Executive Order Revises Handling of Federal Employee Probationary Period

Action: On April 24, the President issued an Executive Order replacing parts of the regulation governing the evaluation of Federal employees in their probationary periods. The Order revises the regulation so that it requires a determination as to whether a person’s continued employment “advances the public interest.” Additionally, the employee now “bears the burden of demonstrating why their continuation in employment through the finalization of their appointment to the Federal service is in the public interest.” Among the factors agencies may use in determining whether continued employment is in the public interest is an evaluation of “whether the employee’s continued employment would advance organizational goals of the agency or the Government.”

Key Insights

• The Administration has made reducing the size of the Federal workforce a key priority; however, these efforts have been complicated by a range of legal constraints governing the dismissal of Federal employees “without cause.” Attempts to fire probationary employees en masse on claims of poor performance have been challenged in court, with one judge stating that “it was a sham in order to try to avoid statutory requirements.”
• Newly hired Federal employees are generally subject to a one or two year probationary period. Regulations superseded by the President’s Order specified that agencies would use the probationary period to determine the fitness of the employee and terminate their service if they fail to demonstrate the requisite qualifications for continued employment and, if an agency decides to terminate a probationary employee for unsatisfactory performance or conduct, it must explain its conclusions about the employee’s performance.
• The Order thus shifts the purpose of the probationary evaluation from merely assessing performance adequacy to requiring a positive demonstration that continued employment serves the public interest as defined by the agency. The Order also shifts the burden of proof to the probationary employee rather than the Agency itself. Guidance issued by the Office of Personnel Management following the Order states that “agencies may decide not to finalize a probationer’s employment for reasons unrelated to their personal performance or conduct.” The Order does not require that agencies disclose to the employee the reason for termination, making litigation against the decision more difficult.
• In addition, the Order’s requirement for an assessment of whether an individual’s employment “advances the organizational goals of the agency or the Government” could be interpreted as a test of the individual’s support of the policy goals of the Administration in power. 
• The Order also claims that the regulations in subpart H of part 315 of title 5 that “purport to limit agency action” regarding probationary employees are “not statutorily required.” The Order does not state which provisions “limit agency action,” though the Administration's rationale may be that, since the statute authorizing the probationary period for Federal employees states that the President “may” issue regulations governing the probationary period, it does not actually require that agencies issue such regulations. This would be a significant change in interpretation of the law.
• The Order is notable not only for its effects on the Federal workforce, but also because it asserts the President’s authority to repeal and establish regulations without the notice and comment typically required by the Administrative Procedure Act (APA). While the APA does allow agencies to forgo the notice and comment period for “good cause,” the legal standards for what constitutes good cause are vague, and this Order did not invoke the provision.