B-212833, JUN 4, 1984

B-212833, JUN 4, 1984

DIGEST: 1. TEMPORARY CIVILIAN EMPLOYEE OF THE AIR FORCE IN GRADE GS-4, STEP 10, POSITION WAS SELECTED FOR A PERMANENT POSITION JUST PRIOR TO THE EXPIRATION OF HER TEMPORARY APPOINTMENT. DELAYS IN PROCESSING THE APPOINTMENT RESULTED IN A BREAK IN SERVICE OF NEARLY 6 WEEKS, AND THE EMPLOYEE WAS REEMPLOYED FOLLOWING THE SERVICE BREAK AT STEP 1 OF GRADE GS-4. THE EMPLOYEE CLAIMS AIR FORCE PERSONNEL SHOULD HAVE APPLIED HIGHEST PREVIOUS RATE RULE UNDER 5 U.S.C. SEC. 5334 TO APPOINT HER AT STEP 10. ABSENT MANDATORY POLICY OR ADMINISTRATIVE REGULATION, USE OF HIGHEST PREVIOUS RATE IS DISCRETIONARY ON AGENCY'S PART. AUTHORIZED APPOINTING OFFICIAL DID NOT ABUSE DISCRETION IN SETTING PAY AT STEP 1 INCIDENT TO REEMPLOYMENT AFTER BREAK IN SERVICE. 2. EMPLOYEE, WHOSE TEMPORARY POSITION EXPIRED, CONTENDS IMPROPER AGENCY DELAY IN PROCESSING PERMANENT APPOINTMENT CAUSED HER TO LOSE THE BENEFITS OF THE HIGHEST PREVIOUS RATE RULE WHEN SHE WAS REEMPLOYED AT STEP 1 OF HER PRIOR GRADE FOLLOWING BREAK IN SERVICE. ABSENT MANDATORY POLICY OR ADMINISTRATIVE REGULATION ON PROCESSING APPOINTMENT, DELAY IN PROCESSING PRIOR TO APPROVAL BY AUTHORIZED OFFICIAL DOES NOT CONSTITUTE ADMINISTRATIVE ERROR WHICH SUPPORTS RETROACTIVE STEP ADJUSTMENT AND BACKPAY.

CARMA R. THOMAS - RETROACTIVE STEP ADJUSTMENT AND BACKPAY:

MS. CARMA THOMAS, AN EMPLOYEE OF THE DEPARTMENT OF THE AIR FORCE, HILL AIR FORCE BASE, UTAH, IS CLAIMING A RETROACTIVE SALARY ADJUSTMENT THROUGH APPLICATION OF THE HIGHEST PREVIOUS RATE RULE TO HER APPOINTMENT ON JULY 19, 1979. WE ARE DENYING MS. THOMAS' CLAIM SINCE USE OF THE HIGHEST PREVIOUS RATE WAS DISCRETIONARY ON THE AGENCY'S PART AND WE FIND NO EVIDENCE ESTABLISHING THAT THE AGENCY ABUSED ITS DISCRETION OR ACTED IMPROPERLY IN THE CIRCUMSTANCES OF THIS CASE.

MS. THOMAS WAS EMPLOYED IN A TEMPORARY POSITION WITH THE DEPARTMENT OF THE AIR FORCE, HILL AIR FORCE BASE, UTAH, AS AN ACCOUNTING TECHNICIAN, GRADE GS-4, STEP 10. APPROXIMATELY 2 WEEKS PRIOR TO THE TERMINATION DATE OF HER TEMPORARY ASSIGNMENT, SHE APPLIED FOR AND WAS SELECTED FOR A PERMANENT POSITION AT THE GRADE GS-4 LEVEL AS A PAYROLL CLERK. BECAUSE THE CIVILIAN PERSONNEL OFFICE HAD NOT PROCESSED THE PAPERWORK FOR HER NEW POSITION BY JUNE 11, 1979, THE EXPIRATION DATE OF HER TEMPORARY ASSIGNMENT, SHE WAS SEPARATED FROM SERVICE AS OF THAT DATE. SHE WAS REEMPLOYED BY THE AIR FORCE ON JULY 19, 1979, AT THE GRADE GS-4, STEP 1 LEVEL.

THE PRIMARY ISSUE IN THIS CASE IS WHETHER OR NOT MS. THOMAS WAS ENTITLED TO THE BENEFIT OF HAVING HER PAY IN HER NEW POSITION SET IN ACCORDANCE WITH THE HIGHEST PREVIOUS RATE RULE. TWO ARGUMENTS MUST BE ADDRESSED IN OUR DETERMINATION ON MS. THOMAS' CLAIM. FIRST, DIFFERENT OFFICES WITHIN THE AIR FORCE DISAGREE AS TO THE PROPER INTERPRETATION AND APPLICATION OF AGENCY REGULATIONS CONCERNING THE HIGHEST PREVIOUS RATE RULE. IN VIEW OF MS. THOMAS' BREAK IN SERVICE, THE HILL AIR FORCE BASE CIVILIAN PERSONNEL OFFICER APPLIED SPECIFIED PROVISIONS OF AIR FORCE REGULATION (AFR) 40-530 (MAY 17, 1971) AND AIR FORCE LOGISTICS COMMAND (AFLC) SUPPLEMENT 1 (AUGUST 7, 1974), AND DETERMINED THAT THE HIGHEST PREVIOUS RATE RULE SHOULD NOT BE USED AS A CRITERIA FOR ESTABLISHING THE EMPLOYEE'S RATE OF PAY AFTER HER REHIRE. THE AIR FORCE ACCOUNTING AND FINANCE CENTER REVIEWED MS. THOMAS' CLAIM, AND, CITING DIFFERENT PROVISIONS OF THE SAME REGULATORY AUTHORITIES, FORWARDED THE CLAIM TO THIS OFFICE RECOMMENDING APPROVAL.

SECONDLY, MS. THOMAS CONTENDS THAT BECAUSE OF THE CIVILIAN PERSONNEL OFFICE'S UNNECESSARY DELAY IN PROCESSING THE REQUIRED DOCUMENTS TO PLACE HER IN THE NEW POSITION, SHE SUFFERED A LOSS OF NINE STEPS, AND A TOTAL OF $2,817 PER YEAR. SHE IS THEREFORE CLAIMING THE DIFFERENCE IN PAY BETWEEN A GRADE GS-4, STEP 1 AND GRADE GS-4, STEP 10 FROM JULY 19, 1979, THROUGH JANUARY 19, 1980, WHEN SHE WAS PROMOTED TO A GRADE GS-5 POSITION, AND THE SUBSEQUENT REDUCTION IN PAY SINCE THAT DATE.

APPLICATION OF THE HIGHEST PREVIOUS RATE RULE

THE ESTABLISHMENT OF AN EMPLOYEE'S RATE OF PAY UPON REEMPLOYMENT TO A POSITION UNDER THE GENERAL SCHEDULE IS GOVERNED BY 5 U.S.C. SEC. 5334 (1976) AND REGULATIONS ISSUED BY THE OFFICE OF PERSONNEL MANAGEMENT AND PUBLISHED IN SECTION 531.203 OF TITLE 5, CODE OF FEDERAL REGULATIONS (1979). THE APPLICABLE REGULATION STATES, IN PART, THAT "WHEN AN EMPLOYEE IS REEMPLOYED, TRANSFERRED, REASSIGNED, PROMOTED, OR DEMOTED, THE AGENCY MAY PAY THE EMPLOYEE AT ANY RATE OF RATE; HOWEVER, IF THE EMPLOYEE'S HIGHEST PREVIOUS RATE FALLS BETWEEN TWO RATES OF HIS OR HER GRADE, THE AGENCY MAY PAY HIM OR HER AT THE HIGHER RATE." 5 C.F.R. SEC. 531.203(C). THIS AUTHORITY IS GENERALLY UNDERSTOOD AS THE HIGHEST PREVIOUS RATE RULE.

THE RULE PROVIDES THE ADMINISTRATIVE DISCRETION TO FIX THE INITIAL SALARY RATE AT THE MINIMUM SALARY OF THE APPOINTIVE GRADE. THUS, UNDER THE STATUTE AND OPM'S IMPLEMENTING REGULATION, AN EMPLOYEE HAS NO VESTED RIGHT UPON REEMPLOYMENT TO RECEIVE THE HIGHEST SALARY RATE PREVIOUSLY PAID TO HER. SEE 31 COMP.GEN. 15 (1951); AND MARY A. MIGUEL, B-181329, NOVEMBER 26, 1975.

WE HAVE FURTHER RECOGNIZED THAT EACH AGENCY IS PERMITTED TO FORMULATE ITS OWN POLICY REGARDING APPLICATION OF THE RULE, AND EACH AGENCY MAY IMPLEMENT A MANDATORY AGENCY POLICY UNDER WHICH THE RULE AUTOMATICALLY APPLIES TO INDIVIDUALS BEING REEMPLOYED UNDER SPECIFIED CIRCUMSTANCES. CLIFTON A. RUSSELL, B-186554, DECEMBER 28, 1976. HOWEVER, WHERE THE AGENCY HAS NOT AFFIRMATIVELY RELINQUISHED THAT DISCRETION THROUGH ADOPTION OF A MANDATORY POLICY OR ADMINISTRATIVE REGULATION, THE AGENCY IS UNDER NO OBLIGATION TO SET AN EMPLOYEE'S PAY AT THE HIGHEST RATE OF HER NEW GRADE WHICH DID NOT EXCEED THE HIGHEST PREVIOUS RATE. SEE IRENE SENGSTACK, B-212085, DECEMBER 6, 1983, CITING RICHARD L. CEPELA, B-184280, FEBRUARY 17, 1977.

IN VIEW OF THE DIVERGENCE OF FINDINGS ON MS. THOMAS' ENTITLEMENT BETWEEN THE TWO AIR FORCE AUTHORITIES, WE MUST EXAMINE THE CONTROLLING REGULATIONS TO THE DISPOSE OF THIS ASPECT OF THE CLAIM. THE HILL AIR FORCE BASE CIVILIAN PERSONNEL OFFICER DETERMINED THAT MS. THOMAS WAS NOT ENTITLED TO THE BENEFIT OF THE HIGHEST PREVIOUS RATE RULE BECAUSE SHE DID NOT MEET THE QUALIFYING REQUIREMENTS OF PARAGRAPH 1(A) OF AFR 40-530 WHICH STATES AS FOLLOWS:

"1. FACTORS CONSIDERED IN SETTING RATES OF PAY. THE COMMANDER, THROUGH HIS CIVILIAN PERSONNEL OFFICER, INSURES THAT THE RATES OF PAY ARE SET ACCORDING TO GOVERNING LAWS AND REGULATIONS. IN ESTABLISHING RATES FULL CONSIDERATION IS GIVEN TO THE PRINCIPLES OF GOOD MANAGEMENT, INCLUDING:

"A. ECONOMY IN THE USE OF FUNDS AVAILABLE TO EMPLOY PERSONNEL REQUIRED TO CARRY OUT ASSIGNED FUNCTIONS.

NOTE: RATES WILL NOT EXCEED THOSE REQUIRED TO ATTRACT QUALIFIED PERSONNEL WITHIN THE RECRUITING AREA."

ADDITIONALLY, THE CIVILIAN PERSONNEL OFFICER RELIED ON THE FOLLOWING GUIDANCE ON THE HIGHEST PREVIOUS RATE (HPR) FROM AFLC SUPPLEMENT 1, PARAGRAPH 3C(4):

"3C(4). HPR MAY BE USED IF AN INDIVIDUAL IS REEMPLOYED AT THE REQUEST OF MANAGEMENT (WITHOUT ANY ACTION HAVING BEEN INITIATED BY THE INDIVIDUAL) PROVIDED THE REQUIREMENTS OF PARAGRAPH 3B ABOVE ARE MET AND CERTIFICATION IS MADE BY THE INSTALLATION CIVILIAN PERSONNEL OFFICE THAT THE VACANCY IS CRITICAL AND HARD-TO-FILL."

THE AIR FORCE ACCOUNTING AND FINANCE CENTER BELIEVES THAT THE CIVILIAN PERSONNEL OFFICER RELIED ON THE "WRONG PORTIONS OF THE APPLICABLE REGULATIONS" AND SHOULD HAVE ALLOWED MS. THOMAS' CLAIM BASED ON PARAGRAPH 3C(4) OF THE AFR 40-530, WHICH STATES IN PART:

"(4) REEMPLOYMENT. THE PAY OF AN EMPLOYEE WHO, AFTER A BREAK IN SERVICE, IS REEMPLOYED AS THE RESULT OF PLACEMENT THROUGH THE CENTRALIZED REFERRAL SYSTEM OR FROM A REEMPLOYMENT PRIORITY LIST IS SET AT A STEP RATE AT LEAST EQUAL TO THE CURRENT RATE FOR THE GRADE AND STEP HE HELD AT THE TIME OF HIS SEPARATION, UNLESS THAT RATE EXCEEDS THE MAXIMUM RATE OF THE GRADE. IF IT EXCEEDS THE MAXIMUM RATE OF THE GRADE, HIS PAY IS SET AT THE MAXIMUM RATE. OTHERWISE, EXCEPT FOR THOSE WHO ARE EXERCISING THEIR MANDATORY REEMPLOYMENT RIGHTS, THE EMPLOYEE'S PAY MAY BE SET AT ANY ONE OF THE STEP RATES OF HIS GRADE PERMITTED BY THE HIGHEST PREVIOUS RATE RULE. IF AN EMPLOYEE IS REEMPLOYED IN A POSITION OF LOWER GRADE OR WITH A LOWER REPRESENTATIVE RATE THAN THE ONE HE HELD AT THE TIME OF HIS SEPARATION, GENERALLY HIS PAY IS NOT SET AT A RATE THAT EXCEEDS THE CURRENT RATE FOR THE GRADE AND STEP HE HELD WHEN HE WAS SEPARATED UNLESS THE APPOINTING OFFICER DETERMINES THAT A HIGHER RATE WOULD BE IN THE BEST INTEREST OF THE AIR FORCE."

ADDITIONALLY THE AIR FORCE ACCOUNTING AND FINANCE CENTER RELIES ON THE FOLLOWING GUIDANCE FROM PARAGRAPH 3B OF AFLC SUPPLEMENT 1:

"3B. EXCEPT FOR PARAGRAPHS 3C(2)(A) AND 3C(2)(B) BELOW, THE FOLLOWING BASIC REQUIREMENTS MUST BE MET FOR USE OF HIGHEST PREVIOUS RATE (HPR): IT MUST HAVE BEEN EARNED IN A DOD POSITION AND WILL BE USED ONLY IN CONNECTION WITH POSITION CHANGES WITHIN THE DOD; IT MUST HAVE BEEN EARNED IN A POSITION WHICH CONTAINS QUALIFYING EXPERIENCE FOR THE POSITION IN WHICH THE EMPLOYEE IS BEING PLACED (EXCEPTIONS ARE: GS-1 THROUGH GS-CLERK, CLERK-TYPIST, AND CLERK-STENO WHICH ARE INTERCHANGEABLE IF OTHERWISE QUALIFIED FOR THE POSITION); IT MUST HAVE BEEN EARNED IN THE 5 YEARS IMMEDIATELY PRECEDING THE POSITION CHANGE, THE EMPLOYEE'S PERFORMANCE MUST HAVE BEEN SATISFACTORY IN THE POSITION ON WHICH THE HPR IS BASED. IN ALL CASES THE RATE OF PAY EARNED DURING A TEMPORARY PROMOTION WILL NOT BE USED AS THE HPR IN ESTABLISHING THE RATE OF PAY FOR ANY POSITION CHANGE."

WE BELIEVE THAT A FULL READING OF THESE REGULATORY PROVISIONS COULD WELL SUPPORT DIFFERING VIEWS AS TO WHETHER MS. THOMAS COULD HAVE BEEN GRANTED - OR INDEED SHOULD HAVE BEEN GRANTED - THE BENEFIT OF HAVING HER PAY SET UNDER THE HIGHEST PREVIOUS RATE RULE. HOWEVER, THERE IS NO EVIDENCE THAT MS. THOMAS WAS "REEMPLOYED AS THE RESULT OF PLACEMENT THROUGH THE CENTRALIZED REFERRAL SYSTEM OR FORM A REEMPLOYMENT PRIORITY LIST," AND THE RECORD DOES NOT SUPPORT A FINDING THAT THERE WAS A NONDISCRETIONARY OBLIGATION ON THE PART OF THE CIVILIAN PERSONNEL OFFICER TO SET MS. THOMAS' PAY AT THE HIGHER RATE REFLECTIVE OF THE BENEFIT OF THE HIGHEST PREVIOUS RATE RULE. WHAT THE REGULATIONS DO PROVIDE IS A CLEARLY DISCRETIONARY SCHEME UNDER WHICH THE LOCAL COMMANDER, THROUGH HIS OR HER CIVILIAN PERSONNEL OFFICER, "CONSIDERS" A NUMBER OF FACTORS AND THE "PRINCIPLES OF GOOD MANAGEMENT" ON A CASE-BY CASE BASIS IN DETERMINING WHETHER OR NOT TO APPLY THE HIGHEST PREVIOUS RATE RULE. THE EXERCISE OF DISCRETION AND FINAL AUTHORITY FOR SETTING RATES OF PAY IN ACCORDANCE WITH GOVERNING LAWS AND REGULATIONS IS VESTED IN THE LOCAL COMMANDER, THROUGH THE CIVILIAN PERSONNEL OFFICER. MOREOVER, THE AIR FORCE REGULATIONS APPLYING TO THIS CASE DO NOT PROVIDE AN AUTOMATIC PROCEDURE OR MANDATORY ENTITLEMENT TO THE HIGHEST PREVIOUS RATE AFTER A BREAK IN SERVICE IN THE CIRCUMSTANCES OF MS. THOMAS' CASE.

ACCORDINGLY, SINCE WE FIND NOTHING IN THE RECORD BEFORE US TO ESTABLISH THAT THE CIVILIAN PERSONNEL OFFICER ABUSED HIS DISCRETIONARY AUTHORITY OR OTHERWISE ACTED IMPROPERLY IN MS. THOMAS' CASE, WE HAVE NO LEGAL BASIS TO SUBSTITUTE OUR INDEPENDENT JUDGMENT - OR THAT OF THE AIR FORCE ACCOUNTING AND FINANCE CENTER - FOR THAT OF THE LOCAL COMMANDER IN SETTING MS. THOMAS' PAY INCIDENT TO HER APPOINTMENT ON JULY 19, 1979.

DELAYED ADMINISTRATIVE PROCESSING OF APPOINTMENT

MS. THOMAS CONTENDS THAT HER CLAIM ARISES BECAUSE OF THE CIVILIAN PERSONNEL OFFICER'S UNNECESSARY DELAY IN PROCESSING THE REQUIRED DOCUMENTS TO PLACE HER IN HER NEW POSITION.

THE AUTHORITY OF THIS OFFICE TO AWARD BACKPAY ON SUCH QUESTIONS ARISES FROM THE BACK PAY ACT, 5 U.S.C. SEC. 5596 (1976), WHICH PROVIDES A REMEDY FOR INSTANCES WHEN AN EMPLOYEE IS FOUND TO HAVE UNDERGONE AN UNWARRANTED OR UNJUSTIFIED PERSONNEL ACTION WHICH HAS RESULTED IN THE WITHDRAWAL OR REDUCTION OF ALL OR PART OF THEIR PAY, ALLOWANCES OR DIFFERENTIALS. HAVE HELD THAT INSTANCES IN WHICH APPOINTMENTS MAY BE EFFECTED RETROACTIVELY AND BACKPAY AWARDED ARE RESTRICTED TO THOSE SITUATIONS IN WHICH AN INDIVIDUAL HAS A VESTED RIGHT TO AN EMPLOYMENT STATUS AT THE TIME OF APPOINTMENT BY VIRTUE OF A STATUTE OR REGULATIONS. THUS, WE HAVE PERMITTED SUCH A REMEDY IN SITUATIONS WHERE AN AGENCY IS FOUND TO HAVE VIOLATED A STATUTORY RIGHT OF REEMPLOYMENT, VIOLATED A MANDATORY POLICY IN EFFECTING APPOINTMENTS, OR IMPROPERLY PREVENTED AN EMPLOYEE FROM ENTERING UPON THE PERFORMANCE OF HIS DUTIES. SEE 54 COMP.GEN. 1028 (1975); AND B-175373, APRIL 21, 1972.

GENERALLY, APPOINTMENT AUTHORITY IS DISCRETIONARY WITH THE AGENCY OFFICIAL GRANTED SUCH AUTHORITY, AND AN EMPLOYEE IS NOT ENTITLED TO THE SALARY OF THE NEW POSITION UNTIL SUCH APPOINTMENT AUTHORITY HAS BEEN EXERCISED. SEE 54 COMP.GEN. 1028, CITED ABOVE. THEREFORE, WE HAVE HELD THAT IN THE ABSENCE OF A LAW OR REGULATION MANDATING APPOINTMENT WITHIN A PARTICULAR TIMEFRAME OR IN ACCORDANCE WITH SPECIFIED CRITERIA, ADMINISTRATIVE DELAY IN PROCESSING SUCH REQUESTS PRIOR TO APPROVAL BY THE AUTHORIZED OFFICIAL DOES NOT CONSTITUTE SUCH ADMINISTRATIVE ERROR AS WILL SUPPORT AWARD OF RETROACTIVE APPOINTMENT AND BACKPAY. GEORGE W. EDWARDS, B-206445, DECEMBER 6, 1982; AND RAYMOND J DELUCIA, B-191378, JANUARY 8, 1979.

WE FIND NO SUCH MANDATORY PROVISION IN THE AIR FORCE REGULATIONS. HAVE HELD THAT WHERE AGENCY ACTION IS COMMITTED TO AGENCY DISCRETION, THE STANDARD TO BE APPLIED BY THE REVIEWING AUTHORITY IS WHETHER THE ACTION IS ARBITRARY, CAPRICIOUS, AN ABUSE OF DISCRETION, OR OTHERWISE NOT IN ACCORDANCE WITH LAW. SEE HAROLD E. LEVINE, 54 COMP.GEN. (1974). AS A RESULT, THE ONLY QUESTION WE MAY CONSIDER IS WHETHER, AS MS. THOMAS CONTENDS, THE PROCESSING DELAY IN HER CASE (WHICH HAD THE EFFECT OF CAUSING A BREAK IN SERVICE RESULTING IN HER PLACEMENT IN STEP 1, GRADE GS- 4 RATHER THAN STEP 10) CONSTITUTED AN IMPROPER OR UNWARRANTED PERSONNEL ACTION. WE HOLD THAT IT DID NOT. HERE, THE RECORD SHOWS THAT SHORTLY BEFORE HER TEMPORARY APPOINTMENT WAS SCHEDULED TO TERMINATE, MS. THOMAS APPLIED FOR AND WAS SELECTED FOR A PERMANENT POSITION. HOWEVER, PARAGRAPH 3C(4) OF AFR 40-530 MAKES CLEAR THAT THE SELECTING OFFICIAL HAS NO AUTHORITY TO PROMISE AN EMPLOYEE ANY SPECIFIC RATE OF PAY. THE RECORD FURTHER SHOWS THAT MS. THOMAS' PAPERWORK WAS "HANDCARRIED TO CIVILIAN PERSONNEL AS SHE HAD ONLY A FEW DAYS REMAINING IN THE TEMPORARY POSITION." MS. THOMAS' TEMPORARY APPOINTMENT EXPIRED ON JUNE 11, 1979, AND HER PERMANENT APPOINTMENT WAS EFFECTIVE JULY 19, 1979. IN THESE CIRCUMSTANCES WE ARE NOT PREPARED TO CONCLUDE THAT THE TERMINATION OF THE TEMPORARY APPOINTMENT AND THE RESULTING BREAK IN SERVICE WERE OCCASIONED BY ANYTHING OTHER THAN NORMAL TIME REQUIREMENTS OF PROCESSING APPOINTMENTS. SENGSTACK, AND MIGUEL, CITED ABOVE. AS SUCH, BASED ON THE RECORD BEFORE US, WE FIND NOTHING WHICH WOULD ESTABLISH THAT THE AGENCY ABUSED ITS DISCRETION OR OTHERWISE ACTED IMPROPERLY IN SETTING MS. THOMAS' RATE OF PAY INCIDENT TO HER REEMPLOYMENT AFTER A BREAK IN SERVICE.

MS. THOMAS' CLAIM IS DENIED.