2023 and Beyond

By William Wiley, April 21, 2023

For more than 40 years, the procedures a supervisor should use when confronted with a non-performing employee have been well-established. The supervisor had to:

1. Give the employee attainable performance standards (objectives, expectations, whatever you want to call them, usually in an annual performance plan),
2. Allow the employee a reasonable period of time to work under those standards to get used to them (hardly ever more than a couple of months), then,
3. Initiate a Performance Improvement Plan memo to tell the employee that he is performing unacceptably, specify that he has 30 days or so to improve, and tell the employee exactly what objectives he has to accomplish during that time to keep his job.

If the employee failed to accomplish the PIP objectives, the supervisor was then obligated by law to remove the employee from the position. Removal from the position could be through reassignment, demotion, or firing. Choosing among those three options was left to the unreviewable discretion of the supervisor. To be sustained on appeal, the agency would have to prove by substantial evidence that the employee’s performance during the PIP was unacceptable.

PRO HINT: Here at FELTG, we have always taught that the supervisor should not just reassign or propose to demote the employee at the end of a failed PIP, but instead confront the employee with the reality that he could be terminated. Then, the supervisor should offer the employee the option of voluntarily requesting a demotion or reassignment (if those options are available), thereby avoiding the need for the supervisor to defend the action on appeal. If the employee were to decline the offer, the supervisor still retained all three options. There would be nothing to lose and much to gain by inviting the employee to initiate a voluntary action.

So why is 2023 an important time to step back and consider where we are with this procedure if it has been around for so long? Well, it’s important because we have a somewhat-new precedential court decision that has added a fourth step to the original procedure and two relatively new Board members who are applying that precedence for the first time to a number of cases.

First, the court-ordered added step. In Santos v. NASA, 990 F.3d 1355 (Fed. Cir. 2021), the court held for the first time that the 1978 law that created the unacceptable performance removal procedure actually required four steps, not three. According to the court, the procedures a supervisor should use when confronted with a non-performing employee are:

1. Give the employee attainable performance standards (objectives, expectations, whatever you want to call them, usually in an annual performance plan),
2. Allow the employee a reasonable time to work under those standards to get used to them (hardly ever more than a couple of months),
3. Collect evidence that the employee is failing one or more specific performance standards, then,
4. Initiate a Performance Improvement Plan memo to tell the employee that he is performing unacceptably, specify that he has 30 days or so to improve, and tell the employee exactly what objectives he has to accomplish during that time to keep his job.

Santos effectively doubled the evidentiary burden that agencies have when defending the removal of a non-performing employee. Pre-Santos, the supervisor needed only to present proof of unacceptable performance that occurred during the PIP. Post-Santos, the supervisor now has to prove incidents of unacceptable performance BOTH pre- and post-PIP initiation. Put another way, before the Santos decision, on appeal the supervisor did not have to defend initiation of the PIP with examples of poor performance. Today, now that we have Santos, the agency’s case file will need documentation to prove that the employee performed unacceptably prior to PIP initiation.

Although Santos was issued two years ago, we have only recently had Board members in place at MSPB to interpret exactly how the new Santos requirement is to be implemented at the front-line level. Now that we’ve had a few post-Santos Board opinions, we can say with a moderate degree of confidence what supervisors should be doing to prepare to defend their post-PIP removal decisions.

We can take a fair amount of instruction from the recent non-precedential order Gwynn v. Treasury, MSPB Docket No. DC-0432-16-0865-I-1 (Feb. 28, 2023) (NP). The facts of the case are in bold below, followed by our FELTG assessment of those facts:

• In the 10-12 months preceding the initiation of a PIP, the supervisor issued the employee eight counseling memoranda. As far as we can tell, there is no requirement to notify the employee of these pre-PIP failures prior to initiation of the PIP to satisfy Santos. In addition, there’s no requirement that any unacceptable performance notifications be in the form of a counseling memorandum. The proof will have to be in the agency file should the employee fail the PIP and the supervisor subsequently proposes to remove the employee. But it’s good to know these memoranda are acceptable justification, if you already have them in the file.
• The supervisor issued the employee a poor midyear progress review and simultaneously placed the employee on a 60-day PIP. The supervisor did not need to issue a midyear progress review to justify the initiation of a PIP. The previous eight memoranda are enough. As we have taught for years, the better practice is to NOT issue a midyear review (or annual summary performance rating) prior to initiating a PIP. By doing so, the supervisor has now given the employee a discrete act to challenge through the EEO complaint process. And that’s exactly what this employee did, thereby occupying the agency with an EEO complaint that might not be resolved for years into the future. POP QUIZ! Now that this employee has been removed from his position for failure of the PIP, and has lost his appeal to MSPB, what happens if EEOC eventually finds that the EEO complaint related to the poor midyear progress review was illegally discriminatory? ANSWER: We don’t know, but it’s probably not good.
• The supervisor initiated a 60-day PIP. After a few weeks on the PIP, the employee underwent emergency surgery and was on approved leave for medical reasons for five months. Once the employee returned to duty, the supervisor allowed the employee two to three weeks to get back up to speed, then re-initiated the PIP for a 30-day period. Had the PIP initially been established for a shorter period, less than 60 days, the supervisor might have been able to complete his evaluation of the employee’s performance prior to the need for sick leave. Be that as it may, the supervisor was fully within his rights to continue with the evaluation of the employee’s performance with the remainder of the PIP after the medical issue was resolved. In other words, he did not “lose the PIP” because of the medical absence. He did not have to start over.
• The supervisor denied the employee’s reasonable accommodation request to telecommute based on his unacceptable performance and the on-going PIP. This is a valuable point. Unacceptable performance can be a valid reason to deny certain disability accommodation requests as well as being a valid reason to deny requests for annual leave or LWOP. But, be sure to follow the RA process every time.
• The supervisor used 13 examples of unacceptable performance to justify the PIP, all drawn from the eight counseling memos and the midyear review. This is the heart of the new Santos requirement. On appeal, the employee attempted to rebut the facts and the conclusions put forward for each of the 13 pre-PIP examples, and the Board evaluated and ruled on the evidence supporting all 13. Of the 13, the Board held that 11 supported a conclusion that the appellant had performed unacceptably and 2 did not. A difficult unanswered question is what if only 9 out of 13 were found to be valid examples, would the PIP still have been justified? What if it was 6 out of 13? Or only 4?

After all of this evidence and analysis regarding pre-PIP performance, MSPB finally got around to evaluating the credibility of the testimony and documents relative to the employee’s performance during the PIP. It concluded that the employee failed to achieve “numerous” PIP objectives. Therefore, the agency’s removal (demotion) action was affirmed.

We now know, without a doubt, that an agency that removes a non-performing employee using 5 USC 432 procedures will have to prove by substantial evidence that the employee was performing unacceptably both pre-PIP and during or after the PIP. As for the pre-PIP failures to meet objectives, we believe Santos is satisfied by informing the employee of these specific incidents of unacceptable performance if they are incorporated into the PIP initiation memo. Such notice would establish that the supervisor ”warned the appellant of the inadequacies in her performance during the appraisal period and gave the employee an adequate opportunity to demonstrate acceptable performance.” Santos, 990 F.3d at 1360-61.

There is one procedural aspect of this “warning” that is unclear. When must the agency come forward with its proof of the unacceptable pre-PIP performance? Is it obligated to present this evidence as an attachment to the PIP initiation memo given to the employee? If so, Santos doesn’t say that.

If the employee fails the PIP and the supervisor proposes the employee’s removal, should proof of the pre-PIP failures be attached to the proposal notice? It would seem necessary to do so to provide the employee a chance to defend himself prior to a decision being made regarding the proposal, e.g., to provide due process. However, in its remand orders implementing Santos, the Board says nothing about a due process concern that the agency did not provide the pre-PIP proof to the employee before making its decision. See Lee v. DVA, 2022 MSPB 11 (2022), paragraph 17: “On remand, the administrative judge shall accept evidence and argument on whether the agency proved by substantial evidence that the appellant’s pre-PIP performance was unacceptable.”

Taking all these recent lessons together, our admittedly legally-conservative FELTG advice to Federal employment law practitioners has changed. When approached by a supervisor who has a non-performing employee, the supervisor should be advised to:

1. Make sure that the employee has been given performance standards (with critical elements identified) and has had at least a couple of months to get used to them.
2. Collect evidence of mistakes the employee has made recently that demonstrate he is performing unacceptably under at least one of his critical elements.
3. Incorporate reference to these mistakes in the PIP initiation memo. The supervisor should retain evidence of the mistakes but does not have to provide that evidence to the employee at this time. However, if you want to give this list to the employee, we recommend attaching it to the end of the PIP initiation so as not to start off on a negative and put the employee on the defensive.

If the employee fails to accomplish the PIP objectives and the supervisor decides to fire the employee, the proposal notice should contain proof of each of these pre- and post-PIP mistakes. Yes, this may be more than necessary, but we would rather err on the side of caution than risk a due process violation before the Board.

Civil service law experts who have been around from the beginning say the Santos requirement to prove pre-PIP unacceptable performance is the most significant change to the 5 USC Chapter 43 unacceptable performance procedures in more than 40 years. It is imperative that all who advise management or represent employees be aware of how this change is being implemented by the current Board members. Wiley@FELTG.com