Improving Performance, Accountability and Responsiveness in the Civil Service

Comment 30426 argues that it would not be burdensome to the administration for OPM to provide individualized due process to employees affected by 7511(b)(2) determinations by providing notice and holding hearings before a neutral hearing officer.

Commenter does not appear to grasp that the President--not OPM-- will be making these determinations. Neither OPM nor any hearing officers will have authority over these Presidential determinations, so hearings before subordinate officers would at most produce non-binding recommendations to the President. OPM considers it self-evident that requiring the President to personally conduct individualized hearings before making 7511(b)(2) determinations would be highly burdensome and detract from his ability to perform his constitutional functions. RIFs and Individualized Due Process

Commenter 30426 argues that OPM was wrong to state in the proposed rule that agency reductions in force (RIFs) raise no constitutional concerns because they implicate legislative due process. Rather, commenter argues these judicial decisions have upheld RIFs on other grounds.

Commenter is correct that courts have not specifically upheld RIFs on the grounds they are governed by legislative due process. OPM appreciates the clarification of its analysis. However, the reasoning underlying judicial holdings that individualized due process is not required for RIFs indicates that it is not required for Presidential exclusions from subchapter II's coverage either.

As Commenter notes, “[c]ourts have also focused on the fact that `a pre-termination hearing would be a futile exercise' in the context of RIFs where there were no facts to adjudicate, as the employees' conduct was not at issue, and no legal criteria applied to the decision to reduce the staff.” \359\ Applying these criteria, a pre- determination 7511(b)(2) hearing would also be a futile exercise. In such a hearing there would be no facts to adjudicate, as previously discussed. Employee conduct would likewise not be at issue and would be wholly irrelevant to the policy-influencing determination. Further, such determinations are also “wholly discretionary judgement call[s]” not susceptible to judicial or administrative review for the reasons previously discussed.

\359\ Commenter points to, e.g., Rodriguez-Sanchez v. Municipality of Santa Isabel, 658 F.3d 125, 130 (1st Cir. 2011), for this proposition.

Consequently, pre- or post-decisional hearings over 7511(b)(2) determinations would be pointless. If the President were to determine regulation writers, or employees in an agency policy unit, or leaders of organizational units were policy-making and subject to 7511(b)(2) they have no basis on which to contest that determination. There is no standard available to show that a position's policy responsibilities are sufficiently large or small to qualify. They would be requesting a hearing over a discretionary Presidential judgment call. There is little likelihood that such a hearing, if provided, would alter the President's analysis about the appropriate scope of 7511(b)(2) exceptions. Due process does not require providing futile hearings that will have no substantive effect. 7511(b)(2) Determinations Are Legislative Actions That Do Not Require Individualized Due Process

Comment 30426 argues that while legislative action can terminate employees' property interest in their positions or adverse action procedures, administrative action does not provide sufficient due process to do so. Commenter cites several cases where courts ruled that administrative agencies could not terminate legislatively granted civil service procedures. The executive vs. legislative distinction Commenter draws is constitutionally irrelevant. Case-law does not draw a procedural due process distinction between whether an act is formally undertaken by the executive, legislative, or judicial branches. What matters is the character of the action, not which branch formally undertakes it. For the reasons discussed above, 7511(b)(2) determinations are generally applicable legislative actions that do not require individualized notice and an opportunity to respond. In United States v. Locke, the Supreme Court explained the due process requirements necessary to implement generally applicable rules. The Court held that legislative action is intrinsically sufficient in providing constitutionally adequate process by “enacting the statute, publishing it, and, to the extent the statute regulates private conduct, affording those within the statute's reach a reasonable opportunity both to familiarize themselves with the general requirements imposed and to comply with those requirements.” \360\ Presidential executive orders fulfill these requirements just as much as congressional or state legislation. None of the cases Commenter cites involved situations where the legislative branch authorized the executive branch to exclude positions from civil service procedures and the executive branch publicly followed the relevant procedures. They instead all involve the executive branch exceeding its authority or ignoring the relevant legislative rules.\361\ OPM does not see these cases as standing for the proposition that a procedurally regular executive determination issued pursuant to a legislative grant of authority would be constitutionally insufficient.

\360\ 471 U.S. 84 (1985).

\361\ For example, Commenter cites cases where a university simply disregarded an employee's tenured status. See Collins v. Marina-Martinez, 894 F.2d 474 (1st Cir. 1990). Commenter similarly cited a case where Cook County simply disregarded legislatively granted civil service procedures. See Carston v. Cnty. of Cook, 962 F.2d 749, 753 (7th Cir. 1992).

Several commenters raised related arguments that the rulemaking violated Supreme Court precedents pertaining to Federal employees' due process protections. Commenters 0638, 2390, 13440, 30426, and others argued that Schedule Policy/Career ignores the Supreme Court's decision in Arnett v. Kennedy.\362\ In Arnett, the Supreme Court held that the Lloyd-La Follette Act's post-termination procedures as used by the agency adequately protected the interests of the Federal employee who had been removed. This contrasted with a pre-termination hearing that the appellant had sought. This case involved an employee who was in the competitive service prior to passage of the CSRA. Schedule Policy/ Career will not affect the grant of post-termination hearings to employees facing adverse actions who remain in the competitive service. As previously articulated, Schedule Policy/Career is based on the ability of the President to except employees from the competitive service under 5 U.S.C. 7511(b)(2) because they are performing policy- influencing type work. Once such employees are placed in Schedule Policy/Career, they are not entitled to either a pre- or post- termination hearing for the reasons discussed above.

\362\ 416 U.S. 134 (1974).

Loudermill is Inapplicable To Schedule Policy/Career

A number of commenters asserted that the rule ignores the Supreme Court's Loudermill decision, Cleveland Board of Education v. Loudermill.\363\ In Loudermill, the Supreme Court held that certain public-sector employees can have a property interest in their employment, per Constitutional Due Process, and that this property interest entails a right to “some kind of hearing” before an employee may be terminated--a right to oral or written notice of charges against them, an explanation of the employer's evidence, and an opportunity to present their side of the issues. The commenters' argument hinges on whether an employee has been granted a statutory or administrative right to a notice or hearing either before or after an adverse action. Under current law, many Federal employees are entitled to a pre- termination notice and opportunity to respond, as well as a subsequent post-termination review and hearing for an adverse action. For positions in the competitive service, such hearings are required. In addition, many positions in the excepted service are also entitled to pre- and post-termination notice/hearings. Nevertheless, the right to a hearing is based the decision of a governmental entity to afford such procedures to its employees, or classes of employees. Schedule Policy/ Career positions will not be entitled to a notice/hearing precisely because of legislative action expressed at 5 U.S.C. 7511(b)(2) that exempts positions that are determined to be of a confidential, policy- determining, policy-making or policy-advocating character from these procedures. The statute does not provide for a notice or hearing on the issue of whether a position is of “a confidential, policy-determining, policy-making or policy-advocating character.” A Presidential decision on the issue is conclusive. For the reasons discussed above, such Presidential determinations are policies of general applicability that require following only legislative due process, and do not require prior individualized hearings and an opportunity to respond. Once positions are reclassified into this Schedule notice and an opportunity to respond is no longer required. Relatedly, no new congressional action is necessary to affect the provisions of Schedule Policy/Career since the CSRA has already spoken to the issue, and in implementing Schedule Policy/Career the executive is merely utilizing an existing authority.

\363\ 470 U.S. 532 (1985).

Several commenters expressed the related view that the rule is at odds with Perry v. Sindermann.\364\ OPM respectfully disagree with this view. The rule is not at odds with Perry v. Sindermann precisely because the rule provides that there is no expectation of a hearing, whether pre- or post-termination for individuals occupying positions filled under Schedule Policy-Career. In Perry, the plaintiff was denied renewal of his contract after 10 years of service teaching in the Texas Community College system. The plaintiff alleged that the non-renewal of his contract was based on his criticisms of Texas public officials. The Supreme Court found that the plaintiff was entitled to a due process hearing. However, this was based on the practices of the college at which he taught. Those practices established a de facto tenure program. There is nothing in Perry suggesting that the school or the State of Texas college governing body could not have amended or changed their rules to eliminate the “tenure type” protection relied upon by the plaintiff. Unlike the situation in Perry, employees whose positions fall under Schedule Policy/Career will be on notice that they have no right to a hearing prior to removal. There is no de facto or informal tenure attaching to positions under Schedule Policy/Career.

\364\ 408 U.S. 593 (1972).

Commenters 8239 and 27012 assert that the cases relied on in the proposed rule--Halverson v. Skagit County \365\ and Gallo v. U.S. District Court for the District of Arizona \366\--do not support OPM's assertion that the reclassification into Schedule Policy/Career is “legislative” in nature and therefore does not require individual due process. However, both cases support the propositions they were cited for in the proposed rule.\367\ Furthermore, as discussed above, various other cases support the proposition that reclassifying positions into Schedule Policy/Career is legislative in nature and therefore satisfies due process requirements.

\365\ 42 F.3d 1257 (9th Cir. 1994) (Halverson).

\366\ 349 F.3d 1169 (9th Cir. 2003) (Gallo).

\367\ See 90 FR 17211; Halverson, 42 F.3d at 1260-61; Gallo, 349 F.3d at 1182.

iii. Construing CSRA To Forbid Schedule Policy/Career Would Create Serious Constitutional Concerns

In the proposed rule, OPM explained that construing the CSRA to prohibit the President from making senior policy-influencing officials at-will would raise serious constitutional concerns. The constitution's Appointments Clause governs the appointment of “Officers of the United States”--officials who exercise significant authority pursuant to Federal law in continuing positions established by law. These officers are divided into two classes; principal officers who exercise final authority for the executive branch and are supervised, in their use of that authority, only by the President, and inferior officers whose actions are supervised by a principal officer. Constitutionally, most Federal officials are neither principal nor inferior officers, but employees without “significant authority” who assist constitutional officers in the performance of their duties.

The Supreme Court explained in Seila Law LLC v. Consumer Financial Protection Bureau (Seila Law) that Congress has little power to insulate constitutional officers (as opposed to employees) from accountability to the President. Article II of the Constitution vests all Federal executive power in the President. Consequently, the President must have authority to supervise--and if necessary, remove-- the officers who wield his delegated authority. “[T]he outermost constitutional limits of permissible congressional restrictions on the President's removal power” is restricting removals of “inferior officers with limited duties and no policymaking or administrative authority.” \368\ As OPM explained in the proposed rule, chapter 75 covers some inferior officers with substantive policymaking or administrative authority. Construing the CSRA to prevent the President from dismissing these officers at-will would contravene Article II's vesting executive power in the President. Construing 7511(b)(2) to allow the President to remove these officers' adverse action procedures eliminates the constitutional difficulty, as the removal protections would exist

at the President's sufferance.\369\ OPM believes that this is the best reading of the CSRA regardless. However, under the doctrine of “constitutional avoidance” courts interpret statutes, if possible, to avoid grave constitutional issues. Even if interpreting 7511(b)(2) to allow the President to remove incumbent officials' adverse action procedures was not the most natural interpretation of the law, it is a permissible one. OPM accordingly concluded the doctrine of constitutional avoidance would require this construction.

\368\ Seila Law LLC v. Consumer Fin. Prot. Bureau, 591 U.S. 197 (2020). The Court also recognized a second exception for the principal officers who lead multimember independent agencies that do not exercise significant executive power. Such principal officers are not covered by chapter 75 and thus not at issue in this rulemaking. Regardless, the Supreme Court recently heard oral argument in a case that will re-examine the continued validity of this exception for the heads of some independent agencies. See Trump v. Slaughter, No. 25A264, No. 25-332, 2025 WL 2692050 (U.S. Sept. 22, 2025).

\369\ 90 FR 17182, 17215 (Apr. 23, 2025).

Commenter 30426 argues that OPM's reliance on this reasoning is flawed. In this regard, Commenter 30426 asserts that (1) OPM failed to identify any statutorily-established civil service positions determined by the courts to be inferior officers, and more broadly that OPM has only identified two specific positions that are offices covered by subchapter II and Commenter disputes their status as offices; and (2) the Court's decision in United States v. Arthrex (2021) establishes that inferior officers with significant power may constitutionally possess removal protections.\370\ Therefore, Commenter 30426 argues that OPM fails to justify abandoning its prior determination in the 2024 final rule that subchapter II raises no constitutional concerns.\371\

\370\ 594 U.S. 1 (2021).

\371\ See 89 FR at 25007 (“[T]hese comments are mistaken in their assertion that `many senior career officials are inferior officers.' OPM is not aware of any judicial decision holding so and the comments cite none.”).

Contrary to Commenter 30426's first argument, OPM has identified examples of positions that are likely inferior officers whose removal protections are unconstitutional if subchapter II binds the President. Commenter 30426 argues that OPM is required to cite specific judicial decisions to justify each position that OPM labels as being occupied by an inferior officer. However, this onerous requirement would lead to the conclusion that almost no inferior officers exist in the Federal Government beyond those explicitly labelled by Federal courts. Such a conclusion does not follow from court precedent and Commenter 30426's “requirement” misrepresents how judicial decisions are implemented.

A judicial decision holds that a specific position is--or is not--a constitutional office. The executive branch then applies the principles established by the courts in reaching these holdings to assess when other positions are likely offices. For example, the U.S. Department of Labor has applied the principles of Seila Law,\372\ Arthrex,\373\ and Lucia v. Securities and Exchange Commission \374\ to arguments raised in cases regarding the constitutionality of removal protections for its administrative law judges.\375\ Similarly, OPM--applying these same principles--found many positions that are likely inferior officers covered by subchapter II, even though these positions are not directly governed by prior cases.\376\

\372\ 591 U.S. 197 (2020).

\373\ 594 U.S. 1 (2021).

\374\ 585 U.S. 237 (2018).

\375\ See Howard v. Apogee Coal Co., BLR, BRB No. 20-0229, slip op. at 3-5 (Oct. 18, 2022).

\376\ While not relevant to this rulemaking, OPM acknowledges that there also may be inferior officers with removal protections in the Senior Executive Service, such as Regional Directors at the Federal Labor Relations Authority (FLRA RDs), that would raise similar constitutional concerns. FLRA RDs have significant delegated authority under 5 U.S.C. 7105(e)(1), which includes the authority (1) to determine whether a group of employees is an appropriate unit; (2) to conduct investigations and to provide for hearings; (3) to determine whether a question of representation exists and to direct an election; and (4) to supervise or conduct secret ballot elections and certify the results thereof. See 5 U.S.C. 7105(e)(1).

For example, as OPM noted in the proposed rule, EEOC office directors in the field, including directors of district, area, field, and local offices, are likely inferior officers with unconstitutional removal protections. Such directors are expressly created by law. Title 42 provides that the EEOC “Chairman . . . shall appoint, in accordance with the provisions of title 5 governing appointments in the competitive service, such officers, agents, attorneys, administrative law judges, and employees as he deems necessary to assist it in the performance of its functions . . . The Commission may establish such regional or State offices as it deems necessary to accomplish the purpose of this subchapter.\377\ Pursuant to this express legislative authorization, the EEOC has by regulation created offices in the field, including district, area, field, and local offices, to assist in its administration and enforcement of the Civil Rights Act, and the EEOC Chair has appointed directors to lead these offices. These positions continue as long as the EEOC regulations remain in effect. Therefore, directors occupy continuing positions established by law.\378\

\377\ 42 U.S.C. 2000e-4(a), (f).

\378\ Commenter 30426 also argues that EEOC Field Office Directors cannot be constitutional officers because their offices are established by regulation and not specifically established by statute. Commenter's source for this assertion is a concurring opinion signed by a single Supreme Court justice. Respectfully, concurrences represent the views of the justices who issue them, but they are not the law. Caselaw has frequently recognized that offices can be established by regulation if those regulations are themselves authorized by statute. See, e.g., United States v. Mouat, 124 U.S. 303, 307-08 (1888). In United States v. Maurice, 26 F.Cas. 1211, 1215 (No. 15,747) (C.C.D. Va. 1823) Justice Marshall concluded that, at least for purposes of a suit to enforce a purported officeholder's bond, the office of agent of fortifications had been created by congressionally approved and authorized Army regulations. So positions created by legislatively authorized regulations can be offices and have been consistently held as such since the earliest days of the Republic. Regardless, as discussed above, the relevant statutory provisions directly authorize the EEOC to create regional offices and appoint officers, so Commenter's objection is inapposite.

Further, as detailed in the proposed rule,\379\ district, area, field, and local office directors clearly exercise significant authority pursuant to EEOC regulations, including authority to serve notices of charges, make a final determination of reasonable cause, negotiate and sign conciliation agreements, negotiate settlements, withdraw charges, issue no-cause determinations, and issue notices of right to sue.\380\ District, area, field, and local directors thus exercise significant authority pursuant to law, which is why EEOC regulations have long described them as “officers.” \381\

\379\ 90 FR at 17212.

\380\ See 5 CFR 1601.10, 1601.14, 1601.18, 1601.19, 1601.20, 1601.21, 1601.24. Field Office Directors do not have unreviewable or final authority to bring charges of violations of the Civil Rights Act. However, unreviewable authority distinguishes principal vs. inferior officers--not between officers and employees. See, e.g., Freytag v. C.I.R., 501 U.S. 868, 881-82 (1991) (finding that special tax judges were officers not employees even though they did not have final decisional authority but issued opinions that did not take effect unless adopted by a higher-ranking official).

\381\ See 29 CFR 1601.5 (“The term `district director' shall refer to that person designated as the Commission's chief officer in each district.”).

Commenter dismisses this analysis because “OPM identifies no decision in which any court has . . . determine[d] that a particular employee at a middle management level in a remote office was an inferior officer.” However, Commenter identifies no case in which courts held an official who wielded the significant authority of an EEOC district, area, field, or local office director was not a constitutional officer either. In the absence of controlling precedents, the executive branch looks to the reasoning underlying Appointments Clause precedents. That reasoning indicates EEOC district, area and local office directors are inferior officers covered by the Appointments Clause because they wield significant administrative authority pursuant to law in continuing positions established by law. Under Seila Law these inferior officers cannot constitutionally be insulated from Presidential removal. Accepting Commenter's construction of the CSRA makes applying subchapter II to these officers unconstitutional.

OPM is aware of many other positions that are likely offices wielding significant policymaking or administrative authority that are covered by subchapter II. For example, National Labor Relations Board (NLRB) Regional Attorneys (Regional Attorneys) are also likely inferior officers. The office of Regional Attorneys is provided for by statute, including an express requirement they be appointed by the NLRB and giving them direct statutory authority to bring--or decline to bring-- civil actions seeking injunctive relief in Federal court for specific violations of the law.\382\ Statutory authority to seek--or decline to seek--an injunction in Federal court to vindicate public rights is a well-established significant authority of an officer.\383\ OPM is aware that NLRB policies currently require Regional Attorneys to obtain approval from the Presidentially-appointed Board before exercising their statutory authority to seek an injunction. But whether their significant authority is subject to higher level review is determinative of whether Regional Attorneys are principal or inferior officers, not whether they are officers at all.\384\ Statutorily vested responsibility for seeking a Federal court injunction is significant authority for Appointments Clause purposes. Thus, it seems likely that Regional Attorneys--who exercise significant authority pursuant to law in continuing positions provided for by law--are Officers of the United States. They also exercise considerable administrative authority. Consequently, under Seila Law interpreting 7511(b)(2) to prevent the President from holding them accountable would raise grave constitutional concerns.

\382\ See 29 U.S.C. 154 (“The Board shall appoint . . . such attorneys, examiners, and regional directors . . . as it may from time to time find necessary for the proper performance of its duties.”); 29 U.S.C. 160(l) (“Whenever it is charged that any person has engaged in an unfair labor practice . . . preliminary investigation of such charge shall be made . . . If, after such investigation, the officer or regional attorney to whom the matter may be referred has reasonable cause to believe such charge is true and that a complaint should issue, he shall, on behalf of the Board, petition any United States district court within any district where the unfair labor practice in question has occurred, is alleged to have occurred, or wherein such person resides or transacts business, for appropriate injunctive relief pending the final adjudication of the Board with respect to such matter.”); 29 CFR 101.37 (”the officer or regional attorney to whom the matter has been referred will make application for appropriate temporary relief or restraining order in the district court of the United States within which the unfair labor practice is alleged to have occurred or within which the party sought to be enjoined resides or transacts business.”).

\383\ See Buckley v. Valeo, 424 U.S. 1, 141 & n.177 (1976) (finding authority to “bring civil action (including proceedings for injunctions) against any person who has engaged or who may engage in acts or practices which violate” the law is reserved to officers).

\384\ See, e.g., Freytag v. C.I.R., 501 U.S. at 881-82 (finding that special tax judges were officers even though they did not have final decisional authority but issued opinions that did not take effect unless adopted by a higher-ranking official).

Additionally, under Freytag v. Commissioner \385\ and Lucia,\386\ officials who perform duties typically assigned to administrative adjudicators are constitutional officers. Scholars have documented that agencies employ over 10,000 non-administrative law judge adjudicators, who are generally employed in either senior General Schedule grades or as Senior Level employees and are covered by subchapter II.\387\ These adjudicators frequently exercise substantive administrative or policy- making authority through their decisions. Under Seila Law, construing the CSRA to insulate these officers from Presidential supervision is unconstitutional.

\385\ 501 U.S. at 868, 881-82 (1991).

\386\ 585 U.S. at 248-49.

\387\ Kent Barnett & Russell Wheeler, Non-ALJ Adjudicators in Federal Agencies: Status, Selection, Oversight, and Removal, 53 Ga. L. Rev., 1, 33-34 (2018) https://digitalcommons.law.uga.edu/cgi/viewcontent.cgi?article=2294&context=fac_artchop. OPM discusses non- ALJ adjudicators here because ALJs are not covered by subchapter II of chapter 75.

For example, the MSPB employs dozens of administrative judges to hear adverse action appeals. These administrative judges occupy “continuing positions established by law” under the Appointments Clause.\388\ Most importantly, these administrative judges exercise significant authority that mirrors the authority highlighted by the Court in Freytag and Lucia: they “take testimony” by receiving evidence, examine witnesses at hearings, and taking pre-hearing depositions; \389\ “[c]onduct trials” by administering oaths, ruling on motions, and generally regulate the course of a hearing and the conduct of parties and counsel; \390\ “rule on the admissibility of evidence;” \391\ they have “[p]ower to enforce compliance with discovery orders;” \392\ and they may punish all contemptuous conduct, including violations of those orders “by means as severe as excluding the offender from the hearing.” \393\ Therefore, pursuant to Freytag and Lucia, MSPB administrative judges meet all the criteria for a constitutional officer. The MSPB recognizes this and requires agency- head appointments to AJ positions. Further, MSPB AJs exercise substantial administrative authority because they decide whether to uphold or reverse employee removals, demotions, and long-term suspensions across the executive branch.\394\ If the CSRA is construed to prevent the President from waiving their adverse action procedures, then under Seila Law, Lucia, and Freytag, chapter 75 cannot be constitutionally applied to MSPB administrative judges. This reasoning likely applies to many more non-ALJ administrative adjudicators across the executive branch.

\388\ Section 1204(a)(1) of Title 5, U.S. Code, provides for the MSPB to “hear, adjudicate, or provide for the hearing or adjudication of all matters within” MSPB's jurisdiction. Section 1204(h) of Title 5, U.S. Code, further authorizes the MSPB “to prescribe such regulations as may be necessary for the performance of its functions,” and 5 U.S.C. 1204(j) authorizes the MSPB Chair to “appoint such personnel as may be necessary to perform the functions of the Board.” Pursuant to this statutory authorization, the MSPB promulgated regulations that authorize (1) the designation of administrative employees as “judges” who perform adjudicatory functions, see 5 CFR 1201.4(a), and (2) the appointment of “[j]udges in the regional and field offices [to] hear and decide initial appeals and other assigned cases as provided for in the Board's regulations,” 5 CFR 1201.10(c).

\389\ Freytag, 501 U.S. at 881; see 5 CFR 1201.41(b).

\390\ Freytag, 501 U.S. at 882; see 5 CFR 1201.41(b).

\391\ Freytag, 501 U.S. at 882; see 5 CFR 1201.41(b).

\392\ Freytag, 501 U.S. at 882; see 5 CFR 1201.41(b).

\393\ Lucia, 585 U.S. at 248; see 5 CFR 1201.43.

\394\ 5 U.S.C. 7701(b)(2)(A).

Many additional other Federal positions are likely constitutional offices. OPM is mindful of Justice Breyer's analysis in Free Enterprise Fund v. Public Company Accounting Oversight Board (2010). Justice Breyer noted “that the term `inferior officer' is indefinite but [ ] efforts to define it inevitably conclude that the term's sweep is unusually broad” \395\ Justice Breyer observed that the Supreme Court has held the following officials “officers”: (1) a district court clerk; \396\ (2) “thousands of clerks in the Departments of the Treasury, Interior and the othe[r]” departments,\397\ who are responsible for “the records, books, and papers appertaining to the office,” \398\ (3) a clerk to “the assistant treasurer” stationed “at Boston;” \399\ (4) and (5) an “assistant-surgeon” and a “cadet-engineer” appointed by the Secretary of the Navy; \400\ (6) election monitors; \401\ (7) United States attorneys; \402\ (8) Federal marshals; \403\

(9) military judges; \404\ and (10) judges in Article I courts.\405\ Given the breadth and depth of the positions the Court has held are offices, OPM thinks it likely that there are many more positions covered by subchapter II that are constitutional offices with significant administrative or policymaking authority. Accordingly, construing the CSRA to prevent the President from waiving the application of subchapter II to policy-influencing positions would create serious constitutional challenges.

\395\ Free Enter. Fund v. Pub. Co. Acct. Oversight Bd., 561 U.S. 477, 539 (2010) (Breyer, J. dissenting).

\396\ Ex parte Hennen, 38 U.S. (13 Pet.) 230, 258 (1839).

\397\ United States v. Germaine, 99 U.S. 508, 511 (1878).

\398\ Ex parte Hennen, 38 U.S. at 259.

\399\ United States v. Hartwell, 73 U.S. (6 Wall.) 385, 392 (1868).

\400\ United States v. Moore, 95 U.S. 760, 762 (1878); Perkins, 116 U.S. at 484.

\401\ Ex parte Siebold, 100 U.S. 371, 397-99 (1879).

\402\ Myers v. United States, 272 U.S. at 159.

\403\ Morrison v. Olson, 487 U.S. 654, 676 (1988); Ex parte Siebold, 100 U.S. at 397.

\404\ Weiss v. United States, 510 U S. 163, 170 (1994).

\405\ Freytag, 501 U.S. at 880-81.

OPM also notes that restrictions on removing some non-officer employees may also be constitutionally problematic. To date, the Court has not decided whether restrictions on removing non-officer employees are categorically constitutional. In Free Enterprise Fund, the Court stated “[w]e do not decide the status of other Government employees, nor do we decide whether lesser functionaries subordinate to officers of the United States must be subject to the same sort of control as those who exercise significant authority pursuant to the laws.” \406\ This issue has not properly been before the Court because the President has statutory authority to waive Chapter 75's application to policy- influencing employees. The Supreme Court and lower court judges have pointed out that “[s]enior or policymaking positions in government may be excepted from the competitive service to ensure Presidential control.” \407\ Therefore, the Court has not needed to address the constitutionality of the CSRA's application to non-officer employees with substantive policymaking or administrative authority.

\406\ 561 U.S. at 506 (internal quotation marks omitted).

\407\ Id.; see Free Enterprise Fund v. Public Co. Accounting Oversight Bd., 537 F.3d 667, 686-87 (D.C. Cir. 2008) (Kavanaugh, J., dissenting).

However, the implication of the Court's Article II precedents is that Congress cannot shield non-officer employees who exercise meaningful executive power from accountability to the President. The Supreme Court has held that executive officials at all grades must be accountable to the President so that the government is accountable to the people.\408\ Under this logic, officials who meaningfully and substantively shape Federal policy through the performance of their duties--even if they do not formally exercise “significant” enough authority to be considered an Officer of the United States--must be accountable to the President. Otherwise, the public could not determine where the blame for a “pernicious measure, or series of measures ought really to fall.” \409\

\408\ Seila Law, 591 U.S. at 203-04 (“[A]s a general matter the Constitution gives the President the authority to remove those who assist him in carrying out his duties. Without such power, the President could not be held fully accountable for discharging his own responsibilities; the buck would stop somewhere else.”) (internal quotation marks omitted); Free Enterprise Fund, 561 U.S. at 497-98 (“[T]he Framers sought to ensure that those who are employed in the execution of the law will be in their proper situation, and the chain of dependence be preserved; the lowest officers, the middle grade, and the highest, will depend, as they ought, on the President, and the President on the community.”) (internal quotation marks omitted).

\409\ Free Enterprise Fund, 561 U.S. at 498.

If the CSRA is construed to prevent the President from holding senior employees with policy-making or policy-determining responsibilities accountable, then the “chain of dependence” between government policy and the people would be broken, and the President would not be fully responsible for the executive power wielded in his name.\410\ To construe the CSRA in the manner suggested by Commenters 30426 and 32647 \411\ would force courts to determine whether Congress can categorically shield policy-making, sub-officer employees from Presidential accountability, and, if not, where the line between permissible and impermissible restrictions runs. These are weighty constitutional questions. Construing the CSRA to allow the President to exempt positions he determines are policy-influencing avoids the need to judicially resolve these grave constitutional issues.

\410\ See id.

\411\ Commenter 32647 also argues the proposed rule cited dicta from Free Enterprise Fund. OPM disagrees as the cited language is clearly part of the analysis in the decision. Compare 90 FR 17212 with Free Enterprise Fund, 561 U.S. at 497-506.

Commenter 30426 makes a second argument against OPM's conclusion that the canon of constitutional avoidance requires construing the CSRA to permit the instant rulemaking. Commenter contends that the Supreme Court's decision in Arthrex approved of removal restrictions for inferior officers with substantial authority.\412\ In Arthrex the Supreme Court held subjecting administrative patent judges' (APJ) decisions to higher level review, rather than striking down their removal protections, was the appropriate remedy to situate them as inferior officers rather than principal officers.

\412\ 594 U.S. at 25-26.

OPM rejects Commenter's analysis. Nothing in Arthrex suggests that restricting the President's ability to remove inferior officers with substantial authority is constitutionally permissible.\413\ The issue of whether APJs could constitutionally possess removal restrictions that bind the President--as opposed to whether severing those removal protections was the appropriate remedy to situate them as inferior officers instead of principal officers--was neither briefed nor decided by the Court.

\413\ See id.

The Arthrex court did allow APJs--constitutional officers--to remain covered by subchapter II of Chapter 75. However, when the Court issued Arthrex President Biden made it clear he supported CSRA adverse action procedures and wanted them to apply broadly to career employees. He had rescinded E.O. 13957 and expressed strong opposition to it on policy grounds.\414\ Therefore, the issue of Presidentially-binding removal restrictions was not before the Court.\415\ The court evaluated a system where inferior officers had removal protections that the President could waive, but expressly had chosen to retain as a policy matter.\416\ That is constitutionally quite different. The Court has previously explained that Chapter 75 removal restrictions for senior employees do not raise constitutional issues precisely because the President can waive them--they do not restrict his power.417 418

\414\ E.O. 14003, 86 FR 7231 (Jan. 22, 2021).

\415\ Free Enterprise Fund, 561 U.S. at 507 (“While the full extent of that authority is not before us, any such authority is of course wholly absent with respect to the Board. Nothing in our opinion, therefore, should be read to cast doubt on the use of what is colloquially known as the civil service system within independent agencies.”).

\416\ See id.

\417\ See Free Enterprise Fund, 561 U.S. at 506-07 (“Nor do the employees referenced by the dissent enjoy the same significant and unusual protections from Presidential oversight as members of the Board. Senior or policymaking positions in government may be excepted from the competitive service to ensure Presidential control, and members of the Senior Executive Service may be reassigned or reviewed by agency heads (and entire agencies may be excluded from that Service by the President).”) (internal quotation marks omitted).

\418\ OPM notes that the regulations this rulemaking rescinds prevent the President from waiving subchapter II's applicability to incumbent officers and employees. As long as these regulations remain in effect, subchapter II procedures present serious constitutional challenges because they do not apply to policy- influencing positions at the President's discretion.

Consequently, OPM correctly noted in the proposed rule that the Arthrex remedy was focused on the line dividing principal and inferior officers, not accountability to the President's Article II executive authority. The Court's remedy appropriately addressed the relevant constitutional defect--unreviewable decisional authority being

vested in officers who were not appointed as principal officers-- without needing to consider the issue of Article II accountability to the President.\419\

\419\ The Appointments Clause requires all principal officers to be appointed by the President with Senate consent, but permits Congress to authorize the President or agency heads to appoint inferior officers without Senate involvement.

Commenter 30246 also argues that OPM has failed to identify any officials covered by subchapter II who have the sort of significant authority that administrative judges exercise, hold positions established by law, and have been found constitutionally ineligible for adverse action coverage under subchapter II. Commenter misses OPM's point that these cases do not exist because 5 U.S.C. 7511(b)(2) generally provides the President with (heretofore latent) authority to exempt relevant positions from those procedures. As a result, courts have not had to confront this question. As for specific positions adjudicated by a court, as explained above, under Freytag,\420\ Lucia,\421\ and Arthrex,\422\ adjudicatory positions such as MSPB administrative judges are generally offices. If 5 U.S.C. 7511(b)(2) does not allow the President to exclude these positions from subchapter II's coverage, and their adjudicatory duties have substantive administrative or policymaking consequences, then under Selia Law any Presidentially-binding removal restrictions are unconstitutional.

\420\ 501 U.S. at 881-82.

\421\ 585 U.S. at 248-49.

\422\ 594 U.S. at 23.

Commenter 30426 further argues that having failed to identify any actual inferior officers subject to section 7511(b)(2)'s protections, and in light of Arthrex's holding that even such officers--if they existed--can constitutionally have removal restrictions, OPM fails to support its argument that the doctrine of constitutional avoidance requires reading the term of art “confidential, policy-determining, policy-making or policy-advocating” as including career employees. OPM rejects this analysis for the reasons discussed above. OPM has identified such offices, and this reading misconstrues Arthrex's holding.

Commenter 30426 also argues that “even if OPM could identify any such officers, it may well be, as in Arthrex, that a simple change to the nature of their relationship with their supervisors would remedy any perceived constitutional issues, while also honoring Congress' grant of adverse action appeal rights to all career employees.” Commenter 30426 also claims that “Arthrex teaches that no change would be required at all if their work is already subject to review by supervisors possessing the authority to overrule them or render final decisions, as would likely be the case with an employee covered by” subchapter II.

Commenter 30426 misunderstands Arthrex and Appointments Clause caselaw. The test for an officer is wielding “significant authority.” \423\ Inferior officers are frequently subject to higher level review and often do not have ultimate authority on disputed matters.\424\ Providing additional supervision of an inferior officer's duties, or changing their reporting lines, could ensure that they are not principal officers but would not still leave them inferior officers wielding significant authority. If this authority involves substantive administrative or policymaking responsibilities, they must constitutionally be accountable to the President.

\423\ Lucia, 585 U.S. at 245.

\424\ See, e.g., Freytag, 501 U.S. at 881-82 (holding that the judges were inferior officers, who had significant authority, despite issuing decisions that did not take effect unless approved by a superior).

Commenters 8019, 13440, 13602, and others argued that Schedule Policy/Career and OPM's reasoning is contrary to the Supreme Court's decisions in Morrison v. Olson,\425\ and/or United States v. Perkins,\426\ both of which upheld restrictions on Presidential removal of inferior officers. Morrison upheld such restrictions for the position of Independent Counsel, while Perkins upheld them for a naval cadet engineer. Commenters similarly pointed to Myers v. United States,\427\ where the Supreme Court held Congress could restrict the President's ability to remove inferior officers appointed without Senate consent.\428\ Commenters also pointed to Humphrey's Executor v. United States,\429\ which upheld congressional restrictions on removal of Federal Trade Commission members--principal officers. Commenters argue that these cases show restrictions on removing even senior officers are constitutionally unproblematic.

\425\ 487 U.S. 654 (1988).

\426\ 116 U.S. 483 (1886).

\427\ 272 U.S. 52 (1926).

\428\ The Supreme Court made a similar finding in Perkins, holding “[w]e have no doubt that when Congress, by law, vests the appointment of inferior officers in the heads of departments, it may limit and restrict the power of removal as it deems best for the public interest. The constitutional authority in Congress to thus vest the appointment implies authority to limit, restrict, and regulate the removal by such laws as Congress may enact in relation to the officers so appointed.” See 116 U.S. at 485.

\429\ 295 U.S. 602 (1935).

As discussed extensively above, OPM believes modern Supreme Court caselaw reinforces the case for this rulemaking. In Seila Law LLC v. Consumer Financial Protection Bureau, 591 U.S. 197 (2020), the Court clarified Morrison and Perkins as a narrow exceptions that stand only for the proposition that Congress can restrict removals of inferior officers “with limited duties and no policymaking or administrative authority.” \430\ The Court also held that restrictions on removals of such officers constitute “the outermost constitutional limits of permissible congressional restrictions on the President's removal power.” \431\ Consequently, following Seila Law, OPM does not construe Perkins, Morrison, or Myers as standing for the proposition that Congress can restrict the President's ability to remove inferior officers who wield substantive administrative or policymaking authority. OPM instead believes, and agrees with Commenter 35512, that the modern caselaw strongly suggests that the narrow Morrison and Perkins exception would be unlikely to apply to most inferior officers who perform policy-influencing duties that would qualify for inclusion in Schedule Policy/Career.

\430\ 591 U.S. at 212.

\431\ Id. at 218.

While this rule applies to policy-influencing positions as defined at 5 U.S.C. 7511(b)(2) rather than strictly to inferior officers, OPM recognizes that there may be an overlap between these roles in a number of circumstances. Given the broad concerns expressed by the Court in Free Enterprise Fund that “[t]he President cannot `take Care that the Laws be faithfully executed' if he cannot oversee the faithfulness of the officers who execute them,” \432\ OPM believes the better interpretation of these precedents is that the President and/or agency heads may remove inferior officers despite putative statutory restrictions on such removals. Accordingly, to the extent this rule may apply to policy-influencing officials who are also deemed to be inferior officers, OPM believes that the President and/or his agency heads must have sufficient constitutional authority to effect removals when deemed necessary. Interpreting subchapter II to deny the President this flexibility would render the statute unconstitutional in these applications. By contrast, OPM's reading of the CSRA--that the President can discretionarily remove adverse action procedures from policy-influencing positions--eliminates this constitutional difficulty.

\432\ Free Enterprise Fund, 561 U.S. at 484.

OPM also believes reliance on Humphrey's Executor to rebuff this rulemaking is misplaced. The Supreme

Court's decision in Humphrey's Executor pertains to PAS members of multi-member regulatory boards and commissions that do not wield substantial executive power. Presidential appointees are not covered by subchapter II and are not the subject of this rule. The Supreme Court has also recently announced it will consider whether to overrule Humphrey's Executor and has stayed lower-court orders directing the reinstatement of tenure-protected independent agency heads that President Trump dismissed.\433\ Consequently, OPM infers that Humphrey's Executor may not be good law for long.

\433\ See, e.g., Trump v. Wilcox, 595 U.S.__, 145 S.Ct. 1415 (2025), (granting stay).

Commenter 8019 also argues that the justification for Schedule Policy/Career ignores the tripartite categorization of Federal workers between Principal Officers, Inferior Officers, and employees set forth in cases such as Lucia v. Securities and Exchange Commission, with the Supreme Court expressing no concerns with removal restrictions on mere employees.\434\ However, as the commenter notes, the Lucia court refused to take up the question of the constitutionality of “for cause” removal protections,\435\ and, indeed, Justice Breyer, writing for three justices in partial concurrence, specifically complained about the Court majority's refusal to take the questions specifically at issue in Commenter 8019's argument. In Free Enterprise Fund (2010) the Roberts Court similarly expressly declined to reach the question of how much accountability “lesser functionaries” must have to the President while noting that section 7511(b)(2) authorizes the President to except policymaking positions “to ensure Presidential control.” \436\ OPM believes that modern separation of powers jurisprudence indicates that Congress cannot insulate inferior officers with administrative or policymaking responsibilities from accountability to the President. For the reasons already discussed, OPM does not accept as controlling Commenter's argument that subchapter II raises no constitutional questions: subchapter II covers some inferior officers which raises clear constitutional problems, and it is not well- established Congress can insulate policymaking but non-officer employees from Presidential accountability. The Court's reasoning in cases like Free Enterprise Fund and Seila Law suggests but that, at least for some policymaking employees, Congress cannot.

\434\ 585 U.S. 237, 244-45 (2018).

\435\ See Lucia, 585 U.S. 237, 255-56 (2018) (Breyer, J., concurring in part and concurring in the judgment) (disagreeing with the majority's decision of the case on constitutional grounds where they did not also take up the question of removal).

\436\ 561 U.S. at 506.

iv. Additional Objections

Commenter 30426 argues that the proposed amendments are contrary to law, ultra vires, and unconstitutional. He footnotes to Justice Jackson's concurrence in Youngstown Sheet & Tube Co. v. Sawyer on the President taking measures incompatible with the expressed or implied will of Congress his power is at its lowest ebb.

As the Supreme Court recently explained, ultra vires applies only when an agency has taken action entirely “in excess of its delegated powers and contrary to a specific prohibition” in a statute.\437\ By contrast, here the President is not acting contrary to a specific statute but under specific statutory authorization--5 U.S.C. 7511(b)(2)(A). This rule falls under Justice Jackson's category one: “When the President acts pursuant to an express or implied authorization of Congress, his authority is at its maximum, for it includes all that he possesses in his own right plus all that Congress can delegate.” \438\ This rule is a fully lawful intra vires action, backed by the full power of the President and of Congress.

\437\ Nuclear Regul. Comm'n v. Texas, 605 U.S. 665, 681 (2025).

\438\ Youngstown Sheet, 333 U.S. at 635-36.

Commenter 30426 argues that public employees have less capacity than members of the general public to effect political change because applicable First Amendment precedents give them little protection when speaking out about personnel practices of a governmental employer. Commenter argues this heightens due process concerns. This is demonstrably untrue. In fact, political scientists have long documented that Federal employees are in fact a powerful and effective interest group.\439\

\439\ See, e.g., Johnson & Libecap at 17.

Commenter 30426 cites a 2016 Supreme Court case holding that the First Amendment prohibits discrimination against government employees based on their perceived political affiliation, not just their actual political affiliation, and that the entire Schedule Policy/Career enterprise is designed to discriminate against Federal employees because of their perceived political affiliation, therefore, violating the First Amendment.

OPM respectfully disagrees with Commenter 30426's premises and reading of the First Amendment. To succeed on a First Amendment retaliation claim a plaintiff must prove that the current career employees bound for Schedule Policy/Career engaged in conduct protected under the First Amendment; the President, OPM, and/or their employing agencies took sufficient action to deter a person of ordinary firmness from exercising their First Amendment rights; and that a causal link exists between the exercise of their First Amendment rights and the reassignment to Schedule Policy/Career.\440\ Commenter's argument fails every step of this analysis.

\440\ See Black Lives Matter DC v. Trump, 544 F.Supp.3d 15, 46 (D.D.C. 2021).

Commenter 30426's claims the President perceives Federal employees to be politically hostile is incomplete and misleading. While the President has taken issue with the conduct of some Federal employees, the President believes there are many other hard-working Federal employees performing valuable work for the American people. Commenter ignores the many times, discussed above, that the President has praised the work of Federal employees. Reading a few hyperbolic remarks literally and with no further context is highly misleading and does not establish a “perceived political affiliation” for the entire Federal workforce that triggers First Amendment scrutiny.

Moreover, there is no retaliatory action. The entire Schedule Policy/Career process is proceeding without any regard to political affiliation. OPM action in reviewing agencies' requests for placement of employees in Schedule Policy/Career does not include review of any employee's identity or other information that could reveal an employee's political affiliation. Schedule Policy/Career recommendations are focused on position duties, not individual traits of incumbent employees. There is simply no consideration of Federal employees' political views at any time, and thus no retaliatory action for employees' putative perceived political affiliations.

Additionally, there is no causal nexus between the putative First Amendment activity and placement in Schedule Policy/Career. In E.O. 14171 the President explained his motivation for issuing the order, namely the difficulty of removing poor performers and those who engage in misconduct (including policy resistance). Commenter 30426 does not show that the President was not motivated by these concerns. Nor could Commenter 30426, because these concerns--as OPM has documented--are real and serious and are why the

President issued the order. OPM agrees with the Commenter that Schedule Policy/Career employees retain their First Amendment right to be free from political discrimination, and the President has separately commanded as much.\441\ So long as Schedule Policy/Career employees work effectively to carry out the President's agenda, their jobs will be safe, no matter their personal political views.

\441\ OPM also notes that under First Amendment precedents governing public employees, government actions that restrict constitutionally protected speech are subject to a balancing test that weighs the value of the employees' speech interest against the government's need for efficient operations. See Connick v. Myers, 461 U.S. 138 (1983). OPM believes that this rulemaking would pass this balancing test if it was subject to First Amendment scrutiny as the rule will promote efficient management of the executive branch. However, for the reasons outlined above, OPM does not believe First Amendment scrutiny is triggered and so courts would not reach this balancing test.

Various commenters asserted that the rule violates Pickering v. Board of Education,\442\ Rutan v. Republican Party,\443\ Janus v. AFSCME,\444\ Branti v. Finkel,\445\ by requiring “compelled speech”, viewpoint discrimination, and other mandatory viewpoints, thus allegedly violating the First Amendment. E.O. 14171 explicitly emphasizes that patronage remains prohibited by defining Schedule Policy/Career to only cover “career positions.” It also expressly describes what is and is not required of Schedule Policy/Career employees prohibiting any requirements that employees pledge personal or political support for the President or his policies. The order and this rule also retain merit-based competitive hiring procedures. In short, the President has repeatedly forbidden treating Schedule Policy/ Career as patronage positions and consequently this rule raises no such constitutional concerns.

\442\ 391 U.S. 563 (1968).

\443\ 497 U.S. 62 (1990).

\444\ 585 U.S. 878 (2018).

\445\ 445 U.S. 507 (1980).

Some commenters asserted that the rule will encourage manipulation of data, e.g., scientific and economic, for political purposes. Several commenters suggested that the proposed rule, by modifying standards for discipline and dismissal, will allow political appointees to threaten or punish career appointees in Schedule Policy/Career positions in order to manipulate, alter, or withhold data necessary for informed scientific and economic decision-making. The operative theory behind the comment appears to be that professional standards can only be maintained if extensive regulatory and administrative hurdles exist with respect to discipline or dismissal of employees. To the contrary, most employees throughout the American economy enjoy limited or non- existent restrictions on their removal for performance or disciplinary reasons. This has not affected the quality of the output of most employees who serve under “at will” employment circumstances. There is no reason to believe that employees serving under Schedule Policy/ Career will be subject to lesser standards or professional expectations. One reason for establishing Schedule Policy/Career is to hold employees to higher standards of performance without the need for supervisors and/or managers to subject themselves to time consuming and often crippling procedures for correction of substandard or unprofessional work. Moreover, as noted supra, E.O. 14171 reinstates and retains the language provided in E.O. 13957 that requires agencies to establish rules to prohibit the same personnel practices prohibited by section 2302(b) of title 5, United States Code, with respect to any employee or applicant for employment in Schedule Policy/Career. Thus, in the very rare circumstances where employees may be improperly influenced to take action that is not warranted by professional standards, procedures will be in place to ensure that PPPs will not be tolerated for positions determined to be included under Schedule Policy/Career. OPM notes that commenters do not provide examples of at- will employment of employees with scientific responsibilities in state government resulting in such abuses, which strongly suggests such abuses under at-will employment systems are rare.

Commenters 3768, 13112, and others, expressed significant concern with the ability of agencies to subvert reduction in force procedures through placement of personnel in Schedule Policy/Career and subsequently terminating them. OPM believes such actions would be inconsistent with the purpose of the final rule. It would be inappropriate for agencies to exercise authority under this rule as a tool to conduct broad workforce reshaping simply to avoid reduction-in- force procedures. The proposed rule is intended to provide agencies with authority to address individual instances of unacceptable performance or misconduct demonstrated by career Schedule Policy/Career officials whose duties and responsibilities are critical to executing the President's policy agenda. Where an agency intends to release or terminate an employee or employees under conditions described in part 351 of this chapter, the agency should follow those procedures, or like procedures under similar authorities. Moreover, OPM is unaware of any initiatives to use Schedule Policy/Career as an alternative to RIFs for workforce restructuring and has no reason to believe the administration is contemplating such a measure. Baseless and inaccurate speculation is not a reason to decline to finalize the proposed rule.

Various commenters suggested that the rule violates the Major Questions Doctrine.\446\ The Major Questions Doctrine is a principle of statutory interpretation in administrative law that limits the authority of Federal agencies to regulate matters of major political or economic significance unless Congress provides explicit authorization.\447\ This rule does not violate the Major Questions Doctrine for four reasons. First, Congress has explicitly authorized these actions. Section 7511(b)(2) provides for excluding positions in the excepted service that are policy-influencing from subchapter II's coverage. Congress has spoken clearly and said the President can do this. Second, the Major Questions Doctrine is a tool for interpreting the scope of congressional delegation of authority to the executive branch. It is not clear this doctrine applies when interpreting the scope of congressional restrictions on the President's Article II authority over the executive branch. In such cases the President's own constitutional authority must also be considered. So, the Major Question Doctrine may not apply regardless. Third, this rule is expected to affect only about 2 percent of the Federal workforce (50,000 positions out of 2.2 million). This modest level of affected employees is not significant enough to implicate the Major Questions Doctrine. Finally, Presidents have commonly created or modified new groups of excepted positions within the civil service. Congress could hardly have failed to anticipate this routine use of Presidential authority. In the last 15 years, four new categories of excepted service positions have been created by both a Democratic and Republican President. Accordingly, OPM believes the Major Questions Doctrine is inapplicable to this rulemaking.

\446\ West Virginia v. Env't Prot. Agency, 597 U.S. 697 (2022).

\447\ OPM notes that the Major Questions Doctrine applies to placing limits on congressional delegations to the executive branch. It has no application to inherent Article II authorities.

In a similar vein, other commenters asserted that Schedule Policy/ Career violates the Non-Delegation Doctrine.

The Non-Delegation Doctrine is a concept that holds that one branch of government cannot delegate to another branch of government the power invested in that branch.\448\ OPM presumes that the commenter is suggesting that the creation of Schedule Policy/Career in the excepted service requires legislative branch action. OPM first notes that the constitution gives the President responsibility for supervising the executive branch. Consequently section 7511(b)(2) is not a delegation of congressional authority to the President but a limitation on congressional restrictions on pre-existing Presidential authority. This does not raise non-delegation concerns because Congress is not “delegating” executive power to the President in the first place. It is declining to restrict power the President already possesses. Second, even if non-delegation principles apply the Supreme Court's caselaw requires only an “intelligible principle” to guide executive branch action.\449\ The policy-influencing terms supply exactly that, so non- delegation requirements are satisfied regardless. Third, even assuming arguendo the commenter is correct on this point and Schedule Policy/ Career requires legislative action, the commenter fails to account for that Title 5 already gives the President authority to take these actions, as discussed throughout this rulemaking. OPM also notes that is would create serious Constitutional concerns under separation of powers doctrine to suggest that the President cannot hold policy- influencing subordinates accountable. Thus, Schedule Policy/Career does not run afoul of the Non-Delegation Doctrine.

\448\ J.W. Hampton, Jr. & Co. v. United States, 276 U.S. 394 (1928).

\449\ See, e.g., Fed. Commc'ns Comm'n v. Consumers Rsch., 606 U.S. 656 (2025).

Other commenters asserted that Schedule Policy/Career is arbitrary and capricious under Motor Vehicle Manufacturers Association v. State Farm Mutual Automobile Insurance Co.\450\ The preamble to the rule clearly articulates the benefits of Schedule/Policy Career and provides a reasoned analysis. Section 7511(b)(2) permits the President to establish a new category of positions in the excepted service. OPM's April 2024 final rule purposely misinterpreted section 7511(b)(2) as a “term of art” in order to avoid the plain meaning of the language of the statute, and to create a roadblock \451\ to a future Administration properly interpreting this language. Moreover, OPM has established cost savings accruing to government agencies through use of Schedule Policy/ Career rather than the use of traditional adverse action procedures.

\450\ 463 U.S. 29 (1983).

\451\ National Active and Retired Federal Employees Association, “OPM Proposes Rule Designed to Prevent Another Schedule F,” (Sept. 19, 2023), https://www.narfe.org/blog/2023/09/19/opm-proposes-rule-designed-to-prevent-another-schedule-f/.

Commenter 18863 asserts that the proposed rule improperly justifies use of E.O. 14171 to nullify the April 2024 final rule. Presumably, this commenter would require OPM to first “reverse” the April 2024 rule before proceeding to promulgate the instant rule. OPM strongly disagrees with this clumsy and unnecessary approach. The President establishes civil service policies in accordance with statutory authorities and OPM implements these policies.\452\ Even assuming arguendo that the April 2024 final rule must be rescinded in order for the current rule to be effected, the commenter provides no reason why OPM cannot both rescind the 2024 rule and simultaneously promulgate a replacement rule--which is exactly what this rulemaking action accomplishes.

\452\ 5 U.S.C. 1103(a)(5-7).

Some commenters tried to argue that Schedule Policy/Career will upend labor-management relations. The premise of this comment appears to be that placing policy-influencing positions into an “at will” status will substantially disturb the relationship between management and non-management employees within Federal agencies. At this time, OPM estimates that approximately 50,000 positions governmentwide will be placed into Schedule Policy/Career. This represents about 2 percent of the entire executive branch employment total (excluding U.S. Postal Service). For about 98 percent of employees, there will be no change in pre- and post-termination notice and due process procedures. The charge that changing removal procedures for 2 percent of all Federal employees will significantly upend and disturb labor relations seems designed to foment hysteria. Moreover, the vast majority of employees who will be affected by these proposed changes will typically be employed in more prominent and higher-graded positions that involve policy-influencing work. In particular, OPM expects that relatively few Federal employees represented by labor unions will be transferred into Schedule Policy/ Career. This is because 5 U.S.C. 7103(a)(11) and 7112(b)(1) statutorily exclude from collective bargaining management officials engaged in formulating, determining, or influencing agency policy. As a result, few bargaining unit employees perform duties that would make their positions eligible for Schedule Policy/Career.

One commenter asserted that the rule is a violation of 5 U.S.C. 555(b). This statutory provision relates to persons who are compelled to appear before an agency. They have a right to be represented by counsel or in some cases by another qualified party. Schedule Policy/ Career contains no provision compelling an appearance before an agency representative.

Various commenters asserted that Schedule Policy/Career violates the Antideficiency Act ADA because it will necessitate unauthorized spending on training and implementation. Nothing in Schedule Policy/ Career rule requires expenditures of appropriated funds beyond that which are normally appropriated to agencies for carrying out personnel management functions.

Other commenters argued that Schedule Policy/Career violates the Paperwork Reduction Act. This rule does not violate the PRA because it imposes no paperwork requirements on parties, whether current employees, employees converted to Schedule Policy-Career, or applicants for Federal employment including applicants for positions under Schedule Policy-Career.

OPM believes that implementing E.O. 14171 would improve the Federal Government's performance and accountability to the American people for several reasons. i. Recruitment and Retention Are Unharmed by This Rule

Commenter 30765 and others argue implementation of Schedule Policy/ Career will exacerbate recruitment and retention problems as applicants might be leery of taking jobs classified as Schedule Policy/Career if they knew they could be removed after a change in administration. This commenter, and others, voiced concerns that this rule would undermine agency recruitment and retention efforts. Some, like Commenter 16246, feared it would eliminate a competitive advantage in Federal hiring and recruitment, and that fear of job loss or reprisal or politicization would reduce the attractiveness of Federal jobs. Others, like Commenter 10727, were concerned that instituting Schedule Policy/Career would open the door to retribution and argued that individuals “considering whether to accept a career civil service position need to know that they will be valued for their knowledge, skills, and

abilities; evaluated based on merit; and not only protected from retribution for offering their candid opinions but encouraged to do so.” Relatedly, many of these commenters suggested that agency missions would be adversely affected by the destabilizing of the civil service, with large numbers of experienced staff leaving their positions during each change of administration.

OPM believes that the new Schedule Policy/Career will not create substantive recruitment and retention concerns or service disruption. OPM considers the commenters to fundamentally misunderstand the operations of this rule and Schedule Policy/Career more broadly. Commenters appear to characterize this rule as an attempt to politicize career positions and thereby create a new de facto schedule for political appointees. As discussed above, Schedule Policy/Career flatly rejects a return to the patronage system. OPM notes that E.O. 14171 defines Schedule Policy/Career positions as career positions, not political appointments. It was redesignated from “Schedule F” to “Schedule Policy/Career” precisely to clarify this status. Therefore, the E.O. not only provides, but generally requires, that Schedule Policy/Career positions be filled using merit-based competitive hiring procedures. As part of this process, political loyalty to the President is forbidden from being a prerequisite of holding a Schedule Policy/ Career position. The E.O. goes a step further, requiring agencies to proactively establish procedures to ensure compliance with that directive, to the extent those procedures are not already in place.

Moreover, employees in Schedule Policy/Career positions who perform well, and faithfully implement the President's agenda to the best of their ability, have little reason to fear dismissal based on non-merit factors. As discussed above, firing experienced policy-influencing employees who perform their duties with integrity and excellence would be counterproductive. While dismissing Schedule Policy/Career employees for poor performance or misconduct may create some disruption, over the long-term the government benefits from employing a high-performing and ethical workforce that understands that democracy requires subordinating their personal policy preferences to those of the voters. Consequently, OPM expects Schedule Policy/Career will not bring about the destabilizing separations commenters fear will occur, nor will it lead to losses of institutional knowledge or reduced employee investment in skills within agencies.

OPM also does not believe that Schedule Policy/Career would impair Federal recruitment and hiring efforts, as some commenters, including but not limited to Commenters 0941, 13414, and 16276, suggest. As noted, nothing in this rule permits political loyalty or litmus tests as part of the hiring process. Employees considering whether to apply for a Policy/Career position will know that if hired, it is because they were evaluated based on merit, taking their knowledge, skills, and abilities into account, not their political affiliation. They would also be filling long-term positions that do not typically disappear upon a change in administration. OPM also notes that systematically retaining poor performers, or those who engage in serious misconduct such as that which occurred at the FDIC and elsewhere, due to an inability to successfully utilize chapter 75 procedures, harms employee morale and can hurt recruitment and retention, especially when the individuals being retained are in influential positions such as those that will be classified as Schedule Policy/Career.

OPM agrees with Commenters 2104, 3624, 7170, 26062, and others who argue that adverse action procedures and appeals give Federal employees greater job security than exist in most other jobs. To the extent that employees value this job security, Schedule Policy/Career's removal of adverse action procedures would reduce the relative value of Federal employment to them. However, OPM no longer believes that this change will significantly impair Federal recruitment or hiring. As Commenter 32359 notes, Federal employees appear to place relatively little value on the availability of adverse action procedures.\453\ Eliminating these procedures for a small fraction of the Federal workforce is thus unlikely to meaningfully affect agency recruitment and retention. In addition, to the extent some employees may seek to leave the Federal Government for lack of job security, OPM views this as a positive result, opening the position to be filled by an employee who would seek to excel in a policy-influencing position who is committed to executing on the President's policy agenda and less concerned about personal job security and bureaucratic processes.

\453\ Comment 32359 draws OPM's attention to a recent Congressional Budget Office evaluation that concluded three-quarters of Federal employees value adverse action protections at less than 5 percent of their salary. See Congressional Budget Office Cost Estimate, Reconciliation Recommendations of the House Committee on Oversight and Government Reform at 6-7 (May 13, 2025), https://www.cbo.gov/system/files/2025-05/HouseOversight2025Reconciliation.pdf. OPM hereby incorporates this cost estimate into the administrative record and takes it to imply that, while job security is a benefit of Federal employment, Federal employees do not see it as a major element of their compensation packages.

Even excluding the nominal value of job security, the Federal Government offers a more generous benefits package than most comparable private-sector employers. For example, the Federal Government provides its employees with both defined benefit and defined contribution retirement plans. Very few private employers offer comparably generous retirement benefits. As a result, the Government generally offers Federal employees a benefits package that exceeds what they could expect to earn in the private sector for similar work. Congressional Budget Office data shows that Federal employees with a bachelor's degree receive $31.70 an hour in non-wage benefits, while comparable private-sector workers receive only $22.00 an hour in non-wage benefits.\454\ For employees with a Master's degree, those figures are $33.50 and $26.20 an hour in the Federal and private sectors, respectively.\455\ Even if Schedule Policy/Career reduces job security to some degree, the Federal Government will still offer a highly competitive benefits package necessary to attract quality talent.

\454\ Congressional Budget Office, Comparing the Compensation of Federal and Private-Sector Employees in 2022 at 15 (Apr. 2024), https://www.cbo.gov/system/files/2024-04/59970-Compensation.pdf.

\455\ Id.

Commenters such as 8375, 31460, and others characterize the rule as creating, functionally, at-will employees, and that this will drive knowledgeable employees into the private sector where they, in the words of the commenters, will not be unfairly targeted for dismissal for arbitrary reasons. This criticism, however, neglects that the vast majority of American employers also operate at-will. Consequently, agencies will not operate at a disadvantage in this regard vis- [agrave]-vis alternative jobs that prospective civil servants could apply for. To the extent this assessment is mistaken, however, OPM believes benefits of Schedule Policy/Career outweigh any such potential costs.

Commenters 14729, 23838, 28756, and 32822 argue that this rule could impede agencies' ability to hire scientific and technical personnel, particularly for scientific and cybersecurity positions. They assert that scientists require independence from agency leadership to adhere to the

scientific method free from political intrusion and so scientists would opt to go elsewhere. Similarly, commenters suggest that technical positions in high demand, like cybersecurity, being classified as Schedule Policy/Career would harm the Federal Government's ability to recruit talent.

OPM believes these commenters are exaggerating the scope or impact of the proposed rule on the scientific, cybersecurity, and technical communities. E.O. 14171 focuses coverage of Schedule Policy/Career on policy-influencing positions that exercise significant authority to shape and implement actions that significantly impact all Americans. These positions exercise authority delegated to them by the President. Although the E.O. does not specifically exclude these highly technical positions (e.g., scientists, cybersecurity experts, etc.) from inclusion in Schedule Policy/Career, it would be inappropriate to include or exclude these positions solely based on these duties. Rather, agencies will need to assess each position's duties within the meaning of their “confidential, policy-determining, policy-making, or policy-advocating character.” It is certainly possible that agencies will identify scientific and technical positions for inclusion in Schedule Policy/Career. However, OPM expects those positions will reflect policy-influencing duties that, for example, directs which scientific projects should be resourced throughout the agency or whether to advocate to Congress for additional appropriated funds to carry-out new projects. Each agency's determination about the policy- influencing character of these positions, not the fact that they conduct research or perform highly technical duties or functions will determine whether or not they are recommended for inclusion in Schedule Policy/Career. OPM expects that, generally, relatively few of these line scientific, cybersecurity, or technical positions will be moved into Schedule Policy/Career because most do not perform policy- influencing work. And as described elsewhere in this final rule, the number of impacted employees across the entire Federal civil service is relatively small--approximately 2%.

Finally, even if OPM believed that Schedule Policy/Career would impair agency recruitment and retention efforts, such costs must be considered alongside the benefits discussed above. Commenter 32359 draws OPM's attention to McKinsey research showing underperforming employees can reduce overall team productivity by 30 percent. OPM agrees this is a significant impairment on agency operations and believes the benefits of facilitating removal of underperforming employees who impair agency performance exceed the costs.

Moreover, the President has determined that the benefits of Schedule Policy/Career--which include enabling agencies to promptly dismiss underperforming senior employees who drag down their agencies' overall performance--outweigh the costs. Constitutionally and statutorily, the President is individually authorized to weigh those policy costs and benefits and decide which course of action to pursue. The President has determined that the challenges discussed above necessitate creating Schedule Policy/Career. It is OPM's responsibility to assist the President in the carrying out of his duties, not vice versa. Consequently, even if OPM were not independently persuaded that the benefits of Schedule Policy/Career outweigh the costs--and OPM is-- OPM would credit a Presidential judgement on the matter and adopt the same conclusion. ii. This Rule Will Improve Performance Management

Commenters 0563, 1152, 1142, and others argue Schedule Policy/ Career is a solution in search of a problem because it seeks to bypass the performance management shortcomings that have plagued Federal agencies. They suggest that it is a poorly designed tool to improve performance management because OPM has failed to provide evidence to suggest that all poor performers are policy-influencing employees, and, therefore, streamlining terminations based on the type of work an employee performs rather than how well the employee performs is suboptimal. OPM agrees that were Schedule Policy/Career designed to be a performance management tool for the entire Federal workforce it would be poorly designed. However, commenters misunderstand the purpose of E.O.s 13957 and 14171, and thereby, this rule, because it is not intended to be a performance management tool for the entire Federal workforce.

Neither E.O.s 13957 and 14171 nor this final rule claim to solve performance management challenges across the entire Federal workforce. Instead, the E.O.s and this rule explain that poor performance by policy-influencing employees is especially problematic because those are the employees who shape how the agency itself executes its mission. So, while OPM agrees with the fact that an employee encumbers a policy- influencing position says nothing about their individual performance, OPM recognizes that it says a lot about the ramifications if they perform poorly. OPM also acknowledges that chapter 43 and 75 procedures make it difficult for supervisors to effectively address poor performance or misconduct. The President has determined that heightened performance accountability is necessary in policy-influencing positions. This rulemaking and the executive orders underpinning it are not intended to address all performance management across the entire Federal workforce. Rather, the final rule is intended to address the serious consequences of poor performance, misconduct, or anti- democratic resistance committed by career employees critical to executing the President's agenda.

Commenters 12636, 13363, 19094, 34954, and others, expressed concern that Schedule Policy/Career employees should retain collateral rights such as freedom from unlawful discrimination on the basis of race, sex, religion, and other protected characteristics. They also argued that employees will be subject to more discrimination as a result of the rule. OPM notes that nothing in this rule precludes an employee covered by this final rule from filing complaints of discrimination with the EEOC. This rule provides for termination for misconduct or poor performance, and discrimination complaint processing is out of scope for this rule. Where an employee complains of discrimination, he or she can seek protection from unlawful practices through the EEO complaint process. Also, commenters' concerns that covered employees will be at more risk of experiencing invidious discrimination as a result of this rule are mere speculation. While covered employees may seek redress of terminations or other adverse actions at the EEOC, any such increase is not, on its own, indicative of more discrimination. And any such increase in the number of complaints brought before the EEOC is outweighed by the benefit to the public by enabling the President to execute on his constitutional prerogative to enact his agenda as endorsed by voters.

Commenters 14285 and 35065 argue that without access to appeal procedures under chapters 43 and 75, employees will pursue their claims in Federal district court. However, binding Supreme Court precedent holds that the CSRA is the exclusive remedial statutory framework for adverse action appeals and judicial review. See United States v. Fausto, 484 U.S. 439 (1988). Thus, employees whom the CSRA

statutorily precludes from appealing adverse actions cannot obtain judicial review in Federal court. Indeed, the CSRA was passed in large part to create a unified framework for judicial review of adverse actions instead of a patchwork of district court rulings. Rather than reliance on Article III courts, E.O. 13957 provides for internal executive branch procedures to prohibit unlawful discrimination. The CSRA does not give district courts jurisdiction to hear challenges to actions ordinarily covered under chapters 43 and 75 taken against Schedule Policy/Career employees. iii. Compensation Incentives

Comment 3727 raised questions on whether employees appointed under Schedule Policy/Career will be eligible for various compensation incentives including student loan repayment, awards, recruitment, relocation, and retention incentives (“3Rs”), and severance pay. Commenter 1876 suggested OPM implement retention incentives for long- tenured employees placed into Schedule Policy/Career to prevent brain drain in critical policy areas.

OPM appreciates these comments and recognizes that reassigning employees to positions in Schedule Policy/Career may result in ineligibility for certain incentives. These tools are used to recruit, retain, and relocate talent to positions critical to the agencies' missions and should remain available to agencies on a limited basis as positions transition to Schedule Policy/Career. OPM is basing this decision on needing to provide a grace period for continuation of receipt of an incentive(s) upon principles of equity and good conscience, to ensure that the government upholds its agreements with employees, and to mitigate the impact described by Commenter 1876. Therefore, OPM is modifying its regulations as immediately discussed below to allow agencies and employees under an applicable incentive agreement to complete the terms of their agreements or continue retention incentive payments when no service agreement is required as warranted.

Schedule Policy/Career employees would normally be ineligible for payments under the Student Loan Repayment Program in 5 U.S.C. 5379, given the statutory exclusion of any employee who “occupies a position that is excepted from the competitive service because of its confidential, policy-determining, policy-making, or policy-advocating character.” 5 U.S.C. 5379(a)(2). OPM is therefore modifying its regulations at part 537 to allow employees whose positions are moved into Schedule Policy/Career to continue to receive student loan repayment benefits under the terms of the applicable service agreement unless eligibility is lost as described in 5 CFR 537.108.

Schedule Policy/Career employees would normally be ineligible for 3Rs under 5 U.S.C. 5753(a)(2)(C) and 5754(a)(2)(C). If employees receiving one of the 3Rs have already entered into agreements with their agency, maintenance of the status quo is strongly desired, provided the employees are otherwise fulfilling the terms of their service agreements. OPM is, therefore, modifying its regulations at subparts A, B, and C of part 575 to allow agencies to continue paying any outstanding 3Rs under the terms of any existing service agreements. For recruitment and relocation incentives, agencies will still be able to terminate service agreements under 5 CFR 575.111(a) and 575.211(a), respectively, for employees whose positions are moved into Schedule Policy/Career. Employees would be entitled to all recruitment or relocation incentive payments that are attributable to completed service and to retain any portion of a recruitment or relocation incentive payment that they received that is attributable to uncompleted service as provided in 5 CFR 575.111(e) and 575.211(e). For retention incentives, OPM is authorizing agencies to continue paying the incentives to employees whose positions are moved into Schedule Policy/Career at the time when the employee is receiving a retention incentive based on the terms of an applicable service agreement, or when the employee is receiving a retention incentive without a service agreement as long as the agency finds the payment is warranted under 5 CFR 575.311(f).

However, agencies will continue to have the discretion to use other compensation flexibilities to assist in recruiting and retaining Schedule Policy/Career employees. This includes the GS superior qualifications and special needs pay setting authority to set pay above step 1 for employees newly appointed or reappointed after a 90-day break in service (5 U.S.C. 5333 and 5 CFR 531.212). Other examples include the GS maximum payable rate rule, which allows agencies to set GS pay based on a higher rate of pay the employee previously received in another Federal job (5 CFR 531.221-223); critical position pay, which allows OPM (in consultation with OMB) to provide an agency authority to fix the rate of basic pay for one or more positions requiring an extremely high level of expertise at a higher rate than would otherwise be payable, up to level I of the Executive Schedule or higher with the approval of the President (5 U.S.C. 5377 and 5 CFR part 535); and authority to approve creditable service for annual leave accrual rates based on non-Federal civil service work and uniformed service experience (5 U.S.C. 6303(e) and 5 CFR 630.205).

Schedule Policy/Career employees will also be eligible for awards under 5 U.S.C. chapter 45 to the extent permitted under Administration policies. In the past, some Administrations have barred awards for noncareer political appointees, but this was done via policy, not because of a statutory requirement. An Administration could establish a policy barring awards for noncareer political appointees (e.g., Schedule C employees, noncareer appointees in the SES, and Presidential appointees in the Executive Schedule) while allowing awards for Schedule Policy/Career employees.

Schedule Policy/Career employees who hold an appointment without a time limitation will be considered to hold a qualifying appointment that conveys potential eligibility for severance pay, subject to meeting all other eligibility requirements. OPM regulations provide that a nonqualifying appointment for severance pay eligibility includes a Schedule C appointment, a noncareer SES appointment, or “an equivalent appointment made for similar purposes.” A Schedule Policy/ Career appointment is not such an equivalent appointment since its purpose is to provide for career employment. iv. Other Legal and Policy Arguments Are Not Persuasive or Relevant

Several commenters raised a variety of arguments challenging the legality of the proposed rule. OPM will address these arguments below. The Supreme Court's Decision in Elrod Is Not Instructive

Commenter 8019 expressed concern with the legality of Schedule Policy/Career with respect to a set of legal precedents which, in that commenter's opinion, render Schedule Policy/Career unlawful. OPM has carefully considered and rejected each of these arguments. As Commenter 8019 notes, Elrod v. Burns \456\ began a line of Supreme Court precedents which dealt with the legality of political patronage-based firing practices. Elrod concerned a practice in the Cook County, Illinois sheriff's

department of, upon a change in administration, replacing roughly half of the employees hired by the outgoing party with new employees of the incoming party.\457\ The outgoing employees were terminated as a matter of course simply because they lacked adequate sponsorship by the incoming party. The issue in that case was whether this practice violated the First Amendment rights of terminated employees, even though those employees had no specific tenure protections under any statute or regulation. A majority of the Elrod court held that purely partisan dismissals were an intrusion on employees' First Amendment freedoms of assembly and expression; it further held that this intrusion could not be justified for reason of enhancing the efficiency of the civil service, nor for reason of ensuring loyalty to the political administration.\458\

\456\ 427 U.S. 347 (1976).

\457\ The other half of employees were “merit” employees with some form of tenure protection.

\458\ Only three justices joined the plurality opinion. Two members of the majority would have ruled on narrower grounds.

Commenter 8019 asserts that the arguments made for allowing the at- will dismissal of the Elrod plaintiffs are identical to the arguments made on behalf of Schedule Policy/Career today. It is true that the Elrod court considered and rejected three arguments against tenure protection--one argument based on bureaucratic efficiency, one based on bureaucratic responsiveness to politics, and one based on the preservation of the role of parties and partisan politics in the democratic process more generally, and that the first two of these arguments bear at least superficial resemblance to arguments made in OPM's proposal rule. However, the arguments arose in a radically different context, and the difference in context colors their legal force. In Elrod, it was understood that appointments and dismissals to plaintiffs' positions were made on the basis of partisan politics alone, and the core legal issue was whether the democracy and efficiency arguments made in favor of patronage dismissal outweighed the employees' First Amendment rights, which the plurality believed to be seriously imperiled by the sheriff department's practice. The plurality rejected out-of-hand any separation of powers concerns that might otherwise be implicated, because it viewed the First Amendment as the core issue.\459\ The plurality reasoned that because, to hold their jobs, plaintiffs must have “pledge[d] their political allegiance to the Democratic Party, work for the election of other candidates of the Democratic Party, contribute a portion of their wages to the Party, or obtain the sponsorship of a member of the Party. . . ,” \460\ they had to choose between their First Amendment rights and their government jobs. The Court thus found that something like “coerced belief” was thus a condition of plaintiffs' continued employment.\461\

\459\ See 427 U.S. at 352-53 (rejecting the applicability of Myers v. United States on the ground that “[T]here can be no impairment of executive power, whether on the state or federal level, where actions pursuant to that power are impermissible under the Constitution. Where there is no power, there can be no impairment of power.”).

\460\ Id. at 355. See also id. at 357 (referring to “Patronage . . . to the extent it compels or restrains belief or association.”).

\461\ Id.

This framing in Elrod created a hostile stance toward arguments for at-will employment as part of the procedural posture of the case, such that the arguments had to meet an overwhelming threshold of persuasiveness to be accepted by the Court.\462\ Still, even in this context, the Court suggested that it was merely “not persuaded” by arguments for at-will employment or found them “not without force, but . . . inadequate . . . to validate patronage wholesale.” \463\ In other words, the Supreme Court found that arguments for at-will employment had merit, but they did not have the kind of merit which could override serious impediments to the exercise of constitutional rights as implicated by pure patronage firings.

\462\ Id. at 362 (“It is firmly established that a significant impairment of First Amendment rights must survive exacting scrutiny. . . . The interest advanced must be paramount, one of vital importance, and the burden is on the government to show the existence of such an interest.”).

\463\ Id. at 364, 367.

Contrast this with the present situation. Both E.O. 14171 and the present rule make clear that those encumbering Schedule Policy/Career positions “are neither expected nor required to personally support the President or his policies.” \464\ They merely must “faithfully implement administration policies to the best of their ability, consistent with their constitutional oath and the vesting of executive authority solely in the President.” \465\ Like most private sector employees, and many state government employees, Schedule Policy/Career employees will be terminable for poor performance or insubordination but are protected from purely partisan dismissals, completely sidestepping the core issue in Elrod. With both the E.O. and the present rule, then, the compelled speech issue which framed the Elrod decision is not present.

\464\ 90 FR 8626; 90 FR 17208 (“Contrary to fears of a return to the spoils system, the President expressly forbid political loyalty tests for Policy/Career employees.”).

\465\ 90 FR 8626.

As Commenter 8019 suggests, Elrod's logic was extended to “confidential” employees by Branti v. Finkel,\466\ which dealt with assistant county public defenders. In that case, the trial court specifically held, and the Supreme Court accepted, that the plaintiffs “had been selected for termination solely because they were Republicans.” \467\ At issue, again, was solely where to draw the line between employees who can be dismissed because of their party affiliations and those who cannot. The Court held that “whatever policymaking occurs in the public defender's office must relate to the needs of individual clients and not to any partisan political interests. Similarly, although an assistant is bound to obtain access to confidential information arising out of various attorney-client relationships, that information has no bearing whatsoever on partisan political concerns.” \468\ Branti, thus, also has no real applicability to Schedule Policy/Career. Not only was the case about patronage firing, but it also dealt with employees who, the Court held, had no information or duties which related to partisan political concerns of the sort implicated by those career positions which are directly related to advancing the policy priorities of the President. For the same reason, Commenter 8019's references to Wieman v. Updegraff,\469\ In Cafeteria Workers v. McElroy,\470\ and Keyishian v. Board of Regents,\471\ which concern the extent to which employees can be disciplined by the government for membership in a subversive political organization, are inapplicable.

\466\ 445 U.S. 507 (1980).

\467\ Id. at 510.

\468\ Id. at 519.

\469\ 344 U.S. 183 (1952).

\470\ 367 U.S. 886 (1961).

\471\ 385 U.S. 589 (1967).

Somewhat recognizing the distinction between Elrod and the present situation, Commenter 8019 suggests that the language protecting Schedule Policy/Career employees from patronage-based dismissal is pretextual, citing several supposed occurrences of partisan firing since President Trump's second inauguration. Commenter's examples, however, are primarily cases where employees were dismissed based upon their conduct in office, not their personal political views. Such conduct-based dismissals do not implicate the First Amendment. Commenter's sole example of alleged screening based on

political views was the administration ending the details of career employees temporarily assigned to the White House National Security Council and returning them to their home agencies. The employees were not fired and, even if they had been, White House policy council positions with national security responsibilities are among the most sensitive policymaking positions in government. Terminations from such positions, much less reassignments from them, raise zero First Amendment concerns. Accordingly, there is no basis on the record to suggest that OPM's current rulemaking is a pretext for mass firings of public servants. The Final Rule Is Consistent With the CSRA and DPAA

Some commenters asserted that Schedule Policy/Career dismissal procedures violate the Lloyd-La Follette Act, requiring certain procedural notice before removal of an employee can be effected. Although the Lloyd-La Follette Act was superseded by the CSRA, the CSRA contains procedural requirements applying to adverse actions and also generally provides for appeals of adverse actions, including dismissals, to the MSPB. In a similar fashion, the DPAA extended the rights of non-preference eligibles to receive pre-termination notice, and also to appeal adverse decisions to the MSPB. As discussed in the proposed rule and above, both the CSRA and the DPAA authorize OPM and the President to exempt employees in policy-influencing positions from access to chapter 75 adverse action procedures and appeals. Thus, this rule maintains harmony with both the CSRA and the Due Process Amendments. The Final Rule Does Not Promote Hatch Act Violations

Commenters 3778, 4652, 13159, 30292, and others, raise concerns that the establishment of Schedule Policy/Career will increase Hatch Act violations or vitiate the law in its entirety by obscuring the distinction between political and career employees. All Federal employees in the executive branch, with the exception of the President and Vice-President, are subject to the requirements of the Hatch Act concerning restrictions on political activity. Certain employees are subject to further restrictions, depending on their employing agency or the roles/functions they perform. The Hatch Act makes no distinction between career and political appointees in terms of application, except for appointees appointed by the President after Senate confirmation, and certain employees paid by an appropriation covering the Executive Office of the President. Even those exceptions primarily relate to enforcement of the Hatch Act rather than covering the substance of the restrictions on political activity. These commenters misconstrue the Hatch Act as allowing political appointees to engage in partisan activity while prohibiting career employees from engaging in the same activity. In fact, all appointed executive branch employees must abide by the Hatch Act restrictions made applicable to their agency or their particular position. Accordingly, OPM does not believe that Hatch Act concerns attach to this rule. No Impacts to Retirement Benefits

One commenter raised concerns that placement in Schedule Policy/ Career will impact retirement benefits. Retirement benefits are not impacted as a result of this rulemaking. If an employee is terminated-- with or without cause--retirement eligibility is determined based on their age and years of Federal service. Eligibility for a voluntary or involuntary immediate retirement (one that begins within 30 days of separation) would permit the former employee to retain their Federal Employees Health Benefits (FEHB) health insurance benefits provided that they meet the eligibility requirements for continued coverage (i.e., the employee has been enrolled in the FEHB program from their first opportunity to enroll or for the full five years of service immediately preceding retirement). If an employee is terminated and the only retirement eligibility is for a deferred annuity, the FEHB insurance terminates and cannot be reinstated in retirement. For employees terminated for cause, they would not be eligible for a discontinued service retirement or voluntary early retirement authority (i.e., VERA). They may be eligible for voluntary immediate retirement options (e.g., Minimum Retirement Age + 10) that may allow them to keep or, after postponing their retirement, reinstate their FEHB health insurance benefits prospectively, provided that the employee meets the eligibility requirements to retain FEHB coverage into retirement. Other Concerns

A few commenters argued that this rulemaking violates 38 U.S.C. 4214 by denying veterans certain hiring and retention preferences. Nothing in this rule bears upon or affects veterans preference in employment as provided for at 38 U.S.C. 4214.

Some commenters argued that this rulemaking violates 5 U.S.C. 609(b) because OPM failed to convene a small business advocacy review panel before issuing the proposed rule. OPM disagrees. This rule has no impact on any small business. It affects only current or prospective Federal employees.

A few commenters argued that this rulemaking fails to provide information required under Section 515 of the Information Quality Act, Public Law 106-554. Relatedly, commenters (14463, 16846, 30317, and 30433) further allege that OPM did not verify the information presented by the sources. On the contrary, OPM used publicly available sources, including data maintained in OPM's own FedScope database. OPM believes that the data sets relied upon represent the best available information concerning the size, scope, and duties of Federal employees, as well as data concerning both disciplinary and performance-based actions.

One commenter argued that this rulemaking is incompatible with the Rehabilitation Act, 29 U.S.C. 791, because it fails to account for disproportionate impacts on Federal employees with disabilities. Despite this assertion, the commenter does not present any evidence that this rulemaking would disproportionately impact Federal employees with disabilities. There is nothing in the rule that affects the hiring of individuals with disabilities into Federal employment. The hiring of such individuals will continue to be governed by applicable law and regulation. To the extent that the commenter argues that this rulemaking violates the Rehabilitation Act under a disparate-impact theory of liability, the President has made clear that such a theory is contrary to the Constitution.\472\

\472\ E.O. 14281, “Restoring Equality of Opportunity and Meritocracy,” 90 FR 17537 (April 23, 2025).

A few commenters argued that the rulemaking is incompatible with the holding in Bowen v. Georgetown University Hospital.\473\ In Bowen, the Supreme Court held that an agency's rulemaking is not retroactive unless Congress expressly authorized retroactivity. This rule does not contain any regulatory provisions that are retroactive in nature. Georgetown University explicitly addressed a statutory scheme which the Court determined did not provide for retroactive regulatory coverage, although the agency had, in fact, invoked coverage on a retroactive basis. There is nothing in this rule that provides for retroactive reclassification

of positions under Schedule Policy/Career, especially insomuch as the rule only applies prospectively.

\473\ 488 U.S. 204 (1988).

Another commenter argues that this rulemaking runs afoul of the Supreme Court's holding in Service v. Dulles.\474\ In Service, the Supreme Court held that the dismissal of a Foreign Service Officer by the Secretary of State was invalid because the Secretary had violated his own internal rules regarding a dismissal which was based on a security violation. The Court found that having promulgated the rules the Secretary was bound by them. Schedule Policy/Career does not implicate the Court's decision in Service because Schedule Policy/ Career employees will serve on an “at will” basis, and dismissals will not need to be based on “for cause” reasoning.

\474\ 354 U.S. 363 (1957).

Lastly, OPM notes that some employees reassigned or hired into Schedule Policy/Career positions may be subject to public financial disclosure reporting under regulations prescribed by the Office of Government Ethics (OGE).\475\ Under 5 CFR 2634.202(e), public filers subject to public financial disclosure reporting include employees whose positions are excepted from the competitive service due to their positions being of a confidential or policy-making character. While no commenters raised concerns over the application or impacts associated with the application of these regulations and this final rule, OPM will work with OGE to provide guidance to agencies on ensuring that they appropriately identify employees subject to these disclosure requirements.

\475\ See 5 CFR part 2634, subpart B.

As discussed in the proposed rule, OPM has concluded that prior expectations or reliance interests in maintaining chapters 43 and 75 procedures as articulated in the April 2024 rulemaking are outweighed by the policy benefits of the current rulemaking. Several commenters, including but not limited to Commenters 1550, 16323, 18739, and 35517 argued the rule undermines the American public's reliance on a non- partisan civil service in many aspects of their lives, including, as Commenter 35517 asserts, “help[ing] families in the wake of hurricanes and deadly fires, facilitat[ing] access to lifesaving payments like Social Security and unemployment insurance, and protect[ing] national security.”

These concerns are unfounded and are untethered to the substance of the rule. The rule solely impacts those who occupy policy-influencing positions. Few line employees responsible for executing service delivery meet these criteria. Further, as discussed extensively above, Schedule Policy/Career positions will remain nonpartisan career positions filled and vacated without regard to employees' personal political affiliation. Those such as Commenter 35517 who raise concerns that this rule will adversely impact the public by undermining its ability to rely on service delivery are seemingly arguing against an imaginary two-step, that reclassifying employees into Schedule Policy/ Career will ipso facto result in a reduction in overall headcount amongst Federal employees. Reduction in headcount is an issue unrelated to this rule and moreover, employees who faithfully perform their jobs to the best of their ability have little to fear from Schedule Policy/ Career. The order expressly prohibits discrimination based on political affiliation, and agencies have strong incentives not to dismiss employees who are competently performing their assigned duties. Doing so would undermine their ability to complete their mission. Employees should be assumed to understand their performance expectations when they take their jobs. Merit Principle Four requires employees to maintain high standards of integrity and conduct, and Merit Principle Six directs agencies to separate employees who do not improve inadequate performance. The employees at risk of dismissal are those who fail to perform adequately or who engage in serious misconduct such as corruption or injecting their personal politics into the performance of their official duties. Congress has made it clear that the civil service benefits from such employees' removal. In such instances, an employee's actual reliance interest is the ability to violate merit principles with little risk of removal--which is not a legitimate reliance interest.

Other commenters, such as 10344, 21721, 30863, and 34821 assert that Federal employees who have invested in agency-specific expertise on the premise they would possess adverse action and procedural protection rights, i.e., job security, have developed settled expectations and reliance interests in those rights. Reclassifying such employees as Schedule Policy/Career, when appropriate, does in fact upset those reliance interests.

However, OPM believes that the prejudice to such employee reliance interests is small and does not believe the thousands of civil servants who perform their duties with integrity and excellence will leave the Federal service for lack of protections. Regardless, removal restrictions provide little benefit to the many employees who perform high quality work and are at little risk of dismissal. As previously discussed, and as Commenter 32359 noted, the Congressional Budget Office estimates that most Federal employees place a relatively low value on access to adverse action appeals. OPM believes this is likely because fully successful employees know they have little need of them.

Even if the prejudice to employee reliance interests were not small, the policy benefits to the executive branch would outweigh them. Poor performing employees who engage in misconduct, corruption, or inject partisanship into the performance of their official duties present a serious concern that undermines the efficiency and integrity of the civil service writ large. The corruption and misconduct at the FDIC demonstrate this clearly. Democracy depends on a nonpartisan civil service in which career employees effectively and faithfully implement the law and the policies of the elected President to the best of their ability. In our system of governance, any reliance interests on so- called “job security” should be subordinate to the necessity of a competent, ethical, and democratically accountable civil service.

Many commenters argued that the proposed rule will create a “chilling effect” on Schedule Policy/Career employees in the performance of their duties, particularly in offering candid advice to agency leadership. Commenters expressed concern that employees would choose not to provide this advice out of fear that doing so would lead to removal if political leadership disagreed. In the April 2024 rule, OPM made a similar assertion that Schedule F “would chill employees broadly and interfere with their willingness to present objective analyses and frank views in carrying out their duties, thus diminishing the reasoned consideration of policy options.” \476\

\476\ 89 FR at 25037.

OPM understands these commenters' concern but respectfully disagrees that the rule will create a chilling effect for the following reasons. First, the purpose of this rule is to reinforce the merit- based, nonpartisan character of the civil service and improve the democratic responsiveness of the Federal Government. The rule clarifies that Schedule Policy/Employees must be able to serve the public and carry out the policies of the elected Administration and agency heads

without regard to their personal political beliefs. Nothing in the rule authorizes or encourages discipline or removal of employees based on the content of their good-faith professional advice.

Second, the rule expressly recognizes that robust, candid internal deliberation and professional disagreement are an essential part of effective government decision-making. As the proposed rule explains, policy-influencing Federal employees are not expected to simply say yes to what they are told. Rather, they “provide their frank and fearless advice to agency leadership.” \477\ This includes advice that challenges assumptions, identifies legal or operational risks, or proposes alternatives, so long as they ultimately implement the lawful decisions of agency leadership. This final rule is directed at ensuring faithful execution of leadership's final, lawful decisions, not at suppressing the process of reaching those decisions.

\477\ 90 FR at 17208-09.

Third, commenters' fear that the rule creates a chilling-effect is speculative and is already addressed by longstanding principles of civil service law that predate this rule. All Federal employees swear an oath to the Constitution which requires them to “faithfully discharge the duties of the office” that they hold.\478\ In fulfilling their oaths, all Federal employees are expected to provide their best professional judgment and implement lawful policy decisions once made, even where they personally disagree. The rule does not alter that balance. It neither expands agency authority to discipline employees for expressing dissenting professional views in appropriate channels, nor eliminates protections taken against Schedule Policy/Career employees based on PPPs.\479\ The President took proactive steps to guard against arbitrary actions prohibited under 5 U.S.C. 2302(b) by requiring agencies to establish through internal agency policies protections for Schedule Policy/Career employees from PPPs including whistleblower reprisal. Data from the most recent FEVS shows that 72% of Federal employees report positively that they can disclose suspected violations of any law, rule, or regulation without fear of reprisal.\480\ In a 2011 MSPB report, employees are more willing to “blow the whistle” when the wrongdoer is a political appointee compared to their supervisor or manager.\481\

\478\ 5 U.S.C. 3331.

\479\ See Section 6 of E.O. 13957.

\480\ U.S. Off. of Pers. Mgmt., Federal Employee Viewpoint Survey: 2024 Governmentwide All Levels-All Index-All Items Reports at Q8, https://www.opm.gov/fevs/reports/governmentwide-reports/governmentwide-reports/governmentwide-all-levels-all-index-all-items-reports/2024/2024-governmentwide-all-levels-all-index-all-items-report.xlsx.

\481\ MSPB, Blowing the Whistle: Barriers to Federal Employees Making Disclosures at 37-38 (Nov. 2011), https://www.mspb.gov/studies/studies/Blowing_The_Whistle_Barriers_to_Federal_Employees_Making_Disclosures_662503.pdf.

Fourth, OPM takes note of empirical research surveying state personnel directors in six states with fully or partially at-will workforces: Colorado, Florida, Georgia, Kansas, Missouri, and South Carolina. This research shows only a small minority of state directors believe at-will employment discourages government employees from either whistleblowing or freely voicing objectives to management directives, while an absolute majority affirmatively believe it does not have these effects.\482\ OPM credits this research and takes it as empirical evidence that at-will employment will not significantly deter whistleblowing or create a chilling effect in the Federal workforce. OPM also notes that commenters failed to provide concrete evidence or examples of a chilling effect in the many states, for example, that currently operate their workforces fully or partially at-will.\483\

\482\ J. Kim & J. Edward Kellough, At-Will Employment in the States, Examining the Perceptions of Agency Personnel Directors, 34(2) Rev. of Pub. Pers. Admin 218-236 (2014), Table 2.

\483\ Comment 26673, submitted by a coalition of Attorneys General affiliated with the Democratic party, draws OPM's attention to a study published in 2006 examining the effect of at-will employment in Florida state government, shortly after Florida passed legislation making most managers at-will employees. This study shows that some managers believed the reform had negative effects on employee's willingness to speak out, while others disagreed. This study does not provide any concrete examples of a chilling effect, nor does it attempt to quantify the extent to which mangers believe it had a chilling effect. OPM takes it to show that shortly after the reform took effect Florida managers had equivocal perceptions of whether at-will employment creates a chilling effect. OPM finds Kim and Kellough's (2014) analysis more predictive of the likely effect of at-will employment in the Federal government. Their more recent study has significantly larger sample size across six states, rather than an analysis of a single state shortly after reforms were effectuated. Their study also empirically assesses the extent to which personnel directors perceive a chilling effect and finds that only about one-in-seven do so. This study thus does make empirical estimates, has a smaller margin of error, and is more likely to reflect the effects of at-will employment generally rather than idiosyncrasies affecting implementation in a single state.

Fifth, the rule is designed to reduce the risk of chilled speech by clearly delineating the boundary between protected professional disagreement and unprotected refusal to carry out lawful instructions. By expressly prohibiting agencies from taking personnel actions against Schedule Policy/Career employees based on political affiliation and requiring political loyalty pledges, and by reaffirming that disagreement with policy--without more--is not a lawful basis for removal, the rule provides employees with clearer guidance and greater assurance that they may offer forthright advice without jeopardizing their careers. Consequently, between the proactive steps taken by the President in E.O. 13957 to extend PPP protections to Schedule Policy/ Career positions and these data points, the so-called chilling effect is unlikely to emerge from this rule.

Commenter 27705 and others argue that regulated entities and private sector companies engaging with the Federal Government rely on stability amongst interpretations of law and information analysis that will dissipate with the implementation of Schedule Policy/Career. These concerns presuppose similar imagined mass removals as discussed above, as well as see-saw changes in interpretation from administration to administration. The Supreme Court's recent ruling in Loper Bright Enterprises v. Raimondo,\484\ which came after OPM's prior rulemaking, should also minimize concerns of such “whipsaw changes” in Federal regulations. Courts and litigants now look to the best interpretation of a statute rather than allowing agencies to construe ambiguous terms. The former doctrine of Chevron deference allowed agency leadership to read its policy preferences into statutory ambiguities, which could produce drastic policy changes with each new presidential administration. The end of Chevron deference gives the executive branch much less discretion to unilaterally change course without authorization from Congress. This will provide regulated entities with greater regulatory certainty, minimizing the potential for “turmoil.”

\484\ 603 U.S. 369 (2024).

Finally, the President has determined that the harms discussed above and in the relevant executive orders outweigh any reliance interests in the status quo. The President is the individual statutorily and constitutionally vested with authority to make that determination. Even if OPM were not independently convinced of that fact--and it is--OPM would credit a Presidential determination weighing the costs and benefits of prospective changes to the civil service rules and regulations.

At least one commenter, Commenter 1785, expressed concern that this rulemaking may be invalid under the authority of FCC v. Fox Television Stations, Inc.\485\ Fox held, following the Court's earlier opinion in Motor Vehicle Manufacturers Association v. State Farm Mutual Automobile Insurance Co.,\486\ that while there is generally not a higher standard for a change in agency policy under APA Section 706(2)(a) arbitrary and capricious review (as compared to the announcement of a completely new policy), there are some relevant differences when the agency changes course. First, as discussed above, when an agency announces a change in policy through notice-and-comment rulemaking, a minimum reasoned explanation must show awareness that there exists a change in policy; it cannot “depart from a prior policy sub silentio or simply disregard rules that are still on the books.” \487\ The agency “need not demonstrate to a court's satisfaction that the reasons for the new policy are better than the reasons for the old one; it suffices that the new policy is permissible under the statute, that there are good reasons for it, and that the agency believes it to be better, which the conscious change of course adequately indicates.” \488\ In Fox, the Supreme Court suggested two circumstances in which the agency might have a higher evidentiary burden when changing course, as opposed to when simply announcing a new policy: “when, for example, its new policy rests upon factual findings that contradict those which underlay its prior policy; or when its prior policy has engendered serious reliance interests that must be taken into account.” \489\

\485\ 556 U.S. 502 (2009).

\486\ 463 U.S. 29 (1983).

\487\ 556 U.S. at 515.

\488\ Id.

\489\ Id.

Commenter 1785 raises the issue that, without justifying its failure to address reliance interests, the present rulemaking may be arbitrary and capricious. The commenter does so without elaborating.\490\ It is thus unclear what reliance interests the commenter has exactly in mind. However, case law decided after the Fox decision suggests that the reliance interests at issue must generally be quite strong to outweigh an agency's authority to undertake an otherwise valid change of course for purposes of APA arbitrary and capricious review. For example, in Encino Motorcars, LLC v. Navarro,\491\ the Department of Labor, in a 2011 rulemaking, reversed course from regulations dating to 1978 which held that service advisors at automotive dealerships are exempt from FLSA overtime pay requirements. The Court held that the heightened threshold based on the reliance interests discussed in Fox was not met. The Court recognized that compensation packages for auto dealership workers had been negotiated for decades with the prior interpretation of the FLSA as a background assumption, so that the change in policy might require an industrywide rethinking of compensation schemes for covered employees. The heightened Fox threshold was not met, because, in the Court's view, the agency said almost nothing to justify its complete about-face on the issue.\492\

\490\ As a threshold matter, an agency need not consider reliance interests which are merely hinted at in passing, without adequate elaboration. See Mingo Logan Coal Co. v. Env't Prot. Agency, 829 F.3d 710, 722 (D.C. Cir. 2016) (“An agency cannot be faulted for failing to discuss at length matters only cursorily raised before it.”).

\491\ 579 U.S. 211 (2016).

\492\ “It did not analyze or explain why the statute should be interpreted [as the new policy required].” Id. at 224.

It is unclear that the agency's scant attempt to justify its new policy in Encino Motorcars would have met even the usual, highly deferential standard for arbitrary and capricious review under the APA, given the almost complete absence of justification for the new policy on the record. The rulemaking thus might be compared to United States Telecom Ass'n v. Federal Communications Commission.\493\ There, the FCC proposed to change its classification of broadband internet services from an information service to a telecommunications service in furtherance of net neutrality. Industry argued that their infrastructure investment was sufficiently based on the existing regulatory regime that, under the authority of Fox, the FCC should not be allowed to change course. The court disagreed. In its rulemaking, the court explained that the agency had specifically taken the industry's reliance interests into account and taken action despite those interests; the FCC had determined that the burdens tied to choice of regulatory regime were a comparatively minor driver of industry investment, compared to demand and competition, such that the industry's reliance interests were not sufficient to override the agency policy.\494\

\493\ 825 F.3d 674 (D.C. Cir. 2016).

\494\ See also Solar Energy Indus. Ass'n v. Federal Energy Regul. Comm'n, 80 F.4th 956 (9th Cir. 2023).

Nothing like the industry-wide reliance interests at issue in Encino Motorcars are present here. It is debatable whether the industry reliance interests overridden in U.S. Telecom. Ass'n are present for that matter. Whatever reliance interests career Federal employees occupying policy-influencing roles may possess, such as reliance in the availability of chapter 75 and chapter 43 proceedings despite their reclassification into the excepted service, would seem to be a comparatively minor driver of the decision to, for example, accept the role. Nothing implicated in Schedule Policy/Career has anything like the economic impact of the regulatory scheme at issue in Encino Motorcars, as we are dealing with a very small proportion of the Federal workforce compared to all employees in a given industry. Further, it is unlikely that the availability of specific forms of review over termination proceedings is as important a driver of individual employment decisions for Federal workers as, for example, salary, position in the organization, occupational autonomy, and prestige.\495\ OPM also notes again that this rulemaking deals with a small proportion of the Federal workforce--only an estimated 2% of Federal workers, will likely be moved into Schedule Policy/Career--and with the availability of procedural protections which are far less central to employment decisions than the pay provisions at issue in Encino Motorcars.

\495\ OPM views the Congressional Budget Office's analysis that three-quarters of Federal employees value the availability of adverse action procedures at less than five percent of their salary as indicating it plays a relatively small role in the overall Federal compensation package.

Even if this were not the case, and Schedule Policy/Career applied more broadly and had great economic significance to employees, the President has determined and OPM concurs that the benefits of strengthening performance management and democratic accountability in the Federal workforce would outweigh these concerns.\496\

\496\ And, as Justice Ginsburg wrote in her Encino Motorcars concurrence, “[R]eliance does not overwhelm good reasons for a policy change. Even if the Department's changed position would necessitate systemic, significant changes to the dealerships' compensation arrangements, the Department would not be disarmed from determining that the benefits of overtime coverage outweigh those costs. `If the action rests upon an exercise of judgment in an area which Congress has entrusted to the agency, of course it must not be set aside because the reviewing court might have made a different determination were it empowered to do so.' ” 579 U.S. at 226-27 (quoting SEC v. Chenery Corp., 318 U.S. 80, 94 (1943) (cleaned up)).