OPM's Bargaining Guidance on the Rating Rule: Contract Expiration, Rollovers and What Unions Can Still Negotiate

Bottom line

“The rolled-over CBA is considered a new agreement” ^[1]. That clause, in OPM’s July 24 bargaining guidance, is the part of the memo most bargaining unit employees should read twice. The protection existing contracts give against OPM’s new performance appraisal rule lasts only for the contract’s term, and OPM says a contract that renews automatically does not extend it ^[1]. The memo also gives agencies a list of what unions can no longer negotiate, and a shorter list of what they still can ^[1].

What happened: OPM’s July 24 memo on bargaining and the rating rule

On July 24, OPM Director Scott Kupor sent agency heads two memos ^{[1, 2]}. The first formally announced the final rule on non-SES performance appraisal, published July 7 as FR Doc. 2026-13715 and effective August 6 ^{[2, 3]}. That rule lifts the ban on forced distribution, removes Level 2, ends mandatory higher-level review of Level 1 ratings, adds a supervisory critical element and bars challenges to ratings of record through negotiated grievance procedures ^{[2, 3]}. The July 8 memo covered the rule itself. The second July 24 memo is new. It tells agencies how the rule fits with their duties under the Federal Service Labor-Management Relations Statute, chapter 71 of title 5 ^[1]. FEDweek reported on it July 27 ^[4].

How we got here. The legal frame is old. Proposals inconsistent with a governmentwide regulation are outside the duty to bargain, and the FLRA has held that OPM’s part 430, subpart B rules are governmentwide regulations ^[1]. But 5 U.S.C. 7116(a)(7) makes it an unfair labor practice to enforce a new regulation against a contract provision that was in effect before the regulation was prescribed ^{[1, 3]}. OPM acknowledged that limit in the final rule and declined to put it in the regulatory text, saying FLRA case law already covers it ^[3]. The new memo turns that case law into instructions.

The non-negotiable list. After the effective date, OPM says these proposals are outside the duty to bargain ^[1]:

• grievances over ratings of record under negotiated procedures;
• summary level patterns that include Level 2, or that top out at Level 4 (effective January 1, 2027);
• pass/fail Pattern A for anyone other than seasonal employees, teachers, GS-1 through GS-4 and Federal Wage System employees;
• anything that would “prohibit, override, or modify” an OPM standardized distribution;
• anything that would bar “comparing, categorizing, or ranking” employees to assign a summary level;
• dropping the supervisory critical element from covered supervisors’ plans.

What stays negotiable ^[1]: procedures for running the appraisal program, consistent with the rule; procedures for informal reconsideration requests; procedures for administrative grievances over ratings, where the agency allows them; supervisor-employee feedback; awards and recognition, including team awards, subject to any OPM spending limits under 5 CFR 430.210(b); and performance improvement plan procedures. OPM calls the list “illustrative, not exhaustive” ^[1].

Instructions to agencies. Inventory every covered contract and catalog conflicting provisions. Track expiration dates and “prepare to implement the final rule in full” as each one lapses. Consult counsel “before declining to bargain, declaring a proposal non-negotiable, or repudiating an existing CBA provision” ^[1].

What it means for you: when does a union contract stop protecting rating grievances?

Bargaining unit employees with a current contract. If your agreement explicitly lets you grieve a rating of record, and it was in effect before the rule was prescribed, that right holds until the contract’s term ends ^{[1, 3]}. Agencies “may not effectuate” conflicting parts of the rule before then ^[1]. The same shield covers contract language that bars a rating distribution ^[1].

If your contract rolls over. Many agreements renew automatically when neither side reopens them. OPM’s view, citing a 1990 FLRA decision involving the Defense Contract Audit Agency, is that the rollover creates a new agreement, and the regulation takes effect “by operation of law” on the date the old term ended ^[1]. Under OPM’s reading, the protection ends at the close of the current term even if neither side reopens the contract. Readers should check two dates in their agreement: the end of the stated term and any automatic renewal clause.

Grievances already filed. A pending grievance or arbitration over a rating can continue under a pre-rule contract that explicitly allows it, until that contract expires ^[1]. After that, OPM tells agencies to argue that the dispute “is no longer arbitrable” and that the arbitrator lacks authority, and to consider converting it to an administrative grievance where agency policy permits ^{[1, 3]}. An arbitrator will decide whether that argument wins. The memo cannot.

Employees whose units were excluded from bargaining. Executive Order 14251, signed March 27, 2025, removed large parts of the government from chapter 71 coverage, among them State, most of Defense, most of Treasury, Veterans Affairs and Justice ^[5]. FEDweek reports that this order and a second 2025 order affected representation rights for about three-fourths of bargaining unit employees, with exceptions mostly for law enforcement, and that injunctions are in place at the VA and TSA while lawsuits continue ^[4]. The July 24 memo does not mention the orders ^[1]. It speaks to agencies that still bargain. Employees in excluded units should not assume the memo’s protections for existing contracts apply to them.

Unions. AFGE argued in March that the overhaul would violate the Civil Service Reform Act, and called the rating approach “a popularity contest, not a meritocratic evaluation system,” according to Federal News Network ^[6]. The final rule rejects the argument that OPM lacks authority to bar rating grievances, relying on a 1993 D.C. Circuit decision ^[3]. The two positions cannot both be right.

Supervisors. The supervisory critical element is non-negotiable ^[1]. Procedures for feedback and for performance improvement plans remain open to bargaining ^[1]. Supervisors in organized units may see both a new element in their own plans and new negotiated procedures for how they rate others.

Employees not in a bargaining unit. The bargaining memo changes nothing for you. The rule’s main changes reach your rating of record on the rule’s own schedule, and your route to contest a rating remains an informal request within 60 days of issuance or another formal proceeding permitted by law ^[3].

Contractors. The rule and the memo govern federal employee appraisal and federal labor relations ^{[1, 3]}. Neither creates obligations for contractor staff.

Questions you’re probably asking

Can my union still grieve my performance rating after August 6, 2026?

Only if your current contract explicitly allows rating grievances and was in place before the rule, and only until that contract’s term ends ^{[1, 3]}. After that, ratings of record are out of the negotiated grievance procedure ^[3].

What happens to rating grievance rights if our union contract rolls over?

OPM’s position is that a rolled-over contract is a new agreement, so the rule applies by operation of law on the date the old term ended and the rollover began ^[1].

Can unions bargain over forced distribution of performance ratings?

No. OPM lists proposals that would prohibit or modify any standardized distribution, or bar ranking employees to assign ratings, as outside the duty to bargain ^[1].

What parts of performance management can unions still negotiate?

Procedures consistent with the rule, informal reconsideration procedures, administrative grievance procedures where the agency allows them, feedback, awards and performance improvement plan procedures ^[1].

What happens to a rating grievance already in arbitration when the contract expires?

OPM tells agencies to argue the dispute is no longer arbitrable and to consider converting it to an administrative grievance where agency policy permits ^{[1, 3]}.

What I’m watching

• August 6, 2026: the rule takes effect, and the non-negotiable list applies to new proposals from that date ^{[1, 3]}.
• No date given: OPM says it will publish guidance on closing out the FY2026 appraisal cycle “under separate cover,” along with further materials; it has also issued FAQs and a quick reference guide on standardized distribution ^[2]. The distribution percentages are still not public ^[4].
• January 1, 2027: the new summary level patterns become mandatory, and Level 2 leaves new appraisal programs ^{[1, 3]}.