A-51616, SEPTEMBER 9, 1936, 16 COMP. GEN. 218

A-51616: Sep 9, 1936

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

AGREEMENTS IN WRITING" ANY FORMAL OR INFORMAL WRITING OR DOCUMENT SHOWING THE CONSENT OF THE PARTIES TO AN EMPLOYEE'S CONTINUANCE IN THE SERVICE OF A CARRIER AFTER REACHING THE AGE OF 65 IS A SUFFICIENT "AGREEMENT IN WRITING BETWEEN THE CARRIER AND EMPLOYEE" WITHIN THE MEANING OF THE TERM AS USED IN SECTION 2 OF THE RAILROAD RETIREMENT ACT OF 1935. WHILE THE EMPLOYEE IS CONTINUED IN EMPLOYMENT UNDER AN AGREEMENT IN WRITING BETWEEN THE CARRIER AND EMPLOYEE FILED WITH THE BOARD. AS THE FINAL DATE FOR THE FILING OF SUCH AGREEMENTS BY EMPLOYEES WHO ATTAINED THE AGE OF SIXTY-FIVE PRIOR TO THAT DATE AND WERE CONTINUED IN SERVICE OF THE CARRIER. A COPY OF THIS FORM IS ATTACHED HERETO. ALMOST ALL OF THE CARRIERS HAVE REFUSED TO EXECUTIVE THE CONTINUANCE IN SERVICE AGREEMENTS ALTHOUGH THEY HAVE CONTINUED IN EMPLOYMENT EMPLOYEES OF SIXTY-FIVE YEARS AND OVER.

A-51616, SEPTEMBER 9, 1936, 16 COMP. GEN. 218

CARRIER'S EMPLOYEES - RETENTION BEYOND RETIREMENT AGE - RAILROAD RETIREMENT ACT OF 1935 - ,AGREEMENTS IN WRITING" ANY FORMAL OR INFORMAL WRITING OR DOCUMENT SHOWING THE CONSENT OF THE PARTIES TO AN EMPLOYEE'S CONTINUANCE IN THE SERVICE OF A CARRIER AFTER REACHING THE AGE OF 65 IS A SUFFICIENT "AGREEMENT IN WRITING BETWEEN THE CARRIER AND EMPLOYEE" WITHIN THE MEANING OF THE TERM AS USED IN SECTION 2 OF THE RAILROAD RETIREMENT ACT OF 1935, 49 STAT. 967, REQUIRING REDUCTION OF THE ANNUITY PAYABLE UPON RETIREMENT TO AN EMPLOYEE RETAINED BEYOND THAT AGE UNLESS UPON AGREEMENT FILED WITH THE RAILROAD RETIREMENT BOARD.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE CHAIRMAN, RAILROAD RETIREMENT BOARD, SEPTEMBER 9, 936:

THERE HAS BEEN RECEIVED YOUR LETTER OF AUGUST 12, 1936, AS FOLLOWS:

SECTION 2 OF THE RAILROAD RETIREMENT ACT OF 1935 PROVIDES AS FOLLOWS:

"UPON THE ATTAINMENT OF SIXTY-FIVE YEARS OF AGE AND CONTINUANCE IN SERVICE BY THE EMPLOYEE (BUT NOT BEFORE THE EFFECTIVE DATE OF THIS ACT), THE ANNUITY OF SUCH EMPLOYEE SHALL BE REDUCED ONE-FIFTEENTH FOR EVERY YEAR OF SUCH CONTINUED SERVICE BEYOND THE AGE OF SIXTY-FIVE YEARS; EXCEPT THAT SUCH REDUCTION SHALL NOT APPLY DURING ANY PERIOD, BEGINNING AT THE AGE OF SIXTY-FIVE AND NOT EXTENDING BEYOND THE AGE OF SEVENTY, WHILE THE EMPLOYEE IS CONTINUED IN EMPLOYMENT UNDER AN AGREEMENT IN WRITING BETWEEN THE CARRIER AND EMPLOYEE FILED WITH THE BOARD, WHICH AGREEMENT MAY PROVIDE FOR EXTENSION OF EMPLOYMENT FOR ONE YEAR AND THEREAFTER IN LIKE MANNER FOR SUCCESSIVE PERIODS OF ONE YEAR EACH.'

THE RAILROAD RETIREMENT BOARD HAS PRESCRIBED A FORM OF AGREEMENT, R.R.B. FORM AA-3, FOR USE IN COMPLIANCE WITH SECTION 2 AND HAS FIXED AUGUST 31, 1936, AS THE FINAL DATE FOR THE FILING OF SUCH AGREEMENTS BY EMPLOYEES WHO ATTAINED THE AGE OF SIXTY-FIVE PRIOR TO THAT DATE AND WERE CONTINUED IN SERVICE OF THE CARRIER. A COPY OF THIS FORM IS ATTACHED HERETO.

THE AGREEMENT REQUIRED BY SECTION 2 AND THE AGREEMENT EXPRESSED IN FORM AA-3 SIMPLY EXPRESS THE CONSENT OF THE EMPLOYEE AND THE CARRIER TO CONTINUANCE IN EMPLOYMENT AFTER THE EMPLOYEE ATTAINS AGE SIXTY-FIVE, BUT LEAVE BOTH PARTIES COMPLETELY FREE TO TERMINATE THE EMPLOYMENT AT ANY TIME.

DURING THE PENDENCY OF THE LITIGATION INVOLVING THE CONSTITUTIONALITY OF THE RAILROAD RETIREMENT ACT, ALMOST ALL OF THE CARRIERS HAVE REFUSED TO EXECUTIVE THE CONTINUANCE IN SERVICE AGREEMENTS ALTHOUGH THEY HAVE CONTINUED IN EMPLOYMENT EMPLOYEES OF SIXTY-FIVE YEARS AND OVER. THEIR REFUSAL IS APPARENTLY BASED UPON A DESIRE NOT TO TAKE ANY ACTION IN RECOGNITION OF THE RAILROAD RETIREMENT ACT. RAILROAD EMPLOYEES OF SIXTY- FIVE YEARS AND OVER ARE THUS LEFT IN A QUANDARY. THEY ARE CONTINUED IN SERVICE BY THEIR CARRIER EMPLOYERS AND ARE PERMITTED BY THE ACT TO CONTINUE, BUT THEY CANNOT SECURE THE PRESCRIBED AGREEMENT TO PROTECT THEMSELVES AGAINST REDUCTION OF ANNUITY, AND THEY CANNOT RETIRE WITHOUT LOSING THEIR RIGHTS TO RETURN TO SERVICE IF THE ACT SHOULD FINALLY BE INVALIDATED.

TO MEET THIS EMERGENCY DURING THE PENDENCY OF THE LITIGATION THE RAILROAD RETIREMENT BOARD PROPOSES THAT WHERE AN EMPLOYEE OF SIXTY-FIVE OR OVER IS IN FACT CONTINUED IN EMPLOYMENT BY THE MUTUAL CONSENT OF HIMSELF AND HIS CARRIER EMPLOYER BUT IS UNABLE, BECAUSE OF THE CARRIER'S UNWILLINGNESS TO TAKE ANY ACTION IN RECOGNITION OF THE ACT, TO SECURE THE CONTINUANCE IN SERVICE AGREEMENT, THE FILING WITH THE BOARD OF ONE OF THE FOLLOWING DOCUMENTS BE DEEMED SUFFICIENT COMPLIANCE WITH SECTION 2 OF THE ACT:

1. A LETTER OR NOTICE FROM THE CARRIER ADDRESSED TO THE EMPLOYEE OR TO ITS EMPLOYEES GENERALLY CONSENTING TO THE CONTINUANCE IN SERVICE AND A LETTER FROM THE EMPLOYEE ACCEPTING THE CONTINUANCE;

2. FORM A.A. 3 EXECUTED BY THE EMPLOYEE AND ACCOMPANIED BY AN AFFIDAVIT BY THE EMPLOYEE STATING THAT HE APPROACHED THE PROPER CARRIER OFFICER AND REQUESTED THE EXECUTION OF THE AGREEMENT ON FORM A.A. 3 AND THAT HIS REQUEST WAS REFUSED THOUGH HE WAS IN FACT CONTINUED IN EMPLOYMENT BY THE CARRIER.

THE FIRST PROPOSAL SHOULD, OF COURSE, OCCASION NO DIFFICULTY. CONTEMPLATES A WRITTEN AGREEMENT EVIDENCED BY THE EXCHANGE OF CORRESPONDENCE. IT IS DOUBTFUL, HOWEVER, WHETHER THE CARRIERS WILL BE WILLING TO ADOPT THAT PRACTICE IN VIEW OF THEIR REFUSAL TO SIGN AGREEMENTS. THE SECOND PROPOSAL SEEMS TO BE THE SUREST WAY OF MEETING THE SITUATION CREATED.

THE BOARD BELIEVES THAT THE PROCEDURE OUTLINED IS A PROPER AND REASONABLE METHOD OF DEALING WITH THE EMERGENCY. THE SUBSTANTIVE RESULTS SOUGHT TO BE ACCOMPLISHED BY SECTION 2 CAN BE ONLY THE FOLLOWING:

(A) THAT UPON THE ATTAINMENT OF AGE SIXTY-FIVE THE EMPLOYEE SHOULD PRESENT HIMSELF TO HIS EMPLOYER AND GIVE THE LATTER THE OPPORTUNITY OF DECIDING WHETHER OR NOT TO CONTINUE THE EMPLOYEE IN SERVICE;

(B) THAT THE BOARD BE CURRENTLY APPRISED OF THE EMPLOYEES OF AGE SIXTY- FIVE AND OVER WHO ARE CONTINUED IN SERVICE.

BOTH OF THESE RESULTS ARE AMPLY ACHIEVED BY THE PROCEDURE OUTLINED. THE EMPLOYEE WILL HAVE PRESENTED HIMSELF TO HIS EMPLOYER AND PROVIDED THE OPPORTUNITY CONTEMPLATED AND THE BOARD WILL HAVE BEEN APPRISED OF THE CONTINUANCE IN SERVICE. OBVIOUSLY THE FACT OF CONTINUANCE OF THE EMPLOYEE IN SERVICE FOR COMPENSATION EVIDENCES COMPLETELY THE MUTUAL CONSENT OF THE PARTIES TO SUCH CONTINUANCE. THE BOARD IS THEREFORE STRONGLY OF THE OPINION THAT THE PROCEDURE OUTLINED SHOULD BE ADOPTED AND THE ANXIETY OF THE LARGE NUMBER OF RAILROAD EMPLOYEES AFFECTED BE THEREBY RELIEVED AS EARLY AS POSSIBLE.

THE BOARD WISHES TO INQUIRE WHETHER YOU WOULD APPROVE THIS PROCEDURE AND IT WILL GREATLY APPRECIATE YOUR EARLY ADVICE.

THE RAILROAD RETIREMENT ACT OF AUGUST 29, 1935, 49 STAT. 967, MAKES A GRANT OF ANNUITIES TO RETIRED RAILROAD EMPLOYEES FROM THE TREASURY OF THE UNITED STATES UNDER CERTAIN CONDITIONS, AND, PURSUANT TO THE FAMILIAR RULE THAT A GRANT MUST BE CONSTRUED MOST STRONGLY IN FAVOR OF THE GRANTOR, IF THERE BE ANY DOUBT AS TO PROPER CONSTRUCTION OF THE STATUTE,"THEN THAT CONSTRUCTION MUST BE ADOPTED WHICH IS MOST ADVANTAGEOUS TO THE INTERESTS OF THE GOVERNMENT.' HANNIBAL AND ST. J.R.R. CO. V. PACKET COMPANY, 125 U.S. 260, 271. IN THE PRESENT MATTER IT WOULD APPEAR THAT THE INTERESTS OF THE GOVERNMENT WOULD BE SERVED MOST ADVANTAGEOUSLY BY A PROCEDURE WHICH WOULD TEND TO DELAY THE RETIREMENT OF THE EMPLOYEES SO THAT THEY WOULD REMAIN ON THE PAY ROLLS OF THE CARRIER INSTEAD OF BEING TRANSFERRED TO THE ANNUITY ROLLS OF THE GOVERNMENT.

THE ACT PROVIDES THAT, SUBJECT TO CERTAIN PRESCRIBED CONDITIONS, EMPLOYEES OF THE CARRIERS SHALL BE RETIRED--- WITH AN ANNUITY TO BE PAID BY THE GOVERNMENT--- UPON ATTAINING THE AGE OF 65 YEARS; AND SECTION 2 OF THE ACT, QUOTED IN YOUR LETTER, PROVIDES FOR CONTINUANCE IN RAILROAD SERVICE OF EMPLOYEES BETWEEN THE AGES OF 65 AND 70 YEARS, WITHOUT ANY SUBSEQUENT REDUCTION IN THE RETIREMENT ANNUITY, FOR PERIODS WHILE THE EMPLOYEE IS SO CONTINUED IN EMPLOYMENT UNDER AN ,AGREEMENT IN WRITING" BETWEEN THE CARRIER AND THE EMPLOYEE FILED WITH THE BOARD. FROM YOUR SUBMISSION IT APPEARS THAT WHILE THE CARRIERS ARE WILLING TO SO CONTINUE THE SERVICES OF SUCH EMPLOYEES, FROM AN ABUNDANCE OF CAUTION THEY ARE UNWILLING TO SIGN FORMAL AGREEMENTS TO THAT EFFECT LEST THEY BE PUT IN THE POSITION OF POSSIBLY CONCEDING THE VALIDITY OF THE LEGISLATION.

WHILE THE STATUTE STIPULATES AN "AGREEMENT IN WRITING" TO BE FILED WITH THE BOARD, NO FORM OF AGREEMENT IS SPECIFIED. THE TERM "AGREEMENT" AS HERE USED IS NOT NECESSARILY SYNONYMOUS WITH ,CONTRACT" AND IT IS EVIDENT THAT NO CONTRACT WAS HERE INTENDED AS EITHER PARTY WOULD BE AT LIBERTY TO DISCONTINUE THE SERVICES AT WILL AT ANY SUBSEQUENT TIME. MANY FORMS OF WRITTEN AGREEMENTS AND CONTRACTS DO NOT REQUIRE THE SIGNATURE OF BOTH PARTIES, FAMILIAR ONES, FOR EXAMPLE, BEING LICENSE AGREEMENTS, PROMISSORY NOTES, AND BILLS OF LADING. ALL THAT WOULD APPEAR TO BE REQUIRED HERE FOR THE GOVERNMENT'S PURPOSES IS ANY FORMAL OR INFORMAL WRITING OR DOCUMENT WHICH MAY BE FILED FOR RECORD PURPOSES SHOWING THE CONSENT OF THE PARTIES TO THE EMPLOYEE'S CONTINUANCE IN THE SERVICE OF THE CARRIER AFTER HE HAS REACHED THE AGE OF 65. THE CONSENT OF THE CARRIER TO SUCH ARRANGEMENT MAY BE MANIFESTED AS READILY BY ITS ACTION IN CONTINUING THE EMPLOYEE IN SERVICE AS BY ITS SIGNATURE TO A FORMAL DOCUMENT; AND AN UNCONTROVERTED AFFIDAVIT BY THE EMPLOYEE THAT HE HAS BEEN SO CONTINUED IN SERVICE AFTER HE HAD NOTIFIED THE CARRIER IN WRITING THAT HE PROPOSED TO REMAIN IN SERVICE NOTWITHSTANDING THE FACT THAT HE HAD ATTAINED THE AGE OF 65 YEARS, WOULD APPEAR, THEREFORE, TO BE SUFFICIENT EVIDENCE IN WRITING OF THE AGREEMENT OF THE PARTIES TO SUCH ARRANGEMENT, AS WOULD, ALSO, CORRESPONDENCE BETWEEN THE EMPLOYEE AND THE CARRIER TO THE SAME EFFECT.

ACCORDINGLY, YOU ARE ADVISED THAT EITHER OF THE TWO METHODS SET FORTH IN YOUR LETTER WOULD EFFECT A SUFFICIENT COMPLIANCE WITH THE REQUIREMENTS OF THE STATUTE IN THIS RESPECT, EXCEPT THAT UNDER THE SECOND METHOD THE AFFIDAVIT OF THE EMPLOYEE SHOULD SHOW THAT HE HAS SIGNED AND FILED WITH THE CARRIER A COPY OF THE AGREEMENT FORM.