B-135115, APRIL 14, 1958, 37 COMP. GEN. 671

B-135115: Apr 14, 1958

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- ARE NOT SUBJECT TO THE CIVIL SERVICE ACT. THEY ARE NOT ENTITLED UPON SUBSEQUENT EMPLOYMENT IN A DEPARTMENT OR AGENCY IN THE EXECUTIVE BRANCH TO SUCH FEDERAL EMPLOYEE RIGHTS AND PRIVILEGES AS THE HIGHEST PREVIOUS SALARY RATE RULE. COMPENSATION SHALL BE NOT LESS THAN THAT PROVIDED BY THE LAWS OF THE STATE (OR THE DISTRICT OF COLUMBIA) IN WHICH THE EMPLOYING ACTIVITY OF ANY SUCH INSTRUMENTALITY IS LOCATED. EXCEPT THAT IN THE CASE OF SUCH EMPLOYEES WHO ARE NOT CITIZENS OF THE UNITED STATES. 2D SESSION) STATES ON PAGE 2 THAT: THIS LEGISLATION WAS INTRODUCED AT THE REQUEST OF THE DEPARTMENT OF DEFENSE. IT IS THE PURPOSE OF THIS LEGISLATION TO CLARIFY. THE POSITION OF CERTAIN PERSONNEL WHO ARE NOT COMPENSATED FROM FUNDS APPROPRIATED BY CONGRESS.

B-135115, APRIL 14, 1958, 37 COMP. GEN. 671

CIVILIAN PERSONNEL - EMPLOYEES OF NONAPPROPRIATED FUND ACTIVITIES - TRANSFER TO CIVILIAN SERVICE POSITIONS SINCE EMPLOYEES OF THE ARMY AND AIR FORCE MOTION PICTURE SERVICE--- A NONAPPROPRIATED FUND ACTIVITY--- ARE NOT SUBJECT TO THE CIVIL SERVICE ACT, THE CIVIL SERVICE RETIREMENT ACT, THE CLASSIFICATION ACT OF 1949, OR THE ANNUAL AND SICK LEAVE ACT OF 1951, THEY ARE NOT ENTITLED UPON SUBSEQUENT EMPLOYMENT IN A DEPARTMENT OR AGENCY IN THE EXECUTIVE BRANCH TO SUCH FEDERAL EMPLOYEE RIGHTS AND PRIVILEGES AS THE HIGHEST PREVIOUS SALARY RATE RULE, SERVICE CREDIT FOR ANNUAL LEAVE ACCRUAL PURPOSES, AND TRANSFER OF SICK LEAVE.

TO THE CHAIRMAN, UNITED STATES CIVIL SERVICE COMMISSION, APRIL 14, 1958:

ON FEBRUARY 3, 1958, YOU REQUESTED OUR DECISION WHETHER THE SALARY RATE EARNED BY AN EMPLOYEE IN THE ARMY AND AIR FORCE MOTION PICTURE SERVICE MAY BE USED AS A "HIGHEST PREVIOUS RATE" UPON HIS SUBSEQUENT EMPLOYMENT IN A DEPARTMENT OR AGENCY SUBJECT TO THE CLASSIFICATION ACT OF 1949, 5 U.S.C. 1071 NOTE, AND THE EFFECT OF SUCH SERVICE UPON THE ACCRUAL AND CREDITING OF LEAVE UPON HIS EMPLOYMENT IN THE DEPARTMENT OR AGENCY.

THE ACT OF JUNE 19, 1952, 66 STAT. 138, 5 U.S.C. 150K, 150K-1, PROVIDES AS FOLLOWS:

CIVILIAN EMPLOYEES, COMPENSATED FROM NONAPPROPRIATED FUNDS, OF THE ARMY AND AIR FORCE EXCHANGE SERVICE, ARMY AND AIR FORCE MOTION PICTURE SERVICE, NAVY SHIP'S STORES ASHORE, NAVY EXCHANGES, MARINE CORPS EXCHANGES, COAST GUARD EXCHANGES, AND OTHER INSTRUMENTALITIES OF THE UNITED STATES UNDER THE JURISDICTION OF THE ARMED FORCES CONDUCTED FOR THE COMFORT, PLEASURE, CONTENTMENT, AND MENTAL AND PHYSICAL IMPROVEMENT OF PERSONNEL OF THE ARMED FORCES, SHALL NOT BE HELD AND CONSIDERED AS EMPLOYEES OF THE UNITED STATES FOR THE PURPOSE OF ANY LAWS ADMINISTERED BY THE CIVIL SERVICE COMMISSION OR THE PROVISIONS OF THE FEDERAL EMPLOYEES' COMPENSATION ACT, AS AMENDED: PROVIDED, THAT THE STATUS OF THESE NONAPPROPRIATED FUND ACTIVITIES AS FEDERAL INSTRUMENTALITIES SHALL NOT BE EFFECTED. * * *

THE NONAPPROPRIATED FUND INSTRUMENTALITIES DESCRIBED IN SECTION 150K OF THIS TITLE SHALL PROVIDE THEIR CIVILIAN EMPLOYEES, BY INSURANCE OR OTHERWISE, WITH COMPENSATION FOR DEATH OR DISABILITY INCURRED IN THE COURSE OF EMPLOYMENT. IN THE CASE OF EMPLOYEES EMPLOYED IN THE CONTINENTAL UNITED STATES (EXCEPT ALASKA), COMPENSATION SHALL BE NOT LESS THAN THAT PROVIDED BY THE LAWS OF THE STATE (OR THE DISTRICT OF COLUMBIA) IN WHICH THE EMPLOYING ACTIVITY OF ANY SUCH INSTRUMENTALITY IS LOCATED. IN THE CASE OF EMPLOYEES EMPLOYED OUTSIDE THE CONTINENTAL LIMITS OF THE UNITED STATES AND IN ALASKA, COMPENSATION SHALL BE NOT LESS THAN THAT PROVIDED IN SECTIONS 907-909 OF TITLE 33, EXCEPT THAT IN THE CASE OF SUCH EMPLOYEES WHO ARE NOT CITIZENS OF THE UNITED STATES, COMPENSATION SHALL BE IN ACCORDANCE WITH REGULATIONS TO BE PRESCRIBED BY THE SECRETARY OF THE ARMY, NAVY, AIR FORCE, OR TREASURY, AS THE CASE MAY BE. THIS SECTION SHALL TAKE EFFECT SIXTY DAYS AFTER JUNE 19, 1952. * * *

THE HOUSE OF REPRESENTATIVES REPORT NO. 1995 (82D CONGRESS, 2D SESSION) STATES ON PAGE 2 THAT:

THIS LEGISLATION WAS INTRODUCED AT THE REQUEST OF THE DEPARTMENT OF DEFENSE. IT IS THE PURPOSE OF THIS LEGISLATION TO CLARIFY, WITH RESPECT TO LAWS GOVERNING THE EMPLOYMENT, REMOVAL, CLASSIFICATION, PAY,RETIREMENT, LEAVE, AND DISABILITY AND DEATH COMPENSATIONS OF FEDERAL OFFICERS AND EMPLOYEES, THE POSITION OF CERTAIN PERSONNEL WHO ARE NOT COMPENSATED FROM FUNDS APPROPRIATED BY CONGRESS, BUT WHO ARE EMPLOYED BY THE DEPARTMENT OF DEFENSE IN THE ARMY AND AIR FORCE EXCHANGES SERVICE, ARMY AND AIR FORCE MOTION PICTURE SERVICE, NAVY EXCHANGES, NAVY SHIP'S STORES ASHORE, MARINE CORPS EXCHANGES, COAST GUARD EXCHANGES, AND OTHER SUCH INSTRUMENTALITIES OF THE UNITED STATES.

THIS QUESTION HAS ARISEN AS A RESULT OF A DECISION OF THE SUPREME COURT OF THE UNITED STATES IN THE CASE OF STANDARD OIL COMPANY V. JOHNSON (316 U.S. 481) WHICH HELD THAT AN ARMY EXCHANGE (THE PREDECESSOR TO ARMY AND AIR FORCE EXCHANGE SERVICE) IS AN INTEGRAL PART OF THE WAR DEPARTMENT AND AS SUCH ENTITLED TO ALL OF THE IMMUNITIES THEREOF WITH RESPECT TO EXEMPTIONS FROM CERTAIN LAWS. WHILE THIS DECISION DID NOT SPECIFICALLY RELATE TO THE QUESTION OF THE STATUS OF EMPLOYEES OF THESE EXCHANGE ACTIVITIES, A DOUBT HAS BEEN RAISED AS TO WHETHER OR NOT THE VARIOUS CIVIL -SERVICE LAWS AND REGULATIONS ADMINISTERED BY THE CIVIL SERVICE COMMISSION ARE APPLICABLE TO CIVILIAN EXCHANGE EMPLOYEES. IN THE PAST THEY HAVE NOT BEEN CONSIDERED FEDERAL EMPLOYEES FOR SUCH PURPOSES. HOWEVER, TO AVOID ANY LEGAL COMPLICATIONS IN THE FUTURE WITH RESPECT TO THE STATUS OF THESE EMPLOYEES, IT IS THE VIEW OF THE COMMITTEE THAT THIS ACTION BE TAKEN TO CLARIFY THE STATUS OF THESE EMPLOYEES.

THIS BILL MERELY RESTATES THE PRESENT UNDERSTANDING OF THE DEPARTMENT OF DEFENSE WITH RESPECT TO THE STATUS OF THESE EMPLOYEES AND ASSURES THAT THEIR PRESENT BENEFITS PROVIDED THROUGH PRIVATE INSURANCE FOR WORKMEN'S COMPENSATION AND EMPLOYERS' LIABILITY WILL BE CONTINUED. ON PAGE 8 OF THE REPORT THE DEPARTMENT OF DEFENSE IN LETTER DATED OCTOBER 15, 1951, QUOTES PARAGRAPH 20A OF AR 60-10/AFR 147-7 AS INDICATING THE STATUS OF EXCHANGE EMPLOYEES. PARAGRAPH 20A READS AS FOLLOWS:

SO FAR AS PRACTICABLE, EXCHANGES WILL BE STAFFED WITH CIVILIAN EMPLOYEES. SUCH EMPLOYEES WILL BE PAID FROM NONAPPROPRIATED FUNDS AND ARE SUBJECT TO PERSONNEL POLICIES AND PROCEDURES PRESCRIBED BY THE A. AND A.F.E.S. THEY ARE NOT WITHIN THE SCOPE OF, NOR IN THEIR APPOINTMENT, REMOVAL, DISCHARGE, SERVICE, OR CONDITIONS OF EMPLOYMENT SUBJECT TO THE CIVIL SERVICE ACT, CLASSIFICATION ACT, CIVIL SERVICE RETIREMENT ACT, OR THOSE PROVISIONS OF LAW APPLICABLE TO THE APPOINTMENT, DISCHARGE, TENURE, OR CONDITIONS OF EMPLOYMENT OF CIVILIAN OFFICERS AND EMPLOYEES OF THE UNITED STATES.

THE DEPARTMENT OF DEFENSE LETTER ALSO STATES THAT THE END SOUGHT TO BE ACCOMPLISHED BY THIS PROPOSED LEGISLATION IS TO CLARIFY THE STATUS OF EMPLOYEES OF NONAPPROPRIATED FUND INSTRUMENTALITIES OF THE DEPARTMENT OF DEFENSE BY REMOVING THE DOUBTS WHICH WERE RAISED AFTER THE DECISION OF THE SUPREME COURT IN STANDARD OIL COMPANY V. JOHNSON, 316 U.S. 481, WHICH DOUBTS WERE NEVER RECOGNIZED OR GIVEN PRACTICAL EFFECT BY THE ADMINISTRATIVE AGENCIES CHARGED WITH THE RESPONSIBILITY FOR DEALING WITH THESE PERSONNEL. CONSEQUENTLY, THE DEPARTMENT SAID THAT THIS LEGISLATION WILL IN NO WAY TAKE AWAY ANY RIGHTS WHICH THESE EMPLOYEES PRESENTLY HAVE, NOR WILL IT CONFER UPON THESE EMPLOYEES ANY RIGHTS, AGAINST EITHER THE DEPARTMENT OF DEFENSE OR THE UNITED STATES GOVERNMENT, WHICH THE EMPLOYEES DO NOT PRESENTLY HAVE.

YOUR SPECIFIC QUESTIONS ARE STATED, AS FOLLOWS:

1. IS EMPLOYMENT WITH THE ARMY AND AIR FORCE MOTION PICTURE SERVICE EMPLOYMENT IN A DEPARTMENT OR AGENCY IN THE EXECUTIVE BRANCH OF THE GOVERNMENT, SO THAT (A) THE SALARY RATE MAY BE USED AS A "HIGHEST PREVIOUS RATE" UNDER SECTIONS 24.102 (J) AND 25.103 (B) (1) OF THE FEDERAL EMPLOYEES' PAY REGULATIONS AND (B) IT WOULD NOT CONSTITUTE A "BREAK IN SERVICE" UNDER SECTION 30.702 OF THE UNIFORM ANNUAL AND SICK LEAVE REGULATIONS?

2. IS EMPLOYMENT WITH THAT SERVICE PROPERLY CREDITABLE AS SERVICE FOR THE PURPOSE OF ESTABLISHING THE RATE OF ANNUAL LEAVE ACCRUAL WHEN THE EMPLOYEE IS LATER APPOINTED TO A POSITION SUBJECT TO THE ANNUAL AND SICK LEAVE ACT OF 1951?

3. IF SICK LEAVE IS EARNED AND CREDITED DURING EMPLOYMENT WITH THE SERVICE, AND THE EMPLOYEE IS EMPLOYED IN A POSITION SUBJECT TO THE ANNUAL AND SICK LEAVE ACT OF 1951 IMMEDIATELY AFTER SEPARATION FROM THE SERVICE, IS SUCH SICK LEAVE TRANSFERABLE UNDER SECTION 205 (E) OF THE ACT?

YOU SAY THAT THE EMPLOYEES OF THE ARMY AND AIR FORCE MOTION PICTURE SERVICE ARE NOT SUBJECT TO THE CIVIL SERVICE ACT, 5 U.S.C. 632, AND ARE NOT COVERED BY THE CIVIL SERVICE RETIREMENT ACT, 5 U.S 691, OR GIVEN SERVICE CREDIT FOR RETIREMENT PURPOSES, BECAUSE THOSE ACTS ARE DEFINITELY ADMINISTERED BY THE COMMISSION. YOU ASSUME ALSO THAT THE CLASSIFICATION ACT WOULD BE WITHIN THE LANGUAGE "ADMINISTERED BY THE CIVIL SERVICE COMMISSION," AS USED IN THE 1952 ACT, AND THAT IF THE ARMY AND AIR FORCE MOTION PICTURE SERVICE USES GENERAL SCHEDULE GRADES AND RATES IT MERELY FOLLOWS THE SCHEDULES OF THE CLASSIFICATION ACT VOLUNTARILY. YOUR VIEW ALSO IS THAT THE ANNUAL AND SICK LEAVE ACT OF 1951, 5 U.S.C. 2061 NOTE, IS INAPPLICABLE SINCE THE COMMISSION ISSUES THE REGULATIONS GOVERNING ADMINISTRATION OF THAT ACT, ALTHOUGH IT DOES NOT ACTUALLY "ADMINISTER" THE ACT.

WE AGREE WITH YOU THAT EMPLOYEES OF THE ARMY AND AIR FORCE MOTION PICTURE SERVICE ARE NOT SUBJECT TO THE CIVIL SERVICE ACT, AND THE RETIREMENT ACT, AS THOSE ACTS ARE ADMINISTERED BY THE CIVIL SERVICE COMMISSION. ALSO, OUR VIEW IS THAT SUCH EMPLOYEES DO NOT COME WITHIN THE PURVIEW OF THE CLASSIFICATION ACT OR THE ANNUAL AND SICK LEAVE ACT OF 1951. WHILE THEIR EMPLOYMENT BY SUCH SERVICE MAY BE FEDERAL SERVICE FOR CERTAIN PURPOSES, THE LANGUAGE OF THE 1952 ACT SPECIFICALLY EXCLUDES THEM FROM BEING "HELD AND CONSIDERED AS EMPLOYEES OF THE UNITED STATES FOR THE PURPOSE OF ANY LAWS ADMINISTERED BY THE CIVIL SERVICE COMMISSION.' THIS, IN EFFECT, PLACES THESE EMPLOYEES IN THE SAME CATEGORY AS EMPLOYEES OF PRIVATE BUSINESS CONCERNING LAWS ADMINISTERED BY THE COMMISSION. ALL OF THE RIGHTS AND PRIVILEGES CONCERNED IN THE QUESTIONS PRESENTED BY YOU ARISE BY VIRTUE OF LAWS ADMINISTERED BY THE COMMISSION EITHER DIRECTLY OR THROUGH REGULATIONS ISSUED BY THE COMMISSION.

THEREFORE, SINCE OUR VIEW IS THAT EMPLOYEES OF THE ARMY AND AIR FORCE MOTION PICTURE SERVICE DO NOT COME WITHIN THE PURVIEW OF THE CIVIL SERVICE ACT, THE RETIREMENT ACT, THE CLASSIFICATION ACT, OR THE ANNUAL AND SICK LEAVE ACT OF 1951, THEY ARE NOT ENTITLED TO ANY OF THE RIGHTS OR PRIVILEGES PRESENTED IN YOUR QUESTIONS. CONSEQUENTLY THE QUESTIONS ARE ANSWERED IN THE NEGATIVE.