B-131475, MAR. 6, 1963

B-131475, MAR. 6, 1963

TO MAJOR WILLIAM H. KOCH:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 21, 1963, AND ENCLOSURES, RELATIVE TO THE RETIRED PAY WITHHELD FROM YOU BY THE DEPARTMENT OF THE ARMY, FROM OCTOBER 1, 1962, PURSUANT TO THE MOST RECENT INTERPRETATION OF THE DUAL COMPENSATION RESTRICTIONS IN SECTION 212 OF THE ECONOMY ACT OF JUNE 30, 1932, CH. 314, 47 STAT. 406, AS AMENDED, 5 U.S.C. 59A.

YOU STATE THAT YOU ENTERED ON ACTIVE MILITARY DUTY AS AN OFFICER ON APRIL 29, 1941, UNDER AN APPOINTMENT IN THE ARMY OF THE UNITED STATES; THAT ON JUNE 9, 1947, YOU WERE APPOINTED A RESERVE OFFICER IN THE GRADE OF MAJOR; THAT ON DECEMBER 27, 1950, YOU WERE TENDERED A TEMPORARY APPOINTMENT AS MAJOR IN THE ARMY OF THE UNITED STATES, AND THAT YOU CONTINUED TO SERVE IN THAT GRADE UNTIL YOU WERE RETIRED FOR PHYSICAL DISABILITY ON NOVEMBER 30, 1951, THE ORDERS IDENTIFYING YOUR COMPONENT AS "ORC.' AN EARLIER QUESTION AS TO THE APPLICATION OF THE DUAL COMPENSATION RESTRICTIONS WAS RESOLVED IN YOUR FAVOR IN THE CASE OF KOCH V. UNITED STATES, CT.CL.NO. 169-57, JUNE 5, 1957, BASED ON THE DECISION IN THE CASE OF TANNER V. UNITED STATES, 129 CT.CL. 792, WHICH INVOLVED THE RIGHTS OF A RESERVE OFFICER RETIRED FOR LONGEVITY UNDER TITLE III OF THE ACT OF JUNE 29, 1948, CH. 708, 62 STAT. 1087. JUDGMENT WAS NOT ENTERED IN YOUR FAVOR AS A RESULT OF THE COURT'S CONSIDERATION OF THE ISSUES INVOLVED, BUT WAS BASED SOLELY ON A STIPULATION OF THE PARTIES. SUBSEQUENT COURT DECISIONS HAVE RAISED A DOUBT AS TO THE CORRECTNESS OF THAT JUDGMENT. SINCE IT WAS RENDERED IN YOUR FAVOR PURSUANT TO A STIPULATION OF THE PARTIES, THE RULE OF RES JUDICATA IS NOT APPLICABLE SO AS TO GOVERN YOUR RIGHT TO RETIRED PAY FOR PERIODS NOT COVERED BY THE JUDGMENT.

APPLICATION OF THE DUAL COMPENSATION RESTRICTIONS HAS BEEN THE SUBJECT OF MANY JUDICIAL INTERPRETATIONS. OUR DECISION OF JULY 9, 1962, B-136459, COPY ENCLOSED, WAS BASED ON THE DECISION BY THE COURT OF CLAIMS IN THE WATMAN CASE, CT.CL.NO. 189-59, DATED MARCH 1, 1961. IN THAT CASE THE PRINCIPLE OF WHICH WAS REAFFIRMED BY THE DECISION OF THE COURT OF CLAIMS IN THE GRANDALL CASE, CT.CL.NO. 4-60, DECIDED MAY 9, 1962, THE COURT BROUGHT OUT THAT THE EXEMPTION FROM THE DUAL COMPENSATION RESTRICTIONS IN THE ECONOMY ACT APPLIES TO A MEMBER'S RETIRED PAY ONLY IF HE EARNED THE RIGHT TO THAT RETIRED PAY BY REASON OF SERVICE IN A RESERVE COMPONENT OR BY REASON OF HIS STATUS BEING ASSIMILATED WITH THAT OF A MEMBER OF A RESERVE COMPONENT. IF HIS STATUS AS A MEMBER OF A RESERVE COMPONENT HAD NO BEARING ON HIS RIGHT TO RETIRED PAY, IT HAS NO BEARING ON HIS RIGHT TO EXEMPTION FROM THE DUAL COMPENSATION RESTRICTIONS.

THE DEPARTMENT OF THE ARMY HAS FURNISHED A REPORT TO THE EFFECT THAT YOUR WERE SERVING ON ACTIVE DUTY UNDER YOUR TEMPORARY APPOINTMENT AS MAJOR IN THE ARMY OF THE UNITED STATES--- RECEIVED UNDER SECTION 515 (C) OF THE OFFICER PERSONNEL ACT OF 1947, CH. 512, 61 STAT. 907--- ON NOVEMBER 30, 1951, WHEN YOU WERE RETIRED FOR PHYSICAL DISABILITY UNDER THE PROVISIONS OF SECTION 402 OF THE CAREER COMPENSATION ACT OF 1949, APPROVED OCTOBER 12, 1949, CH. 681, 63 STAT. 816. CONTRARY TO YOUR BELIEF, IT APPEARS THAT ALTHOUGH YOU HELD AN APPOINTMENT AS MAJOR IN THE OFFICERS' RESERVE CORPS FROM JUNE 9, 1947, YOU NEVER SERVED ON ACTIVE DUTY IN THAT CAPACITY AND THAT, THEREFORE, SUCH APPOINTMENT HAS NO BEARING ON YOUR RIGHT TO RECEIVE RETIRED PAY IN ADDITION TO COMPENSATION FOR YOUR CIVILIAN EMPLOYMENT. YOU DID NOT RECEIVE THE ACTIVE DUTY PAY AND ALLOWANCES OF A MAJOR UNTIL YOU WERE GIVEN A TEMPORARY PROMOTION TO THAT GRADE ON DECEMBER 27, 1950. YOU WERE RETIRED IN THE GRADE OF MAJOR BECAUSE YOU SERVED SATISFACTORILY IN THAT GRADE AS A TEMPORARY OFFICER, AS PROVIDED IN SECTIONS 402 (D) AND 409 OF THE 1949 ACT. THE COURT CONCLUDED THAT WATMAN WAS EXEMPT FROM THE RESTRICTIONS OF THE ECONOMY ACT SINCE THE ACT OF SEPTEMBER 22, 1941, 55 STAT. 728, UNDER WHICH HE RECEIVED HIS APPOINTMENT AS A TEMPORARY OFFICER, GRANTED SUCH OFFICERS "THE SAME RIGHTS, PRIVILEGES, AND BENEFITS" AS MEMBERS OF THE OFFICERS' RESERVE CORPS. THE RIGHTS, PRIVILEGES AND BENEFITS GRANTED TO TEMPORARY OFFICERS UNDER THE 1947 ACT--- APPLICABLE IN YOUR CASE--- WERE RESTRICTED TO THOSE WHICH ACCRUED WHILE SERVING ON ACTIVE DUTY AS A TEMPORARY OFFICER.

ACCORDINGLY, IT MUST BE CONCLUDED THAT YOU ARE NOT EXEMPT FROM THE DUAL COMPENSATION RESTRICTIONS OF THE ECONOMY ACT AND THAT YOUR RETIRED PAY WAS PROPERLY WITHHELD BY THE DEPARTMENT OF THE ARMY FROM OCTOBER 1, 1962.

H.R. 12721, 87TH CONGRESS, WAS DESIGNED TO SIMPLIFY, MODERNIZE AND CONSOLIDATE THE LAWS RELATING TO THE EMPLOYMENT OF THE CIVILIANS IN MORE THAN ONE POSITION AS WELL AS THE LAWS GOVERNING THE CIVILIAN EMPLOYMENT OF RETIRED MEMBERS OF THE ARMED FORCES. THE BILL WOULD HAVE REPEALED SOME FORTY STATUTORY PROVISIONS RELATING TO DUAL EMPLOYMENT OR DOUBLE COMPENSATION, INCLUDING SECTION 212 OF THE ECONOMY ACT, AS AMENDED. SIMILAR BILL, S-3780, WAS INTRODUCED IN THE 87TH CONGRESS. WHILE NEITHER OF THOSE BILLS WAS ENACTED INTO LAW, IT IS UNDERSTOOD THAT OTHER BILLS RELATING TO THIS PROBLEM WILL BE INTRODUCED FOR CONSIDERATION BY THE 88TH CONGRESS. SEE IN THIS CONNECTION H.R. 3816, 88TH CONGRESS, WHICH HAS BEEN REFERRED TO THE COMMITTEE ON POST OFFICE ..END :