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United States Court of Appeals for the Federal Circuit
04-3061
DAVID MORAVEC,
Petitioner,
v.
OFFICE OF PERSONNEL MANAGEMENT,
Respondent.
Joseph M. Codega, of Cranston, Rhode Island, argued for petitioner.
David A. Harrington, Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice, of Washington, DC, argued for respondent. On
the brief were Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director,
James M. Kinsella, Deputy Director, and Cristina C. Ashworth, Trial Attorney. Of
counsel was Earl Sanders, Office of the General Counsel, Office of Personnel
Management, of Washington, DC.
Appealed from: United States Merit Systems Protection Board
United States Court of Appeals for the Federal Circuit
04-3061
DAVID MORAVEC,
Petitioner,
v.
OFFICE OF PERSONNEL MANAGEMENT,
Respondent.
__________________________
DECIDED: December 22, 2004
__________________________
Before RADER, DYK, and PROST, Circuit Judges.
PROST, Circuit Judge.
The petitioner, David Moravec, asks this court to review the final decision of the
Merit Systems Protection Board (“the Board”) denying his appeal of the Office of
Personnel Management (“OPM”) decisions rejecting his claim for full annuity benefits
under the Civil Service Retirement System (“CSRS”) and requiring him to repay
$18,190.30 in annuity benefits that he received in error. Moravec v. Office of Pers.
Mgmt., Docket No. BN831M010205-I-1 (M.S.P.B. Sept. 8, 2003) (“Final Decision”).
Because the Board’s decision was not arbitrary, capricious, an abuse discretion,
otherwise not in accordance with the law, or unsupported by substantial evidence, we
affirm.
BACKGROUND
Mr. Moravec served as a civilian reserve technician in the Rhode Island Army
National Guard (“RIARNG”) between October 25, 1964 and January 1, 1980. On
January 17, 1980, he was placed on leave without pay (“LWOP”) by the RIARNG. On
January 1, 1982, he was formally separated from his civilian position in the RIARNG.
Between January 1, 1980 and May 31, 1998, he served on active guard reserve
(“AGR”) duty in the RIARNG. The petitioner returned to a civilian reserve technician
position from June 1, 1998 until he lost his membership in the RIARNG on February 27,
2000 as a result of reaching the age of sixty. Two days later, he was separated from his
position a second time because he could no longer meet his position’s requirement of
membership in the RIARNG. In all, the petitioner spent eighteen years and five months
on continuous AGR duty in the RIARNG and sixteen years and ten months as a civilian
reserve technician in the RIARNG. Because two years of the continuous eighteen
years and five months spent by Mr. Moravec in the AGR were spent on LWOP from his
civilian position, OPM granted Mr. Moravec CSRS credit for those two years.1
The day he was separated from his position as a civilian reserve technician for
the second time, Mr. Moravec applied for immediate retirement under the CSRS. In
order to qualify for full retirement benefits under the CSRS, the petitioner was required
to have served for a period of twenty years in the civil service.
5 U.S.C. § 8336(b)
(2004). The OPM originally accepted Mr. Moravec’s application and began making
annuity payments to him. But after paying $18,190.30 in annuity payments, the OPM
reversed course and notified the petitioner by letter on March 5, 2001 that it was
denying his application for CSRS retirement benefits. The OPM informed Mr. Moravec
1
Because of military service performed prior to 1980, Mr. Moravec is
credited with having served eighteen years in the military even after his two years on
LWOP are subtracted from his military service. For our purposes, we will consider Mr.
Moravec to have spent sixteen years and five months in continuous AGR service.
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that his active military service in the RIARNG from January 1, 1982 to May 31, 1998
was not creditable towards his civil service retirement benefits because he did not have
valid reemployment rights under either the Veterans’ Reemployment Rights Act (“the
VRRA”) found in
38 U.S.C. § 2021-27 or the Uniformed Services Employment and
Reemployment Rights Act (“USERRA”) found in
38 U.S.C. § 4301-33 and, as a result,
he did not qualify for the immediate annuity available to him at age sixty after twenty
years of service. In a separate letter dated March 7, 2001, the OPM further requested
that Mr. Moravec repay the annuity payments that he had erroneously received to date.
Mr. Moravec responded in a March 16, 2001 letter to the OPM requesting
reconsideration and a waiver of his debt. On July 12, 2001, the OPM again denied Mr.
Moravec’s request for an immediate CSRS retirement annuity based on his combined
civilian and AGR service. OPM also denied his request for waiver of his debt. On July
25, Mr. Moravec again asked for a waiver of his debt on the grounds that he was not at
fault for the erroneous annuity payments and that equity and good conscience would
justify waiving his debt. No answer from the OPM to this final waiver request is found in
the record.
After being denied an immediate CSRS annuity and waiver of his debt, the
petitioner filed an appeal with the Board. After a hearing, the Board’s administrative
judge issued an initial decision upholding the OPM’s reconsideration decision. Moravec
v. Office Pers. Mgmt., Docket No. BN831M010205-I-1, slip op. at 13-14 (M.S.P.B. Dec.
28, 2001) (“Initial Decision”). Mr. Moravec then petitioned for review of the
administrative judge’s ruling on the annuity and waiver issues. The Board, after
reviewing Mr. Moravec’s case, issued a final decision affirming the administrative
04-3061 3
judge’s decision and denying Mr. Moravec’s appeal of the OPM’s decisions relating to
his annuity and waiver claims. Final Decision.
Mr. Moravec timely appealed the Board’s decision to this court. We have
jurisdiction to resolve this case under
28 U.S.C. § 1295(a)(9).
DISCUSSION
We must set aside any Board decisions that are:
(1) arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law;
(2) obtained without procedures required by law, rule, or
regulation having been followed; or
(3) unsupported by substantial evidence.
5 U.S.C. § 7703(c) (2004). Substantial evidence is “such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion.” Consol. Edison
Co. v. NLRB,
305 U.S. 197, 229 (1938).
On appeal, the petitioner alleges that the Board wrongly denied his request for a
full and immediate CSRS retirement annuity by failing to count his military service for
CSRS purposes. He also argues that even if we find that the Board correctly decided
that he was not qualified for a CSRS retirement annuity at the age of sixty, his debt for
the erroneously paid annuity benefits should nevertheless be waived.
A. Mr. Moravec’s Claim to a CSRS Retirement Annuity
Mr. Moravec argues that he had valid reemployment rights at the time he left his
AGR service and that service was, as a result, creditable towards his civil service
retirement annuity. He argues that he properly exercised the reemployment rights
conferred upon him by the VRRA within the time limits prescribed by USERRA. He
04-3061 4
further argues that it is the VRRA that controls the disposition of reemployment rights in
this case—and not USERRA, which, in his view, merely set a maximum time limit for
non-civil service work on employees leaving civil service. Furthermore, he argues that
he did not abandon his civilian career when he left his civilian position to enter AGR
service.
The USERRA limits to five years the amount of time a member of the civil service
can spend in military service while retaining reemployment rights and civil service
benefits.
5 U.S.C. § 4312(c) (1994). As it states:
[A] person who is absent from a position of employment by
reason of service in the uniformed services [shall be eligible
for civil service reemployment rights and benefits and other
employment benefits] if such person’s cumulative period of
service in the uniformed services, with respect to the
employer relationship for which a person seeks
reemployment, does not exceed five years.
Id. By its terms, USERRA is not retroactive such that a civil servant who left the civil
service prior to its 1994 enactment was limited to only five years of military service.
Instead, USERRA only prospectively limited civil servants to five years of military
service from its date of passage. Mr. Moravec was reemployed in 1998, within the five-
year deadline set by USERRA. As we have previously held, his “reemployment rights
did not expire until December 12, 1999. [His] reemployment rights up to and including
December 12, 1994 are defined by VRRA.” Woodman v. Office of Pers. Mgmt.,
258
F.3d 1372, 1378 (Fed. Cir. 2001); see
5 C.F.R. § 353.203(b) (2004).
We have found, however, that Congress intended both VRRA and USERRA to
distinguish between career and non-career military service for civil servants who leave
their positions. See Woodman,
258 F.3d 1372. In Woodman, we found that the
04-3061 5
“VRRA, like USERRA, only applie[s] to non-career military service.”
Id. at 1378.
Accordingly, our inquiry in Woodman focused on whether the Board’s finding that the
petitioner’s AGR service had constituted career military service was supported by
substantial evidence.
Id. In that case, we used indicia of the petitioner’s intent to
determine whether or not he had pursued career military service (as opposed to non-
career service) and, thus, extinguished his reemployment rights with his civilian
employer. Among the indicia used were the petitioner’s continuous fourteen-year
service as a full-time member of the AGR and his active pursuit of extensions of his
AGR service. In the end, we concluded that “Mr. Woodman’s actions created a de facto
resignation by indicating to [his employer] that he never intended to return to his civilian
position.”
Id. at 1379.
Three years after Woodman, we reaffirmed the core principle of Woodman in
Kiszka v. Office of Personnel Management,
327 F.3d 1301 (Fed. Cir. 2004). Though we
did not analyze an employee’s rights under USERRA in Kiszka, we did use that case to
re-assert the idea that “resignation can result in the loss of reemployment rights.”
Id. at
1306.
Mr. Moravec argues that the facts of this case are materially different from those
in Woodman and, thus, compel a different result. He argues that Woodman, unlike him,
was on active military duty long enough to qualify for full active duty military retirement
benefits when he sought reemployment from his civilian employer. Secondly, he points
out that, unlike Woodman who was denied reemployment, he was reemployed by his
civilian employer. Third, he notes that he exercised his reemployment rights before the
expiration of those rights (as determined by the five-year time limit established by
04-3061 6
USERRA).2 While all of these facts are undoubtedly true, the petitioner reads our
holding in Woodman too narrowly. Our opinion in Woodman does not confine our
holding to the facts presented in that case. Using legislative history, we noted in
Woodman that Congress’s intent in enacting USERRA was to encourage non-career
military service as opposed to career military service.
Id. at 1377. We also noted that
other courts had reduced the relevant inquiry regarding employment rights to whether or
not the employee intended to “forsake one’s civilian job” in order to start a military
career. Woodman,
258 F.3d at 1378 (citing Paisley v. City of Minneapolis,
79 F.3d 722,
725 n.5 (8th Cir. 1996)). Ultimately, we decided that the key inquiry under both VRRA
and USERRA was whether or not Woodman intended to make a career in the military
after he left his civilian job.
Id.
Thus, in this case, our inquiry reduces to whether Mr. Moravec intended to
pursue a career of service in the AGR or whether his service can be more properly
characterized as a temporary non-career hiatus in his civil service career. All of the
Board’s findings of fact in this inquiry are reviewed for substantial evidence.
5 U.S.C.
§ 7703(c).
The Board found that Mr. Moravec intended to pursue a career in the military
after he left his civilian technician position to serve in the RIARNG AGR. The Board
relied on four different facts to arrive at this finding. First, the Board noted that the
length of the AGR service at issue for which Mr. Moravec was denied CSRS credit
exceeds that of the petitioner in Woodman. In this case, the relevant AGR service for
2
This does not distinguish him from Woodman however. As we noted in
Woodman, Woodman’s reemployment rights did not expire by the time he requested
reemployment from his civilian employer. Woodman,
258 F.3d at 1378.
04-3061 7
which Mr. Moravec was denied CSRS credit exceeds sixteen years, compared to
fourteen years for Woodman. Second, the Board noted that the record reflected that
Mr. Moravec returned to civilian employment shortly before his sixtieth birthday in order
to retire as a civilian and receive a civilian pension—not because he felt himself to be
returning to civilian employment after a temporary hiatus. Third, the Board noted that
Mr. Moravec did not object to his 1982 separation from his civilian position and did not
request to be placed on LWOP until February 9, 1994. Fourth, the Board noted that
right before his 1982 separation from his position, the petitioner withdrew the funds that
he had placed in his civil service pension fund and that such an act ordinarily terminates
an employee’s right to a future annuity and indicates an intention to terminate his civilian
career. Final Decision at 8-9.3 As the Board noted, the totality of these factors
supported the proposition that Mr. Moravec intended to leave his civilian employment to
start a career in the military. Though we have not articulated any one decisive factor to
be used in determining an employee’s entitlement to CSRS retirement benefits, we do
note that the facts considered and used by the Board were correct and relevant ones in
determining if Mr. Moravec was entitled to a CSRS annuity.
All of the Board’s cited facts are amply supported by the record and, as a whole,
amount to the substantial evidence necessary for this court to affirm the Board’s
conclusion that Mr. Moravec intended to pursue a career in the military. Accordingly,
3
The Eighth Circuit has held that a withdrawal of retirement contributions
“clearly indicat[ed] [the employee’s] understanding that he had terminated his
employment and [was moving] on to another career.” Paisley,
79 F.3d at 725. Paisley
is persuasive authority that we have considered in resolving this case.
04-3061 8
we affirm the Board’s determination that Mr. Moravec was not entitled to full CSRS
annuity benefits.
B. Waiver of Erroneously Paid Benefits
The second issue Mr. Moravec raises relates to the erroneously paid annuity
benefits that he received prior to being notified by OPM that he was being denied the
CSRS annuity that he had applied for. Mr. Moravec argues that since the mistaken
payments were made through no fault of his own and because their repayment would
cause him undue hardship, he ought to be entitled to a waiver of repayment on the
grounds of “equity and good conscience” as established by
5 U.S.C. § 8346(b).
Section 8346(b) of Title 5 of the United States Code states:
Recovery of payments under this subchapter may not be
made from an individual when, in the judgment of the Office
of Personnel Management, the individual is without fault and
recovery would be against equity and good conscience.
5 U.S.C. § 8346(b) (2004). Two of the grounds that would constitute recovery against
“equity and good conscience” are either that recovery would cause financial hardship for
the person charged with the obligation of repayment or that the payee “relinquished a
valuable right or changed positions for the worse” as a result of the erroneous payment.
5 C.F.R. § 831.1403(a)(1)-(2) (2004).4 Financial hardship is defined in the regulations
as arising when the payee “needs substantially all of his/her current income and liquid
assets to meet ordinary and necessary living expenses and liabilities.”
5 C.F.R.
§ 831.1404 (2004).
4
The final alternative ground offered by the regulation is that “recovery
would be unconscionable under the circumstances.”
5 C.F.R. § 1403(3). The petitioner
has not made any argument before this court that recovery of the erroneous annuity
payments by OPM would be unconscionable.
04-3061 9
As the administrative judge noted in the Board’s initial decision, Mr. Moravec has
significant liquid assets. Initial Decision at 13-14. The Board also took into account Mr.
Moravec’s monthly income and expenses in reviewing his financial status.
Id. Only
after such a review did the Board find that he did not need “substantially all of his/her
current income and liquid assets to meet current ordinary and necessary living
expenses and liabilities” and was therefore not entitled to a waiver of repayment on
financial hardship grounds.
Id. at 12-14. Furthermore, the Board found that Mr.
Moravec made no showing that he detrimentally relied on the erroneous annuity
payments. The findings of the Board regarding Mr. Moravec’s request for waiver of
repayment were not arbitrary, capricious, an abuse of discretion or otherwise not in
accordance with law. Furthermore, the Board’s finding was supported by substantial
evidence. Accordingly, given our standard of review, we cannot set aside the Board’s
decision.
CONCLUSION
For the aforementioned reasons, the Board’s denial of Mr. Moravec’s appeal is
affirmed.
AFFIRMED
04-3061 10
