B-134763, MAY 8, 1974, 53 COMP GEN 834

B-134763: May 8, 1974

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SINCE IN ABSENCE OF SPECIFIC STATUTORY AUTHORITY UNITED STATES IS NOT LIABLE FOR NEGLIGENT OR ERRONEOUS ACTS OF ITS OFFICERS. 1974: THIS DECISION TO THE NATIONAL LABOR RELATIONS BOARD IS IN RESPONSE TO THE REQUEST OF ITS GENERAL COUNSEL. WERE DISCHARGED BY THEIR EMPLOYER. THE TWO EMPLOYEES WERE TO BE MADE WHOLE BY THEIR EMPLOYER FOR ANY MONIES LOST AS A RESULT OF THEIR ILLEGAL DISCHARGES. THIS INSTRUCTION WAS CONTRARY TO WELL ESTABLISHED BOARD PRECEDENTS AND STANDARD OPERATING PROCEDURES (SEE PARAGRAPH 10604 OF THE NATIONAL LABOR RELATIONS BOARD INTERNAL INSTRUCTIONS AND GUIDELINES MANUAL). THE ERROR OF THE BOARD AGENT WAS DISCOVERED. BOARD EFFORTS TO RESOLVE THIS MATTER WITH THE UNEMPLOYMENT INSURANCE BOARD AND THE STATE UNEMPLOYMENT INSURANCE APPEALS BOARD HAVE RESULTED IN A FINAL DETERMINATION BY THE STATE THAT THE EMPLOYEES MUST REPAY THE AMOUNT IN CONTROVERSY.

B-134763, MAY 8, 1974, 53 COMP GEN 834

AGENTS - GOVERNMENT - GOVERNMENT LIABILITY FOR ACTS BEYOND AUTHORITY - ERRONEOUS INFORMATION NATIONAL LABOR RELATIONS BOARD (BOARD) MAY NOT USE APPROPRIATED FUNDS TO PAY CLAIMS FOR MONIES MISTAKENLY DEDUCTED FROM BACK PAY AWARD TO TWO DISCRIMINATEES DUE TO ERRONEOUS INSTRUCTIONS OF BOARD AGENT, SINCE IN ABSENCE OF SPECIFIC STATUTORY AUTHORITY UNITED STATES IS NOT LIABLE FOR NEGLIGENT OR ERRONEOUS ACTS OF ITS OFFICERS, AGENTS, OR EMPLOYEES COMMITTED IN PERFORMANCE OF OFFICIAL DUTIES; BUT MAY PAY DISCRIMINATEES SUCH AMOUNTS AS BOARD MAY COLLECT FROM EMPLOYER. B-134763, FEB. 14, 1958, OVERRULED.

IN THE MATTER OF USE OF APPROPRIATED FUNDS BY NATIONAL LABOR RELATIONS BOARD, MAY 8, 1974:

THIS DECISION TO THE NATIONAL LABOR RELATIONS BOARD IS IN RESPONSE TO THE REQUEST OF ITS GENERAL COUNSEL. HE REQUESTED OUR VIEWS AS TO WHETHER THE BOARD MAY USE ITS APPROPRIATIONS TO PAY TWO CLAIMS AGAINST THE BOARD ARISING FROM THE SETTLEMENT OF AN UNFAIR LABOR PRACTICE CHARGE, WHICH ALLEGED THAT TWO EMPLOYEES, MR. DANIEL P. LARKIN AND MR. MICHAEL C. KANY, WERE DISCHARGED BY THEIR EMPLOYER, BUCK KNIVES, INC., BECAUSE OF THEIR ACTIVITIES IN SUPPORT OF A UNION. BUCK KNIVES, INC., CASE NO. 21-CA- 10629.

UNDER THE TERMS OF THE SETTLEMENT AGREEMENT, THE TWO EMPLOYEES WERE TO BE MADE WHOLE BY THEIR EMPLOYER FOR ANY MONIES LOST AS A RESULT OF THEIR ILLEGAL DISCHARGES. IN COMPUTING THIS LOSS THE BOARD AGENT ASSIGNED TO THE CASE INSTRUCTED THE EMPLOYEES TO DEDUCT AS INTERIM EARNINGS MONIES RECEIVED FROM UNEMPLOYMENT COMPENSATION DURING THE BACK PAY PERIOD; HOWEVER, THIS INSTRUCTION WAS CONTRARY TO WELL ESTABLISHED BOARD PRECEDENTS AND STANDARD OPERATING PROCEDURES (SEE PARAGRAPH 10604 OF THE NATIONAL LABOR RELATIONS BOARD INTERNAL INSTRUCTIONS AND GUIDELINES MANUAL), AND THE HOLDING OF THE SUPREME COURT IN NATIONAL LABOR RELATIONS BOARD V. GULLETT GIN CO., 340 U.S. 361 (1951). THE EMPLOYER SUBSEQUENTLY COMPLIED WITH THE AGREEMENT AND THE BOARD CLOSED THE CASE ON JUNE 23, 1972.

ON FEBRUARY 23, 1973, THE EMPLOYEES INFORMED THE BOARD THAT THE UNEMPLOYMENT INSURANCE BOARD OF THE STATE OF CALIFORNIA DEMANDED REPAYMENT OF THE UNEMPLOYMENT COMPENSATION WHICH THEY HAD RECEIVED DURING THE BACK PAY PERIOD. UPON EXAMINATION, THE ERROR OF THE BOARD AGENT WAS DISCOVERED. BOARD EFFORTS TO RESOLVE THIS MATTER WITH THE UNEMPLOYMENT INSURANCE BOARD AND THE STATE UNEMPLOYMENT INSURANCE APPEALS BOARD HAVE RESULTED IN A FINAL DETERMINATION BY THE STATE THAT THE EMPLOYEES MUST REPAY THE AMOUNT IN CONTROVERSY.

BY LETTER DATED MARCH 19, 1974, THE BOARD INFORMED THE EMPLOYER OF THE ERRONEOUS INSTRUCTION AND THE BOARD DEMANDED THAT THE EMPLOYER PAY TO IT THE SUM OF $697 ON BEHALF OF MR. LARKIN AND $650 ON BEHALF OF MR. KANY, IN ORDER THAT THE BOARD COULD REMIT THESE AMOUNTS TO THE UNEMPLOYMENT INSURANCE BOARD OF THE STATE OF CALIFORNIA ON BEHALF OF THESE EMPLOYEES.

IT IS THE WISH OF THE BOARD TO CLOSE THIS MATTER. TO DO SO, IT PROPOSES TO PAY THE UNEMPLOYMENT INSURANCE BOARD OF THE STATE OF CALIFORNIA $697 AND $650 ON BEHALF OF MR. LARKIN AND MR. KANY RESPECTIVELY FROM ITS APPROPRIATED FUNDS AND ENDEAVOR TO RECOVER THAT SUM FROM THE EMPLOYER. HOWEVER, FOR THE REASONS DISCUSSED BELOW, WE CANNOT APPROVE THE USE OF APPROPRIATED FUNDS FOR THIS PURPOSE MERELY BECAUSE A MISTAKE WAS CAUSED BY A GOVERNMENT AGENT.

WE HAVE CONSISTENTLY HELD THAT THE RECEIPT BY ONE DEALING WITH A GOVERNMENT OFFICIAL OF ERRONEOUS INFORMATION, WHICH WAS RELIED UPON BY THE RECIPIENT TO HIS DETRIMENT, DOES NOT AFFORD A LEGAL BASIS FOR A PAYMENT FROM APPROPRIATED FUNDS. IT IS WELL ESTABLISHED THAT IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY, THE UNITED STATES IS NOT LIABLE FOR THE NEGLIGENT OR ERRONEOUS ACTS OF ITS OFFICERS, AGENTS, OR EMPLOYEES, EVEN THOUGH COMMITTED IN THE PERFORMANCE OF THEIR OFFICIAL DUTIES. SEE HART V. U.S., 95 U.S. 316, 318 (1877); ROBERTSON V. SICHEL, 127 U.S. 507, 515 (1888); GERMAN BANK OF MEMPHIS V. U.S., 148 U.S. 573, 579 (1893); FEDERAL CROP INSURANCE CORPORATION V. MERRILL, 332 U.S. 380 (1947); 19 COMP. GEN. 503 (1939); 22 ID. 221 (1942); 44 ID. 337 (1964); 46 ID. 348 (1966); B- 176040, JUNE 30, 1972; B-176982, DECEMBER 14, 1972. WHILE IT IS REGRETTABLE THAT THE TWO EMPLOYEES MAY HAVE BEEN MISLED BY THE ERRONEOUS INFORMATION, THAT FACT IS INSUFFICIENT TO AUTHORIZE A PAYMENT FROM APPROPRIATED FUNDS. TO THE EXTENT THAT THIS CONFLICTS WITH B-134763, FEBRUARY 14, 1958, THAT DECISION WILL NO LONGER BE FOLLOWED.

OF COURSE, IN THE EVENT THAT THE BOARD IS SUCCESSFUL IN COLLECTING THE AMOUNTS IN QUESTION FROM BUCK KNIVES, INC., THE BOARD MAY THEN PAY SUCH AMOUNTS TO OR ON BEHALF OF MR. LARKIN AND MR. KANY. IN THIS CONNECTION, MR. LARKIN'S LETTER TO THIS OFFICE DATED JANUARY 20, 1974, STATES THAT HE HAS PAID THE UNEMPLOYMENT INSURANCE BOARD OF THE STATE OF CALIFORNIA. THUS, IF THE BOARD EFFECTS RECOVERY FROM BUCK KNIVES IT SHOULD TAKE APPROPRIATE ACTION TO ENSURE THAT ANY PAYMENTS OF THE RECOVERED AMOUNTS ARE MADE TO THE PROPER PARTIES, I.E., THAT MR. LARKIN, MR. KANY, AND THE UNEMPLOYMENT INSURANCE BOARD OF THE STATE OF CALIFORNIA RECEIVE ONLY THE AMOUNTS TO WHICH THEY ARE ENTITLED.