[Federal Register Volume 63, Number 148 (Monday, August 3, 1998)]
[Rules and Regulations]
[Pages 41177-41181]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-20447]



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Rules and Regulations
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Federal Register / Vol. 63, No. 148 / Monday, August 3, 1998 / Rules 
and Regulations

[[Page 41177]]


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MERIT SYSTEMS PROTECTION BOARD

5 CFR Part 1201


Practices and Procedures

AGENCY: Merit Systems Protection Board.

ACTION: Final rule.

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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 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 removing an obsolete section of its rules governing 
mixed cases and making technical changes to its mixed case and 
enforcement rules to correct a citation. 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.

EFFECTIVE DATE: August 3, 1998.

FOR FURTHER INFORMATION CONTACT: Robert E. Taylor, Clerk of the Board, 
(202) 653-7200.

SUPPLEMENTARY INFORMATION: The Board previously published an interim 
rule 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); amend its rules governing requests for attorney fees to change 
the time limit for filing and incorporate an evidentiary requirement 
from the Board's case law; and make a technical change to its rules 
governing mixed cases (62 FR 17041, April 9, 1997). The interim rule 
requested public comments and allowed 60 days, until June 9, 1997, for 
receipt of such comments.

Public Comments

    Comments were received from two Federal agencies. One commenter 
made the following recommendations for revisions in the interim rule:
    (1) That Sec. 1201.3(c)(1) be amended to reflect the choices among 
statutory and negotiated grievance procedures involving agencies other 
than MSPB;
    (2) That Sec. 1201.201 be amended to further define ``consequential 
damages'' and ``compensatory damages;'' and
    (3) That Sec. 1201.204(a)(1) be amended to require that a request 
for damages be raised before an arbitrator as early as possible.
    The recommendation numbered (1) above asks the Board to amend its 
regulation at Sec. 1201.3(c)(1), which deals with the choice of 
procedure for bargaining unit employees between an appeal to MSPB and a 
grievance under a negotiated grievance procedure (NGP), to specify the 
additional choices that may be made between a grievance under a NGP and 
the statutory procedures of an agency other than MSPB, such as filing 
an equal employment opportunity (EEO) complaint under the Equal 
Employment Opportunity Commission's regulations or a complaint alleging 
a violation of 5 U.S.C. 2302(b)(1) with the Special Counsel. While 
providing this additional information could be useful, it appears to go 
beyond the scope of the Board's regulatory authority, which is limited 
to matters within its jurisdiction (5 U.S.C. 1204(h) and 7701(k), and 
38 U.S.C. 4331). It is appropriate for the Board's regulations to 
advise potential appellants where there is a choice between the Board's 
appellate procedures and another procedure, such as the NGP. It does 
not appear appropriate, however, for the Board to address choices to be 
made between a grievance under a NGP and the statutory procedures of 
another agency.
    The recommendation numbered (2) above asks the Board to amend its 
regulation at Sec. 1201.201 (c) and (d) to further define the terms, 
``consequential damages'' and ``compensatory damages.'' The Board has 
determined that such definitions should be made through case-by-case 
adjudication. It believes that the scope of damage awards should be 
made in the context of an appeal, where the matter can be fully 
considered in the light of arguments from the parties.
    The recommendation numbered (3) above asks the Board to amend its 
regulation at Sec. 1201.204(a)(1) to include a requirement that a 
request for damages be raised before an arbitrator as early as 
possible. Such an amendment, which would involve the Board imposing a 
requirement on a proceeding before an arbitrator pursuant to a 
negotiated grievance procedure, would clearly be beyond the scope of 
the Board's regulatory authority.
    After review of these comments, the Board has determined that none 
of the revisions recommended by this commenter should be made.
    The other commenter recommended that in Sec. 1201.203(b)(2) of the 
interim rule (now Sec. 1201.202(d)(1) in the final rule), the word 
``appeal'' be changed to ``action'' to conform to the language of 38 
U.S.C. Sec. 4324. The Board notes that in chapter 43 of title 38 
(Uniformed Services Employment and Reemployment Rights Act, or USERRA), 
the terms ``action'' and ``complaint'' are both used to describe a 
matter that may be raised before MSPB. The Board's regulations in part 
1201 define ``appeal'' as ``(a) request for review of an agency 
action'' (5 CFR 1201.4(f)), and the

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regulations use the term ``appeal'' in a manner that can be applied to 
any matter processed under the Board's appellate jurisdiction 
procedures. Furthermore, in its interim rule implementing other 
provisions of USERRA (62 FR 66813, December 22, 1997), the Board uses 
the term ``appeal'' throughout to describe a matter that can be raised 
before the Board under USERRA. To maintain consistency in its 
regulations, therefore, the Board has determined that the revision 
recommended by this commenter should not be made.

Changes to Subpart H

    Following an internal review, the Board has determined that several 
changes should be made in subpart H of part 1201, as added by the 
interim rule, to simplify and streamline the procedures for deciding 
requests for consequential damages or compensatory damages and to 
clarify certain other provisions. These changes are as follows:
    (1) The introductory language of Sec. 1201.202(a), which sets forth 
various authorities for the Board to award attorney fees and, where 
applicable, costs, expert witness fees, and litigation expenses, is 
revised to clarify that the listed authorities do not constitute an 
exclusive list. As explained in the preamble to the interim rule (62 FR 
17041-17042, April 9, 1997), some of the newer authorities overlap 
earlier authorities. Other authorities may be enacted in new 
legislation. As a result, appellants in certain kinds of cases may be 
able to proceed with a request for attorney fees under more than one 
authority.
    (2) Section 1201.202(a)(5) is revised by adding 5 U.S.C. 7701(g)(1) 
as an authority for the Board to award attorney fees in a Special 
Counsel complaint for corrective action under 5 U.S.C. 1214. This 
addition reflects the court ruling in Frazier versus MSPB, 672 F.2d 
150, 168-170 (D.C. Cir. 1982), that 5 U.S.C. 7701(g)(1) permits the 
Board to award attorney fees in a Special Counsel corrective action. 
Although Public Law 103-424 added a specific authority for an award of 
attorney fees in such cases in a new provision at 5 U.S.C. 1214(g)(2), 
an award could also be made under 5 U.S.C. 7701(g)(1), so both of these 
authorities are cited in the revised Sec. 1201.202(a)(5).
    (3) A new paragraph (d) is added to Sec. 1201.202 to provide 
definitions of a ``proceeding on the merits'' and an ``addendum 
proceeding.'' The definition of a ``proceeding on the merits'' at 
Sec. 1201.202(d)(1) is the same as that contained in 
Sec. 1201.203(b)(2) in the interim rule. The definition of an 
``addendum proceeding'' at Sec. 1201.202(d)(2) is based on language 
that was in Secs. 1201.203(b) (1) and (b)(3) in the interim rule. 
Because these definitions apply to subpart H as a whole, they are more 
appropriately placed in Sec. 1201.202 than in the attorney fee 
provisions of Sec. 1201.203.
    (4) With the addition of the definitions at Sec. 1201.202(d), 
Sec. 1201.203(b) is revised to state simply that a request for attorney 
fees will be decided in an addendum proceeding.
    (5) Section 1201.203(c) is revised to clarify where a motion for 
attorney fees must be filed. Following the publication of the interim 
rule, the Board published a change in its part 1201 regulations 
governing procedures for original jurisdiction cases to allow initial 
decisions to be issued by a judge in the Board's headquarters (62 FR 
48449, September 16, 1997). Section 1201.203(c) is revised by replacing 
the term ``decision'' in the first sentence with ``initial decision.'' 
This clarifies that a motion for attorney fees must be filed with the 
regional or field office where the initial decision in the merits 
proceeding was issued. The second sentence is revised to clarify that a 
motion for attorney fees must be filed with the Clerk of the Board 
where the initial decision was issued at the Board's headquarters, as 
well as when the only MSPB decision in the merits proceeding is a final 
decision of the Board.
    (6) Section 1201.203(d) in the interim rule is divided into two 
sections, 1201.203(d), ``Time of filing,'' and 1201.203(e), 
``Service.'' Accordingly, Sec. 1201.203 (e) and (f) in the interim rule 
are redesignated Sec. 1201.203 (f) and (g), respectively. In addition, 
``Initial decision'' is added to the heading of the redesignated 
Sec. 1201.203(g).
    (7) Section 1201.204(a)(1) is revised to conform the time limit for 
making a request for consequential damages or compensatory damages to 
the time limit established by Sec. 1201.24(b) for raising a claim or 
defense not included in the appeal. The time limit may be waived for 
good cause shown. Under the interim rule, a claim for damages could 
have been made as late as the time the first pleading with the 3-member 
Board was filed.
    (8) A new provision, ``Form and content of request,'' is added as 
Sec. 1201.204(b). This provision, which parallels the ``Form and 
content of request'' provision for a request for attorney fees at 
Sec. 1201.203(a), establishes that a request for damages must include 
both the amount of damages sought and the reasons why, under the 
applicable statutory standard, an award of damages should be made. 
Section 1201.204(b) in the interim rule is redesignated 
Sec. 1201.204(c).
    (9) Sections 1201.204(d) and (e) in the final rule replace sections 
Secs. 1201.204(c) through (e) in the interim rule. The new provisions, 
which parallel the provisions for deciding a request for attorney fees 
in section Sec. 1201.203 to the extent possible, are intended to 
provide a more uniform and streamlined procedure for deciding a request 
for consequential damages or compensatory damages. Section 1201.204(d) 
provides that a request for damages will be decided in an addendum 
proceeding. A judge, however, may waive this requirement and consider a 
request for damages in a merits proceeding where such action is in the 
interest of the parties and will promote economy and efficiency in 
adjudication. Section 1201.204(e) prescribes the procedures for 
initiation of an addendum proceeding on a request for damages after 
there is a final decision in the merits proceeding. The time limit for 
filing, place of filing, service, and response requirements are the 
same as for a request for attorney fees under Sec. 1201.203. A 
conforming change is made to Sec. 1201.111, as amended by the interim 
rule.
    (10) Section 1201.204(g) is revised by adding ``Initial decision'' 
to the heading; by revising the text to state that the judge will issue 
an initial decision in the addendum proceeding, which shall be subject 
to a petition for review by the Board; and by removing the language 
regarding a recommended decision issued by an administrative law judge 
(Sec. 1201.204(g)(2) in the interim rule). Under the Board's revised 
procedures for original jurisdiction cases (62 FR 48449, September 16, 
1997), a recommended decision will be issued only in certain Hatch Act 
cases involving Federal or District of Columbia government employees. 
Because neither consequential damages nor compensatory damages are 
available in such cases, there is no longer a need for the language 
regarding recommended decisions.
    (11) Section 1201.204(h) is a new provision that prescribes 
procedures for consideration of a request for consequential damages or 
compensatory damages in the first instance by the 3-member Board. Such 
consideration would occur where a request is first made on petition for 
review of a judge's initial decision on the merits and the Board waives 
the time limit for making the request, or where a request is made in a 
case where the only MSPB proceeding is before the 3-member

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Board, as in a request to review an arbitration decision under 5 U.S.C. 
7121(d). In such situations, the regulation provides that the Board 
may: (1) Consider both the merits of the case and the request for 
damages and issue a final decision; (2) remand the case to the judge 
for a new initial decision, either on the request for damages only or 
on both the merits and the request for damages; or (3) where there has 
been no prior proceeding before a judge, forward the request for 
damages to a judge for hearing and a recommendation to the Board, after 
which the Board will issue a final decision on both the merits and the 
request for damages.
    (12) Section 1201.204(h) in the interim rule is redesignated 
Sec. 1201.204(i).
    For the convenience of its customers, the Board is republishing 
subpart H in its entirety.

Technical Changes

    The following changes of a technical nature are also made in this 
final rule:
    (1) The amendments to sections Secs. 1201.121 and 1201.131 made by 
the interim rule were subsequently superseded by amendments made by 
interim rules issued on September 16, 1997 (62 FR 48449), and December 
22, 1997 (62 FR 66813). Therefore, the amendments made to sections 
Secs. 1201.121 and 1201.131 by the interim rule are not adopted in this 
final rule.
    (2) The interim rule made technical amendments to Sec. 1201.163. 
The Board has since determined that this provision, governing mixed 
cases that were filed under Reorganization Plan No. 1 of 1978, is 
obsolete, because all such cases have been completed. Therefore, in 
lieu of the technical amendments made by the interim rule, 
Sec. 1201.163 is removed in its entirety.
    (3) As a result of the renumbering of Sec. 1201.119 as 
Sec. 1201.120 by an earlier amendment to the Board's regulations (59 FR 
30863, June 16, 1994), three citations to this provision in the Board's 
regulations have been rendered incorrect. Therefore, the Board is 
amending Secs. 1210.157, 1201.183(a)(4), and 1201.183(b)(3) to change 
``1201.119'' to read ``1201.120.''
    The Board is publishing this rule as a final rule pursuant to 5 
U.S.C. 1204(h).
    Accordingly, the Board adopts as final its interim rule published 
at 62 FR 17041, April 9, 1997, with the following changes:
    1. Section 1201.111(b)(6), as amended by the interim rule, is 
revised to read as follows:


Sec. 1201.111  [Amended]

* * * * *
    (b) * * *
    (6) A statement of any further process available, including, as 
appropriate, a petition for review under Sec. 1201.114 of this part, a 
petition for enforcement under Sec. 1201.182, a motion for attorney 
fees under Sec. 1201.203, a motion to initiate an addendum proceeding 
for consequential damages or compensatory damages under Sec. 1201.204, 
and a petition for judicial review.
* * * * *
    2. The amendments made to Secs. 1201.121(b) and 1201.131 by the 
interim rule are not adopted. Those sections continue to read as 
revised by 62 FR 48449, September 16, 1997, and further amended by 62 
FR 66813, December 22, 1997.


Sec. 1201.157  [Amended]

    3. Section 1201.157 is amended by removing ``Sec. 1201.119'' and by 
adding in its place ``Sec. 1201.120.''


Sec. 1201.163  [Removed]

    4. In lieu of the amendments made by the interim rule, section 
1201.163 is removed.


Sec. 1201.183  [Amended]

    5. Section 1201.183 is amended at paragraphs (a)(4) and (b)(3) by 
removing ``Sec. 1201.119'' in each paragraph and by adding in its place 
``Sec. 1201.120.''
    6. Subpart H, as added by the interim rule, is revised 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


Sec. 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 Sec. 1201.202(a)(1). 
There are, however, other attorney fee provisions that apply only to 
specific kinds of cases. For example, Sec. 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, 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.


Sec. 1201.202  Authority for awards.

    (a) Awards of attorney fees (plus costs, expert witness fees, and 
litigation expenses, where applicable). The Board is authorized by 
various statutes to order payment of attorney fees and, where 
applicable, costs, expert witness fees, and litigation expenses. These 
statutory authorities include, but are not limited to, the following 
authorities to 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

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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) or 5 U.S.C. 
7701(g)(1), 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.
    (d) Definitions. For purposes of this subpart:
    (1) 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.
    (2) An addendum proceeding is a proceeding conducted after issuance 
of a final decision in a proceeding on the merits, including a decision 
accepting the parties' settlement of the case. The final decision in 
the proceeding on the merits may be an initial decision of a judge that 
has become final under Sec. 1201.113 of this part or a final decision 
of the Board.


Sec. 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. A request for attorney fees will be 
decided in an addendum proceeding.
    (c) Place of filing. Where the initial 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 initial decision. Where the decision in the 
proceeding on the merits was an initial decision issued by a judge at 
the Board's headquarters or where the only decision was a final 
decision issued by the Board, a motion for attorney fees must be filed 
with the Clerk of the Board.
    (d) Time of filing. 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.
    (e) Service. A copy of a motion for attorney fees 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.
    (f) 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.
    (g) Initial decision; 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.


Sec. 1201.204  Proceedings for consequential damages and compensatory 
damages.

    (a) Time for making request. (1) A request for consequential 
damages or compensatory damages must be made during the proceeding on 
the merits, no later than the end of the conference(s) held to define 
the issues in the case.
    (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. The time limit will not be waived if a party 
shows that such waiver would result in undue prejudice.
    (b) Form and content of request. A request for consequential 
damages or compensatory damages must be made in writing and must state 
the amount of damages sought and the reasons why the appellant or 
respondent believes he or she is entitled to an award under the 
applicable statutory standard.
    (c) 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.
    (d) Addendum proceeding. (1) A request for consequential damages or 
compensatory damages will be decided in an addendum proceeding.
    (2) A judge may waive the requirement of paragraph (d)(1), either 
on his or her own motion or on the motion of a party, and consider a 
request for damages in a proceeding on the merits where the judge 
determines that such action is in the interest of the parties and will 
promote efficiency and economy in adjudication.
    (e) Initiation of addendum proceeding. (1) A motion for initiation 
of an addendum proceeding to decide a request for consequential damages 
or compensatory damages 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. Where the initial decision in the proceeding 
on the merits was issued by a judge in a MSPB regional or field office, 
the motion must be filed with the regional or field office that issued 
the initial decision. Where the decision in the proceeding on the 
merits was an initial decision issued by a judge at the Board's 
headquarters or where the only decision was a final decision issued by 
the Board, the motion must be filed with the Clerk of the Board.

[[Page 41181]]

    (2) A copy of a motion for initiation of an addendum proceeding to 
decide a request for consequential damages or compensatory damages 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.
    (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) Initial decision; 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.
    (h) Request for damages first made in proceeding before the Board. 
Where a request for consequential damages or compensatory damages is 
first made on petition for review of a judge's initial decision on the 
merits and the Board waives the time limit for making the request in 
accordance with paragraph (a)(2) of this section, or where the request 
is made in a case where the only MSPB proceeding is before the 3-member 
Board, including, for compensatory damages only, a request to review an 
arbitration decision under 5 U.S.C. 7121(d), the Board may:
    (1) Consider both the merits and the request for damages and issue 
a final decision;
    (2) Remand the case to the judge for a new initial decision, either 
on the request for damages only or on both the merits and the request 
for damages; or
    (3) Where there has been no prior proceeding before a judge, 
forward the request for damages to a judge for hearing and a 
recommendation to the Board, after which the Board will issue a final 
decision on both the merits and the request for damages.
    (i) 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.


Sec. 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: July 28, 1998.
Robert E. Taylor,
Clerk of the Board.
[FR Doc. 98-20447 Filed 7-31-98; 8:45 am]
BILLING CODE 7400-01-U