[Entitlement to Backpay Under the Highest Previous Rate Rule]

The Defense Logistics Agency requested a decision concerning an employee's entitlement to receive backpay under the highest previous rate rule incident to a reassignment and transfer. After the employee resigned from his new position, he resumed his former position without a change in grade. The employee contended that the agency was obligated to apply the highest rate rule and set his salary at a higher level since his reassignment was at a higher grade level. GAO held that the maximum salary which an employee may be paid on reemployment, reassignment, promotion, or change in appointment may be established at any rate of the employee's grade which does not exceed the employee's highest rate of pay previously received; however, where an agency has not relinquished its discretionary authority through adoption of a mandatory policy, it is not obligated to set an employee's pay at the highest rate of his current grade. Accordingly, the backpay claim was denied.