B-136376, AUGUST 29, 1958, 38 COMP. GEN. 175

B-136376: Aug 29, 1958

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THE EMPLOYEE WHO PERFORMS SERVICES PRIOR TO DISCLOSURE OF THE RECORD FALSIFICATION IS IN A DE FACTO STATUS WHICH ENTITLED THE EMPLOYEE TO RETAIN COMPENSATION PREVIOUSLY RECEIVED BUT DOES NOT GIVE RISE TO ANY ENFORCEABLE RIGHT TO COMPENSATION NOT RECEIVED. RETIREMENT DEDUCTIONS FROM THE EMPLOYEE'S SALARY DURING THE PERIOD OF EMPLOYMENT ARE FOR TRANSFER FROM THE RETIREMENT FUND TO THE APPROPRIATION FROM WHICH THE SALARY PAYMENTS WERE MADE. THIS APPOINTMENT WAS LATER CHANGED TO AN EXCEPTED APPOINTMENT-CONDITIONAL EFFECTIVE SEPTEMBER 19. WOULD HAVE PRECLUDED HIS APPOINTMENT. WHILE CHARGES WERE BEING PREPARED FOR HIS INDEBTEDNESS. THE DEPARTMENT OF THE AIR FORCE DETERMINED THAT THE EMPLOYEE'S STATUS WAS THAT OF A DE FACTO EMPLOYEE DURING THE PERIOD OF HIS EMPLOYMENT AND THAT HE WAS NOT ENTITLED TO ANY SALARY PAYMENTS AFTER THE FALSIFICATION OF HIS EDUCATION WAS ESTABLISHED.

B-136376, AUGUST 29, 1958, 38 COMP. GEN. 175

CIVILIAN PERSONNEL - FALSE QUALIFICATION, ETC., STATEMENTS - DE FACTO STATUS - RETIREMENT DEDUCTIONS IN CASES WHERE FALSIFICATION OF EDUCATION INFORMATION AT THE TIME OF EMPLOYMENT WOULD BE AN ABSOLUTE BAR TO EMPLOYMENT, THE EMPLOYEE WHO PERFORMS SERVICES PRIOR TO DISCLOSURE OF THE RECORD FALSIFICATION IS IN A DE FACTO STATUS WHICH ENTITLED THE EMPLOYEE TO RETAIN COMPENSATION PREVIOUSLY RECEIVED BUT DOES NOT GIVE RISE TO ANY ENFORCEABLE RIGHT TO COMPENSATION NOT RECEIVED; THEREFORE, RETIREMENT DEDUCTIONS FROM THE EMPLOYEE'S SALARY DURING THE PERIOD OF EMPLOYMENT ARE FOR TRANSFER FROM THE RETIREMENT FUND TO THE APPROPRIATION FROM WHICH THE SALARY PAYMENTS WERE MADE.

TO THE CHAIRMAN, UNITED STATES CIVIL SERVICE COMMISSION, AUGUST 29, 1958:

ON MAY 22, 1958, YOUR CHIEF OF THE RETIREMENT DIVISION, FILE DRS:RMC:EM R -122609, REQUESTED OUR ADVICE CONCERNING THE PROPER DISPOSITION OF RETIREMENT DEDUCTIONS MADE FROM THE SALARY OF AN EMPLOYEE DURING HIS EMPLOYMENT BY THE DEPARTMENT OF THE AIR FORCE.

INFORMATION FURNISHED BY THE DEPARTMENT OF THE AIR FORCE SHOWS THAT THE EMPLOYEE RECEIVED A TEMPORARY APPOINTMENT EFFECTIVE AUGUST 8, 1955, AS A CONSTRUCTION ENGINEER ( TECHNICAL BUILDING). THIS APPOINTMENT WAS LATER CHANGED TO AN EXCEPTED APPOINTMENT-CONDITIONAL EFFECTIVE SEPTEMBER 19, 1955. LATER A VERIFICATION OF THE EMPLOYEE'S CERTIFIED EDUCATION INFORMATION DISCLOSED FALSIFICATION OF HIS EDUCATION WHICH, IF IT HAD BEEN KNOWN AT THE TIME OF HIS EMPLOYMENT, WOULD HAVE PRECLUDED HIS APPOINTMENT. HE RESIGNED EFFECTIVE MAY 1, 1957, WHILE CHARGES WERE BEING PREPARED FOR HIS INDEBTEDNESS. THE DEPARTMENT OF THE AIR FORCE DETERMINED THAT THE EMPLOYEE'S STATUS WAS THAT OF A DE FACTO EMPLOYEE DURING THE PERIOD OF HIS EMPLOYMENT AND THAT HE WAS NOT ENTITLED TO ANY SALARY PAYMENTS AFTER THE FALSIFICATION OF HIS EDUCATION WAS ESTABLISHED. AS A RESULT OF THIS DETERMINATION HIS SALARY PAYMENTS WERE DISCONTINUED ON MARCH 24, 1957. ON APRIL 4, 1958 (1CSC FORM 3037), THE DEPARTMENT OF THE AIR FORCE REQUESTED THE RETIREMENT DEDUCTIONS TAKEN FROM THE SALARY OF THE EMPLOYEE DURING HIS EMPLOYMENT WITH THAT DEPARTMENT BE TRANSFERRED FROM THE RETIREMENT FUND TO THE APPROPRIATION FROM WHICH HIS SALARY PAYMENTS WERE MADE. THE QUESTION TO BE DETERMINED IS WHETHER THE EMPLOYEE IS TO BE CONSIDERED A DE FACTO EMPLOYEE DURING THE PERIOD OF HIS EMPLOYMENT OR WHETHER THE FALSIFICATION OF HIS EDUCATION MAKES HIS EMPLOYMENT CONTRACT VOIDABLE AT THE OPTION OF THE GOVERNMENT.

AS A GENERAL RULE OUR VIEW HAS BEEN THAT FALSIFICATION IN AN EMPLOYEE'S APPLICATION WHICH DOES NOT INVOLVE AN ABSOLUTE BAR TO HIS EMPLOYMENT DOES NOT RENDER HIS EMPLOYMENT VOID AB INITIO BUT VOIDABLE ONLY. THAT IS, IF THE TRUE FACTS HAD BEEN KNOWN AT TIME OF APPOINTMENT, AND IF THE APPOINTMENT, NEVERTHELESS, WITHIN THE DISCRETION OF THE AGENCY OR THE CIVIL SERVICE COMMISSION, COULD HAVE BEEN MADE, SUCH APPOINTMENT IS TO BE TREATED AS VOIDABLE. SEE A-82648, FEBRUARY 3, 937; B-110831, AUGUST 4, 1952; AND 37 COMP. GEN. 483. IN CASES WHERE THE FALSIFICATION IN AN EMPLOYEE'S APPLICATION INVOLVES AN ABSOLUTE BAR TO HIS EMPLOYMENT WE HAVE HELD THAT THE EMPLOYMENT CANNOT BE MADE THE BASIS OF A LEGAL CLAIM FOR SERVICES RENDERED THEREUNDER. THE EMPLOYEE IS TO BE REGARDED AS A DE FACTO EMPLOYEE--- NOT APPLICABLE IN CASE OF STATUTORY PROHIBITION--- AND AS SUCH IS ENTITLED TO RETAIN SUCH PAYMENTS AS MAY HAVE BEEN MADE TO HIM. HE HAS NO ENFORCEABLE RIGHT TO COMPENSATION THAT HAS NOT BEEN PAID. SEE 15 COMP. GEN. 587; 23 COMP. GEN. 606; B-90406, DECEMBER 1, 1949; AND B- 122347, MARCH 30, 1955. IN THE CASE OF A STATUTORY PROHIBITION, GENERALLY, THE SUM PAID FOR THE ENTIRE PERIOD OF EMPLOYMENT IS FOR RECOVERY. 29 COMP. GEN. 75; 35 COMP. GEN. 216. F: AUTOMATIC RETIREMENT CASES, 12 COMP. GEN. 341, 31 COMP. GEN. 262.

IN THE PRESENT CASE THE DEPARTMENT OF THE AIR FORCE HAS REPORTED THAT THE EMPLOYEE COULD NOT HAVE BEEN APPOINTED IF IT HAS BEEN KNOWN AT THE TIME OF HIS EMPLOYMENT THAT THE EDUCATION INFORMATION HE FURNISHED WAS FALSE. A RESULT OF SUCH FALSIFICATION, THE DEPARTMENT DETERMINED THAT THE EMPLOYEE'S STATUS WAS THAT OF A DE FACTO EMPLOYEE DURING THE PERIOD OF HIS EMPLOYMENT. THIS DETERMINATION APPEARS TO CONFORM WITH OUR VIEWS, AS EXPRESSED ABOVE. THEREFORE, WE CONCLUDE THAT THERE IS NO AUTHORITY TO PAY TO THE EMPLOYEE THE AMOUNT DEDUCTED FROM HIS SALARY AS RETIREMENT DEDUCTIONS FOR THE PERIOD HE WAS EMPLOYED BY THE DEPARTMENT OF THE AIR FORCE.

ACCORDINGLY, THE RETIREMENT DEDUCTIONS TAKEN FROM THE EMPLOYEE'S SALARY DURING HIS EMPLOYMENT WITH THE DEPARTMENT OF THE AIR FORCE SHOULD BE TRANSFERRED FROM THE RETIREMENT FUND TO THE APPROPRIATION FROM WHICH HIS SALARY PAYMENTS WERE MADE AS REQUESTED BY THAT DEPARTMENT. SEE 35 COMP. GEN. 216, 219. THE ENCLOSURES SUBMITTED WITH THE LETTER OF MAY 22, 1958, ARE RETURNED HEREWITH AS REQUESTED.