Merit Systems Protection Board shifts review of federal employee misconduct

Maryland Matters · Federal News Network · September 7, 2026

The Trump administration is changing the way the Merit Systems Protection Board reviews federal employee cases. The changes could give agencies may get more flexibility in disciplining federal employees, but critics say they remove worker safeguards. (Photo by Tom Hausman/Capital News Service) By Drew Friedman

Agencies may get more flexibility in disciplining federal employees, after the Merit Systems Protection Board finalized a rule ending decades-old standards for reviewing misconduct cases.

MSPB on Thursday lifted a requirement to consider the “Douglas factors” in every employee misconduct case — 12 considerations the board has used for the last 45 years to determine whether a penalty, such as a firing or demotion, was reasonable.

Once the final rule takes effect in 30 days, MSPB will evaluate whether an agency’s penalty for an employee accused of misconduct was reasonable on a case-by-case basis, rather than reviewing all 12 considerations listed under the Douglas factors.

Stemming from a 1981 Department of Veterans Affairs case, MSPB has relied on the Douglas factors in reviewing misconduct appeals, looking at the seriousness of the offense, the employee’s disciplinary record and the potential for the employee to be rehabilitated, among other considerations .

But the final rule pivots toward more flexible considerations of the “totality of the circumstances” to determine whether an agency’s penalty against an employee “promotes the efficiency of the service.” The board’s rule also states that it may “mitigate the agency’s original penalty to the maximum reasonable penalty.”

In the final rule, the board described the Douglas factors as “rigid and mechanistic” and a “template for recitation.” The list has compelled administrative judges and agencies to consider factors not necessarily applicable to an employee’s case, MSPB contended.

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The board said its changes will make the appeals process more flexible, streamlined and cost-efficient. The board also emphasized that its new standards remain “reasoned, grounded in record evidence and subject to review by the federal courts.”

“What ends is the treatment of the twelve factors as a compulsory analytic code: the expectation that every factor be recited in every case, the litigation of penalty appeals as audits of factor-recitation and any premise that an otherwise reasonable penalty may be disturbed because a decision letter or an initial decision did not march through an enumerated list,” MSPB wrote.

Michael Fallings, managing partner at Tully Rinckey law firm, pushed back on the notion that using the full list of factors to determine appropriate penalties is “too rigid.” The new rule will hand more power and discretion to agencies, he argued, while posing new obstacles for federal employees.

“Employees can’t rely on a factor that was maybe really in their favor, such as lack of prior discipline, or lack of notoriety,” Fallings said in an interview. “Having a list of factors, I believe, only helps a decision. It provides more clarity on how to analyze the penalty.

“Agencies and the MSPB weren’t always using all the factors; they were deciding which factors apply to each situation,” Fallings said. “In many cases — I would say even most cases — you would see the MSPB say a factor is neutral because it doesn’t apply here.”

Removing requirements for the standard list to be considered may also create inconsistencies in the penalties employees face for similar charges, Fallings argued.

“And that may lead to more confusion on what penalties actually do apply to a certain set of facts,” he said. “Employees won’t know how to exactly challenge their removal or an adverse action.”

Out of hundreds of public comments MSPB received on its proposal, many opposed the change. Federal unions, organizations and current and former employees argued that it would lead to vague and arbitrary disciplinary standards, as well as politically motivated decisions.

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“The ‘totality of the circumstances’ standard they propose lacks a defining principle,” the American Federation of Government Employees wrote in August public comments on the proposed regulations. “It is precisely the type of subjective non-standard that Congress has repeatedly sought to guard against.

“Adopting such a flimsy approach, without a sound factual footing and after 45 years of heavy reliance interests, will result in an analytical vacuum where agencies and the MSPB will be at sea without the established tools needed to make reasoned and reasonable penalty determinations,” the union said.

The final rule this week comes after MSPB issued joint proposed regulations with the Office of Personnel Management earlier this summer. OPM’s portions of the regulations, involving performance improvement plans and settlement agreements, are still pending finalization.

MSPB’s final rule is the latest of several significant changes that have altered the board’s processes and narrowed its jurisdiction. In July, OPM finalized regulations to make itself — rather than MSPB — the deciding authority over employees who appeal a firing or other adverse action during reductions in force, suitability actions and probationary periods.

For federal employees, removing the Douglas factors is a “massive change,” Fallings said, arguing that it will restrict their due process rights.

“This has been the method in determining a penalty for decades,” he said. “To have this change — and being that it is to the disadvantage of employees — I wouldn’t be surprised if there are challenges in court to this rule.”

Read the full story at Maryland Matters