# *Performance-Based Actions under Chapters 43 and 75 of Title  5 – Similarities and Differences*

There are two different statutes that authorize  an agency to demote or remove an employee for performance-based reasons:  (1) 5 U.S.C. § 4303 (which can only be used  for failure in a critical performance element); and (2) 5 U.S.C. § 7513 (which  can be used for performance or conduct that harms the efficiency of the  service).  

This choice of chapters may be confusing for  laypeople, as chapter 75 is typically thought of in the context of misconduct,  since that is the section of the statute for misconduct-based actions.  However, agencies are permitted to take a  performance-based action under either statute, provided they comply with the  process for the chapter they select.  It  is very important that the agency put the employee on notice of which law is  being used – and for which charges – prior to taking the action, as it usually  cannot later re-characterize an action into one taken under a different law and  MSPB has been told it cannot do so for the agency.1

As explained in our 2009 report, *Addressing Poor Performers and the Law*, the decision by  management regarding which section of the law to use for a performance-based  action tends to vary greatly by agency and by the nature of the work being  performed.  Some officials may opt for  chapter 75 because they prefer not to have a formal performance improvement  period (a requirement in chapter 43), while others may opt for chapter 43  because of its lower standard of proof or the ability to impose a penalty that  is not subject to outside review once the agency has proven the performance  failure.  Agencies may also layer their  own, internal, requirements on actions under either chapter that may cause that  chapter to become a less appealing option for management.  For example, at least one agency requires  that management offer an informal performance improvement period before  implementing a formal performance improvement period.

Below is a table showing where the two chapters  share common practices and where they differ.

|                                           | Chapter 43                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Chapter 75                                                                                                                                                                                                                                                                                         |
|-------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Critical Element                          | Agency *must* prove the performance deficiency is in a critical element.2                                                                                                                                                                                                                                                                                                                                                                                                         | Agency is *not* required to prove the performance deficiency is in a critical element.3                                                                                                                                                                                                            |
| Efficiency of the Service                 | Agency is *not* required to prove that the adverse action will promote the efficiency of the    service.4                                                                                                                                                                                                                                                                                                                                                                         | Agency *must* prove that the adverse action will promote the efficiency of the service.5                                                                                                                                                                                                           |
| Burden of Proof                           | Action must be supported by *substantial evidence*.  This means that a reasonable person might    find the evidence supports the agency’s findings regarding the poor    performance, even though other reasonable persons might disagree.6                                                                                                                                                                                                                            | Action must be supported by a *preponderance of the evidence*.  This means that a reasonable person would    find the evidence makes it more likely than not that the agency’s findings    regarding the poor performance are correct.7                                                 |
| Establishment of Performance Expectations | When the employee’s performance in one or    more critical elements is unacceptable, the employee will: (1) be notified of    the deficiency; (2) be offered the agency’s assistance to improve; and (3) be    warned that continued poor performance could lead to a change to lower grade    or removal.8  (This is commonly referred to as the PIP,    an abbreviation for both performance improvement plan and also for    performance improvement period.) | The extent to which an employee is on notice    of the agency’s expectations is a factor in determining the appropriateness    of the penalty.9  Also, an agency cannot require that an    employee perform better than the standards that have been communicated to the    employee.10 |
| Recency of Events                    | A change to a lower grade or a removal action    cannot be based on performance that is more than 1-year old at the time of    the issuance of the proposal notice.11                                                                                                                                                                                                                                                                                                             | While there is no requirement that an action    be proposed within a particular period of time, unexplained excessive delays    can have a negative effect upon the agency’s ability to prove the action is    proper and warranted.12                                                       |
| Advance Notice                            | The agency must provide a notice of proposed    action and a reasonable opportunity to reply 30 days before any action can be    taken.13                                                                                                                                                                                                                                                                                                                                         |
| Content of Advance Notice                 | The notice must state the specific instances    of poor performance that are the basis for the action *and also the critical performance element involved.*14                                                                                                                                                                                                                                                                                                                     | The notice must state the specific instances    of poor performance that are the basis for the action.15                                                                                                                                                                                           |
| Deciding Official                         | Must be a person higher in the chain of    command than the person who proposed the action.16                                                                                                                                                                                                                                                                                                                                                                                     | The deciding official does *not* have to be a person higher in the    chain of command than the person who proposed the action.17                                                                                                                                                                  |
| Agency Decision                           | Agency must issue a final decision within an    additional 30 days of the expiration of the 30 days advance notice period.18                                                                                                                                                                                                                                                                                                                                                      | Agency is under no particular time    constraint, other than there cannot be a delay so extensive that it    constitutes an error that harms the employee.19                                                                                                                                       |
| Decline Following Improvement             | If the employee’s performance improves during    the PIP, and remains acceptable for 1 year, a new PIP is necessary before    taking an action *under this chapter*.20                                                                                                                                                                                                                                                                                                      | There is no obligation to offer a period of    improvement at any point.21                                                                                                                                                                                                                         |
| Penalty Mitigation                        | Once the agency meets the requirements to    take an action, MSPB *cannot* reduce    the agency’s penalty.22                                                                                                                                                                                                                                                                                                                                                                | After finding that the agency meets the    requirements to take a chapter 75 action, MSPB *may* reduce the agency’s penalty if that penalty is unreasonable.23                                                                                                                               |
| *Douglas* Factors                         | The *Douglas* factors are not used.24                                                                                                                                                                                                                                                                                                                                                                                                                                             | The agency must consider the relevant *Douglas* factors when reaching a    decision on the appropriate penalty.25                                                                                                                                                                                  |
| Affirmative Defenses                      | The agency action will not be sustained if    the employee was harmed by the agency’s failure to follow procedures or if    the agency decision was reached as a result of the commission of a prohibited    personnel practice.26                                                                                                                                                                                                                                          |
| Merit Principles                          | Merit principles must be adhered to in all    performance-based actions.27                                                                                                                                                                                                                                                                                                                                                                                                        |

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1*Wilson v. Department of Health and Human Services*, 770 F.2d 1048,  1055 (Fed. Cir. 1985) (holding that the agency cannot later use a law it did  not invoke).  *See Hanratty v. Federal Aviation Administration*, 780 F.2d 33, 35  (Fed. Cir. 1985) (holding that MSPB cannot re-characterize which law was used); *Lovshin v. Department of the Navy*,  767 F.2d 826, 843 (Fed. Cir. 1985).  *Lovshin* specifically stated that the  agency using chapter 43 could use “an alternative” or “additional” charge under  chapter 75.  The Board does not have any  precedential decisions in which an agency proposed a removal simultaneously  using both chapters 43 and 75 with one expressed as the alternative to the  other.  As 5 U.S.C. § 1204(h) prohibits the  Board from issuing advisory opinions we will not use this opportunity to  resolve that question, only note that *Lovshin* uses both “alternative” and “additional” as words to describe the agency’s  options.2 5 U.S.C. § 4301(3).3 “Case law does not require that a specific standard of  performance be established and identified in advance for the appellant in an  action brought under chapter 75; rather, it simply requires that, when an  agency takes an action for unacceptable performance under chapter 75, it prove  that its measurement of the appellant’s performance was both accurate and  reasonable.”  *Moore v. Department of the Army*, 59 M.S.P.R. 261, 265 (1993).4*Lovshin v. Department of the Navy*, 767 F.2d 826, 834 (1985).  5 5 U.S.C. §  7513(a).  The action must be taken “only  for such cause as will promote the efficiency of the service.”6 5 U.S.C. §  7701(c)(1)(A).  Substantial evidence  means “[t]he degree of relevant evidence that a reasonable person, considering  the record as a whole, might accept as adequate to support a conclusion, even  though other reasonable persons might disagree.”  5 C.F.R. § 1201.4(p).  When enacting the Civil Service Reform Act of  1978 (CSRA), the conference report indicates this lower burden of proof was used  “because of the difficulty of proving  that an employee’s performance is unacceptable.”  H.R.  Conf. Rep. 95‐1717, 139. 7 5 U.S.C. §  7701(c)(1)(b). Preponderance of the evidence means “[t]he degree of relevant  evidence that a reasonable person, considering the record as a whole, would  accept as sufficient to find that a contested fact is more likely to be true  than untrue.”  5 C.F.R. § 1201.4(q).8 5 C.F.R. §§ 432.104,  432.105(a).9*Fairall v. Veterans Administration*, 844 F.2d 775, 776 (1987); *Douglas v. Veterans Administration*, 5 M.S.P.R. 280, 306 (1981).  This means that if the agency did not express  a performance expectation to the employee (in performance standards or by other  means), the lack of notification would be considered as a mitigating factor  when deciding if the agency’s action was appropriate.  *Fairall v. Veterans Administration*, 33 M.S.P.R. 33, 45-46 (1987). 10*Shorey v. Department of the Army*, 77 M.S.P.R. 239, 244 (1998).11 5 U.S.C. §  4303(c)(2)(a).12*See Baldwin v. Department of Veterans Affairs*, 109 M.S.P.R. 392, ¶  15 (2008) (reiterating that a charge may be dismissed if an agency’s delay in  proposing the adverse action is unreasonable and prejudicial to the appellant).  An unexplained delay may create the appearance that the agency did not consider  the conduct serious or chose to act for an improper reason.  *Compare  Brown v. Department of the Treasury*, 61 M.S.P.R. 484, 492 (1994) (holding  that it was a mitigating factor when the agency did not propose disciplinary  action until 11 months after it learned about the incident) *with Cates v. Department of Agriculture*,  24 M.S.P.R. 468, 471 (1984) (holding that a 1-year delay in proposing the  removal action, resulting in the proposal occurring shortly after the appellant  filed his grievance, was not proof of retaliation when the agency adequately  explained the reasons for the delay), *aff’d*,  776 F.2d 1065 (Fed. Cir. 1985).13 For chapter 75  actions, the agency may effectuate the removal in less than 30 days if there is  reasonable cause to believe the employee has committed a crime for which a  prison sentence may be imposed.  5 U.S.C.  § 7513(b)(1) and (2).  14 5 U.S.C. §  4303(b)(1)(a)(i) and (ii).15 An agency must give the employee a  notice containing the charges as well as an explanation of its evidence and  provide the employee an opportunity to respond.   A failure to take any of these steps will result in the action being  reversed on the basis that it violates the employee’s minimum due process  rights.  *Greene v. Department of Health and Human Services*, 48 M.S.P.R. 161,  166 (1991); *see also**Cleveland Board of Education v.  Loudermill*, 470 U.S. 532 (1985); *Stephen  v. Department of the Air Force*, 47 M.S.P.R. 672, 680-81 (1991).16 5 U.S.C. § 4303(b)(1)(D)(ii).  Technically, for a chapter 43 action, the  term is that a higher-level official must “concur” in the action, not that the  “deciding” official must be at a higher level.  *See**Franco v. Department of Health and Human Services*, 32 M.S.P.R. 653,  657 (1987).  However, when practitioners  speak of this role, the term “deciding official” is often used for both chapter  75 and chapter 43 actions.17 The decision will be  valid if it has “the knowledge and approval of an official with termination  authority.”  This power to terminate is  derived from the power to appoint.  *Vandewall v. Department of Transportation*,  55 M.S.P.R. 561, 564 (1992).  In a chapter  75 action, “it is well settled that the proposing and the deciding official may  be the same person.”  *Davis v. Department of Transportation*,  39 M.S.P.R. 470, 478 (1989).  *See also Cross v. Veterans Administration*,  16 M.S.P.R. 429, 431 (1983); *Belanger v.**Department of Transportation*, 16  M.S.P.R. 304, 309 (1983).18 5 U.S.C. § 4303.  An extension of an additional 30 days is  possible for any one of six purposes described at 5 C.F.R §  432.105(a)(4)(i)(B).  An extension for  any other purpose must be obtained from the Office of Personnel Management  (OPM) under the procedures specified at 5 C.F.R. §  432.105(a)(4)(i)(C).  19*See* 5 U.S.C. § 7701(c)(2)(A); *Day  v. Department of Housing and Urban Development*, 50 M.S.P.R. 680, 682  (1991).  In *Day*, the appellant claimed the agency action should be invalidated  because of a 4-month delay between the issuance of the notice of proposed  removal and the removal decision.  MSPB held  that the appellant failed to show he was harmed by the agency’s delay, and thus  the action would not be invalidated on those grounds. 20 5 C.F.R §  432.105(a)(2).21 “The requirement of prior notification of deficient  performance necessary to a chapter 43 removal is conspicuously and purposely  absent from” the criteria to take a chapter 75 action.  *Fairall  v. Veterans Administration*, 844 F.2d 775, 776 (1987).  22*Lisiecki v. Merit Systems Protection Board*, 769 F.2d 1558, 1567-68  (Fed. Cir. 1985), *cert. denied*, 475  U.S. 1108 (1986).  23*Id*. 24 The *Douglas* factors come from a case (*Douglas v. Veterans Administration*, 5  M.S.P.R. 280, 305-06 (1981)) that lists what a deciding official  should consider when determining the appropriate penalty to address problems  with an employee.  Because the *Douglas* factors are used to determine if  an agency’s penalty should be mitigated, and a chapter 43 penalty cannot be  mitigated, the *Douglas* factors are  not used for chapter 43 actions. * Lisiecki v. Merit Systems Protection Board*,  769 F.2d 1558, 1565-66 (Fed. Cir. 1985), *cert.  denied*, 475 U.S. 1108 (1986).  25*See  Cunningham v. U.S. Postal Service*, 112 M.S.P.R. 457, ¶ 6 (2009) (explaining that if an agency  imposes a removal action under a zero tolerance policy without giving bona fide  consideration to the appropriate *Douglas* factors, its penalty determination is not entitled to deference); *Hilliard v. U.S. Postal Service*, 111 M.S.P.R. 634, ¶ 7  (2009) (holding that an agency’s failure to consider relevant *Douglas* factors of which it was aware  warrants an award of attorney fees), *aff’d*,  403 F. App’x 504 (Fed. Cir. 2010); *Halper  v. U.S. Postal Service*, 91 M.S.P.R. 170, ¶ 7 (2002) (explaining that a  failure to consider all of the relevant *Douglas* factors will result in the adjudicator performing the assessment using the *Douglas* factors and modifying the  penalty if necessary).  26 5 U.S.C. § 7701(c)(2).27*Lovshin v. Department of the Navy*, 767 F.2d 826, 840-41 (1985)  (explaining that “Congress intended that merit principles must be adhered to by  agencies in all performance-based actions” and “Congress itself designed a  statutory framework which implements merit principles in connection with chapter  75 actions”).