A-83411, FEBRUARY 19, 1937, 16 COMP. GEN. 775

A-83411: Feb 19, 1937

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OR EMOLUMENT OF ANY CIVIL EMPLOYEE OF THE UNITED STATES REMOVED FOR CAUSE" IS APPLICABLE WHERE THERE IS INVOLVED A REMOVAL FOR CAUSE OF AN EMPLOYEE LEGALLY APPOINTED OR EMPLOYED. NOT WHERE THE EMPLOYMENT IS OBTAINED THROUGH FRAUD AND INVALID IN ITS INCEPTION. THAT AN EMPLOYEE WHO OBTAINS EMPLOYMENT THROUGH FRAUD IS NOT ENTITLED TO UNPAID COMPENSATION IS NOT FOR APPLICATION TO EMPLOYMENT OBTAINED THROUGH MISREPRESENTATIONS SUCH AS WOULD RENDER THE APPOINTMENT OR CONTRACT OF EMPLOYMENT VOIDABLE ONLY. IS AS FOLLOWS: IN DECISION OF THE COMPTROLLER GENERAL OF 7 JANUARY. IT WAS HELD IN THE CASE OF AN EMPLOYEE OF THE PANAMA CANAL THAT EMPLOYMENT OBTAINED BY FRAUDULENT MISREPRESENTATION AND DECEIT CONFERRED NO ENFORCEABLE RIGHT TO COMPENSATION THAT HAD NOT BEEN PAID ALTHOUGH SAID EMPLOYEE WAS ENTITLED AS A DE FACTO EMPLOYEE TO RETAIN PAYMENTS THAT HAD BEEN MADE TO HIM.

A-83411, FEBRUARY 19, 1937, 16 COMP. GEN. 775

COMPENSATION - WITHHOLDING - STATUTORY PROHIBITION - DISMISSALS FOR CAUSE AFTER LEGAL, VOIDABLE, OR VOID APPOINTMENTS THE ACT OF FEBRUARY 24, 1931, 46 STAT. 1415, PROHIBITING THE "WITHHOLDING OR CONFISCATION OF THE EARNED PAY, SALARY, OR EMOLUMENT OF ANY CIVIL EMPLOYEE OF THE UNITED STATES REMOVED FOR CAUSE" IS APPLICABLE WHERE THERE IS INVOLVED A REMOVAL FOR CAUSE OF AN EMPLOYEE LEGALLY APPOINTED OR EMPLOYED, AND NOT WHERE THE EMPLOYMENT IS OBTAINED THROUGH FRAUD AND INVALID IN ITS INCEPTION, BUT THE RULE IN 15 COMP. GEN. 587, THAT AN EMPLOYEE WHO OBTAINS EMPLOYMENT THROUGH FRAUD IS NOT ENTITLED TO UNPAID COMPENSATION IS NOT FOR APPLICATION TO EMPLOYMENT OBTAINED THROUGH MISREPRESENTATIONS SUCH AS WOULD RENDER THE APPOINTMENT OR CONTRACT OF EMPLOYMENT VOIDABLE ONLY.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE NAVY, FEBRUARY 19, 1937:

YOUR LETTER OF JANUARY 28, 1937, IS AS FOLLOWS:

IN DECISION OF THE COMPTROLLER GENERAL OF 7 JANUARY, 1936, TO THE GOVERNOR OF THE PANAMA CANAL (15 COMP. GEN. 587), IT WAS HELD IN THE CASE OF AN EMPLOYEE OF THE PANAMA CANAL THAT EMPLOYMENT OBTAINED BY FRAUDULENT MISREPRESENTATION AND DECEIT CONFERRED NO ENFORCEABLE RIGHT TO COMPENSATION THAT HAD NOT BEEN PAID ALTHOUGH SAID EMPLOYEE WAS ENTITLED AS A DE FACTO EMPLOYEE TO RETAIN PAYMENTS THAT HAD BEEN MADE TO HIM.

THE COMMANDANT OF THE NAVY YARD, WASHINGTON, D.C., REPORTS THAT THE RULE ENUNCIATED IN THE CITED DECISION IS BEING APPLIED IN ANALOGOUS CASES, AND COMPENSATION NOT ALREADY PAID HAS BEEN WITHHELD IN A NUMBER OF INSTANCES. THE PAY ROLLS INVOLVED SHOW THE RATE OF PAY AND THE NUMBER OF UNITS EMPLOYED WITH A NOTATION IN THE "REMARKS" COLUMN THAT PAYMENT WAS WITHHELD IN ACCORDANCE WITH THE COMPTROLLER GENERAL'S DECISION.

SOME DOUBT HAS ARISEN AS TO THE LEGALITY OF THIS PRACTICE BECAUSE OF THE FOLLOWING PROVISION OF THE ACT OF 24 FEBRUARY, 1931 (46 STAT. 1415; 5 U.S.C. SEC. 46 (A) (, VIZ:

"FROM AND AFTER FEBRUARY 24, 1931, THERE SHALL BE NO WITHHOLDING OR CONFISCATION OF THE EARNED PAY, SALARY, OR EMOLUMENT OF ANY CIVIL EMPLOYEE OF THE UNITED STATES REMOVED FOR CAUSE: PROVIDED, THAT IF AT THE TIME OF SUCH REMOVAL ANY SUCH EMPLOYEE IS INDEBTED TO THE UNITED STATES ANY SALARY, PAY, OR EMOLUMENT ACCRUING TO SUCH EMPLOYEE COMING WITHIN THE PROVISIONS OF THIS SECTION SHALL BE APPLIED IN WHOLE OR IN PART TO THE SATISFACTION OF ANY CLAIM OR INDEBTEDNESS DUE TO THE UNITED STATES.'

IN VIEW OF THE EXPRESS PROVISIONS OF THE CITED ACT, YOUR DECISION IS REQUESTED AS TO WHETHER PAYMENTS MAY BE WITHHELD FROM EMPLOYEES UNDERCIRCUMSTANCES SIMILAR TO THOSE SET FORTH IN YOUR DECISION OF 7 JANUARY, 1936, SUPRA, IT BEING NOTED FROM THE FACTS REPORTED IN THE DECISION THAT THE EMPLOYEE WHOSE CASE WAS THEN UNDER CONSIDERATION HAD BEEN REMOVED FOR CAUSE WHICH CONSISTED OF HIS FRAUDULENT MISREPRESENTATION IN OBTAINING EMPLOYMENT.

IF THE QUESTION IS ANSWERED IN THE NEGATIVE, PLEASE STATE WHAT DISPOSITION SHOULD BE MADE OF THE AMOUNTS THAT HAVE HERETOFORE BEEN WITHHELD ON THIS GROUND.

YOUR LETTER SEEMS TO INDICATE THERE MAY BE A MISUNDERSTANDING AS TO THE SCOPE OF THE DECISION OF JANUARY 7, 1936, 15 COMP. GEN. 587.

THE ACT OF FEBRUARY 24, 1931, QUOTED IN YOUR LETTER IS APPLICABLE WHERE THERE IS INVOLVED A REMOVAL FOR CAUSE OF AN EMPLOYEE WHO HAD BEEN LEGALLY APPOINTED OR EMPLOYED.

THE CASE CONSIDERED IN THE DECISION OF JANUARY 7, 1936, INVOLVED A CASE OF A PERSON WHO HAD OBTAINED EMPLOYMENT UNDER THE PANAMA CANAL THROUGH FRAUD IN THE NAME OF AND BY POSING AS ANOTHER PERSON. THE DECISION HELD AS FOLLOWS:

IT APPEARS THAT BUT FOR THE FRAUDULENT MISREPRESENTATION AND DECEIT PRACTICED BY THE EMPLOYEE REFERRED TO IN YOUR LETTER, HE COULD NOT HAVE OBTAINED THE EMPLOYMENT, AND THAT, UPON DISCOVERY OF THE FRAUDULENT NATURE OF THE ENTRY INTO SERVICE, THE EMPLOYEE WAS IMMEDIATELY DISCHARGED. UNDER SUCH CIRCUMSTANCES, THE CONTRACT OF EMPLOYMENT CANNOT BE MADE THE BASIS OF A LEGAL CLAIM FOR SERVICES RENDERED THEREUNDER. AT MOST, HE COULD BE REGARDED AS ONLY A DE FACTO EMPLOYEE AND AS SUCH ENTITLED TO RETAIN SUCH PAYMENTS AS MAY HAVE BEEN MADE TO HIM, BUT HAVING NO ENFORCEABLE RIGHT TO COMPENSATION THAT HAD NOT BEEN PAID.

ACCORDINGLY, YOU ARE ADVISED THAT NO PAYMENT TO THIS EMPLOYEE IS AUTHORIZED FOR SERVICE RENDERED UNDER THE FRAUDULENTLY OBTAINED EMPLOYMENT.

THERE WAS SIMPLY APPLIED THE GENERAL RULE APPLICABLE TO APPOINTMENTS OR EMPLOYMENTS INVALID IN THEIR INCEPTION. THERE IS NOTHING IN THE ACT OF FEBRUARY 24, 1931, TO INDICATE AN INTENT TO ABROGATE THAT RULE. THERE WAS NO INTENTION BY THE DECISION TO HOLD THAT UNPAID COMPENSATION MUST BE WITHHELD FROM AN EMPLOYEE DISMISSED BECAUSE OF A MISREPRESENTATION SUCH AS WOULD RENDER THE APPOINTMENT OR CONTRACT OF EMPLOYMENT VOIDABLE ONLY. SEE IN THIS CONNECTION DECISION OF FEBRUARY 3, 1937, A-82648, TO THE CIVIL SERVICE COMMISSION.