Washington, D.C., November 10, 2025 — The Department of War is now authorized to offer federal employees financial incentives to accept termination without exercising their appeal rights, according to a September 30 memo from Under Secretary Anthony Tata that recently became public. The policy permits management to offer separation payments up to $25,000, voluntary early retirement, or as much as 12 weeks of paid administrative leave in exchange for employees signing away their right to challenge the action.
The memo requires employees to sign settlement agreements stating that acceptance of these incentives is voluntary and waiving all rights to challenge the removal action before the Merit Systems Protection Board, Equal Employment Opportunity Commission, or any other forum. This represents a significant departure from typical federal practice. While agencies occasionally enter settlement agreements where employees drop appeals in exchange for removal of disciplinary records or reassignment, agencies do not normally offer upfront cash or extended paid leave as an enticement to forgo due process.
The payment options become available once management issues a notice of proposed removal for unacceptable performance. Under the new procedures, employees facing removal have just seven calendar days to respond to the proposal, down from the standard 30 days under traditional performance-based actions. The deciding official then has 30 days to issue a final decision. If the employee accepts one of the three incentive packages, the agency bypasses the entire appeals process.
The voluntary separation incentive payment option requires that funds be available and that positions be abolished or restructured according to existing VSIP requirements. The voluntary early retirement authority applies to employees who have worked at the department for more than 30 days before a reduction or restructuring is approved. The deferred resignation program provides up to 12 weeks of paid administrative leave while the employee remains on the payroll until separation.
Why this matters becomes clear when you look at the broader context. The memo uses Chapter 75 of Title 5, which is normally reserved for misconduct cases, rather than Chapter 43, which covers performance issues and requires performance improvement plans. This faster track combined with financial incentives creates pressure on employees to accept separation rather than fight back, even when they believe the performance charges are unfounded or pretextual.
Federal employment attorney Justin Schnitzer cautioned that the policy creates troubling incentives:
“When you combine expedited timelines, lowered standards for removal, and cash payments for waiving appeals, you have a recipe for pressuring federal employees to walk away from careers they have spent decades building, even when the performance allegations would not survive scrutiny.”
What federal employees should know now is that accepting any of these incentives means permanently giving up the right to challenge the removal action. Employees who receive a notice of proposed removal should immediately document everything, preserve all emails and performance reviews, and consult with a federal employment attorney before signing any agreement. Once those appeal rights are waived, they cannot be recovered, even if the removal was improper or discriminatory. The short response timeline makes acting quickly essential.