[Question Concerning Repayment of Relocation Expenses]

A former Federal Aviation Administration (FAA) employee claimed repayment for retirement contributions which FAA applied against his indebtedness for advance annual leave and relocation expenses. The employee had signed a travel and transportation agreement with the agency agreeing to remain in government service for 12 months from the date of his relocation. The employee was fired for his participation in an air traffic controller strike. Following his removal, FAA determined that he was indebted for advance annual leave and the repayment of his relocation expenses and it applied his retirement contributions against his indebtedness and pursued collection of the balance of the debt. The employee did not dispute his indebtedness for the advance annual leave. However, he argued that: (1) since the agency failed to allow him to complete his contractual obligations, it cannot seek damages for breach of the agreement; (2) service agreements apply only to transfers within the continental United States; and (3) FAA may not extend the service agreement beyond the limits of the statute. GAO found that, since the employee's transfer was not within the continental United States, he was required by statute to sign a service agreement. In addition, GAO has held that, even though the statute does not require a service agreement, agencies may refuse to pay relocation expenses unless an employee signs a service agreement. Accordingly, GAO found that the employee was indebted for the relocation expenses paid pursuant to the agreement.