B-147767, MAY 12, 1967, 46 COMP. GEN. 798

B-147767: May 12, 1967

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ARE . WHOSE EMPLOYEES ARE NOT CIVILIAN EMPLOYEES OF THE GOVERNMENT FOR THE PURPOSES OF SECTION 9 (A/ . - IS DOUBTFUL. " INCLUDE THE OFFICERS AND EMPLOYEES OF HOWARD UNIVERSITY? (2) IF YOUR ANSWER TO QUESTIONS (1) IS NEGATIVE. ARE THE OFFICERS AND EMPLOYEES OF FREEDMEN'S HOSPITAL WHO TRANSFER TO HOWARD UNIVERSITY UNDER PUBLIC LAW 87-262 "INVOLUNTARILY SEPARATED FROM THE SERVICE" AS THOSE WORDS ARE USED IN SECTION 9 (C) OF PUBLIC LAW 89-301. SECTION 9 (A) OF PUBLIC LAW 89-301 IS. INCLUDING EACH CORPORATION WHOLLY OWNED OR CONTROLLED BY THE UNITED STATES * * * HOWARD UNIVERSITY WAS INCORPORATED BY ACT OF CONGRESS DATED MARCH 2. THE UNIVERSITY HAS BEEN HELD TO HAVE BEEN A PRIVATE CORPORATION AS DISTINGUISHED FROM A GOVERNMENT INSTRUMENTALITY.

B-147767, MAY 12, 1967, 46 COMP. GEN. 798

OFFICERS AND EMPLOYEES - SEVERANCE PAY - INVOLUNTARY SEPARATION REQUIREMENT WHETHER THE EMPLOYEES OF FREEDMEN'S HOSPITAL WHO PURSUANT TO PUBLIC LAW 87-262, ENACTED PRIOR TO THE SEVERANCE PAY PROVISIONS IN SECTION 9 OF PUBLIC LAW 89-301, DATED OCTOBER 29, 1965, ARE ,INVOLUNTARILY SEPARATED FROM THE SERVICE" WITHIN THE CONTEMPLATION OF SECTION 9 (C) OF THE 1965 ACT UPON TRANSFER TO HOWARD UNIVERSITY--- A PRIVATE SELF GOVERNED INSTITUTION UNDER THE TERMS OF ITS CORPORATE CHARTER, WHOSE EMPLOYEES ARE NOT CIVILIAN EMPLOYEES OF THE GOVERNMENT FOR THE PURPOSES OF SECTION 9 (A/ --- IS DOUBTFUL. THEREFORE, THE EMPLOYEES SHOULD BE EXCLUDED FROM THE SEVERANCE PAY PROVISIONS UNDER THE REGULATORY AUTHORITY CONTAINED IN SECTION 9 (B) (8), AND ANY ALLOWANCE OF SEVERANCE PAY TO THE EMPLOYEES AUTHORIZED BY CONGRESS.

TO THE CHAIRMAN, UNITED STATES CIVIL SERVICE COMMISSION, MAY 12, 1967:

WE REFER TO YOUR LETTER OF APRIL 28, 1967, REQUESTING A DECISION UPON THE FOLLOWING QUESTIONS:

(1) DOES THE LANGUAGE IN SECTION 9 (A) OF PUBLIC LAW 89-301,"EACH CIVILIAN OFFICER OR EMPLOYEE IN OR UNDER--- (1) THE EXECUTIVE BRANCH OF THE UNITED STATES," INCLUDE THE OFFICERS AND EMPLOYEES OF HOWARD UNIVERSITY?

(2) IF YOUR ANSWER TO QUESTIONS (1) IS NEGATIVE, ARE THE OFFICERS AND EMPLOYEES OF FREEDMEN'S HOSPITAL WHO TRANSFER TO HOWARD UNIVERSITY UNDER PUBLIC LAW 87-262 "INVOLUNTARILY SEPARATED FROM THE SERVICE" AS THOSE WORDS ARE USED IN SECTION 9 (C) OF PUBLIC LAW 89-301.

SECTION 9 (A) OF PUBLIC LAW 89-301 IS, IN PART, AS FOLLOWS:

EXCEPT AS PROVIDED IN SUBSECTION (B) OF THIS SECTION, THIS SECTION APPLIES TO EACH CIVILIAN OFFICER OR EMPLOYEE IN OR UNDER---

(1) THE EXECUTIVE BRANCH OF THE GOVERNMENT OF THE UNITED STATES,INCLUDING EACH CORPORATION WHOLLY OWNED OR CONTROLLED BY THE UNITED STATES * * *

HOWARD UNIVERSITY WAS INCORPORATED BY ACT OF CONGRESS DATED MARCH 2, 1867, 14 STAT. 438. THE UNIVERSITY HAS BEEN HELD TO HAVE BEEN A PRIVATE CORPORATION AS DISTINGUISHED FROM A GOVERNMENT INSTRUMENTALITY. SEE MAIATICO CONSTRUCTION COMPANY V. UNITED STATES, 79 F.2D 418 AND COBB V. HOWARD UNIVERSITY, 106 F.2D 860. WHILE THE ACT OF INCORPORATION WAS AMENDED ON MAY 13, 1938, 52 STAT. 351, NOTHING IN THE AMENDING STATUTE CHANGED THE PRIVATE CHARACTER OF THE CORPORATION (HOWARD UNIVERSITY).

WE NOTE THAT CONGRESS ENACTS ANNUAL APPROPRIATIONS FOR THE SUPPORT AND MAINTENANCE OF HOWARD UNIVERSITY AND THAT THE PRESIDENT AND DIRECTORS OF THE CORPORATION ARE DIRECTED TO SUBMIT ANNUAL REPORTS TO THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE (20 U.S.C. 121). WE NOTE THAT UNDER 20 U.S.C. 122 AND 123 CERTAIN RESTRICTIONS ARE IMPOSED UPON THE USE OF FEDERAL APPROPRIATIONS ENACTED FOR THE BENEFIT OF THE UNIVERSITY AND PROVISION IS MADE FOR INSPECTION OF THE UNIVERSITY BY FEDERAL OFFICIALS AND FOR THE CONTROL AND SUPERVISION OF EXPENDITURES OF MONEYS FROM THE SAID APPROPRIATIONS. NEVERTHELESS, EXCEPT FOR THE PURPOSE OF SEEING THAT APPROPRIATIONS ARE EXTENDED FOR THE PURPOSES AND WITHIN THE LIMITATIONS PRESCRIBED BY CONGRESS, NEITHER THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE NOR ANY OTHER FEDERAL OFFICIAL HAS ANY ADMINISTRATIVE OR SUPERVISORY CONTROL OVER THE OPERATIONS, ACTIVITIES OR ASSETS OF THE UNIVERSITY, WHICH REMAINS A PRIVATE SELF GOVERNED INSTITUTION UNDER THE TERMS OF ITS CORPORATE CHARTER.

SUCH FACT WAS RECOGNIZED BY THE CONGRESS WHEN CONSIDERING H.R. 6302, SUBSEQUENTLY ENACTED AS PUBLIC LAW 87-262, 20 U.S.C. 124. SEE PAGES 2 AND 3 OF S.REPT. NO. 876, SEPTEMBER 5, 1961, ON H.R. 6302, AND PAGE 2 OF H.REPT. NO. 741, JULY 19, 1961, ON H.R. 6302. SEE ALSO PAGE 64 OF THE HEARINGS HELD MAY 15 AND 19, 1961, BY THE SPECIAL SUBCOMMITTEE ON EDUCATION OF THE COMMITTEE ON EDUCATION AND LABOR, HOUSE OF REPRESENTATIVES. MOREOVER, IT IS FURTHER INDICATED IN SUCH LEGISLATIVE HISTORY THAT THE FEDERAL EMPLOYEES OF FREEDMEN'S HOSPITAL WOULD BE TRANSFERRING TO NON-FEDERAL POSITIONS AT HOWARD UNIVERSITY.

FOR THE FOREGOING REASONS WE ARE OF THE OPINION THAT AN OFFICER OR EMPLOYEE OF HOWARD UNIVERSITY IS NOT A CIVILIAN OFFICER OR EMPLOYEE IN OR UNDER THE EXECUTIVE BRANCH OF THE GOVERNMENT OF THE UNITED STATES WITHIN THE CONTEMPLATION OF SECTION 9 (A) OF PUBLIC LAW 89-301, 5 U.S.C. 5595. YOUR FIRST QUESTION, THEREFORE, IS ANSWERED IN THE NEGATIVE.

ORDINARILY AN OTHERWISE ELIGIBLE EMPLOYEE WHO IS INVOLUNTARILY SEPARATED FROM A FEDERAL POSITION WOULD BE ENTITLED TO SEVERANCE PAY EVEN THOUGH IMMEDIATELY AFTER SUCH SEPARATION HE BECOMES EMPLOYED IN A POSITION IN A PRIVATE ORGANIZATION. HOWEVER, IT IS OUR OPINION THAT AN EMPLOYEE OF FREEDMEN'S HOSPITAL WHO TRANSFERS TO HOWARD UNIVERSITY INCIDENT TO THE TRANSFER OF THE HOSPITAL TO THAT UNIVERSITY IS IN A CATEGORY SEPARATE AND APART FROM AN EMPLOYEE WHO IMMEDIATELY AFTER INVOLUNTARY SEPARATION FROM A GOVERNMENT POSITION ACCEPTS A POSITION WITH SOME OTHER PRIVATE ORGANIZATION.

WE POINT OUT THAT THE ACT AUTHORIZING THE TRANSFER OF FREEDMEN'S HOSPITAL TO HOWARD UNIVERSITY WAS ENACTED ON SEPTEMBER 21, 1961, LONG BEFORE THE SEVERANCE PAY PROVISIONS OF THE ACT OF OCTOBER 29, 1965. AT THE TIME OF THE 1961 ENACTMENT CAREFUL CONSIDERATION WAS GIVEN TO THE RIGHTS AND BENEFITS OF THE EMPLOYEES WHO WOULD ELECT TO TRANSFER TO HOWARD UNIVERSITY. IN THAT CONNECTION THE 1961 ACT PROVIDES AS FOLLOWS:

SEC. 2. (A) THE AGREEMENT FOR TRANSFER OF FREEDMEN'S HOSPITAL REFERRED TO IN SECTION 1 SHALL INCLUDE PROVISIONS TO ASSURE THAT---

(1) ALL INDIVIDUALS WHO ARE CAREER OR CAREER-CONDITIONAL EMPLOYEES OF THE HOSPITAL ON THE DAY PRECEDING THE EFFECTIVE DATE OF THE TRANSFER TO THE HOSPITAL, EXCEPT THOSE IN POSITIONS WITH RESPECT TO WHICH THEY HAVE BEEN NOTIFIED NOT LESS THAN SIX MONTHS PRIOR TO THE EFFECTIVE DATE OF SUCH TRANSFER THAT THEIR POSITIONS ARE TO BE ABOLISHED, WILL BE OFFERED AN OPPORTUNITY TO TRANSFER TO HOWARD UNIVERSITY;

(2) HOWARD UNIVERSITY---

(A) WILL NOT REDUCE THE SALARY LEVELS FOR SUCH EMPLOYEES WHO TRANSFER.

(B) WILL DEPOSIT CURRENTLY (I) IN THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND CREATED BY THE ACT OF MAY 22, 1920, THE EMPLOYEE DEDUCTIONS AND AGENCY CONTRIBUTIONS REQUIRED BY THE CIVIL SERVICE RETIREMENT ACT, AND (II) IN THE FUND CREATED BY SECTION 5 (C) OF THE FEDERAL EMPLOYEES' GROUP LIFE INSURANCE ACT OF 1954 THE EMPLOYEE DEDUCTIONS AND AGENCY CONTRIBUTIONS REQUIRED BY THE FEDERAL EMPLOYEES' GROUP LIFE INSURANCE ACT OF 1954.

(C) WILL PROVIDE OTHER BENEFITS FOR SUCH EMPLOYEES AS NEARLY EQUIVALENT AS MAY BE PRACTICABLE TO THOSE GENERALLY APPLICABLE, ON THE EFFECTIVE DATE OF THE TRANSFER OF THE HOSPITAL, TO CIVILIAN EMPLOYEES OF THE UNITED STATES, AND

(D) IN DETERMINING THE SENIORITY RIGHTS OF ITS EMPLOYEES, HOWARD UNIVERSITY WILL CREDIT SERVICE WITH FREEDMEN'S HOSPITAL PERFORMED BY SUCH EMPLOYEES WHO TRANSFER, ON THE SAME BASIS AS IT WOULD CREDIT SUCH SERVICE HAD IT BEEN PERFORMED FOR SUCH UNIVERSITY;

(3) THE TRANSFER WILL BECOME EFFECTIVE NOT LATER THAN THE BEGINNING OF THE SECOND MONTH WHICH BEGINS AFTER CONSTRUCTION OF THE NEW HOSPITAL FACILITIES AUTHORIZED BY SECTION 3 IS COMMENCED.

(C) EACH INDIVIDUAL WHO IS AN EMPLOYEE OF FREEDMEN'S HOSPITAL ON THE DATE OF ENACTMENT OF THIS ACT AND WHO TRANSFERS TO HOWARD UNIVERSITY SHALL, SO LONG AS HE IS CONTINUOUSLY IN THE EMPLOY OF HOWARD UNIVERSITY,BE REGARDED AS CONTINUING IN THE EMPLOY OF THE UNITED STATES FOR THE PURPOSES OF THE CIVIL SERVICE RETIREMENT ACT, THE FEDERAL EMPLOYEES' GROUP LIFE INSURANCE ACT OF 1954. FOR PURPOSES OF SECTION 3121 (B) OF THE INTERNAL REVENUE CODE OF 1954 AND SECTION 210 OF THE SOCIAL SECURITY ACT, SERVICE PERFORMED BY SUCH INDIVIDUAL DURING THE PERIOD OF HIS EMPLOYMENT AT HOWARD UNIVERSITY SHALL BE REGARDED AS THOUGH PERFORMED IN THE EMPLOY OF THE UNITED STATES.

IT IS APPARENT FROM THE ABOVE THAT EMPLOYEES ELECTING TO TRANSFER TO HOWARD UNIVERSITY WILL NOT BE INVOLUNTARILY SEPARATED FROM THE SERVICE IN THE FULL SENSE OF THAT WORD SINCE PROVISIONS HAVE BEEN MADE FOR THEIR CONTINUED EMPLOYMENT WITHOUT LOSS IN SALARY AND FOR REMAINING SUBJECT TO THE RETIREMENT AND LIFE INSURANCE ACTS APPLICABLE TO FEDERAL EMPLOYEES. ALSO, THE SERVICE IN HOWARD UNIVERSITY IS REGARDED AS FEDERAL SERVICE SO AS TO EXEMPT SUCH EMPLOYEES FROM SOCIAL SECURITY COVERAGE AND CORRESPONDING TAX PROVISIONS.

UNDER SUCH CIRCUMSTANCE WE ARE RELUCTANT TO CONCLUDE THAT SUCH EMPLOYEES ARE ENTITLED TO SEVERANCE PAY UPON THEIR TRANSFER TO HOWARD UNIVERSITY. IN VIEW OF THE DOUBT IN THE MATTER AND THE NUMBER OF EMPLOYEES INVOLVED OUR VIEW IS THAT IF SEVERANCE PAY IS TO BE ALLOWED IT SHOULD BE SPECIFICALLY AUTHORIZED BY THE CONGRESS. THEREFORE, WE SUGGEST THAT THE CIVIL SERVICE COMMISSION GIVE CONSIDERATION TO EXCLUDING SUCH CLASS OF EMPLOYEES FROM THE SEVERANCE PAY PROVISIONS UNDER THE REGULATORY AUTHORITY CONTAINED IN SECTION 9 (B) (8) OF PUBLIC LAW 89-301.