By Barbara Haga, June 21, 2022

Santos v. NASA changed the landscape last year, placing an additional requirement on agencies to prove that the person who was being placed in an improvement period for unacceptable performance actually was unacceptable at that time. Santos v. NASA, 990 F.3d 1355, Fed. Cir. 2021.

It’s not the biggest leap one could imagine. In some agencies, HR staff routinely gave a recounting of prior unacceptable behavior as part of their PIP notices anyway. I certainly did it in the old days and taught it that way – until someone convinced me that I didn’t have to do it.

Now, times have changed.

With the recent decision from the Board in Lee v. VA, 2022 MSPB 11 (May 12, 2022), cases decided previously are being remanded for proof in this regard.

In November 2020, OPM wrote in the supplementary material regarding 5 CFR 432.104: “The amended rule does not relieve agencies of the responsibility to demonstrate that an employee was performing unacceptably – which per statute covers the period both prior to and during a formal opportunity period – before initiating an adverse action under chapter 43.” That’s what the Federal Circuit quoted in Santos. In its January 2022 proposed regulations (87 FR 200), OPM stated that the Federal Circuit “misread” its position. We will have to wait and see what happens when the Federal Circuit next looks at the issue. In the meantime, Santos is controlling.

So, what am I adding to this discussion? Just a caution for those agencies who have a Minimally Successful/Needs Improvement (Level 2) rating on their critical elements. If you don’t have such a level on your elements, you can stop reading now and move on to another article. If you do have a Level 2 on your elements, there is a point you should be aware of in applying Santos.

The Sky is Not Falling

 I am sure some of you are thinking, “Oh, no, what now?” Before you get excited, I should note that not many agencies have a Level 2 element rating. A lot of agencies have switched away from systems that included that. For example, most of the Department of Defense eliminated Level 2 in recent years. The Department of Interior doesn’t have it anymore. Neither does NASA.

Not even everyone with a Level 2 in their system has an issue.  You could have a Level 2 summary rating without having a Level 2 on an individual critical element. This could be done with non-critical elements (e.g., the person fails a non-critical element and ends up with a Level 2, but if they fail a critical element that’s a Level 1).

Most who have a Level 2 summary rating have a Level 2 element rating, too. Still, that may not be a problem. If you have a decent written Level 2 standard in place throughout the cycle, you’re fine.  The problem could come up in two ways:

1) You need to adjust your Level 2 because it is very generic and you need to make it specific enough to adequately communicate Level 2 to the employee with the PIP notice, or 2) You never wrote it at all until you issued the PIP. If you fall in these two groups, Santos is going to make you change your process.

Tracing Board Cases on this Issue

I have a list of cases on this topic that I include in my Advanced Employee Relations course materials every time I teach it.   [Editor’s note: Register now for Barbara for Advanced ER in Norfolk on August 2-4.]

There are a few famous – or infamous – cases where agencies lost their 432 actions because they had a Level 2 on the element but never communicated a Level 2 standard to the employee during the PIP.

I always emphasize the point that this is a procedural error, and it doesn’t matter how many boxes of evidence of poor performance that you may have, you lose.

Here’s a quick list of those cases:

  • Jackson-Francis v. OGE, 103 MSPR 183 (MSPB 2006)
  • Henderson v. NASA, 2011 MSPB 12 (MSPB 2011)
  • Pace v. Army, CH-0432-14-0335-I-1 (MSPB 2015)(NP)

The employee in Latimer v. Air Force, CH-0432-17-0114-I-1 (May 17, 2017)(ID) was covered under the Defense Civilian Intelligence Personnel System (DCIPS). The vast majority of DOD employees were rated under a system without a Level 2 when this decision was issued. However, DCIPS had one.

Henderson v. NASA was decided before NASA eliminated Level 2 from its rating system. The decision includes a succinct paragraph that explains the problem:

The administrative judge correctly found that each element of the performance plan has five possible ratings, i.e., “fails to meet expectation[s],” “needs improvement,” “meets expectations,” “exceeds expectations,” and “significantly exceeds expectations.” ID at 5; IAF, Tab 4, Subtab 4w at 3. The performance standard for the appellant’s position, however, only sets forth one level of performance, i.e., what one must do to “meet” the standard. ID at 5, 12; IAF, Tab 4, Subtab 4w at 4-6. Where an appellant is rated on a five-tier system for his critical elements, the agency must inform him, at a minimum, of what he must to do to perform at the “needs improvement” level to avoid a performance-based action. See, e.g., Jackson-Francis, 103 M.S.P.R. 183, ¶¶ 6-7, 10 (the agency erred by requiring the appellant to reach a “fully successful” level of performance during the PIP to avoid removal under chapter 43 because under a five-tier system, an employee’s performance can be “not satisfactory” without falling to a level that requires removal). Therefore, because the agency’s five-tier performance appraisal plan is based on a single written standard of satisfactory performance, the administrative judge correctly found that it violates the statutory requirement of objectivity because it requires extrapolation more than one level above and below the written standard. Id. at 5, 12; see Donaldson, 27 M.S.P.R. at 295-98. (underlining added).

If the Board requires the Level 2 standard to be in place to judge whether the performance is unacceptable during the PIP, it seems logical that they will also find that without it being in place you cannot prove that the person was unacceptable prior to the PIP. Just a word to the wise.

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