This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

17041

Vol. 62, No. 68

Wednesday, April 9, 1997

MERIT SYSTEMS PROTECTION

BOARD

5 CFR Part 1201

Practices and Procedures

AGENCY: Merit Systems Protection

Board.

ACTION: Interim rule with request for

comments.

SUMMARY: The Merit Systems Protection

Board (MSPB or the Board) is amending

its rules of practice and procedure to:

Implement the compensatory damages

provision of the Civil Rights Act of

1991, Public Law 102–166, with respect

to MSPB cases where certain kinds of

discrimination are found; implement

the attorney fee provision of the

Uniformed Services Employment and

Reemployment Rights Act of 1994,

Public Law 103–353; implement the

attorney fee, consequential damages,

and choice of procedures provisions of

Public Law 103–424 (MSPB and Office

of Special Counsel reauthorization of

1994); and amend its existing rules

governing requests for attorney fees to

change the time limit for filing and

incorporate an evidentiary requirement

from the Board’s case law. The purpose

of these amendments is to provide

guidance to the parties to MSPB cases,

and their representatives, on how to

proceed with respect to requests for

attorney fees, consequential damages,

and compensatory damages, and to

inform them of the statutory

requirement regarding choice of

procedures in cases involving both an

appealable action and a prohibited

personnel practice other than

discrimination. The Board is also

making a technical change to its rules

governing mixed cases to reflect the fact

that the Equal Employment Opportunity

Commission’s regulations governing

Federal employee discrimination

complaints are now found at 29 CFR

part 1614. The Board is implementing

other provisions of Public Law 103–424

through an amendment to its rules at 5

CFR part 1209, which is being

published simultaneously with this

amendment.

DATES: Effective date April 9, 1997.

Submit written comments on or before

June 9, 1997.

ADDRESSES: Send comments to Robert E.

Taylor, Clerk of the Board, Merit

Systems Protection Board, 1120

Vermont Avenue, NW, Washington, DC

20419. Comments may be sent via email to mspb@mspb.gov.

FOR FURTHER INFORMATION CONTACT:

Robert E. Taylor, Clerk of the Board,

(202) 653–7200.

SUPPLEMENTARY INFORMATION: This

amendment consists principally of the

addition of a new subpart H to the

Board’s rules of practice and procedure

at 5 CFR part 1201. This new subpart

sets forth the Board’s statutory

authorities to make awards of attorney

fees (plus, where applicable, costs,

expert witness fees, and litigation

expenses), consequential damages, and

compensatory damages. It combines the

Board’s existing procedural rules

governing requests for attorney fees

(with modifications) with new

procedural rules governing requests for

consequential damages and

compensatory damages. Conforming

amendments are made in appropriate

sections of part 1201.

Awards of Attorney Fees

The Civil Service Reform Act of 1978

(CSRA), Public Law 95–454, authorized

the newly established Merit Systems

Protection Board to award attorney fees

to an employee or applicant who

prevails before the Board. The CSRA

provided two authorities for attorney fee

awards. The first, 5 U.S.C. 7701(g)(1),

authorizes an award where warranted in

the interest of justice, including any

case in which the agency engaged in a

prohibited personnel practice or the

agency’s action was clearly without

merit. The second, 5 U.S.C. 7701(g)(2),

applies only to cases where the

employee or applicant prevails on a

finding of discrimination; it authorizes

an award under the standards of section

706(k) of the Civil Rights Act of 1964

(42 U.S.C. 2000e–5(k)). The Civil Rights

Act standard also permits an award for

out-of-pocket costs such as those for

copying, postage, and facsimile (see

Chin v. Department of the Treasury, 55

M.S.P.R. 84, 86 (1992)).

Although the CSRA authorities for

attorney fee awards were made a part of

chapter 77 of title 5 of the U.S. Code,

which governs appeals to MSPB,

subsequent case law determined that

section 7701(g) provides authority for an

award of attorney fees in other kinds of

MSPB cases as well. In Frazier v. MSPB,

672 F.2d 150, 168–170 (D.C. Cir. 1982),

the U.S. Court of Appeals for the District

of Columbia Circuit ruled that section

7701(g) permitted the Board to award

attorney fees where the Special Counsel

obtained corrective action from the

Board for an employee and the

employee also was represented by

private counsel. In Social Security

Administration v. Goodman, 28

M.S.P.R. 120, 124–125 (1985), the

Board, citing Frazier, ruled that it could

award attorney fees to a prevailing

administrative law judge in an agency

action brought under 5 U.S.C. 7521.

The Whistleblower Protection Act of

1989 (WPA), Public Law 101–12,

included a new provision—at that time

5 U.S.C. 1221(g)(1), now 5 U.S.C.

1221(g)(2)—making an agency liable for

payment of attorney fees and costs in an

action before MSPB where an employee,

former employee, or applicant prevails

on a finding of a prohibited personnel

practice. Although enacted as part of the

new chapter 12 of title 5, governing

individual right of action (IRA) appeals

filed by whistleblowers, the provision,

by its plain language, applies to any

MSPB case in which an employee,

former employee, or applicant prevails

on a finding of a prohibited personnel

practice. The Board has construed

‘‘costs’’ in this provision to include a

prevailing employee’s out-of-pocket

costs, such as those for copying, clerical

services, word processing services,

postage, and facsimile (see Bonggat v.

Department of the Navy, 59 M.S.P.R.

175, 179 (1993)).

In October 1994, President Clinton

signed two new laws that provide four

additional authorities for the Board to

make attorney fee awards. The

Uniformed Services Employment and

Reemployment Rights Act of 1994

(USERRA), Public Law 103–353,

authorized the Board to adjudicate

Federal employee complaints alleging

violation of a right or benefit to which

an individual is entitled following

service in the uniformed services and
17042 Federal Register / Vol. 62, No. 68 / Wednesday, April 9, 1997 / Rules and Regulations

included authority for the Board to

award reasonable attorney fees, expert

witness fees, and other litigation

expenses (38 U.S.C. 4324(c)(4)). Public

Law 103–424, which reauthorized

MSPB and the Office of Special

Counsel, included a new provision—5

U.S.C. 1221(g)(1)(B)—that requires an

award of attorney fees and any other

reasonable costs incurred when the

Board orders corrective action under

section 1221 of title 5, governing IRA

appeals and certain other whistleblower

appeals. (The former section 1221(g)(1)

was renumbered section 1221(g)(2).)

Public Law 103–424 also included two

provisions authorizing awards of

attorney fees in Special Counsel cases.

In a corrective action case under 5

U.S.C. 1214, where the Special Counsel

obtains corrective action for an

employee, former employee, or

applicant, and that individual also is

represented by private counsel, the

Board may award attorney fees under 5

U.S.C. 1214(g)(2). Where an employee

against whom the Special Counsel has

brought a disciplinary action under 5

U.S.C. 1215 is the prevailing party, the

Board may award attorney fees under 5

U.S.C. 1204(m).

Thus, the Board now has seven—

sometimes overlapping— statutory

authorities to make awards of attorney

fees. (An eighth authority was enacted

in October 1996 as part of the

Presidential and Executive Office

Accountability Act, Public Law 104–

331, but that authority does not take

effect with respect to cases to be

adjudicated by MSPB until the

President issues implementing

regulations or on October 1, 1998,

whichever is earlier. See section 2(a),

adding new 3 U.S.C. 435.)

The Board’s existing rules governing

requests for attorney fees, found at 5

CFR 1201.37(a), implement only the two

original authorities provided by the

CSRA and the additional authority

provided by the WPA in 1989. There is

a need, therefore, to amend the Board’s

rules governing requests for attorney

fees to incorporate the new statutory

authorities and, in view of the overlap

among certain of the authorities for

attorney fee awards, to provide guidance

to parties and their representatives as to

how the Board will apply its various

authorities for attorney fee awards to the

cases it adjudicates.

In the course of its review of the rules

governing requests for attorney fees, the

Board also has determined that two

changes should be made in its existing

rules. The current time limit for filing a

request for attorney fees—30 days after

an initial decision becomes final or 35

days after a final Board decision—is

deleted and replaced by a requirement

that such a request be filed as soon as

possible after there is a final Board

decision but no later than 60 days after

the date on which a decision becomes

final. This change is intended to reduce

the need for litigation over late-filed

attorney fee requests. The evidentiary

requirements for attorney fee requests

are amended, in accordance with the

Board’s established case law, to

incorporate the requirement for

evidence of an established attorneyclient relationship. Allen v. U.S. Postal

Service, 2 M.S.P.R. 420, 427 n.9 (1980).

See Stewart v. Office of Personnel

Management, 70 M.S.P.R. 544 (1996).

Awards of Consequential Damages

Public Law 103–424 also gave the

Board new authority—in two kinds of

cases only—to order payment of

medical costs, travel expenses, and any

other reasonable and foreseeable

consequential damages incurred by an

employee, former employee, or

applicant. This authority applies only

where the Board orders corrective action

in a Special Counsel case brought under

5 U.S.C. 1214 (see 5 U.S.C. 1214(g)(2))

or in an IRA or other whistleblower

appeal to which 5 U.S.C. 1221 applies

(see 5 U.S.C. 1221(g)(1)(A)(ii)).

Because the Board has no existing

rules governing awards of consequential

damages, there is a need to amend its

rules of practice and procedure to set

forth the statutory authorities for it to

make such awards and to prescribe

procedural rules for making requests for

such awards. In these new rules, the

Board uses the term ‘‘consequential

damages’’ to encompass what the

statutory provisions at 5 U.S.C.

1214(g)(2) and 5 U.S.C. 1221(g)(1)(A)(ii)

describe as ‘‘medical costs incurred,

travel expenses, and any other

reasonable and foreseeable

consequential damages.’’ The legislative

history of Public Law 103–424 provides

no further guidance as to the kinds of

costs and expenses intended to be

covered by these provisions. The Board,

therefore, will interpret these provisions

through its adjudication of individual

cases.

The Board has had little opportunity

to date to address these new provisions

for awards of consequential damages in

actual cases. Its principal ruling thus far

is that the consequential damages

provisions of Public Law 103–424 may

not be applied retroactively and,

therefore, do not apply where the

contested personnel action took place

before the law’s effective date, October

29, 1994. See Roman v. Department of

the Army, 72 M.S.P.R. 409 (1996). In

Roman, the Board also ruled that while

the appellant’s claimed mileage costs

could not be awarded as consequential

damages, because of the Board’s ruling

against retroactive application, they

could be awarded as ‘‘costs’’ under the

WPA provision for attorney fees and

costs (formerly 5 U.S.C. 1221(g)(1), now

5 U.S.C. 1221(g)(2)). The Board declined

in Roman to decide what the term

‘‘travel expenses’’ means in the new

consequential damages provisions.

Despite the paucity of case law

dealing with consequential damages, the

Board has determined that its

procedural rules for adjudication of

requests for consequential damages

should be consistent with those

governing requests for compensatory

damages. These rules are discussed

below under ‘‘Awards of Compensatory

Damages.’’

Awards of Compensatory Damages

Section 102 of the Civil Rights Act of

1991, Public Law 102–166, authorizes

an award of compensatory damages

where there is a finding of intentional

discrimination or a failure to provide

reasonable accommodation, where such

discrimination is prohibited by the Civil

Rights Act of 1964, the Rehabilitation

Act of 1973, or the Americans with

Disabilities Act of 1990 (42 U.S.C.

1981a). In late 1992, the Equal

Employment Opportunity Commission

ruled that compensatory damages under

the Civil Rights Act of 1991 are

available to Federal employees in

administrative proceedings (Jackson v.

U.S. Postal Service, EEOC Appeal No.

01923399, Nov. 12, 1992).

The Board issued its first decision on

a request for compensatory damages in

July of 1994. Hocker v. Department of

Transportation, 63 M.S.P.R. 497, 503–

508 (1994), aff’d. 64 F.3d 676 (Fed. Cir.

1995) (table), cert. denied, 116 U.S. 918,

116 S.Ct. 918 (1996). Citing the EEOC

ruling in Jackson, the Board ruled in

Hocker that compensatory damages are

available in MSPB proceedings where

there is a finding of discrimination to

which section 102 of the Civil Rights

Act of 1991 applies. The Board further

ruled that it would not apply the

compensatory damages provision of the

Civil Rights Act of 1991 retroactively to

cases pending on the effective date of

the Act, November 21, 1991. In

addition, the Board stated that a request

for compensatory damages may not be

made for the first time in a petition for

enforcement of a Board order (unless the

non-compliance with the order

constituted a separate, intentional act of

discrimination) but must be made in the

proceeding on the merits before the

judge.
Federal Register / Vol. 62, No. 68 / Wednesday, April 9, 1997 / Rules and Regulations 17043

In Yates v. U.S. Postal Service, 70

M.S.P.R. 170, 179–180 (1996), the Board

distinguished the Hocker requirement

that a request for compensatory damages

must be made in the proceeding on the

merits before the judge as dictum, ruling

that an appellant who prevails on a

finding of discrimination to which

section 102 of the Civil Rights Act of

1991 applies has a right to seek

compensatory damages. Finding that the

appellant was not notified of his right to

seek compensatory damages or the time

for doing so, the Board gave the

appellant 30 days from the date of the

decision to file a request for

compensatory damages with the judge.

(Accord Spencer v. Department of the

Navy, MSPB Docket No. DC–0752–96–

0116–I–1, Jan. 3, 1997, and Callagan v.

Department of Agriculture, MSPB

Docket No. DE–0752–95–0588–I–2, Feb.

26, 1997).

Other key cases in which the Board

has ruled on compensatory damages

issues include Schultz v. U.S. Postal

Service, 70 M.S.P.R. 633, 639–640

(1996) (remand to judge for adjudication

of compensatory damages claim

necessary where appellant made claim

early on in the appeal), and Currier v.

U.S. Postal Service, 72 M.S.P.R. 191,

195–198 (1996) (where appellant has

made a nonfrivolous claim of

discrimination to which section 102 of

the Civil Rights Act of 1991 applies but

has not specifically made a claim for

compensatory damages, judge should

afford opportunity to make such a claim

before dismissing appeal as moot; judge

may bifurcate proceeding by deferring a

decision on a claim for compensatory

damages for a separate proceeding after

there is a final decision in the merits

proceeding).

Because the Board has no existing

rules governing awards of compensatory

damages, there is a need to amend its

rules of practice and procedure to set

forth the statutory authority for it to

make such awards and to prescribe

procedural rules for making requests for

such awards. Based on its rulings in

cases involving compensatory damages

to date, the Board in these rules calls for

a request for compensatory damages to

be made as early as possible in a Board

proceeding before an administrative

judge or administrative law judge. Such

a request is to be made no later than the

time the first pleading is filed with the

three-member Board. In permitting a

request for compensatory damages to be

made as late as the time of the first filing

with the three-member Board, the Board

is following the lead of the EEOC (the

lead agency in interpreting

compensatory damages provisions).

Hocker, supra. See Thorne v.

Department of Education, EEOC No.

01922524, slip op. at 3 (Dec. 23, 1993);

Square v. Department of Veterans

Affairs, EEOC No. 0193053, slip op. at

5 (Aug. 25, 1994); and Simpkins v. U.S.

Postal Service, EEOC No. 01942339, slip

op. at 2–3 (Sep. 28, 1995).

The rules permit the judge or the

Board, as applicable, to waive the time

limit for good cause shown. The rules

also permit the judge or the Board, as

applicable, to decide a request for

compensatory damages in the merits

proceeding or to defer it for an

addendum proceeding.

Amendment to Choice of Procedures

Section 9(b) of Public Law 103–424

amended 5 U.S.C. 7121, ‘‘Grievance

procedures,’’ by adding a new

subsection (g) which imposes a new

choice of procedures requirement.

Where an employee is subject to a

personnel action that is appealable to

MSPB, and the employee may grieve the

action under a negotiated grievance

procedure (NGP), and the employee

alleges that the action was the result of

a prohibited personnel practice—other

than discrimination—that may form the

basis of a complaint to the Special

Counsel, the employee may elect not

more than one of the following

remedies: an appeal to MSPB, a

grievance under the NGP, or a corrective

action complaint under subchapters II

(Special Counsel actions) and III (IRA

appeals) of chapter 12 of title 5. The

choice among these three procedures is

deemed to have been made when the

employee timely files an appeal with

MSPB, a written grievance under the

NGP, or a complaint with the Special

Counsel.

The Board’s existing rules at 5 CFR

1201.3(c) reflect the choice of

procedures requirements of 5 U.S.C.

7121 prior to its amendment by Public

Law 103–424. Those rules require a

choice between an MSPB appeal and a

grievance under the NGP where there is

an allegation of discrimination (see 5

U.S.C. 7121(d)) or where the personnel

action is a performance-based action

under chapter 43 of title 5 or an adverse

action under chapter 75 of title 5 (see 5

U.S.C. 7121(e)). There is a need,

therefore, for the Board to amend its

rules at 5 CFR 1201.3(c) to incorporate

the new choice of procedures

requirement in 5 U.S.C. 7121(g).

Under 5 U.S.C. 7121 as amended by

Public Law 103–424, an employee who

chooses to seek corrective action from

the Special Counsel could not also

appeal to MSPB—unless the prohibited

personnel practice complained of is an

action based on whistleblowing, in

which case the employee could file an

IRA appeal with MSPB after exhausting

the procedures of the Office of Special

Counsel. (See Briley v. National

Archives and Records Administration,

71 M.S.P.R. 211, 224–226 (1996).)

Technical Amendment

The Equal Employment Opportunity

Commission’s regulations governing

discrimination complaints filed by

Federal employees, formerly found at 29

CFR part 1613, are now found at 29 CFR

part 1614. The Board, therefore, is

amending its mixed case rules at 5 CFR

1201.163 to change all references to ‘‘29

CFR part 1613’’ to read ‘‘29 CFR part

1614.’’

Section-by-Section Guide to Changes

The following paragraphs constitute a

section-by-section guide to the changes

made in 5 CFR part 1201 by this

amendment.

(1–3) The authority citation for part

1201 is amended to include the

authority for the Board to issue

implementing regulations under

USERRA, 38 U.S.C. 4331.

(4) Section 1201.3(b), concerning

appeals governed by part 1209, is

amended to include a statement that the

attorney fee and consequential damages

provisions of subpart H apply to such

appeals.

(5) Section 1201.3(c)(1) is amended to

incorporate the choice of procedures

requirements of 5 U.S.C. 7121(g), as

discussed above under ‘‘Amendment to

Choice of Procedures.’’

(6) Section 1201.3(c)(2) is amended to

incorporate the provisions of 5 U.S.C.

7121(g) regarding when a choice of

procedures is deemed to have been

made, as discussed above under

‘‘Amendment to Choice of Procedures.’’

(7) Section 1201.37 is amended to

change the title from ‘‘Fees’’ to ‘‘Witness

fees;’’ to remove paragraph (a)—which

is moved to the new subpart H (with

modifications)—in its entirety; and to

redesignate the remaining paragraphs.

(8) Section 1201.55(b), concerning

objections to motions, is amended to

remove the reference to a motion for

attorney fees; new section 1201.203(d)

in subpart H will now apply to such

objections.

(9) Section 1201.111(b)(6), concerning

the statement in a judge’s initial

decision of any further processes

available, is amended to state that such

further processes include, as

appropriate, a motion for attorney fees

under new section 1201.203 of subpart

H, and, where a claim for consequential

damages or compensatory damages has

been deferred for an addendum

proceeding, the right to such a
17044 Federal Register / Vol. 62, No. 68 / Wednesday, April 9, 1997 / Rules and Regulations

proceeding, with the time to be

established by the judge.

(10) Section 1201.112(a)(3),

concerning a judge’s retaining

jurisdiction to rule on a request for

attorney fees after isssuing an initial

decision, is amended to also authorize

the judge to retain jurisdiction to rule on

a request for consequential damages or

compensatory damages under subpart

H.

(11) Section 1201.121, concerning

actions brought by the Special Counsel,

is amended by revising the section title

to read ‘‘Scope of jurisdiction;

application of subparts B, F, and H.’’

(12) Section 1201.121 is further

amended by revising the heading of

paragraph (b) to read ‘‘Application of

subparts B, F, and H;’’ by revising

paragraph (b) to state that all provisions

of subpart B of part 1201—not just the

hearing procedures—apply to Special

Counsel cases, except as otherwise

expressly provided by this subpart; and

by including in the revised paragraph

(b) cross-references to subpart F for

enforcement proceedings and to subpart

H for requests for attorney fees,

consequential damages, and

compensatory damages.

(13) Section 1201.131, concerning

procedures for actions against

administrative law judges, is amended

by revising it to state that all provisions

of subpart B of part 1201—not just the

hearing procedures—apply to actions

against administrative law judges,

except as otherwise expressly provided

by this subpart, and by including crossreferences to subpart F for enforcement

proceedings and to subpart H for

requests for attorney fees and

compensatory damages.

(14) Section 1201.163, concerning

mixed case procedures, is amended at

paragraphs (a) and (c) by removing ‘‘29

CFR part 1613’’ each place it appears

and by replacing it with ‘‘29 CFR part

1614.’’

(15) A new subpart H is added after

subpart G of part 1201. The following is

a section-by-section guide to the

provisions of subpart H:

Section 1201.201 states that the

purpose of subpart H is to prescribe

procedures for awards of attorney fees

(plus costs, expert witness fees, and

litigation expenses, where applicable),

consequential damages, and

compensatory damages in MSPB cases.

It provides a general overview of the

Board’s statutory authorities to make

such awards.

Section 1201.202(a) provides a

‘‘roadmap’’ to each statutory authority

for the Board to award attorney fees

(plus costs, expert witness fees, and

litigation expenses, where applicable)

and describes the kind of case or cases

with which each authority is associated.

Section 1201.202(b) sets forth the

Board’s statutory authorities for awards

of consequential damages and describes

the kind of case with which each

authority is associated. Section

1201.202(c) sets forth the Board’s

statutory authority to award

compensatory damages and incorporates

the definition of such damages from 42

U.S.C. 1981a.

Section 1201.203 prescribes

procedures for requests for attorney fees.

The procedures are essentially the same

as in the Board’s existing rules at 5 CFR

1201.37(a)(3), with some modifications.

The time limit for filing a motion for

attorney fees has been changed to ‘‘as

soon as possible after a final decision of

the Board but no later than 60 days after

the date on which a decision becomes

final.’’ A requirement for submission of

evidence of ‘‘an established attorneyclient relationship’’ has been

incorporated, reflecting the Board’s

established case law. Certain changes in

wording have been made to clarify that

the provisions apply to MSPB cases

generally—not just to appeals, the

requirements for an addendum

proceeding are set forth more fully, and

a definition of a ‘‘proceeding on the

merits’’ has been added.

Section 1201.204 prescribes

procedures for requests for

consequential damages and

compensatory damages. Paragraph (a)(1)

calls for such requests to be made as

early as possible in the merits

proceeding before an administrative

judge or administrative law judge. Such

a request may be made no later than the

time the first pleading is filed with the

three-member Board. Paragraph (a)(2)

permits the judge or the Board, as

applicable, to waive the time limit for

filing a request for consequential

damages or compensatory damages for

good cause shown. Paragraph (b) sets

forth the service requirements.

Paragraph (c) of section 1201.204

authorizes the judge or the Board, as

applicable, to decide a request for

consequential damages or compensatory

damages either in the merits proceeding

or in an addendum proceeding after

there is a final decision on the merits.

Paragraph (d) requires the judge, where

a decision on a request for

consequential damages or compensatory

damages has been deferred for an

addendum proceeding, to schedule that

proceeding after there is a final Board

decision. Paragraph (e) permits the

Board, at its discretion, to order that an

addendum proceeding to decide a

request for consequential damages or

compensatory damages be held prior to

the issuance of a final decision on the

merits.

Paragraph (f) of section 1201.204

provides for the application of

appropriate provisions of subpart B in

an addendum proceeding to decide a

request for consequential damages or

compensatory damages, and paragraph

(g) provides for a petition for review of

the judge’s initial decision by the Board

and for Board review of a recommended

decision of an administrative law judge.

Paragraph (h) provides for EEOC review

of a final Board decision on a request for

compensatory damages (but not

consequential damages) in accordance

with subpart E of part 1201.

Section 1201.205 provides that a final

Board decision issued under subpart

H—on a request for attorney fees,

consequential damages, or

compensatory damages—is subject to

judicial review in accordance with 5

U.S.C. 7703.

Citations

All citations to MSPB decisions are to

West Publishing Company’s Merit

Systems Protection Board Reporter

(M.S.P.R.). The citation to a D.C. Circuit

decision is to West Publishing

Company’s Federal Reporter, second

series (F.2d). These publications are

available in many law libraries and

some public libraries. They are also

available in the MSPB Library, 1120

Vermont Avenue, NW, 8th Floor,

Washington, DC, which is open to the

public between 1:00 and 5:00 PM,

Monday through Friday (excluding

Federal holidays).

The Board is publishing this rule as

an interim rule pursuant to 5 U.S.C.

1204(h).

List of Subjects in 5 CFR Part 1201

Administrative practice and

procedure, Civil rights, Government

employees.

Accordingly, the Board amends 5 CFR

part 1201 as follows:

PART 1201—[AMENDED]

1–3. The authority citation for part

1201 is revised to read as follows:

Authority: 5 U.S.C. 1204 and 7701, and 38

U.S.C. 4331, unless otherwise noted.

4. Section 1201.3 is amended in

paragraph (b) by adding a sentence to

the end of the paragraph to read as

follows:

§ 1201.3 Appellate jurisdiction.

* * * * *

(b) * * * The provisions of subpart H

of this part regarding awards of attorney

fees and consequential damages under 5
Federal Register / Vol. 62, No. 68 / Wednesday, April 9, 1997 / Rules and Regulations 17045

U.S.C. 1221(g) apply to appeals

governed by part 1209 of this chapter.

* * * * *

5. Section 1201.3 is amended by

revising paragraph (c)(1)(ii) and adding

paragraph (c)(1)(iii) to read as follows:

* * * * *

(c) * * *

(1) * * *

(ii) An appealable action involving a

prohibited personnel practice other than

discrimination under 5 U.S.C.

2302(b)(1) may be raised under not more

than one of the following procedures:

(A) The Board’s appellate procedures;

(B) The negotiated grievance

procedures; or

(C) The procedures for seeking

corrective action from the Special

Counsel under subchapters II and III of

chapter 12 of title 5 of the United States

Code.

(iii) Except for actions involving

discrimination under 5 U.S.C.

2302(b)(1) or any other prohibited

personnel practice, any appealable

action that is excluded from the

application of the negotiated grievance

procedures may be raised only under

the Board’s appellate procedures.

* * * * *

6. Section 1201.3 is further amended

at paragraph (c) by adding a sentence to

the end of paragraph (c)(2) to read as

follows:

* * * * *

(c) * * *

(2) * * * When an employee has the

choice of pursuing an appealable action

involving a prohibited personnel

practice other than discrimination

under 5 U.S.C. 2302(b)(1) in accordance

with paragraph (c)(1)(ii) of this section,

the Board considers the choice among

those procedures to have been made

when the employee timely files an

appeal with the Board, timely files a

written grievance under the negotiated

grievance procedure, or seeks corrective

action from the Special Counsel by

making an allegation under 5 U.S.C.

1214(a)(1), whichever event occurs first.

* * * * *

§ 1201.37 [Amended]

7. Section 1201.37 is amended by

revising the heading to read ‘‘Witness

fees’’; by removing paragraph (a) in its

entirety; by removing the heading of

paragraph (b), and by redesignating

paragraphs (b)(1), (b)(2), and (b)(3) as

paragraphs (a), (b), and (c), respectively.

§ 1201.55 [Amended]

8. Section 1201.55 is amended at

paragraph (b) by removing the phrase,

‘‘and unless the motion is one for

payment of attorney fees under

§1201.37(a) of this part,’’ in the first

sentence.

§ 1201.111 [Amended]

9. Section 1201.111 is amended by

removing the phrase, ‘‘and a petition for

judicial review.’’ in paragraph (b)(6) and

by adding in its place the phrase ‘‘a

petition for judicial review, a motion for

attorney fees under section 1201.203 of

this part, and where a claim for

consequential damages or compensatory

damages has been raised, the right to an

addendum proceeding to determine

consequential damages or compensatory

damages, with the time to be established

by the judge.’’.

§ 1201.112 [Amended]

10. Section 1201.112 is amended by

removing the semi-colon at the end of

paragraph (a)(3) and by adding in its

place the phrase ‘‘, consequential

damages, or compensatory damages

under subpart H of this part;’’.

11. Section 1201.121 is amended by

revising the heading to read as follows:

§ 1201.121 Scope of jurisdiction;

application of subparts B, F, and H.

12. Section 1201.121 is further

amended by revising paragraph (b) to

read as follows:

* * * * *

(b) Application of subparts B, F, and

H. Except as otherwise expressly

provided by this subpart, the regulations

in subpart B of this part apply to

complaints or requests filed by the

Special Counsel under this subpart.

Subpart F of this part applies to

enforcement proceedings in connection

with Special Counsel complaints or

requests decided under this subpart.

Subpart H of this part applies to

requests for attorney fees, consequential

damages, or compensatory damages in

connection with Special Counsel

complaints decided under this subpart.

13. Section 1201.131 is revised to read

as follows:

§ 1201.131 Procedures.

When an agency proposes an action

against an administrative law judge, the

regulations in subpart B of this part

apply, unless these provisions expressly

provide otherwise. Initial and

subsequent pleadings, however, must be

filed and served in accordance with

§ 1201.122 of this subpart. Subpart F of

this part applies to enforcement

proceedings in connection with actions

against administrative law judges

decided under this subpart. Subpart H

of this part applies to requests for

attorney fees or compensatory damages

in connection with actions against

administrative law judges decided

under this subpart.

§1201.163 [Amended]

14. Section 1201.163 is amended at

paragraphs (a) and (c) by removing ‘‘29

CFR part 1613’’ each place it appears

and by adding in its place ‘‘29 CFR part

1614’’.

15. Part 1201 is amended by adding

new subpart H to read as follows:

Subpart H—Attorney Fees (Plus Costs,

Expert Witness Fees, and Litigation

Expenses, Where Applicable),

Consequential Damages, and

Compensatory Damages

Sec.

1201.201 Statement of purpose.

1201.202 Authority for awards.

1201.203 Proceedings for attorney fees.

1201.204 Proceedings for consequential

damages and compensatory damages.

1201.205 Judicial review.

Subpart H—Attorney Fees (Plus Costs,

Expert Witness Fees, and Litigation

Expenses, Where Applicable),

Consequential Damages, and

Compensatory Damages

§1201.201 Statement of purpose.

(a) This subpart governs Board

proceedings for awards of attorney fees

(plus costs, expert witness fees, and

litigation expenses, where applicable),

consequential damages, and

compensatory damages.

(b) There are seven statutory

provisions covering attorney fee awards.

Because most MSPB cases are appeals

under 5 U.S.C. 7701, most requests for

attorney fees will be governed by

§ 1201.202(a)(1). There are, however,

other attorney fee provisions that apply

only to specific kinds of cases. For

example, § 1201.202(a)(4) applies only

to certain whistleblower appeals.

Sections 1201.202 (a)(5) and (a)(6) apply

only to corrective and disciplinary

action cases brought by the Special

Counsel. Section 1201.202(a)(7) applies

only to appeals brought under the

Uniformed Services Employment and

Reemployment Rights Act.

(c) An award of consequential

damages is authorized in only two

situations: Where the Board orders

corrective action in a whistleblower

appeal under 5 U.S.C. 1221, and where

the Board orders corrective action in a

Special Counsel complaint under 5

U.S.C. 1214. Consequential damages

include such items as medical costs and

travel expenses, and other costs as

determined by the Board through case

law.

(d) The Civil Rights Act of 1991 (42

U.S.C. 1981a) authorizes an award of

compensatory damages to a prevailing

party who is found to have been

intentionally discriminated against

based on race, color, religion, sex,
17046 Federal Register / Vol. 62, No. 68 / Wednesday, April 9, 1997 / Rules and Regulations

national origin, or disability.

Compensatory damages include

pecuniary losses, future pecuniary

losses, and nonpecuniary losses, such as

emotional pain, suffering,

inconvenience, mental anguish, and loss

of enjoyment of life.

§1201.202 Authority for awards.

(a) Awards of attorney fees (plus costs,

expert witness fees, and litigation

expenses, where applicable). The Board

may order payment of:

(1) Attorney fees, as authorized by 5

U.S.C. 7701(g)(1), where the appellant

or respondent is the prevailing party in

an appeal under 5 U.S.C. 7701 or an

agency action against an administrative

law judge under 5 U.S.C. 7521, and an

award is warranted in the interest of

justice;

(2) Attorney fees, as authorized by 5

U.S.C. 7701(g)(2), where the appellant

or respondent is the prevailing party in

an appeal under 5 U.S.C. 7701, a request

to review an arbitration decision under

5 U.S.C. 7121(d), or an agency action

against an administrative law judge

under 5 U.S.C. 7521, and the decision

is based on a finding of discrimination

prohibited under 5 U.S.C. 2302(b)(1);

(3) Attorney fees and costs, as

authorized by 5 U.S.C. 1221(g)(2), where

the appellant is the prevailing party in

an appeal under 5 U.S.C. 7701 and the

Board’s decision is based on a finding

of a prohibited personnel practice;

(4) Attorney fees and costs, as

authorized by 5 U.S.C. 1221(g)(1)(B),

where the Board orders corrective action

in a whistleblower appeal to which 5

U.S.C. 1221 applies;

(5) Attorney fees, as authorized by 5

U.S.C. 1214(g)(2), where the Board

orders corrective action in a Special

Counsel complaint under 5 U.S.C. 1214;

(6) Attorney fees, as authorized by 5

U.S.C. 1204(m), where the respondent is

the prevailing party in a Special

Counsel complaint for disciplinary

action under 5 U.S.C. 1215; and

(7) Attorney fees, expert witness fees,

and litigation expenses, as authorized

by the Uniformed Services Employment

and Reemployment Rights Act, 38

U.S.C. 4324(c)(4).

(b) Awards of consequential damages.

The Board may order payment of

consequential damages, including

medical costs incurred, travel expenses,

and any other reasonable and

foreseeable consequential damages:

(1) As authorized by 5 U.S.C.

1221(g)(1)(A)(ii), where the Board orders

corrective action in a whistleblower

appeal to which 5 U.S.C. 1221 applies;

and

(2) As authorized by 5 U.S.C.

1214(g)(2), where the Board orders

corrective action in a Special Counsel

complaint under 5 U.S.C. 1214.

(c) Awards of compensatory damages.

The Board may order payment of

compensatory damages, as authorized

by section 102 of the Civil Rights Act of

1991 (42 U.S.C. 1981a), based on a

finding of unlawful intentional

discrimination but not on an

employment practice that is unlawful

because of its disparate impact under

the Civil Rights Act of 1964, the

Rehabilitation Act of 1973, or the

Americans with Disabilities Act of 1990.

Compensatory damages include

pecuniary losses, future pecuniary

losses, and nonpecuniary losses such as

emotional pain, suffering,

inconvenience, mental anguish, and loss

of enjoyment of life.

§1201.203 Proceedings for attorney fees.

(a) Form and content of request. A

request for attorney fees must be made

by motion, must state why the appellant

or respondent believes he or she is

entitled to an award under the

applicable statutory standard, and must

be supported by evidence substantiating

the amount of the request. Evidence

supporting a motion for attorney fees

must include at a minimum:

(1) Accurate and current time records;

(2) A copy of the terms of the fee

agreement (if any);

(3) A statement of the attorney’s

customary billing rate for similar work

if the attorney has a billing practice or,

in the absence of that practice, other

evidence of the prevailing community

rate that will establish a market value

for the attorney’s services; and

(4) An established attorney-client

relationship.

(b) Addendum proceeding. (1) A

request for attorney fees will be decided

in an addendum proceeding before a

judge after issuance of a final decision

in the proceeding on the merits,

including a decision accepting the

parties’ settlement of the case.

(2) For purposes of this subpart, a

‘‘proceeding on the merits’’ is a

proceeding to decide an appeal of an

agency action under 5 U.S.C. section

1221 or 7701, an appeal under 38 U.S.C.

4324, a request to review an arbitration

decision under 5 U.S.C. 7121(d), a

Special Counsel complaint under 5

U.S.C. section 1214 or 1215, or an

agency action against an administrative

law judge under 5 U.S.C. 7521.

(3) The final decision in the

proceeding on the merits may be an

initial decision of a judge that has

become final under section 1201.113 of

this part or a final decision of the Board.

(c) Place of filing. Where the decision

in the proceeding on the merits was

issued by a judge in a MSPB regional or

field office, a motion for attorney fees

must be filed with the regional or field

office that issued the decision. Where

the decision in the proceeding on the

merits was issued by the Board, a

motion for attorney fees must be filed

with the Clerk of the Board.

(d) Time of filing; service. A motion

for attorney fees must be filed as soon

as possible after a final decision of the

Board but no later than 60 days after the

date on which a decision becomes final.

A copy of the motion must be served on

the other parties or their representatives

at the time of filing. A party may file a

pleading responding to the motion

within the time limit established by the

judge.

(e) Hearing; applicability of subpart B.

The judge may hold a hearing on a

motion for attorney fees and may apply

appropriate provisions of subpart B of

this part to the addendum proceeding.

(f) Review by the Board. The judge

will issue an initial decision in the

addendum proceeding, which shall be

subject to the provisions for a petition

for review by the Board under subpart

C of this part.

§ 1201.204 Proceedings for consequential

damages and compensatory damages.

(a) Time for making request. (1) In all

instances where a request for

consequential damages or compensatory

damages is made, it should be made as

early as possible in a Board proceeding

before an administrative judge or

administrative law judge but no later

than the first pleading filed with the

three-member Board.

(2) The judge or the Board, as

applicable, may waive the time limit for

making a request for consequential

damages or compensatory damages for

good cause shown.

(b) Service. A copy of a request for

consequential damages or compensatory

damages must be served on the other

parties or their representatives when the

request is made. A party may file a

pleading responding to the request

within the time limit established by the

judge or the Board, as applicable.

(c) Discretion to decide in merits

proceeding or addendum proceeding.

When a request for consequential

damages or compensatory damages is

made, the judge or the Board, as

applicable, may:

(1) Consider the request during the

proceeding on the merits and rule on

the request in the decision on the merits

if the judge or the Board, as applicable,

determines that such action is in the

interest of the parties and will promote

efficiency and economy in adjudication;

or
Federal Register / Vol. 62, No. 68 / Wednesday, April 9, 1997 / Rules and Regulations 17047

(2) Defer a decision on the request for

an addendum proceeding. Except as

provided in paragraph (e) of this

section, the addendum proceeding will

be held after issuance of a final decision

in the proceeding on the merits. As used

in this section, a ‘‘final decision in the

proceeding on the merits’’ has the same

meaning as in § 1201.203(b) of this part.

(d) Initiation of addendum

proceeding. If a decision on a request for

consequential damages or compensatory

damages has been deferred for an

addendum proceeding, the judge will

schedule the proceeding after issuance

of an initial decision that becomes final

or a final Board decision.

(e) Discretion of Board to order

addendum proceeding. Notwithstanding

paragraphs (a) through (d) of this

section, the Board, at its discretion, may

order that an addendum proceeding to

decide a request for consequential

damages or compensatory damages be

held prior to the issuance of a final

decision on the merits. If the Board

exercises this discretion, the Board

order will provide for initiation of the

addendum proceeding.

(f) Hearing; applicability of subpart B.

The judge may hold a hearing on a

request for consequential damages or

compensatory damages and may apply

appropriate provisions of subpart B of

this part to the addendum proceeding.

(g) Review by the Board. (1) An initial

decision issued by a judge under this

section, whether in accordance with

paragraph (c)(1) of this section or in an

addendum proceeding, shall be subject

to the provisions for a petition for

review by the Board under subpart C of

this part.

(2) A recommended decision issued

by an administrative law judge in

accordance with paragraph (c)(1) of this

section shall be subject to the provisions

of subpart D of this part.

(h) EEOC review of decision on

compensatory damages. A final decision

of the Board on a request for

compensatory damages pursuant to the

Civil Rights Act of 1991 shall be subject

to review by the Equal Employment

Opportunity Commission as provided

under subpart E of this part.

§ 1201.205 Judicial review.

A final Board decision under this

subpart is subject to judicial review as

provided under 5 U.S.C. 7703.

Dated: April 1, 1997.

Robert E. Taylor,

Clerk of the Board.

[FR Doc. 97–8643 Filed 4–8–97; 8:45 am]

BILLING CODE 7400–01–U

MERIT SYSTEMS PROTECTION

BOARD

5 CFR Part 1209

Practices and Procedures for Appeals

and Stay Requests of Personnel

Actions Allegedly Based on

Whistleblowing

AGENCY: Merit Systems Protection

Board.

ACTION: Interim rule with request for

comments.

SUMMARY: The Merit Systems Protection

Board (MSPB or the Board) is amending

its rules of practice and procedure for

whistleblower appeals to implement the

provisions of Public Law 103–424

(MSPB and Office of Special Counsel

reauthorization of 1994) that: Added a

new personnel action and amended

another in the statutory provisions

governing prohibited personnel

practices; and added a requirement that

the Board refer its findings to the

Special Counsel when it determines in

a whistleblower proceeding that a

current Federal employee may have

committed a prohibited personnel

practice. The Board is also amending its

rules of practice and procedure for

whistleblower appeals to include a

cross-reference to subpart H of part 1201

regarding awards of attorney fees and

consequential damages. The purpose of

these amendments is to provide

guidance to the parties to MSPB cases

and their representatives regarding the

new and amended personnel actions, to

refer parties and their representatives to

subpart H of part 1201 for the

procedures governing requests for

attorney fees and consequential

damages, and to provide public notice

of the requirement that the Board refer

certain prohibited personnel practice

findings to the Special Counsel. The

Board is implementing other provisions

of Public Law 103–424 through an

amendment to its rules at 5 CFR part

1201, which is being published

simultaneously with this amendment.

DATES: Effective date April 9, 1997.

Submit written comments on or before

June 9, 1997.

ADDRESSES: Send comments to Robert E.

Taylor, Clerk of the Board, Merit

Systems Protection Board, 1120

Vermont Avenue, NW, Washington, DC

20419. Comments may be sent via email to mspb@mspb.gov.

FOR FURTHER INFORMATION CONTACT:

Robert E. Taylor, Clerk of the Board,

(202) 653–7200.

SUPPLEMENTARY INFORMATION: Public

Law 103–424, which reauthorized the

Board and the Office of Special Counsel

in October 1994, also included a

number of provisions that affect cases

involving prohibited personnel

practices, especially actions based on

whistleblowing. This amendment to the

Board’s rules at 5 CFR part 1209 reflects

two of those provisions.

New and Amended Personnel Actions

Section 5 of Public Law 103–424

amended 5 U.S.C. 2302(a)(2)(A), the list

of personnel actions that may form the

basis for a prohibited personnel

practice, to: (1) add a new personnel

action, ‘‘a decision to order psychiatric

testing or examination;’’ and (2) replace

the existing provision, ‘‘any other

significant change in duties or

responsibilities which is inconsistent

with the employee’s salary or grade

level,’’ with an amended provision,

‘‘any other significant change in duties,

responsibilities, or working conditions.’’

Because the Board’s rules at 5 CFR

1209.4(a) incorporate the statutory list

of personnel actions at 5 U.S.C.

2302(a)(2)(A), it is necessary to amend

the Board’s rules to reflect the changes

made in the statutory provision by

Public Law 103–424.

The Board has ruled that these

amendments to 5 U.S.C. 2302(a)(2)(A)

may not be applied retroactively to

cases pending on the effective date of

the amendments, October 29, 1994,

where the personnel action occurred

prior to the effective date, because the

amendments enlarge the category of

conduct that may form the basis of a

prohibited personnel practice. See

Caddell v. Department of Justice, 66

M.S.P.R. 347, 352–54 (1995), and Briley

v. National Archives and Records

Administration, 71 M.S.P.R. 211, 223–

224 (1996).

Referrals to the Special Counsel.

Section 4(c) of Public Law 103–424

amended 5 U.S.C. 1221(f) to add a new

requirement that when the Board

determines in a proceeding under

section 1221 of title 5 (governing

individual right of action appeals and

certain other whistleblower appeals)

that a current Federal employee may

have committed a prohibited personnel

practice, the Board is to refer the matter

to the Special Counsel for investigation

and possible prosecution under 5 U.S.C.

1215. The Board began making such

referrals to the Special Counsel soon

after this provision took effect on

October 29, 1994. It is now amending its

rules at 5 CFR part 1209 by adding a

new subpart E to provide public notice

that it is required to make such referrals.