Claim for Backpay Following Improper Demotion

The American Federation of Government Employees requested a decision concerning the claim of a Government Printing Office (GPO) employee for retention of his current rate of pay and a retroactive promotion with backpay incident to an improper reduction in grade. The union asked whether the employee was entitled to retain the higher rate of pay he received prior to restoration to his former position, and whether he was entitled to a retroactive promotion and backpay during the period of the improper demotion. The employee had initially appealed his demotion to the Federal Employee Appeals Authority (FEAA). The FEAA decision, as affirmed by the Merit Protection Board, held that GPO had acted arbitrarily and capriciously. GPO then canceled the demotion and restored the employee to his former position. The union contended that the employee should not have suffered a reduction in his annual rate of pay incident to restoration to his former position. The union also argued that, but for the improper demotion, the employee would have been promoted, and thus, should have been restored to the higher grade and awarded backpay. GPO contended that it restored the employee to his former rate and credited him with an ingrade increase. It denied that the employee would have been promoted and, therefore, he was not entitled to a promotion and backpay. Finally, GPO contended that the employee was not otherwise entitled to backpay since his actual gross earnings including overtime exceeded what he would have earned in his former position. GAO held that the employee did suffer a reduction in pay upon restoration. However, since GPO employees were not subject to the appropriate regulation, he could not retain the higher rate of pay. In addition, since the employee could not show that he would have been promoted pursuant to law, regulation, or collective bargaining agreement, he was not entitled to the retroactive promotion. Finally, the agency computed the employee's pay as if he had not been demoted and determined that the backpay would have been less than the interim earnings. Therefore, although the employee did not have to return the interim earnings, he was not entitled to backpay.