Labor & Employment Law Daily Wrap Up, AGENCY NEWS—OPM advises on liability for performance management, noting concerns have been expressed, (Dec 1, 2025)

By Brandi O. Brown, J.D.

“[S]ome managers and supervisors feel more secure having an additional safeguard in place. One option is professional liability insurance to guard against claims that would ordinarily be raised against the agency employer.”

“Federal managers and supervisors sometimes express concern that they may be held personally liable for taking certain performance management actions,” explains a memo from the Associate Director for Workforce Policy and Innovation within the U.S. Office of Personnel Management. Thus, in the memo, which is addressed to Chief Human Capital Officers, Managers, and Supervisors, Associate Director Veronica E. Hinton “provides an overview of the extremely limited scope of personal liability for managers and supervisors as they manage employees’ job performance and address unacceptable performance.”

The memo points to the June 2025 performance management-related memo issued by OPM, which purported to reform performance management by ending the “inflation” of employee performance ratings and by requiring new elements in certain performance plans, including certain course requirements. That memo also advised agencies to revise certain agency policies and make other changes.

Agency liability. The more recent memo explains that, while it is the agency, not the manager or supervisor in their individual capacity, that is acting when performance management actions are taken, such as “issuing a performance rating, putting an employee on a performance improvement plan, or proposing or deciding to reduce in grade or remove an employee for unacceptable performance,” sometimes managers or supervisors are sued personally. When those actions are “within the scope of their employment,” the memo explains, DOJ typically provides representation.

However, it notes that agencies can hold managers and supervisors responsible when they misuse their authority or act improperly, but reiterates that “[t]he agency, not individual managers and supervisors, ultimately is responsible for any performance of conduct-related adverse actions taken against employees.”

Insurance option. “Nonetheless,” the memo continues, “some managers and supervisors feel more secure having an additional safeguard in place. One option is professional liability insurance to guard against claims that would ordinarily be raised against the agency employer.” It also notes that section 642 of Public Law 106-58, as amended, requires the agencies to reimburse eligible employees for up to one-half of the cost of that insurance, with certain conditions and subject to caps.

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