[Federal Register Volume 79, Number 64 (Thursday, April 3, 2014)]
[Proposed Rules]
[Pages 18658-18661]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-07443]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 79, No. 64 / Thursday, April 3, 2014 / 
Proposed Rules

[[Page 18658]]



MERIT SYSTEMS PROTECTION BOARD

5 CFR Part 1201


Practices and Procedures

AGENCY: Merit Systems Protection Board.

ACTION: Proposed rule.

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SUMMARY: The Merit Systems Protection Board (MSPB or the Board), 
following an internal review of MSPB regulations and after 
consideration of comments received from MSPB stakeholders, is proposing 
to amend its rules of practice and procedure by amending its 
regulations governing how jurisdiction is established over Board 
appeals.

DATES: Submit written comments on or before May 5, 2014.

ADDRESSES: Submit your comments concerning this proposed rule by one of 
the following methods and in accordance with the relevant instructions:
    Email: mspb@mspb.gov. Comments submitted by email can be contained 
in the body of the email or as an attachment in any common electronic 
format, including word processing applications, HTML and PDF. If 
possible, commenters are asked to use a text format and not an image 
format for attachments. An email should contain a subject line 
indicating that the submission contains comments to the Board's 
proposed rule regarding jurisdiction. The Board asks that parties use 
email to submit comments if possible. Submission of comments by email 
will assist MSPB to process comments and speed future actions, 
including publication of a final rule.
    Fax: (202) 653-7130. Faxes should be addressed to William D. 
Spencer and contain a subject line indicating that the submission 
contains comments concerning the Board's proposed rule regarding 
jurisdiction.
    Mail or other commercial delivery: William D. Spencer, Clerk of the 
Board, Merit Systems Protection Board, 1615 M Street NW., Washington, 
DC 20419.
    Hand delivery or courier: Comments should be addressed to William 
D. Spencer, Clerk of the Board, Merit Systems Protection Board, 1615 M 
Street NW., Washington, DC 20419, and delivered to the 5th floor 
reception window at this street address. Such deliveries are only 
accepted Monday through Friday, 9 a.m. to 4:30 p.m., excluding Federal 
holidays.
    Instructions: As noted above, MSPB requests that commenters use 
email to submit comments, if possible. All comments received will be 
made available online at the Board's Web site, including any personal 
information provided, unless the comment includes information claimed 
to be Confidential Business Information or other information whose 
disclosure is restricted by law. Those desiring to submit anonymous 
comments must submit comments in a manner that does not reveal the 
commenter's identity, include a statement that the comment is being 
submitted anonymously, and include no personally-identifiable 
information. The email address of a commenter who chooses to submit 
comments using email will not be disclosed unless it appears in 
comments attached to an email or in the body of a comment.

FOR FURTHER INFORMATION CONTACT: William D. Spencer, Clerk of the 
Board, Merit Systems Protection Board, 1615 M Street NW., Washington, 
DC 20419; phone: (202) 653-7200; fax: (202) 653-7130; or email: 
mspb@mspb.gov.

SUPPLEMENTARY INFORMATION: 

Background

    On June 7, 2012, the Board published a proposed rule proposing 
amendments to 5 CFR 1201.56. 77 FR 33663. Now, as then, 5 CFR 1201.56 
provides without qualification that the Board's jurisdiction must be 
proven by preponderant evidence. In the proposed rule, the Board noted 
that 5 CFR 1201.56 is in conflict with a significant body of Board case 
law holding that certain jurisdictional elements may be established by 
making nonfrivolous allegations. The Board therefore proposed to amend 
this regulation to allow the use of nonfrivolous allegations to 
establish certain jurisdictional elements.
    The Board received numerous thoughtful comments concerning the 
proposed amendments to this regulation. Because many of the comments 
addressed matters that went well beyond the scope of the original 
proposed rule, the Board decided to withdraw the proposed rule and 
reconsider the existing regulation in light of the comments and 
internal discussions spurred by the comments. 77 FR 62350.

Continuing Review

    Shortly after the withdrawal of the proposed amendments to 5 CFR 
1201.56, the Board directed an internal MSPB working group (MSPB 
regulations working group) to thoroughly review 5 CFR 1201.56 and any 
related issues concerning the Board's jurisdiction. The MSPB 
regulations working group thereafter developed several options for the 
Board to consider. On November 8, 2013, the Board published a 
solicitation of public comments in the Federal Register seeking 
additional public comment on the various options developed by the MSPB 
regulations working group. 78 FR 67076. Pursuant to this solicitation 
of public comments, the text, summaries, and analyses of the options 
developed by the MSPB regulations working group were made available for 
review at the Board's Web site (www.mspb.gov/regulatoryreview/index.htm). In response to the request for public comment, the Board 
received 72 pages of comments from 26 commenters. The options prepared 
by the MSPB regulations working group and all comments received in 
response to the request for comments are available on the Board's Web 
site and will remain posted there under the heading ``Regulatory Review 
Initiative'' through the completion of this rulemaking.

Summary of Proposed Changes/Section-by-Section Analysis

    Following a review of the proposals submitted by the MSPB 
regulations working group and the public comments received by the Board 
in response to its request for comments, the Board has decided to 
propose the following amendments to its regulations governing how 
jurisdiction is established over Board appeals.

Section 1201.4 General Definitions

    The Board proposes to transfer the definitions of ``substantial 
evidence,'' ``preponderance of the evidence,'' and ``harmful error'' 
from 5 CFR 1201.56(c)

[[Page 18659]]

to this regulation as paragraphs (p), (q) and (r) to consolidate 
important definitions in one regulation. None of these definitions are 
otherwise changed. The Board also proposes to add a new definition of 
``nonfrivolous allegation'' in paragraph (s) that defines this term as 
an assertion that, if proven, could establish the matter at issue. The 
definition further explains that an allegation made under oath or 
penalty of perjury will be considered nonfrivolous when it is more than 
conclusory, plausible on its face, and material to the legal issues in 
the appeal. This definition is consistent with current Board case law.

Section 1201.56 Burden and Degree of Proof

    5 CFR 1201.56 currently provides that the appellant bears the 
burden of proving jurisdiction by preponderant evidence; that the 
agency bears the burden of supporting a performance-based action by 
substantial evidence and supporting any other action by preponderant 
evidence; and that the appellant will prevail if he or she can 
establish a successful affirmative defense under 5 U.S.C. 7701(c)(2) 
(specifically, that the agency action was based on a harmful procedural 
error, constituted a prohibited personnel practice, or was not in 
accordance with law). The foregoing principles do not apply, however, 
in four categories of appeals: An individual right of action (IRA) 
appeal under the Whistleblower Protection Act, 5 U.S.C. 1221; an appeal 
under the Veterans Employment Opportunities Act (VEOA), 5 U.S.C. 
3330a(d); an appeal under the Uniformed Services Employment and 
Reemployment Rights Act (USERRA), 38 U.S.C. 4324, in which the 
appellant alleges discrimination or retaliation in violation of 38 
U.S.C. 4311; and an appeal of denial of restoration under 5 CFR part 
353.
    To correct this anomaly, this proposed rule would amend section 
1201.56 to limit its applicability to appeals other than IRA appeals, 
VEOA appeals, USERRA discrimination and retaliation appeals, and denial 
of restoration appeals and insert a new regulation, revised section 
1201.57, to address the burden and degree of proof and scope of review 
in such appeals.
    The Board further proposes to transfer the definitions of 
``substantial evidence,'' ``preponderance of the evidence,'' and 
``harmful error'' from 5 CFR 1201.56 to 5 CFR 1201.4. Finally, the 
Board also proposes to add a new requirement that the administrative 
judge inform the parties of the proof required as to the issues of 
jurisdiction, the timeliness of the appeal, and affirmative defenses.
    The following authorities justify the Board's proposed rule 
limiting the coverage of section 1201.56 to appeals other than IRA, 
VEOA, USERRA (discrimination and retaliation), and denial of 
restoration appeals, as well as the proposed creation of a new 
regulation (section 1201.57) covering such appeals: Yunus v. Department 
of Veterans Affairs, 242 F.3d 1367, 1371 (Fed. Cir. 2001) (to establish 
jurisdiction in an IRA appeal, the appellant must prove that he has 
exhausted his remedy before the Office of Special Counsel and make 
nonfrivolous allegations that he engaged in whistleblowing activity by 
making a protected disclosure and the disclosure was a contributing 
factor in the agency's decision to take or fail to take a personnel 
action); Williams v. Department of the Air Force, 97 M.S.P.R. 252, ] 6 
(2004) (to establish jurisdiction in a VEOA appeal involving a claimed 
violation of veterans' preference rights, the appellant must show that 
he exhausted his remedy with the Department of Labor and make 
nonfrivolous allegations that he is a preference eligible and the 
agency violated his rights under a statute or regulation relating to 
veterans' preference); Weed v. Social Security Administration, 112 
M.S.P.R. 323, ] 13 n.5 (2009) (to establish jurisdiction in a VEOA 
appeal involving a claimed violation of the right to compete, the 
appellant must show that he exhausted his remedy with the Department of 
Labor and make nonfrivolous allegations that he is a veteran as 
described in 5 U.S.C. 3304(f)(1) and the agency denied him the right to 
compete under merit promotion procedures for a vacant position for 
which the agency accepted applications from outside its own workforce); 
Gossage v. Department of Labor, 118 M.S.P.R. 455, ] 10 (2012) (to 
establish jurisdiction in a USERRA discrimination case, the appellant 
must make nonfrivolous allegations that an executive agency committed 
discrimination based on his past military service or obligation to 
perform service); Chambers v. Department of the Interior, 116 M.S.P.R. 
17, ] 12 (2011) (the appellant bears the burden of proof on the merits 
in an IRA appeal); Dale v. Department of Veterans Affairs, 102 M.S.P.R. 
646, ] 13 (2006) (the appellant bears the burden of proof on the merits 
in a VEOA appeal); Clavin v. U.S. Postal Service, 99 M.S.P.R. 619, ] 6 
(2005) (the appellant bears the burden of proof on the merits in a 
USERRA discrimination case); Marren v. Department of Justice, 51 
M.S.P.R. 632, 638-39 (1991) (in an IRA appeal, the Board lacks 
authority to adjudicate an appellant's affirmative defense under 5 
U.S.C. 7701(c)(2)), aff'd, 980 F.2d 745 (Fed. Cir. 1992) (Table); 
Goldberg v. Department of Homeland Security, 99 M.S.P.R. 660, ] 11 
(2005) (in a VEOA appeal, the Board lacks authority to adjudicate an 
appellant's affirmative defense under 5 U.S.C. 7701(c)(2)); Bodus v. 
Department of the Air Force, 82 M.S.P.R. 508, ]] 14-17 (1999) (in a 
USERRA discrimination case, the Board lacks authority to adjudicate an 
appellant's affirmative defense under 5 U.S.C. 7701(c)(2)).
    The Board justifies the proposed rule excluding denial of 
restoration appeals from the coverage of section 1201.56 as follows. 
Until recently, the Board had held that jurisdiction over a restoration 
appeal was established by nonfrivolous allegations that the agency 
violated the appellant's restoration rights under 5 CFR part 353. Chen 
v. U.S. Postal Service, 97 M.S.P.R. 527, ] 12 (2004). In Bledsoe v. 
Merit Systems Protection Board, 659 F.3d 1097 (Fed. Cir. 2011), the 
court affirmed the Board's dismissal of a restoration appeal for lack 
of jurisdiction, but found that the Board's jurisdiction must be 
established in such appeals by preponderant evidence as required by 5 
CFR 1201.56, citing Garcia v. Department of Homeland Security, 437 F.3d 
1322 (Fed. Cir. 2006) (en banc). As a result, the Board found it 
necessary to overrule Chen in Latham v. U.S. Postal Service, 117 
M.S.P.R. 400, ] 10 (2012) and to apply the preponderance of the 
evidence standard for jurisdictional determinations in restoration 
appeals. However, the court also stated in Garcia that, if the Board 
has a sufficient basis, it may adopt a nonfrivolous allegation standard 
for an appeal by changing its regulation on jurisdiction in accordance 
with notice and comment rulemaking procedures. 437 F.3d at 1343. The 
Board finds that it is appropriate in restoration appeals to apply the 
nonfrivolous allegation standard.

Section 1201.57 Establishing Jurisdiction in Appeals Not Covered by 
Section 1201.56; Burden and Degree of Proof; Scope of Review

    This proposed regulation, which the Board proposes to insert in 
place of existing section 1201.57, would make clear that, in contrast 
to an appeal governed by section 1201.56, in IRA appeals, VEOA appeals, 
USERRA discrimination and retaliation appeals, and denial of 
restoration appeals, the appellant is not required to establish all 
jurisdictional elements by preponderant evidence and bears the burden 
of proof on the merits. This proposed regulation

[[Page 18660]]

also contains a provision requiring administrative judges to provide 
notice to the parties of the specific jurisdictional, timeliness, and 
merits elements that apply in a particular appeal, as well as a 
provision directing the parties to statutes and regulations that 
contain additional information concerning such appeals.

Sections 1201.57, 1201.58, and 1201.59

    In order to allow the insertion of new section 1201.57, the Board 
proposes to redesignate existing section 1201.57 as section 1201.58 and 
existing section 1201.58 as section 1201.59.

List of Subjects in 5 CFR Part 1201

    Administrative practice and Procedure.

    Accordingly, for the reasons set forth in the preamble, the Board 
proposes to amend 5 CFR part 1201 as follows:

PART 1201--PRACTICES AND PROCEDURES

0
1. The authority citation for 5 CFR part 1201 continues to read as 
follows:

    Authority:  5 U.S.C. 1204, 1305, and 7701, and 38 U.S.C. 4331, 
unless otherwise noted.

0
2. In Sec.  1201.4, add new paragraphs (p), (q), (r), and (s) as 
follows:


Sec.  1201.4  General definitions.

* * * * *
    (p) Substantial evidence. The 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. This is a lower standard of proof than preponderance of 
the evidence.
    (q) Preponderance of the evidence. The 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.
    (r) Harmful error. Error by the agency in the application of its 
procedures that is likely to have caused the agency to reach a 
conclusion different from the one it would have reached in the absence 
or cure of the error. The burden is upon the appellant to show that the 
error was harmful, i.e., that it caused substantial harm or prejudice 
to his or her rights.
    (s) Nonfrivolous allegation. A nonfrivolous allegation is an 
assertion that, if proven, could establish the matter at issue. An 
allegation generally will be considered nonfrivolous when, under oath 
or penalty of perjury, an individual makes an allegation that:
    (1) Is more than conclusory;
    (2) Is plausible on its face; and
    (3) Is material to the legal issues in the appeal.
0
3. Revise Sec.  1201.56 to read as follows:


Sec.  1201.56  Burden and degree of proof.

    (a) Applicability. This section does not apply to the following 
types of appeals which are covered by Sec.  1201.57:
    (1) An individual right of action appeal under the Whistleblower 
Protection Act, 5 U.S.C. 1221;
    (2) An appeal under the Veterans Employment Opportunities Act, 5 
U.S.C. 3330a(d);
    (3) An appeal under the Uniformed Services Employment and 
Reemployment Rights Act, 38 U.S.C. 4324, in which the appellant alleges 
discrimination or retaliation in violation of 38 U.S.C. 4311; and
    (4) An appeal under 5 CFR 353.304, in which the appellant alleges a 
failure to restore, improper restoration of, or failure to return 
following a leave of absence.
    (b) Burden and degree of proof. (1) Agency. Under 5 U.S.C. 
7701(c)(1), and subject to the exceptions stated in paragraph (c) of 
this section, the agency bears the burden of proof and its action must 
be sustained only if:
    (i) It is brought under 5 U.S.C. 4303 or 5 U.S.C. 5335 and is 
supported by substantial evidence (as defined in Sec.  1201.4(p)); or
    (ii) It is brought under any other provision of law or regulation 
and is supported by a preponderance of the evidence (as defined in 
Sec.  1201.4(q)).
    (2) Appellant. (i) The appellant has the burden of proof, by a 
preponderance of the evidence (as defined in Sec.  1201.4(q)), with 
respect to:
    (A) Issues of jurisdiction;
    (B) The timeliness of the appeal; and
    (C) Affirmative defenses.
    (ii) In appeals from reconsideration decisions of the Office of 
Personnel Management (OPM) involving retirement benefits, if the 
appellant filed the application, the appellant has the burden of 
proving, by a preponderance of the evidence (as defined in Sec.  
1201.4(q)), entitlement to the benefits. Where OPM proves by 
preponderant evidence an overpayment of benefits, an appellant may 
prove, by substantial evidence (as defined in Sec.  1201.4(p)), 
eligibility for waiver or adjustment.
    (c) Affirmative defenses of the appellant. Under 5 U.S.C. 
7701(c)(2), the Board is required to reverse the action of the agency, 
even where the agency has met the evidentiary standard stated in 
paragraph (b) of this section, if the appellant:
    (1) Shows harmful error in the application of the agency's 
procedures in arriving at its decision (as defined in Sec.  1201.4(r));
    (2) Shows that the decision was based on any prohibited personnel 
practice described in 5 U.S.C. 2302(b); or
    (3) Shows that the decision was not in accordance with law.
    (d) Administrative Judge. The administrative judge will inform the 
parties of the proof required as to the issues of jurisdiction, the 
timeliness of the appeal, and affirmative defenses.


Sec. Sec.  1201.57 and 1201.58  [Redesignated as Sec. Sec.  1201.58 and 
1201.59]

0
4. Redesignate Sec. Sec.  1201.57 and 1201.58 as Sec. Sec.  1201.58 and 
1201.59, respectively.
0
5. Add Sec.  1201.57 to read as follows:


Sec.  1201.57  Establishing jurisdiction in appeals not covered by 
Sec.  1201.56; burden and degree of proof; scope of review.

    (a) Applicability. This section applies to the following types of 
appeals:
    (1) An individual right of action (IRA) appeal under the 
Whistleblower Protection Act, 5 U.S.C. 1221;
    (2) A request for corrective action under the Veterans Employment 
Opportunities Act (VEOA), 5 U.S.C. 3330a(d);
    (3) A request for corrective action under the Uniformed Services 
Employment and Reemployment Rights Act (USERRA), 38 U.S.C. 4324, in 
which the appellant alleges discrimination or retaliation in violation 
of 38 U.S.C. 4311; and
    (4) An appeal under 5 CFR 353.304, in which an appellant alleges a 
failure to restore, improper restoration of, or failure to return 
following a leave of absence (denial of restoration appeal).
    (b) Matters that must be proven by a preponderance of the evidence. 
An appellant who initiates an appeal covered by this section has the 
burden of proof, by a preponderance of the evidence (as defined in 
Sec.  1201.4(q)), on the following matters:
    (1) When applicable, exhaustion of a statutory complaint process 
that is preliminary to an appeal to the Board;
    (2) Timeliness of an appeal under 5 CFR 1201.22;
    (3) Standing to appeal, when disputed by the agency or questioned 
by the Board. (An appellant has ``standing'' when he or she falls 
within the class of persons who may file an appeal under the law 
applicable to the appeal.); and
    (4) The merits of an appeal, if the appeal is within the Board's 
jurisdiction and was timely filed.
    (c) Matters that must be supported by nonfrivolous allegations. 
Except for matters described in paragraphs (b)(1) and (3) of this 
section, in order to establish jurisdiction an appellant who initiates 
an appeal covered by this section must make nonfrivolous

[[Page 18661]]

allegations (as defined in Sec.  1201.4(s)) with regard to the 
substantive jurisdictional elements applicable to the particular type 
of appeal he or she has initiated.
    (d) Scope of the appeal. Appeals covered by this section are 
limited in scope. With the exception of denial of restoration appeals, 
the Board will not consider matters described at 5 U.S.C. 7701(c)(2) in 
an appeal covered by this section.
    (e) Notice of jurisdictional, timeliness, and merits elements. The 
administrative judge will provide notice to the parties of the specific 
jurisdictional, timeliness, and merits elements that apply in a 
particular appeal.
    (f) Additional information. For additional information on IRA 
appeals, the reader should consult 5 CFR part 1209. For additional 
information on VEOA appeals, the reader should consult 5 CFR part 1208, 
subparts A & C. For additional information on USERRA appeals, the 
reader should consult 5 CFR part 1208, subparts A & B.
    For additional information on denial of restoration appeals, the 
reader should consult 5 CFR part 353, subparts A & C.

William D. Spencer,
Clerk of the Board.
[FR Doc. 2014-07443 Filed 4-2-14; 8:45 am]
BILLING CODE 7400-01-P