B-170839, NOV. 20, 1970

B-170839, NOV. 20, 1970

TRANSFER - AGREEMENT BREACH AUTHORIZING REFUND OF AMOUNTS WITHHELD FROM PAY AS THE RESULT OF EMPLOYEES BREACH OF A TRANSFER AGREEMENT EXECUTED UNDER 5 U.S.C. 5724(I). EMPLOYEE WHO WAS TRANSFERRED FROM WASHINGTON, D.C., TO OAKLAND, CALIF., UNDER AN AGREEMENT THAT REQUIRED THAT HE REMAIN IN THE SERVICE OF THE DEPARTMENT OF THE ARMY FOR 12 MONTHS FOLLOWING THE TRANSFER, AND THAT HE REIMBURSE THE GOVERNMENT IN THE EVENT HE SHOULD VIOLATE THE AGREEMENT, AND WHO TRANSFERRED TO THE GENERAL SERVICES ADMINISTRATION BEFORE THE 12 MONTH PERIOD ELAPSED, IS ENTITLED TO A REFUND OF MONIES WITHHELD IN SATISFACTION OF HIS INDEBTEDNESS FOR THE TRANSFER EXPENSES UNDER FINN V U.S. CT. CL. NO. 396-69 WHICH HELD THAT UNDER 5 U.S.C. 5724(I) AN AGENCY OF THE GOVERNMENT DOES NOT HAVE THE AUTHORITY TO REQUIRE AN EMPLOYEE TO REMAIN IN THE SERVICE OF A PARTICULAR AGENCY FOR 12 MONTHS FOLLOWING TRANSFER BUT ONLY TO REMAIN "IN THE GOVERNMENT SERVICE". IN VIEW OF FINN DECISION, THE RULING IN 46 COMP. GEN. 738 IS NO LONGER APPLICABLE EXCEPT FOR THE LAST PARAGRAPH CONCERNING COLLECTION ACTION.

TO MR. W. M. MAY:

THIS REFERS TO YOUR LETTERS OF AUGUST 19 AND NOVEMBER 4, 1970, REFERENCE MTW-CPF, CONCERNING THE CLAIM OF MR. BYRON K. WILLIAMS FOR REFUND OF ALL AMOUNTS WITHHELD FROM HIS PAY AS A RESULT OF HIS BREACH OF A TRANSFER AGREEMENT EXECUTED UNDER 5 U.S.C. 5724(I).

THE RECORD SHOWS THAT MR. WILLIAMS WAS TRANSFERRED FROM WASHINGTON, D.C., TO OAKLAND, CALIFORNIA, UNDER TRAVEL ORDER DATED AUGUST 21, 1967. INCIDENT TO THAT TRANSFER THE EMPLOYEE SIGNED AN AGREEMENT TO REMAIN IN THE SERVICE OF THE DEPARTMENT OF THE ARMY FOR 12 MONTHS FOLLOWING THE EFFECTIVE DATE OF HIS TRANSFER. ALSO, THE EMPLOYEE AGREED TO REIMBURSE THE GOVERNMENT FOR ALL EXPENSES INCURRED IN CONNECTION WITH HIS TRANSFER IN THE EVENT HE SHOULD VIOLATE THE SERVICE AGREEMENT. ON MARCH 10, 1968, MR. WILLIAMS TRANSFERRED TO THE GENERAL SERVICES ADMINISTRATION IN SAN FRANCISCO, THEREBY VIOLATING THE TERMS OF HIS AGREEMENT WITH THE DEPARTMENT OF THE ARMY. AS A RESULT OF SUCH BREACH THE DEPARTMENT OF THE ARMY HAS BEEN WITHHOLDING THE SUM OF $25 FROM THE EMPLOYEE'S PAY IN SATISFACTION OF HIS INDEBTEDNESS FOR THE TRANSFER EXPENSES.

BY LETTER TO YOU DATED AUGUST 12, 1970, MR. WILLIAMS REQUESTED CANCELLATION OF HIS INDEBTEDNESS AND REFUND OF ALL AMOUNTS WITHHELD FROM HIS SALARY ON ACCOUNT OF SUCH INDEBTEDNESS ON THE BASIS OF THE DECISION RENDERED BY THE U.S. COURT OF CLAIMS IN FINN V UNITED STATES, CT. CL. NO. 396-69, DECIDED JULY 15, 1970. YOU QUESTION WHETHER THE FINN DECISION IS APPLICABLE TO MR. WILLIAMS' CASE.

THE FINN DECISION HOLDS THAT UNDER 5 U.S.C. 5724(I) AN AGENCY OF THE GOVERNMENT DOES NOT HAVE AUTHORITY TO REQUIRE AN EMPLOYEE TO SIGN AN AGREEMENT TO REMAIN IN THE SERVICE OF THAT PARTICULAR AGENCY FOR 12 MONTHS FOLLOWING THE EFFECTIVE DATE OF THE EMPLOYEE'S TRANSFER. THE COURT STRESSED THE FACT THAT THE LANGUAGE OF SUBSECTION 5724(I) REQUIRES ONLY THAT THE EMPLOYEE AGREE TO REMAIN "IN THE GOVERNMENT SERVICE." WE HAVE BEEN ADVISED THAT THE GOVERNMENT WILL TAKE NO FURTHER ACTION IN THE FINN CASE. THEREFORE, THE JUDGMENT IN THAT CASE IS FINAL.

SINCE THE COURT HAS RULED THAT AGREEMENTS, SUCH AS THE ONE EXECUTED BY MR. WILLIAMS, ARE UNENFORCEABLE, MR. WILLIAMS' INDEBTEDNESS MAY BE CANCELLED AND HE MAY BE REFUNDED THE AMOUNTS WITHHELD FROM HIS PAY ON ACCOUNT OF SUCH INDEBTEDNESS.

IN 46 COMP. GEN. 738 (1967) WE HELD THAT AGREEMENTS EXECUTED UNDER 5 U.S.C. 5724(I) MAY REQUIRE THE EMPLOYEE TO REMAIN WITH THE PARTICULAR AGENCY CONCERNED RATHER THAN "IN THE GOVERNMENT SERVICE." IN VIEW OF THE FINN DECISION, THE RULING IN 46 COMP. GEN. 738 NO LONGER IS FOR APPLICATION, EXCEPT FOR THE LAST PARAGRAPH THEREOF CONCERNING THE TAKING OF APPROPRIATE COLLECTION ACTION IF THE EMPLOYEE FAILS TO REMAIN IN THE GOVERNMENT SERVICE FOR 12 MONTHS.