(a) Appeals by non-OPM employees. OPM will assign personnel to adjudicate an appeal under this part by an employee of an agency other than OPM. OPM personnel assigned to adjudicate an appeal under this part shall be insulated from officials who participated personally and substantially in the challenged personnel action or provided case-specific advice concerning that action. OPM adjudicators shall not consider material ex parte communications concerning the merits of an appeal. If such a communication occurs, OPM will place a summary of the communication in the record and provide the parties a reasonable opportunity to respond, unless disclosure is prohibited by law. In addition, no OPM employee may be assigned to adjudicate an appeal if the employee has a relationship with the appellant or, during the preceding two years, that person was an employee of the agency that is party to the action to be assigned. When necessary, OPM may assign an administrative law judge to preside over the adjudication of an appeal.

(b) Appeals by OPM employees. OPM will assign an administrative law judge to adjudicate an appeal under this part by an OPM employee and to issue an initial decision. To insulate the adjudication of its own employees' appeals from agency involvement, OPM will not disturb initial decisions in those cases unless a party shows that there has been harmful procedural irregularity in the proceedings before the administrative law judge, a clear error of law, or a material factual error that affected the outcome of the appeal. For purposes of this paragraph (b), the term harmful procedural irregularity means an irregularity in the application of procedures that was likely to have caused the administrative law judge to reach a conclusion different from the one he or she would have reached in the absence or cure of the irregularity. The assignment of an administrative law judge under this paragraph (b) or under paragraph (a) of this section does not make 5 U.S.C. 554,556,or.

(c) Ascertainment of facts. OPM may require either party to provide additional information, and it may audit or investigate an agency's action in the course of adjudicating an appeal if it determines, in its sole discretion, that the existing record is insufficient to resolve a material issue within OPM's jurisdiction, and that the audit or investigation is reasonably likely to produce information material to resolving that issue. An individual serving as a representative of either party may not participate in an audit or investigation unless OPM specifically requests them to do so. The review of an agency action must be based solely on the developed written record unless OPM determines that a hearing is necessary and efficient in resolving an appeal. For purposes of this section, the phrase necessary and efficient means circumstances in which the written record is insufficiently developed to make a determination regarding one or more facts material to the outcome of the appeal, or where there is a disputed issue of witness credibility that is material to the outcome of the appeal. Where an investigation or audit is conducted, OPM will:

(1) Inform the employee, the employee's representative, and the agency of an investigation or audit; and

(2) Provide the employee, the employee's representative, and the agency with the results of an investigation or audit, and a reasonable opportunity to submit arguments or additional information to support their positions.

(d) Initial decision. OPM will notify the employee, employee's representative, and agency in writing of its decision.

(e) Remedies. (1) If the employee is the prevailing party, OPM will order relief including correction of the personnel action and any back pay, interest, and reasonable attorney fees consistent with subpart H of part 550 of this chapter. The employee as a prevailing party is not entitled to compensatory damages or other relief not authorized under 5 U.S.C. 5596(b).

(2) If the agency timely requests reconsideration of an initial decision or OPM reopens and reconsiders an initial decision, the agency must continue to provide the relief ordered unless OPM issues an order staying any such relief. No such stay may be ordered that would deprive the employee of pay and benefits while the initial decision is pending reconsideration.