B-153724, APR. 15, 1964

B-153724: Apr 15, 1964

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SHIELDS: REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 28. WHICH WAS DISALLOWED BY OUR SETTLEMENT OF APRIL 16. MCFARLANE WAS TRANSFERRED TO THE FLEET RESERVE. HE WAS RELEASED FROM ACTIVE DUTY ON AUGUST 17. IT IS REPORTED THAT HIS RETAINER PAY AS A TRANSFERRED FLEET RESERVIST WAS WITHHELD FROM HIM BY THE DEPARTMENT OF THE NAVY FOR THE PERIOD FROM MARCH 1. A CIVILIAN GOVERNMENT EMPLOYEE'S RIGHT TO DISABILITY COMPENSATION ON ACCOUNT OF AN INJURY SUFFERED IN LINE OF DUTY IS GOVERNED BY THE FEDERAL EMPLOYEES' COMPENSATION ACT. PROVIDES IN PERTINENT PART AS FOLLOWS: "/A) AS LONG AS THE EMPLOYEE IS IN RECEIPT OF COMPENSATION UNDER SECTIONS 751-756. UNTIL THE EXPIRATION OF THE PERIOD DURING WHICH SUCH INSTALLMENT PAYMENTS WOULD HAVE CONTINUED.

B-153724, APR. 15, 1964

TO MR. FRED W. SHIELDS:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 28, 1964, SUBMITTING ON BEHALF OF YOUR CLIENT, MR. JAMES A. MCFARLANE, A REQUEST FOR REVIEW OF HIS CLAIM FOR PAYMENT OF NAVY RETAINER PAY WITHHELD FROM HIM DURING THE PERIOD MARCH 1, 1954, TO MAY 26, 1955, WHICH WAS DISALLOWED BY OUR SETTLEMENT OF APRIL 16, 1958.

THE RECORD SHOWS THAT MR. MCFARLANE WAS TRANSFERRED TO THE FLEET RESERVE, CLASS F-6, ON OCTOBER 16, 1952, AND RETAINED ON ACTIVE DUTY. HE WAS RELEASED FROM ACTIVE DUTY ON AUGUST 17, 1953. IT IS REPORTED THAT HIS RETAINER PAY AS A TRANSFERRED FLEET RESERVIST WAS WITHHELD FROM HIM BY THE DEPARTMENT OF THE NAVY FOR THE PERIOD FROM MARCH 1, 1954, TO MAY 26, 1955, DURING WHICH PERIOD HE RECEIVED DISABILITY COMPENSATION AS A CIVILIAN EMPLOYEE OF THE GOVERNMENT UNDER THE PROVISIONS OF THE FEDERAL EMPLOYEES' COMPENSATION ACT OF SEPTEMBER 7, 1916, CH. 458, 39 STAT. 742, AS AMENDED.

A CIVILIAN GOVERNMENT EMPLOYEE'S RIGHT TO DISABILITY COMPENSATION ON ACCOUNT OF AN INJURY SUFFERED IN LINE OF DUTY IS GOVERNED BY THE FEDERAL EMPLOYEES' COMPENSATION ACT. SECTION 7 (A) OF THAT ACT, AS AMENDED, 5 U.S.C. 757 (A), PROVIDES IN PERTINENT PART AS FOLLOWS:

"/A) AS LONG AS THE EMPLOYEE IS IN RECEIPT OF COMPENSATION UNDER SECTIONS 751-756, 757-781, 783-791 AND 793 OF THIS TITLE, OR, IF HE HAS BEEN PAID A LUMP SUM IN COMMUTATION OF INSTALLMENT PAYMENTS, UNTIL THE EXPIRATION OF THE PERIOD DURING WHICH SUCH INSTALLMENT PAYMENTS WOULD HAVE CONTINUED, HE SHALL NOT RECEIVE FROM THE UNITED STATES ANY SALARY, PAY, OR REMUNERATION WHATSOEVER EXCEPT IN RETURN FOR SERVICES ACTUALLY PERFORMED, AND EXCEPT PENSIONS FOR SERVICE IN THE ARMY OR NAVY OF THE UNITED STATES * * *.'

IT HAS LONG BEEN HELD BY THE ACCOUNTING OFFICERS OF THE GOVERNMENT THAT DISABILITY COMPENSATION PAYMENTS UNDER THE FEDERAL EMPLOYEES' COMPENSATION ACT MAY NOT BE MADE TO A PERSON CONCURRENTLY WITH THE PAYMENT OF MILITARY OR NAVAL RETAINER OR RETIRED PAY IN THE ABSENCE OF A SPECIFIC STATUTE SO PROVIDING. HOWEVER, IN THE CASE OF MULHOLLAND V. UNITED STATES, 139 CT.CL. 507 (1957), THE COURT OF CLAIMS HELD THAT A MEMBER OF THE FLEET RESERVE MAY RECEIVE RETAINER PAY CONCURRENTLY WITH EMPLOYEES' DISABILITY COMPENSATION BECAUSE (1) SECTION 4 OF THE NAVAL RESERVE ACT OF 1938, CH. 690, 52 STAT. 1176, 34 U.S.C. 853 (B) (1946 ED.), MADE THE PROHIBITION CONTAINED IN SECTION 7 (A) OF THE FEDERAL EMPLOYEES' COMPENSATION ACT INAPPLICABLE TO MEMBERS OF THE NAVAL RESERVE (WHICH THEN INCLUDED THE FLEET RESERVE), AND BECAUSE (2) FLEET RESERVE RETAINER PAY IS PAID IN PART FOR READINESS TO RENDER SERVICE WHEN CALLED UPON AND, TO THAT EXTENT, IT IS PAID "IN RETURN FOR SERVICES ACTUALLY PERFORMED" WITHIN THE MEANING OF THE FEDERAL EMPLOYEES' COMPENSATION ACT.

IN OUR DECISION OF SEPTEMBER 25, 1958, 38 COMP. GEN. 243, WE SAID THAT WE WOULD FOLLOW THE DECISION IN THE MULHOLLAND CASE FOR PERIODS BEFORE 1953, IT BEING NOTED THAT SECTION 4 OF THE NAVAL RESERVE ACT OF 1938 WAS REPEALED BY SECTION 803 OF THE ARMED FORCES RESERVE ACT OF 1952, CH. 608, 66 STAT. 505, EFFECTIVE JANUARY 1, 1953, AND THAT THEREAFTER THE FLEET RESERVE CEASED TO BE A PART OF THE NAVAL RESERVE AND BECAME A PART OF THE REGULAR NAVY. IT APPEARS THAT THE WITHHOLDING OF MR. MCFARLANE'S RETAINER PAY BY THE NAVY BECAUSE OF HIS RECEIPT OF DISABILITY COMPENSATION AS A CIVILIAN EMPLOYEE WAS IN ACCORDANCE WITH OUR DECISION OF SEPTEMBER 25, 1958.

IN THE CASE OF TAWES V. UNITED STATES, 146 CT.CL. 500 (1959), THE COURT OF CLAIMS FURTHER EXTENDED THE AREA OF OPERATION OF THE RULE OF THE MULHOLLAND CASE SO AS TO PERMIT THE PAYMENT OF RETIRED PAY (AS DISTINGUISHED FROM RETAINER PAY) BASED ON SERVICE IN THE NAVAL RESERVE AND AUTHORIZED UNDER THE PROVISIONS OF TITLE III OF THE ACT OF JUNE 29, 1948, CH. 708, 62 STAT. 1087--- WHICH APPLIES TO RESERVE RETIREMENT--- CONCURRENTLY WITH THE RECEIPT OF COMPENSATION UNDER THE FEDERAL EMPLOYEES' COMPENSATION ACT. THAT CASE IS WITHOUT RELEVANCE HERE, SINCE THE JUDGMENT IN THE PLAINTIFF'S FAVOR WAS BASED ON HIS SERVICE IN THE NAVAL RESERVE. THE FLEET RESERVE HAD CEASED TO BE A PART OF THE NAVAL RESERVE BEFORE THE PERIOD HERE INVOLVED.

CONCERNING THE CASE OF STEELMAN V. UNITED STATES, CT.CL.NO. 24-60, DECIDED JUNE 7, 1963, THE SOLE QUESTION PRESENTED WAS WHETHER A REGULAR NAVY RETIRED ENLISTED MAN WAS ENTITLED TO RECEIVE RETIRED PAY AND DISABILITY COMPENSATION. SINCE THE DECISION AGAINST THE PLAINTIFF WAS NOT BASED ON THE MULHOLLAND CASE, NOTHING STATED IN SUCH DECISION WITH RESPECT TO THAT CASE MAY BE ACCEPTED AS FURNISHING A BASIS FOR MODIFYING OUR DECISION OF SEPTEMBER 25, 1958.

IT APPEARING THAT THERE HAS BEEN NO PERTINENT AMENDMENT TO THE FEDERAL EMPLOYEES' COMPENSATION ACT WHICH WOULD AUTHORIZE THE DUAL PAYMENTS IN QUESTION, THE SETTLEMENT OF APRIL 16, 1958, IS SUSTAINED.