Determining the Appropriate Penalty for Federal Employees Charged With Misconduct

When a federal agency punishes an employee for misconduct and the employee appeals to the Merit Systems Protection Board (MSPB), how does the Board decide whether the penalty fits? For appeals filed on or after October 5, 2026, the answer is different.

For decades the Board has required consideration of the 12 factors laid out in Douglas v. Veterans Administration, a 1981 decision. Under a final rule published September 3, 2026, it will no longer require those factors in every case. Instead, the Board will ask whether the agency’s penalty is “within the tolerable limits of reasonableness” in light of the totality of the circumstances, decided case by case.

What the new rule text says (5 CFR 1201.56(b)(3), for appeals under 5 U.S.C. 7513): the agency’s choice of penalty is entitled to “substantial deference.” If the Board sustains all of the charges, it will not substitute its judgment for the deciding official’s. It sustains a reasonable penalty, or it may mitigate an unreasonable one to the maximum reasonable penalty. If it sustains only some charges, it may impose a lesser penalty the agency said it would have chosen, mitigate to the maximum reasonable penalty, or give the agency a chance to impose a lesser penalty.

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What the Board says is not changing: the Douglas considerations, such as the seriousness of the offense, the employee’s disciplinary and work record, consistency with penalties for similar employees and the potential for rehabilitation, remain available wherever they matter, and parties remain free to raise them. An agency that relies on aggravating factors must still list them in the advance notice of the proposed action so the employee can respond.

The rule grew out of a joint July 2026 proposal with the Office of Personnel Management titled “Promoting Employee Accountability,” which drew about 676 unique comments. OPM is finalizing its own parts separately. Appeals already pending on October 5 will be decided under the framework in effect when they were filed. Contact: Gina K. Grippando, Clerk of the Board, (202) 653-7200 (RIN 3124-AA35).

Federal Register filing: https://www.federalregister.gov/documents/2026/09/03/2026-18061/determining-the-appropriate-penalty-for-federal-employees-charged-with-misconduct

This is a Notice Nearby publisher-desk Federal brief — a short in-house summary of a public federal filing. It is not official agency minutes, not a newspaper story, and not Legal Publication. It does not satisfy a statutory notice requirement.