B-131439, OCT. 8, 1957

B-131439: Oct 8, 1957

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WE ARE REQUESTED TO RENDER OUR DECISION ON THE MATTER. IT APPEARS THAT THE EMPLOYEE WAS SUSPENDED WITHOUT PAY. WAS RESTORED TO DUTY ON NOVEMBER 23. COULD NOT BE EXTENDED TO AN EMPLOYEE IN A NONSENSITIVE POSITION WHO WAS SUBJECT TO THE PROVISIONS OF SECTION 14 OF THE VETERANS' PREFERENCE ACT OF 1944. UPON RESTORATION THE EMPLOYEE HERE INVOLVED WAS PAID BACK PAY ON THE BASIS OF OUR DECISION OF SEPTEMBER 20. HE WAS NOT IN THE CLASSIFIED CIVIL SERVICE. 130 C.CLS. 358) IF IT WERE NOT FOR THE REPORTED FACT THAT HE IS A PREFERENCE ELIGIBLE WITHIN THE PURVIEWOF SECTION 14 OF THE VETERANS' PREFERENCE ACT OF 1944. IS SUBJECT TO THE BACK PAY PROVISIONS OF SECTION 6 (B) (2) OF THE ACT OF AUGUST 24.

B-131439, OCT. 8, 1957

TO THE SECRETARY OF THE INTERIOR:

THE ADMINISTRATIVE ASSISTANT SECRETARY'S LETTER OF AUGUST 23, 1957, FORWARDED TO US CERTAIN CORRESPONDENCE RELATING TO THE CLAIM OF MR. BERTAL J. MCCARTY FOR AN ADDITIONAL AMOUNT REPRESENTING COMPENSATION FOR A PERIOD OF SUSPENSION OR SEPARATION FROM SERVICE AS AN EMPLOYEE OF THE ALASKA RAILROAD. CERTAIN OTHER CORRESPONDENCE HAD PREVIOUSLY BEEN INFORMALLY FURNISHED US. WE ARE REQUESTED TO RENDER OUR DECISION ON THE MATTER.

IT APPEARS THAT THE EMPLOYEE WAS SUSPENDED WITHOUT PAY, EFFECTIVE APRIL 24, 1954, TERMINATED ON AUGUST 13, 1954, AND WAS RESTORED TO DUTY ON NOVEMBER 23, 1956, AS A RESULT OF THE DECISION OF THE SUPREME COURT OF THE UNITED STATES IN COLE V. YOUNG, 351 U.S. 536, WHICH HELD THAT THE SUMMARY SUSPENSION AND DISMISSAL PROCEDURES OF EXECUTIVE ORDER NO. 10450 AND THE ACT OF AUGUST 26, 1950, 64 STAT. 476, COULD NOT BE EXTENDED TO AN EMPLOYEE IN A NONSENSITIVE POSITION WHO WAS SUBJECT TO THE PROVISIONS OF SECTION 14 OF THE VETERANS' PREFERENCE ACT OF 1944, AS AMENDED, 5 U.S.C. 863, PRESCRIBING THE PROCEDURES TO BE FOLLOWED IN THE DISCHARGE, SUSPENSION, ETC., OF PREFERENCE EMPLOYEES FOR CAUSE.

UPON RESTORATION THE EMPLOYEE HERE INVOLVED WAS PAID BACK PAY ON THE BASIS OF OUR DECISION OF SEPTEMBER 20, 1956, 36 COMP. GEN. 225 (DEALING SPECIFICALLY WITH RESTORATIONS RESULTING FROM THE OHIO AND YOUNG DECISION), AND OTHER PERTINENT DECISIONS, FOR THE PERIOD OF SUSPENSION OR REMOVAL. THE EMPLOYEE HAS RAISED OBJECTION TO THE AMOUNT PAID AND HAS REQUESTED PAYMENT OF AN ADDITIONAL AMOUNT BASED UPON THE CONTENTIONS HEREINAFTER DISCUSSED.

THE EMPLOYEE URGES AT THE OUTSET THAT, UNLIKE EMPLOYEES OF THE POST OFFICE DEPARTMENT WITH WHICH THE DECISION IN 36 COMP. GEN. 225 DEALT, HE WAS NOT IN THE CLASSIFIED CIVIL SERVICE. WE AGREE WITH THAT BECAUSE THE CIVIL SERVICE REGULATIONS EXCEPT FROM THE COMPETITIVE (CLASSIFIED) SERVICE EMPLOYEES OF THE ALASKA RAILROAD. 5 CPR 6.110 (E) (1). THIS WOULD RESULT IN THE EMPLOYEE NOT BEING ENTITLED TO ANY BACK PAY AT ALL (CHOLLAR V. UNITED STATES, 130 C.CLS. 358) IF IT WERE NOT FOR THE REPORTED FACT THAT HE IS A PREFERENCE ELIGIBLE WITHIN THE PURVIEWOF SECTION 14 OF THE VETERANS' PREFERENCE ACT OF 1944, AS AMENDED, SUPRA, AND, THEREFORE, IS SUBJECT TO THE BACK PAY PROVISIONS OF SECTION 6 (B) (2) OF THE ACT OF AUGUST 24, 1912, AS ADDED BY THE ACT OF JUNE 10, 1948, 62 STAT. 355, 5 U.S.C. 652 (B) (2).

THE EMPLOYEE'S OTHER CONTENTIONS RELATE TO THE APPLICATION OF SECTION 6 (B) (2) JUST CITED, WHICH READS IN PERTINENT PART (QUOTING FROM THE UNITED STATES CODE) AS FOLLOWS:

"ANY PERSON WHO IS DISCHARGED, SUSPENDED, OR FURLOUGHED WITHOUT PAY, UNDER SECTION 863 OF THIS TITLE, WHO * * * IS REINSTATED OR RESTORED TO DUTY * * * SHALL BE PAID COMPENSATION AT THE RATE RECEIVED ON THE DATE OF SUCH DISCHARGE, SUSPENSION, OR FURLOUGH FOR THE PERIOD FOR WHICH HE RECEIVED NO COMPENSATION WITH RESPECT TO THE POSITION FROM WHICH HE WAS DISCHARGED, SUSPENDED, OR FURLOUGHED, LESS ANY AMOUNTS EARNED BY HIM THROUGH OTHER EMPLOYMENT DURING SUCH PERIOD, AND SHALL FOR ALL PURPOSES EXCEPT THE ACCUMULATION OF LEAVE BE DEEMED TO HAVE RENDERED SERVICE DURING SUCH PERIOD.'

MR. MCCARTY'S FIRST CONTENTION WITH REGARD TO THE AMOUNT OF BACK PAY RELATES TO THE METHOD USED IN THE COMPUTATION. AN EXPLANATION AND TABULATION IS CONTAINED IN A LETTER OF THE PERSONNEL OFFICER OF THE ALASKA RAILROAD DATED AUGUST 1, 1957, IN PERTINENT PART AS FOLLOWS:

"* * * ALL ASSIGNMENTS IN TRAIN AND ENGINE SERVICE ARE BASED ON SENIORITY. IT IS REASONABLE TO ASSUME THAT MR. MCCARTHY WOULD HAVE EARNED AT LEAST THE AVERAGE, PROVIDED HE WORKED FULL TIME, DURING THE PERIOD OF SUSPENSION. THE COMPENSATION THAT WOULD HAVE BEEN PAID TO MR. MCCARTY WAS THEREFORE CALCULATED ON TWO DIFFERENT BASES. SINCE MR. MCCARTY WAS AN ENGINEER IN FREIGHT SERVICE AT THE TIME OF HIS SUSPENSION, COMPUTATIONS WERE MADE BASED ON A MINIMUM OF 100 MILES OR 8 HOURS PER DAY FROM THE DATE OF HIS SUSPENSION, AND ALSO ON THE BASIS OF WHAT HE MIGHT HAVE EARNED ON AN AVERAGE BASIS. AS AN ENGINEER IN FREIGHT SERVICE HE WOULD EARN MORE THAN THE MINIMUM DAY AND SO CALCULATIONS WERE MADE ON THE ACTUAL EARNINGS OF ENGINEERS AHEAD OF MR. MCCARTY ON THE ENGINEERS SENIORITY ROSTER AND THOSE BELOW HIM, USING THE AVERAGE OF THOSE EMPLOYEES WHO PERFORMED REASONABLY COMPARABLE SERVICE.

"COMPUTATIONS WERE FIRST MADE BY TAKING THE PAYROLL FIGURES ON THE GROSS PAY OF THREE ENGINEERS AND TWO FIREMEN AS THEY STOOD ON THE RESPECTIVE SENIORITY ROSTERS ABOVE AND BELOW MR. MCCARTY. THE TOTAL OF THE EARNINGS OF THESE FIVE MEN WAS DIVIDED BY FIVE TO OBTAIN AN AVERAGE. IN ADDITION, THE EARNINGS OF THE ENGINEER NEXT AHEAD OF MR. MCCARTY AND THE FIREMAN NEXT BELOW HIM ON THE SENIORITY ROSTERS WERE COMPUTED TO DETERMINE THIS AVERAGE. THE DIFFERENCE BETWEEN THESE TWO AVERAGES FOR THE TIME INVOLVED WAS WITHIN $30.00 OF BEING THE SAME. THE MONEY AMOUNT, HOWEVER, COULD NOT BE USED TO PRODUCE AN AVERAGE FOR MR. MCCARTY SINCE THESE EARNINGS INCLUDED PAY INCREASES GRANTED AFTER MR. MCCARTY'S SUSPENSION.

"IN ACCORDANCE WITH MR. COULTER'S LETTER OF OCTOBER 29 AND HIS RADIOGRAM OF NOVEMBER 8 ADVISING THAT MR. MCCARTY WAS NOT ENTITLED TO WAGE INCREASES FOR THE PERIOD OF SUSPENSION AND SEPARATION, WE USED THE ACTUAL MILEAGE MADE BY ENGINEER MILTON A. LOOMIE AND FIREMAN JOSEPH MARTIN, NEXT AHEAD AND NEXT BEHIND RESPECTIVELY, TO OBTAIN AN AVERAGE OF THE ACTUAL MILES RUN DURING THIS PERIOD IN COMPUTING THE PAY DUE MR. MCCARTY.

"THE FOLLOWING TABULATION SHOWS MILES RUN, RATE PER MILE, AMOUNT THAT WOULD HAVE BEEN PAID AT THIS RATE DIVIDED BY TWO TO OBTAIN AN AVERAGE, LESS THE INTERIM EARNINGS OF MR. MCCARTY, AND THE AMOUNT PAID:

CHART.

MILES RATE PER

RUN MILE AMOUNT 1954 LOOMIS 21,619 .2230 $ 7,051.04 MARTIN 22,852 .2230 5,096.00

DIVIDED BY 2 12,147.04

AVERAGE 6,073.52

LESS INTERIM EARNINGS 1,186.91

GROSS (LESS INTERIM EARNINGS) 4,886.61 LOOMIS 46,687 .2230

10,411.20 MARTIN 40,381 .2230

9,004.96 DIVIDED BY 2 19,416.16

AVERAGE 9,708.08 LESS

INTERIM EARNINGS 3,148.92 GROSS (LESS

INTERIM EARNINGS) 6,559.16 LOOMIS 44,188

.2230

9,853.92MARTIN 37,838 .2230

8,437.87 DIVIDED BY 2 18,291.79

AVERAGE 9,145.90 LESS

INTERIM EARNINGS 3,962.44 GROSS (LESS

INTERIM EARNINGS) 5,183.46 GROSS EARNINGS:

(1954) $ 6,073.52 (1955) 9,708.08

(1956) 9,145.90 24,927.50

$24,927.50 DEDUCTIONS: INTERIM

EARINGS (1954) $1,186.91

(1955) 3,148.92

(1956) 3,962.44 $8,298.27 WITHHOLDING TAX 2,993.26 RETIREMENT

1,080.90 TERRITORIAL TAX 374.16 FEDERAL INSURANCE 118.46 ABR MEDICAL ASSOC. DUES 123.25 ADVANCE (CASH) 500.00 5,190.03 TOTAL DEDUCTIONS

$13,488.30 13,488.30 AMOUNT OF CHECK

$11,439.20

"1. PAYMENT WAS MADE FROM APRIL 24, 1954 TO NOVEMBER 22, 1956. MR. MCCARTY WAS ON PAID LEAVE THROUGH APRIL 24, 1956 (4) AND RETURNED TO DUTY NOVEMBER 23, 1956.

"2. PAYMENT WAS MADE AT THE RATE OF LAST PAY RATE OF $0.2230 PER MILE.

"3. NO ALLOWANCE WAS MADE FOR GENERAL SALARY INCREASE, STEP INCREASES OR WEIGHT ON DRIVERS.

"4. WHEN HOSTLING SERVICE WAS PERFORMED THIS WAS CONVERTED TO 100 MILES FOR EIGHT HOURS STRAIGHT TIME AND 150 MILES FOR EIGHT HOURS OVERTIME.

"5. YEARLY MILEAGES EARNED BY LOOMIS AND MARTIN WERE AVERAGED, THEN MULTIPLIED BY .2230 TO PRODUCE A MONEY FIGURE. YEARLY EARNINGS OF MR. MCCARTY FROM W-2 FORMS FURNISHED FOR 1954, 1955 AND 1956 (NOT INCLUDING HIS WIFE'S EARNINGS) WERE DEDUCTED FOR ACTUAL PAYMENT FIGURES.'

THE EMPLOYEE ASSERTS THAT THE METHOD OF COMPUTATION USED IS UNFAIR TO HIM BECAUSE IT INVOLVED EMPLOYEES WITH LOWER RATES OF PAY THAN HIS. HOWEVER, IT IS TO BE NOTED THAT THE RATE OF PAY FOR THE OTHER EMPLOYEES WAS NOT USED IN THE COMPUTATION BUT ONLY THEIR MILEAGE. THE RATE OF PAY USED WAS THE RATE MR. MCCARTY WAS RECEIVING ON THE DATE OF SUSPENSION OR OPERATION. UNDER THE EXPRESS TERMS OF THE STATUTE QUOTED ABOVE, SUCH RATE WAS THE CORRECT ONE. ALSO, THE METHOD OF ESTIMATION OF THE MILEAGE MR. MCCARTY WOULD HAVE ACCUMULATED UNDER THE RAILROAD'S ASSIGNMENT SYSTEM STRIKES US AS BEING FAIR AND REASONABLE UNDER THE CIRCUMSTANCES AND AS PROPERLY HAVING BEEN USED AS A BASIS FOR COMPUTATION OF BACK PAY. RELATED TO THE MATTER OF COMPUTATION IS THE CONTENTION THAT WAGE INCREASES DURING THE PERIOD OF SUSPENSION OR SEPARATION SHOULD BE INCLUDED. THE STATUTE PROVIDES THAT THE RATE OF COMPENSATION TO BE USED IS THE "RATE RECEIVED ON THE DATE OF" THE ADVERSE ACTION. THE QUOTED LANGUAGE NECESSARILY EXCLUDES ANY INTERIM CHANGES IN RATE OF COMPENSATION. 35 COMP. GEN. 241; GREEN V. UNITED STATES, 124 C.CLS. 186; O-BRIEN V. UNITED STATES, 124 ID. 655; JEFFREY V. UNITED STATES, 127 ID. 231.

ANOTHER ITEM QUESTIONED BY MR. MCCARTY IS THE DENIAL OF ANNUAL AND SICK LEAVE ACCRUAL DURING THE PERIOD OF SUSPENSION OR SEPARATION. THE STATUTORY PROVISION QUOTED ABOVE MAKES IT CLEAR THAT LEAVE SHALL NOT ACCRUE FOR THE PERIOD FOR WHICH BACK PAY IS PAYABLE, AND, THEREFORE, DENIAL OF SUCH ACCRUAL WAS PROPER. HOWEVER, NOTING THE STATEMENT IN THE PERSONNEL OFFICER'S LETTER OF AUGUST 1, 1957, THAT THE EMPLOYEE WAS ON "PAID LEAVE THROUGH APRIL 24, 1956 (4)," THERE IS FOR CONSIDERATION OUR DECISION OF APRIL 25, 1957, 36 COMP. GEN. 738, CONCERNING RECREDIT OF ANNUAL LEAVE GRANTED TO EMPLOYEES IN CONNECTION WITH SECURITY SUSPENSIONS UNDER THE ACT OF AUGUST 26, 1950, SUPRA, WHEN RESTORED UNDER THE COLE V. YOUNG DECISION. CF. 36 COMP. GEN. 779.

MR. MCCARTY ALSO QUESTIONS DEDUCTIONS FROM BACK PAY OF HIS GROSS EARNINGS (BEFORE THE DEDUCTION OF INCOME TAXES) FROM OTHER EMPLOYMENT DURING THE PERIOD OF SUSPENSION OR SEPARATION, IT BEING HIS CONTENTION THAT THE DEDUCTION SHOULD BE FOR "INTERIM NET EARNINGS" WHICH, IN HIS OPINION, WOULD EXCLUDE INCOME TAXES ON THE AMOUNTS EARNED. THE PHRASE "INTERIM NET EARNINGS" APPEARS IN THE BACK PAY PROVISIONS OF THE ACT OF AUGUST 26, 1950, SUPRA, WHICH ARE INAPPLICABLE HERE (36 COMP. GEN. 225 SUPRA). THE STATUTORY PROVISION HERE APPLICABLE REQUIRES THAT THERE BE DEDUCTED "ANY AMOUNTS EARNED BY HIM THROUGH OTHER EMPLOYMENT.' CLEARLY, THE DEDUCTION MUST BE THE TOTAL AMOUNTS EARNED WITHOUT REDUCTION BY THE AMOUNT OF INCOME TAXES THEREON. WE DO NOT MEAN TO IMPLY, HOWEVER, THAT THE TERM "INTERIM NET EARNINGS" IS TO BE GIVEN A DIFFERENT MEANING. CF. 35 COMP. GEN. 268.

OBJECTION ALSO IS RAISED CONCERNING THE DEDUCTIONS UNDER THE FEDERAL EMPLOYEES' GROUP LIFE INSURANCE ACT OF 1954, 68 STAT. 736. MR. MCCARTY CONTENDS THAT THE ACT DID NOT BECOME EFFECTIVE UNTIL AFTER HIS SUSPENSION OR SEPARATION AND THAT SINCE HE COULD NOT SIGN AN AUTHORIZATION FOR DEDUCTIONS UNDER THE CIRCUMSTANCES, THE DEDUCTIONS FOR THE PERIOD OF SUSPENSION OR SEPARATION WERE IMPROPER. HOWEVER, UNDER THE TERMS OF SECTION 5 (A) OF THE ACT, 68 STAT. 738, ELIGIBLE EMPLOYEES ARE AUTOMATICALLY COVERED UNLESS WRITTEN NOTICE IS GIVEN OF A DESIRE NOT TO BE COVERED AND, THEREFORE, NO WRITTEN AUTHORIZATION IS NECESSARY AS A CONDITION TO COVERAGE. OF COURSE, IN SITUATIONS SUCH AS HERE PRESENTED, WHERE THE EMPLOYEE IS NOT ACTUALLY IN SERVICE, NO OPPORTUNITY IS AFFORDED TO WAIVE COVERAGE; NEVERTHELESS, FOR THE REASONS STATED IN THE LAST PARAGRAPH OF OUR DECISION IN 36 COMP. GEN. 225, SUPRA, OUR VIEW IS THAT EMPLOYEES SUBJECT TO THE RETROACTIVE COVERAGE OF THE BACK PAY STATUTE HERE INVOLVED ARE COVERED BY THE INSURANCE STATUTE AND THAT DEDUCTIONS SHOULD ACCORDINGLY BE MADE FROM RETROACTIVE COMPENSATION. WE NOTE THAT THE REGULATIONS OF THE CIVIL SERVICE COMMISSION, 5 CFR 22,306, RELATING TO APPEALS OF PREFERENCE ELIGIBLES, NOW PROVIDE FOR POSTHUMOUS CONSIDERATION OF APPEALS AND ISSUANCE OF RETROACTIVE CORRECTIVE RECOMMENDATIONS, IN THE CASE OF DECEASED APPELLANTS, SO THAT IT IS POSSIBLE FOR INSURANCE BENEFITS TO BECOME RETROACTIVELY AVAILABLE.

AS TO THE DEDUCTION OF THE ALASKA RAILROAD MEDICAL ASSOCIATION DUES, OUR OPINION IS THAT THE OBJECTION IS WELL TAKEN. THE CORRESPONDENCE SHOWS THAT AFTER HIS REINSTATEMENT MR. MCCARTY FILED A CLAIM FOR REIMBURSEMENT OF EXPENSES OF MEDICAL TREATMENT INCURRED DURING HIS SUSPENSION OR SEPARATION BUT THAT THE CLAIM WAS DISALLOWED BECAUSE THE MEDICAL ASSOCIATION PLAN CALLS FOR PAYMENT OF ONLY THE COSTS OF MEDICAL CARE PROVIDED BY CONTRACT DOCTORS IN ALASKA. SINCE MR. MCCARTY HAD RETURNED TO THE STATES AS A RESULT OF HIS SUSPENSION OR SEPARATION, HE COULD NOT, OF COURSE, AVAIL HIMSELF OF THE SERVICES OF THE ASSOCIATION'S CONTRACT DOCTORS. THEREFORE, IT APPEARING THAT THE BENEFITS FOR WHICH DUES ARE PAYABLE ACTUALLY WERE NOT AVAILABLE DURING THE PERIOD OF SUSPENSION OR SEPARATION, WE CONCLUDE THAT THE DEDUCTION OF MEDICAL ASSOCIATION DOES FROM THE BACK PAY OTHERWISE ALLOWABLE WAS UNWARRANTED AND THE AMOUNT THEREOF SHOULD BE REFUNDED. WE HAVE NOT OVERLOOKED THE STATEMENT THAT NO ALASKA RAILROAD EMPLOYEE IS ENTITLED TO THE MEDICAL BENEFITS OUTSIDE OF ALASKA. HOWEVER, IN CONSIDERING THE PROPRIETY OF ASSESSING DUES, WE WOULD DISTINGUISH BETWEEN CASES OF VOLUNTARY ABSENCE FROM ALASKA AND CASES SUCH AS THE PRESENT ONE IN WHICH THE ABSENCE IS IN A LARGE MEASURE INVOLUNTARY. WE ALSO HAVE NOTED THE STATEMENT THAT THE ASSOCIATION HAS PAID OUT A SUBSTANTIAL SUM FOR MEDICAL TREATMENT FOR MR. MCCARTY SINCE HIS REINSTATEMENT, BUT, ASSUMING THAT THE AMOUNT OF BENEFITS THUS PAID DID NOT DEPEND UPON LENGTH OF MEMBERSHIP IN THE ASSOCIATION, INCLUDING THE PERIOD OF SUSPENSION OR SEPARATION, WE DO NOT THINK THAT FACT IS MATERIAL.

THE CLAIM FOR REIMBURSEMENT OF THE EXPENSES OF TRAVEL AND TRANSPORTATION IN LEAVING ALASKA AND RETURNING THERETO PROPERLY WAS NOT ALLOWED, IN THE ABSENCE OF STATUTORY AUTHORITY FOR SUCH REIMBURSEMENT UNDER THE CIRCUMSTANCES HERE PRESENTED. THE APPLICABLE BACK PAY STATUTE AUTHORIZES PAYMENT OF COMPENSATION "AT THE RATE RECEIVED ON THE DATE OF" ADVERSE ACTION, ONLY, AND DOES NOT AUTHORIZE REIMBURSEMENT OF ANY INCIDENTAL EXPENSES OCCASIONED BY THE ADVERSE ACTION.

IN SUMMARY, WE AGREE ON THE PRESENT RECORD WITH THE DEPARTMENT'S DISPOSITION OF MR. MCCARTY'S CLAIM, EXCEPT IN THE MATTER OF THE MEDICAL ASSOCIATION DUES AND RECREDIT OF LEAVE FOR THE PERIOD OF MUTUAL LEAVE IMMEDIATELY PRECEDING SUSPENSION WITHOUT PAY.