Inserts a new section 712 into title 38 establishing authority and procedures for removal, demotion, or suspension of covered Department employees based on performance or misconduct, including rights and procedures, timing limits, judicial review, whistleblower protections, definitions, and application.

Amends the table of contents for title 38 by inserting an item for the newly added section 712 after the item relating to section 711.

Amends 38 U.S.C. 714: (a) adds a new paragraph (3) requiring the deciding Department employee, when making initial removal/demotion/suspension decisions for a covered individual, to exclusively apply specified factors and requires the Secretary to review and uphold the initial decision if supported by substantial evidence; (c) strikes paragraph (1)(D) and inserts specified punctuation into paragraph (3); (d) adds limitations that, except for constitutional issues, administrative judges, the Merit Systems Protection Board, and courts may not review or mitigate challenges to the penalty imposed against a covered individual, and strikes paragraph (10); redesignates subsection (h) as subsection (j); inserts new subsection (h) stating the section’s procedures supersede collective bargaining agreements to the extent of any inconsistency and new subsection (i) stating the section applies to performance or misconduct beginning on the date of enactment of Public Law 115–41; and in the redesignated subsection (j) modifies paragraph (1) and adds subparagraph (E) defining a supervisor or management official by reference to 5 U.S.C. 7103(a).

Amends 38 U.S.C. 7403(f)(3) by revising the clause beginning the paragraph to add a reference to consistency with a new subparagraph (B), and by adding subparagraph (B) establishing that, for covered individuals appointed to such positions, matters shall be resolved, at the Secretary’s sole discretion, under section 712, section 714, or title 5 as though such individuals had been appointed under title 5.

Amends subsection (a) to require that certain determinations be made 'by substantial evidence' (insertion of that standard into the subsection).