Thomas J. Wallen v. Office of Personnel Management ( 2016 )

UNITED STATES OF AMERICA
MERIT SYSTEMS PROTECTION BOARD
THOMAS J. WALLEN, DOCKET NUMBER
Appellant, DC-0841-15-0167-I-1
v.
OFFICE OF PERSONNEL DATE: September 2, 2016
MANAGEMENT,
Agency.
THIS FINAL ORDER IS NONPRECEDENTIAL 1
David Steidle, Esquire, Roanoke, Virginia, for the appellant.
Karla W. Yeakle, Esquire, Washington, D.C., for the agency.
BEFORE
Susan Tsui Grundmann, Chairman
Mark A. Robbins, Member
FINAL ORDER
¶1 The appellant has filed a petition for review of the initial decision, which
affirmed the reconsideration decision of the Office of Personnel Management
(OPM) denying his application for a deferred retirement annuity under the Civil
Service Retirement System (CSRS). Generally, we grant petitions such as this
1
A nonprecedential order is one that the Board has determined does not add
significantly to the body of MSPB case law. Parties may cite nonprecedential orders,
but such orders have no precedential value; the Board and administrative judges are not
required to follow or distinguish them in any future decisions. In contrast, a
precedential decision issued as an Opinion and Order has been identified by the Board
as significantly contributing to the Board’s case law. See 5 C.F.R. § 1201.117(c).
2
one only when: the initial decision contains erroneous findings of material fact;
the initial decision is based on an erroneous interpretation of statute or regulation
or the erroneous application of the law to the facts of the case; the administrative
judge’s rulings during either the course of the appeal or the initial decision
were not consistent with required procedures or involved an abuse of discretion,
and the resulting error affected the outcome of the case; or new and material
evidence or legal argument is available that, despite the petitioner’s due
diligence, was not available when the record closed. Title 5 of the Code of
Federal Regulations, section 1201.115 (5 C.F.R. § 1201.115). After fully
considering the filings in this appeal, we conclude that the petitioner has not
established any basis under section 1201.115 for granting the petition for review.
Therefore, we DENY the petition for review and AFFIRM the initial decision,
which is now the Board’s final decision. 5 C.F.R. § 1201.113(b).
DISCUSSION OF ARGUMENTS ON REVIEW
¶2 Effective June 7, 2010, the Patent and Trademark Office (PTO) appointed
the appellant to a career-conditional GS-11 Patent Examiner position, subject to
completion of a 1-year probationary period. Initial Appeal File (IAF), Tab 7
at 29. The appellant resigned from his position effective May 17, 2011, prior to
completion of his probationary period. 2 Id. at 32. On June 25, 2013, the
appellant applied for a deferred retirement annuity under CSRS. Id. at 40-41. On
his application, he indicated that he had prior Federal service in 1969 and from
2
According to the appellant, PTO notified him on May 17, 2011, that he would be
terminated during his probationary period unless he resigned within 24 hours. IAF,
Tab 7 at 22.
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1977 to 1990 and that he previously had filed an application for a refund of his
retirement contributions under CSRS. 3 Id. at 41.
¶3 In an initial decision dated April 18, 2014, OPM denied the appellant’s
application for a deferred retirement annuity under CSRS because he was not
“covered under CSRS for at least one year ou[t] of the last two years preceding
[his] final separation.” Id. at 37. On May 17, 2014, the appellant requested
reconsideration of OPM’s initial decision, id. at 8-9, and, on May 29, 2014, he
submitted a supplemental pleading, id. at 21‑28. In an October 21, 2014
reconsideration decision, OPM affirmed its initial decision. Id. at 5-7. OPM
explained that the initial decision correctly determined that the appellant was
ineligible for a deferred retirement annuity because he had not served in a
position covered by CSRS for at least 1 year out of his final 2 years of service
prior to separation. Id. at 6. OPM further found that the appellant was not
entitled to an annuity because he had received a refund of his retirement
deductions and, moreover, that he was ineligible to make a redeposit of his
refunded retirement deductions because he was not currently employed in a
Federal position. Id.
¶4 On November 18, 2014, the appellant appealed OPM’s reconsideration
decision to the Board. 4 IAF, Tab 1. In his closing brief, the appellant argued that
OPM erred by finding that he did not serve 1 year out of his final 2 years of
3
The appellant’s individual retirement record reflects that the Department of the Navy
employed him in a civil service position from June 19 to September 19, 1969, and again
from August 15, 1977, to August 26, 1978. IAF, Tab 7 at 47-48. From August 27,
1978, through December 7, 1985, PTO employed the appellant as a Patent Examiner.
Id. at 45 ‑ 56. From December 8, 1985, until his resignation effective December 14,
1990, the appellant was employed by the Department of Agriculture. Id. at 44. In
December 1990, the appellant requested a refund of his retirement deductions. Id.
at 49.
4
Although the appellant initially requested a hearing, he subsequently waived his right
to one, and the parties agreed to a decision based on the written record. IAF, Tab 1
at 1, Tab 9 at 1.
4
service in a position covered by CSRS and that he did not have the right to
redeposit his refunded retirement deductions. IAF, Tab 10 at 12‑24. He further
argued, for the first time, that the deadline for making a redeposit of his
withdrawn retirement contributions should be waived because he received
misinformation from PTO regarding the requirement to make a redeposit in order
to claim retirement credit for his prior service, thereby depriving him of his
entitlement to a deferred retirement annuity. Id. at 25-30. The administrative
judge provided the appellant notice of his burden of proof to establish that the
redeposit deadline should be waived and reopened the record to afford him an
opportunity to respond. IAF, Tab 11‑12, 16 at 1-2. The appellant submitted a
response. IAF, Tab 17.
¶5 In an initial decision based on the written record, the administrative judge
affirmed OPM’s reconsideration decision. IAF, Tab 18, Initial Decision (ID).
Although the administrative judge found that OPM incorrectly determined that
the appellant did not meet the eligibility requirements for a deferred retirement
annuity under CSRS, he concluded that OPM correctly determined that the
appellant was not entitled to the benefit. ID at 4-11. Specifically, the
administrative judge found that the appellant received a refund of his retirement
deductions after he left Federal service in 1990, thereby voiding his annuity
rights, and that he did not make the requisite redeposit during his subsequent
period of Federal employment. Id. The administrative judge also found that the
appellant was not entitled to a waiver of the deadline for making a redeposit.
ID at 12‑14.
¶6 The appellant has filed a petition for review of the initial decision, OPM has
responded in opposition to the petition for review, and the appellant has replied to
OPM’s opposition. Petition for Review (PFR) File, Tabs 1, 4‑5.
5
The administrative judge correctly determined that the appellant met the
eligibility criteria for a retirement annuity under CSRS.
¶7 Eligibility for retirement benefits under CSRS generally requires that the
employee demonstrate that he has completed: (1) at least 5 years of civilian
service; and (2) at least 1 year of creditable civilian service covered by CSRS
within the last 2 years prior to “any separation from service.” 5 U.S.C.
§ 8333(a)-(b); Carreon v. Office of Personnel Management, 321 F.3d 1128, 1130
(Fed. Cir. 2003). The administrative judge found that the appellant met the first
requirement because he completed more than 13 years of creditable service during
his continuous employment from August 1977 through December 1990. ID at 5;
IAF, Tab 7 at 44-48. He also determined that the appellant met the second
requirement because he completed at least 1 year of creditable civilian service in
a position covered by CSRS within the last 2 years before his separation from
service in December 1990. ID at 5-6. Thus, although the appellant did not meet
the eligibility requirements as to his most recent separation in 2011, the
administrative judge found that he did meet the eligibility requirements and was
eligible for a retirement annuity based on his separation occurring in 1990.
ID at 7 n.n. 5, 11.
¶8 The parties do not challenge these findings on review, and we discern no
basis to disturb them. PFR File, Tabs 1, 4-5. Therefore, we agree with the
administrative judge that, contrary to the finding in OPM’s reconsideration
decision, the appellant meets the eligibility criteria for a deferred retirement
annuity under CSRS based on his separation from service in 1990. ID at 4-7.
The administrative judge correctly determined that the appellant was not entitled
to a deferred retirement annuity.
¶9 Although the appellant was eligible for a deferred retirement annuity, the
administrative judge agreed with OPM’s alternate finding that the appellant
was not entitled to an annuity because he received a refund of his retirement
deductions and did not make the requisite redeposit during his subsequent period
of Federal employment from 2010 to 2011. ID at 7; IAF, Tab 7 at 6. The
6
appellant does not dispute these findings on review. PFR File, Tabs 1, 5. He
argues, however, that the administrative judge erred in finding that he did not
qualify for an exception to the redeposit requirement. PFR File, Tab 1 at 7-10.
¶10 A former Federal employee may elect to receive a lump-sum refund of his
previously paid retirement deductions. 5 U.S.C. § 8342(a). Upon receipt of that
payment, the employee “voids all annuity rights . . . based on the service on
which the lump-sum credit is based, until the employee . . . is reemployed in the
service.” Id. Under 5 U.S.C. § 8334(d)(1), the loss of annuity rights may be
cured by an employee’s redeposit of the lump-sum payment with interest.
Carreon, 321 F.3d at 1130-31; Sanchez v. Office of Personnel
Management, 47 M.S.P.R. 343, 346‑47 (1991). In addition, 5 U.S.C.
§ 8334(d)(2)(B), as implemented by 5 C.F.R. § 831.303(c)(1), allows certain
employees, who are otherwise eligible to receive a nondisability annuity under
CSRS, to receive credit for a period of refunded service without making the
redeposit. In such a case, the employee will receive an annuity at a reduced
rate. 5 U.S.C. § 8334(d)(2)(B); 5 C.F.R. § 831.303(c)(2). This exception to the
redeposit requirement is available only to: (1) employees “whose retirement is
based on a separation occurring before October 28, 2009, and who [have] not
completed payment of a redeposit for refunded deductions based on a period of
service that ended before October 1, 1990 . . . provided the nondisability annuity
commences after December 1, 1990”; and (2) employees “whose retirement is
based on a separation on or after October 28, 2009, and who [have] not completed
payment of a redeposit for refunded deductions based on a period of service that
ended before March 1, 1991.” 5 C.F.R. § 831.303(c)(1)(i)‑(ii); see 5 U.S.C.
§ 8334(d)(2)(A)(i); see also National Defense Authorization Act for Fiscal Year
2010 (NDAA), Pub. L. No. 111-84, § 1902, 123 Stat. 2190, 2615‑2616 (2009)
(amending 5 U.S.C. § 8334(d)(2)(A)(i) by replacing “October 1, 1990” with
“March 1, 1991” effective October 28, 2009).
7
¶11 The administrative judge found that this exception to the redeposit
requirement did not apply to the appellant because his retirement was based on
his December 14, 1990 separation, i.e., a separation occurring before October 28,
2009, and the period of service for which he received a refund ended on
December 14, 1990, several weeks after the October 1, 1990 deadline.
ID at 9-10. Regarding the appellant’s argument that he qualified for the
exception because his December 14, 1990 separation occurred before the
amended deadline date of March 1, 1991, the administrative judge explained that
the March 1, 1991 deadline in 5 C.F.R. § 831.303(c)(1)(ii) and 5 U.S.C.
§ 8334(d)(2)(A)(i) applied only to employees whose entitlement to an annuity
was “based on a separation from service” occurring on or after October 28, 2009.
ID at 10-11 (quoting NDAA, § 1902(b), 123 Stat. at 2615‑2616). Because the
appellant’s entitlement to an annuity was based on his separation from service on
December 14, 1990, the administrative judge concluded that the 2009 amendment
did not affect the appellant’s rights under section 8334(d). ID at 10-11. The
administrative judge further found that the appellant was not entitled to an
annuity “based on his separation from service” in 2011 because he did meet the
eligibility requirements of 5 U.S.C. § 8333 for his period of reemployment ending
in 2011 but had not redeposited his withdrawn retirement contributions while
reemployed. Id.
¶12 On review, the appellant argues that the administrative judge erred by
relying on 5 C.F.R. § 831.303(c) in interpreting 5 U.S.C. § 8334(d)(2)(A)(i)
because the regulation “did not exist in its current form when appellant separated
in 2011.” PFR File, Tab 1 at 8-9. Thus, he contends that the Board should defer
to his “equally valid interpretation” of the statute, which is that the 2009
amendment (replacing the October 1, 1990 deadline for qualifying separations
with a March 1, 1991 deadline) applies to “any individual that separated on or
after the enactment of the Act,” regardless of whether the service immediately
8
preceding that separation meets the eligibility requirements for an annuity under
CSRS. Id. at 9 (emphasis in original).
¶13 The appellant is correct that, at the time of his separation in 2011,
section 831.303(c) did not appear in its current form. See 5 C.F.R. § 831.303(c)
(2011); see also 79 Fed. Reg. 46,618 (Aug. 8, 2014) (subsequently codified
at 5 C.F.R. § 831.303(c)). However, the language of the statute itself is clear
without reference to the regulations, and we find no support for the appellant’s
proffered interpretation of the 2009 amendment. As the administrative judge
correctly explained, the NDAA for Fiscal Year 2010 amended
section 8334(d)(2)(A)(i) by extending the deadline for a qualifying separation
from October 1, 1990, to March 1, 1991, and provided that the amendment “shall
be effective with respect to any annuity, entitlement to which is based on a
separation from service occurring on or after the date of enactment of this Act
[October 28, 2009].” 5 NDAA, § 1902(b), 123 Stat. at 2615‑2616. The
appellant’s interpretation of the amendment is inconsistent with the plain
language of the NDAA, which clearly states that the amendment applies only to
those whose entitlement to an annuity is based on a separation occurring on or
after October 28, 2009, not to those who merely separate after that date. Id.
Further, an employee must have at least 1 year of creditable service in a position
covered by CSRS within the last 2 years preceding the separation in order to be
“eligible for an annuity . . . based on the separation.” 5 U.S.C. § 8333(b). Thus,
we agree with the administrative judge that the appellant could only base his
entitlement to a retirement annuity under CSRS on his separation from service in
5
Although the applicability provision of the 2009 amendment was not codified into the
text of the section 8334(c), it is codified in the notes of section 8334. 5 U.S.C. § 8334
note. The Board and its reviewing court, without reservation, have applied laws that
have been codified in the notes of the U.S. Code. See, e.g., Brooks v. Department of
Homeland Security, 95 M.S.P.R. 464, ¶ 15 (2004). Moreover, while the U.S. Code is
prima facie evidence of the laws contained therein, the Code cannot prevail over the
Statutes at Large when the two are inconsistent. Id. (citing United States v. Welden,
377 U.S. 95, 98 n.4 (1964)).
9
December 1990, and not on his separation in 2011, because he did not have 1 year
of creditable service in a covered position within the last 2 years preceding his
2011 separation. ID at 6-7; see 5 U.S.C. § 8333(b).
¶14 In sum, we find that the administrative judge correctly interpreted amended
section 8334(d)(2)(A), and we discern no basis to disturb the administrative
judge’s finding that the appellant is not entitled to receive a reduced annuity in
lieu of making a redeposit pursuant to section 8334(d)(2)(A).
The administrative judge correctly determined that the appellant is not entitled to
a waiver of the deadline to redeposit his refunded retirement deductions.
¶15 As stated above, an employee who receives a lump-sum refund of his
previously paid retirement deductions voids his annuity rights. 5 U.S.C.
§ 8342(a). An employee who received a refund pursuant to 5 U.S.C. § 8342 may,
however, be allowed credit for his prior service under 5 U.S.C. § 8334(d)(1) if,
“[w]hile subsequently reemployed in a covered position,” he redeposits the
amount received, with interest. Carreon, 321 F.3d at 1130-31; Sanchez,
47 M.S.P.R. at 346‑47. Here, the appellant could have, but did not, redeposit his
withdrawn retirement contributions, with interest, while reemployed in a covered
position, prior to his resignation on May 17, 2011. IAF, Tab 7 at 32. Because the
appellant is no longer employed in a covered position, OPM cannot accept his
request to redeposit the withdrawn funds or grant him a deferred annuity.
See 5 U.S.C. § 8334(d)(1) (stating that an “employee,” as defined by
section 8331(1), who has received a refund of retirement deductions may deposit
the amount received, with interest, in order to receive credit for the period of
service covered by the refund). The appellant argues, however, that the deadline
for making a redeposit, i.e., his last day of employment on May 17, 2011, should
be waived.
¶16 As the administrative judge correctly explained below, the Board recognizes
three bases for waiving a filing deadline prescribed by statute or regulation:
(1) the statute or regulation expressly provides for a waiver under specified
10
circumstances; (2) an agency’s affirmative misconduct precludes enforcement of
the deadline under the doctrine of equitable estoppel; and (3) an agency’s failure
to provide a notice of rights of the applicable filing deadline, where such notice is
required by statute or regulation, warrants a waiver of the deadline. IAF, Tab 15
at 11-12; Perez Peraza v. Office of Personnel Management, 114 M.S.P.R. 457, ¶ 7
(2010). In the initial decision, the administrative judge found that the appellant
had failed to establish any basis for waiver of the redeposit deadline. ID
at 12-14. Specifically, he determined that the relevant statutes and regulations
did not provide for a waiver under specified circumstances and that the appellant
failed to allege that the agency had a statutory or regulatory obligation to provide
him with notice pertaining to the redeposit deadline. ID at 12. Further, he
determined that the appellant’s allegations that PTO misinformed him regarding
the redeposit requirement and, in 2010, improperly appointed him as a “career
conditional, with no annuity rights” did not establish that the redeposit deadline
should be waived under the doctrine of equitable estoppel. ID at 13-14.
¶17 On review, the appellant has not challenged the administrative judge’s
finding that the first potential basis for waiver does not apply, and we discern no
reason to disturb this finding. ID at 12. However, the appellant argues that the
administrative judge erred in finding that bases (2) and (3) did not warrant waiver
of the filing deadline for making a redeposit. PFR File, Tab 1 at 10-18.
¶18 To prevail on an equitable estoppel claim, the appellant must demonstrate
by preponderant evidence that: (1) he reasonably relied on the information
provided by the Government officials; and (2) the actions of the relevant
government officials constituted “affirmative misconduct.” Perez
Peraza, 114 M.S.P.R. 457, ¶¶ 9, 14. The unintentional, negligent provision of
misinformation, however, does not constitute affirmative misconduct. Id., ¶ 10;
Nunes v. Office of Personnel Management, 111 M.S.P.R. 221, ¶ 19 (2009). Here,
the appellant argues on review, as he did below, that the deadline for making a
redeposit of his refunded retirement deductions should be waived because he
11
reasonably and detrimentally relied on misinformation provided by PTO.
PFR File, Tab 1 at 13‑15. Specifically, the appellant argues that PTO provided
him an employee handbook, which “undeniably states that a rehired employee
who left service prior to March 1, 1991, would be paid an annuity regardless of
whether [he] completed a redeposit.” Id.; IAF, Tab 10 at 34. He further argues
that “PTO must be assigned full knowledge of the contents of the handbook,” and,
therefore, “[i]t speaks for itself that the PTO knew, or certainly should have
known, the handbook was at a minimum incomplete and . . . inaccurate when
applied to the Appellant’s situation.” PFR File, Tab 1 at 14.
¶19 Although PTO may have been negligent in providing the appellant a
document containing incomplete or inaccurate information, we are not persuaded
by the appellant’s bare assertions that PTO officials knew or should have known
that the information in the handbook was incorrect. Absent any, much less
preponderant, evidence that PTO officials knowingly and intentionally
misinformed the appellant, we discern no basis to disturb the administrative
judge’s finding that the appellant failed to establish that PTO officials engaged in
affirmative misconduct. ID at 10‑11; see Nunes, 111 M.S.P.R. 221, ¶ 19 (stating
that the unintentional provision of misinformation does not constitute
affirmative misconduct).
¶20 The appellant further argues that he is entitled to a waiver on the basis of
equitable estoppel because PTO “reinstated him in 2011 as a career conditional
employee” rather than reinstating him as a former career employee with tenure
status, in violation of 5 C.F.R. § 315.201(c)(4). PFR File, Tab 1 at 10-11, 15-17.
He argues that the administrative judge erred in finding that this allegation was
irrelevant to the estoppel issue because “[v]iolation of the law is always
affirmative misconduct.” Id. at 10; ID at 13. Moreover, he argues, PTO’s
violation of section 315.201(c)(4) “affirmatively precluded him from receiving
any benefit counseling.” PFR File, Tab 1 at 10.
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¶21 Pursuant to 5 C.F.R. § 315.401, “an agency may appoint by reinstatement to
a competitive service position a person who previously was employed under
career or career-conditional appointment (or equivalent).” 5 C.F.R. § 315 .401(a)
(emphasis added). Such appointments are exempt from the 1-year probationary
period if the individual previously satisfied that requirement. 5 C.F.R.
§ 315.201(c)(4). Although it appears that the appellant may have been eligible
for a reinstatement appointment under 5 C.F.R. § 315.401, appointment under the
section is permissive, rather than mandatory, and it does not appear from the
evidence in the record that he was actually appointed under that legal authority.
IAF, Tab 7 at 29-32. To the contrary, the letter confirming the appellant’s
appointment stated that he was required to complete a 1-year probationary period.
Id. at 29. Thus, we find no merit to the appellant’s argument that PTO violated a
regulation, and we agree with the administrative judge that the appellant has
failed to establish any affirmative misconduct on the part of PTO as to warrant
the application of equitable estoppel.
¶22 Regarding the third potential basis for waiving a statutory or regulatory
deadline, the appellant argues that PTO had an obligation to provide him with
benefit counseling and notice of the redeposit deadline pursuant to the “OPM
regulation” in the “CSRS Handbook,” which sets forth an agency’s
responsibilities when an employee, who is not entitled to an immediate annuity,
separates from service. PFR File, Tab 1 at 12-13. Contrary to the appellant’s
contention, however, the guidelines set forth in OPM’s CSRS and Federal
Employees’ Retirement System (FERS) Handbook are not regulations.
See Roman v. Central Intelligence Agency, 297 F.3d 1363, 1368‑69 (Fed. Cir.
2002) (referring to OPM’s CSRS and FERS Handbook for Personnel and Payroll
Offices as “an internal handbook,” which, unlike a regulation, was not
“promulgated pursuant to statutory authority and following formal notice and
comment proceedings”). Thus, PTO’s failure to provide the appellant with notice
13
of his rights and the applicable filing deadline pursuant to guidelines in the
CSRS/FERS Handbook provides no basis for waiver of a statutory filing deadline.
¶23 Accordingly, we affirm the initial decision.
NOTICE TO THE APPELLANT REGARDING
YOUR FURTHER REVIEW RIGHTS
You have the right to request review of this final decision by the U.S.
Court of Appeals for the Federal Circuit. You must submit your request to the
court at the following address:
United States Court of Appeals
for the Federal Circuit
717 Madison Place, N.W.
Washington, DC 20439
The court must receive your request for review no later than 60 calendar days
after the date of this order. See 5 U.S.C. § 7703(b)(1)(A) (as rev. eff. Dec. 27,
2012). If you choose to file, be very careful to file on time. The court has held
that normally it does not have the authority to waive this statutory deadline and
that filings that do not comply with the deadline must be dismissed. See Pinat v.
Office of Personnel Management, 931 F.2d 1544 (Fed. Cir. 1991).
If you need further information about your right to appeal this decision to
court, you should refer to the Federal law that gives you this right. It is found in
title 5 of the United States Code, section 7703 (5 U.S.C. § 7703) (as rev. eff.
Dec. 27, 2012). You may read this law as well as other sections of the
United States Code, at our website, http://www.mspb.gov/appeals/uscode.htm.
Additional information is available at the court’s
website, www.cafc.uscourts.gov. Of particular relevance is the court’s “Guide
for Pro Se Petitioners and appellants,” which is contained within the
court’s Rules of Practice, and Forms 5, 6, and 11.
If you are interested in securing pro bono representation for an appeal to
the U.S. Court of Appeals for the Federal Circuit, you may visit our website
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at http://www.mspb.gov/probono for information regarding pro bono
representation for Merit Systems Protection Board appellants before the Federal
Circuit. The Merit Systems Protection Board neither endorses the services
provided by any attorney nor warrants that any attorney will accept representation
in a given case.
FOR THE BOARD: ______________________________
Jennifer Everling
Acting Clerk of the Board
Washington, D.C.