B-238725, Aug 14, 1990
B-238725: Aug 14, 1990
Is obligated to repay the government a proportional amount of the training expenses as required by statute and regulation. There is no indication in the record that the agency was arbitrary or capricious in denying the employee's request for waiver of the training expenses under the provisions of 5 U.S.C. Sheila Martin - Training Expenses - Breach of Service Agreement: The issue in this decision is whether an employee of the Department of Housing and Urban Development (HUD) who resigned from her position after receiving training in a non-government facility but before completing a statutory service obligation. Is obligated to repay the government a proportional amount of the training expenses.
B-238725, Aug 14, 1990
CIVILIAN PERSONNEL - Compensation - Training expenses - Reimbursement - Breach of service agreements DIGEST: An employee who resigned from her position after receiving training in a non-government facility but prior to completing her service obligation mandated by 5 U.S.C. SEC. 4108(a) (1988), is obligated to repay the government a proportional amount of the training expenses as required by statute and regulation. Furthermore, there is no indication in the record that the agency was arbitrary or capricious in denying the employee's request for waiver of the training expenses under the provisions of 5 U.S.C. Sec. 4108(c) (1988). However, due to ambiguity in the employee's written service agreement, her service obligation should be limited to the minimum time required by law.
Sheila Martin - Training Expenses - Breach of Service Agreement:
The issue in this decision is whether an employee of the Department of Housing and Urban Development (HUD) who resigned from her position after receiving training in a non-government facility but before completing a statutory service obligation, is obligated to repay the government a proportional amount of the training expenses. We hold that the employee is so obligated for the reasons set forth below; however, the amount of the obligation is subject to correction.
Ms. Sheila Martin, formerly an employee of HUD, has appealed the determination of our Claims Group, /1/ that she is indebted to the United States for expenses paid by the government in connection with training she received in a non-government facility beginning on October 15, 1987, and ending on March 31, 1988.
Ms. Martin was selected by HUD to enter a 1-year training program (October 15, 1987, to October 15, 1988) designed to recruit candidates for entry-level technical professional positions. The first 6 months of this training program consisted primarily of classroom and field training followed by 6 months of on-the-job training in a HUD field office. Ms. Martin signed an agreement, required by 5 U.S.C. Sec. 4108(a), which stated that upon completion of the training, "I will serve in the agency for 2 calendar years after the completion of the 1 year training period, I agree to serve the agency for a period equal to the length of training. ..." The agreement also stated immediately above the employee's signature block: "Period of obligated service (For non-government training only) 2 years."
Ms. Martin left the agency on March 10, 1989, to accept a position in a local government agency. The agency has refused Ms. Martin's request for waiver of repayment of her training expenses under the provisions of 5 U.S.C. Sec. 4108(c) (1988) and seeks repayment of $8,125.33 of her $10,209.88 training expenses.
It is Ms. Martin's position that the internal contradiction contained within the service agreement which she was required to sign, and which is apparent from the above quoted portions of the agreement, /2/ renders the agreement invalid for lack of a "meeting of the minds" between the parties, and therefore she is not obligated to complete any specific amount of service. In the alternative, Ms. Martin maintains that if she is found to have had an obligated period of service, her obligated service period should be consistent with the minimum statutory requirement of 3 times the length of the training period. /3/
Further, she maintains that the period of service should be held to have commenced at the conclusion of her training in non-government facilities (March 31, 1988) and not at the end of the 1 year training program (October 15, 1988) as maintained by HUD. According to Ms. Martin's calculations, she spent only 84 days in non-government facilities, which ended on March 31, 1988, and that her period of obligated service ended on March 20, 1989, or 252 working days thereafter.
We have considered Ms. Martin's argument that the service agreement which she signed should be considered void due to its ambiguity in an essential term-- the length of the service obligation-- which thereby prevented a "meeting of the minds." We cannot accept this argument because the issue is not simply one of contract law, but concerns the the employee's rights and obligations under the governing statutes and regulations. B-174990, Mar. 14, 1972. The applicable statute, 5 U.S.C. Sec. 4108(a)(1) and (2), requires that an employee selected for training in a non-government facility agree in writing to continue in the agency's service "after the end of the training period for a period at least three times the length of the training period," and to pay to the government the expenses incurred for the training if voluntarily separated before the end of the agreed service period. Such an obligation, required by statute, is not relieved by ambiguity within the written agreement. Cf. Jennifer L. Johnson, B-230338.2, June 2, 1989, concerning a similar transfer service agreement.
Under the provisions of 5 U.S.C. Sec. 4108(c) and 5 C.F.R. Sec. 410.509 (1988), the employing agency has discretionary authority to waive repayment of the training expenses if it is shown that recovery would be against equity and good conscience or against the public interest. HUD has refused to do so, and unless the agency action is arbitrary or capricious or otherwise in violation of law, we are bound to accept it. B-233734, May 30, 1989; B-174990, supra.
In this case we have examined the record and do not find that the agency in declining to waive repayment acted in an arbitrary or capricious manner or in violation of law.
As regards the amount Ms. Martin must repay, we note that HUD computed the cost of the training and seeks payment of a percentage of the cost based on the proportion of the service agreement not completed. See 5 C.F.R. Sec. 410.509(a)(1) (1988). HUD based its calculations on a 2-year service obligation, support for which is found in the written service agreement. However, because of the ambiguity in the written service agreement as to the period of obligated service, we believe that the minimum period required by the statute must govern and not the greater period of the written service agreement. /4/
The statute covers only the training in the non-government facility and provides for a period of continued service "... after the end of the training period for a period at least equal to three times the length of the training period. ..." Therefore, under the circumstances discussed above, Ms. Martin's obligated service period should be 3 times the length of the training she received in non government facilities.
The record indicates that the non-government facility training received by Ms. Martin began on October 15, 1987, and ended on March 31, 1988, but there is some question as to whether it took place continuously during this period. Therefore, HUD should calculate those days within this period which are applicable in computing the time in training through non- government facilities consistent with the regulatory guidance provided in 5 C.F.R. Sec. 410.507 (1989). The period so-calculated times 3 is then Ms. Martin's period of obligated service. Since the record indicates that no training took place after March 31, 1988, in non-government facilities, Ms. Martin should be credited for her service beginning April 1, 1988, until her service terminated. HUD should then re-compute Ms. Martin's debt based on any remaining unserved obligation.
Ms. Martin is liable to repay the government the amounts expended for her training expenses consistent with this decision. /5/
/1/ Settlement Certificate Z-2861934, Nov. 14, 1989.
/2/ The agreement on the one hand refers to a service obligation of "2 calendar years" but on the other hand defines the service obligation as "a period equal to the length of training."
/3/ 5 U.S.C. Sec. 4108(a)(1).
/4/ The agency indicates that the ambiguous language was not discovered until after the agreement was signed, but its intent was explained to the participants in November 1987 and March 1988. However, that was after the training had begun.
/5/ Ms. Martin questions HUD's action in withholding her final salary payment as offset against the training cost for which she is indebted. This procedure is authorized by law providing that the cost of training is recoverable by setoff against accrued pay, compensation, amount of retirement credit, or other amount due the employee from the government, and by such other methods as provided by law for the collection of debts. See 5 U.S.C. Sec. 4108(c) (1988); 64 Comp.Gen. 142, at 146 (1984).