B-142198, APRIL 5, 1960, 39 COMP. GEN. 681

B-142198: Apr 5, 1960

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PROVIDES FOR PERIODIC PAYMENTS BASED ON SATISFACTORY PERFORMANCE OF SERVICES FOR THE PERIOD FOR WHICH PAYMENT IS CLAIMED. THERE IS ESTABLISHED AN EMPLOYER-EMPLOYEE RELATIONSHIP RATHER THAN THE STATUS OF INDEPENDENT CONTRACTOR. PROVIDES FOR TERMINATION BY EITHER PARTY WITHOUT REGARD TO THE AMOUNT OF WORK COMPLETED BY THE TERMINATION DATE IS NOT TO BE REGARDED AS A LUMP-SUM CONTRACT WITH PAYMENTS IN INSTALLATIONS AT THE CONVENIENCE OF THE GOVERNMENT. A CIVIL SERVICE RETIRED ANNUITANT WHO IS REEMPLOYED UNDER A CONTRACT WHICH ESTABLISHES AN EMPLOYER-EMPLOYEE RELATIONSHIP RATHER THAN AN INDEPENDENT CONTRACTOR STATUS IS TO BE CONSIDERED AS . IN THE ABSENCE OF ANY EVIDENCE OF CONGRESSIONAL INTENT THAT WORD "APPOINTIVE" IN SECTION 13 (B) WAS USED IN A MORE RESTRICTIVE SENSE THAN SIMILAR WORDS IN FORMER STATUTES.

B-142198, APRIL 5, 1960, 39 COMP. GEN. 681

CIVILIAN PERSONNEL - RETIREMENT - REEMPLOYED ANNUITANTS - ANNUITY DEDUCTIONS - CONTRACT EMPLOYEES - STATUS AS CONTRACTOR OR EMPLOYEE UNDER AN EMPLOYMENT CONTRACT WHICH DESCRIBES THE SERVICES AS PERSONAL AND PROFESSIONAL, PROVIDES FOR PERIODIC PAYMENTS BASED ON SATISFACTORY PERFORMANCE OF SERVICES FOR THE PERIOD FOR WHICH PAYMENT IS CLAIMED, FOR TERMINATION UPON WRITTEN NOTICE, AND DOES NOT MAKE THE CONTRACTOR RESPONSIBLE FOR THE END PRODUCT, THERE IS ESTABLISHED AN EMPLOYER-EMPLOYEE RELATIONSHIP RATHER THAN THE STATUS OF INDEPENDENT CONTRACTOR. AN EMPLOYMENT CONTRACT WHICH PROVIDES FOR PAYMENT BY THE MONTH AT SEMI- MONTHLY INTERVALS, RATHER THAN FOR PAYMENT OF A SUM CERTAIN FOR AN END PRODUCT, AND PROVIDES FOR TERMINATION BY EITHER PARTY WITHOUT REGARD TO THE AMOUNT OF WORK COMPLETED BY THE TERMINATION DATE IS NOT TO BE REGARDED AS A LUMP-SUM CONTRACT WITH PAYMENTS IN INSTALLATIONS AT THE CONVENIENCE OF THE GOVERNMENT. A CIVIL SERVICE RETIRED ANNUITANT WHO IS REEMPLOYED UNDER A CONTRACT WHICH ESTABLISHES AN EMPLOYER-EMPLOYEE RELATIONSHIP RATHER THAN AN INDEPENDENT CONTRACTOR STATUS IS TO BE CONSIDERED AS ,EMPLOYED" IN AN "APPOINTIVE" POSITION WITHIN THE MEANING OF SECTION 13 (B) OF THE CIVIL SERVICE RETIREMENT ACT, 5 U.S.C. 2263, FOR ANNUITY DEDUCTIONS, IN VIEW OF THE LONG-STANDING INTERPRETATION OF THE WORD "APPOINTED" AS BRINGING PERSONS EMPLOYED UNDER CONTRACT UNDER THE STATUTORY PROHIBITIONS, OR RESTRICTIONS, APPLICABLE TO REEMPLOYED ANNUITANTS, AND IN THE ABSENCE OF ANY EVIDENCE OF CONGRESSIONAL INTENT THAT WORD "APPOINTIVE" IN SECTION 13 (B) WAS USED IN A MORE RESTRICTIVE SENSE THAN SIMILAR WORDS IN FORMER STATUTES. IN VIEW OF THE SPECIFIC PROVISIONS IN SECTIONS 5 AND 7 OF THE ACT OF SEPTEMBER 2, 1957, PUBLIC LAW 85-262, 71 STAT. 588 AND 589, WHICH DEAL WITH EXEMPTIONS FROM LAWS AFFECTING THE EMPLOYMENT OF PERSONS BY THE LINCOLN SESQUICENTENNIAL COMMISSION, THE TERM "SERVICES" IN SECTION 4 OF THE ACT, WHICH CONFERS BROAD DISCRETIONARY POWERS ON THE COMMISSION IN THE PROCUREMENT OF "SUPPLIES, SERVICES AND PROPERTY" WITHOUT REGARD TO THE LAWS AND PROCEDURES APPLICABLE TO FEDERAL AGENCIES, DOES NOT HAVE REFERENCE TO PERSONAL SERVICES; THEREFORE, IN THE ABSENCE OF THE INVOCATION OF THE AUTHORITY IN SECTION 4 TO EXEMPT A CIVIL SERVICE RETIRED ANNUITANT WHO WAS EMPLOYED UNDER CONTRACT BY THE COMMISSION FROM THE ANNUITY DEDUCTION PROVISIONS IN SECTION 13 (B) OF THE CIVIL SERVICE RETIREMENT ACT, 5 U.S.C. 2263, TOGETHER WITH THE FACT THAT SUCH DEDUCTIONS WERE MADE, THE EMPLOYEE'S COMPENSATION MUST BE REGARDED AS SUBJECT TO ANNUITY DEDUCTION.

TO MANLEY W. ALLEN, LINCOLN SESQUICENTENNIAL COMMISSION, APRIL 5, 1960:

ON MARCH 2, 1960, YOU SUBMITTED FOR OUR DECISION THE QUESTION WHETHER YOU MAY REFUND TO MARGARET JORGENSEN, AS CLAIMED BY HER, THE CIVIL SERVICE RETIREMENT ANNUITY DEDUCTED FROM PAYMENTS MADE TO HER FOR SERVICES RENDERED UNDER A CONTRACT WITH THE LINCOLN SESQUICENTENNIAL COMMISSION.

SECTION 13 (B) OF THE CIVIL SERVICE RETIREMENT ACT, AS AMENDED, 70 STAT. 757, 5 U.S.C. 2263, PROVIDES IN PERTINENT PART AS FOLLOWS:

(B) IF AN ANNUITANT UNDER THIS ACT * * * HEREAFTER BECOMES EMPLOYED, OR ON THE DATE OF ENACTMENT OF THE CIVIL SERVICE RETIREMENT ACT AMENDMENTS OF 1956 IS SERVING, IN AN APPOINTIVE OR ELECTIVE POSITION, HIS SERVICE ON AND AFTER THE DATE HE WAS OR IS SO EMPLOYED SHALL BE COVERED BY THIS ACT. DEDUCTIONS FOR THE FUND SHALL BE WITHHELD FROM HIS SALARY, BUT THERE SHALL BE DEDUCTED FROM HIS SALARY, EXCEPT FOR LUMP-SUM LEAVE PAYMENT PURPOSES UNDER THE ACT OF DECEMBER 21, 1944, A SUM EQUAL TO THE ANNUITY ALLOCABLE TO THE PERIOD OF ACTUAL EMPLOYMENT, * * *

THE CLAIMANT WAS ENGAGED UNDER A CONTRACT ENTERED INTO ON NOVEMBER 3, 1958, BETWEEN THE EXECUTIVE DIRECTOR OF THE LINCOLN COMMISSION AND THE CLAIMANT. ARTICLES I AND II PROVIDED AS FOLLOWS:

ARTICLE I. SCOPE OF SERVICES. FOR THE CONSIDERATION OF FIVE HUNDRED DOLLARS ($500.00) PER MONTH, THE PAYMENT TO BE MADE BY THE COMMISSION AS HEREINAFTER SET FORTH, THE CONTRACTOR SHALL, UNDER THE SUPERVISION OF DR. C. PERCY POWELL, RESEARCH DIRECTOR OF THE COMMISSION, PERFORM THE FOLLOWING PERSONAL AND PROFESSIONAL SERVICES:

ASSIST IN THE PREPARATION OF THE TEXT OF A PUBLICATION WITH THE TITLE " LINCOLN: DAY-BY-DAY 1861-1865" BY CLOSE READING AND COMPETENT EXAMINATION OF NEWSPAPERS, PUBLISHED MONOGRAPHS, MANUSCRIPT CORRESPONDENCE, PERIODICAL LITERATURE, AND THE LIKE. THE TEXT WILL RECORD THE FULL DAILY ACTIVITIES OF PRESIDENT LINCOLN WHILE HE WAS IN THE WHITE HOUSE.

ARTICLE II. PAYMENT FOR PERSONAL SERVICES. BASED ON SATISFACTORY PERFORMANCE OF THE SERVICES DESCRIBED IN ARTICLE I HEREOF, AS DETERMINED AND APPROVED IN ACCORDANCE WITH ARTICLE III HEREOF, THE CONTRACTOR SHALL BE ENTITLED TO BE PAID FIVE HUNDRED DOLLARS ($500.00) MONTHLY. PAYMENTS SHALL BE MADE TWICE A MONTH, EXCEPT THAT PAYMENT FOR WORK PERFORMED DURING THE MONTHS OF OCTOBER 1958, AND APRIL 1959, SHALL BE MADE ON A PRO-RATA BASIS IN ONE PAYMENT FOR EACH MONTH.

ARTICLE III OF THE CONTRACT PROVIDED FOR PAYMENT ON VOUCHERS SUPPORTED BY SEMIMONTHLY INVOICES OR STATEMENTS "DESCRIBING THE PERSONAL OR PROFESSIONAL SERVICES RENDERED * * * DURING THE BILLING PERIOD * * *.' ARTICLES IV AND V ARE NOT PERTINENT TO THE MATTER HERE IN QUESTION. ARTICLE VII PROVIDED THAT THE CONTRACT WAS TO BE OPERATIVE FOR A 6-MONTH PERIOD BEGINNING OCTOBER 9, 1958, AND TERMINATING APRIL 8, 1959. ARTICLE VIII PROVIDED THAT THE CONTRACT COULD BE TERMINATED BY EITHER PARTY PRIOR TO APRIL 8, 1959, UPON WRITTEN NOTICE OF AT LEAST 30 DAYS.

THE CONTRACT ON ITS FACE ESTABLISHES AN EMPLOYER-EMPLOYEE RELATIONSHIP AND DOES NOT CONSTITUTE THE CLAIMANT AN INDEPENDENT CONTRACTOR. SUCH CONCLUSION FOLLOWS FROM THE PROVISION DESCRIBING THE SERVICES AS PERSONAL AND PROFESSIONAL; THE PROVISION FOR SUPERVISION; THE PROVISION FOR PERIODIC PAYMENT BASED UPON SATISFACTORY PERFORMANCE OF SERVICES FOR THE PERIOD FOR WHICH PAYMENT IS LAIMED; AND THE PROVISION FOR TERMINATION UPON WRITTEN NOTICE. ALSO OF SIGNIFICANCE IS THE FACT THAT THE CONTRACT DID NOT MAKE THE CLAIMANT ENTIRELY RESPONSIBLE FOR AN END PRODUCT OR RESULT--- THE CLAIMANT HAVING BEEN REQUIRED MERELY TO ASSIST IN THE PREPARATION OF THE TEXT OF THE SUBJECT PUBLICATION. 27 AM. JUR., INDEPENDENT CONTRACTORS, SECTION 2; 56 C.J.S., MASTER AND SERVANT, SECTION 3 (1), ET SEQ.

WE CANNOT AGREE WITH YOUR SUGGESTION THAT THE CONTRACT MAY BE VIEWED AS A LUMP-SUM ONE WITH PAYMENTS IN INSTALLMENTS AS A CONVENIENCE TO THE COMMISSION AND THE CLAIMANT AS THE WORK PROGRESSED. THE CONTRACT CLEARLY PROVIDED FOR PAYMENT BY THE MONTH (WITH THE EXCEPTION OF FRACTIONAL PERIODS IN OCTOBER 1958 AND APRIL 1959) AT SEMIMONTHLY INTERVALS, AND, AS PREVIOUSLY NOTED, DID NOT PROVIDE A SUM CERTAIN FOR AN END PRODUCT OR RESULT. FURTHERMORE, THE CONTRACT WAS SUBJECT TO TERMINATION BY EITHER PARTY UPON WRITTEN NOTICE, WITHOUT REGARD TO THE QUANTUM OF WORK COMPLETED BY THE TERMINATION DATE. IN OUR OPINION, THOSE CONSIDERATIONS NEGATIVE A LUMP-SUM CHARACTERISTIC.

YOU SAY THAT WHILE THE CONTRACT PROVIDED FOR SUPERVISION, IT IS UNDERSTOOD THAT THE CLAIMANT ACTED MOSTLY INDEPENDENTLY AND WITHOUT CLOSE SUPERVISION, USING THE FACILITIES OF THE LIBRARY OF CONGRESS. HOWEVER, OUR VIEW IS THAT, EVEN THOUGH THE CLAIMANT MAY NOT HAVE BEEN CONTINUOUSLY UNDER DIRECT OBSERVATION OR SUPERVISION, THE PROVISION IN ARTICLE III FOR PERIODIC SUBMISSION OF EVIDENCE OF PROGRESS, TOGETHER WITH THE RIGHT OF TERMINATION CONFERRED BY ARTICLE VIII, AFFORDED THE MEANS OF SUPERVISION SUFFICIENT TO SATISFY THE ELEMENT OF CONTROL USUALLY CONSIDERED IN DETERMINING WHETHER A CONTRACTOR IS AN INDEPENDENT CONTRACTOR OR AN EMPLOYEE. 56 C.J.S., MASTER AND SERVANT, SECTION 3 (3), (4), (5).

THERE REMAIN FOR CONSIDERATION THE QUESTIONS WHETHER A PERSON WHO SERVES UNDER A CONTRACT OF EMPLOYMENT, SUCH AS THE ONE HERE INVOLVED, IS TO BE CONSIDERED AS "EMPLOYED" IN AN "APPOINTIVE" POSITION WITHIN THE MEANING OF SECTION 13 (B) OF THE RETIREMENT ACT, SUPRA, AND, IF SO, WHETHER ANY PROVISION OF PUBLIC LAW 85-262, 71 STAT. 587, CREATING THE LINCOLN SESQUICENTENNIAL COMMISSION, EXEMPTED, OR SERVED AS A BASIS FOR THE DISCRETIONARY EXEMPTION OF, A RE-EMPLOYED ANNUITANT FROM THE REQUIREMENT FOR DEDUCTION OF ANNUITY FROM COMPENSATION.

AS TO THE FIRST QUESTION JUST STATED, OUR DECISIONS CONSISTENTLY HAVE HELD THAT PERSONS EMPLOYED UNDER A CONTRACT OF EMPLOYMENT ARE WITHIN STATUTORY PROHIBITIONS AGAINST, OR RESTRICTIONS ON, THE RE EMPLOYMENT OF ANNUITANTS (SECTION 204 OF THE ACT OF JUNE 30, 1932, 47 STAT. 404, 5 U.S.C. 715A (1952 ED.); SECTION 2 (B) OF THE ACT OF MAY 29, 1930, AS AMENDED BY SECTION 2 OF THE ACT OF JANUARY 24, 1942, 56 STAT. 13, 5 U.S.C. 715; SECTION 2 (B) OF THE ACT OF FEBRUARY 28, 1948, 62 STAT. 49). COMP. GEN. 300; 14 ID. 253; 18 ID. 573 (AMPLIFIED, 18 ID. 624); 22 ID. 300; B-125559, DECEMBER 27, 1955, MAY 16, JULY 30 AND AUGUST 28, 1957. VIEW OF OUR LONG-STANDING INTERPRETATION OF THE TERM "APPOINTED" AND ITS VARIANTS AS USED IN THE STATUTES JUST CITED, WE WOULD NOT BE WARRANTED IN HOLDING THAT CONGRESS USED THE WORD "APPOINTIVE" IN SECTION 13 (B) IN A MORE RESTRICTIVE SENSE THAN SIMILAR WORDS HERETOFORE WERE USED.

CONCERNING THE QUESTION OF EXEMPTION FROM SECTION 13 (B), SECTION 4 (B) OF PUBLIC LAW 85-262, TO WHICH YOU REFER, CONFERS BROAD DISCRETIONARY POWERS UPON THE COMMISSION IN THE PROCUREMENT OF ,SUPPLIES, SERVICES AND PROPERTY" WITHOUT REGARD TO THE LAWS AND PROCEDURES APPLICABLE TO FEDERAL AGENCIES, TO SUCH EXTENT AS FOUND TO BE NECESSARY. HOWEVER, WE DO NOT BELIEVE THAT THE "SERVICES" MENTIONED IN SECTION 4 (B) HAVE REFERENCE TO PERSONAL SERVICES SUCH AS HERE INVOLVED. WE REACH THAT CONCLUSION BECAUSE SECTIONS 5 (A) AND 7 DEAL WITH EXEMPTIONS FROM LAWS AFFECTING THE EMPLOYMENT OF PERSONS, WHICH EXEMPTIONS WOULD HAVE BEEN UNNECESSARY IF SECTION 4 (B) HAD BEEN INTENDED TO REFER TO PERSONAL SERVICES. IT IS PERTINENT TO NOTE THAT SECTION 7, IN EXEMPTING RETIRED MILITARY AND CERTAIN OTHER OFFICERS FROM THE DUAL COMPENSATION AND EMPLOYMENT LAWS, EXPRESSLY EXCEPTS FROM THE EXEMPTIONS THE RESTRICTIONS OF SECTION 212 OF THE ACT OF JUNE 30, 1932, AS AMENDED, 5 U.S.C. 59A, ON CONCURRENT RETIRED PAY AND CIVILIAN COMPENSATION, FROM WHICH WE MAY INFER THAT RETIRED CIVILIAN ANNUITANTS LIKEWISE WERE NOT TO BE EXEMPTED FROM THE CONDITIONS PRESCRIBED BY SECTION 13 (B) OF THE RETIREMENT STATUTE, SUPRA, FOR RE- EMPLOYMENT. IN ANY EVENT, THE PROVISIONS OF SAID SECTION 4 (B) ARE NOT SELF-EXECUTING, AND THERE IS NOTHING IN THE RECORD BEFORE US TO SHOW THAT THE COMMISSION PURPORTED TO INVOKE SUCH DISCRETIONARY AUTHORITY FOR THE PURPOSE OF EXEMPTING CLAIMANT FROM THE REQUIREMENT OF SECTION 13 (B) FOR THE DEDUCTION OF THE ANNUITY FROM COMPENSATION. CF. 22 COMP. GEN. 400; ID. 1083; 24 ID. 216, 220. ON THE CONTRARY, SINCE THE DEDUCTIONS WERE IN FACT MADE, IT IS EVIDENT THAT THERE WAS NO INTENTION TO WAIVE THE REQUIREMENTS OF SAID SECTION 13 (B).

UPON THE BASIS OF THE FOREGOING COMMENTS WE MUST HOLD THAT YOU ARE NOT AUTHORIZED TO CERTIFY A VOUCHER COVERING REFUND OF THE ANNUITY DEDUCTED FROM CLAIMANT'S COMPENSATION UNDER THE CONTRACT OF EMPLOYMENT.

THE ENCLOSURES WHICH ACCOMPANIED YOUR LETTER OF MARCH 2 ARE HEREWITH RETURNED.